BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA JR., CAL/EPA HEADQUARTERS BUILDING 1001 I STREET BYRON SHER AUDITORIUM SACRAMENTO, CALIFORNIA THURSDAY, JANUARY 25, 2007 9:00 A.M. JAMES F. PETERS, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 10063 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Robert F. Sawyer, Chairperson Ms. Sandra Berg Ms. Dorene D'Adamo Dr. Henry Gong Mrs. Barbara Riordan Supervisor Ron Roberts STAFF Ms. Catherine Witherspoon, Executive Officer Mr. Tom Cackette, Chief Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Mr. Tom Jennings, Chief Counsel Mr. Richard Bode, Chief, Health and Exposure Assessment Branch Mr. Joe Calavita, Air Pollution Specialist Mr. Richard Corey, Chief, Research and Economic Studies Branch Dr. Bart Croes, Chief, Research Division Mr. Bob Cross, Chief, Mobile Source Control Division Mr. Dan Donohoue, Chief, Emissions Assessment Branch Mr. Michael Fitzgibbon, Manager, Emission Control Technology Section Mr. Bob Fletcher, Chief, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Ms. Mei Fong, Air Resources Engineer Dr. Susan Gilbreath, Population Studies Section Mr. Mike Jaczola, Engineering Evaluation Section Mr. Bob Jenne, Senior Staff Counsel Ms. Diane Johnston, Senior Staff Counsel Mr. Harold Holmes, Manager, Engineering Evaluation Section Mr. Jack Kitowski, Chief, On-Road Controls Branch Ms. Kathleen Kozowa, Research Division Mr. Robert Krieger, Manager, Emissions Evaluation Section Ms. Leslie Krinsk, Senior Staff Counsel Ms. Karen Magliano, Chief, Air Quality Data Branch Dr. Eileen McCauley, Manager, Atmospheric Processes Research Section Ms. Annmarie Mora, Air Pollution Specialist Dr. Nehzat Motallebi, Atmospheric Processes Research Section Ms. Sylvia Morrow, Manager, Particulate Matter Analysis Section Ms. Linda Murchison, Chief, Planning and Technical Support Division Ms. Therese Najita, Particulate Matter Analysis Section Ms. Lucina Negrete, Manager, Alternative Strategies Section Mr. Chuck Shulock, Manager, Greenhouse Gas Reduction Program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED STAFF Mr. Dean Simeroth, Chief, Criteria Pollutants Branch Ms. Gayle Sweigert, Manager, Air Quality Analysis Section Mr. Mike Terris, Senior Staff Counsel Mr. Floyd Vergara, Staff Counsel Dr. Barbara Weller, Manager, Population Studies Section ALSO PRESENT Mr. Jack Alquist, Guild Cleaners Inc. Mr. Bob Blackburn, California Cleaners Association Mr. Jack Broadbent, Bay Area Air Quality Management District Mr. Luis Cabrales, Coalition for Clean Air Mr. James Camilleri, Camilleri Mechanical Mr. Tim Carmichael, Coalition for Clean Air Mr. Jose Carmona, Center for Energy Efficiency and Renewable Technologies Mr. Paul Choe Mr. David Dawson, Textile Care Allied Trades Association Mr. Tom DePippo Mr. Barry Gershenson, Internationl Fabricare Institute Mr. Sandra Giarde, California Cleaners Association Mr. Mike Harris, South Coast Air Quality Management District Ms. Bonnie Holmes-Gen, American Lung Association of California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. John Horst, Margaret's Cleaners Mr. Peter Jung, Plaza Cleaners Mr. Daniel Jussicha Mr. Hans Kim Mr. Doug Korthof Mr. Ed Krantz, Broadway Cleaners Mr. James Lee, Korean Dry Cleaners Association of Northern California Dr. David Lighthall Mr. Lawrence Lim, Korean Dry Cleaners Association Mr. James Lyons, Northern California Korean Dry Cleaners Mr. Kirk Marckwald, California Environmental Associates, Association of American Railroads Mr. Jon Meijer, International Fabricare Institute Mr. Tariq Mohammid Mr. Zion Orpaz, Megs Environmental Tech Solutions Mr. John Park Ms. Sung Park, Natures Best Cleaners Mr. Harry Pruyn Mr. Doug Quetin, Monterey Bay Air Quality Management District Mr. Steve Risotto, Halogenated Solvents Industry Alliance Ms. Lisa Rosen Mr. Lanny Schmid, Union Pacific Railroad PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi APPEARANCES CONTINUED ALSO PRESENT Ms. Sarah Sharpe, Coalition for Clean Air Mr. Gordon Shaw, Hangers Cleaners Mr. Doug Shinn, Korean Dry Cleaners Association of Northern California Mr. Peter Sinsheimer, Urban & Enviornmental Policy Institute Mr. Robert Smerling, Brentwood Royal Cleaners Mr. Mark Stehly, Burlington Northern Santa Fe Ms. Nily Stoler, Talyn Cleaners Mr. Steve Swanson, Swanson's Cleaners Ms. Lupe Valdez, Union Pacific Railroad Dr. Barry Wallerstein, South Coast Air Quality Management District Ms. Lynnette Watterson, Crystal Cleaning Center Ms. Jill Whynot, South Coast Air Quality Management District Mr. David Yi PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX PAGE Pledge of Allegiance 1 Opening remarks by Chairperson Sawyer 1 Roll Call 3 Item 07-1-1 Chairperson Sawyer 4 Executive Officer Witherspoon 5 Board Discussion and Q&A 21 Mr. Korthof 26 Item 07-1-2 Chairperson Sawyer 29 Executive Officer Witherspoon 30 Staff Presentation 30 Board Discussion and Q&A 45 Item 07-1-3 Chairperson Sawyer 48 Executive Officer Witherspoon 48 Staff Presentation 49 Board Discussion and Q&A 54 Item 07-1-4 Chairperson Sawyer 56 Staff Presentation 56 Board Discussion and Q&A 61 Motion 63 Vote 63 Item 07-1-5 Chairperson Sawyer 64 Executive Officer Witherspoon 65 Staff Presentation 65 Ombudsman Quetin 82 Board Discussion and Q&A 84 Mr. Cabrales 116 Ms. Holmes-Gen 119 Ms. Sharpe 121 Dr. Lighthall 124 Mr. DePippo 126 Mr. Mohammid 129 Ms. Stoler 130 Mr. Orpaz 132 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 viii INDEX CONTINUED PAGE Item 07-1-5(continued) Mr. Alquist 133 Mr. Sinsheimer 137 Mr. Shaw 140 Mr. Jussicha 145 Mr. Kim 146 Ms. Park 147 Mr. Jung 150 Mr. Swanson 152 Mr. Risotto 154 Mr. Dawson 159 Ms. Watterson 163 Mr. Horst 165 Mr. Krantz 168 Mr. Blackburn 170 Mr. Bons 172 Afternoon Session 175 Item 07-1-5(continued) Mr. Gershenson 175 Mr. Meijer 177 Ms. Giarde 181 Mr. Lyons 184 Mr. Shinn 187 Mr. Yi 188 Mr. Lim 189 Mr. Choe 191 Mr. Lee 192 Mr. Park 195 Mr. Pruyn 196 Mr. Camilleri 198 Mr. Smerling 201 Mr. Carmona 204 Mr. Carmichael 206 Ms. Whynot 209 Mr. Broadbent 214 Ex Parte Communications 217 Board Discussion and Q&A 221 Motion 232 Vote 232 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ix INDEX CONTINUED PAGE Item 07-1-6 Chairperson Sawyer 232 Executive Officer Witherspoon 233 Staff Presentation 233 Board Discussion and Q&A 240 Ex Parte Communications 252 Motion 253 Vote 253 Item 07-1-7 Chairperson Sawyer 253 Staff Presentation 254 Board Discussion and Q&A 262 Item 07-1-8 Chairperson Sawyer 266 Executive Officer Witherspoon 267 Staff Presentation 268 Board Discussion and Q&A 278 Item 07-1-9 Chairperson Sawyer 284 Executive Officer Witherspoon 284 Staff Presentation 284 Dr. Wallerstein 294 Mr. Harris 297 Mr. Stehly 301 Mr. Schmid 305 Ms. Valdez 309 Mr. Marckwald 311 Mr. Korthof 313 Item 07-1-10 Chairperson Sawyer 316 Executive Officer Witherspoon 316 Staff Presentation 317 Board Discussion and Q&A 330 Dr. Wallerstein 332 Mr. Broadbent 334 Mr. Quetin 337 Public Comment Mr. Korthof 339 Ms. Rosen 342 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 x INDEX CONTINUED PAGE Adjournment 345 Reporter's Certificate 346 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON SAWYER: Good morning. The January 3 25, 2007, public meeting of the Air Resources Board will 4 now come to order. 5 Please rise and join me in the Pledge of 6 Allegiance. 7 (Thereupon the Pledge of Allegiance was 8 Recited in unison.) 9 CHAIRPERSON SAWYER: Thank you. 10 I have a few opening remarks before we get 11 started. 12 First, there's been a minor change to today's 13 agenda. The closed session noticed for today's lunch 14 period has been canceled. 15 Second, to all the witnesses signing up to speak 16 today -- do we know what that is? 17 Following usual practice, the Board will impose a 18 three-minute time limit so that everyone gets a chance to 19 speak. Please put your testimony into your own words. It 20 is easier for the Board to follow if you go straight to 21 the main points you want to make. You do not need to read 22 your written testimony to us since it will be entered into 23 the record in its entirety. 24 Third, we have translation services available in 25 Korean for those who need it. I understand that there are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 some technical difficulties, but we're working on them. 2 The headsets are available outside the hearing room at the 3 attendant sign-up table. 4 Will the translator please repeat this statement 5 in Korean. 6 (Thereupon a statement was read in Korean.) 7 CHAIRPERSON SAWYER: Thank you. 8 We also have translation services in Spanish for 9 whose who need it. Please see the clerk if you require 10 these services. 11 And from our translator. 12 (Thereupon a translation in Spanish.) 13 CHAIRPERSON SAWYER: Finally, I would now like 14 everyone in the room to note the emergency exits to your 15 right of the hearing room and to the rear through the main 16 entrance. If exiting through the rear of the hearing 17 room, please follow the exit signs to the left just past 18 the rest rooms. 19 In the event of a fire alarm, we are required to 20 evacuate this room immediately. Evacuees will exit down 21 the stairways and possibly to a relocation site across the 22 street. When the "all clear" signal is given, we will 23 return to the hearing room and resume the hearing. 24 We will now take up our first agenda item. 25 BOARD CLERK ANDREONI: Excuse me, Mr. Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Can we do the roll? 2 CHAIRPERSON SAWYER: Okay. I was waiting for the 3 quorum. 4 Would the clerk please call the roll. 5 BOARD CLERK ANDREONI: Ms. Berg? 6 BOARD MEMBER BERG: Present. 7 BOARD CLERK ANDREONI: Ms. D'Adamo? 8 Dr. Gong? 9 BOARD MEMBER GONG: Here. 10 BOARD CLERK ANDREONI: Ms. Kennard? 11 Mayor Loveridge? 12 Mrs. Riordan? 13 BOARD MEMBER RIORDAN: Here. 14 BOARD CLERK ANDREONI: Supervisor Roberts? 15 BOARD MEMBER ROBERTS: Here. 16 BOARD CLERK ANDREONI: Dr. Sawyer? 17 CHAIRPERSON SAWYER: Here. 18 BOARD CLERK ANDREONI: Mr. Chairman, we have a 19 quorum. 20 CHAIRPERSON SAWYER: Thank you. 21 I would like to remind anyone in the audience who 22 wishes to testify on today's agenda items to please sign 23 up with the Clerk of the Board. 24 If you prefer not to identify yourself, you have 25 the right to do so. Just indicate a number so that we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 know to call you and remember what the number is. 2 If you have a written statement, please provide 3 30 copies when you sign up to testify. 4 Our first agenda item is 7-1-1, a report from our 5 Executive Officer on the Action Plan for 2007. 6 This overview of major administration and 7 legislative initiatives and Air Resources Board responses 8 previews items this Board will be considering throughout 9 2007. 10 This year brings new challenges to the air 11 resource board. In addition to our primary public health 12 mission, we have new mandates to cut greenhouse gases and 13 to expand alternative fuel use to help lower California's 14 reliance on for ebb oil. 15 In his State-of-the-State address, Governor 16 Schwarzenegger highlighted California's commitment to our 17 environmental future through clean technologies that also 18 stimulate the California economy. The Governor announced 19 a low carbon fuel standard for transportation fuels sold 20 in California. With this new directive, California will 21 more than triple the size of the state's renewable fuels 22 market and place about 7 million alternative fuel or 23 hybrid vehicles on California roads by 2020. These 24 actions will lower greenhouse gas emissions and provide 25 cleaner air in California communities. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 The framework for our new responsibilities on 2 greenhouse gases has been established through statute and 3 the Governor's Greenhouse Gas Executive Order. We have 4 requested resources to carry out this program and are 5 taking steps to meet our early commitments. 6 Our work on conventional controls -- emission 7 controls will be equally challenging in 2007. This year 8 the state implementation plans for the new federal 9 eight-hour ozone standard are due to the U.S. EPA. 10 This year will also see progress on the Goods 11 Movement Emission Reduction Plan we adopted last April, 12 with the added support of $1 billion in bond funds 13 approved by the voters in November for that purpose. 14 Finally, the largest diesel control measures to 15 date will come before the Board this year, affecting both 16 off-road and on-road mobile sources. 17 This is a challenging list. I am confident with 18 the support of the Administration, this Board's vision, 19 our dedicated staff, and the active participation of many 20 affected stakeholders, we can meet the challenge. 21 I will now ask Ms. Witherspoon to begin her 22 report. 23 (Thereupon an overhead presentation was 24 Presented as follows.) 25 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Sawyer. And good morning, members of the Board. 2 When we gave this presentation to you last year, 3 the Board was taken aback by the number of items that were 4 before us in 2006. And I'm pleased to say that we met all 5 of those challenges with the minor exceptions of a couple 6 regulations that were continued into this calendar year 7 such as the dry-cleaning item we'll hear later today and 8 the emission warranty and recall for vehicles that we'll 9 be taking up in March. So it was a very successful year 10 in 2006, which is a good start for 2007. 11 If I could have the next slide please. 12 --o0o-- 13 EXECUTIVE OFFICER WITHERSPOON: I'm going to talk 14 about four basic topics: The Governor's initiatives, are 15 own rule makings, other major activities that aren't in 16 the form of rules, and federal rule makings that are vital 17 to our attainment prospects. 18 Next slide. 19 --o0o-- 20 EXECUTIVE OFFICER WITHERSPOON: The Governor of 21 course has put out his 2007/08 budget proposal, which 22 contains a substantial increase in resources for the Air 23 Resources Board and approximately 10 percent growth in our 24 staffing from a thousand to eleven hundred or more, and a 25 complement of contract and research funds. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 There are two executive orders on climate change. 2 There is an executive order on a low carbon fuel standard. 3 The Governor -- the Administration has completed 4 the Goods Movement Action Plan that we've been working on 5 for the last couple of years, which has appended to it 6 this Board's emission reduction plan for goods movement. 7 And then the leading issue for the year are the 8 pace and content of the infrastructure bonds that the 9 voters approved in November: What goes first, what are 10 the criteria, and that kind of thing. 11 Next slide. 12 --o0o-- 13 EXECUTIVE OFFICER WITHERSPOON: So here is the 14 summary of the proposed budget for the Air Resources 15 Board. And the detail in contract are total funds and 16 positions. 17 The zero emission vehicle element is for the 18 hydrogen staff that were due to sunset this fiscal year. 19 For the mobile source certification we have a 20 backlog in vehicle certification and in all the activity 21 going on for diesel retrofit technologies. And so we've 22 asked for additional resources to speed that work up. 23 And then the 200 million was part of the bond 24 package, but a simple part to administer. So that was in 25 the Governor's initial proposal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 And the proposal for the 1 billion in goods 2 movement is still pending. 3 --o0o-- 4 EXECUTIVE OFFICER WITHERSPOON: Here's the first 5 of the Governor's executive order. You've been briefed on 6 this in last calendar year. It's what established our 7 goals for emission reduction. 8 The next slide. 9 --o0o-- 10 EXECUTIVE OFFICER WITHERSPOON: Once Assembly 11 Bill 32 passed the Legislature the Governor expanded upon 12 his first executive order to indicate that although that 13 bill talked mostly about the Air Resources Board and our 14 regulatory efforts, there was still a need for 15 collaboration with all other State agencies and that Cal 16 EPA Secretary Linda Adams would lead that effort. 17 He also established a Market Advisory Committee 18 to meet for the first six months of this year to give us 19 some suggestions on how we ought to establish our 20 regulations for market trading as part of the overall 21 greenhouse gas reduction plan. And we're part of those 22 activities. 23 Next slide. 24 --o0o-- 25 EXECUTIVE OFFICER WITHERSPOON: The most recent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 executive order is about low carbon fuels; and after our 2 greenhouse gas standard for motor vehicles is the single 3 biggest regulatory action -- stand-alone regulatory action 4 to reduce greenhouse gases in the existing plans. 5 And the Governor set a goal of reducing carbon 6 intensity 10 percent by 2020 through the use of lower 7 carbon fuels, and asked this Board to consider whether 8 that could be accomplished as an early action measure 9 under Assembly Bill 32. We will be bringing to you in 10 April our recommendations for what should be early action 11 measures, and staff thinks this should be on the list. 12 The University of California at the Davis and 13 Berkeley campuses are both working with us on the analysis 14 for alternative fuels. And the California Energy 15 Commission has been asked to give us recommendations by 16 June of this year -- and we'll ask them to update those 17 next year -- on what the pathway should be to the new 18 carbon standards based on the availability of various 19 feedstocks and prices and that sort of thing. 20 Next slide. 21 --o0o-- 22 EXECUTIVE OFFICER WITHERSPOON: The 23 Administration finally released its Goods Movement Action 24 Plan to the California Transportation Commission and to 25 the general public, which identifies the preferred PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 transportation projects to relieve acute congestion in 2 four strategic goods movement corridors. And then our 3 emission reduction plan is attached. And of course the 4 bond decisions and expenditures are pending. 5 --o0o-- 6 EXECUTIVE OFFICER WITHERSPOON: Here are the four 7 corridors that are in that plan; the total amount of bond 8 funds approved by the voters, with our 1 billion a piece 9 of that and the 200 million for school buses also a piece 10 of that. 11 And, Supervisor Roberts, you'll be pleased to see 12 the San Diego Land Port is absolutely part of the 13 strategic plan. 14 BOARD MEMBER ROBERTS: Thank you. 15 EXECUTIVE OFFICER WITHERSPOON: Next slide. 16 --o0o-- 17 EXECUTIVE OFFICER WITHERSPOON: Our rule makings 18 are grouped in subject order, not by month, because as you 19 know the calendar can be fluid depending on issues that 20 come up in our workshop process. So I'm going to go 21 through them by these categories. 22 Next slide. 23 --o0o-- 24 EXECUTIVE OFFICER WITHERSPOON: In our Goods 25 Movement Action Plan we committed to -- and also our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 Diesel Cleanup Plan to adopt, retrofit, and accelerate our 2 retirement requirements for construction and mining 3 equipment. Last year we were given for the current budget 4 $25 million dollars for helping to finance that 5 replacement in municipal fleets. And we will be 6 bringing -- making those grants in this calendar year -- 7 the first six months of this calendar year. 8 Our private truck fleet rule is under 9 development. It might not reach you until the beginning 10 of next year. But we'll be talking about it a lot over 11 the course of this year. 12 And then we're updating our retrofit verification 13 procedures; and as you saw, also expanding that staff. 14 --o0o-- 15 EXECUTIVE OFFICER WITHERSPOON: More of the goods 16 movement strategy is to deal with the port trucks that do 17 the short hauls that are in the hands of not very strong 18 economic players, people who make less than 30,000 a year 19 gross. And so part of the bond funds will be used to 20 figure out a strategy, a new economic model for getting 21 them into cleaner trucks. 22 You've already adopted a low sulfur fuel 23 requirement for auxiliary engines on marine vessels. 24 We're going to bring you a regulation for the same kind of 25 requirement in the main engine. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 You've also adopted low sulfur fuel rules for 2 harbor craft. The rule we're going to bring you this year 3 is about the engines and replacing those and retrofitting 4 those and accelerating retirement. 5 We're working on shore power for ships. It's 6 also called cold ironing. This is also a piece of the 7 bond proposal where we and port authorities and other 8 parties interested in contributing, like the South Coast 9 Air Quality Management District, would pay for the 10 installation of the electrified port and induce shippers 11 to pay for the conversion of the ship to accept electrical 12 power. 13 And then we were bringing to you a speed limit 14 regulation for ships in California waterways later this 15 year. 16 --o0o-- 17 EXECUTIVE OFFICER WITHERSPOON: On climate 18 change, the early mandates in Assembly Bill 32 are to 19 revisit the 1990 baseline level and assume that it's -- 20 assure that it's accurate, because that is the mandatory 21 limit that we must return to by 2020. 22 And we have received from the California Energy 23 Commission the top-down emission inventory that they have 24 maintained for the last several years. And we will be 25 doing what we can to refine it before this item comes to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 you at the end of the year. We'll also re bringing you a 2 mandatory reporting regulation in November or December. 3 Next slide. 4 --o0o-- 5 EXECUTIVE OFFICER WITHERSPOON: AB 32 requires us 6 while we're working on the comprehensive solution to 7 identify stand-alone Air Resources Board regulations that 8 can be adopted and enforceable by January 1st, 2010. So 9 by June of this year, we need to suggest you a list of 10 what those should be. We're actually going to bring that 11 quickly in April so we can get to work on the regulations 12 themselves. 13 And then we will need to bring to you for 14 adoption by the end of '08, beginning of '09 what those 15 regulations are so that they can get through the Office of 16 Administrative Law in time to be enforceable by January 17 1st, 2010. 18 We received more than 50 suggestions at this 19 week's workshop on what the early action measures should 20 be. We won't be able to undertake all of those as 21 regulations. But we intend to tell you about everything 22 else that we're starting to work on that may or may not 23 fit in the window. And also the Administration wants to 24 publish at the same time you're working on this list 25 what's going on across state government as an early action PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 activity. 2 --o0o-- 3 EXECUTIVE OFFICER WITHERSPOON: AB 32 requires 4 this Board to establish two advisory committees to assist 5 us in implementation of the Global Warming Solutions Act. 6 And later this morning you will vote on proposed members 7 for an Environmental Justice Advisory Committee and 8 members for an Economic and Technology Advancement 9 Committee. 10 --o0o-- 11 EXECUTIVE OFFICER WITHERSPOON: As I indicated, 12 we're going to move quickly on the 200 million from the 13 bond funds. We need to update the guidelines to be 14 current with the needs of the school districts. The money 15 is sufficient to get rid of all of the remaining pre-'77 16 buses and a large portion of the pre-'88 buses. And the 17 bond allows expenditures on retrofits as well. So several 18 thousand more can have particulate filters. 19 Next slide. 20 21 EXECUTIVE OFFICER WITHERSPOON: This is the year 22 for the ZEV technology review, one of your favorite items. 23 In the spring we will bring to you the recommendations and 24 review of an expert panel that we have convened, that has 25 been meeting with all the auto manufacturers, their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 suppliers, other technical experts to assess the state of 2 technology, and share their recommendations with us. And 3 then presuming that there is a need for some modification, 4 October is the month that we would bring to you suggested 5 changes to the ZEV/LEV regulation. 6 Also this year, test procedures are changing for 7 new certification of vehicles in the heavy categories and 8 their useful life. Also, high speed testing is coming 9 this year, isn't it? -- yes -- which is making it harder 10 for manufacturers to comply. So there are some issues 11 with that. 12 Next slide. 13 --o0o-- 14 EXECUTIVE OFFICER WITHERSPOON: For the other 15 kinds of pollutants, hydrocarbons in particular, we'll be 16 bringing you: 17 A regulation on above-ground gasoline storage 18 tanks, which happen to be mostly in the hands of the 19 agricultural industry. Not exclusively but mostly. 20 Yet another revision to consumer products 21 standards. We brought you Phase 1 last year. Phase 2 is 22 coming this year. 23 A model rule on architectural coatings which are 24 under district authority. Our suggestion on what the next 25 iteration should be. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 And then the Legislature enacted a bill 2 authorizing us to regulate indoor air purifiers that put 3 ozone in the indoor environment. And so we will bring you 4 a regulation to strenuously regulate, if not ban, those 5 devices. 6 Next slide. 7 --o0o-- 8 EXECUTIVE OFFICER WITHERSPOON: We've been 9 working for a very long time on the gasoline regulation. 10 When we phased out MTBE we were required to ensure that 11 there were no excess emissions, that we preserved all of 12 the benefits. And part of this had to do with our 13 understanding of the role of ethanol in gasoline, 14 permeation emissions and that sort of thing. There's been 15 extensive vehicle testing going on. 16 We will be bringing you adjustments to the 17 predictive model this spring to address those issues. 18 Minor technical amendments on diesel fuel 19 specifications. 20 Same thing on compressed natural gas 21 specifications for its use in motor vehicles. 22 And -- there's somebody on the mike in big heavy 23 sighs. 24 (Laughter.) 25 CHAIRPERSON SAWYER: I've been told that we're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 working on the microphones for the translation -- for the 2 headphones. And so we just have to bear with a little bit 3 of noise. We do want to get that work done. 4 EXECUTIVE OFFICER WITHERSPOON: Well, I hope -- 5 maybe they're translating me and I'm talking too fast. 6 (Laughter.) 7 EXECUTIVE OFFICER WITHERSPOON: I do talk fast. 8 Last year you approved criteria for making grants 9 for alternative fuels. We were given 25 million in this 10 fiscal year. And we will bring back to you our proposals 11 for how those funds should be expended. 12 --o0o-- 13 EXECUTIVE OFFICER WITHERSPOON: Later this 14 morning we will take up a continuation of the dry-cleaning 15 regulation to consider the phase out of Perc for dry 16 cleaning. 17 And this spring also we're bringing you 18 formaldehyde controls for particle boards and other 19 composite wood products. 20 --o0o-- 21 EXECUTIVE OFFICER WITHERSPOON: State law 22 requires that we in the Office of Environmental Health 23 Hazard Assessment revisit all of our ambient air quality 24 standards and identify toxic air contaminants to make sure 25 that those lists are protective enough for children. This PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 year we're bringing in proposed revisions to the nitrogen 2 dioxide standard in California. And it will be a more 3 stringent proposal. 4 Next slide. 5 --o0o-- 6 EXECUTIVE OFFICER WITHERSPOON: Other major 7 activities. 8 As Dr. Sawyer indicated, this is a SIP year. 9 State implementation plans are due for ozone. The core of 10 those plans are measures under this Board's authority and 11 under U.S. EPA authority. It's really all about diesel 12 turnover and the legacy fleets. 13 And then we have a much more rigorous analyses in 14 the Valley and in the South Coast, and it's sort of a more 15 technical item. We have to update our regional haze SIP. 16 --o0o-- 17 EXECUTIVE OFFICER WITHERSPOON: And I should have 18 said the particulate plans are due the beginning of next 19 year. And so in some cases districts are working on them 20 simultaneously. You will be having special hearings on 21 these plans. The law requires when possible that we 22 convene hearings in the district whose plan we're 23 considering. So we have a special hearing in San Joaquin, 24 a special hearing in the South Coast. And then at our San 25 Diego Board hearing is a normal Board hearing, but we'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 take up the San Diego plan and Ventura I think at that 2 hearing. 3 Next slide. 4 --o0o-- 5 EXECUTIVE OFFICER WITHERSPOON: In the Carl Moyer 6 Program you have a report today that's retrospective. And 7 later this year you will see revised -- revisions to the 8 guidelines document on how the money gets spent. And it's 9 a moving target, because the money can only go to surplus 10 non-mandatory activities. So as we regulate these 11 categories, you know, we have to shift around where the 12 incentive money goes. One of the things we're really 13 trying to work on is means testing in the Carl Moyer 14 Program to move the money evermore to the people who can't 15 afford to comply, where it won't get done unless there's a 16 subsidy. 17 Next slide. 18 --o0o-- 19 EXECUTIVE OFFICER WITHERSPOON: For environmental 20 justice we're continuing to work on major source 21 categories and their localized risks, including rail yards 22 and ports. 23 We are also doing special studies in Wilmington 24 and harbor communities. And you'll see our report on that 25 later today of unique analyses we've innovated to detect PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 local exposures. 2 Next slide. 3 --o0o-- 4 EXECUTIVE OFFICER WITHERSPOON: We have been 5 working on the premature death statistics that underlie 6 our work on particulate matter. And you heard a lot about 7 this when we did the Goods Movement Action Plan. There's 8 been a great deal of work going on in California and at 9 the national level -- I asked for a picture of a heart or 10 a lung. That's a heart because the premature death is 11 often attributed to heart attacks that are caused by 12 inflammation from the particulate exposure, et cetera. 13 And some people find that slide disconcerting. 14 There is the suggestion from all of this peer 15 review that the exposures in California are greater than 16 the national norm, that the premature death rate needs to 17 be adjusted. And so we will be bringing to you an item 18 talking about that. And then the work will go on. We 19 have another item later in the year on continuing 20 research. 21 Next slide. 22 --o0o-- 23 EXECUTIVE OFFICER WITHERSPOON: Part of the 24 Governor's budget is the significant expansion to our 25 research program. We have 5 million a year for extramural PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 research. And we'll have almost 2 million more that's 2 coming to us for climate, which will free up money for 3 more health research in our baseline budget. 4 And then every year we have a joint annual 5 meeting with our Research Screening Committee. That will 6 be in may. 7 --o0o-- 8 EXECUTIVE OFFICER WITHERSPOON: On the federal 9 side there are four major rule makings that affect 10 attainment here. 11 And I think this is the only slide on the federal 12 rulemakings, is that right? 13 Yes, it is. 14 --o0o-- 15 EXECUTIVE OFFICER WITHERSPOON: And so, in sum, 16 it's an enormously challenging year. It will be busy for 17 us and busy for you. And the cavalry's coming in the form 18 of new Board members. Your colleagues should be added we 19 hope soon to the Board. And more than a hundred new staff 20 and about 30, 40 million in new funds for the Air 21 Resources Board, plus a billion point two for incentive 22 programs. 23 CHAIRPERSON SAWYER: Thank you very much, Ms. 24 Witherspoon. 25 Do the Board members have questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 BOARD MEMBER RIORDAN: Well, Mr. Chairman, I -- 2 first of all let me say what a challenging year we're 3 going to have. And I certainly hope you get the staff and 4 the funds quickly, because time is marching on to some of 5 these dates. 6 I want to go back to sort of how one -- and you 7 may not have decided this. But in looking at some of 8 the -- for instance, let's just take diesel. And goods 9 movement is a good example. To apportion the money out 10 and to -- you can either go to what's easiest or what is 11 the most difficult first. And also some of the strategy 12 might be to look at what's needed early on. And how are 13 you going to reach a conclusion on proportioning out your 14 time and effort and money? How do you think you're going 15 to attack it? 16 EXECUTIVE OFFICER WITHERSPOON: That is an 17 excellent question. 18 The first draft bill we wrote for implementing 19 the bond was given to the Air Resources Board. And we'll 20 figure it out, just trust us. 21 That didn't fly. 22 So yesterday the Governor issued an executive 23 order requiring all agencies receiving bond funds to have 24 strategic plans and business models and auditing 25 procedures in place, I believe it is, by March 1st. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 Separately we have been in direct discussions with the 2 Governor's office as he prepares to issue his own proposal 3 on which of the bonds should go first in those strategic 4 decisions. And there is a preference I believe that the 5 one billion be part of the earliest package. 6 And then we got into the deeper detail about what 7 would it be spent on, does the Air Resources Board have a 8 plan? The staff's recommendation is to direct the funds 9 both to the parties who don't have the ability to comply, 10 that we would not be able to regulate, like the drayage 11 truck operators. And we've spent a lot of time in the 12 goods movement and advisory committee that the 13 Administration assembled -- and, Ms. Riordan, you were 14 there -- convincing many stakeholders that private trucks 15 at the port were the Achilles' heel of port operations. 16 They are the biggest impact on the adjacent community. 17 They are the dirtiest vehicles. They have a very high 18 volume of activity, and they must be addressed for public 19 health necessity for attainment. And they are simply 20 unable to obtain loans and purchase new vehicles. So that 21 was our number one category for which subsidies were 22 required. 23 Then he also felt that money needed to flow as an 24 incentive where we could not regulate, such as the federal 25 sources and international sources, who needed to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 induced to participate. So, for example, the railroads 2 have 40-year-old switcher engines that suit them just 3 fine. They have no economic reason to replace them. But 4 if we were to put money on the table, could we entice them 5 to match or more than match us and get rid of the 400 old 6 switchers in California? 7 Likewise, on port electrification it is not in a 8 shipper's interest for fleets that move around the world 9 to install electrical capacity on the ships. By and 10 large, it is for Princess Cruise Lines. It hasn't been in 11 the case for container shipping. And so were we to put in 12 electrified ports, could we get people to sign contracts 13 with us and, in particular, if they had preferential 14 access to unloading and the best piers that they would 15 commit, and we would work simultaneously on the placement 16 of ships with the placement of the pier? 17 So those were our leading suggestions. We are 18 not proposing to do this like the Carl Moyer Program where 19 it is distributed through every air district in the state. 20 We see them in much larger groupings of funds, and the 21 players are different. We need to work with the port 22 authorities, with the shipping association, with the U.S. 23 EPA and put together package proposals and business models 24 to pull this off. And the drayage trucks is going to be 25 the absolute hardest. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 But what the Administration ultimately proposes 2 will be an opening suggestion. The Legislature will add 3 its own expectations. 4 I should say there's also a high expectation of a 5 geographical overlay back to those four strategic 6 corridors and who gets what share. And that might not be 7 up to us either. But we would try to make the best use of 8 the funds once we received them to get the greatest bang 9 for the buck, the most tonnage reduction, the greatest 10 risk reduction. And we won't get it all at once either. 11 The spending plans are on the order of a four- or 12 five-year spend-down to move a billion dollars. 13 CHAIRPERSON SAWYER: Ms. D'Adamo. 14 BOARD MEMBER D'ADAMO: So just in follow-up. 15 Even though this will be unlike Carl Moyer in that it 16 won't flow proportionately through the districts, there 17 will be some effort more than likely through the 18 Legislature to provide for geographic distribution? 19 EXECUTIVE OFFICER WITHERSPOON: Yes, both by the 20 Administration and by the Legislature. But Carl Moyer, 21 for example, says every air district gets a hundred 22 thousand right off the top. And the Administration and 23 the Goods Movement Plan was trying to be very strategic 24 and where the worst congestion is, where the worst air 25 quality problems are, and flow the money to those areas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 So that might still happen. There might still be 2 some that aren't in the four corridors that are 3 recipients. But I think it will mostly be distributed 4 between those four corridors. 5 CHAIRPERSON SAWYER: We have a request to speak 6 from the public. 7 Doug Korthof. 8 MR. KORTHOF: Thank you for allowing me to 9 speak -- or not. 10 Thank you for allowing me to speak. Doug 11 Korthof. I come from Seal Beach. 12 These are exciting times. Greenhouse gas 13 emissions and the state taking the lead in fighting global 14 warming, greenhouse gas emissions, and this sort of thing. 15 The public is excited about this and knowledgeable. And 16 it validates the foresight that the Board showed in 1990 17 with the original ZEV mandate. The public holds this 18 mandate dear and it really values the California Resources 19 Board for taking this important step and now for following 20 it up. 21 I also want to emphasize that these are very big 22 goals, vast goals; 10 percent reduction by 2010. Folks, 23 we're still going in the wrong direction. You know, we're 24 still increasing our oil consumption. This is a very 25 difficult goal. And I want to emphasize that we have to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 keep the ZEV mandate, that is, mobile source pollution, in 2 mind when dealing with trying to get these action goals. 3 It's all very well to spew out verbiage that we're going 4 to do all this action. But we have to take practical 5 measures which actually implement those, and I'm sure the 6 Board will do that. 7 The whole idea of using oil is sort of a mistake. 8 And we're actually interrupting a gigantic geological 9 cycle, where vegetation rots and then converts into coal, 10 pressure forces it into oil, oil goes deeper down, gets 11 forced into natural gas and then into carboniferous rocks 12 and then comes up again in volcanic action. Why should we 13 be taking this gas and coal in the middle of this cycle 14 and releasing this -- unsequestering it into the air? 15 Which is having significant effects on our carbon dioxide 16 content, which is why we really do have to take action. 17 And only through the ZEV mandate, only through mobile 18 source pollution can we actually make an impact. 19 I want to suggest that new strategies would be 20 needed to do this. Leverage. Help people leverage their 21 investments, their money, for instance, on solar rooftop 22 power, power that's on the customer's side of the meter, 23 distributed electric power. Leverage their investment by 24 allowing them -- or making available plug-in cars that can 25 help to amortize that investment and enable people that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 otherwise couldn't afford a solar rooftop system to be 2 able to do so. Not only is this environmental justice; 3 it's a smart use of resources. Because even so, the 4 individual is putting up 60 to 90 percent with the new 5 guidelines from the California Energy Commission for 6 performance-based systems, doing a lot of paperwork, and 7 putting their roof -- using their roof for the solar 8 system. They're reaching out to you and they're saying, 9 "Please help us." By allowing them to use some of their 10 gas money to pay for the solar system by diverting that to 11 plugging in an electric car for some of their 12 transportation, you would actually be using their money in 13 a smart sense. And only by such strategies are we going 14 to actually make a difference and even have a chance of 15 meeting the Governor's bold goals. And please, I ask you 16 to keep that in mind. This is the only pathway we have. 17 Thank you. 18 CHAIRPERSON SAWYER: Thank you very much. A fine 19 start to the value of public input to our process. 20 Ms. D'Adamo. 21 BOARD MEMBER D'ADAMO: I'd just like to thank the 22 witness for bringing up the issue of plug-in hybrids. And 23 I know Mayor Loveridge provided us with sort of a concept 24 proposal several months ago, and just wondering where that 25 fits in. I guess ZEV's -- the technology review comes up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 in October. But what is staff doing to look into that 2 proposal that Mayor Loveridge provided us? 3 EXECUTIVE OFFICER WITHERSPOON: Well, the expert 4 panel's report comes sooner than that in May. And so 5 plug-in hybrids are part of the assessment. And Mayor 6 Loveridge had wanted to start working and incentivizing 7 plug-in hybrids now. And we thought that that would be 8 jumping ahead of the deliberations on the ZEV mandate. 9 But what has happened in the interim is many manufacturers 10 have brought forward products as prototype vehicles that 11 could be available and made the future look even more 12 promising than it did before. 13 CHAIRPERSON SAWYER: Thank you. 14 Does staff have any further comments? 15 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 16 CHAIRPERSON SAWYER: Since this is not a 17 regulatory item, it's not necessary to officially close 18 the record. 19 Agenda Item 7-1-2, Staff's Annual Report on 20 California's Air Quality Status and Long-Term Trends. 21 We follow the Air Resources Board 2007 Action 22 Plan with a discussion of our air quality progress to 23 date. We have achieved a lot, but we need to accomplish 24 more. We have several major programs underway to continue 25 reducing emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 Ms. Witherspoon, please introduce this item. 2 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 3 Sawyer. 4 California's long-term air quality trends are 5 very encouraging and suggest that we've been taking the 6 right steps to protect public health. However, as you 7 indicated, there's still a great distance we need to 8 travel before every Californian is protected from harmful 9 air pollution. 10 At this time I'd like to ask Theresa Najita to 11 begin the staff presentation. 12 Theresa. 13 (Thereupon an overhead presentation was 14 Presented as follows.) 15 MS. NAJITA: Thank you, Ms. Witherspoon. And 16 good morning, Chairman Sawyer and members of the Board. 17 Today's presentation will begin with an overview 18 of California state and federal standard nonattainment 19 areas. 20 Our focus will be on the federal eight-hour ozone 21 and PM 2.5 standards. I will highlight the progress 22 towards attainment made over the last decade as well as 23 summarize how 2006 air quality compares to recent years. 24 Finally, I will close with some success stories. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 MS. NAJITA: These maps depict the nonattainment 2 areas for state ozone and particulate matter standards. 3 As you can see, the almost the entire state is 4 nonattainment for one or both pollutants. 5 Because state implementation plans for the 6 federal eight-hour ozone and PM2.5 standards are due over 7 the next year and a half, the focus of today's 8 presentation will be on progress towards attainment of 9 these federal standards. However, it is important to 10 recognize that considerably more will need to be done to 11 meet the more stringent state standards. 12 --o0o-- 13 MS. NAJITA: There are 15 nonattainment areas for 14 the federal eight-hour ozone standard. Two areas, the 15 South Coast and the San Joaquin Valley, are also 16 nonattainment for the federal PM2.5 standard. The ozone 17 nonattainment areas span many different parts of the 18 state, from coastal regions and inland valleys to desert 19 and mountain areas. We will look at progress towards 20 meeting the federal standards in these different regions 21 of the state with a focus of the two most challenging 22 areas, the South Coast and the San Joaquin Valley. 23 --o0o-- 24 MS. NAJITA: Let's first look at eight-hour ozone 25 beginning with California's coastal areas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 --o0o-- 2 MS. NAJITA: California's coastal areas have 3 temperate climates, cooler temperatures than inland areas, 4 and onshore winds that favor better air quality. 5 The federal ozone nonattainment districts in 6 coastal areas are Ventura, San Diego, and portions of the 7 South Coast Air Basin. 8 While attainment is determined for the South 9 Coast Air Basin as a whole, to evaluate progress we will 10 look at air quality in both its coastal and inland areas. 11 Although the San Francisco Bay Area is designated 12 nonattainment, they now meet the federal eight-hour ozone 13 standard. 14 --o0o-- 15 MS. NAJITA: To illustrate ozone progress we will 16 use two air quality indicators. First is the design 17 value. This refers to the highest monitored concentration 18 used to assess compliance with the standard. Attainment 19 is reached when the design value is at or below the level 20 of the standard. Later we will look at the number of days 21 the standard is exceeded in a year. This slide shows how 22 far above the federal standard each coastal area was in 23 1995 compared to 2005. 24 The coastal areas have made the most dramatic 25 progress. Based on recent air quality data, the Bay Area PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 now meets the eight-hour standard. Ventura is less than 2 10 percent above the standard and San Diego is very close 3 to attainment. 4 Most sites in the coastal portion of the South 5 Coast also meet the federal standard. For this assessment 6 the coastal sites in South Coast include the southwestern 7 third of Los Angeles County and most of Orange County. 8 Statewide about 19 million people live in these coastal 9 areas, which represents approximately 55 percent of 10 California's population. 11 --o0o-- 12 MS. NAJITA: Now let's look at the inland areas 13 with the more difficult air quality challenges. These 14 areas include about 30 percent of the state's population, 15 or about 11 million people. 16 In contrast to the coastal areas, geography and 17 climate pose significant challenges to air quality 18 progress in the Sacramento region, the San Joaquin Valley, 19 and most of the South Coast Air Basin. There are many 20 days with hot temperatures and stagnant conditions and 21 mountain ranges keep pollutants trapped. 22 The next slide shows the trend in design values 23 for these regions. 24 --o0o-- 25 MS. NAJITA: Inland areas have made progress, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 not at the same pace as the coastal areas. Progress has 2 been greatest in the South Coast. Today the South Coast's 3 design value is 50 percent above the standard, compared to 4 95 percent above the standard ten years ago. Progress is 5 much more modest in the San Joaquin Valley and the 6 Sacramento regions. The San Joaquin Valley saw 5 percent 7 decrease and the Sacramento region a 10 percent decrease 8 in design values in the last ten years. 9 We will next look in more detail at the South 10 Coast and the San Joaquin Valley. 11 --o0o-- 12 MS. NAJITA: Looking at basin-wide statistics 13 gives only a partial view of progress. When we summarize 14 air quality by air basin, the statistics tend to be 15 dominated by a small number of high sites. Drilling down 16 and looking in more detail within an air basin provides a 17 better understanding of progress. These two maps show how 18 monitored values have changed on a spatial basis over the 19 last ten years. 20 To orient you, areas in green have designed 21 values that meet the federal eight-hour standard. On one 22 end of the scale, the yellow areas have values just above 23 the standard. At the other end the darkest orange and red 24 colors indicate design values almost twice the level of 25 the standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 As you can see, areas that meet the standard or 2 are just above the standard have greatly expanded; and the 3 areas with the worst air quality, as shown by dark orange 4 and red, have shrunk. 5 Another interesting observation is that the area 6 with the highest concentrations has moved eastward. Today 7 the area with the darkest red color shows the high site of 8 Crestline in the San Bernardino Mountains. 9 --o0o-- 10 MS. NAJITA: Another way to assess air quality is 11 to look at the number of days per year that the federal 12 standard was exceeded. This graph compares the number of 13 exceedance days in 1995 to 2005 for several different 14 areas in the South Coast Air Basin. These include the San 15 Fernando Valley in the north, the San Gabriel Valley, and 16 the Inland Empire comprised of San Bernardino and 17 Riverside counties. 18 All areas except for Crestline saw decreases of 19 45 to 85 percent in this period. 20 One striking observation is that the San Gabriel 21 Valley has seen the greatest decrease among the three 22 areas. This region, which once had the worst air quality, 23 now has less than 15 exceedance days compared to over 80 24 days in 1995. 25 It is important to note that most of the progress PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 reflected on this slide occurred prior to the year 2000. 2 Ozone levels have been relatively flat in the last few 3 years, which is a concern. However, when we looked at the 4 last 30-year long-term trend, we noted other periods where 5 progress slowed before another period of progress began. 6 It is difficult to draw conclusions about what 7 has been happening in recent years. But the bottom line 8 is we need more emission reductions, and attaining the 9 eight-hour standard will be a challenge. 10 --o0o-- 11 MS. NAJITA: As we discussed in previous slides, 12 Crestline is the high ozone site for the South Coast. 13 This is a high elevation site downwind of most of the 14 basin's emissions. This situation provides a perfect 15 opportunity for the formation and transport of pollutants. 16 Crestline is best characterized as a mountain 17 community with a small population and limited emission 18 sources. Elevated locations at the edge of major air 19 basins pose some of our greatest attainment challenges 20 statewide. 21 Another example, as we will see in the next 22 slide, is Sequoia National Park. 23 --o0o-- 24 MS. NAJITA: I would now like to move on to the 25 San Joaquin Valley. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 These maps show progress on a spatial basis from 2 1995 to 2005. Again, they depict an aspect of air quality 3 improvement not evident when we look at design values and 4 exceedance days for the basin as a whole. 5 As you can see, the areas in green, which meet 6 the federal standard, have expanded, particularly in the 7 north. Most importantly, the dark orange and red areas, 8 with the worst air quality, have shrunk significantly. 9 Today the highest ozone values are seen in 10 Sequoia National Park and in the southern portion of the 11 valley at Arvin. 12 --o0o-- 13 MS. NAJITA: This slide shows ozone progress 14 using the indicator of exceedance days for different parts 15 of the San Joaquin Valley over the last decade. We have 16 selected key sites that illustrate differences in the 17 magnitude of the problem and relative progress. 18 The northern region includes the Stockton urban 19 area. The central region includes the Fresno and Merced 20 urban areas. And the southern region encompasses the 21 Bakersfield area. Sequoia National Park and the high side 22 of Arvin are plotted separately. 23 The number of exceedance days increases as you 24 move north to south, with only a few days in the north, to 25 an average of 30 days in the central and southern portions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 of the basin. All three regions saw decreases ranging 2 from 55 to 70 percent over this ten-year period. However, 3 Sequoia National Park saw an increase in exceedance days. 4 This is reminder that we need to ensure our programs are 5 effective at these downwind sites as well as at the upwind 6 urban areas. 7 Another area we need to focus on is the town of 8 Arvin, tucked in next to the mountains in the Southern 9 Valley. The number of exceedance days there have 10 decreased, but at a more modest rate than other parts of 11 the valley. Arvin had over 50 exceedance days in 2005. 12 It is important to point out that almost all of 13 the progress shown in the graph has occurred since 2003. 14 The number of exceedance days had increased 15 between 1999 and 2003. ARB staff analysis indicate the 16 presence of weather patterns especially conducive to ozone 17 formation during that time. Then beginning in 2004, with 18 more typical weather conditions, exceedance days began to 19 decline. 20 --o0o-- 21 MS. NAJITA: This map shows the location of the 22 Arvin site in the southern valley. This area has a small 23 population and limited emission sources and is impacted by 24 transport from upwind urban areas. It is also surrounded 25 by mountains on three sides which trap pollutants in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 region. Similar to Crestline for the South Coast, Arvin 2 is a primary driver for attainment planning in the San 3 Joaquin Valley. 4 --o0o-- 5 MS. NAJITA: Now I'd like to briefly discuss the 6 federal ozone nonattainment districts in California's 7 mountain and desert areas. 8 The mountain counties nonattainment areas include 9 the Sierra Foothill communities that border the Sacramento 10 and San Joaquin Valley. Western Nevada County is also 11 included as a foothill nonattainment area. 12 Further south are several desert areas: Antelope 13 Valley and the Western Mojave Desert, and the Coachella 14 Valley. 15 Also listed on the slide is eastern Kern County 16 and Imperial County, which borders Mexico and southern 17 California. 18 These nonattainment areas are quite diverse but 19 have one important thing in common: Their air quality 20 problem is primarily due to transport. Let's Look at 21 recent ozone progress in these areas. 22 --o0o-- 23 MS. NAJITA: This graph illustrates progress in 24 terms of how far above the standard an area is now 25 compared to ten years ago. All these regions have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 improved except Nevada County. The most progress was made 2 in the Mojave desert. Today the design value there is 25 3 percent above the standard, down from 65 percent ten years 4 ago. Attainment in these areas is primarily linked to 5 reductions in the upwind areas. 6 The value of looking at different indicators is 7 illustrated by Nevada County. Here the design value has 8 increased, but the number of days over the standard has 9 been slowly declining. 10 In the attainment planning process we must focus 11 on the high ozone values. But it helps to understand 12 progress when we also look at the frequency and spatial 13 distribution of exceedances. 14 Now I'd like to briefly discuss the 2006 ozone 15 season. 16 --o0o-- 17 MS. NAJITA: The 2006 ozone season was comparable 18 to previous years for most areas with a few exceptions. 19 The South Coast had peak concentrations similar to recent 20 years. The San Joaquin Valley had an increase in the 21 number of exceedance days, but 2006 was still among the 22 lowest in the last 20 years. Sacramento also had an 23 increase in the number of exceedance days, but the design 24 value was unchanged. 25 Some of you may remember the July heat wave in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 northern California last summer, with a record number of 2 days with extremely hot temperatures. This severe weather 3 had the most noticeable impact on the coastal areas that 4 either attain or are very close to attainment. For 5 example, the Bay Area had 12 exceedance days compared to 1 6 in 2005 and none in 004. 7 --o0o-- 8 MS. NAJITA: I will now turn attention to PM2.5. 9 --o0o-- 10 MS. NAJITA: As with ozone, it is the inland 11 sites that exhibit the most severe PM2.5 air quality 12 problems. As we noted earlier, California has two areas 13 that are designated nonattainment for the federal PM2.5 14 standard: The South Coast and the San Joaquin Valley. 15 There are two aspects to the federal PM2.5 16 standard: The 24 hour and the annual average. As you 17 will see in subsequent slides, considerable progress has 18 been made toward meeting both of these standards. 19 --o0o-- 20 MS. NAJITA: PM2.5 monitoring using federally 21 defined methods just began in the past few years. Design 22 value statistics are available beginning in 2001. Since 23 that time the 24-hour design value has decreased 15 24 percent in the South Coast and 35 percent in the San 25 Joaquin Valley. Both the South Coast and the San Joaquin PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 Valley now meet the federal PM2.5 24-hour standard. 2 The second aspect of the federal PM2.5 standard 3 is the annual average. The annual average design values 4 at all sites in the South Coast are decreasing, with the 5 greatest decline, 25 percent, seen at the high site of 6 riverside Rubidoux. Rubidoux still, however, exceeds the 7 annual average standard by 50 percent. 8 --o0o-- 9 MS. NAJITA: The news is similar in the San 10 Joaquin Valley, with all sites showing a decrease in their 11 annual average design value. The northern valley sites 12 are now below the federal standard with the high sites in 13 the south. As with the South Coast, the valley's high 14 site shows the greatest rate of decline. Although closer 15 to the federal standard than the South Coast, Bakersfield 16 still exceeds by 25 percent. 17 We will now briefly look at 2006. 18 --o0o-- 19 MS. NAJITA: We know that historically the first 20 half of the year is a good indication of the annual 21 average. Therefore, although not all PM data has been 22 submitted, we can still get an indication of the expected 23 values for 2006. Average concentrations from the first 24 half of the year are higher than in 2005 but lower than 25 previous years. This makes it likely that the downward PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 trend in the design value, as noted in the previous 2 slides, will continue. 3 --o0o-- 4 MS. NAJITA: While California still faces 5 considerable challenges in meeting the federal eight-hour 6 ozone and PM2.5 standards in many areas of the state, as 7 well as the more stringent state standards, I would like 8 to conclude by highlighting several success stories. 9 --o0o-- 10 MS. NAJITA: In evaluating ozone trends, the 11 progress towards attainment of the eight-hour standard in 12 the coastal areas has been dramatic. The Bay Area meets 13 the federal eight-hour standard and San Diego and Imperial 14 are very close to attainment. 15 Moreover, exceedance days have decreased in 16 Ventura County by 85 percent over the last decade. 17 Progress has been more modest when looking either 18 design values or exceedance days in the inland valleys. 19 However, measured in terms of population exposure, 20 significant progress has occurred in the past 15 years. 21 In looking at population exposure to eight-hour 22 ozone concentrations above the federal standard, the South 23 Coast has seen a 75 percent decrease since 1990. Most of 24 this progress occurred prior to 2000, with a much smaller 25 rate of decline in the years since. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 The San Joaquin Valley saw a 50-percent reduction 2 since 1990, with, similar to other air quality trends in 3 the valley, most of the decline occurring since 2002. 4 --o0o-- 5 MS. NAJITA: This graph shows the great strides 6 we've made with regard to the federal one-hour ozone 7 standard. As you know, this standard was the focus of our 8 planning efforts for a number of years. The air quality 9 trends for one-hour ozone tracked very well with those for 10 eight-hour ozone. 11 The number of exceedance days has decreased 12 dramatically since 1990, by 70 percent in the South Coast 13 and by 60 percent in the San Joaquin Valley. These 14 reductions have greatly contributed to the progress that 15 we have seen today for the federal eight-hour standard. 16 --o0o-- 17 MS. NAJITA: The decline in PM2.5 concentrations 18 in the San Joaquin Valley and the South Coast has been 19 substantial. Both areas are also making significant 20 progress in meeting the federal PM10 standards, which 21 included both a 24 hour and an annual average component. 22 The San Joaquin Valley now attains both federal 23 PM10 standards. The South Coast Air Basin meets the 24 federal 24-hour PM10 standard. And the PM10 annual design 25 value is now less than 10 percent above the standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 --o0o-- 2 MS. NAJITA: To conclude, I will just remind the 3 Board and the audience that California now meets carbon 4 monoxide standards statewide. The last remaining hot spot 5 in the border region of Imperial County is now in 6 attainment. 7 Thank you. We will be more than happy to answer 8 any questions. 9 CHAIRPERSON SAWYER: Thank you. 10 Do Board members have questions? 11 Ms. D'Adamo. 12 BOARD MEMBER D'ADAMO: If we could turn to slide 13 28. 14 I've been familiar with this for a while, that 15 the South Coast as compared to the San Joaquin Valley has 16 shown greater progress. But the thing that sort of 17 baffles me is that the progress that's been made in the 18 valley, as I understand it, was made prior to -- just 19 prior to 2003, and in South Coast it was prior to 2000. 20 Other than climate, what factors could you attribute to 21 that? 22 AIR QUALITY DATA BRANCH CHIEF MAGLIANO: 23 I think what we've seen is -- oh, this is Karen 24 Magliano. I'm Chief of the Air Quality Data Branch. 25 What we've seen in the South Coast is that they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 made dramatic progress in almost all indicators prior to 2 the year 2000, and we've seen some real -- a flattening 3 out since then. Certainly we've looked at things such as 4 weather conditions, et cetera, and that's something that 5 we're still exploring to understand that. 6 San Joaquin is actually the opposite, where we 7 saw relatively flat trends for most indicators through the 8 year 2002, 2003, and then subsequent to those -- in the 9 last most recent years is when we've seen the greatest 10 progress in the San Joaquin Valley. 11 Some of the things that we're looking at is that 12 our -- obviously our emission reduction programs are 13 phasing over time. And so we have differences in these 14 areas in terms of how much ROG or NOx you might have. And 15 that can influence how much ozone is produced in these 16 different regions. And then as I mentioned, we also have 17 year-to-year meteorological variability that can cause 18 different rates of decline in the different regions. 19 BOARD MEMBER D'ADAMO: How about the turnover of 20 the fleet, the valley lagging behind and the turnover, as 21 compared to South Coast? Does that play into it? 22 EXECUTIVE OFFICER WITHERSPOON: If you remember, 23 part of the staff presentation was that what -- the reason 24 the valley did not have progress before 2003 is they had 25 unusually stagnant weather conditions. And so we might PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 have seen a downward trend if they hadn't had just an 2 awful inversion layer and very persistent pattern. And 3 once that was relieved, the underlying trend from all the 4 diesel regulations this Board has adopted began to 5 surface. 6 The valley is extremely NOx dependent. All the 7 modeling seems to show that. And so your measures to 8 address motor vehicles and U.S. EPA's standards are having 9 an effect. 10 BOARD MEMBER D'ADAMO: Thank you. 11 CHAIRPERSON SAWYER: Dr. Gong. 12 BOARD MEMBER GONG: Mr. Chairman. 13 Quick question about -- you mentioned in the same 14 slide population exposure. So you're also using 15 population numbers as a denominator in that? You must be 16 if you say that. 17 AIR QUALITY DATA BRANCH CHIEF MAGLIANO: Yes, 18 that's correct. 19 BOARD MEMBER GONG: Okay. So have the 20 populations changed or moved around that much in these two 21 areas? 22 AIR QUALITY DATA BRANCH CHIEF MAGLIANO: It's 23 mainly -- the changes are primarily driven by the 24 improvement in air quality itself. Though certainly we 25 are seeing changes in where population growth is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 occurring. In the South Coast you are seeing increasing 2 population, for example, in the eastern portion of the 3 basin. But most of that change is due more to the air 4 quality rather than the population changes. 5 BOARD MEMBER GONG: Okay. Thank you. 6 CHAIRPERSON SAWYER: Does staff have any further 7 comments? 8 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 9 CHAIRPERSON SAWYER: There are no requests from 10 the public. 11 Since this is not a regulatory item, it is not 12 necessary to officially close the record. 13 Agenda Item 7-1-3, Informational Health Update. 14 The Air Resources Board staff provides the Board with 15 regular updates on current research findings on the health 16 effects of air pollution. 17 Today staff will report the findings of a recent 18 California study on the adverse effects of coarse 19 particulate matter on heart function in older adults. 20 Ms. Witherspoon. 21 (Thereupon an overhead presentation was 22 Presented as follows.) 23 Thank you, Dr. Sawyer. 24 EXECUTIVE OFFICER WITHERSPOON: The connection 25 between fine particulate air pollution and adverse health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 effects is well established. However much less is known 2 about the health effects of coarse particulate. You may 3 recall the U.S. EPA struggled over the process of 4 developing a coarse particulate standard in 2006 but 5 decided to uphold the PM10 standard. Today's presentation 6 provides important information on a recent study examining 7 the association between coarse particulate and heart 8 function that was conducted among senior citizens with 9 coronary heart disease residing in the Coachella Valley. 10 Dr. Susan Gilbreath from our Health and exposure 11 Assessment Branch will make the presentation. 12 DR. GILBREATH: Thank you, Ms. Witherspoon. 13 Good morning, Dr. Sawyer and members of the 14 Board. 15 In this health update I will discuss the results 16 from an important study evaluating the association between 17 coarse particle air pollution and heart rate variability 18 among older adults in California's Coachella Valley. 19 --o0o-- 20 DR. GILBREATH: Particulate matter of ten microns 21 or less, or PM10, is a mixture of coarse and fine 22 particles. Coarse particles measure between two and a 23 half and ten microns in diameter and are comprised of 24 particles such as dust, sand, and non-exhaust vehicle 25 emissions like tire rubber. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 Coarse particles can have biological substances 2 such as pollen, fungi, and endotoxins on their surfaces. 3 Endotoxins are toxic substances released by some bacteria. 4 The source and composition of PM varies greatly 5 by region. For example, coarse particulate matter is 6 highly correlated with PM10 in desert and some 7 agricultural regions, but not in urban areas. 8 --o0o-- 9 DR. GILBREATH: Although many peer-reviewed 10 studies have examined the effects of particulate matter on 11 health, few have specifically addressed coarse particles. 12 The health effects identified from these coarse particle 13 studies appear to result mainly from short-term exposures. 14 Some of these studies have found coarse-particle-related 15 increases in cardiovascular and total deaths. These 16 findings were stronger in desert regions. 17 A previous population-based study in the 18 Coachella valley found a 2-percent increase in daily 19 cardiac-related deaths per 10 microgram per cubic meter 20 increase in estimated coarse PM levels. Similar results 21 were found in another study in Phoenix, Arizona. These 22 increases in cardiac deaths could be due to the unique 23 source and composition of particles in the desert. 24 Studies examining coarse particles in urban areas 25 have generally not found strong associations with death, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 perhaps because the pollution is dominated by 2 combustion-generated fine particles. 3 A study in Mexico City found an increase in daily 4 deaths in relation to an increase in coarse particles. It 5 is thought that the toxicity of coarse particles in this 6 urban area could be due to the biological elements of 7 these coarse particles. 8 Studies in several areas have found that coarse 9 particles are a strong predictor of respiratory-related 10 hospital admissions. Other research found that coarse 11 particles are also associated with cardiac-related 12 hospital admissions. 13 Some toxicological studies indicate some coarse 14 particles are capable of eliciting inflammatory effects 15 and oxidative damage. Of the few studies examining 16 long-term exposure to particulate matter and incidents of 17 death, only one has found some evidence of association 18 with coarse particles. That study was conducted in a very 19 specific and sensitive population. 20 I am going to focus my discussion on this current 21 study performed by Dr. Lipsett and colleagues in the 22 Coachella Valley and its implications for public health 23 protection. 24 --o0o-- 25 DR. GILBREATH: The Coachella Valley is a popular PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 desert resort and retirement community east of Los 2 Angeles. This arid valley is home to over 400,000 3 year-round residents, hundreds of thousands of seasonal 4 residents, and is also a popular vacation destination. 5 Like much of the southwest, particulate matter in 6 the Coachella Valley is dominated by coarse particles. On 7 windy days up to 95 percent of particles are coarse. 8 Approximately 60 percent of PM mass is geologic 9 in origin, that is, dust and soil; while only 8 percent 10 originates from vehicles. 11 --o0o-- 12 DR. GILBREATH: The study focused on 19 senior 13 citizens with heart disease who were living in the 14 Coachella Valley. Participants wore heart monitors 24 15 hours a day, one day a week, for up to 12 weeks during the 16 spring of 2000. 17 The heart monitor data was examined for changes 18 in heart rate variability. Heart rate variability is a 19 measure of the beat-to-beat changes in heart rate and is 20 an indicator of the heart's ability to respond to stress. 21 Decreased heart rate variability is associated with an 22 increased risk of cardiac disease and death. 23 In this study, ambient measurements of coarse PM 24 were compared to changes in heart rate variability. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 DR. GILBREATH: The researchers found a 2 significant decrease in heart rate variability associated 3 with coarse PM levels. That is, on average the heart of 4 each senior was less able to adjust its rhythm in response 5 to environmental stimuli. 6 This graph shows decreases in heart rate 7 variability in relation to pollutant averaging time. 8 Notice how the strength of the effect between coarse PM 9 and overall variability increased as the pollutant 10 averaging time was increased. This effect continued 11 through six-hour averaging, disappearing completely at 24 12 hours. All these averaging times except for 24 hours were 13 statistically significant. 14 It is important to note that the 4 percent 15 decrease in variability at 6 hours would have been missed 16 if only the 24-hour average had been used. This suggests 17 that the effects from coarse PM occur in relatively close 18 time period after exposure. 19 --o0o-- 20 DR. GILBREATH: Findings from this small but 21 elegant study underline the significance of exposure to 22 coarse particulate air pollution and add to the growing 23 body of evidence that short-term exposure to coarse 24 particles can be hazardous to public health. The fact 25 that the health effects were apparent only when using PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 averaging times shorter than the standard 24 hours 2 indicates the health effects may be short-term as well. 3 Further study is needed to more clearly define 4 risk to public health. In California, coarse particles 5 are controlled to attain the PM10 standards. You may 6 recall that last year the United States Environmental 7 Protection Agency considered adopting a short-term coarse 8 PM standard for urban areas but not for rural areas. 9 Ultimately they dropped the idea and decided to rely on a 10 short-term PM10 standard. 11 When the ARB established its PM2.5 standard in 12 2002, they retained the state PM10 standards. European 13 decision makers also left PM 10 standards unchanged. 14 Results from this and other studies demonstrate 15 that some short-term effects from coarse particles can 16 have significant health effects. Coarse PM will be an 17 important focus for future particulate pollution research 18 efforts. 19 Thank you. 20 CHAIRPERSON SAWYER: Do Board Members have any 21 questions? 22 Dr. Gong. 23 BOARD MEMBER GONG: Just a comment really. I 24 think that was a very nice presentation, of a recently 25 published report about the health effects of coarse PM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 I am struck by the literature regarding coarse PM 2 in that the heart rate variability changes are small. And 3 I'm not a cardiologist, but I would dare say a 4 percent 4 change doesn't seem like a lot to me, even though it's 5 statistically significant. 6 So the question then I would generate is: Is it 7 clinically significant? And I think the jury is still out 8 on heart rate variability as an absolute predictor of 9 cardiac mortality in the future. 10 You can even find heart rate variability changes 11 in young adults given the right circumstances, as well as 12 other disease conditions as well. So how specific -- how 13 sensitive? It's probably very sensitive. But how 14 specific is the question I would ask. 15 I think the EPA has also issued an RFA for coarse 16 health-effects-related research as well. So that should 17 certainly help supplement the information about this 18 coarse mold. 19 Thank you. 20 CHAIRPERSON SAWYER: Does staff have any further 21 comments? 22 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 23 CHAIRPERSON SAWYER: Since this is not a 24 regulatory item, it's not necessary to officially close 25 the record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 Agenda Item 7-1-4, consideration of five research 2 proposals. 3 During the past year I have recused myself from 4 considering all research proposals because of previous 5 research in air quality at the University of California. 6 I believe at this point it is appropriate for me 7 to participate in the review of research considered by the 8 Board. 9 Would staff please introduce this item. 10 (Thereupon an overhead presentation was 11 Presented as follows.) 12 AIR POLLUTION SPECIALIST MORA: Good morning, Dr. 13 Sawyer and members of the Board. 14 Today we are presenting five research proposals 15 for your review and approval. These proposals were part 16 of the Board's 2006-2007 Research Plan and have been 17 approved by the Research Screening Committee. 18 The first project will provide a spatiotemporal 19 analysis of air pollution and death. 20 California currently has no statewide studies 21 assessing death resulting from air pollution in the 22 general population. This study will derive assessments of 23 the health effects from particulate and gaseous air 24 pollution and all cause and cost-specific death in 25 California based on the American Cancer Society cohort. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 The investigators will examine whether specific 2 particle characteristics are associated with larger health 3 effects to different particle constituents and sources of 4 exposure, and will determine how critical time duration 5 and level of air pollution exposure are in contributing to 6 death in California. 7 This study may be able to elucidate our 8 understanding of specific source contributions to death by 9 studying the effects from expressways and ports. 10 This study will supply the first California-wide 11 estimates of death associated with PM2.5 exposure and 12 other co-pollutants derived from a representative adult 13 California population, thus supplying the ARB with a 14 valuable resource for deriving benefits estimates. 15 This information will help strengthen ARB's 16 efforts to implement policies that protect public health. 17 --o0o-- 18 AIR POLLUTION SPECIALIST MORA: The next project 19 will augment our current contract with the Department of 20 Health Services entitled "Air Pollution and Cardiovascular 21 Disease in the California Teachers study cohort." 22 The original project was funded by ARB in 2004 to 23 study the effects of chronic exposure to air pollution 24 among women. This study demonstrated that long-term 25 exposure to PM2.5, carbon monoxide, and nitric oxide was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 associated with heart attacks and strokes as well as 2 reaffirming the strong and consistent relationship between 3 PM2.5 and death. 4 The Augmentation will extend these analyses by 5 examining several unanswered questions such as: 6 Susceptible subgroups, critical time windows of PM 7 exposure to specific disease categories, effects in 8 smokers, specific cardiovascular causes of death, and 9 others. 10 This proposed augmentation will be important for 11 the next review of ambient air quality standards for PM 12 and possibly for several gases in California and at the 13 federal level. 14 --o0o-- 15 AIR POLLUTION SPECIALIST MORA: The third 16 project, toxicity of source-oriented ambient aerosol. 17 Ambient particulate matter has been linked with 18 death and disease. But it is unknown which components are 19 the most responsible. Ambient PM derives from a wide 20 range of sources and experiences a range of atmospheric 21 processes that may alter its toxicity. 22 Direct exposures of animals to PM emissions 23 neglects at the source atmospheric photochemistry that may 24 enhance toxicity; while exposure to total ambient PM 25 combines the effect of many sources. So it does not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 elucidate which source contributes to the toxicity. 2 This study will use a single particle mass 3 spectrometer to selectively collect and separate ambient 4 particles with a series of samplers. 5 The sampled material will then be installed into 6 rats that will be studied for several possible toxic 7 endpoints. The result will be a relative toxicity indices 8 for particles derived from each source category. This 9 will help the ARB to develop a PM control strategy that 10 focuses on sources based on the relative toxicities of the 11 PM emissions. 12 --o0o-- 13 AIR POLLUTION SPECIALIST MORA: The next two 14 projects will assist in our climate change mitigation 15 efforts. 16 The first project will provide an inventory of 17 greenhouse gas emissions from stationary air conditioning 18 and refrigeration systems. Millions of stationary 19 refrigeration and air conditioning, or RAC systems, exist 20 in California, ranging from small hermetically sealed 21 residential refrigerators to large supermarket direct 22 expansion refrigeration systems containing thousands of 23 pounds of refrigerant. 24 RAC systems produce both direct and indirect 25 emissions. The direct emissions are typically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 high-global-warming-potential refrigerant emissions due to 2 leaks, routine servicing, intentional or accidental 3 venting, and end-of-life refrigerant reclamation. 4 RAC systems can also produce indirect CO2 5 emissions resulting from energy generated to operate the 6 equipment. 7 The objective of the proposed research is to 8 generate a California-specific equipment and refrigerant 9 inventory and energy use data. This will also estimate 10 emissions associated with energy-saving strategies and 11 advanced design retail food systems. These data will 12 enable ARB to develop the necessary rules, regulations, 13 and/or voluntary measures to implement AB 32. 14 --o0o-- 15 AIR POLLUTION SPECIALIST MORA: The last project 16 will produce a reliable upper bound on the annual amount 17 of HFC-134a that is available for recovery in vehicles 18 that are dismantled or salvaged in California. It will 19 also quantify the vehicles that are dismantled annually 20 and characterize them by age, type, reason for retirement, 21 and any distinction among various vehicle categories in 22 the amount of refrigerant available for recovery. 23 The ARB will use this information to determine 24 the potential value of using ARB resources to assist the 25 U.S. EPA in enforcing a federal regulation. That PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 regulation requires dismantlers and salvagers to recover 2 refrigerant before they breach the air conditioning system 3 of vehicles. State assistance to the U.S. EPA in 4 enforcing refrigerant recovery is a proposed greenhouse 5 gas reduction strategy in the California Climate Action 6 Team Report. 7 That concludes the presentation. We request that 8 you approve these research proposals for funding. Be 9 happy to answer any questions. 10 CHAIRPERSON SAWYER: Thank you very much. 11 Dr. Gong. 12 BOARD MEMBER GONG: I think this is an impressive 13 array of projects to be considered by the Board. 14 I just wanted to clarify. The first two projects 15 from University of California and Department of Health 16 Services, the populations are essentially all Californians 17 throughout the state. And I believe the third one is 18 actually set up in the San Joaquin Valley; is that 19 correct? 20 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 21 That is correct, Dr. Gong. 22 BOARD MEMBER GONG: Okay. So I just wanted to 23 point that out to my colleague on the Board that the San 24 Joaquin Valley is well represented on this array here. 25 That's all. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 Oh, I'm sorry. One more question. 2 Since you brought up coarse particles, are any of 3 these studies going to be looking at coarse particle 4 health effects? 5 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 6 They are. They're going to -- well, they'll be 7 included PM10 -- a look at PM10 fractions and fine 8 fractions -- PM fine as well. But they won't -- I don't 9 think right now they're going to try and separate out 10 specifically the 2.5 to 10 fraction. 11 POPULATION STUDIES SECTION MANAGER WELLER: 12 But it will be included in the PM10 fraction, 13 which will be also examined as well as the fine. 14 BOARD MEMBER GONG: In all three of those studies 15 I referred to in other words? 16 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 17 The Jerrett study and the teachers cohort by Dr. 18 Lipsett will. 19 BOARD MEMBER GONG: Thank you. 20 CHAIRPERSON SAWYER: A reminder to Board members 21 of our policy concerning ex parte communications. While 22 we may communicate off the record with outside persons 23 regarding board rule making, we must disclose the names of 24 our contacts and the nature of our communications on the 25 record. This requirement applies specifically to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 communications which take place after the public agenda of 2 the Board hearing has been published. 3 Are there any communications that you need to 4 disclose? 5 None. 6 Have all members of the Board have had an 7 opportunity to review the proposals? 8 Are there any additional concerns or comments? 9 If not, do I have a motion to adopt? 10 BOARD MEMBER GONG: So moved. 11 CHAIRPERSON SAWYER: And a second? 12 BOARD MEMBER D'ADAMO: Second. 13 CHAIRPERSON SAWYER: All those in favor please 14 indicate by saying aye. 15 (Ayes.) 16 CHAIRPERSON SAWYER: Opposed? 17 The adoption of measures -- Resolutions Nos. 7-1 18 through 7-4 and 7-7 is confirmed. 19 Since this is not a regulatory item, it's not 20 necessary to officially close the record. 21 At this time we will take a brief break to give 22 our court reporter relief. 23 And this will be about ten minutes in length, and 24 then we'll resume with the next item. 25 (Thereupon a recess was taken.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 CHAIRPERSON SAWYER: Agenda Item 7-1-5, Proposed 2 Amendments to the Control Measure for Perchloroethylene 3 Dry-cleaning Operations. 4 Could we have a repeat announcement from our 5 Korean translator please at this time. 6 (Thereupon a translation in Korean.) 7 CHAIRPERSON SAWYER: Thank you. 8 This is the second opportunity to consider a 9 proposal after the Board's direction to staff at the May 10 25th, 2006, hearing to return to the Board with a proposal 11 that would phase out the use of Perchloroethylene in 12 dry-cleaning operations. Today's proposal will address 13 the Board's request. 14 Ms. Witherspoon, please introduce this item. 15 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 16 Sawyer. 17 At the May 2006 hearing, the Board heard staff's 18 initial proposal to reduce Perc emissions from 19 dry-cleaning operations through the application of best 20 available control technology. You asked that we revise 21 the proposed regulation to instead phase out the use of 22 Perc. You also urged us to take the economic impacts on 23 small businesses into consideration when developing the 24 phase-out schedule. 25 The revised staff proposal we are presenting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 today does both things. Staff is proposing to prohibit 2 new Perc dry-cleaning machines statewide and to phase out 3 all existing Perc machines based on the age of each 4 machine. 5 Staff is also proposing additional requirements 6 for manufacturers and distributors of Perc to enable us to 7 track Perc sales in California. These requirements will 8 facilitate implementation of the Perc replacement 9 incentive program mandated by state law. 10 The staff presentation of the revised regulatory 11 proposal will be made by May Fong of the Stationary Source 12 Division. 13 (Thereupon an overhead presentation was 14 Presented as follows.) 15 AIR RESOURCES ENGINEER FONG: Good morning, Dr. 16 Sawyer and members of the Board. 17 As you have heard, today's proposal will address 18 the Board's direction to revise the dry-cleaning 19 regulation to phase out the use of Perc in dry-cleaning 20 operations. 21 --o0o-- 22 AIR RESOURCES ENGINEER FONG: Our presentation 23 today will cover the topics on this slide. 24 --o0o-- 25 AIR RESOURCES ENGINEER FONG: I will now go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 through some background of our current dry-cleaning 2 regulation and how we came to today's proposal. 3 --o0o-- 4 AIR RESOURCES ENGINEER FONG: In 1991 Perc was 5 identified as a toxic air contaminant. As a result the 6 Board adopted a number of regulations to reduce exposures 7 to Perc, and they are listed here. Also the districts 8 have adopted a number of rules to reduce or eliminate the 9 use of Perc in degreasing operations. 10 As you are aware, South Coast AQMD adopted their 11 dry-cleaning rule in 2002 which would phase out Perc use 12 by the end of 2020. 13 --o0o-- 14 AIR RESOURCES ENGINEER FONG: In 2003, staff 15 began an evaluation of the effectiveness of existing 16 dry-cleaning ATCM which was adopted in 1993. In February 17 of 2006, the technical assessment report of the evaluation 18 was published. In May 2006, staff proposed amendments to 19 the dry-cleaning ATCM to the Board to reduce exposures to 20 Perc in dry-cleaning operations. 21 After hearing public comments and considering 22 staff's proposal, the Board directed staff to return to 23 them with a new proposal requiring the phase out of Perc 24 from dry-cleaning operations. The Board also directed 25 staff to consider the cost impacts of the proposal to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 dry-cleaning industry. 2 --o0o-- 3 AIR RESOURCES ENGINEER FONG: As part of the 4 Board's direction the staff updated assessment of the 5 dry-cleaning industry. The next three slides provide an 6 updated characterization of the dry-cleaning industry in 7 California. 8 Although the total number of dry-cleaning 9 facilities is about the same, there has been about a 20 10 percent decrease in the number of Perc facilities since 11 2003. Today there are about 3,400 Perc dry-cleaning 12 facilities statewide, with about 40 percent located in the 13 South Coast Air District. 14 And as you have heard before, most dry-cleaning 15 facilities are owner operated small businesses, with few 16 employees, and operating on a small profit margin. They 17 are usually located near residences and a handful of these 18 are co-residential facilities where people live in the 19 same building with the dry-cleaning operation. 20 --o0o-- 21 AIR RESOURCES ENGINEER FONG: This slide shows 22 the changes that have occurred in the types of 23 dry-cleaning machines between 2003 and 2006. Again, the 24 total number of dry-cleaning machines is about the same. 25 But there has been a significant decrease in the number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 Perc machines and an associated increase in the number of 2 non-Perc machines. 3 The market share of Perc and non-Perc machines 4 are shown on the last two columns. As shown, the market 5 share of Perc machines has decreased from 86 percent in 6 2003 to 70 percent in 2006. Correspondingly, the market 7 share for non-Perc machines has increased, from about 14 8 percent in 2003 to about 30 percent in 2006. 9 The next slide will show the makeup of the Perc 10 alternatives in California. 11 --o0o-- 12 AIR RESOURCES ENGINEER FONG: As mentioned 13 earlier, about 70 percent of the dry-cleaning machines are 14 using Perc as a solvent. The most popular alternative to 15 Perc is the high flash point hydrocarbon solvents. About 16 21 percent of the dry-cleaning machines currently use 17 these hydrocarbon solvents. GreenEarth is a solvent 18 composed of D-5, a type of siloxane. About 4 percent of 19 the dry-cleaning machines are using this solvent. 20 About 3 percent of the dry-cleaning machines are 21 water-based. However, only about 45 businesses use 22 water-based cleaning systems exclusively. The others are 23 used in combination with other types of dry-cleaning 24 machines. 25 There are about 10 carbon dioxide machines in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 operation. And about 80 dry-cleaning machines use other 2 solvents such as rynex, puredry and stoddard. 3 --o0o-- 4 AIR RESOURCES ENGINEER FONG: This slide shows 5 the update of cost figures to purchase and install a new 6 dry-cleaning machine. The costs reflect list prices for 7 all machines except for professional wet-cleaning systems. 8 The professional wet-cleaning system costs are based on AB 9 998 grant recipients actual cost information. As you can 10 see, the average costs of the professional wet-cleaning 11 system are about the same as Perc. 12 The average cost of high flash-point hydrocarbon 13 and GreenEarth machines are about 36 percent higher. And 14 the cost of the carbon dioxide machines are about three 15 times that of Perc. 16 --o0o-- 17 AIR RESOURCES ENGINEER FONG: This slide shows a 18 cost comparison for a facility to purchase and operate a 19 dry-cleaning technology. The annual cost for switching to 20 an alternative dry-cleaning technology are calculated 21 assuming the dry cleaner will take out a five-year loan at 22 an interest rate of 10 percent. They're also based on 23 updated machine and installation costs, operating and 24 maintenance costs, an account for the tax benefits that 25 the cleaners have to have due to the provision for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 accelerated depreciation. 2 As shown on this slide, the range of annual costs 3 is between 8,300 and 35,000 for alternative technologies. 4 This compares to a 7,300 for secondary control Perc 5 machine. 6 --o0o-- 7 AIR RESOURCES ENGINEER FONG: I will now present 8 our proposed amendments to phase out Perc. 9 --o0o-- 10 AIR RESOURCES ENGINEER FONG: Based on the 11 Board's direction at the May hearing, we consider several 12 factors in drafting the proposed amendments. The proposed 13 amendments would affect facilities outside the South Coast 14 AQMD because they already have a rule to phase out Perc 15 machines by 2020. That amendments would phase out the use 16 of Perc dry-cleaning machines, eliminate the use of Perc 17 machines in co-residential and new facilities as soon as 18 practical, and maximize risk reduction of existing 19 facilities while taking into consideration the economic 20 impact on small businesses. 21 --o0o-- 22 AIR RESOURCES ENGINEER FONG: The proposed 23 amendments will affect about 2,000 facilities containing 24 2100 machines located outside the South Coast Air Basin. 25 The machines within these facilities are calculated to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 emit about 1.8 tons of Perc per day. Statewide about 2 three tons per day of Perc is being emitted from Perc 3 dry-cleaning facilities. 4 --o0o-- 5 AIR RESOURCES ENGINEER FONG: The proposed 6 amendments will prohibit new Perc machines in new 7 facilities beginning January 1st, 2008. As a result, the 8 potential health risks due to Perc emissions from new 9 dry-cleaning facilities will be reduced to near zero, as 10 some Perc spotting agents may continue to be used. 11 --o0o-- 12 AIR RESOURCES ENGINEER FONG: For existing 13 facilities, the proposed amendments will also prohibit new 14 Perc machines beginning January 1st, 2008. In addition, 15 existing Perc machines will need to be removed based on 16 machine type and age. Beginning in July 2010, all Perc 17 machines must be removed from service if they are 18 converted machines or if they are 15 years old. 19 After July 2010, Perc machines will be removed 20 from service when they become 15 years old. Staff used a 21 15-year useful machine life to maximize emission reduction 22 with consideration of costs. 23 Finally, for existing facilities, there is to be 24 a complete removal of all Perc dry-cleaning machines by 25 January 1st, 2023. This action will result in a reduction PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 of potential health risks associated with Perc emissions 2 from existing Perc facilities to near zero upon full 3 implementation of the proposed amendments. 4 --o0o-- 5 AIR RESOURCES ENGINEER FONG: Because of 6 potential high localized health risks for co-residential 7 facilities, we are requiring actions that are different 8 from the rest of the existing facilities. 9 For co-residential facilities, in addition to no 10 new Perc machines, beginning January 1st, 2008, we are 11 requiring them to expeditiously remove the existing Perc 12 machines from operation by July 2010, regardless of how 13 old the machines are. The results of this action will 14 reduce the risk from co-residential facilities rapidly to 15 near zero. 16 --o0o-- 17 AIR RESOURCES ENGINEER FONG: We have also 18 reviewed an revised as appropriate other requirements in 19 the original dry-cleaning regulation. They include 20 strengthening the good operating practices and 21 record-keeping and reporting requirements. 22 --o0o-- 23 AIR RESOURCES ENGINEER FONG: Requirements for 24 Perc distributors and manufacturers were added to improve 25 the implementation of AB 998. AB 998 was adopted by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 Legislature at the end of 2003 for the purposes of 2 showcasing nontoxic and non-smog-forming technologies 3 throughout the state. There has been some difficulty in 4 collecting fees for this program. These added 5 requirements to the regulation would ensure a mechanism 6 for the collection of fees as well as provide information 7 to ARB on the effectiveness of the program. 8 --o0o-- 9 AIR RESOURCES ENGINEER FONG: Next I would like 10 to present the benefits and potential impacts of our 11 proposed regulation. 12 --o0o-- 13 AIR RESOURCES ENGINEER FONG: The benefits of the 14 proposed amendments are summarized here. The proposed 15 amendments will virtually eliminate the potential health 16 risks due to Perc emissions from dry-cleaning machines at 17 new dry-cleaning facilities starting January 1st, 2008. 18 For existing facilities the health risks from the use of 19 Perc machines will be further reduced starting on July 20 1st, 2010, and will be virtually eliminated by January 21 1st, 2023, when all of the Perc machines are required to 22 be removed from service. 23 For co-residential facilities, the Perc 24 associated health risks will be virtually eliminated by 25 July 1st, 2010. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 --o0o-- 2 AIR RESOURCES ENGINEER FONG: This slide shows 3 the costs of implementing the proposed amendments and the 4 impacts. The statewide implementation costs of the 5 proposed amendments is estimated to be $41 million over 15 6 years. 7 Dry cleaners are mostly small businesses that 8 have low profit margins. Our evaluation based on facility 9 survey information and on publicly available financial 10 information show that the total yearly after-tax profit 11 for a dry cleaner is about $3,300. As mentioned earlier 12 in the cost comparison of alternative dry-cleaning 13 technologies, the annual net cost for purchasing and 14 maintaining a professional wet-cleaning system is 15 estimated to be 8,300; and, therefore, for the hydrocarbon 16 or GreenEarth system is calculated to be 11,400. These 17 numbers are based on a long period of five years. 18 Therefore, the annual net cost is about 2 1/2 to 19 3 1/2 times a typical dry cleaner's net profit after tax. 20 For a facility to completely pay off his costs 21 for the first five years with his net profit only, it 22 would take between 10 1/2 to 16 1/2 years. To the extent 23 that is possible, dry cleaners may choose to recover the 24 costs by increasing the costs of their services. For 25 example, to totally recover the annual costs a $15 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 dry-cleaning bill would increase by a dollar twenty to a 2 dollar sixty, depending on the alternative chosen. 3 If unable to pass on the increased costs, most 4 facilities may experience significant adverse economic 5 impacts. 6 --o0o-- 7 AIR RESOURCES ENGINEER FONG: I will now present 8 some of the key issues that we have considered and the 9 impacts associated with those issues. 10 --o0o-- 11 AIR RESOURCES ENGINEER FONG: We have received 12 comments that the useful life of a Perc machine is 10 13 years instead of the 15 years that was used in our 14 analysis. As a result, we should phase out existing Perc 15 machines five years earlier when the machines are 10 years 16 old. The earlier phaseout would provide additional 17 potential risk reduction near existing facilities. 18 --o0o-- 19 AIR RESOURCES ENGINEER FONG: Staff is not 20 recommending the accelerated phase out of Perc machines 21 based on a 10-year phase-out schedule. Accelerating the 22 phase out of Perc machines would increase costs to dry 23 cleaners beyond the proposed amendments because of the 24 cost of reduced useful life. For five-year reduction of a 25 secondary control machine, the reduced useful life cost is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 $16,700. This is about five times the annual after-tax 2 profit for a typical dry cleaner. 3 The current proposal supports a 15-year useful 4 life and allows dry cleaners to recover the costs for 5 purchasing and operating an alternative dry-cleaning 6 system that allows sufficient time for nontoxic and 7 non-smog-forming technologies to gain general acceptance. 8 --o0o-- 9 AIR RESOURCES ENGINEER FONG: And accelerated 10 10-year phaseout would also impact South Coast 11 dry-cleaners. As a result, the number of machines that 12 would need to be removed by 2010 would increase from 660 13 in the current proposal to about 2120 including the South 14 Coast machines. 15 The statewide implementation costs would increase 16 by over 260 percent, from the current $41 million to $108 17 million. The rapid phaseout of the machines may lead to a 18 number of support issues and may limit the chances of 19 successful operation of the replacement technologies. 20 --o0o-- 21 AIR RESOURCES ENGINEER FONG: We have received 22 comments concerning the use of hydrocarbon machines. 23 --o0o-- 24 AIR RESOURCES ENGINEER FONG: Staff is not 25 proposing to prohibit new hydrocarbon machines because PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 they're the most common alternatives, with significant 2 market penetration, with a 21-percent market share in 3 2006. Market share of the other alternatives available 4 total about 5 percent, very small, because most of the 5 mixed use facilities are partly Perc or partly 6 hydrocarbon. 7 Prohibiting new hydrocarbon would impact South 8 Coast dry cleaners. According to the cost to impacted 9 facilities, economic analysis show that the statewide 10 implementation costs would double, from $41 million to $82 11 million. And even if all Perc machines are converted to 12 hydrocarbon machines, the hydrocarbon emission increase is 13 about .7 tons per day outside the South Coast and 1.2 tons 14 per day statewide. Staff believes that districts can 15 mitigate this increase with reductions from other sources 16 in their state implementation plans. 17 --o0o-- 18 AIR RESOURCES ENGINEER FONG: Comments have been 19 received to require all Perc dry cleaners within 300 feet 20 of a residence, sensitive receptor, and businesses to be 21 phased out by 2010 regardless of age, type of control on 22 equipment, and facility ventilation type. The reason for 23 this buffer zone is to be more health protective of those 24 near a dry cleaner. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 AIR RESOURCES ENGINEER FONG: To include this 2 requirement for existing facilities would be detrimental 3 to almost all California dry cleaners. About 98 percent 4 of a the dry-cleaning facilities are located next to 5 businesses. And about 64 percent of the dry-cleaning 6 facilities are within 300 feet of a residence. As stated, 7 the 300-foot buffer zone would virtually benefit by 2010. 8 Staff's calculation shows that it would more than 9 triple the state implementation costs, from $41 million to 10 $131 million. 11 Additionally, site-specific near-source risks can 12 be addressed by districts using the AB 2588 Hot Spots 13 program. 14 --o0o-- 15 AIR RESOURCES ENGINEER FONG: Other comments that 16 we have received are listed on this slide. As you have 17 heard earlier, some of the alternative machines have 18 acceptance costs for health issues. Also, the financial 19 impacts may be minimized if there's more financial 20 assistance. There are no justifications for phasing out 21 Perc and longer phase-out periods are needed. 22 --o0o-- 23 AIR RESOURCES ENGINEER FONG: After reviewing 24 recently submitted technical comments, staff is proposing 25 one 15-day modification to the proposed regulation order. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 --o0o-- 2 AIR RESOURCES ENGINEER FONG: We will now look at 3 next steps. 4 --o0o-- 5 AIR RESOURCES ENGINEER FONG: Upon approval of 6 the proposed amendments staff will update the existing 7 curriculum for the environmental training program to 8 reflect amendments. All certified instructors will be 9 provided with the updated training curriculum and notified 10 to begin using the new curriculum or to incorporate the 11 changes into the approved curriculum effective January 12 1st, 2008. 13 In addition, to assure that trained operators are 14 aware of the changes to the curriculum, staff will develop 15 an advisory to inform the dry-cleaning industry of the 16 changes to the training curriculum. 17 --o0o-- 18 AIR RESOURCES ENGINEER FONG: As you are aware, 19 AB 998 encourages the use of nontoxic and non-smog-forming 20 alternatives through a grant incentive program and a 21 demonstration program. The programs are funded through a 22 fee on Perc used in dry-cleaning operations. 23 The current qualifying technologies are 24 water-based systems and carbon dioxide systems. 25 The grant program provides $10,000 grants to dry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 cleaners to switch from systems using Perc to nontoxic 2 non-smog-forming alternatives. 3 The demonstration program will showcase the 4 qualifying technologies statewide and provide an 5 opportunity to educate dry cleaners on the benefits, costs 6 and effectiveness of these alternatives. 7 During implementation of the AB 998 program, 8 staff have encountered fee collection issues. Therefore, 9 ARB is actively seeking enforcement action to back-collect 10 fees. In addition, as mentioned earlier, staff added 11 record-keeping and reporting provisions for Perc 12 distributors and manufacturers to the proposed amendments 13 to better collect fees. 14 I will go over the status of the grant and 15 demonstration programs in the next two slides. 16 --o0o-- 17 AIR RESOURCES ENGINEER FONG: The AB 998 program 18 started in 2004. During program implementation, over 90 19 applications were preapproved. However, only 23 20 applicants purchased and installed wet-cleaning or carbon 21 dioxide equipment and received the $10,000. 22 Reasons for not completing the grant process 23 include: Financial issues; concerns of water-base and CO2 24 cleaning technologies, a selection of hydrocarbon or 25 GreenEarth technology over Perc. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 To encourage greater participation ARB will be 2 accepting and processing grant applicants on a continuous 3 basis in 2007 rather the during a single application 4 period each year. 5 --o0o-- 6 AIR RESOURCES ENGINEER FONG: Due to limited 7 funds collected in 2004 and 2005, ARB did not -- was not 8 able to begin the demonstration program. In 2006, the ARB 9 has sufficient funds to start the demonstration program. 10 In February of 2006, we released a request for 11 grant and demonstration proposals. In response we 12 received two proposals in July 2006. We have reviewed and 13 approved both proposals and expect to issue contracts 14 shortly. 15 The two proposed projects we spent two years and 16 will be showcasing the nontoxic and non-smog-forming 17 technologies at 23 sites around the state, including sites 18 in Los Angeles, San Diego, San Francisco, Sacramento, San 19 Joaquin, and other locations. 20 --o0o-- 21 AIR RESOURCES ENGINEER FONG: The following are 22 the staff's recommendations: 23 --o0o-- 24 AIR RESOURCES ENGINEER FONG: Staff recommends 25 that the Board adopt the proposed amendment with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 staff-proposed 15-day modification. 2 Thank you. That concludes my presentation. 3 CHAIRPERSON SAWYER: Thank you very much. 4 Madam Ombudsman, please describe the public 5 participation process that occurred while this item was 6 being developed and share any concerns or comments you may 7 have with the Board. 8 OMBUDSMAN QUETIN: Thank you. 9 Dr. Sawyer and members of the Board. This 10 regulation was developed with input from a wide variety of 11 individual dry cleaners, several trade associations, over 12 a dozen manufacturers of dry-cleaning equipment and 13 solvents, dry-cleaning environmental training instructors, 14 the Institute for Research and Technical Assistance, the 15 Coalition for Clean Air, and the National Resources 16 Defense Council. 17 The ATCM background work with -- the background 18 work with industry representatives began, as you heard, in 19 April 2003. Since that time staff has conducted over 100 20 site visits to facilities in 66 cities that covered 9 21 local air districts. They also have conducted several 22 mail and phone surveys. The information gathered was 23 subsequently used to develop the draft regulatory concepts 24 and language which was first published in October of 2005. 25 To date they had held 17 work group meetings and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 made extensive personal contacts with industry 2 representatives, state and local agencies, environmental 3 pollution prevention and public health advocates, and 4 other interested parties through meetings, telephone calls 5 and electronic mail. 6 In addition, staff has held five public workshops 7 since November 2005. The first workshop was held November 8 29th, 2005, in Sacramento; the second on February 8th, 9 2006, in Oakland; and the third on February 9th, 2006, in 10 El Monte; and the fourth on March 16th, 2006, in 11 Sacramento; and the fifth and final, September 19th, 2006, 12 in Sacramento. 13 Staff also had three meetings with the Korean Dry 14 Cleaners Association in the Bay Area. The first two 15 meetings were held on March 2nd, 2006, in Oakland and on 16 March 18th, 2006, in Sunnyvale. These meetings had an 17 interpreter present. 18 Additionally there was a meeting on August 17th, 19 2006, in San Francisco. 20 The first two meetings had more than 150 21 attendees, and the third had approximately 10. 22 The hearing notice, the executive summary of the 23 staff report, and the proposed regulation were provided in 24 Korean. The staff report and hearing notice were posted 25 on ARB's website on December 8th, 2006. Additionally, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 nearly 5600 stakeholders received the information through 2 the mail and more than 300 received the information via 3 the list serve. 4 In closing, there are a few outstanding issues 5 regarding this regulation which the stakeholders will 6 express during the public testimony period. 7 Thank you. 8 CHAIRPERSON SAWYER: Thank you very much. 9 Do any Board members have questions? 10 Ms. D'Adamo. 11 BOARD MEMBER D'ADAMO: Well, more along the lines 12 of a comment, Dr. Sawyer. 13 I think what we have before us is a vast 14 improvement from, you know, where we were several months 15 ago. And I really appreciate the work that staff did in 16 trying to balance out the concerns of a phaseout and -- 17 because it can be done in a constructive and timely way 18 without unduly impacting businesses. 19 I have to say though that I continue to have some 20 angst with what's in the proposal. I really do want to 21 hear what the witnesses have to say, but wanted to at 22 least share beforehand with my Board members here that I 23 would be inclined to have an earlier phaseout of the 24 machines, something more along the lines of what the South 25 Coast phase-out period is, like 2020. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 I also am concerned about sensitive receptors. 2 But I think that looking at that 300-foot buffer zone 3 would probably unduly burden some of the smaller and 4 minority businesses. So I'd be leaning more toward an 5 earlier phaseout of 2020. 6 In particular, I've got a concern about allowing 7 new purchases until 2008. And I don't really know -- I'd 8 be open to hearing what staff would have to say as to how 9 to deal with that, because I know we have to go through 10 the process to get this rule final; so perhaps with an 11 earlier phaseout and some reconfiguring the useful life of 12 the machinery. I just feel that if anyone is purchasing 13 these machines knowing what's been out there in the public 14 for some time, that this is a toxic substance and that the 15 Board was likely to phase it out, I just don't see any 16 point in allowing 15 years in addition to a year from now 17 when those new machines would be purchased. 18 CHAIRPERSON SAWYER: Would staff comment on the 19 2008 no-new-purchases date. 20 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 21 Basically the -- this is Dan Donohoue. 22 Basically the regulation, you know, we have a 23 date that it kicks in. What would happen -- I mean one 24 way to address that is through -- if in fact we moved 25 forward the final compliance date to December 2020, that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 would in effect -- basically the model year machines that 2 are purchased in -- the model year 2006 and 2007 machines, 3 basically what that would mean is that they would be given 4 one year or two years less useful life. 5 So that would be one way of taking care of those 6 that if those -- if anybody purchases a model year -- has 7 purchased a model year 2006 or purchases a model year 8 2007, they would not get a full 15-year useful life. They 9 would get 14 or 13, and that would -- there would be an 10 economic thing. 11 The issue -- one of the things that is happening 12 based upon the uncertainty as to what's happened with the 13 Perc machines, there has been a general decrease in the 14 number of them purchased over the timeframe. You know, we 15 think that the 2006, 2007 model years is going to be 16 around 100 machines, you know, outside the South Coast. 17 So, you know, the loss of useful life on that is going to 18 be in the 3,000, $6,000 range. So we're looking at maybe 19 half a million. 20 The other issue that, at least in talking to the 21 districts, we -- you know, we had talked to the Bay Area 22 district, and they had indicated that over the last year 23 and a half they had not -- that there had been one Perc 24 machine, you know, that had been installed in their 25 district. So we think that the number that actually are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 going to be installed in this timeframe before 2008 are 2 fairly limited. 3 EXECUTIVE OFFICER WITHERSPOON: I'm going to 4 speak to the 2008 issue only. 5 The very best we could do is to say the ban takes 6 effect on the effective date of the rule, which depends on 7 how fast we can process it through the Office of 8 Administrative Law; but it will be sometime this calendar 9 year. And so we could shave some months off of that date. 10 But 2008 ordinarily -- you know, that several months go by 11 after you adopt and we file with OAL in to our CEQA 12 records, and it's just a simple change to say upon 13 effective date of the rule and win a little bit of that 14 time back. But we cannot put a prohibition in before 15 there's an effective date unless you adopt an emergency 16 regulation. And you have to satisfy the conditions of an 17 emergency, and I don't think you could in this instance. 18 CHAIRPERSON SAWYER: Ms. Kennard. 19 BOARD MEMBER KENNARD: Thank you. 20 I had a question about the grant program. 21 How much money is in the total program? 22 EMISSIONS EVALUATION SECTION MANAGER KRIEGER: To 23 date right now we collected about 800,000. 24 BOARD MEMBER KENNARD: And I was struck by the 25 lack of participation. Has any thought been given to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 trying to change the requirements so that maybe on a 2 per-unit basis it's deeper subsidy or something so that 3 more people can participate? 4 EMISSIONS EVALUATION SECTION MANAGER KRIEGER: 5 Yeah, there are have been talk about actually the 6 amount of the grant program be even increasing to that 7 effects. But also the fact of the matter is, you know, 8 those types of cleaning technologies, now it talks about 9 smog farming technologies, are still kind of gaining 10 acceptance and gaining ground. And even though we may 11 send all these applications out to introduce this program, 12 there's kind of a hesitation on a lot of the industry 13 about which one to choose or how far to go about with this 14 grant. 15 So we are in the process of actually doing our 16 demonstration projects as well. And those will also 17 showcase throughout California so the cleaners will have a 18 chance to actually go to these cleaner, look at them, see 19 if these technologies will work for them, and then maybe 20 build upon that. So that's in the process as well. 21 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: This 22 is Dan Donohoue. I'd like to respond to one other thing. 23 The legislation was very specific on how much 24 money got spent for demos, how much got spent for grant, 25 and how much the grant amount could be. And the grant PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 amount cannot exceed $10,000. It can only be for a 2 non-Perc, non-VOC. So we are very much restricted as to 3 what we can do on that. Right now the participation, you 4 know, on the grant program has been limited. We think it 5 will change some with the advent of, you know, what we 6 adopt here. We're continuing -- we're in the process of 7 putting together reports to the Legislature and we'll be 8 looking at some additional recommendations within that as 9 far as what might be able to be done. And we certainly 10 are looking for comments from the affected parties as to 11 what things they think we can do. 12 But it is very restrictive in how the 13 program -- how the legislation's set out what we could do. 14 BOARD MEMBER KENNARD: Thank you. 15 CHAIRPERSON SAWYER: Ms. Berg. 16 BOARD MEMBER BERG: Thank you. 17 On slide 10 when we talk about the annual cost 18 comparisons, I notice that we didn't have any numbers 19 addressing the maintenance. My understanding is there is 20 a maintenance savings between -- or a difference in 21 maintenance cost or even product cost between these 22 various types of cleaning technologies. 23 AIR RESOURCES ENGINEER FONG: Yes, we did an 24 update assessment of maintenance and operating costs after 25 the Board hearing. And what we have found was that there PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 is a big range in costs and that for all the alternatives, 2 it's plus or minus 10 percent -- that the range is plus or 3 minus 10 percent compared to hydrocarbon. So within the 4 costs that is shown in the total annual costs, that takes 5 into consideration what we found to be the annual 6 maintenance and operating costs. 7 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Let 8 me just try and help on that just a little bit. 9 There are a whole bunch of categories that we 10 looked at as far as costs. We looked at maintenance 11 issues. We looked at whether it was a hazardous compound 12 and had to -- you know, it had to be treated specially. 13 We looked at district fee costs, we looked at power costs, 14 we looked at water costs, we looked at cleaning costs, we 15 looked at labor costs. And those were highly variable 16 depending on the technology. 17 But when you came over to the side over here and 18 you added all those on, it really looked like on an annual 19 basis -- it says between 20,000 and 22,000 a year for all 20 of those activities, pretty much regardless of what the 21 particular technology was. So later on in the slides when 22 we talked about the overall cost, you know, the annual 23 cost comparison, we've just incorporated that. But 24 they're basically in the end the same, but each individual 25 category may be significantly different. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 BOARD MEMBER BERG: And also In thinking about 2 costs, did we include the fee for using Perc? 3 AIR RESOURCES ENGINEER FONG: Yes. So solvent 4 costs, it was included, as well as compliance costs. 5 BOARD MEMBER BERG: And then when I'm looking at 6 the cost of the regulation, I was curious as to -- since 7 we are having the machines replaced at the end of their 8 useful life, I was wondering in calculating the cost of 9 the regulation why the cost difference wouldn't be 10 replacing for a Perc machine and the difference of 11 replacing then on hydrocarbon or one of the other 12 processes. So why isn't the cost we're looking at between 13 a $1,000 and 4,300? Because they have to replace the 14 machine at the end of its useful life. And that's on 15 slide 21. 16 STATIONARY SOURCE DIVISION CHIEF FLETCHER: This 17 is Bob Fletcher. 18 I think that the difference is we could have 19 presented that as a differential cost. What we were 20 looking at as the actual annual cost of operation, that 21 takes into account all of the factors that Dan was 22 showing. So if you went back to slide we were just on, 23 you would see that there is a Perc line there that says 24 that the cost is 7300. So you could look at an 25 incremental cost differential, but that isn't how we did PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 the cost analysis. We looked at what -- because we 2 thought the relevant here was the cost of -- the actual 3 cost to the dry cleaners and the money that they would 4 have to raise in order to meet their debt obligation. 5 EXECUTIVE OFFICER WITHERSPOON: The other part of 6 the explanation is we chose a useful life, and the 7 machines have variable lives. So that there are machines 8 that last 17 years, 19 years, 25 years. They're 9 reconditioned. And we would be accelerating the 10 retirement of those machines. 11 And there will be testimony from the industry 12 later asking you to allow the machines to live as long as 13 they will work. And so we have drawn a line at where most 14 stop working and said, "We'll consider this useful life 15 and we'll prohibit them thereafter." But, in fact, 16 there's a cost associated with those at the tail that keep 17 operating. 18 And we have accelerated retirement in 19 co-location. I don't know if that accounts for the entire 20 41 million. And we've inflated the costs by having all 21 the turnover assigned to this reg, because that's what 22 you're getting at. There would have been turnover 23 anyways; why aren't we just counting the added cost of a 24 different machine? But in some cases we're forcing the 25 turnover. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 BOARD MEMBER BERG: Okay. Thank you. 2 STATIONARY SOURCE DIVISION CHIEF FLETCHER: And 3 the $41 million is the incremental cost, recognizing that 4 they would have had to purchase another machine anyway. 5 So it's just the 8300 to 11,400 represents the total cost; 6 41 million is the incremental cost. 7 BOARD MEMBER BERG: Okay. That's helpful. Thank 8 you very much. 9 And I just want to get clarification on the 10 co-residential, the machines that will be taken out of 11 service in 2010 that are co-residential. Are we talking 12 about the 50 machines on slide 6? 13 AIR RESOURCES ENGINEER FONG: Yes. 14 BOARD MEMBER BERG: So we're accelerating those 15 machines regardless of age? 16 AIR RESOURCES ENGINEER FONG: Yes. 17 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 18 Definitive, yes. 19 AIR RESOURCES ENGINEER FONG: Yes. And our 20 assumption is that they would lose three years of useful 21 life on the calculation for the co-residential facilities. 22 EXECUTIVE OFFICER WITHERSPOON: But most of them 23 are 12 years old or, you know, we assume them to be. 24 There might be some of different ages. 25 BOARD MEMBER BERG: But we assume it under what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 basis? Because we have knowledge? 2 AIR RESOURCES ENGINEER FONG: Under -- yes, 3 because most of the co-residential facilities are in the 4 Bay Area and most of them would have had to comply to a 5 Bay Area rule in 1998. 6 BOARD MEMBER BERG: Okay. Thank you for that. 7 And, also, on the AB 998 program, who pays the 8 fee for that? Manufacturers or the dry cleaners? 9 EMISSIONS EVALUATION SECTION MANAGER KRIEGER: 10 Actually the Perc distributors. 11 BOARD MEMBER BERG: The Perc distributors? 12 And what was the estimate fees that were to be 13 collected on an annual basis? 14 EMISSIONS EVALUATION SECTION MANAGER KRIEGER: 15 The estimated fees to be collected actually for 16 2005 -- the program began on August 2004, so we collected 17 only a quarter for that year. But for 2005 we estimated 18 to be about $1 million in collection there for 2005. 19 2006, we have not received invoices yet, so we're still in 20 the process. 21 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: And 22 what did we collect? 23 EMISSIONS EVALUATION SECTION MANAGER KRIEGER: We 24 collected about 800,000. 25 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Part PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 of the issue here is that the original calculations that 2 the bill was done on assumed that the -- you know, had 3 something like 380,000 gallons of Perc being used per 4 year. And then the calculations basically assumed that 5 that number of gallons would remain constant with respect 6 to time. What has happened is there's been a number of 7 things that have changed that. 8 Number 1, the number of Perc machines out there 9 has dropped from 86 percent in 2003 to 70 percent, so 10 we've lost Perc machines. 11 Number 2, the number of secondary Perc machines 12 that use less Perc -- emit less Perc and use less Perc has 13 changed significantly between 2003 and 2006. 14 And then the third thing is is that the program 15 does not tax recycled Perc. And we've seen a significant 16 increase in the use of recycled Perc in the program. 17 So while the legislation looked at essentially a 18 constant Perc volume and increasing taxes each year by a 19 dollar, we're actually seeing a significantly decrease in 20 volume of Perc. That's not to say we still don't have 21 some record keeping and collection issues. We're pursuing 22 the collection issues through enforcement action and we're 23 trying to take care of the record-keeping problems through 24 the proposed addition of record-keeping requirement for 25 the manufacturers and distributors. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 BOARD MEMBER BERG: Thank you for that 2 explanation. 3 And, finally, I also want to say congratulations 4 to staff. I know this has been arduous. And also that I 5 am leaning towards Ms. D'Adamo's idea of phasing out 6 sooner, aligning with South Coast. But I understand why 7 we need to start -- or have Perc machines through 2008. I 8 would just hope that we would really encourage the 9 industry as we move forward with what are intentions are. 10 And then I am concerned that whatever processes 11 we agree that are available to the dry cleaners, that in 12 future years that they get the full useful life out of 13 these machines that they're purchasing today. So if the 14 hydrocarbon machines become an issue 10 years from now, 15 that these people, the dry cleaners that are purchasing 16 hydrocarbon machines today, get their full useful life, 17 because that is fair. 18 Thank you. 19 CHAIRPERSON SAWYER: Supervisor Roberts. 20 BOARD MEMBER ROBERTS: Yeah. Before you hear the 21 public testimony I'm not going to indicate whether I'm -- 22 when I'm phasing in or phasing out. I'll wait for that. 23 But there seems to be something missing here. 24 And maybe it was because of the brevity of the report. 25 But with something that's so toxic, that's been around for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 so long, and has had so many people working with it in 2 close proximity, there surely must be some health studies 3 that at least give us a clue to the fatality rates of 4 those people who are working everyday with this stuff. 5 And the dangers? I mean this sounds like a very toxic and 6 dangerous chemical. And there was no reference made to 7 any of the health studies. 8 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: We 9 have Dr. Melanie Marty here from the Office of 10 Environmental Health Hazard Assessment. And I'd gladly 11 throw that question to her. 12 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 13 MANAGER MARTY: Thanks, Dan. 14 There actually are some health studies. There 15 are studies -- toxicology studies in animals, which was 16 what generated the concern about Perc to begin with. It's 17 carcinogenic in animal studies. There are half a dozen or 18 more now. 19 There's cohort studies of humans who've worked 20 with Perc. The International Agency for Research on 21 Cancer considers it a probable human carcinogen because 22 many of those studies found elevated cancer risks in the 23 people who work with Perc. The studies are hard to do. 24 It's hard to get good exposure measures, so there's some 25 inconsistency in the data. But there are elevated risks PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 in many studies for esophageal cancer, lymphoma, cervical 2 cancer, and bladder cancer. They're inconsistent study to 3 study, but there's definitely some evidence in bodies who 4 look at these types of data think that it's a probable 5 human carcinogen. 6 BOARD MEMBER ROBERTS: And these are looking at 7 people who have been working within these facilities for 8 some time? 9 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 10 MANAGER MARTY: It's looking at primarily dry cleaners. 11 BOARD MEMBER ROBERTS: Okay. And there's -- none 12 of that got shared with us in any of our reports. And I'm 13 kind of curious why that might be the case. 14 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 15 MANAGER MARTY: That's for you, Dan. 16 (Laughter.) 17 STATIONARY SOURCE DIVISION CHIEF FLETCHER: I'll 18 take that one. 19 We typically when we're doing the control 20 measures don't spend a great deal of time on the health 21 considerations because that's done in the identification 22 phase. So we have the two-phased process that we've used 23 for toxic air controls. So we haven't typically done that 24 other than to assess the risk of exposure to the compound 25 around the facilities that we're regulating. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: And 2 as far as the -- yet there is some information within the 3 chapter there where we talk about the summary information 4 with respect to that as part of the record. The 5 identification report that was approved by, you know, the 6 SRP and the Board is part of the public record with 7 respect to this measure also. 8 We've done this before also with the Board when 9 we brought the Perc reg cleaning issue to you also. We 10 may have had a little bit of oversight. We keep 11 forgetting that we're the staying, but the Board changes. 12 So sorry about that. 13 BOARD MEMBER RIORDAN: I think if you think about 14 it, I may be the only one that was there at the hearing. 15 So it would be good maybe to provide some of that research 16 in future -- when we know that we've listed an item many 17 years ago and now we're dealing with it in a different 18 way. 19 EXECUTIVE OFFICER WITHERSPOON: We'd be happy to 20 do that. We can also make them available at your back 21 table there. They're large two-volume studies, which are 22 incorporated by reference in this record. And, in fact, 23 we can send someone upstairs and get one and bring it down 24 to the hearing room so you can -- 25 BOARD MEMBER ROBERTS: Well, I'm not going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 look through it too far when -- Catherine. But thank you. 2 EXECUTIVE OFFICER WITHERSPOON: But it should be 3 available to you. And they are -- they are summarized in 4 a cursory way in the -- 5 BOARD MEMBER ROBERTS: It seems like in the past 6 you've provided at least summaries where we have really 7 conclusive reports. And if there's a whole series of 8 reports and they're not conclusive, we should know that. 9 EXECUTIVE OFFICER WITHERSPOON: Right. 10 BOARD MEMBER ROBERTS: But it just seems to me 11 that somehow this got overlooked. And I appreciate that, 12 because it seems to me you've established that case. And 13 if we're jumping to the conclusion that we have to shorten 14 the period of time that you're recommending here, then we 15 should have a thorough understanding of all the reasons. 16 And I don't have that. And my colleagues may all be 17 familiar with all of those studies. I'd be very surprised 18 if they were. But I don't have the background with those. 19 EXECUTIVE OFFICER WITHERSPOON: Okay. And that's 20 actually a good suggestion too for the formaldehyde item 21 that's coming up later this spring. We'll be sure to 22 cover that when we bring that to you. 23 CHAIRPERSON SAWYER: If there are no further 24 questions from Board members, we'll move to the public 25 testimony. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 But, Dr. Gong, did -- 2 BOARD MEMBER GONG: Since everyone else has said 3 something. 4 Just two issues of concern to me to some extent. 5 And I'll actually express the concerns as questions 6 related to, one, the -- on slide 24 it says, "Data 7 supports a 15-year useful life of the Perc machines." 8 I've heard some estimates less than that. And 9 obviously these are just averages or median values that 10 are being presented to me what I read. My question really 11 is: What's useful life mean and is it really 15 years? 12 Is the 15 years that you're using in your calculations, is 13 it that critical to your financial calculations in this 14 slide, for example? And if it goes less than that, how 15 does that affect the numbers? I guess it would probably 16 increase them or worsen them to a certain extent. 17 But, again, I just don't know how -- what the 18 critical value is for the useful life, I guess. 19 EXECUTIVE OFFICER WITHERSPOON: Before staff 20 gives you a technical answer, let me just clarify, that if 21 a machine wears out sooner, it's gone and they cannot buy 22 a new Perc machine. So they don't get to use 15 years 23 with a machine and then you add on another one for a 24 couple years. As soon as the Perc machine dies, it's 25 gone. No new one. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 BOARD MEMBER GONG: Okay. 2 EXECUTIVE OFFICER WITHERSPOON: But we're saying 3 we won't take it out any sooner than 15 years if it's 4 still working. 5 BOARD MEMBER GONG: Right. 6 Let me ask the second question before I forget 7 the second question. 8 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: But 9 what if I forget the two-part answer to your first 10 question? 11 (Laughter.) 12 BOARD MEMBER GONG: Oh, yeah. 13 All right. The second issue I'll ask as a 14 question, in a sense. It refers to the high flash-point 15 hydrocarbon machines. 16 Conceptually, it seems awkward for me to say that 17 it's okay to use a machine that produces smog-forming 18 byproducts which further downstream create ozone. You 19 presented the ozone data already, for example. And the 20 issues I have, one is, if we gradually phase out the Perc 21 machines, the use of the hydrocarbon machines will 22 probably go up, I would assume. It'll increase. It's not 23 going to stay static. And we're also going to have a 24 nitrogen dioxide standard we'll be contending with 25 downstream here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 So it just seems a little awkward. And perhaps 2 staff and the witnesses can come up with a resolution in 3 my brain as to: How can we reconcile that? I'm having 4 difficulty with that, and as it's against what I think 5 we're supposed to doing both at the district level and 6 also at this level. 7 CHIEF COUNSEL JENNINGS: Well, you've asked a 8 very good question which is at the heart of the California 9 Environmental Quality Act, or CEQA. When you take an 10 action on a rule like this, you have to determine whether 11 there are significant adverse environmental impacts to 12 mitigate them as much as is feasible and then if there is 13 still residual impacts to make an overriding 14 considerations determination that the benefit from the 15 Perc reduction outweighs the hydrocarbons. And we have 16 prepared a resolution that includes that finding. But 17 that's certainly something that you want to think through 18 and be comfortable that that's how you conclude. 19 EXECUTIVE OFFICER WITHERSPOON: The way staff 20 looked at it -- and if you cast back to Lynn Terry's 21 presentation this morning, if every machine went to 22 hydrocarbon, we're talking about 1.2 tons statewide and 23 every what machine will not. And then you saw the map of 24 the ozone nonattainment areas and the shift away from 25 population centers, you know, for where those exposures PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 are being felt -- which is not to say that ozone isn't 2 significant and that it won't matter. But at the same 3 time this 15-year period is going on, we're working on 4 attainment plans. And while it's not desirable to have 5 any increase in hydrocarbons, it is probably we believe 6 manageable with all the other control programs. And our 7 air quality assessments are telling us NOx is driving a 8 lot of the remaining ozone problems. 9 So on balance, though not desirable -- and it is 10 significant, we can't dismiss it out of hand -- we think 11 that it's all right to allow this to occur. And if you 12 were to take that option away, it would fundamentally 13 change the nature of this regulation and how expensive it 14 was to the parties affected. 15 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: I 16 did want to, you know, make a comment. The Board faced a 17 similar issue in the year 2000 on Perc brake cleaners. 18 These were aerosol cleaners that were used to clean 19 brakes. There was -- on the market there were 20 Perc-containing brake cleaners, there were VOC-containing 21 brake cleaners, and there were some water cleaners 22 available. The water-based products were about 25 percent 23 of the market. It was a pretty even split between the 24 other two. 25 We understood -- or we conveyed to the Board, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 the Board agreed, that it was most beneficial to remove 2 the Perc brake cleaners and live with some increase in the 3 hydrocarbon emissions associated with that because of the 4 near-source risk associated with the Perc brake cleaners. 5 So that decision was made then. 6 We're looking at very similar levels of increase. 7 The worst case increase outside the South Coast here is .7 8 tons per day over the rest of the state, which is a -- you 9 know, which is a fairly small amount. It is significant, 10 but fairly small amount that is similar to what we were 11 looking at there. But also even when we were dealing with 12 the brake cleaners at that point in time there was a 13 larger penetration of the alternative technologies at 14 least as far as the water-based technologies. We don't 15 quite see that yet in this market. 16 So historically that's, you know, an issue that 17 the Board has wrestled with. 18 BOARD MEMBER GONG: I'll just say that sooner or 19 later these other -- the hydrocarbon cleaning machines may 20 come up again. I mean if we pass what had been proposed 21 today, it could come up downstream in the future as 22 another avenue to try to reduce the NOx that's being 23 produced. Because, as I understand it, it's getting 24 harder and harder to -- more difficult to have realistic 25 SIPs, you know, in terms of actually finding where you can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 actually decrease things. So you've already taken down 2 the low lying fruit, and it seems like you've got some 3 higher fruit up there. 4 EXECUTIVE OFFICER WITHERSPOON: Oh, there's still 5 a lot of low lying but expensive fruit, like all the 6 legacy fleet. It will come up again, perhaps in the South 7 Coast more than in the San Joaquin. Not in the Bay Area 8 where a lot of these machines are. I really don't think 9 it will come up there. And we have a 2024 timeframe for 10 attainment in the South Coast. 11 There is a provision in your resolution 12 consistent with Ms. Berg's remarks that if people choose 13 to buy hydrocarbon machines, they'd be allowed to use them 14 through their useful life. And although staff hasn't 15 talked about it, it's probably comparable to this useful 16 life. And so it would be after that juncture. If we 17 needed to do something about it, that's when it would 18 happen, at the very tail end of that attainment plan. 19 But we see that as unfair too, that, you know, if 20 you push everybody towards hydrocarbon in lieu of Perc, 21 you can't take that option away before they've recovered 22 that investment. 23 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: I 24 did -- you did ask on the useful life, how critical is it? 25 It's very critical in the calculation, because if you lose PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 a year of useful life, that's about $3300, which is along 2 the line of the profit. So it is important in the 3 calculation. 4 But I think the other issue about where is the 5 data from, the best data that we've been able to find is a 6 result of our survey. And back in 2003 when we were 7 looking -- and based on the results of that, back in 2003 8 fully 50 percent of the primary control machines were 9 already over 10 years old. The half time -- or, you know, 10 50 percent of the converted machines were over 17 years 11 old. And so that's the best data that we've been -- been 12 able to come up. There's a lot of anecdotal statements 13 made by various people that it should be 8 or 12 or 14. 14 It's important to decide on some time. We worked this 15 process fairly extensively through a technical working 16 group to kind of, you know, see what -- you know, what it 17 is. We had proposals that it should be placed on mileage. 18 You know, we didn't feel that that was a practical way to 19 do. 20 So we think we have the best data to come up with 21 a time. And we think we've had general concurrence that 22 that's probably a reasonable. It could go, you know, 23 three years one way or the other, but that's staff's best 24 recommendation. 25 BOARD MEMBER GONG: If you have a reg based on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 useful life before you terminate the machine then, 2 pragmatically it would be to my advantage as the owner to 3 keep that machine Perc'ing and maintaining it and 4 everything else, correct? 5 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 6 Correct. And that's one of the reasons that this 7 particular reg has a number of good operating practices in 8 it and annual measurements and leak checks and 9 requiring -- you know, we've enhanced the requirements to 10 require spare gaskets. There's district inspections 11 associated with these things. So we've tried to do some 12 things to ensure that those machines are maintained in a 13 very good condition. The environmental training program 14 helps to do that too. 15 And I think one of the factors -- a lot of the 16 numbers you hear about what's the useful life of a machine 17 have to do with nationwide averages. We do think that 18 because Perc has been regulated for such a long time, 19 because we've had environmental training programs, because 20 we've had these operating practices, that there may well 21 be, you know, a little bit longer useful life for these 22 machines in California as compared to the nationwide 23 average. 24 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, I would 25 say there's a counter-incentive to come and get 10,000s PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 from the state while you still can. If you're on the 2 verge of having to replace that machine, and the Perc 3 revenues are decreasing as this transition is going on, 4 you know, you sort of have to calculate that all out. And 5 then there's other things going on out in the marketplace 6 like leasing pressures, these receives being pushed out of 7 commercial retail strips and that sort of thing. 8 So a lot of different factors are going to affect 9 whether Perc machine owners milk the 15 years or move 10 sooner. And if it dies, it's gone. 11 CHAIRPERSON SAWYER: Ms. Berg. 12 BOARD MEMBER BERG: I'm a little bit disturbed by 13 the health information we just got. I heard probables a 14 lot. I heard inconsistent studies, but we concluded that. 15 And I've been making a lot of decisions based on known 16 carcinogen. 17 And then my second question would be: What 18 studies have been done and what are our conclusions on 19 hydrocarbon health risk assessments? 20 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 21 MANAGER MARTY: Okay. I think -- you know, I'm using the 22 language that we're used to on the health side. For 23 epidemiologists to study something, a) it's pretty hard. 24 You have to have a good enough sample size. You have to 25 know a lot about the exposure including having reasonable PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 measures of exposure and so forth. We don't have those 2 really good measures for most of the epi studies, if not 3 all of the epi studies, on Perchloroethylene. What that 4 does is it tends to buy us the results towards finding no 5 effect, yet we still find an effect. So that in our minds 6 says, okay, there is very likely an effect. 7 We use a term "probable" because that is the -- 8 sort of the standard way of looking at a carcinogen if you 9 don't have really straight-forward studies that show for 10 sure, definitely, this causes cancer in humans. It's a 11 very high bar, very high bar. 12 Also I should point out that many chemicals are 13 regulated based on the animal toxicology data. It's clear 14 that the animal toxicology data shows that 15 Perchloroethylene is carcinogenic. 16 So in the absence of the ability to do really 17 good human studies, we always rely on animal studies. So 18 that's something that needs to be kept in mind. 19 EXECUTIVE OFFICER WITHERSPOON: And just another 20 piece of context. California's toxics laws really came of 21 age in the eighties and early nineties. And there has 22 been a presumption for decades that animal carcinogens 23 should be thought to be dangerous to human beings absent a 24 strong biological reason that they would not compute to 25 human activity. And so that has been added to the amount PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 of epidemiological evidence, such as it is, for -- or for 2 this Board to do all the listing of chemicals. And this 3 Board identified Perc as a toxic air contaminant on the 4 basis of animal evidence in 1991, and the research has 5 continued since then. 6 But it is a California practice and it carries 7 across all aspects of environmental and public health laws 8 and programs that animal evidence is akin to human 9 evidence and, you know, will be corroborated later. And 10 then IARC just uses these terminology that's different 11 than ours of probable and known. We don't use that 12 language. We say toxic. 13 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 14 MANAGER MARTY: I should add also that it's not just 15 California that basis their regulations on animal toxicity 16 data in the absence of human data. But the United State 17 EPA, all of the European countries, Japan -- it's a common 18 practice given that it's so difficult to study people. 19 BOARD MEMBER BERG: And the studies on 20 hydrocarbon? 21 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 22 MANAGER MARTY: The studies on hydrocarbon are more 23 limited. We do know that at high concentrations, like any 24 organic solvent, they are neurotoxic. We also have 25 information that they are irritants to the eyes, nose, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 throat for the most part, especially the longer chain 2 hydrocarbons. But we don't have information that they are 3 carcinogenic. 4 And so that's the information that we have right 5 now. 6 BOARD MEMBER BERG: Okay. Thank you. 7 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 8 Melanie, a number of these hydrocarbons, you 9 know, basically are straight-chain carbon compounds. Does 10 that lead you to think a little bit different than as 11 compared to being cyclic hydrocarbons, et cetera? 12 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 13 MANAGER MARTY: Yeah, the aromatic hydrocarbons tend to 14 give toxicologists and epidemiologists a lot more concern 15 than the straight-chain hydrocarbons. The aromatic 16 hydrocarbons have -- there's a lot of carcinogens that are 17 aromatic hydrocarbons. 18 BOARD MEMBER BERG: But you wouldn't feel then 19 that exposure to the cleaning industry would show a higher 20 cancer, an actual cancer -- 21 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 22 MANAGER MARTY: Okay. Let me reword your question so that 23 I understand it. Are you asking me whether I think 24 there's a higher elevated cancer risk with Perc use or 25 with hydrocarbon use? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 BOARD MEMBER BERG: With Perc use. 2 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 3 MANAGER MARTY: With Perc use, yes, I think that there 4 are -- there is certainly evidence that there are elevated 5 cancer risks across a number of organs in a number of 6 studies. It may not be sufficient evidence to classify 7 that as causal, but that's a very high bar, it's a very 8 high bar. It took a very long time to cause -- to say 9 that cigarette smoking causes lung cancer. It took 10 decades of research before people would say okay. 11 BOARD MEMBER BERG: Okay. Thank you. 12 BOARD MEMBER GONG: And I -- 13 BOARD MEMBER ROBERTS: Could I -- 14 BOARD MEMBER GONG: Just one quick comment. 15 I would also say that the VOCs that are released 16 with the hydrocarbon cleaning machines basically form 17 ozone, or can. So it's not just the end product of 18 cleaning that come off that are necessarily toxic, but 19 also the transformation of those products into secondary 20 pollutants such as ozone. And that's why I mentioned my 21 brief discourse about the nitrogen dioxide standard and 22 the smog forming capabilities. 23 BOARD MEMBER ROBERTS: Let me -- something I 24 guess that's concerning me is that with 3400 facilities 25 statewide, with the number of employees that have been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 working in these environments for decades, with a board 2 that for 15 years now has been saying this is a toxic, it 3 seems to me that it would have been an easy thing to go 4 look and see what's happening to these employees. And 5 what I'm hearing, that there's no such study. 6 EXECUTIVE OFFICER WITHERSPOON: Actually, Dr. -- 7 BOARD MEMBER ROBERTS: I'm not asking you to 8 respond. I mean I'm -- you've already said that that's 9 the case. 10 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 11 MANAGER MARTY: I think it's really -- 12 BOARD MEMBER ROBERTS: And it's not a shortage of 13 information. It's -- for whatever reason, our system has 14 decided not to look at this. And it just seems to me to 15 be all so different from the way we've done when we have 16 available -- I mean you've got -- I would imagine there's 17 going to be a lot of people testify today that have 18 probably worked in these facilities for years and years 19 and years. And I know that the Perc is getting out there 20 within that environment, because we're having problems 21 with the pollution of the ground level. And that's why 22 they're not leasing -- why the landlords aren't leasing 23 any longer to these facilities. We've got a number of 24 things going on here. But I think that -- I'm just a 25 little uncomfortable with the way the questions regarding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 the health studies have been dismissed. 2 BOARD MEMBER D'ADAMO: Dr. Sawyer? 3 CHAIRPERSON SAWYER: Yes. 4 BOARD MEMBER D'ADAMO: Well, it's just my 5 understanding that once it is classified as toxic air 6 contaminant, which is something that this Board did before 7 my time, the next step is the risk management plan. And 8 that's what's before us today. And I would liken the 9 concern -- and I think that we should have as much 10 information as possible. But what makes me a little 11 uncomfortable about this discussion is the need to go back 12 and pour through all of those studies once again. Every 13 time we have a regulation on diesel, we don't go back and 14 revisit the decision that was made -- or review it 15 again -- that was made back in the early 1990s or whatever 16 that date was. 17 So I do think it would be good if we could get 18 the documentation. But I think that a previous Board 19 determined based upon the evidence that was presented at 20 that time that Perc is a toxic air contaminant. And 21 that's the process, correct, as outlined in the statute? 22 EXECUTIVE OFFICER WITHERSPOON: That's correct. 23 BOARD MEMBER ROBERTS: I'm not going to labor 24 this, but I was on this Board that declared diesel a 25 toxic. We study diesel every year. You fund studies for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 diesel every year. We didn't stop studying diesel. We're 2 regulating diesel and we're studying diesel. 3 Just because this was declared a toxic in '91 4 doesn't excuse not having looked at this, especially when 5 you have a group that is so intimately involved with it. 6 And that's what's making me uncomfortable. There's 7 something, you know, that even -- I'm not talking about in 8 California -- that nationwide or anywhere else there's 9 not a -- there isn't the kind of conclusive testimony that 10 I would expect at this point. But that -- I don't want to 11 labor that any longer. I think we're using different 12 standards for different things here today. 13 BOARD MEMBER D'ADAMO: Well, I just think -- 14 would agree with you. More information is better. But 15 perhaps just a different level of comfort zone as to how 16 to proceed. 17 CHAIRPERSON SAWYER: Okay. The first three 18 witnesses who have signed up to speak in this item are 19 Luis Cabrales, Bonnie Holmes-Gen, Sarah Sharpe. 20 Mr. Cabrales. 21 MR. CABRALES: Thank you very much, Dr. Sawyer. 22 Good morning, Board members. Luis Cabrales at Coalition 23 for Clean Air. Also a founding member of Residents of 24 Pico Rivera for Environmental Justice in the Los Angeles 25 area. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 I really want to thank you and thank staff for 2 these efforts to phase out Perc. This is great work. And 3 I just want to thank you for this effort. 4 The proposal is an important step to protect 5 health of Californians. But we still feel that this 6 proposal needs to be strengthened in three key ways: 7 Number 1, to adopt Regulatory Alternative No. 1, 8 which would include a phase out of Perc and of any new 9 VOC-containing systems, that is, hydrocarbon; which 10 according to staff's own words in the proposal itself will 11 provide the maximum protection from emissions of Perc 12 while preventing an increase in volatile organic compound 13 emissions from hydrocarbon solvents. 14 This is a great opportunity to look at this 15 alternative that would be the most cost effective and 16 would maximize public health. By phasing out Perc and VOC 17 at the same time you will not have to do this process 18 twice and deal with VOC emissions and hydrocarbon cleaning 19 in the future. 20 At the same time, you will not force cleaners to 21 go through this same process again and again. Chances are 22 the hydrocarbon systems will be phased out in the future 23 and it will definitely be a lot more headache for cleaners 24 themselves. And we do keep cleaners in consideration when 25 we make this request. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 Number 2, to adopt Regulatory Alternative No. 3, 2 which would decrease the phase-out period to ten years, we 3 did our own research, we looked at different research. 4 The U.S. EPA's own research points a ten-year lifetime of 5 Perc equipment. And there are other studies available 6 pointing out to ten years lifetime of Perc equipment. 7 After ten years, all Perc equipment starts to break down 8 more often, which requires cleaners themselves to invest 9 more money just in repairs alone. 10 Number 3, we would like you to consider to look 11 at the buffer zone within 300 feet from residential zones 12 or any area containing sensitive receptors. 13 We are very pleased that the proposal requires 14 all Perc machines at co-residential locations to be phased 15 out by July 2010. But we're also concerned that this 16 doesn't protect other sensitive sites, including schools, 17 retirement homes and medical facilities. According to -- 18 CHAIRPERSON SAWYER: Because of the large number 19 of speakers, I'm going to be very strict on the three 20 minute limit. So please conclude your remarks. 21 MR. CABRALES: I will. Thank you very much. 22 I would just like to remind you that, as ARB 23 staff and AQMD have acknowledged, that there's a huge 24 number of public schools within these 300-foot buffer 25 zone. So it is important that Board members look at this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 issue and look for a compromise on how to protect more 2 people from the threats of Perc. 3 Thank you very much. 4 CHAIRPERSON SAWYER: Bonnie Holmes-Gen. 5 MS. HOLMES-GEN: Mr. Chairman and Board members, 6 Bonnie Holmes-Gen with the American Lung Association of 7 California. 8 And the American Lung Association wants to 9 express our strong support for phasing out 10 Perchloroethylene due to the serious health impacts of 11 this highly toxic chemical. And we applaud the Board's 12 efforts, the efforts of the staff in putting together this 13 difficult regulation and pursuing in particular the 14 phase-out approach. 15 We believe the Board is playing a very important 16 role in moving the state to cleaner, less toxic 17 alternatives in dry cleaning. And our main concern, 18 echoing the comments of Mr. Cabrales, that we should 19 achieve this transition much more quickly. 20 There's been a lot of discussion about the 21 economic costs of the phase out before you. And it's very 22 easy to calculate the cost to the individual dry cleaners 23 of changing their equipment. But it's much more difficult 24 to estimate the health costs of the hospitalizations, of 25 the illnesses, of the deaths, both to individuals and to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 society -- the costs to individuals and the cost to 2 society that is currently linked to the use of this highly 3 toxic chemical. And if you could -- if we could calculate 4 that more clearly, I think you'd have a much more clear 5 idea of the health benefits of moving quickly to phasing 6 out this Perc equipment. 7 We wanted to echo again the comments of Mr. 8 Cabrales and say that we think the phaseout should be 9 accelerated. We appreciate the proposal by Member D'Adamo 10 about accelerating the phaseout and having that phaseout 11 occur at least by 2020. We also think the 15-year life 12 should be reduced. There's much evidence of course these 13 machines don't last as long as 15 years. 14 We're also concerned about allowing the 15 hydrocarbon technology. From the American Lung 16 Association's perspective, we're very concerned about the 17 tremendous challenges in meeting our state and federal 18 ozone standards and the serious health effects of ozone 19 pollution. So it does cause us concern to allow a 20 technology that is going to be increasing ozone precursors 21 when we're still so far from meeting our state and federal 22 attainment goals. 23 Finally, we are very concerned that the Board 24 should move to aggressively implement AB 998. We're 25 pleased of course to see that the ARB plans to begin PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 demonstration programs at 23 sites around the state. But 2 we urge the Board to move very quickly to solicit 3 additional proposals to quickly remedy the fee collection 4 issues. I understand there could be millions of dollars 5 collected right now in the AB 998 fund, and that that 6 would of course significantly cushion the economic impacts 7 to businesses in achieving this phaseout. And I think 8 that would allow you then to move forward and tighten the 9 timeframe, require a final phase-out date more quickly, 10 and actually reduce that 15-year lifetime if you knew that 11 you had millions of dollars in the fund to provide 12 incentive monies to change out this highly toxic 13 equipment. 14 Thank you for the time. 15 CHAIRPERSON SAWYER: Thank you. 16 Sarah Sharpe. And then we will have Dave 17 Lighthall, Tom DePippo, and Tariq Mohammid. 18 MS. SHARPE: Good morning, Board members and 19 staff. My name again is Sarah Sharpe. I represent the 20 Coalition for Clean Air and I'm from the Fresno office. 21 Thank you for your efforts to phase out Perc in 22 dry-cleaning. I'm going to reiterate a lot of what Mr. 23 Cabrales said. And I also want to congratulate you or 24 show my appreciate for the great discussion that you've 25 had so far today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 Staff's proposal to phase out Perc is an 2 important step to help protect the health of all 3 Californians, including people in San Joaquin Valley, and 4 to ensure the future success of cleaners. 5 However, we do believe the proposal should be 6 strengthened in three key ways: 7 First, we want you to adopt Regulatory 8 Alternative No. 1, to include a total phase out of Perc 9 and new VOC containing systems. According to staff's own 10 words, this alternative will provide the maximum 11 protection for emissions -- from emissions of Perc while 12 preventing an increase in volatile organic compound 13 emissions from hydrocarbon solvents. 14 Second, we want you to adopt Regulatory 15 Alternative No. 3, to decrease the phase-out period. 16 Instead of the 15-year phaseout in your current proposal, 17 speed up this process to a 10-year phaseout. This 18 alternative provides stronger protection for workers and 19 the public. Further, it better reflects research that 20 points to a 10-year lifetime expectancy, as previous 21 speakers have mentioned. 22 I also want to throw in here that when speaking 23 to people in the San Joaquin Valley about this issue, they 24 really feel strongly that the sooner, the better -- the 25 sooner you can phase out, the better. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 Staff estimates this option will cost more. But 2 what about the current and future costs of Perc cleanup of 3 water wells and brownfields, plus the health care expenses 4 from workers, owners and residents who lack health 5 insurance, which we have quite a few of in the San Joaquin 6 Valley. 7 Allowing dry cleaners to continue to operate 8 equipment older than ten years will only increase all 9 these risks and costs. 10 Number 3, Perc dry cleaners within 300 feet from 11 residential zones or any other -- any area containing 12 sensitive receptors should be phased out by 2010. As we 13 stated before, we feel it's very important to include 14 sensitive sites such as schools, retirement homes, medical 15 facilities. And I would add day cares in that. I know 16 that there's some -- at least one in Fresno that's near a 17 day care. To provide immediate protection to those who 18 need it most require Perc dry cleaners within 300 feet of 19 residential zones to be phased out by 2010, again. 20 And, finally, I wish I could join many of my 21 colleagues, which may have spoken yet, but in saying that 22 my outfit had been wet cleaned. But unfortunately I'm 23 from Fresno and we don't have the option to choose 24 alternative types of cleaners like wet cleaners, at least 25 as far as I know, because perhaps of the lack of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 implementation of AB 998. And I would really urge you to 2 enforce that and implement it as soon as possible so that 3 all parts of the state can have the benefit of having 4 alternatives. 5 I'm hopeful that your decision today will create 6 safer options for consumers like me and my family as soon 7 as possible. 8 Thank you. 9 CHAIRPERSON SAWYER: Thank you very much. 10 Dr. Lighthall. 11 MR. LIGHTHALL: Thank you, Chairman Sawyer. 12 First of all I'd like to say I'm a research 13 associate at the Central Valley Health Policy Institute at 14 Fresno State University, but I'm representing -- thank 15 you. Oh, very good. Technical assistance here from the 16 boss. 17 -- but my comments here today reflect my own 18 personal and professional judgment rather than the 19 position of the Health Policy institute. 20 First of all, I very much appreciated the 21 discussion that we've had here so far. And there's been 22 three issues that have already been flagged I think very 23 well by members of the Board that I would like to speak 24 to. And one of them is the risk assessment issue of 25 Perchloroethylene. This is something that I've studied PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 for a while. I used to integrate this into my course work 2 at Colgate University. And, that is, the laboratory 3 evidence of Perchloroethylene, as was pointed out, is 4 clear in terms of its carcinogenic impacts. 5 The epidemiological research has also shown 6 elevated prevalence -- okay, we say elevated risk. Let's 7 get it straight. We're talking about elevated prevalence 8 of cancers amongst cohorts particularly focused on people 9 who are either living above dry cleaners or people who are 10 working within those businesses. 11 So Supervisor Roberts, you have flagged what I 12 felt was the elephant in the room here today. And, that 13 is, the occupational exposure risk of Perchloroethylene, 14 which was not even mentioned in the PowerPoint 15 presentation that we had here today, and in fact is the 16 most serious public health issue in addition to any kind 17 of ambient sort of dispersion of the chemical. 18 So that in fact is a very powerful argument for a 19 ten-year phaseout or perhaps a slightly attenuated 20 timeframe for Perchloroethylene, and that -- those health 21 impacts have to be balanced against the economic 22 information that predominated in the PowerPoint 23 presentation. I did not see anything about any effort to 24 quantify health risks. And I realize that's difficult. 25 I think the second point is that either through PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 more aggressive use of AB 998 or we have a long period of 2 the possibility supplemental legislation, that we will be 3 able to soften the burden of an accelerated phaseout. 4 The third point, going to Dr. Gong's point, is 5 we're going to hear I think some compelling testimony here 6 about the effectiveness of wet cleaning. And to allow 7 hydrocarbon to continue as business as usual I think is a 8 mistake, especially if you're in the business of trying to 9 protect the public from ozone. 10 So thank you very much. And, again, appreciate 11 all the work of staff and the leadership of the Board here 12 in pushing this forward. 13 California, as we've seen in AB 32, is leading 14 the way. This should have been addressed by the federal 15 government a long time ago. But I commend you for taking 16 these steps. 17 Thank you. 18 CHAIRPERSON SAWYER: Thank you. 19 Mr. DePippo. 20 MR. DePIPPO: My name is Tom DePippo. I own a 21 single dry cleaner in Garden Grove, California. And I've 22 incurred some expense coming down here making this trip. 23 But I feel it's really important that you hear my story. 24 I've been a dry cleaner now for 14 years. And 12 25 of those 14 years I've used Perchloroethylene. I've just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 recently as of 14 months ago switched over to wet 2 cleaning. 3 The shopping center of which I'm a member of has 4 sold the property three different times since I've been a 5 member there. And after each time the center was sold, 6 core samples were drug around my machine and around my 7 place of business to find any contamination. 8 The first two trips around I passed with flying 9 colors. I'm a very articulate dry cleaner. I'm very -- I 10 make everything the way it's supposed to be. And I watch 11 those circumstances very closely. 12 However, the third time they just did the core 13 samples on my store, it was about 15 months ago, and I had 14 one hit at 6.7 parts per million at four feet down, the 15 water table being 22 feet down. And I was drawn by the 16 geologist and told me that I was now in violation and 17 contamination. 18 I was facing a $200,000 cleanup, of which I did 19 not have. Eighty-five percent of the dry cleaners are 20 small dry cleaners like myself. So if it wasn't for the 21 landlord wanting to sell the property so fast, I probably 22 wouldn't be here today. And I'm sure there are dry 23 cleaners that -- they're not here today that have been 24 wiped out over this very same thing. So the human element 25 here is very important. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 The cost of the cleanup, like I said, was 2 $200,000. And that cost me my entire life savings, not to 3 mention my marriage. I had to sell all of my stocks and 4 switched over to the wet cleaning system. 5 I was of course forced into it. But as through 6 using the wet cleaning system, I found that it was very 7 rewarding. And I survived the other. A lot of the 8 benefits in the wet cleaning system -- if you haven't had 9 a chance, you should seek out somebody in your community 10 who does wet cleaning and try it. 11 You will notice right off the bat that there is 12 no odor to your clothes and that your clothes will be 13 clean, because in Perchloroethylene they are great -- and 14 hydrocarbon -- for taking out oil-based stains. But water 15 is the best that you could use for protein-type stains. 16 And it will take out 75 percent of what's out there today. 17 CHAIRPERSON SAWYER: I must ask you to conclude, 18 please. 19 MR. DePIPPO: So if you get a chance, go ahead 20 and do it. 21 I had a couple other things to say. And wanted 22 to answer Lydia Kennard's question real quick that she 23 had. She wanted to know why there was a lack of 24 participation due to the grants that were given out. And 25 the main reason is economics; the difference being about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 40 to $50,000, which the dry cleaner's going to have to 2 pick up, take out in the form of a lease, and is going to 3 have to pay out about a thousand extra per month, which is 4 going to deeply cut into his gross profits. 5 Had a few other statistics on the benefits of wet 6 cleaning. 7 CHAIRPERSON SAWYER: Thank you very much. 8 MR. DePIPPO: I'm out of time. Thank you. 9 CHAIRPERSON SAWYER: Tariq Mohammid. And then we 10 will have Nily Stoler, Zion Orpaz, and Jack Alquist. 11 And the future speakers, please come up and sit 12 in the front. 13 MR. MOHAMMID: Good morning, Chairman and Board 14 members. My name is Tariq Mohammid. And I've been -- I 15 changed Perc to wet cleaning since March of 2005. And I 16 forced into wet cleaning because of price. And the cost 17 of maintaining the Perc machines was way too high. 18 But recently -- it's been two years now, and I'm 19 very happy. The clothes I'm wearing -- people think that 20 wet cleaning is going to shrink your clothes. The jacket 21 I'm wearing, I clean in my own store. You can see it 22 shining and everything. It's better than Perc and better 23 than hydrocarbon. 24 To me, same thing. The hydrocarbon is the 25 same -- next ten year we're going to be in the same PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 situation again, talking about hydrocarbon. And wet 2 cleaning is the right way to clean. 3 And I have too many regular customers which 4 move from -- I'm in Huntington Park. My regular customers 5 move to east side, and they still come to me because of 6 cleaning and because no odor, no nothing, no shrinking. 7 And I would like to ask the Board to consider 8 about taking out Perc and hydrocarbon. 9 Thank you very much. 10 CHAIRPERSON SAWYER: Thank you very much. 11 Nily Stoler. 12 MS. STOLER: Mr. Chairman and Board members. My 13 name is Nily Stoler. And right now I own three 14 dry-cleaning stores. In the year 2002 I decide to buy 15 cleaners -- I decided to bought a cleaner. That time I 16 didn't have a clue what is dry cleaning. After I bought 17 the business I told myself, "Oh, gosh. What Nily has just 18 fallen into." 19 Dry cleaners that have a Perc as a solvent, that 20 can cause a cancer. And I have to be there every day and 21 inhale all that chemical. 22 And inside the store it was so hot. I would say 23 that we have about 15 degrees higher than regular 24 temperature outside. And I look at my workers. I asked 25 them, "How do you feel every day?" They said, "Oh, I have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 to go back home. And first thing I have to do is rest." 2 And one of my machine controllers, he showed me his hands, 3 it was crusty and cracked. 4 Then I told to myself, "Do they have any machine 5 that can do a professional cleaners but cannot cause that 6 problem?" They do have. But I choose to be a wet 7 cleaners. And after -- when I replaced the machine, I was 8 afraid that the wet clean might shrink or make damage to 9 my customer's clothes. I didn't immediately took out the 10 Perc machine. Slowly, slowly we learned and we gained 11 confidence. 12 After operate two years we decide to take out the 13 Perc machine that I can run ten years more. And after two 14 years of experience I can share my experience of advantage 15 then. 16 I don't have to be worried of my employee health 17 and myself and my family's. And I don't have to worry if 18 the chemical will spill. And now, my store -- inside my 19 store, I can feel that the air is fresh and we have 20 temperature -- regular temperature as outside. 21 And except this, I reduce the utility costs as 22 electric or gas by 30 or 40 percent. 23 And last of all, and is very important for me and 24 for all the dry cleaners, is the customers just like it. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 CHAIRPERSON SAWYER: Thank you very much. 2 Zion Orpaz. 3 MR. ORPAZ: Good morning. My name is Zion Orpaz. 4 And I have been in the business for about 30 years, 25 in 5 the dry-cleaning business, 5 years to 6 years in 6 California for wet cleaning. 7 I saw some reports yesterday, day before 8 yesterday, from the staff maybe, it was things that was 9 changed or not, that there were claim that there was not 10 enough wet cleaning establishments in California. Well, I 11 have a list in my hand right now on about 123 or 120 wet 12 cleaning establishment that I personally put in -- either 13 installed, directed, guided, coached probably around 80 of 14 them in the last three years. 15 What we find today, that there are more stores 16 around acceptance of wet cleaning is tremendous. If we 17 had the participation of the staff with the grants 18 earlier, wet cleaning would have been the leader in 19 alternative technology. Remember, it's $40,000 for the 20 system. Take 15 years -- you were talking about 15 years, 21 about millions of dollars. $40,000 over 15 years, what 22 are we talking about, $250 a month, $300 a month? 23 If you don't have $300 a month, don't be in 24 business. Okay? 25 So today we arrived to such a point in wet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 cleaning that it's as good and better than dry-cleaning. 2 It's better than solvents. It's better than any solvent 3 that we know in the market today. And I'm surprised by 4 the staff -- forgive me, but I'm surprised by you when 5 you're saying that, "Oh, I spoke with detergent 6 manufacturers." I own a detergent manufacturer. I supply 7 to probably 70 percent of wet clean in California the 8 detergent that makes the clothes looks like a million 9 dollars. Nobody ever spoke with us. Just a point. 10 Anyway, to let you know, that today the 11 alternative that we -- safe alternative, economically, 12 nothing better than wet cleaning; quality, nothing better 13 than wet cleaning. 14 I'll stop right there. 15 Thank you very much. 16 CHAIRPERSON SAWYER: Thank you very much. 17 Jack Alquist. And then we'll have Peter 18 Sinsheimer, Gordon Shaw, and Daniel Jussicha. 19 MR. ALQUIST: My name's Jack Alquist. I own and 20 operate Guild Cleaners; Guild Cleaners, Wine Country; and 21 Village Cleaners. I've been in the industry over 40 22 years. I'm a second generation dry cleaner. I'm the past 23 President of IFI and Chairman of the Board. I co-chaired 24 the IFI committees that wrote the Certified Environmental 25 Dry Cleaner and the Certified Professional Dry Cleaner. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 I'm the fifth dry cleaner in the world to use GreenEarth. 2 I only represent myself here, Guild Cleaners from Wine 3 Country, none of the above entities. 4 In October I replaced one of my original 5 GreenEarth machines with a new state-of-the-art machine. 6 Environmentally, operator, cleaning capability it's the 7 best and most idiot-proof machine I've ever bought. 8 I started looking for this technology in 1983 to 9 operate PCE valve clean -- that ought to shiver your 10 timbers. Yeah, petroleum, anything, it wasn't there. 11 In seven years since GreenEarth came into this 12 industry, and they dumped their money in too, 13 environmental testing, research and development, and they 14 devoted a working relationship to the soap companies, to 15 the manufacturers of equipment. This technology got here 16 in seven years. They see the need for this 17 infrastructure. 18 In 50 years this group effort has not occurred 19 with PCE, with petroleum, anything else. Maybe CO2, but 20 who can afford it? 21 In January '02 -- on January 2nd I started 22 highbred wet cleaning. It is -- we like it. It's a 23 wonderful supplement. It is not a substitute. There's 24 six ingredients to make water work: You got to have a 25 technology of the washer and the drier; you got to have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 the additives to make the water be friendly and safe; 2 you've got to have the proper program to make these 3 washers work with the additives; you've got to have 4 careful sorting of garments to wash; and you have to have 5 extreme management to dry these garments; and most 6 important, and no one talks about, you have to have 7 tension finishing preferably with air boards. No one 8 talks about it. 9 Conventional equipment won't work for pressing 10 wet cleaning if you're going to do any type of a volume. 11 If you take any one of these six ingredients out, wet 12 cleaning fails. 13 Wet cleaning's expensive. It's not as forgiving 14 as silicone. Mismanage it and you buy the garment. The 15 additives are going to run five to ten times the cost of 16 silicone and the silicone additives. The labor to sort 17 drying and washing is going to run about 25 percent more, 18 is what it looks like to us. 19 We're too new in the game to tell about spotting 20 labor. It will probably be reduced with wet cleaning. 21 The same with energy costs for washing and drying. 22 You need about 20 percent more space to house the 23 washer and drier than you do my current new 50 pound 24 GreenEarth machine I bought. 25 The cost of capital outlay for the tension PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 equipment's going to run you 45 to 60,000 minimum. That 2 gives you a pant tension unit, an upper garment tension 3 unit, an air board; and use your existing utility press, 4 throw in another 25. These are minimums for the washer 5 and drier. Another 2,000 for the additive costs just to 6 fire up this washing machine. 7 This is the other thing that's not mentioned: 8 The cost to train for wet cleaning, drying, and especially 9 finishing. None of this is provided by the manufacturers, 10 additive people, or equipment distributors for free. Some 11 of the training's not available, period. 12 I spent $860 for eight hours to review the 13 washing programs in training. No written material 14 covering the programs in training. No fallback for 15 retraining. 16 I spent $1500 for ten hours for in-house training 17 on upper garment tension finishing; coats, blouses, et 18 cetera. No written program. Only verbal. No fallback. 19 Two guys in the United States I found to do this. 20 No training available for air board finishing, 21 which I'm very keen on. I wrote my own programs. It took 22 12 months to write them and implement. And we've got it 23 and I've got it in a book that works. 24 You want instant reduction from air pollution or 25 some dry cleaners? Put in air boards and tension PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 finishing equipment. My two locations we've reduced gas 2 consumption over 15 months by 20 to 40 percent. That's 20 3 to 40 percent less in the atmosphere. In my new little 4 revamped highbred press shop we've reduced electrical and 5 gas consumption -- 6 CHAIRPERSON SAWYER: I must ask you to conclude 7 your remarks please. 8 MR. ALQUIST: Basically I applaud your action for 9 getting rid of Perc. Be careful how you treat the 10 alternative methods to replace Perc and make it go away. 11 With that, you all have an invite any time you 12 want to see any of these three new technologies. All of 13 them are the latest that's out there, from finishing to 14 wet cleaning to the GreenEarth cleaning. And as I've said 15 in my pages that I gave you, there's a time to call and a 16 place. 17 Thank you. 18 CHAIRPERSON SAWYER: Thank you very much. 19 Peter Sinsheimer. 20 MR. SINSHEIMER: Good morning. Thank you very 21 much for letting me today. 22 (Thereupon an overhead presentation was 23 Presented as follows.) 24 MR. SINSHEIMER: My name is Peter Sinsheimer. 25 I'm the Director of the Pollution Prevention Center at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 Occidental College. 2 Since the year 2000 our center has administered a 3 demonstration program on nontoxic, non-smog-forming 4 technology. And the results of the first phase of this 5 evaluation were published in the Journal of Air Waste 6 Management. 7 --o0o-- 8 MR. SINSHEIMER: The first slide I have coming up 9 here is an evaluation of technical performance, showing 10 that the overall success rate, the bottom line there, that 11 the cleaners would switch from wet cleaning -- from Perc 12 dry cleaning to wet cleaning at a comparable rate. 13 --o0o-- 14 MR. SINSHEIMER: The next slide shows that they 15 were able to retain a very high rate of their customers 16 after they switched out. 17 --o0o-- 18 MR. SINSHEIMER: In terms of the next slide which 19 shows the operating costs -- in each of the case of these 20 cleaners who switched out, their operating cost was 21 significantly lower than when they were operating with 22 Perchloroethylene. 23 Finally, in terms of energy, as was said by prior 24 folks, the energy -- electricity used here is 25 significantly lower for every cleaner that's switched. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 --o0o-- 2 MR. SINSHEIMER: And the next slide is natural 3 gas use, was lower in every case but one. 4 So in sum, the study affirms that wet cleaning as 5 a viable cost effective zero emission and energy efficient 6 technology. 7 --o0o-- 8 MR. SINSHEIMER: So since the year 2000, there's 9 been a substantial increase in the installation of 10 professional wet cleaning in California. The rate of 11 increase has outpaced other non-VOC technologies, 12 including GreenEarth and CO2. We expect this rate to 13 accelerate as we begin the AB 998 demonstration program 14 with ARB, as was discussed previously. But if there is a 15 freeze on VOC dry cleaning, this rate will increase even 16 further. 17 So being zero emission, energy efficient and 18 affordable, professional wet cleaning is exactly the kind 19 of green technology that should be fully supported by the 20 ARB. 21 This is why Alternative 1, which has been 22 proposed to you in your packet today, a phaseout of Perc 23 and a freeze on VOC dry-cleaning, is unquestionably the 24 preferred choice. ARB staff has not only said that 25 Alternative 1 is the most cost effective alternative PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 that's being -- that you're looking at today, but it's the 2 most health protective. So it eliminates a toxic use, it 3 reduces future smog levels, and it reduces greenhouse gas 4 emissions. 5 California has been proven as a leader in 6 promoting environmental and pollution prevention 7 technology. Alternative 1 provides you the opportunity of 8 continuing this leadership. 9 Thank you. 10 CHAIRPERSON SAWYER: Thank you very much. Gordon 11 Shaw. 12 MR. SHAW: Good afternoon. I'm Gordon Shaw, and 13 I own Hangers Cleaners in San Diego. 14 (Thereupon an overhead presentation was 15 Presented as follows.) 16 MR. SHAW: I have two plants and two drop stores. 17 This plant opened in late 2005. 18 I use only liquid carbon dioxide for dry-cleaning 19 in my plants. From 1978 through 2000 I had owned six Perc 20 plants. I do not receive any fees from anything CO2 21 related. 22 Being the only CO2 cleaner in my market I enjoy 23 the benefit of our unique selling proposition. I am a 24 moderate environmentalist. More important, I believe 25 strongly in providing the best service and quality to my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 customers. With CO2 the garments stay like new, the 2 customer gets clothes without any residual solvent. I 3 essentially follow the principles of the triple bottom 4 line. 5 I am here to share my CO2 experience and facts 6 about CO2 dry-cleaning. 7 --o0o-- 8 MR. SHAW: In April 2001, I opened the first 100 9 percent all-natural liquid CO2 dry cleaner on the West 10 Coast. I did so to create a competitive advantage and to 11 try to positively revolutionize my industry. 12 Anyone seeing my plant knows immediately that 13 Hangers is different. We are upscale and a bit pricey. 14 Accordingly we must ensure that customers are aware of our 15 benefits of our CO2 process. We explain to every new 16 customer and the hundreds of visitors from all over how 17 CO2 cleans clothes in a 60 degree process in a liquid with 18 a specific gravity of less than water, which yields a much 19 gentler process and it is extremely color safe. 20 We use the same recycled CO2 that is delivered to 21 thousands of restaurants; totally benign; safe for the 22 air, the ground, employees and customers. My CO2 machines 23 in San Diego have dry cleaned over 900,000 garments since 24 April of 2001. I am certain CO2 can help many California 25 dry cleaners improve the quality of their service. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 --o0o-- 2 MR. SHAW: I also know I have provided a valuable 3 benefit for my employees, my customers and my community, 4 and I'm extremely proud to provide this environmentally 5 friendly option to thousands of San Diegans. 6 My machines is more expensive and more complex 7 than many machines in operation. It can be learned, but 8 it does require a more professional approach. 9 --o0o-- 10 MR. SHAW: I also believe, however, that many dry 11 cleaners could not accept the -- or adapt to the CO2 12 technology. Too many operators are unsophisticated. They 13 have only the lowest costs in mind. Many would reject the 14 notion of progress and stewardship within their 15 operations. Technological change in the industry will 16 weed out the marginal performers, and that is a good 17 thing. 18 Since opening I've received awards and 19 commendations from the City of San Diego, County of San 20 Diego, California DTSC for my pioneering the use of CO2 21 technology, and IFI. We have been featured in TV reports; 22 magazine articles; trade publications, most notably 23 Newsweek. In fact, three days ago Newsweek.COM published 24 the first in a series on Hangers Cleaners. 25 And, in summation, I would like to emphasize that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 CO2 dry cleaning is not for everyone. There are higher 2 costs. But there is a definite demand for a truly 3 environmentally friendly dry-cleaning service. And, more 4 important, it is viable and it's thriving in San Diego. 5 And I'm always available for questions and information. 6 Thank you very much. 7 CHAIRPERSON SAWYER: Thank you -- 8 BOARD MEMBER ROBERTS: Mr. Chairman, I just want 9 to for the record -- 10 CHAIRPERSON SAWYER: Yes. 11 BOARD MEMBER ROBERTS: -- I have visited his 12 establishment. And it's good to see him here testifying. 13 I didn't know you were going to be here today, Gordon. 14 But thank you. 15 MR. SHAW: I wouldn't miss it. Thank you, 16 Supervisor. 17 CHAIRPERSON SAWYER: I guess I need to ask the 18 question of what the CO2 emissions are associated with the 19 CO2 dry cleaning. 20 MR. SHAW: We operate approximately the same 21 cycle times, 44 minutes, at which time we have about 22 22 PSI in the wheel. And we vent to the atmosphere, which is 23 about 10 pounds by weight of CO2. And this CO2 is not new 24 CO2. It's CO2 that's been recycled; the same thing you 25 would find in your carbonated beverages. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 CHAIRPERSON SAWYER: Staff. 2 AIR RESOURCES ENGINEER FONG: We did not evaluate 3 how much CO2's been used by the process, but that they do 4 use recycled CO2 and, therefore, there's no net increase 5 in CO2 emissions. 6 CHAIRPERSON SAWYER: This is CO2 recovered from 7 where? 8 AIR RESOURCES ENGINEER FONG: From various 9 industrial processes. 10 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 11 Yeah, refineries mainly, but CO2 emissions that 12 would go up the stack, recovered and used for, you know, 13 carbonated -- you know, to fill the CO2 tanks for food 14 service, carbonated beverages, et cetera, and any other 15 uses. 16 CHAIRPERSON SAWYER: Okay. I know that our 17 inventory has carbonated beverages as a CO2 source. I'm 18 just -- I was curious whether this application was a ton 19 per year or what -- 20 STATIONARY SOURCE DIVISION CHIEF FLETCHER: There 21 are only about ten of these dry cleaners in the state 22 right now. And if they're looking at ten pounds, you 23 know, annually, then we didn't -- 24 MR. SHAW: Per load. 25 STATIONARY SOURCE DIVISION CHIEF FLETCHER: So we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 don't think it's, you know, on the radar yet. But we will 2 look into it and get back to you with an estimate. 3 CHAIRPERSON SAWYER: Thank you. 4 MR. SHAW: Mr. Chairman, I've also been told that 5 my CO2 comes from the oil refining industry. 6 CHAIRPERSON SAWYER: Thank you very much. 7 MR. SHAW: Thank you. 8 CHAIRPERSON SAWYER: Daniel Jussicha. And then 9 we'll have Hans Kim, Sung Park, and Peter Jung. 10 MR. JUSSICHA: Good afternoon. My name is Daniel 11 Jussicha. I'm the owner of Ontario Cleaners in Ontario. 12 I've been in dry-cleaning business for ten years. And 13 then I switched to wet cleaning since October 2004. 14 Before I switched there was pressure from the 15 landlord aware of the contamination. So they keep 16 increasing the cost of the rental also to put me -- seal 17 the floor and put the containment, which has cost me quite 18 a bit of money, like $8,000. 19 And then there is also a rule to phase out the 20 Perc. That's why I'm looking at an alternative. And then 21 I looked through hydrocarbon. I looked at the wet 22 cleaning. 23 And then hydrocarbon is good, but there's some 24 issue that did not clean really well on the white 25 garments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 And then on the wet cleaning I found out it's -- 2 determined something that I like it and then I decided to 3 choose. And then it's really little over two years. And 4 then when we got -- find out it's very amazing, which is 5 it's the employees' noticing that the garment is much 6 cleaner than the Perc cleaning. 7 And then also for the safety, there is no -- a 8 fire hazard to -- I mean the fire hazard as a hydrocarbon. 9 Also, there is the health. I have an asthma 10 problem. So since I switched to the wet cleaning I don't 11 have to carry the asthma sprayer anymore, and I think 12 that's very helpful for me. And then it's helpful also 13 for the employees. And then the customers also like it 14 because the cleaners are -- It don't smell such a harsh 15 smell from the chemical. But it's sprays. 16 So thank you very much. 17 CHAIRPERSON SAWYER: Thank you. 18 Hans Kim. 19 MR. KIM: Good afternoon, Boards. Thank you for 20 this time. And thank you, everybody, for supporting wet 21 cleaning. 22 Since my last attendance here I was able to give 23 you a little bit more update of wet cleaning, how much we 24 have grown. The industry challenges me, somehow the wet 25 cleaning is not a viable alternatives. It's only for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 small operators. You cannot do a wide range of garments. 2 Your operation will be limited by -- it's a sales volume. 3 Because it's -- you require a lot of tensions. You 4 require enormous amount of training skills, so on and so 5 forth. 6 But as of very this moment, I have a wet 7 cleaners, they are doing more than 1,500 pieces a day. I 8 have a wet cleaners that's dedicated. It's located in 9 Malibu, La Jolla, even in San Luis Obispo, in various 10 locations they're doing very, very high end garments, and 11 they're doing the movie stars' garments, all dedicated in 12 wet cleaning. 13 So wet cleaning is a viable alternative to other 14 solvents, absolutely. And like Peter mentioned, the 15 numbers will grow and people will adopt. If staff just 16 give us a little bit more hands and educate the public, 17 educate the cleaners, I think we will have a successful 18 result. 19 Thank you very much. 20 CHAIRPERSON SAWYER: Thank you. 21 Sung park. 22 MS. PARK: Good morning, Board members. Thank 23 you for giving me this chance to speak. My name is Sung 24 Park. I am from Natures Best Cleaners in Rancho 25 Cucamonga, California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 I have used the wet cleaning for past five years 2 and Perc cleaning for 12 years before that. I switched to 3 wet cleaning because of my landlord. But also Perc left 4 me afraid for the health of my co-workers, the customer, 5 the environment, and myself. I look for other way to 6 cleaning garments. 7 I look into the hydrocarbon, but found it not a 8 good option. Not only was it another unhealthy solvent. 9 It did not clean well at all. I decided to use wet 10 cleaning because I did not want to have any more problems 11 with the solvent. 12 Now, I am glad that I use wet cleaning, because 13 it is a healthy solution to cleaning clothes. And I can 14 be proud that I provide excellent cleaning service to my 15 customers. 16 I am excited to say that my business has grown a 17 lot. But more importantly, being a resident of 18 California, I believe that we needed to support a cleaner, 19 healthier place to live. Not just for us, but also for 20 our children and the grand children, for our future. 21 I believe that many cleaners has the wrong 22 information about the wet cleaning, because they have not 23 been given all the facts. I would like to tell them why 24 wet cleaning is so good for everyone. 25 Number 1, save a great deal on electricity and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 gas. When Southern California Edison Company come to my 2 store for testing, they show me how much I save the bill. 3 Number 2, my employees are going home earlier 4 than when I was using Perc. I did not take longer to 5 press the clothes. 6 Number 3, the finish the clothes are left in 7 better quality when I clean with wet cleaning. I am 8 really, really happy I choose wet cleaning that more than 9 five years ago. 10 I wish I had more time to tell you all the good 11 things about the wet cleaning, but I appreciated the time 12 given me. Thank you for listening. 13 CHAIRPERSON SAWYER: Thank you very much. 14 I have one question. Are there any garments that 15 you would not wet clean? 16 MS. PARK: I do 98 percent wet cleaning right 17 now. 18 CHAIRPERSON SAWYER: And the other two percent do 19 you send somewhere else or -- 20 MS. PARK: I still do, but it take a little more 21 time to than some other things. But I still do. I do 22 everything. 23 Thank you. 24 CHAIRPERSON SAWYER: Thank you. 25 Peter Jung. And then we will have Steve Swanson, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 Steve Risotto, and David Dawson. 2 MR. JUNG: Thank you for giving me the 3 opportunity to speak today. My name is Pete Jung. I am 4 the owner of the Plaza Cleaners 9000 in Ventura County. I 5 started this business in 1991. 6 I made a switch to wet cleaning last year because 7 landlord did not want to renew the lease. He said any 8 kind of chemicals would not be allowed. 9 But at first I was worried about the negative 10 things I had heard about wet cleaning, that wet cleaning 11 with higher operating costs, clothes shrink, more 12 manpower, and only small cleaner to make less than 20,000 13 per month in sales. My cleaner makes more than double 14 over these amount. But I didn't have another option, so I 15 made the switch unwillingly. 16 I soon found out that all of these negative 17 things I had heard were not true. After installing the 18 wet cleaning machine my operating costs are much less than 19 when I used the Perc. I am saving 40 percent of 20 electricity, 30 percent of natural gas, low order 21 consumption because of no cooling tower needed, hundred 22 percent waste renewal and government permit fee and so 23 forth. 24 I don't have the problems with clothing shrinkage 25 because I have the right machines and follow proper PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 procedures. I didn't hire additional staff after all. 2 The same staff are working the same hours. My staff like 3 this new working atmosphere very much because we don't 4 deal with the hazardous material anymore. 5 My business is doing well and I make the same 6 amount as I used to make with the Perc. My customers have 7 noticed that their clothes are clean and have no chemical 8 smell even we didn't tell them. 9 Many other cleaners like me may be afraid to 10 switch to wet cleaning. But I'm here to say they 11 shouldn't be. It has worked for my business. 12 I will now close by saying that I am not an 13 environmental activist, but I do see that world is 14 changing because of pollution. I noticed that things like 15 global warming are harming people and the earth we live 16 on. Many natural disasters and unusual weather patterns 17 so frequently happen nowadays. The earth is sick and 18 ailing. We have to do something. I am just one clearer. 19 I am small and the pollution that I made on my own 20 facility was not a big deal. But think of thousands other 21 cleaners in the State of California and how much impact we 22 all make. We all have the responsibility to do something. 23 Our generation may survive with this pollution, 24 but what about our next generation, our grandchildren, 25 great grandchildren? We need to take responsibility for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 better environmental and for our future. 2 Thank you. 3 CHAIRPERSON SAWYER: Thank you very much, Mr. 4 Jung. And I can say that I personally appreciate your 5 environmental approach to your business. 6 Steve Swanson. 7 MR. SWANSON: Thank you. 8 I actually did not intend to be here today, but 9 at the last minute I made a decision and I'm glad I did. 10 I'm speaking to you from a point of view I don't think 11 that you're used to and, that is, a nonpartisan no-agenda 12 person. 13 I'm from Swansons Cleaners. We've been in 14 Sacramento since 1944. We have used petroleum, we have 15 used Perchloroethylene, we have used GreenEarth, we have 16 used wet cleaning. We have traveled the country to look 17 at CO2. We have traveled the country to look at wet 18 cleaning. We have done our duty, our due diligence. 19 Currently we have two plants running 20 Perchloroethylene. We have one plant running GreenEarth 21 entirely. We believe that all three plants clean equally. 22 So let me tell you that GreenEarth cleans just fine. It 23 does take some know-how. It does -- there is a learning 24 curve. There's a learning curve with anything. I believe 25 with petroleum there's also probably a learning curve and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 some people just don't get past it. 2 We've looked at wet cleaning. And we've traveled 3 to Los Angeles. We've met Peter Sinsheimer. We looked at 4 the plants that he's taken us to. And we had every 5 intention to go big into wet cleaning. There were 6 motivation -- economic motivations, the $10,000 and so 7 forth, and environmental motivation. 8 We decided not to go heavy into wet cleaning but 9 to go with strong as we could. And we believe that's 15 10 to 20 percent of our volume can go wet cleaning. The 11 point that I'm trying to make with wet cleaning is that we 12 want to provide a service to our customers that is better 13 than they can provide themselves. We don't believe wet 14 cleaning can provide that entirely. 15 On the other hand, wet cleaning has a great role 16 for many garments. And it does a better job for many 17 garments. But it's not the one answer. 18 I would just think that let businesses decide 19 what to use that is environmentally friendly. 20 The other thing with wet cleaning, if you don't 21 mind, when you look at Perchloroethylene, petroleum, 22 GreenEarth, we recycle our solvent. We are not sending it 23 down the drain each and every iteration. If you think of 24 wet cleaning, right now as it stands, after every cycle it 25 goes down the drain. We have problems with water PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 consumption right now, drought, whatever, northern 2 California fighting southern California for water rights 3 and so forth. We have -- we pollute the water. There are 4 all kinds of issues with water. Wet cleaning in my mind, 5 unless you're recycling the water, which I haven't heard, 6 I think there's an issue. 7 But, again, I just wanted to let you know that we 8 have tried many different options. And right now we are 9 using Perc and we are using GreenEarth and we're satisfied 10 with both of them. 11 Thank you. 12 CHAIRPERSON SAWYER: Thank you. 13 (Applause.) 14 CHAIRPERSON SAWYER: Steve Risotto. 15 MR. RISOTTO: Yes, thank you, Dr. Sawyer and 16 members of the Governing Board. Let me summarize my 17 comments. 18 First of all, I represent the Halogenated 19 Solvents Industry Alliance, which is the manufacturers of 20 perchloroethylene. So I guess I do have a vested 21 interest. And we have submitted extensive comments, but 22 let me hit the highlights. 23 First, the risks from Perc are overstated in this 24 proposal. The proposal would result in little or no 25 reduction in the estimates of potential cancer risk in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 California. The proposal will, however, result in a 2 significant increase in VOC emissions. And ARB staff have 3 failed to meet the requirements of Health and Safety Code 4 Section 57005 in developing this proposal. 5 To get to Supervisor Roberts' comments, the Cal 6 EPA risk model that underlies this assessment greatly 7 over-estimates human metabolism of Perc at low exposures 8 that are of most interest to this assessment. And those 9 are based on animal data. 10 Previous studies of cancer among workers exposed 11 to Perc lack valid exposure measurements or other adequate 12 indicators of potential exposure. The key thing is how 13 much of the solvent were they exposed to. A lot of these 14 studies they really don't know. 15 These previous worker studies also did not 16 control for lifestyle factors, most notably cigarette 17 smoking and alcohol consumption. And to counter the point 18 that Dr. Marty made previously, these shortcomings in 19 these studies do not necessarily bias the study against 20 the negative finding. 21 A recent study of Nordic dry-cleaning workers, 22 which HSIA participated in supporting, suggesting that 23 Perc is not a carcinogen, addresses most of the 24 shortcomings of those previous studies. This study is not 25 included in the current Cal EPA review. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 U.S. EPA, however, is expected to release a draft 2 update of its risk assessment of Perc shortly that will be 3 subsequently reviewed by the National Academy of Sciences. 4 The EPA assessment will include consideration of the 5 Nordic study and recent data on human metabolism of Perc 6 at low doses, two critical aspects. 7 Using the current Cal EPA risk factor, ARB 8 estimates that its proposal will reduce overall population 9 cancer risk from between one and two in a million to less 10 than one in a million. Given that the current estimate of 11 risk from all cancers within the U.S. population is about 12 300,000 in a million, 3 in 10, 30 percent, ARB's estimated 13 risk reduction is meaningless. 14 The estimated potential risk reduction resulting 15 from this current proposal, that is, to less than one in a 16 million, is the same as the estimate in the staff's 17 previous proposal to this Board back in May. 18 Now, there has been discussion of VOC and there 19 will likely be more. All the available evidence suggest 20 that the vast majority of cleaners faced with having to 21 select a solvent other than Perc will choose a 22 photochemically reactive solvent. We've heard previously 23 from South Coast that that's what's happening and may hear 24 again. 25 According to the staff, ARB faces a monumental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 task over the next several years to find ways to reduce 2 ozone levels in the state. In light of this challenge, 3 increasing VOC emissions as a result of this proposal does 4 not appear to be a prudent choice. 5 Section 57005 of the Health and Safety Code 6 requires that ARB consider less costly alternatives to its 7 proposal. According to the staff's own data and analysis, 8 both of the alternatives it considered would result in 9 higher costs. As part of its analysis, the staff did not 10 consider a longer phase-out period or its original May 11 2006 proposal, both of which are less costly than the 12 current. 13 Both of these alternatives also are consistent 14 with Section 57005. 15 CHAIRPERSON SAWYER: I must ask you to conclude 16 please. 17 MR. RISOTTO: Sure. Just about to finish. 18 The May 2006 proposal in fact would achieve a 19 comparable reduction in risk estimates over a shorter 20 period of time. 21 Thank you. 22 CHAIRPERSON SAWYER: Thank you. 23 Would staff comment on the risk number that we 24 just heard, the one part -- one in a million. 25 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 Basically what the commenter was referring to is 2 the overall ambient levels of Perc right now. The, you 3 know, based on the ambient air monitoring, statewide 4 average is slightly -- is close to 1. You know, the 5 action as far as phasing out Perc is going to release -- 6 you know, reduce that further, there's still are other 7 sources of Perc emissions. 8 The main purpose of the proposal though is really 9 addressing the near-source risk, what's happening around 10 that. So I mean, are we making a significant change in 11 the overall ambient? We're going to get it below one in a 12 million with this -- with this proposal. But the actual 13 main focus is, what do we do about the cancer levels 14 around facilities? And those are, you know, much higher 15 than that. 16 EXECUTIVE OFFICER WITHERSPOON: On the order of 17 60 per million. 18 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 19 Secondary machine, we're probably looking at 20 20 meters -- you know, 40 in a million for an average 21 facility, something like that. 22 But that's based on the 70-year risk thing, you 23 know. So as you decrease the life of the machines, that's 24 going to significantly change that number. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 David Dawson. And then we will have Lynnette 2 Watterson, John Horst, and Ed Krantz. 3 MR. DAWSON: Good afternoon, Dr. Sawyer, ladies 4 and gentlemen. 5 Thank you for this opportunity this afternoon to 6 speak with you. My name is David Dawson. I'm here in my 7 capacity as Chair of the Textile Care Allied Trades 8 Association Government Affairs Committee, TCATA. 9 TCATA is a trade association that dates back to 10 1920 and represents companies which manufacture and 11 distribute equipment and supplies to the laundry and 12 dry-cleaning industries. To be completely candid, we no 13 longer have any manufacturing members with operations in 14 California, the last one having moved their operations to 15 another state in 2005 indicating that it was just too 16 difficult to do business in California. 17 I would like to tell you this morning about a 18 chemical product known as 5-nitro-o-anisidine. In 19 November of 2006, that chemical product caused cancer in 20 California. Two months ago. In fact, it was listed on 21 the Proposition 65 list going back to 1989. However, in 22 December of 2006, this chemical no longer caused cancer in 23 California. What happened? Certainly Californians didn't 24 develop immunity to this substance. No, what happened was 25 a reassessment of the scientific information surrounding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 this product. 2 What's troubling is that a national toxicology 3 program removed that product from their list as a 4 carcinogen in 1991, indicating there wasn't sufficient 5 evidence of carcinogenicity to continue to regulate this 6 product as a carcinogen. Now, what's troubling about 7 that, what is so problematic is that it took 15 years for 8 that information to reach California, to travel from 9 Washington to California. 10 And I cite this example today because it is a 11 very real-life contemporaneous illustration with important 12 parallels to the issue that's before us today. Our 13 association has previously provided written comments with 14 regard to the detail of the issues surrounding this issue 15 before us. However, given some of the questions we heard 16 earlier today, indicating a lack of familiarity with the 17 health information and the epidemiology surrounding 18 dry-cleaning workers, it would appear that not everyone 19 has read these comments carefully. 20 And so I would urge you, before you take this 21 very important step, this very serious step, which is 22 going to destroy business assets that are used in the 23 production, distribution and sale of this product, destroy 24 the businesses -- particularly the small businesses that 25 use this product and can't afford to, that you become PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 familiar with the information that's presented in the 2 Nordic study, a very well designed, well conducted study 3 that was published in February of 2006, which shows that 4 the questions and uncertainty that arose in earlier 5 studies of Perchloroethylene, that those questions have 6 been resolved. The issues of esophageal cancer do not 7 reveal themselves in the Nordic study. 8 So we would like to ask this Board to very 9 carefully and deliberately ensure that all of that current 10 health information is in fact studied and examined before 11 taking this very serious step. 12 One other point I'd like to make before I close 13 is that there has been a lot of discussion of VOC 14 emissions with respect to dry-cleaning chemicals. And it 15 seems that VOCs are all treated the same. And, in fact, 16 they are not. They differ considerably in terms of their 17 maximum incremental reactivity. For example, the 18 petroleum solvent that was once very common in this 19 industry has an MIR index of 1.82. The current 20 hydrocarbon solvents -- 21 CHAIRPERSON SAWYER: I must ask you to conclude 22 please. 23 MR. DAWSON: Okay. The current hydrocarbon 24 solvents offered for dry cleaning have an MIR that is one 25 half of that. So one half the potential to create PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 atmospheric ozone than earlier petroleum solvents. 2 Again, thank you very much for your 3 consideration. 4 CHAIRPERSON SAWYER: Thank you. 5 Dr. Gong. 6 BOARD MEMBER GONG: The Nordic study has been 7 brought up several times. It wasn't brought up I believe 8 back in May of 2006. I may be wrong. 9 STATIONARY SOURCE DIVISION CHIEF FLETCHER: It 10 was. 11 BOARD MEMBER GONG: Okay. I guess I was wrong. 12 I hate to admit that publicly. 13 (Laughter.) 14 BOARD MEMBER GONG: But could someone just 15 refresh my memory about that and our response to that 16 comment about the Nordic study results. 17 Thank you. 18 OEHHA AIR TOXICOLOGY AND EPIDEMIOLOGY SECTION 19 MANAGER MARTY: This is Melanie Marty. 20 Yeah, the paper was published in February last 21 year. And they took a look at the Nordic countries and 22 dry-cleaning workers in those Nordic countries. Again, 23 exposure measurement was problematic, which is sort of 24 typical of Epi studies particularly in this case. But 25 they did find elevated risks of bladder cancer amongst PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 dry-cleaning workers. And that finding was also found in 2 one of the U.S. -- big U.S. cohort studies. 3 They did not find elevated risk in this study of 4 esophageal cancer. The authors note that it could be a 5 difference between exposure in the U.S. and exposure in 6 the Nordic countries. And then there were some other 7 confounding factors. 8 This study is not a negative study by any 9 stretch. So I don't think it refutes anything that has 10 been seen in earlier epidemiology studies. 11 And we have read it and considered it. 12 CHAIRPERSON SAWYER: Thank you. 13 Lynnette Watterson. 14 MS. WATTERSON: Good morning, Dr. Sawyer and 15 Board members. Thank you for the opportunity to come 16 before you again. I'm learning how to get to Sacramento. 17 I run a family business that my mom started 44 18 years ago. We presently have eight employees. And 19 coupled with my 20 years full-time at our store, we have a 20 total of 88 years of service. And particularly our dry 21 cleaner has been with us for 25 years. 22 We are in a strip mall, have always been at the 23 same location, and recently signed a ten-year lease with a 24 five-year option. 25 Over the years many of our employees have had PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 children who are healthy and thriving. 2 I've been very involved in our association and 3 industry. I'm the immediate past president of the 4 California Cleaners Association. And I've actively 5 participated in the ARB work groups and have always been 6 very impressed by the broadness and thoroughness of your 7 staff. 8 Last May I was quite disappointed to hear the 9 unanimous refuting of the recommendations of staff, as I 10 think they had done an exemplary job in addressing all the 11 issues as it relates to whether or not to ban Perc. 12 There's much discussion that we hear about the 13 life of equipment. And yet we are missing that link, as 14 Supervisor Roberts pointed out, about the health risks as 15 they pertain to dry cleaners working in dry-cleaning 16 plants. I personally know many, many dry cleaners who 17 have carried on multi-generational family businesses. And 18 the older generation has lived long, happy, healthy lives 19 and the younger people are showing no adverse effect of 20 continuing. 21 Research will eventually produce a product that 22 we, as dry cleaners, and you, as regulators, can embrace. 23 But for the moment, I don't think that product exists. 24 Wet cleaning is a natural adjunct of dry cleaning. It's 25 not a new technology. Only the fancy equipment is new. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 So dry -- wet cleaning is part of what we do every day as 2 well. 3 So until the time comes that there's a product 4 that we can all embrace and know that it's not going to 5 have adverse effect, please allow our industry to choose 6 what they want to use. And definitely it's fine to 7 mandate state-of-the-art equipment, compliance with 8 regulations. And, most importantly, the success or 9 failure of a business has to do with how it's operated, 10 the conscientiousness of the operator and machinery lasts 11 as well as it's taken care of. A car going unserviced for 12 five years won't work as well and neither will a 13 dry-cleaning machine. 14 Thank you for your time. And please give serious 15 consideration to your decision. 16 Thank you. 17 (Applause.) 18 CHAIRPERSON SAWYER: Thank you. 19 John Horst. 20 MR. HORST: Thank you very much for appearing 21 here before you. My name is John Horst, and I am here 22 today to represent my business, Margaret's Cleaners, and 23 other dry cleaners in California using Perc. 24 I have been in the dry-cleaning business using 25 Perc and petroleum solvents since 1956. In La Jolla we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 added hydrocarbon to our operation in 1998. And we do a 2 substantial amount of wet cleaning and have for years. My 3 first job in the dry-cleaning business was wet cleaning 4 for my grandfather. So you can figure out how long ago 5 that was. 6 However, our experience has proven that not one 7 solvent can effectively clean all garments. And I think 8 that is very important. We are looking towards the future 9 in using other alternative solvents as they become 10 available and proven. 11 Our position is this: We believe that Perc has 12 served the industry well for many years with no related 13 health problems or injuries to date. No substantiated 14 claims against Perc for bad health among workers can be 15 cited. We have careful maintenance procedures and 16 employee training at Margaret's Cleaners. We have had a 17 safety coordinator on board our staff since 1999 -- 1990. 18 Even before some of these regulations were in 19 force Margaret's Cleaners was proactive in keeping a 20 clean, vapor-free working atmosphere for our employees. 21 We believe Perc is a viable and useful solvent, as with 22 any other chemical should be used with regard for the 23 employees. We have long advocated this attention to 24 detail and feel with proper procedures, we have committed 25 and accomplished a clean environment, thus making Perc a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 very useful and safe product for our employees and 2 customers. 3 We believe Perc has a long history of safe use in 4 our industry and should be allowed continued use when 5 handled properly. We advocate continued maintenance and 6 controlled operating procedures. 7 We like the alternative solvents and feel they 8 may have a place in the industry if they are cost 9 effective. However, none of these solvents have 10 demonstrated the cleaning power of Perc. Therefore, the 11 alternatives are an economical disadvantage to date. If 12 Perc continues to go up in price, it will make our 13 operating costs unfairly passed on to the public. It 14 places a burden on us financially to grow and pass 15 employee cost-of-living bonuses. 16 In conclusion, at Margaret's Cleaners we feel we 17 have responsibility to be good stewards of all solvent, 18 not just Perc. We wish to be granted to continue the 19 controlled use of Perc so that we may be able to always 20 provide the public with affordable and clean methods of 21 servicing those clothes. We know dry cleaning is the most 22 affordable and logical cleaning process with the use of 23 Perc and wish so see it be allowed for continued use in 24 our state. 25 Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 CHAIRPERSON SAWYER: Thank you. 2 (Applause.) 3 CHAIRPERSON SAWYER: Ed Krantz, and then we will 4 have Bob Blackburn. And following that, we will be taking 5 a break for approximately one-half hour. 6 MR. KRANTZ: Mr. Chairman and Board, my name is 7 Ed Krantz. My wife and I own the Broadway Cleaners in 8 Redwood City. 9 We first started using Perc in 1947. I am 70 10 years old. I've been working with it for 60, or around it 11 anyway. 12 My father and my brother and I used the 13 transferring machine for a number of years, approximately 14 40 years, where we had to take the clothes out damp and 15 put them in a dryer. To this day my father -- well, he's 16 not with us anymore. But my father and my brother had no 17 adverse effects from Perc. All our employees over that 18 60-year period -- I knew most of them pretty well -- I've 19 never heard any of them complain about it, go home sick. 20 As far as I know, they had no health problems. 21 My father passed away three years ago. He 22 started in the cleaning business in San Francisco at 17. 23 He died at 95. 24 We had one person retire from us who started -- 25 she was a French immigrant. She came here as a teenager, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 worked in the cleaning industry till she retired at 65. 2 She passed away five years ago at 95. 3 Burt Bolton had Roy's Cleaners in Redwood City. 4 He was a Perc user. He died at 91 four years ago. 5 We put a new machine in about 15 years ago. We 6 conserve with that new machine. We cut our Perc use down 7 by 80 percent. It's a closed loop machine; nothing goes 8 to the atmosphere. The machine I feel is good for another 9 10 or 15 years. To replace that machine, it would cost 10 between 50 and 120,000 or more dollars. 11 So I wish that you would hopefully move back your 12 decision to make any restrictions on that another year or 13 two until some of these other solvents that are coming out 14 prove that they would be the same. 15 Perc is probably the best cleaning solvent out 16 there. Well, not probably, but it is the best cleaning. 17 It has the best cleaning factor. I've looked at different 18 options in Orlando, Florida, and New Orleans and Los 19 Angeles conventions. And I've always hoped that I'd find 20 something that would replace Perc. 21 But we do a lot of volume at our cleaners in 22 draperies. We wet clean some and we always have. When I 23 was in grade school we did wet cleaning. The other 24 alternative was we've used DF 2000 from some of our 25 competitors for the blackout linings in the draperies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 That area in between the bulk of the draperies, I don't 2 know anything else better than Perc to clean them. 3 So hopefully you'll give us a little more time 4 till some of these things develop. We've looked at a new 5 product Street's is coming out with. It's a possibility 6 that it might be a viable thing, but it's pretty early to 7 tell. 8 Thank you. 9 CHAIRPERSON SAWYER: Thank you very much. 10 Bob Blackburn. 11 MR. BLACKBURN: Hi there. My name is Bob 12 Blackburn, and I'm currently the President of the 13 California Cleaners Association. I'm a second generation 14 dry cleaner. I drew my first paycheck when I was 12 years 15 old, and I'll be 69 here next Tuesday. 16 I'm healthy. My dad passed away when he was just 17 one week short of his 80th -- no, his 90th birthday. He 18 was 89. And I come from an era where we used Perc in the 19 transfer unit, where we had to take the clothes wet from 20 one machine and put them in another machine. And so I've 21 breathed that thing for years. I feel pretty good. 22 (Laughter.) 23 MR. BLACKBURN: So the health issue is a 24 non-issue in my book. I understand that we're moving in 25 California to try to do something about limiting emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 somewhere. But don't get on this health kick, because I 2 can -- I'll run most of you right now. 3 (Laughter.) 4 MR. BLACKBURN: The issue that I want to make 5 today is that I travel up and down the state and I have 6 visited probably a thousand dry cleaners within the last 7 four or five years. I visit them because I teach the Air 8 Resources Board Air Toxic Control Measure to dry cleaners 9 that call and want to be trained. And I go into their 10 plant and I look at their plants. 11 And to phase out dry-cleaning machines when they 12 are X years old is really not a good thing. Some of these 13 machines are 20 years old and they are just as tight as a 14 drum. Some of them are four or five years old and they 15 leak like a sieve. So to say 15 years you got to get rid 16 of it is really a bad thing. We have set in place in this 17 law here that we're talking about, this 93109, the way to 18 check the emissions of machines. The Air Resources Board 19 districts have ways of checking how much that machine is 20 emitting. If it goes past the limit, can it, get rid of 21 it. Give them some times, say, "You have to replace this 22 thing." But as long as it's perking, let them go ahead 23 and use the machine. 24 These people put their life into this business 25 and some of them can't afford to buy a new machine just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 because their machine now is 15 years old. They're just 2 struggling by on a shoestring wage as it is. But they 3 have been very dutiful and they've been mindful of what 4 they needed to do and they've changed their gaskets, 5 they've taken care of the machine. And they should be 6 allowed to stay in business. Because if you put this on 7 them, you're going to drive them out of business, I'm 8 afraid. 9 I don't use Perc currently in my shop. I use an 10 alternative solvent. And I do probably 50 percent wet 11 cleaning and 50 percent with the solvent called Rynex. 12 Because I could see the handwriting on the wall. This 13 thing was coming down the pike. And so I knew when I 14 opened up my new store I wasn't going to put in Perc. But 15 those folks that have a good Perc machine should be 16 allowed to use it. 17 That's all I've got to say about it. 18 CHAIRPERSON SAWYER: Thank you very much. 19 I have one slight modification of what I told 20 you. And, that is, we will be losing the services of our 21 translator. We have one individual scheduled to testify 22 who will be using the translator. So we will take this 23 one additional speaker before our break. 24 Mr. Oh Jae Bons please and the translator. 25 (Thereupon the following presentation was through PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 an interpreter.) 2 MR. BONS: My name is Oh Jae Bons. I'm in San 3 Francisco. I'm in the dry-cleaning business. 4 According to ARB's statistics, the Perc usage was 5 reduced from 1,100,000 gallons in 1991 to 378,000 gallons 6 in 2003. And also the evaporation of that chemical was 7 reduced from 742,000 gallons to 222,000 gallons. And that 8 means cleaners are living up to related regulations. And 9 it also reflects that people in dry-cleaning business all 10 voluntarily are being cooperative and do good business 11 practices in their business. 12 Compared to other industry and its waste, the 13 pollution and the waste of dry-cleaning industry is 14 minimal. And yet ARB is trying to impose very strict 15 regulations. Just like pollution from the cars, there are 16 other elements that pollute our environment. And no one 17 wants to live in the environment with polluted water where 18 your head gets dizzy. And we just cannot stop using what 19 we've been using just because we don't like it, just like 20 we have to use the cars. Realistically we cannot give up 21 everything that's necessary for our daily lives. 22 We all would like to make an effort to minimize 23 environmental pollution, but I feel that there's no real 24 solution. Instead of banning Perc completely and just 25 thinking about the benefit that we get from it, I wish the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 Board takes more time to come up with better solution and 2 allow us to use the Perc until then. 3 Thank you very much. 4 CHAIRPERSON SAWYER: Thank you very much. 5 At this time we will take a break of 6 approximately 30 minutes. Following the break Barry 7 Gershenson, Jon Meijer, and Sandra Giarde will be the 8 first speakers. 9 Thank you. 10 (Thereupon a lunch break was taken.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 AFTERNOON SESSION 2 CHAIRPERSON SAWYER: We will resume our public 3 testimony. And again it will be Barry Gershenson, Jon 4 Meijer, and Sandra Giarde. 5 MR. GERSHENSON: Thank you. Good afternoon, Dr. 6 Sawyer and the Board. Thank you for allowing me the 7 pleasure of speaking to all of you. My name is Barry 8 Gershenson. I am the past President of the California 9 Cleaners Association. And currently I'm a director for 10 the International Fabricare Institute, and a dry cleaner 11 through and through. 12 I've been in the dry cleaning business for 44 13 years. I'm part of one of these -- part of these older 14 guys that were up here before me talking about taking 15 clothing that was cleaned in Perc and transferring it from 16 one machine to the next. That was part of my generation 17 also. 18 So not that it's total proof, but I'd like to say 19 that I feel great, there's been no problems. And I had 20 Perc for 41 years and it's a wonderful -- it's been a 21 wonderful cleaning solution and we've had good success 22 with it. 23 I just have to commend the Board and technology 24 out there for always looking for the best available 25 technology that's available. And that's one of the things PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 that we as dry cleaners are always challenged around, 2 always looking for what's the best thing out there. I 3 mean as any small business person knows in this audience, 4 running a small business is difficult, and trying to stay 5 ahead of it and have enough left over for the employees 6 and your family has always been the challenge. So that's 7 always the challenge of a small business person. 8 I know that dry cleaners in itself have always 9 been interested in the community at large, their 10 employees. I mean the employees are our families I mean 11 with inside of our buildings, and it's something that we 12 hold dearly -- I personally hold dearly as part of my own 13 personal community. So environmental issues or what's the 14 best thing for our community and for our employees and for 15 California is what's important to the dry cleaners in this 16 state. 17 I know that fashion does dictate a lot of the 18 solvents that are currently being used and alternative 19 solutions that are being cleaned. I think it's -- I know 20 that high fashion can be dictated in various parts of the 21 state. We at our company deal with a very high-end 22 clientele that dictates a lot of high-end fashion. And a 23 lot of dry cleaners really based upon the price of the 24 garments they're dealing with and the care labels that are 25 on there, it's been a big part of it to really maintain a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 manufacturer's suggestion of the best possible solution to 2 clean that clothing in. 3 So I also wanted to address the dry-cleaning 4 machines itself. I know personally 15 years is not 5 unreasonable with good care. And we've -- I personally 6 have had that experience of having two machines side by 7 side that have lasted 15 years. And I know that -- I 8 think the analogy earlier was it's all about maintenance 9 and taking care of it. So it's a hard number to come up 10 with, and so I respect your decision. But keep in mind 11 that it's a hard number just to throw out as far as 10 12 years or 15 years. 13 So in summary, I just wanted to say thank you for 14 your consideration. I feel that Perc is still a viable 15 choice for the dry-cleaning industry. I understand that 16 there's been studies and other things that have been done 17 and there's other studies that have opposed that. But 18 it's still an opportunity to look at alternatives, be it 19 water, be it GreenEarth, be it other solvents, that we 20 cleaners are always looking for the best available 21 technology. 22 So thank for your that. 23 CHAIRPERSON SAWYER: Thank you. 24 Jon Meijer. 25 MR. MEIJER: Dr. Sawyer, Board. Thank you. My PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 name is Jon Meijer. I'm here on behalf of the 2 International Fabricare Institute. We're the association 3 that represents dry cleaners, launderers, and wet 4 cleaners. IFI has been around for more than a hundred 5 years. 6 I am still -- the original proposal that staff 7 had developed and industry worked on -- very hard on we 8 thought was a very fair proposal, while still allowing the 9 air toxics -- the toxic control boards to make their own 10 decisions but allow for a technology-based standard. 11 My biggest concern in trying to -- to a couple 12 issues that haven't been addressed quite as much are the 13 issue more about alternatives is with regard what is an 14 alternative versus a viable alternative? We see it to 15 be -- it seems like stepping on egg shells when we talk 16 about some of the alternatives that are actually available 17 to dry cleaners. 18 What came out of the staff report is that about 19 40 percent of all the dry cleaners in the state gross less 20 than a hundred thousand dollars a year. That is virtually 21 nothing. When the average dry cleaner grosses in this 22 country about 250,000 to $300,000 per year in gross sales, 23 $100,000 is a small amount of gross sales to make any real 24 decisions about anything. 25 What concerns me more than anything else when we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 talk about a viable alternative, can it clean the clothes 2 that actually come into your plant on a regular basis? 3 Does it have fair capital costs, realistic labor and 4 expenses, and are the environmental health concerns. The 5 International Fabricare Institute has in fact tested 6 several alternatives, most notably the recent one with 7 GreenEarth, and we found it to be a very viable 8 alternative. But that's as far as we can go. Dry 9 cleaners need real answers to decisions about 10 alternatives. They cannot afford to go to one on 11 technology and then five years later go to another 12 technology. 13 There is financial assistance supposedly at least 14 with AB 998. But it only covers wet cleaning and CO2. 15 CO2 fine, but very, very cost prohibitive. The $10,000 16 that a dry cleaner could get for a CO2, it just doesn't 17 cut it. It won't work. It's just too much money that 18 we're talking about, while a very viable alternative for 19 people who can afford it. 20 A couple of issues related to dry -- with wet 21 cleaning that I did want to bring up is that IFI has over 22 80 years experience with wet cleaning. It's been around 23 for a long, long time. Consumers understand wet cleaning, 24 dry cleaners understand wet cleaning, because they 25 understand water. The technology has not changed that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 much. Maybe some of the chemistry has changed and maybe a 2 little bit of the equipment. But it's still wet cleaning. 3 IFI certainly believes, as part of a wet cleaning 4 partnership that included a compromise with Green Peace, 5 the Centers for Neighborhood Technology, validated by 6 various studies for over a long, long period of time -- 7 some of the original wet cleaning studies began as early 8 as 1991 and 1992 -- that you can't do more than 80 percent 9 wet cleaning. It's a great adjunct to dry cleaning. 10 We're a strong supporter of wet cleaning. You just can't 11 do it a hundred percent of the time. With a lot of extra 12 labor and a lot of extra expense and a lot of training, 13 you can get up to 80 percent. That's it. Nothing else 14 will happen. You're not going to be able to do more. 15 Some people will say you can do a hundred percent wet 16 cleaning. But outside of the State of California the 17 handful of wet cleaners that are out there, the ones that 18 are still in business doing a hundred percent wet 19 cleaning, many of them have converted to other types of 20 solvents. 21 CHAIRPERSON SAWYER: Would you please conclude 22 your remarks please. 23 MR. MEIJER: Yes, sir. 24 The last thing I want to talk very quickly is 25 about the Federal Trade Commission. Federal Trade PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 Commission does not recognize wet cleaning as an 2 alternative care method. They're not looking at it, 3 they're not reviewing it, to our knowledge, and we'd be a 4 part of that particular process. 5 And one last point. Who's going to pay for the 6 garment if you wet clean it and it's damaged? The dry 7 cleaner will pay for it. No one else will pay for that 8 garment if it's damaged. There is no acceptable care 9 label for wet cleaning. 10 And one last thing, is the manufacturer has only 11 one way to put a -- you can -- several -- they only have 12 to put in one type of care instruction for the garment. 13 These high-end care labels that come in will not have a 14 wet cleaning care label on it, because it takes too much 15 time, too easy to mess up the garment, and they're going 16 to do what's easiest for them and what's easiest for the 17 customer. 18 Thank you. 19 (Applause.) 20 CHAIRPERSON SAWYER: Sandra Giarde. 21 MS. GIARDE: Thank you very much, Board members 22 and staff. I'm Sandra Giarde, Executive Director of the 23 California Cleaners Association. We are the statewide 24 affiliate of the International Fabricare Institute. And 25 as such, we recognize -- have members who are cleaners of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 all shapes, sizes and, yes, technologies. 2 There are a couple of issues that have been 3 talked about time and again, so I won't touch on those 4 other than to say that I echo the comments of Dave Dawson 5 representing TCATA, Steve Risotto representing HSIA, and 6 Jon Meijer who just spoke before I did. 7 The things that come to our mind from 8 California's viewpoint of representing all cleaners is the 9 fact that California is a diverse state. We saw it with 10 the staff reports that preceded this issue. We looked at 11 the maps. We looked at dispersion rates for ozone and 12 other substances. But what we do have is we now have a 13 proposal that pretends to be one-size-fits-all. And we've 14 all looked these issues. You've served on the Board a 15 long time and you know that the issues of South Coast are 16 not necessarily the same issues shared by Bay Area or San 17 Joaquin County, Mojave, San Diego, Amador. And what we're 18 looking at here is a real opportunity to let the local air 19 districts do their job. 20 South Coast in 2002 went ahead with what they 21 felt was best for their community and their issues. 22 However, in the time past then we haven't seen any of the 23 remaining 34 air districts follow their lead. And in fact 24 in the comments submitted you actually had an air district 25 that dissented, saying that they felt the best issue was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 not to phase out Perc but again to go back to the model 2 that was proffered for consideration in May of 2006. 3 The other issue that was brought up in that May 4 2006 hearing that we were all at was not just a directive 5 by the staff -- or a directive to staff to explore a phase 6 out of Perc, but it was a look at the economic impacts and 7 possible financial assistance for cleaners. 8 Unfortunately that hasn't manifested itself. Our 9 association put forth a bill a few years ago, Assembly 10 Bill 845, which would have granted tax credits to cleaners 11 who would shift away from Perk to an alternative 12 technology. That bill died in committee for lack of 13 legislative support. On a federal level we had Senate 14 Bill 1939, HR 1303, and HR 978. All would have done the 15 same thing. None of which were supported. 16 I really feel that it is not because of staff 17 that people aren't turning to the grants that are existing 18 for wet cleaning and CO2. They aren't turning to them 19 because it doesn't fit their business model. Gordon Shaw 20 has a great CO2 plant, but he also recognizes in his 21 Newsweek article that it costs more -- up to $2 more per 22 garment to clean, and he also is in an upscale area that 23 can afford it. 24 What we're asking here today is to let local air 25 districts do their jobs. Let them choose what they need PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 to do with best available control technology, testing, 2 inspections and admissions rates. And if you are going to 3 proceed with the rule as proposed, let's maybe wait a year 4 and let our colleagues a few blocks down the road at the 5 Legislature put their tax money and their legislative 6 bills where the will is here and see what they can do to 7 assist cleaners, because nothing less is going to be 8 viable. 9 Thank you. 10 (Applause.) 11 CHAIRPERSON SAWYER: Thank you. 12 Our next three speakers are James Lyons, Doug 13 Shinn, and David Yi. 14 (Thereupon an overhead presentation was 15 Presented as follows.) 16 MR. LYONS: Good afternoon, and thank you for the 17 opportunity to address the Board. I am Jim Lyons. I'm 18 here today on behalf of the Northern California Korean Dry 19 Cleaners Association. We've submitted legal and technical 20 comments. You'll also hear from some of the association 21 members following me. 22 I'd like to make it clear from the start that the 23 association is not in favor of a ban on Perc. But what 24 I'm going to present is a regulatory alternative should 25 you decide that a Perc ban is necessary that would help PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 ease the economic impact on the association's members and 2 assure their survival. 3 --o0o-- 4 MR. LYONS: These are just some facts from the 5 staff report. The numbers in parentheses are the page 6 numbers where you may find them. It's already been pretty 7 well established about the small nature of the business. 8 The staff report also indicates that the 9 regulation may have significant adverse economic impacts. 10 The only financial incentives are the grants for CO2 and 11 wet cleaning. 12 And the staff report also includes an alternative 13 that hasn't gotten much play here, I think it was 14 Alternative No. 2, which is, "increasing the Perc 15 phase-out period lessens the economic burdens of 16 compliance on the affected industry." 17 Next slide please. 18 --o0o-- 19 MR. LYONS: This is the proposed regulatory 20 alternative that the association feels would preserve the 21 economic viability of its members. If you're going to ban 22 Perc, the association would agree with the ban on the 23 installation of new machines, as is the case with the 24 staff proposal. The association would also agree with the 25 removal of converted machines from service, as specified PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 in the staff proposal. 2 As was mentioned I think at the beginning by 3 Board Member Berg, it's critical that once a new 4 technology is selected that the people who buy that are 5 allowed to operate it over the entire useful life of that 6 piece of equipment. It sounded like maybe there'd be a 7 motion in the resolution. I'm wondering if we couldn't 8 even get some regulatory language in there that will make 9 it clear that when you purchase a machine that's non-Perc, 10 that in order to comply with this regulation that you're 11 guaranteed that you can use it till the end of its useful 12 life. 13 It's also been mentioned that there's quite a 14 range of incomes in terms dry cleaners. Revenues range 15 from less than $100,000 for 40 percent of the cleaners to 16 more than 500,000 a year. 17 What we'd also ask for is for the definition of a 18 low revenue cleaner with some special regulatory 19 provisions. In the proposal that I've got up there right 20 now, that would be a cleaner with an annual revenue of 21 $250,000 -- or less than 250 in 2006. And they'd be able 22 to use their Perc machines until January 1st, 2020, 23 getting away from this lifetime issue, or when their 24 machines reach 15 years of age, whichever comes later. 25 A key in turning over Perc machines if you decide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 to do a ban is to provide financial incentives to the 2 industry. The association would be agreeable to 3 revisiting this phase-out schedule if in fact financial 4 incentives become available for all alternatives. And 5 it's important that the VOC machines be included in that. 6 Thank you very much. 7 CHAIRPERSON SAWYER: Thank you. 8 (Applause.) 9 CHAIRPERSON SAWYER: Doug Shinn. 10 MR. SHINN: Thank you for the opportunity to 11 speak for Korean Dry Cleaners Association, especially for 12 those smaller mom-and-pop cleaners. 13 First of all, apply the same -- the useful life 14 of 15 years to all cleaners is unfair, because smaller 15 cleaners the machine has a lower mileage when compared to 16 one that is in the larger cleaners. So I've been seeing 17 many -- the machine in the small dry-cleaning shop works 18 fine after over 20 years, and it passes annual inspection 19 every time. 20 So I'm asking for -- actually for 20 years useful 21 life for the smaller sized dry-cleaning business. But if 22 you have to make a decision to remove Perc machine 23 prematurely, then there must be some form of the subsidies 24 or grant incentives or lower interest rate the government 25 loan available to them first, so that those mom-and-pop PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 shop dry-cleaning owners wouldn't go out of business. 2 Thank you. 3 CHAIRPERSON SAWYER: Thank you. 4 David Yi. 5 Next we will have Lawrence Lim, Paul Choe, and 6 James Lee. 7 MR. YI: Thank you, Mr. Chairman, for giving me 8 an opportunity to speak. I'm from -- California. And I 9 have four brothers and one sister, all of them running 10 dry-cleaning business except the one youngest one. 11 Mine is a short one. I want to ask the Board 12 whether the life expecting of the Perc drying machine 13 being 15 years is based on specific scientific statistics. 14 I think there is a problem of indicating the usage period 15 without considering each machine's capability and quality. 16 Just like cars, one can't really say how long one can use 17 it. 18 I have a -- machine that I used in my business 19 over 20 years. And yet they are in good use. And it's up 20 to the current standard and regulation. 21 In other words the main thing is -- and the users 22 operating Perc is determining the life of their machine. 23 It's a big waste of assets if we can't -- if we 24 have to remove -- removal of this -- operating machines. 25 Therefore, I think the Board should organize the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 inspection team to go out to each dry-cleaning location 2 and do inspection on existing machines and make assessment 3 as to how long the machine -- businesses should keep their 4 machine instead of determining timeframe of the use. 5 Thank you very much. 6 CHAIRPERSON SAWYER: Thank you. 7 Lawrence Lim. 8 MR. LIM: Good afternoon, Dr. Sawyer, Board 9 members, and ARB staff. My name is Lawrence Lim. I'm 10 represent all Korean American dry cleaners in California. 11 There are four association, which: Sacramento, Northern, 12 Southern, San Diego. 13 We have estimated over 2,000 cleaners owned by 14 Korean American among 5400 cleaners in California. There 15 are approximately 1,450 registered members throughout the 16 state. And if new regulations pass, it will directly 17 apply to Korean dry cleaners, the mom-and-pop stores. 18 We -- association staff knows this hearing is 19 very important, but most members don't. And ARB staff's 20 moving too fast than what we can. We have only the 21 communicate with monthly meeting and the bimonthly 22 magazines. 23 We had most of the cleaners that they not be able 24 to come here because they are -- they're running by 25 husband and wife. And if they here, then that means they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 have to shut down their business. And we had ARB workshop 2 the last September in Oakland after business hours. And 3 it was more than 200 cleaners was attend this. And if you 4 like to -- please don't think they're not showing here 5 which means, you know, that they don't care about it. I 6 mean they really care about it. But we can't -- we don't 7 have no choice. 8 And we believe there are no alternative solvents. 9 Wet cleaning is not an option. People must consider 10 Federal Trade Commission changes care label laws. And 11 also to check the amount of water usage and cost of a 12 sewer system. I do the wet cleaning also. And at least 13 the one load use about 20 gallons of -- for each load. 14 And the regular launder, it takes about 150 gallons. And 15 we have 5400 cleaners in California. If we do the all wet 16 clean, and each cleaner using at least a thousand gallons 17 a day, how much water will be needed? And it will go to 18 the soil line directly. It's not the recycle. And we 19 need more water in California. I know that it is -- the 20 air pollution is important, but we need to save the water 21 also. 22 CO2 is too expensive to offer to buy in 23 mom-and-pop stores. And just a general idea is Perc 24 machine is around 30 to 40,000 and hydrocarbon machine 70 25 to 80,000. CO2 machine is around 120,000 or more. It is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 almost impossible to buy for the mom-and-pop stores. 2 Now, hydrocarbon is not an option also. 3 CHAIRPERSON SAWYER: Would you please conclude 4 your remarks. 5 MR. LIM: Yes. 6 It will have same situation like Perc sooner or 7 later. In addition, we comply all regulations and rules 8 and reduce the Perc emission usage by 90 percent and the 9 per gallon usage. New Perc machine reduce Perc usage 10 also. 11 Too many questions to the alternative solvent. 12 We need better time to study, find the best way for the 13 California and dry-cleaning business. We care about 14 public safety and environment issues much as you do. 15 Thank you. 16 (Applause.) 17 CHAIRPERSON SAWYER: Thank you. 18 Paul Choe. 19 MR. CHOE: Good afternoon, Chairman Sawyer and 20 Board members. My name is Paul Choe from southern 21 California. And I'd like to ask Board members and ARB 22 staff what would you do if a biological agent or anthrax 23 or any kind of chemical warfare come to your town and 24 contaminate your clothes and contaminate your household 25 items? What would you do? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 Anybody got the answer? 2 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 3 Put them in the microwave? 4 (Laughter.) 5 MR. CHOE: Water-based cleaning -- and I have 6 alternative technology in my shop. It's improving 7 everyday. But I I'd like to see that few Perc dry 8 cleaners remain open in each of our cities so we can 9 respond to the emergency situation to our local 10 governments in case of natural disaster comes to our town. 11 The Perc, you can handle those problems. But 12 other technologies, let's find it out, please. 13 CHAIRPERSON SAWYER: Thank you. 14 James Lee. And then we will have Haemi Jun, June 15 John Park, and Harry Pruyn. 16 MR. LEE: Thank you, Dr. Sawyer, and members of 17 the Board. My name is James Lee. I'm a second generation 18 dry cleaner owner. My father and I were in dry-cleaning 19 industry since 1983, approximately 24 years. 20 I am here on behalf of Korean Dry Cleaning 21 Association of Northern California. And like Lawrence 22 mentioned, a lot of our members cannot make it to this 23 meeting because they're a mom-and-pop small business 24 owners where they have to put in approximately 70 hours a 25 week day-to-day basis. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 Another thing that I want to add is year 2002 we 2 did a survey among our members using a Perc machine. We 3 asked if there was any health risk that was caused -- any 4 kind of illness due to the Perc, and there were none. 5 I truly believe that the proposed ATCM as 6 currently written will have devastating economic impacts 7 on mom-and-pop stores at this time. 8 Even at this moment, as we speak about banning 9 Perc, it already stirred up a lot of concerns and stress 10 among mom-and-pop stores. Not only that, negative and 11 misleading information and view on dry-cleaning machine as 12 hazardous and legal liabilities by growing number of 13 property owners are denying lease renewals. 14 Regardless of the proposal to try to ban Perc 15 machine in 15 year or 10 year, some property owners are 16 not renewing their leases because of the presence of 17 actual dry-cleaning machine. Either it could be 18 dry-cleaning, even hydrocarbon machines. Which means if 19 this proposal passes today banning Perc within 15 years 20 would have negative perception to most of the landowners 21 and will definitely deny the new leases to their sites. 22 And that is what we'll be seeing at the south California 23 after the Rule 1421 has passed. A lot of places are 24 moving out of the existing premises and going to other 25 locations or you're going to have to shut down. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 Increasing number of retiring dry cleaners are 2 not able to find buyers, not able to sell their business 3 at the premium price if they're equipped with a Perc 4 machine. Either they have to give up huge discounts to 5 sell their store or they have to actually purchase new 6 equipments before they sell. 7 Because of some of the issues, phase out Perc 8 machine will result in premature replacement of 9 dry-cleaning equipment regardless of banning the Perc 10 within so many years. 11 Again, implementing this new law banning the Perc 12 will have devastating economic impact on the mom-and-pop 13 store. 14 Not only that, we are very confused. No viable 15 alternative have been presented to dry-cleaning industry 16 and many of us do not know which direction that we need to 17 go. 18 Another biggest concern among dry cleaners is 19 that we have to face this never-ending regulation and the 20 threats of liability, even as we follow every law in the 21 book regards to dry-cleaning machines. 22 Here are some things that I'd like to consider -- 23 I want the Board of Directors to consider: 24 If you can monitor the status of the result of 25 South Coast AQMD Rule 1421 before any further changes that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 could be made. 2 Second is that conduct an independent study on 3 the viable dry-cleaning technologies that would benefit 4 both California and the dry-cleaning businesses. 5 Third, educate properly, inform California's 6 consumers on dry-cleaning businesses as well as the 7 dry-cleaning in this state. 8 And if we are to adopt different alternatives, we 9 want to have assurance to recover our investment before 10 additional burdens are imposed on us by new regulations. 11 Thank you. 12 CHAIRPERSON SAWYER: Thank you. 13 Haemi Jun. 14 John Park. 15 MR. PARK: Thank you, Board members and the ARB 16 staff. My name is John Park. 17 Right now it's an issue like there's a -- problem 18 is every years they change the new laws of dry-cleaning 19 business. They are -- all small business owners are 20 confused. They say, well, what kind of machines they have 21 to buy? That's why they -- they're confused. The law is 22 every year change. 23 Now, so ARB's recommending is CO2 machines right 24 now. So business owners too small business. They can't 25 fit it. The machine too big and price too expensive. So PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 they can't afford that ones. I want to stay with them the 2 good finance programs. I want to recommend these -- I 3 want our business -- small business owners a good 4 financing programs. 5 Thank you. 6 CHAIRPERSON SAWYER: Thank you. 7 Question? 8 BOARD MEMBER BERG: I think more just a 9 statement, that I don't want it to be misconstrued that 10 this -- the ARB, it's my understanding, is not 11 recommending only CO2 technology. And so I can understand 12 that there is a lot of confusion. I know as an industry 13 member it does seem confusing and we'll really need to get 14 information out about the alternative technologies that 15 are available as this rule in whatever form does take 16 place. 17 CHAIRPERSON SAWYER: Harry Pruyn. And then we 18 will have James Camilleri, Robert Smerling, and Jose 19 Carmona. 20 MR. PRUYN: Dr. Sawyer and staff and members. 21 Thank you for giving us this opportunity to speak. 22 I haven't prepared a speech. I'm not a 23 scientist. But there's a lot of information in here. All 24 I could do is present to you what I feel my truth is. 25 I'm a very small dry cleaner. Back in 1995 we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 purchased a brand new dry-cleaning machine with the option 2 of the carbon absorber or not. We decided we better get 3 it. It's better for the environment. It's better for 4 myself, my brother who works for me, and my employee. 5 At that point I thought everything was going to 6 be okay. Then we started hearing that you're going to 7 phase out Perc. I figure, "Oh, jeez, what am I going to 8 do now? I'm having problems paying the bills." We find 9 out that I have till 2020. Good, I get time to wipe my 10 brow, get back to work and try to make a little more 11 money, increasing my cost for cleaning the garments for my 12 customers. 13 Now I get this letter that says you want to phase 14 out Perc machines that are 15 years old or older. For me, 15 I've only got a couple more year left on my machine. This 16 is going to be a burden. I'd have to shut down a shop. 17 I'm asking if you could give us 15 years from today to 18 phase out our dry-cleaning machines. 19 I'm looking at water, but I see clothes shrink. 20 I don't know if you know what tensioning machines are, but 21 they actually stretch your clothes back to the original 22 position. You ought to see it happen. 23 About the petroleum machines, if we get rid of 24 all our Perc machines and everybody goes to petroleum, we 25 have more smog. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 About the CO2 machines, at what, eight to ten 2 pounds of CO2 being released into the atmosphere? I'm not 3 sure, but does that deplete the ozone? Does anybody know? 4 Does CO2 deplete the ozone? 5 No? 6 Okay, great. But I don't have $150,000 for a new 7 machine. And $10,000 is a drop in the bucket. 8 Please consider our situation. 9 Thank you. 10 CHAIRPERSON SAWYER: Thank you. 11 James Camilleri. 12 MR. CAMILLERI: Thank you for letting me speak. 13 Looks like I'm probably the only machinery guy 14 here. And I've been in the industry since I was 18, so 15 it's about 22 years. And I'm the fella who fixes these 16 machines that everybody's talking about. 17 The thing that I want to talk about is, these 18 Perc machines that are out now, that technology that's 19 been developed has enabled these machines to be able to 20 use any solvent whatsoever. The exposure to the person 21 using the dry-cleaning machine is very limited. What they 22 do -- I don't know if you -- do you guys understand the 23 process of what these machines do? 24 Well, the third generation machines used to dry 25 the machines, cool down the air. You open the loading PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 door and you take out the clothing. That technology is 2 pretty much almost phased out now. There's still some 3 people who have it, and those are the machines that are 4 about 20 years old. And I agree that those machines 5 probably should go, because they can't really go to the 6 requirements of Bay Air Quality, who I work with all the 7 time. 8 I think if you leave the regulations alone and 9 let these people use the Perc machines, the fourth 10 generation Perc machines that go through the secondary 11 absorption unit, there's very limited exposure to the 12 people in the plant. And on top of that they -- also the 13 air quality requires these cleaners to put a room around 14 the machine with its own exhaust system, with a lining 15 inside the room, where the only person that goes in there 16 is the dry cleaner. The pressers don't even touch it or 17 anything like that. So I think the laws and the 18 regulations that are in place now are pretty much 19 adequate. 20 And the solvent is the best solvent out there. I 21 mean it cleans the clothes. Everybody seems to love it. 22 And everybody's begrudgingly not wanting to go to 23 petroleum, wet cleaning, CO2, and you're hearing all the 24 opposition to it. 25 I stand to gain a lot of money because I'll be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 selling all this new equipment. But the people that are 2 losing are, you know, the customers -- my customers. And 3 some of them don't make that much money. And some of them 4 aren't the best spotters in the world. And Perc is the 5 chemical that really takes out a stain without any 6 pre-spotting. And, you know, you can just post-spot. And 7 they're making more money using the Perc. When they have 8 to reeducate themselves with a new technology, they're 9 going to be also losing money at that point, paying me 10 more money to train them and paying me more money to buy 11 new equipment, tensioning equipment and stuff like that. 12 I should be up here going, "Yeah, do it," you know, "pass 13 this law." 14 But I see that -- you know, I've been in it so 15 long that -- the laws that Bay Air Quality's put in place 16 seem to be pretty much working. You've noticed that the 17 solvent consumption has gone down dramatically. And these 18 machines are designed for that. They're designed in 19 Europe and they're designed with German technology. 20 That's who's designing these machines -- and the Italians. 21 I've been through the engineering school and everything 22 like that. And their goal is to not let any of that 23 solvent escape, to be able to reuse that solvent as much 24 as you can, so that end users don't need to buy more 25 solvent, because it's expensive. And then their profit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 margin is -- you know, as a business, is more for them. 2 But -- 3 CHAIRPERSON SAWYER: Would you please conclude. 4 MR. CAMILLERI: My final opinion would be if you 5 kind of just let them use Perc and maybe just use the 6 new -- and let them use the new machines and keep the 7 regulations the way they are, the state doesn't have to 8 spend any more money and everybody would be happy. 9 CHAIRPERSON SAWYER: Thank you. 10 Robert Smerling. 11 (Thereupon an overhead presentation was 12 Presented as follows.) 13 MR. SMERLING: Thank Chairman, Board. 14 I want to talk a little bit about liquid carbon 15 dioxide cleaning -- next -- and what it has to offer in 16 today's cleaning world. 17 --o0o-- 18 MR. SMERLING: CO2 is a process that has been 19 developed for commercial use and retail dry-cleaning. It 20 is a nonflammable, nontoxic, colorless natural cleaning 21 gas that is -- subject to pressure, becomes a liquid 22 solvent. The CO2 when it is pressurized is a great 23 cleaning solvent. There's no global warming that is added 24 when we release it to our atmosphere. 25 Next. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 --o0o-- 2 MR. SMERLING: CO2 comes from humans and animal 3 exhale, from CO2. The atmosphere consists of roughly 3 4 percent of CO2 -- you can keep on for the whole thing. 5 Oops. Can you go back. 6 -- direct from CO2 wells at high concentration, 7 byproducts from ammonia plants, also from ethanol plants 8 and refineries. Other sources include ethanol oxide 9 natural gases, processing plants, and from flume gases. 10 --o0o-- 11 MR. SMERLING: CO2 is completely nonflammable, 12 noncarcinogenic -- sorry -- nontoxic, nonpolluting. It's 13 odorless, it's tasteless, biodegradable and it's organic. 14 --o0o-- 15 MR. SMERLING: Major applications for CO2: Beer 16 and soft drinks, freezing foods, fire extinguishers, 17 pharmaceuticals, welding, rocket fuels, crude oil 18 recovery, pH control in water, grain fumigations, 19 electronics, and dry cleaning. 20 --o0o-- 21 MR. SMERLING: CO2 process benefits. 35 minutes 22 in the dry-cleaning cycle dry to dry; cool operating 23 temperatures; total hazardous free; no air, ground, or 24 water contamination; less water disposal; no heat settings 25 of stains; no cleaning risk on leather, furs -- I mean we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 can clean -- leathers, furs and sequences; typical 30 to 2 40 percent increase in garment life -- 3 --o0o-- 4 MR. SMERLING: -- less maintenance in machinery; 5 double the equipment life; and completely organic in both 6 ends of the consumer and the environment. 7 --o0o-- 8 MR. SMERLING: This is our cleaning, what we did 9 last year in our store on garments. We did over 263,000 10 garments. We did over 5,000 pounds -- 5,000 loads. Our 11 average load was 50 pounds. Our average cleaning -- the 12 wash time was 35 minutes. We use roughly 760 pounds a 13 week of CO2. 14 CHAIRPERSON SAWYER: I must ask you to conclude 15 please. 16 MR. SMERLING: Okay. Basically in our industry 17 we could clean everything in CO2. We've done this now for 18 the last four and a half years. We have had no waste 19 stream on the end. It is very viable. We've been doing 20 this for many years. We're actually -- at the end of this 21 year we are growing to a big location, to a 10,000 square 22 foot location where we're going to expand to a bigger 23 location in the Los Angeles area. 24 Thank you very much. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 BOARD MEMBER RIORDAN: Mr. Chairman, may I ask 2 just one question? 3 CHAIRPERSON SAWYER: Please. 4 BOARD MEMBER RIORDAN: Do other cleaners send to 5 you certain garments that they can't do? 6 MR. SMERLING: I get from actually all through 7 California and actually from the country, from other dry 8 cleaners, we get a lot of garments from around the world 9 actually. We actually were invited -- we're the only dry 10 cleaner that I know of that were invited to the Milan show 11 and by other manufacturers to show what we've done in the 12 CO2 industry. So other manufacturers are actually 13 recognizing what we do in the dry-cleaning industry right 14 now, which is very well known in what we're doing. We're 15 really recognized now. All the manufacturers from Brooks 16 Brothers to Nieman Marcus have been recognizing our 17 cleaning process. 18 BOARD MEMBER RIORDAN: Thank you. 19 CHAIRPERSON SAWYER: Jose Carmona. And then 20 we'll have Tim Carmichael, Jill Whynot, and Jack 21 Broadbent. 22 MR. CARMONA: Good afternoon, Chairman Sawyer, 23 Board. Jose Carmona with the Center for Energy Efficiency 24 and Renewable Technologies. And I'll be very, very brief. 25 I just wanted to speak on two points: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 One is the opportunity to explore technologies 2 that on one hand reduce our CO2 emissions but also give us 3 energy efficiency benefits in light of a lot of the work 4 we'll probably be doing on the electricity sector side in 5 terms of managing our carbon footprint. 6 The second piece I wanted to speak to is the 7 issue of cost that has been spoken about by small 8 businesses. I think as we move forward through AB 32 9 implementation and other processes, particularly the 10 market mechanisms, that we explore creative revenue 11 recycling mechanisms in light of the new commoditization 12 of carbon and the price that will be incurred particularly 13 in increased costs in light of the electricity sector 14 because of the carbon mandate we will be providing the 15 next couple of years. 16 I think if we could find ways on one hand to push 17 technology pathways that reduce our reliance on 18 electricity by -- particularly at this point where we are 19 seeing an in-growth of powerplant generation expected in 20 the Los Angeles area. Obviously from a carbon standpoint, 21 we need to do everything we can to stabilize what we do. 22 So if we reduce our reliance on electricity, increase 23 energy efficiency, at the same time explore creative 24 funding mechanisms in light of what may be coming down the 25 pike in our carbon implementation pathway, that we find PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 ways to get these monies into small businesses and those 2 that are going to be most vulnerable to the economics that 3 we may foresee in the future in light of what we will be 4 doing vis-a-vis AB 32. 5 Thank you. 6 CHAIRPERSON SAWYER: Thank you. 7 Tim Carmichael. 8 MR. CARMICHAEL: Good afternoon, Dr. Sawyer, 9 members of the Board. I wasn't planning on testifying 10 because I lost my voice yesterday. But I really -- I 11 wanted to just make a couple of quick points, feeding off 12 of things that have come up today that I think it might be 13 helpful clarify. 14 This agency has been very sensitive to small 15 business interests in the years that I've worked with this 16 agency, and I think that is appropriate. But I think it's 17 also very important to remember why this agency exists. 18 You exist to protect public health from air pollution. 19 That is your purpose. And that needs to be paramount in 20 your consideration of everything that comes before you. 21 That is why you're here. 22 I appreciated Supervisor Roberts and the 23 follow-ons by Ms. Berg regarding the health information. 24 I think -- you're absolutely right. The staff should 25 present more health information to back up their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 programs -- or their proposals to you. They have it. And 2 I think you highlighted an important point -- or 3 shortcoming of this presentation. But I want to assure 4 you, it's not that they didn't have information to present 5 you or that this compound is somehow okay and they're 6 pretending it's not okay. 7 This is one of the nastiest compounds that we use 8 in our society. There are tens of thousands of toxic 9 chemicals in use in America today. There are about 200 10 that are listed as hazardous air pollutants or toxic air 11 contaminants. Perc is listed on that list. On top of 12 that, it is contaminating tens of thousands of wells in 13 our state. So on top of the air pollution hazard, it's a 14 water pollution hazard. 15 The other thing that you need to keep in mind 16 when you're talking about toxics and how to handle them, 17 if it's on the TAC or HAP list, it is something that we 18 need -- that's an acknowledgement that we need to move 19 away from this compound as quickly as we can. And 20 everything on there is something that we -- on that list 21 we need to move away from. 22 Unfortunately this system today allows it -- or 23 makes it -- it's easier to get a compound into widespread 24 use than it is to get it out of widespread use. You think 25 about the industries, you know, whether they're working in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 Washington or here in Sacramento, pushing for their 2 compounds, to sell more and use more, and you think about 3 how much effort goes into literally stopping something 4 from getting listed as a TAC or a HAP, if it made it 5 through that filter and got on the list, it's a bad actor. 6 And this agency is totally appropriate in taking steps to 7 phase it out or get rid of it. And that is the mindset I 8 believe you should have relative to this compound. 9 Just two quick closing points. Again, I 10 apologize for my voice. 11 Dr. Gong I think was absolutely right in raising 12 the concern early on about the VOC alternatives. You are 13 going to -- this agency's going to have to deal with that, 14 whether you deal with it today or in the near term. A 15 toxicologist told me years ago that every VOC is a toxic 16 waiting to be discovered. I continue to believe that. 17 It's only a matter of time for the medical science to 18 improve. 19 The second important part though is later this 20 year your staff's going to bring to you a SIP, and they're 21 going to give you all sorts of heartache stories about how 22 they've looked high and low for reductions in every 23 category and they're going to come up way short of what we 24 need to attain clean air -- 25 CHAIRPERSON SAWYER: Would you please conclude. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 MR. CARMICHAEL: -- clean air standards. 2 The shift to hydrocarbon is an increase of more 3 than a ton in VOCs per day. That's a big increase in 4 today's -- in California's environment. 5 And the final comment I want to make is: Ms. 6 D'Adamo suggested that matching the South Coast phaseout 7 would be a good improvement over this proposal. We agree 8 that it's directionally the right way to go. The phaseout 9 should be shorter. But this agency should also know that 10 ten years is a very reasonable amount of time to give this 11 industry to phase out the compound. And we really believe 12 2017 or 2018 is plenty of time to move away from a 13 compound this toxic. 14 Thank you very much. 15 CHAIRPERSON SAWYER: Thank you. 16 Jill Whynot. 17 (Thereupon an overhead presentation was 18 Presented as follows.) 19 MS. WHYNOT: Good afternoon, Chairman Sawyer and 20 members of the Board. I'm Jill Whynot and I'm making 21 comments today on behalf of the staff at South Coast Air 22 Quality Management District. 23 Before I do that though I also wanted to 24 highlight that the California Air Pollution Control 25 Officers Association, which is an organization that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 represents all the districts in the state, also sent a 2 comment letter supporting a Perc phaseout. 3 Next slide please. 4 --o0o-- 5 MS. WHYNOT: We're pleased to purport the staff 6 proposal, and I just wanted to quickly reiterate the 7 reasons. You've heard a lot of testimony today that Perc 8 is a potential human carcinogen. The staff report also 9 points out that when it was identified as a toxic air 10 contaminant, there was not a threshold level identified 11 below which you would expect no adverse impacts. There 12 are also potential acute and chronic health impacts. 13 Because of the nature of the industry, they're 14 located very close to their customers. They use large 15 amounts of this chemical. And they can pose very high 16 cancer risks to their neighbors and surrounding community. 17 The proposed Perc phaseout is both technically 18 and economically feasible. Four years ago we adopted a 19 rule. We have seen a significant shift away from Perc dry 20 cleaning, and the total number of dry cleaners has 21 remained constant. So we have not seen the total number 22 diminish. 23 A phase out of Perc is the most health protective 24 approach. There are a variety of different alternatives. 25 When our board adopted the rule, they made the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 determination that it was an acceptable environmental 2 trade-off to have a little bit more smog-forming potential 3 but to eliminate the use of something that is a toxic 4 contaminant. 5 --o0o-- 6 MS. WHYNOT: Our rule's been on the books for a 7 little over four years. We started with an immediate ban 8 on any new Perc at new facilities. And in total we're 9 going to end up about two years earlier than the state 10 ATCM for proposed phaseout. So if you were to move the 11 staff deadline up two years, we would still be equivalent 12 to what you would have on the books. 13 When we adopted our rule we had about 100 14 non-Perc dry cleaners out of about 2200. We now have over 15 750 non-Perc. So they're successful, it's viable, and 16 we're seeing that being used. 17 Our rule also has some interim measures until the 18 phaseout becomes effective. And we also have a toxic new 19 source review rule that limits relocations of any source 20 with toxics that's near a school to less than one in a 21 million. So essentially we don't have any dry cleaners 22 relocating near schools. 23 So for these reasons, we request that -- 24 depending on the schedule that you have, if it's at least, 25 you know, maybe two years faster than the state proposal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 or what they have, that we think our rule would be 2 equivalent. 3 So just to conclude -- next slide. Thank you. 4 --o0o-- 5 MS. WHYNOT: -- we support the recommendation. 6 We think the most health protective approach is to phase 7 out the use of this chemical. And it's also very 8 important that you continue to have the staff support this 9 with the grants and the demonstration sites, because that 10 way cleaners will be educated, they'll have the 11 incentives, they'll have the help, and they'll have the 12 knowledge they need to be successful. 13 And with that, thank you very much. 14 BOARD MEMBER RIORDAN: Mr. Chairman, I have one 15 quick question. 16 Those dry cleaners that formerly used Perc, now 17 have changed to something else, do you have any sense of 18 what they went to, what's the predominant -- 19 MS. WHYNOT: The vast majority of them are going 20 to the hydrocarbon solvent, the DF 2000. When we adopted 21 our rule we had about 75. We now have about 640 or so. 22 So that seems to be the most common. I believe it's the 23 easiest transition. 24 We've also had though a six-fold increase in the 25 number of wet cleaners in four years. So that technology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 is also establishing more of a foothold. 2 BOARD MEMBER RIORDAN: Thank you. 3 MS. WHYNOT: You're welcome. 4 CHAIRPERSON SAWYER: Thank you. 5 Jack Broadbent. 6 Oh, excuse me. Dr. Gong. 7 BOARD MEMBER GONG: Jill, thank you for your 8 presentation. 9 MS. WHYNOT: You're welcome. 10 BOARD MEMBER GONG: That was actually part of my 11 question about the conversion to hydrocarbon cleaning. 12 So South Coast has done this and you've had to 13 switch. Is this going to become a problem for you with 14 the increase in OX, the VOC production in your ozone SIP? 15 I know it's not the only problem. But you've experienced 16 it in the South Coast Air District. So is it still a fair 17 trade-off in the year 2007 compared to 2002? 18 MS. WHYNOT: Well, as you suggest, there are many 19 challenges in making attainment, both of the ozone and the 20 PM standards, for us. And it is important to try and get 21 as much reduction as you can. We felt that there were 22 other reductions that we could be a little more aggressive 23 on in terms of some of our other VOC sources. There are 24 also VOCs from consumer products and other things that are 25 regulated by the state that you can help, you know, make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 up that little bit of difference on when those regulations 2 come before you as well. 3 So at the time it was considered that you've got, 4 you know, a -- I showed some slides last time of a lot of 5 dry cleaners that are right next to apartment buildings 6 and schools and, you know, a strip mall, near a grocery 7 store, that it was worthwhile to have, you know, a 8 somewhat significant, you know, because we often regulate 9 that -- but a little bit more VOCs and the ozone problem, 10 but that was a good trade-off in order to protect the 11 cancer risk for the residents. But, yeah, it is a 12 difficult balancing. 13 BOARD MEMBER GONG: So it's a trade-off you're 14 still -- your agency's still willing to accept today? 15 MS. WHYNOT: Because we're implementing it, so we 16 will have that, yes. 17 BOARD MEMBER GONG: Thanks. 18 CHAIRPERSON SAWYER: Jack Broadbent. 19 MR. BROADBENT: Good afternoon, Mr. Chairman, 20 members of the Board. Jack Broadbent, Executive Officer 21 for the Bay Area Air Quality Management District. 22 I'm pleased to be here to express the support of 23 the Bay Area Air Quality Management District's staff for 24 the proposed amendments to the ATCM for the Perc dry 25 Cleaners. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 The existing ATCM has made California a true 2 leader in terms of reducing Perc emissions from dry 3 cleaners. 4 The rule has been very effective at reducing 5 health risks. It also -- because of its close typical 6 proximity of dry cleaners to the residents and workers, we 7 think Perc dry cleaners frankly cause a significant health 8 risk to public health. 9 In the Bay Area it's particularly problematic in 10 the sense that it's not uncommon to have a dry cleaner 11 located just essentially above -- or having residence 12 right above a dry cleaner. This is something I think a 13 lot of you have probably seen in San Francisco and Oakland 14 and other very dense parts of our state. 15 The proposed phase out of Perc we believe is 16 feasible given the development of viable alternatives. In 17 the Bay Area, about a third of the dry cleaners have gone 18 ahead and converted over to other alternatives. 19 To answer a question that I might get also, it's 20 been primarily hydrocarbon, the DF 2000 that Jill Whynot 21 mentioned earlier, about 90 percent of conversions in the 22 Bay Area. They've done that voluntarily. They've not 23 done that as the result of a phaseout in the Bay Area. 24 They've done that because I think a lot of dry cleaners in 25 the Bay Area see the handwriting on the wall. They see PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 that Perc is a toxic air contaminant. They know that it 2 makes good business sense to look at other alternatives, 3 and they've made those conversions. So that's I think 4 important information for you in terms of your decision 5 making. 6 We believe that the -- the staff of the Bay Air 7 District think that the timeframe for the phase-out is 8 very reasonable. And because there are viable 9 alternatives that are well established and you have some 10 of these other innovative technologies on the horizon, we 11 think the rule -- or the ATCM makes a lot of sense. 12 As I mentioned, we have about 50 co-located -- or 13 co-residential dry-cleaning facilities in California, most 14 of which are located in the Bay Area. And your staff's 15 proposal to eliminate the Perc from these facilities makes 16 a lot of sense. It's one in which it's right around the 17 corner. It's a July 1st, 2010, date in the proposal. And 18 we wholeheartedly support that provision. We think it 19 takes a very important step forward in protecting public 20 health. 21 And with that, Mr. Chairman, I know you've heard 22 a lot of speakers, and so I'm going to close and conclude 23 my remarks. 24 And I appreciate the opportunity. 25 CHAIRPERSON SAWYER: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 I want to thank all the speakers who came today 2 to tell us your views on this regulation. 3 Does staff have any additional comments to make? 4 EXECUTIVE OFFICER WITHERSPOON: I misspoke 5 earlier when I said we already had in the resolution for 6 you language with respect to having the full useful life 7 of an alternative machine that is installed. But we have 8 drafted that language, and Diane Johnston can read it to 9 you at the appropriate time. Also, we drafted a similar 10 clause indicating it would be our intent to reach out to 11 the dry-cleaning industry whatever decision you make and 12 explain to them the alternatives available. 13 So when you get to the resolution, we'll have her 14 read those two clauses to you. 15 CHAIRPERSON SAWYER: Since all testimony, written 16 submissions, and staff comments for this item have been 17 entered into the record and the Board has not granted an 18 extension of the comment period, I'm officially closing 19 the record on this portion of Agenda item 7-1-5. Written 20 or oral comments received after the comment period is 21 closed will not be accepted as part of the official record 22 on this agenda item. 23 In fulfillment of our policy concerning ex parte 24 communications, are there any communications that Board 25 members need to disclose? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 Dr. Gong. 2 BOARD MEMBER GONG: Yes. On January 16th I met 3 in my office with Peter Sinsheimer, Occidental College. 4 And our discussion mirrored what he said today during this 5 morning. 6 On January 22 I had a telephone conference call 7 with Tim Carmichael and Luis Cabrales, Coalition for Clean 8 Air, and Adrian Martinez, NRDC. 9 And on January 23 I had a telephone conversation 10 with John Dunlap, Jim Douglas, and Ron Benjamin of 11 GreenEarth Cleaning. 12 And that concludes my ex parte. 13 CHAIRPERSON SAWYER: Ms. D'Adamo. 14 BOARD MEMBER D'ADAMO: Yes. On the 9th of 15 January I had a telephone conversation with Tim Carmichael 16 and Luis Cabrales with Coalition for Clean Air. And then 17 I also spoke briefly with Tim Carmichael today. And those 18 discussions mirrored the positions that they took before 19 us. 20 CHAIRPERSON SAWYER: Ms. Kennard. 21 BOARD MEMBER KENNARD: None. 22 CHAIRPERSON SAWYER: On the 18th of January I had 23 a conference call with Tim Carmichael and Luis Cabrales, 24 and our discussions mirrored what they presented today. 25 On the 24th of January I met in my office with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 Jim Lyons, Lawrence Lim, Doug Shinn, David Kim, James Lee, 2 and Thomas Sohn. And again their comments mirrored what 3 they discussed today. 4 BOARD MEMBER RIORDAN: Thank you, Mr. Chairman. 5 All of this occurred on January 23rd: 6 I had the following phone calls with Mike Belote 7 and Sandra Giarde from the California Cleaners 8 Association. The testimony of Sandra represented what 9 that conversation was. 10 With Peter Sinsheimer from the Pollution 11 Prevention Center at Occidental College. His testimony 12 mirrored our conversation of the 23rd. 13 I spoke also on the 23rd to Lynnette Watterson, 14 owner of the Crystal Cleaning Center. And her testimony 15 today mirrored what our conversation was on January 23rd. 16 CHAIRPERSON SAWYER: Thank you. 17 Ms. Berg. 18 BOARD MEMBER BERG: Thank you, Mr. Chairman. 19 On January 15th I had a telephone conversation 20 with Mike Bulote and Sandra Giarde from the California 21 Cleaners Association. And my conversation mirrored her 22 testimony -- Sandra's testimony today. 23 On January 18th I had a conference call with Luis 24 Cabrales, Coalition for Clean Air; Adrian Martinez, NRDC; 25 and Peter Sinsheimer for the Pollution Prevention Center PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 of Occidental College. And my conversation mirrored their 2 testimony here today. 3 On January 23rd I had a phone conversation with 4 Lynnette Watterson, owner of Crystal Cleaner Center in San 5 Mateo. And our conversation also mirrored her testimony 6 today. 7 Thank you. 8 CHAIRPERSON SAWYER: Supervisor Roberts. 9 BOARD MEMBER ROBERTS: Thank you. 10 Mr. Chairman, I didn't have any conversations 11 with anybody. But one my staff members did, and I'm told 12 I need to report that. 13 CHAIRPERSON SAWYER: Yes. 14 BOARD MEMBER ROBERTS: Mr. Gary Rotto on January 15 23rd, according to his notes, he had a phone call from 16 Adrian Martinez of the NRDC, and they discussed the 17 proposal for a 300-foot buffer; also the possible ban on 18 Perc; and a discussion of VOC-based dry-cleaning 19 alternatives and the proposal to accelerate the ban on 20 Perc. 21 Later that day he also had a conversation with 22 Lynnette Watterson of the Crystal Cleaning Center. And he 23 said that that discussion revolved around her request to 24 return to the previous staff recommendations that were 25 discussed in May. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 He also had a conversation -- a second 2 conversation on January 24th with Adrian Martinez of NRDC 3 to follow up on the reasons for advancing phase-out time 4 of Perc and a proposal to coincide the ARB phaseout with 5 the South Coast phaseout and a clarification of 6 dry-cleaning machine life spans. 7 CHAIRPERSON SAWYER: Thank you. 8 I need to go back and correct the record. My 9 statement closing the record should be replaced by the 10 following: 11 I will now close the record on this agenda item. 12 However, the record will be reopened when the 15-day 13 notice of public availability is issued. Written or oral 14 comments received after this hearing date but before the 15 15-day notice is issued will not be accepted as part of 16 the official record on this agenda item. 17 When the record is reopened for a 15-day comment 18 period, the public may submit written comments on the 19 proposed changes, which will be considered and responded 20 to in the final statement of reasons for the regulation. 21 Ms. D'Adamo, having heard the testimony today, 22 what is your feeling about your earlier recommendation? 23 BOARD MEMBER D'ADAMO: I still think that we need 24 to have an earlier phaseout. So at this point, if it 25 would be appropriate, I would move the adoption of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 resolution with the following changes: 2 First, that we prohibit new Perc machines 3 beginning upon the effective date of the rule. And then, 4 secondly, that we phase out Perc machines by 2020, instead 5 of the 2023 date that is currently being proposed. 6 CHAIRPERSON SAWYER: Would any of the Board 7 members like to comment on Ms. D'Adamo's proposal? 8 Supervisor Roberts. 9 BOARD MEMBER ROBERTS: Yeah, Mr. Chairman, I 10 would. And I'll begin by saying I'm not going to support 11 the proposal. 12 I think that the staff has brought us a 13 reasonable alternative here. And while it doesn't sound 14 like a significant difference, I think it is. I think it 15 allows for some time in an area where there -- it seems to 16 me there needs to be some clarity. 17 I'm not comfortable that if I were in this 18 industry that I'd run out and invest in hydrocarbon, 19 because I don't think that anything that we say here today 20 is going to be much of a promise, and I think that it's 21 just a question of time when they're faced with some of 22 the same issues. 23 And, in fact, after hearing that the way the CO2 24 is basically just a delay of releasing that into the 25 atmosphere, probably as soon as there's enough of those PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 there's going to be an issue to deal with also. 2 So I think that some of the primary options here 3 are really questionable at best. I think the economic 4 impacts are strong. 5 And I think that the health testimony is pretty 6 clear, at somewhere between 40 and 60 per million over a 7 70-year exposure. You know, we are -- there's a lot of 8 comments that I've heard, but nothing that erases that. 9 That is not a terribly significant health risk, although 10 we're treating it as though it is. 11 So I think that the testimony; the impacts; the 12 fact that, if I understand correctly, even South Coast 13 allowed a longer period of time to amortize these, they've 14 arrived at a date of 2020 now, but they started earlier 15 and they gave people a longer run at this, it just seems 16 to me that we're -- we are -- I think in this instance 17 we're not treating people fairly. We're causing some of 18 them to stampede into a solution that we're probably going 19 to at a later date be looking at and they'll probably be 20 very regretful that they adopted that. 21 So to tighten this down even further I think 22 would be the wrong thing. I believe that Perc is a 23 problem. But I think that we do have the health 24 assessments in terms of the significance of that problem, 25 and I don't think that that warrants deviating from the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 staff recommendation that's here today. 2 BOARD MEMBER RIORDAN: Mr. Chairman, I'm going to 3 support the staff recommendation. And it's based on two 4 things: One is the opportunity that staff gave me to 5 observe three of the alternative methods of cleaning. 6 When I first heard this item I wasn't sure what was going 7 to take the place of Perc, though obviously something 8 needed to. But I think that I am now convinced that there 9 are three methods, and really four, the fourth being a 10 very expensive one, but albeit a very good one. And so 11 I'm convinced that we're moving in the right direction to 12 eliminate Perc from the dry-cleaning facilities in the 13 State of California. 14 I am concerned, as Supervisor Roberts is, that 15 there is a difference of how we are treating those outside 16 of the South Coast in terms of timing. I'm not sure 17 exact -- we know when the South Coast dealt with this, 18 which I believe on the record is 2002. Is that right? 19 EXECUTIVE OFFICER WITHERSPOON: (Nods head.) 20 BOARD MEMBER RIORDAN: So I don't know when it 21 took effect. Maybe it took effect in 2003. I have no 22 idea. But they have been given some extra time. And I 23 think that is fair to give our dry cleaners in the rest of 24 the State of California the same amount of time. 25 And then I support clearly the staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 recommendation for all of the other items. When your Perc 2 machine goes down, you're going to buy a new type of 3 machine. And every other part of it I think is very fair. 4 But I -- Ms. D'Adamo, I know your efforts are 5 well placed to, you know, move this along. But I think 6 there's a sense of fairness that I have towards the 7 business of dry cleaning, and there are a lot of the 8 people who will be affected by what we do today. And I 9 just think there needs to be a sense of fairness for all 10 dry cleaners in the State of California. 11 CHAIRPERSON SAWYER: Ms. Kennard. 12 BOARD MEMBER KENNARD: I have a question first. 13 One of the earlier speakers talked about the 300-foot 14 rule. And the question is why it didn't include land uses 15 other that residential, schools, et cetera. I just wanted 16 to get some background on that. 17 Or maybe I'm confused. 18 EXECUTIVE OFFICER WITHERSPOON: Many of the 19 environmental groups that testified today and that 20 submitted letters requested that we add to the proposal a 21 300-foot buffer zone for any dry cleaner located next to a 22 residence, a school or a business. And what staff 23 explained in the issues discussion of their 24 presentation -- and they asked too that those replace 25 their Perc machines by 2010 -- that 98 percent of the dry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 cleaners in California meet that definition. And it's an 2 effective ban on Perc and a drastic acceleration of the 3 schedule we were recommending. And so we are not pursuing 4 that. 5 The only place where there is a buffer zone is in 6 the South Coast, and it's for the placement of new 7 dry-cleaning facilities. They are not allowing them to 8 encroach upon schools. 9 BOARD MEMBER KENNARD: Okay. Thank you for that 10 clarification. 11 I do want to comment on my view on Ms. D'Adamo's 12 proposal. 13 I really do believe staff stretched beyond the 14 original May 2006 proposal and that the staff 15 recommendation is quite a good balance. Although nothing 16 is ever perfect between the economic costs of the 17 industry, which I think are enormous in the sense that 18 these are very small businesses, family-owned businesses, 19 and the burden of conversion are very, very significant, 20 yet balancing the need for an acceleration of the health 21 benefits. So I am going to support the staff 22 recommendation on this one. 23 CHAIRPERSON SAWYER: Ms. Berg. 24 BOARD MEMBER BERG: I started out the day feeling 25 pretty strongly that acceleration was something that I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 would look at today. But I was bothered by the -- or 2 maybe it helped clear it up -- the health risk assessment 3 study. And so I do also feel that staff has really 4 stretched and brought us a good rule, and I will also 5 support the staff recommendation. 6 I would like to know if the purchase of the Perc 7 machines to 2008, if they would be able to buy any Perc 8 machine or would they buy the Perc machine that was the 9 best technology available? 10 STATIONARY SOURCE DIVISION CHIEF FLETCHER: Under 11 the local air quality management district permitting 12 requirements, they would likely be required to buy the 13 best technology available today. 14 But there's nothing in our requirements that 15 would specify. So it would be the district requirements 16 that would apply. 17 BOARD MEMBER BERG: Okay. And I'm sure the 18 districts are looking at that very carefully. I think 19 that would be an important aspect. 20 So I too will support the staff position. 21 CHAIRPERSON SAWYER: To formalize Ms. D'Adamo's 22 motion to amend -- to include these two changes, I should 23 ask if we have a second to that, favoring changing the 24 staff recommendation? 25 BOARD MEMBER GONG: I second it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 CHAIRPERSON SAWYER: Okay. And would you like to 2 comment upon your reasons -- 3 BOARD MEMBER GONG: Yes. There is an advantage 4 of speaking last. Now I know what the odds are. 5 (Laughter.) 6 BOARD MEMBER GONG: It's okay. It's okay. 7 You've got to do what you think you've got to do. 8 I support your amendments. I won't get into all 9 the reasons. I think they've been voiced by my colleagues 10 on the Board as well as staff and everyone who has 11 testified. 12 And I just -- I guess I won't beat a dead horse 13 again. I think the VOC issue that I keep reiterating 14 every now and then is one that it will come back if we 15 pass it the way it is. I don't see much support from my 16 fellow Board members about that. But I am concerned about 17 it. That's why I raised the issue. It's still there. It 18 will come back later. And who knows what will be next on 19 the hit list. But I think it's inevitable. 20 And I know there are trade-offs in life as well 21 as in policy making. But that still bothers me. But for 22 the moment I guess we're voting just on this particular 23 item. 24 So I'll end my statement there. 25 CHAIRPERSON SAWYER: Okay. Are there any other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 further comments? 2 If not, do I have a call for a vote on Ms. 3 D'Adamo's motion? 4 SENIOR STAFF COUNSEL JOHNSTON: May I -- before 5 you have a call for the vote, could I ask for just a 6 clarification. 7 On the final date of phaseout we want to make 8 sure that we have the date as December -- is it your 9 suggest that it be December 31st, 2020? 10 BOARD MEMBER D'ADAMO: I think that would be 11 consistent with South Coast. 12 SENIOR STAFF COUNSEL JOHNSTON: I believe so, 13 yes. 14 BOARD MEMBER D'ADAMO: I do have a comment that 15 I'd just like to make for the record, because I made the 16 motion and didn't, you know, specify any reasons, although 17 I did earlier today. 18 I too am very concerned about the impact on small 19 businesses. But when I looked at that 300-foot buffer, 20 which is originally what I was considering as far as a 21 motion, I felt that that would have an undue burden on 22 small businesses because they have a tendency to locate 23 more so in residential areas and the bigger chain stores 24 seem to be located outside of residential areas. So on 25 balance, that's why I chose to go with the 2020 date. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 And I do think there is something different here 2 when we're looking at this rule as compared to the climate 3 that existed in South Coast when they adopted their rule. 4 Dry cleaners have known that this is a problem for quite 5 some time. And all you have to do is open up a paper and 6 see the water impacts and the impact that the water 7 impacts on water supply are having on small communities 8 and municipalities. So there is a cost to society. And, 9 believe me, the taxpayers are paying for it when we have 10 to go and clean up these wells. I've seen it in the 11 community where I live and many communities surrounding. 12 So I think we need to go faster than the overall 13 amount of time that South Coast provided for, because 14 there is a greater awareness. And as we've seen the 15 changeover voluntarily in the Bay Area and in other areas, 16 dry cleaners are just much more aware of the impacts than 17 they were several years ago. 18 CHAIRPERSON SAWYER: If there are no further 19 comments, I assume we're ready for a vote on Ms. D'Adamo's 20 proposed change. 21 Would the clerk please call the roll. 22 BOARD CLERK ANDREONI: Ms. Berg? 23 BOARD MEMBER BERG: No. 24 BOARD CLERK ANDREONI: Ms. D'Adamo? 25 BOARD MEMBER D'ADAMO: Aye. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 BOARD CLERK ANDREONI: Dr. Gong? 2 BOARD MEMBER GONG: Yes. 3 BOARD CLERK ANDREONI: Ms. Kennard? 4 BOARD MEMBER KENNARD: No. 5 BOARD CLERK ANDREONI: Ms. Riordan? 6 BOARD MEMBER RIORDAN: No. 7 BOARD CLERK ANDREONI: Supervisor Roberts? 8 BOARD MEMBER ROBERTS: No. 9 BOARD CLERK ANDREONI: And Dr. Sawyer? 10 CHAIRPERSON SAWYER: Yes. 11 BOARD CLERK ANDREONI: We have 3 "yes" votes and 12 4 "noes". 13 CHAIRPERSON SAWYER: Okay. So before us now is 14 the original proposal by the staff, with some 15 modifications that they have provided to us today as well. 16 Maybe you should review what those are. 17 SENIOR STAFF COUNSEL JOHNSTON: We would add -- 18 suggest adding to the resolution two "further resolved" 19 paragraphs. One which would read: "Be it further 20 resolved that the Board direct staff to ensure that they 21 consider the full useful life of equipment in any future 22 rule making for this source category." 23 And the second paragraph would be: "Be it 24 further resolved that the Board directs the staff to make 25 information available to the industry on alternatives to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 the use of Perchloroethylene dry-cleaning machines." 2 CHAIRPERSON SAWYER: Are there any questions? 3 BOARD MEMBER KENNARD: Move staff recommendation. 4 CHAIRPERSON SAWYER: We have a move to vote on 5 the measure. Is there a second on the move to vote? 6 BOARD MEMBER RIORDAN: Second. 7 CHAIRPERSON SAWYER: All those in favor please 8 say aye. 9 (Ayes.) 10 CHAIRPERSON SAWYER: Opposed? 11 Motion's carried. 12 Thank you, staff, very much for working on this 13 over the past year. 14 Agenda Item 7-1-6, the appointment of two 15 advisory committees to assist the Air Resources Board with 16 the implementation of AB 32, the California Global Warming 17 Solutions Act of 2006. 18 The Board has the important responsibility to 19 create a greenhouse gas reduction program that will be a 20 model not just for California but also for the rest of the 21 nation and the world. This program must achieve the 22 maximum feasible and cost effective reductions in 23 greenhouse gas emissions. At the same time, we must 24 maintain and enhance our progress in reducing criteria 25 pollutant and toxic emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 The advisory committees we are establishing today 2 will focus on issues central to our charge under the bill. 3 Ms. Witherspoon, please begin the presentation. 4 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 5 Sawyer. 6 The Global Warming Solutions Act directs ARB to 7 form two advisory committees, an Environmental Justice 8 Advisory Committee and an Economic and Technology 9 Advancement Advisory Committee. 10 There is a tremendous amount of expertise in both 11 areas, and we have drawn from those experts in 12 recommending a slate of members for each committee to you. 13 Although the proposed membership is limited for 14 practical reasons, please be aware that all meetings of 15 these advisory committees will occur in public following a 16 public notice so interested people who are not official 17 committee members will have an opportunity to participate 18 as well. 19 Chuck Shulock will make the staff presentation. 20 (Thereupon an overhead presentation was 21 Presented as follows.) 22 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 23 Good morning, Mr. Chairman and members. I'm 24 Chuck Shulock, Program Manager for Greenhouse Gas 25 Reduction at the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 The passage last year of the California Global 2 Warming Solutions Act of 2006 put the Air Resources Board 3 in the forefront of state activities for reducing 4 greenhouse gas emissions. This act gave the Board a 5 number of responsibilities to be fulfilled along the way 6 to meeting the 2020 target for emission reductions. There 7 will be many meetings in the months and years ahead at 8 which the Board will act on climate change matters. 9 Today we're bringing to you the first of these 10 items. This agenda item concerns the appointment by the 11 Board of two committees, the Environmental Justice 12 Advisory Committee and the Economic and Technology 13 Advancement Advisory Committee, both of which are 14 specifically mandated by AB 32. 15 --o0o-- 16 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 17 Today's presentation will cover several aspects 18 regarding the formation of these committees. First we'll 19 look at the charge to each committee, why it's being 20 created, and what it's being asked to do. 21 Then we'll review the individuals proposed for 22 membership and their affiliations. 23 Finally, we'll discuss some basic logistics 24 regarding the operation of the committees. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 2 Before going into the details of each committee, 3 I'd like to make one general point regarding the public's 4 ability to provide input into our proceedings. As Ms. 5 Witherspoon mentioned, we received a large number of 6 nominations for these committees. Many more qualified 7 names were suggested than could be accommodated on the 8 committees and still allow them to function. But that 9 does not mean that those not selected will have no voice 10 in the process. All of these committee meetings will be 11 noticed and will be open to the public. 12 In addition, there will be many other 13 opportunities to provide input on these important issues. 14 Staff will be hosting a series of workshops to solicit 15 comment on AB 32 work as it proceeds. We also plan to set 16 up sector-specific work groups to take advantage of all 17 available expertise. Finally, we're always open to ad hoc 18 consultation and comment. 19 --o0o-- 20 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 21 Turning now to the formation of the committees. 22 The first committee we'll be looking at today is the 23 Environmental Justice Committee. 24 --o0o-- 25 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 As I'm sure you're aware, the Governor and the 2 Legislature were determined to ensure that efforts to 3 reduce greenhouse gases not cause any additional burdens 4 for our citizens living in low income and minority areas. 5 Thus AB 32 carries within it the charge to create an 6 Environmental Justice Advisory Committee. 7 This committee will be called upon to offer 8 advice on potential impacts to minority and low income 9 communities as ARB staff develop the scoping plan of 10 proposed emission reduction measures. 11 The Environmental Justice Committee also is free 12 to call attention to any other issues during its tenure of 13 service. 14 --o0o-- 15 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 16 AB 32 mandated that this committee have at least 17 three members and that the membership must represent 18 communities with significant exposure to air pollution, 19 including communities with minority or low income 20 populations. 21 The legislation also said that committee members 22 must be drawn from nominations submitted by environmental 23 justice groups and other community organizations. 24 To assemble potential committee members staff 25 solicited nominations from appropriate organizations. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 we also posted a solicitation for members on the Board's 2 climate change website. 3 The result of these efforts is that the 4 individuals submitted today for Environmental Justice 5 Committee membership all were recommended by environmental 6 justice and community organizations. 7 We're also pleased to report that these 8 organizations conferred amongst themselves and submitted 9 to staff a consensus list of nominees and alternates. The 10 proposed membership of the committee that we are bringing 11 forward today reflects the consensus list proposed by 12 these community organizations. 13 As required, the proposed members are all from 14 communities with significant exposure to air pollution and 15 communities with significant low income or minority 16 populations. The proposed list also reflects geographic 17 diversity in that four of the proposed members are from 18 the Bay Area, four are from southern California, and three 19 from the Central Valley. 20 --o0o-- 21 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 22 And so we're pleased to present to you the 23 individuals recommended for membership on the 24 Environmental Justice Committee. They are Chione Flegal, 25 Latino Issues Forum -- Okay, you have them there before PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 you. And I won't go through member by member, but they're 2 listed. 3 So why don't we go to slide 9 please. 4 --o0o-- 5 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 6 From a logistical standpoint, the details of the 7 operation of the committee will be determined by the 8 committee. But staff anticipates that the committee will 9 meet quarterly. 10 As required by AB 32, committee members from 11 nonprofit organizations will receive per diem to support 12 their attendance. 13 ARB staff will provide support for the committee. 14 --o0o-- 15 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 16 The second committee to be formed today, also 17 mandated by AB 32, is the Economic and Technology 18 Advancement Advisory Committee. 19 --o0o-- 20 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 21 AB 32 establishes ambitious reduction targets, 22 and the development of new green technologies will be 23 essential in order to achieve success. Meanwhile the 24 research done on technology to reduce greenhouse gas 25 emissions will in many cases provide California businesses PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 with valuable commercialization opportunities. 2 This committee's main duty will be to advise ARB 3 on research and development opportunities related to 4 emerging technologies. These opportunities may take the 5 form of demonstration projects, partnerships with other 6 states and nations, opportunities to transfer technology, 7 and looking for and recommending investments, incentives, 8 and tax credits. 9 The committee is expected to provide a written 10 report on its findings and to supply information to be 11 used in the Cal EPA Secretary's Technology Incentive Plan, 12 which is to be completed by June 1 of 2008. 13 --o0o-- 14 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 15 Staff received numerous stakeholder nominations 16 for membership on this committee. The candidates 17 presented to you today represent a broad range of 18 experience and are drawn from a wide range of excellent 19 individuals from the technology, academia, business, and 20 nonprofit arenas. 21 --o0o-- 22 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 23 I have three slides here that run through the 24 members. Again, you have them in your presentation. And 25 we'll move on to the logistical slide. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 --o0o-- 2 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 3 Again, we anticipate that the committee will meet 4 quarterly and that ARB staff will provide support for the 5 committee. 6 --o0o-- 7 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 8 In conclusion, staff recommends that the Board 9 approve Resolution 07-1-6 creating these committees with 10 the recommended members. 11 The resolution provides that members of the 12 Environmental Justice Committee from nonprofit groups 13 receive per diem for attendance at committee meetings. 14 The resolution further provides that ARB staff will 15 furnish staff support for both of these committees. 16 That concludes the staff presentation. 17 And thank you. 18 CHAIRPERSON SAWYER: Do Board members have any 19 questions? 20 Ms. Kennard. 21 BOARD MEMBER KENNARD: Yes, I do. I have a 22 couple of governance questions. 23 What are the terms of these committee 24 assignments? 25 EXECUTIVE OFFICER WITHERSPOON: With respect to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 the Economic and Technology Advancement Committee -- the 2 statute doesn't give terms at all. But we had asked the 3 Econ and Tech Advancement Committee to give us major 4 recommendations by the end of this year and then to pause 5 and consider whether they should continue in operation; 6 and if so, for what purpose? 7 With the Environmental Justice Committee, we 8 expect them to convene through the creation of the 9 comprehensive scoping plan and perhaps through the 10 adoptions of major regulations. So they'll be in 11 existence for three to four years at least. 12 BOARD MEMBER KENNARD: And with respect to the 13 alternates on the EJ Committee, is that an alternate in 14 the event the principal member cannot attend a specific 15 meeting or as an alternate in the event they resign as a 16 committee member? 17 EXECUTIVE OFFICER WITHERSPOON: The former. 18 BOARD MEMBER KENNARD: Okay. Thank you. 19 CHAIRPERSON SAWYER: Dr. Gong. 20 BOARD MEMBER GONG: I'm not sure how you 21 structured this. But will there be any linkage between 22 the two committees at all in terms of maybe one meeting 23 out of the year to just cross-talk and cross-fertilize 24 each other? Is that possible or is that advantageous, for 25 that matter? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 2 We had not anticipated that. I think as we go 3 forward, if it appears that -- you know, that could 4 certainly be possible. But we had not anticipated that. 5 Go ahead. 6 EXECUTIVE OFFICER WITHERSPOON: At the workshop 7 Monday, I was approached privately by someone who thought 8 we should have a community member on the Economic and 9 Technology Advancement Group. And so at that time I 10 thought, well, maybe we should just bring them together. 11 There's a third committee that Cal EPA is 12 operating. That's the Market Advisory Committee. And we 13 do intend to bring all three together. When the Market 14 Committee completes its work in July, their 15 recommendations will be of huge interest to the 16 Environmental Justice Committee and could affect the 17 source of subsidies, the kind of research that the Econ 18 and Tech Committee feels should have the highest priority. 19 So we will connect those dots. 20 BOARD MEMBER GONG: I think that's a good idea. 21 It just occurred to me for just the first two 22 committees, forgetting the third one, that some projects 23 may not work in certain communities, for various reasons. 24 And so you could have the greatest technology on earth but 25 not be able to apply it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 EXECUTIVE OFFICER WITHERSPOON: Yeah. And 2 they'll all be interested in money. And so to the extent 3 that moving into market mechanisms provides an opportunity 4 to generate capital, say, through the auctioning of 5 emission allocations, then there'll be questions about 6 where are those revenues devoted? Do they go in to R&D, 7 do they go into these lower income communities to fund 8 certain kinds of activities, do they do both, do they buy 9 down the price of power at dry cleaners such as Jose 10 Carmona talked about earlier? Lots of options. 11 CHAIRPERSON SAWYER: I've had a request from 12 Secretary Adams to expand the Economic and Technology 13 Advancement Advisory Committee to include an expert in 14 forestry. I concur with this recommendation. I think 15 we're not prepared to name a person at this time because 16 we haven't contacted anybody or -- 17 EXECUTIVE OFFICER WITHERSPOON: Well, we'll check 18 around. And we had been approached about including Andrea 19 Tuttle, who's the former Secretary of Forestry under the 20 Davis administration, who's now with the Pacific Forest 21 Trust, as a potential member. And we'll loop back -- it 22 was also Secretary Michael Chrisman from Resources who 23 asked a forestry representative be included. And we'll 24 confer with him as to his preferences. 25 CHAIRPERSON SAWYER: Yeah, I hope the Board will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 concur on doing this. 2 BOARD MEMBER RIORDAN: That's a good idea. 3 CHAIRPERSON SAWYER: Supervisor Roberts. 4 BOARD MEMBER ROBERTS: Yeah, thank you. 5 When you gave the report -- when you finished 6 with the first committee, you pointed to the geographic 7 diversity there. You didn't do that on the second 8 committee. As I look at this, it seems to have 9 predominantly northern California representation. 10 Is that a criteria in the first committee and not 11 in the second committee? 12 EXECUTIVE OFFICER WITHERSPOON: Well, I'll try to 13 address that, because -- and I was present in the bill 14 negotiations and this is, you know, an artifact of those 15 to some extent. When AB 32 was going through the 16 Legislature the business community said, "Don't pass it, 17 don't pass it, don't pass it. Oh, my God, if you're going 18 to pass it, we need help, we financial help." And the 19 response from the Administration was "no promises. You 20 know, the state is in fiscal distress. But please tell us 21 your ideas and we'll listen to them." 22 So half of the members of this committee are 23 representing the industry to be regulated and what their 24 needs might be as we go into those rule makings: The 25 utilities, the oil companies, the chamber of commerce, et PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 cetera. And we had other requests from the cement 2 industry. We couldn't accommodate them all. 3 Then we balanced the committee with futurists, 4 academics, folks who had a sense about where the 5 technologies were going to come from, the leading edge, 6 what government investments made a difference, where the 7 job generation was going to be, where the new export 8 markets were going to be, so that we could get both of 9 those kinds of ideas out of the committee. 10 And so we didn't think at all about geographical 11 representation. And if you think that there's either a 12 kind of industry or a kind of academic that we're 13 missing -- we're up to an unwieldy number of 19. But -- 14 BOARD MEMBER ROBERTS: Well, yeah, you've got a 15 large number, and I'm not seeking to add more numbers. 16 But I still think there are geographic 17 perspectives. I know -- for people of northern California 18 this may come as a shock to you -- there actually are 19 academics in southern California. And in rounding -- 20 EXECUTIVE OFFICER WITHERSPOON: We had a very 21 long list. 22 BOARD MEMBER ROBERTS: -- in rounding out this 23 committee -- 24 EXECUTIVE OFFICER WITHERSPOON: We had scripts 25 people on the proposal and state -- we had a lot of them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 BOARD MEMBER ROBERTS: Well, I'm just looking at 2 the final cut. I don't know who was on there. But 3 this -- 4 EXECUTIVE OFFICER WITHERSPOON: Well, I should 5 tell you too that Dr. Lloyd is already assembling a list 6 of expert witnesses he wants to bring in to have speak to 7 the committee and help shape their recommendations. And 8 so that's another way we're going to bring people in from 9 around the state in different sectors and -- 10 BOARD MEMBER ROBERTS: Yeah, I'm just looking at 11 the committee members here. 12 EXECUTIVE OFFICER WITHERSPOON: Yeah, I know. 13 BOARD MEMBER ROBERTS: And I'm -- you're dancing 14 around the obvious. And, that is, not only was it not 15 given much consideration; it wasn't given any 16 consideration. And I think it's an important criteria. I 17 think there are perspectives that sometimes don't get 18 recognized, as you know, Catherine, when I have to 19 continually point out that we have a lab port in southern 20 California. Some people in northern California don't know 21 that. And I think it would -- this would be a better 22 committee if there were some stronger geographic 23 representation on it. 24 EXECUTIVE OFFICER WITHERSPOON: Is there a member 25 you'd like to recommend? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 BOARD MEMBER ROBERTS: This is the first time 2 I've seen the list, so I don't have any. There's 3 nobody -- I'm confident that with a little bit of effort 4 you could recruit some very qualified candidates who would 5 round this out culturally if not academically. 6 EXECUTIVE OFFICER WITHERSPOON: And there's not a 7 statutory limit on membership. It's really all about 8 manageability. So, yeah, we could find -- 9 BOARD MEMBER ROBERTS: Bounce a couple of these 10 off and add a couple from southern California and you'll 11 have a nice committee. 12 BOARD MEMBER RIORDAN: Some of those groups 13 though, Supervisor Roberts, I think do represent the whole 14 of the state. And I'm looking at the California Chamber 15 of Commerce, the Farm Bureau. BP is everywhere. So there 16 are some that just are basically statewide. And so that 17 at least gives me some comfort that the south -- while you 18 know better in terms of the technical people and maybe the 19 academic people that might be from southern California 20 that you're thinking about, I can tell you that there are 21 some of those agents -- or, you know, groups that really 22 are statewide groups. In other words, the California 23 Chamber of Commerce is going to represent business 24 throughout the State of California, not just any one 25 particular area, in my opinion. And the same would be for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 the Farm Bureau. Those are the two that I know best. 2 EXECUTIVE OFFICER WITHERSPOON: We'd love to have 3 scripts, you know. We can talk to you off line about it. 4 BOARD MEMBER ROBERTS: Yeah. I'm not even 5 necessarily pushing somebody from San Diego. But I would 6 guess if I had the addresses of everybody on this list and 7 where they live, I'm not sure there's anybody from 8 southern California. That doesn't seem to me in -- due 9 respect, everything that I'm hearing here, you've got 10 three academic institutions on there -- everything -- you 11 know, it seems to me that there should be some regional 12 perspective on here that's missing. And I think it would 13 be worth making the change. And, you know, I don't have a 14 name to recommend and I'm not trying to particularly push 15 anybody from San Diego either. But I would feel more 16 comfortable if we -- a committee this large that is so 17 narrowly represented is disturbing to me. 18 BOARD MEMBER KENNARD: May I suggest an amendment 19 to the staff recommendation and, that is, that we add an 20 additional member that is more reflective of the southern 21 California region? And that staff can work with whomever 22 and, in particular, Supervisor Roberts to identify that 23 person. 24 EXECUTIVE OFFICER WITHERSPOON: Be happy to do 25 that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 CHAIRPERSON SAWYER: I second that. 2 BOARD MEMBER BERG: I'll second. 3 Sorry. 4 EXECUTIVE OFFICER WITHERSPOON: You've got 5 witnesses on this item. 6 CHAIRPERSON SAWYER: So we can move ahead with 7 this, Catherine? Do we need to -- 8 EXECUTIVE OFFICER WITHERSPOON: Yes, we can. 9 I'm -- 10 CHAIRPERSON SAWYER: -- come back to the Board? 11 EXECUTIVE OFFICER WITHERSPOON: No, if you give 12 us direction, we can follow through. In 1978 the Board 13 reserved to itself the responsibility for naming advisory 14 committees. That's why this item's before you today. And 15 if you give us sufficient direction, we can complete the 16 action on your behalf, the kind of individual you're 17 looking for us to find, and we can simply inform you we've 18 completed that work. 19 I don't think we need to bring it back as an 20 additional Board item. 21 SENIOR STAFF COUNSEL JENNE: So, Dr. Sawyer, if 22 we took that approach, the Board would be delegating to 23 the Executive Officer the responsibility of finding the 24 individual to appoint to the advisory committee, both for 25 the forestry member and the member from southern PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 California. 2 EXECUTIVE OFFICER WITHERSPOON: If that's okay 3 with you. 4 CHAIRPERSON SAWYER: I think that'd be fine. 5 Perhaps you could consult with me and I could act on 6 behalf of the Board and -- 7 EXECUTIVE OFFICER WITHERSPOON: Actually you 8 can't, but I can. 9 CHAIRPERSON SAWYER: Oh, okay. 10 (Laughter.) 11 EXECUTIVE OFFICER WITHERSPOON: But you can 12 certainly tell me what to do, and I'd be happy to consult 13 with Supervisor Roberts as well. 14 CHAIRPERSON SAWYER: Yeah, I think that's the way 15 we need to do it. 16 I must admit a little bit of embarrassment in 17 looking at this list and seeing the geographic 18 distribution is not representative of the state. I must 19 admit that was not an item high on our agenda, and that 20 certainly is a fault. And thank you for pointing it out. 21 Okay. Are there any other questions? 22 With that, we have requests from four individuals 23 to provide testimony. In order they will be Tim Martinez, 24 Edward Lombard, Willie Galvan, and Roy Perez. 25 Mr. Martinez. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 Temporarily lost? 2 Mr. Lombard. 3 Do I have the right list? 4 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 5 Yes. 6 CHAIRPERSON SAWYER: Willie Galvan? 7 And Roy Perez. 8 EXECUTIVE OFFICER WITHERSPOON: Mr. Chairman, 9 just for the record, these were all individuals who asked 10 to be included on the Environmental Justice Advisory 11 Committee. And we felt that chambers of commerce were not 12 the intended membership of that committee, even though 13 they represent Hispanic, black and vets chambers. And 14 that's why we went with sort of the traditional definition 15 of the environmental justice community on the consensus 16 slate that those various organizations prepared for us. 17 BOARD MEMBER RIORDAN: Ms. Witherspoon, I 18 think -- and I understand and concur -- but I think we 19 need to write to these individuals very specifically and 20 tell them that these meetings are open, we would really 21 appreciate their input at the meetings. And I think they 22 can have a lot of effect just by their presence and their 23 input. 24 DEPUTY EXECUTIVE OFFICER TERRY: Actually, Ms. 25 Riordan, we did -- in our notification letter before this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 meeting did exactly that, let them know, open meetings, we 2 certainly encourage their participation, and there would 3 be opportunity for public comment in all the meetings. 4 BOARD MEMBER RIORDAN: Okay. Good. 5 CHAIRPERSON SAWYER: Does staff have any further 6 comments? 7 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 8 GREENHOUSE GAS REDUCTION PROGRAM MANAGER SHULOCK: 9 No. 10 CHAIRPERSON SAWYER: Since this is not a 11 regulatory item, it's not necessary to officially close 12 the record. 13 Are there any ex parte communications that Board 14 members need to disclose? 15 I must admit that I must have been contacted by 16 large numbers of people on appointments to this committee, 17 but it did not occur to me that it fell under the ex parte 18 and I didn't keep any record of it. 19 SENIOR STAFF COUNSEL JENNE: It would fall under 20 the ex parte communications because it is an item the 21 Board is taking formal action on even though it's not a 22 regulatory item. But if you wanted to you, could, you 23 know, provide the list later of the ex parte contacts that 24 you had if you can -- to the extent that you can remember 25 them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 CHAIRPERSON SAWYER: Okay. I will provide that 2 information later for the record as best I can reconstruct 3 it. 4 And there's nobody else that has any ex parte 5 contact? 6 All right. The Board has before it Resolution 7 No. 7-6, providing for the appointment of the recommended 8 committee members, with modifications as discussed. 9 Do I have a motion to adopt? 10 BOARD MEMBER D'ADAMO: So moved. 11 CHAIRPERSON SAWYER: And a second? 12 BOARD MEMBER BERG: Second. 13 BOARD MEMBER RIORDAN: With the amendments. 14 CHAIRPERSON SAWYER: With the amendments. 15 Is there any further discussion at this time? 16 If not, all those in favor please indicate by 17 saying aye. 18 (Ayes.) 19 CHAIRPERSON SAWYER: Opposed? 20 Motion is carried. 21 The next agenda item is 7-1-6, relating to the 22 appointment of two advisory -- oops, excuse me -- is 23 7-1-7, an informational update on recent findings in 24 climate change sciences. Staff will provide the Board 25 with semiannual updates on new research findings. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 many disciplines involved in studying climate change are 2 very productive and every month significant findings occur 3 and are reported. The Board needs to be aware of the most 4 important findings to make decisions based on the best 5 possible science. Thus staff will provide regular updates 6 to the Board on recent work on climate change. 7 Ms. Witherspoon, please introduce this item. 8 EXECUTIVE OFFICER WITHERSPOON: Go right ahead, 9 Dr. Motallebi. 10 DR. MOTALLEBI: Thank you, Ms. Witherspoon. 11 Good afternoon, Dr. Sawyer and members of the 12 Board. 13 In today's update we will present key scientific 14 findings from several of the most significant papers on 15 climate change published in the past few years. 16 (Thereupon an overhead presentation was 17 Presented as follows.) 18 DR. MOTALLEBI: The various scientific fields 19 associated with studying the earth's climate are very 20 active, with hundreds of papers published every year. To 21 help the Board keep up to date on the critical scientific 22 publications in this field, staff will present an update 23 to the Board twice a year on the most important findings. 24 Today's presentation will highlight papers which 25 strengthen the evidence that global warming is human PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 induced, show dramatic loss of ice cap, and present some 2 economic analysis. 3 --o0o-- 4 DR. MOTALLEBI: There has been much progress in 5 identifying fingerprints of climate change driven by 6 greenhouse gases. Global temperature is valuable too for 7 summarizing the state of global climate. 8 Measurements show that global average temperature 9 has increased by 1.6 degrees Fahrenheit in past hundred 10 years, with most of it happening in the last three 11 decades. The spatial pattern of where this warming is 12 occurring around the globe indicates most of the warming 13 was caused by heat-trapping emissions from human 14 activities. 15 Dr. James Hansen of NASA and his colleagues have 16 concluded that the air is within 1 degree Centigrade of 17 maximum temperature of the past million years and that 18 global warming of more than 1 degree Centigrade, or 1.8 19 degree Fahrenheit, relative to the year 2000 will 20 constitute a dangerous climate change as judged from 21 possible sea level rise of at least one meter per century. 22 --o0o-- 23 DR. MOTALLEBI: Ocean exhibit natural temperature 24 cycles, with some areas cooling at the same time that 25 others warm. This natural internal variability results PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 from heat transport from one place to another, but it adds 2 no new heat to the ocean. 3 However, recent scientific studies indicate that 4 the world's ocean have absorbed about 20 times as much 5 heat as the atmosphere over the past half century, Leading 6 to higher temperature not only at the surface but deeper. 7 --o0o-- 8 DR. MOTALLEBI: The result of several independent 9 scientific studies show that the six oceans that circle 10 the globe have been warming from surface downward 11 simultaneously for at least the past 40 years. 12 In this slide, the observed oceanic temperature 13 for the past 40 years in the North Atlantic Ocean is 14 compared with two different climate models. 15 The observations are shown as the red line. The 16 blue region represent the expected temperature variation 17 due to natural drivers. As you can see, there is very 18 poor agreement with observed temperature. 19 The green shaded area shows the climate model 20 results when both human-induced warming effects and 21 natural variability are included. These combined effects 22 show a substantial match with the observed temperature. 23 This figure represents similar trends found in other 24 oceans. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 DR. MOTALLEBI: One unpleasant surprise in recent 2 years has been that observed ice melt has occurred much 3 more rapidly than previously predicted by climate modeling 4 studies. 5 --o0o-- 6 DR. MOTALLEBI: In recent years climate 7 scientists have been surprised by unprecedented loss in 8 global ice cover. Ice caps appear to respond much more 9 quickly to climate perturbation than previously thought. 10 Over the past decade, scientists documented rapid melting 11 around the coasts of Greenland. The loss of ice from 12 Greenland doubled over the past two years, as its glaciers 13 flowed faster into the ocean in the response to a warmer 14 climate. 15 Even though this ice melt only contributes to the 16 sea level rise of half a millimeter per year, Dr. James 17 Hansen has predicted that the vast island's ice cap will 18 approach irreversible meltdown with another 3.5 to 5.5 19 degrees Fahrenheit rise in global temperatures. 20 Greenland is the second largest land-based ice 21 sheet in the world. A complete melting of this sea ice 22 would raise global sea level by almost 20 feet, a level 23 that would permanently flood virtually all of America's 24 major coastal cities. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 DR. MOTALLEBI: Among the most serious effects of 2 global warming is sea level rise, caused by a combination 3 of melting glaciers all over the world and the thermal 4 expansion of the water as the oceans warm. As you can 5 see, there is already almost a 20 centimeter (about 8 6 inches) rise in sea level in past century. Coastal cities 7 such as San Francisco, Los Angeles, Miami, New York, and 8 low-lying countries such as Netherlands and Bangladesh 9 will be seriously impacted if sea levels rise 10 significantly. 11 --o0o-- 12 DR. MOTALLEBI: Carbon dioxide is the largest 13 contributor to the human-caused climate change and the 14 World Meteorological Organization says that CO2 has 15 increased for 90 percent -- CO2 has accounted for 90 16 percent of warming over the past decade. 17 CO2 levels now stand about 27 percent higher than 18 at any point in the last 400,000 years. 19 Several recent scientific sources indicate that 20 from 2000 to 2005, the growth rate of CO2 emission was 21 more than 2.5 percent per year, whereas in the 1990s it 22 was less than 1 percent per year. This increasing trend 23 in emissions tracks atmospheric CO2 concentrations, and it 24 also indicates that CO2 emissions are increasing more 25 rapidly despite the international effort to reduce the use PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 of the fossil fuels. 2 --o0o-- 3 DR. MOTALLEBI: What the future holds with 4 respect to climate change depends on human actions. 5 Because greenhouse gases have a very long lifetime in the 6 atmosphere, the emissions already in the atmosphere mean 7 that the world will continue to see increased warming over 8 the next century. We need to take strong and immediate 9 action to prevent the warming from becoming catastrophic. 10 --o0o-- 11 DR. MOTALLEBI: If the developed world meets the 12 Governor's 2050 targets for emission reductions and 13 developing world introduces clean technologies, the 14 temperature rise may be less than 5 degrees Fahrenheit. 15 Here in California that could result in loss of 30 to 60 16 percent of Sierra snowpack and a doubling in heat wave 17 days. 18 If the Board world continues on a path 19 characterized as a medium-high emission, the temperature 20 rise could be as much as 8 degree Fahrenheit and the 21 damages increase accordingly. However, if the world 22 continues to emit greenhouse gases in "business as usual" 23 scenario, by 2099 California could experience a 24 catastrophic increase in average temperature of 10 degree 25 Fahrenheit and 90 percent loss of snowpack. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 --o0o-- 2 DR. MOTALLEBI: As you can imagine, it's very 3 difficult to accurately predict the future for human 4 society and economy. Thus economic assessments of future 5 impacts of climate change have significant uncertainties. 6 However, a number of studies suggest losses of 7 global gross domestic product between 1.5 and 5 percent 8 each year assuming a 4.5 degree Fahrenheit warming. 9 Existing research also indicates the cost of policies to 10 stabilize greenhouse gases concentrations center around 1 11 percent of GDP per year. However, stabilization policy at 12 550 ppm of CO2 would not prevent a rise in global 13 temperature, but only keep temperature lower than what 14 they might be without a stabilization policy. As such, 15 future damages are not eliminated, only reduced. 16 --o0o-- 17 DR. MOTALLEBI: Sometimes decisions can be 18 postponed without great cost. Not so with global warming. 19 Heat-trapping emissions are cumulative, and delaying the 20 decision to reduce emissions will only make the task of 21 solving it much more difficult. 22 As the blue curve in this graph shows, if 23 national emission reductions start soon, we can stay on 24 the stabilizing heat-trapping gases path at 450 ppm with 25 an annual emission reduction rate that gradually ramps up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 to 3.2 percent per year. 2 But if we delay a serious start and allow 3 continued emission growth at nearly the "business as 4 usual" rate, the annual emission reduction rate required 5 to stay on this path jumps to 8.2 percent per year, shown 6 by the red curve. This illustrates the importance of 7 maintaining a continuous path from the Governor's 2020 8 target to his 2050 goal. 9 --o0o-- 10 DR. MOTALLEBI: In conclusion, there will always 11 be uncertainty in understanding a system as complex as the 12 world's climate. However, there is now strong scientific 13 evidence that significant global warming is taking place 14 due to the higher concentration of greenhouse gases in the 15 atmosphere. And most of the scientists are convinced that 16 this rapid warming is largely due to human activities. 17 These conclusions are supported by direct 18 measurements of rising surface air temperature and 19 subsurface ocean temperatures, phenomena such as increases 20 in average global sea levels, retreating glaciers all 21 around the world, and changes to many physical and 22 biological systems. 23 As stated and proven by many credible scientists, 24 global climate change is no longer a theory. It is a 25 serious and urgent reality. These findings indicate that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 recent acceleration of greenhouse gas emissions is pushing 2 the Earth to drastic climate change with significantly 3 destructive impacts on the Earth's ecosystems. 4 --o0o-- 5 DR. MOTALLEBI: The reports of the Fourth 6 Assessment by the Intergovernmental Panel on Climate 7 Change will be released starting in February, with the 8 final synthesis report due to be released in November of 9 this year. The assessment will represent the consensus of 10 over 2,000 scientists from every country in the world. 11 These reports are very respected and shape global opinion. 12 Preliminary news reports suggest it will conclude that the 13 evidence of climate change has strengthened significantly 14 since the third assessment publish in 2001. 15 Staff will summarize the most important findings 16 on the physical basis of climate change and impacts, 17 adaptation, and mitigation at the July Board meeting. 18 This concludes my presentation. We would be 19 happy to answer any questions. 20 Thank you. 21 CHAIRPERSON SAWYER: Thank you very much. 22 Do Board members have questions? 23 Dr. Gong. 24 BOARD MEMBER GONG: Thank you for that very 25 interesting presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 DR. MOTALLEBI: Thank you. 2 BOARD MEMBER GONG: I'd appreciate a copy of the 3 slides. I think they're very -- they're nice slides, but 4 they're very important and recent information that I'm 5 sure even other Board members could use as well. 6 One question I have, and that's really about 7 negative reports. There's still skeptics out there or 8 people who do not believe in global warming is here, and 9 they refer to recent studies and things like that. So my 10 question is, to be somewhat fair and balanced, if you can, 11 and in brief time: Is it possible to also pay some 12 attention to any negative information? Again, just trying 13 to balance it out a little bit. It's not to say that we 14 don't believe in it, but it is all one direction, it seems 15 like. 16 ATMOSPHERIC PROCESSES SECTION MANAGER McCAULEY: 17 My name is Eileen McCauley. I'm the manager of 18 the Atmospheric Processes Section. 19 You're right. There is so much research going on 20 and the climate is such an extremely complex phenomena, 21 that there are studies that give what may seem like 22 different results. And each study has to be considered 23 seriously. We also have to be careful not to rush to 24 conclusions, because climactic change is only established 25 through a long-term trend. So looking at just a couple PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 years or even a decade obviously does not establish a 2 climactic record. 3 So you're right, you do need to look at all of 4 the studies with a scientific eye. 5 BOARD MEMBER GONG: I guess my point is that even 6 with scientific eyes it's hard sometimes to really put it 7 into perspective, because we're right in the middle of 8 this -- or somewhere in this continuing of climactic 9 change. So it would be nice for me as a scientist, as a 10 Board member, as a layperson to better understand how to 11 respond to people who say, "Well, it doesn't exist" or 'I 12 have a study that says opposite of that." It may not be 13 the opposite. It is a snapshot study perhaps and they're 14 coming to different conclusions based on limited data, 15 time, I don't know. 16 But I think that's very important just to get our 17 point our across about global warming. 18 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, I've 19 asked the Research Division to help us nonscientists 20 understand the significance of studies as they emerge. 21 And they already have an e-mail tree amongst various 22 experts inside the Air Resources Board where they share 23 what each one of them has drawn from different literature. 24 And then I've asked them to help, you know, compute it for 25 the rest of us. And we'd certainly be happy to add you to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 that e-mail exchange. 2 And then the other thing too I want to point out 3 is we haven't lost our capability for critical analysis. 4 And one example is the Stern report that came out from 5 London indicating the costs of inaction. And our staff 6 looked quite carefully at the way that analysis was done 7 and concluded it was overstated. They weren't comfortable 8 with the analysis. And what you saw here was a more 9 moderate assessment. And so we didn't introduce it by 10 saying, "This is our counter to the Stern report." But in 11 fact we are critically screening and looking what other 12 researchers in the field are saying about the science as 13 it's coming out. And we'll try to communicate that to you 14 more. 15 BOARD MEMBER GONG: Thanks. That's very good to 16 hear. I appreciate that. 17 CHAIRPERSON SAWYER: Yes. 18 BOARD MEMBER KENNARD: I had actually had a 19 question about the costs of inaction. And I just wanted 20 to clarify the timeframe in which this loss of GDP -- is 21 that the 2070 to 2099? 22 MR. KENNEDY: My name is David Kennedy. 23 That's the 2050 value. So it would be a loss of 24 global GDP in 2050. 25 BOARD MEMBER KENNARD: And assuming that we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 a 4.5 degree warming at 2050, then the loss in GDP at that 2 point -- 3 MR. KENNEDY: I believe so. I believe so, yes. 4 BOARD MEMBER KENNARD: Okay. So we'd have to 5 lose -- we'd have to be at that point of warming -- 6 MR. KENNEDY: Yes. 7 BOARD MEMBER KENNARD: -- to lose that amount of 8 GDP? 9 MR. KENNEDY: Yes. 10 BOARD MEMBER KENNARD: Okay. Thank you. 11 CHAIRPERSON SAWYER: All right. We have no 12 witnesses on this item to testify. 13 And since this is not a regulatory item, it's not 14 necessary to officially close the record. 15 Agenda Item 7-1-8, an update to the Board on the 16 harbor community's monitoring study being conducted in the 17 neighborhoods near the ports of Los Angeles and Long 18 Beach. 19 This is a heavily industrialized area with large 20 concentrations of diesel truck and rail traffic. To 21 better study the potentially high localized impacts in 22 this region, our Research Division is conducting a series 23 of enhanced monitoring projects collectively referred to 24 as the Harbor Communities Monitoring Studies. 25 Ms. Witherspoon, please introduce this item. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 (Thereupon an overhead presentation was 2 Presented as follows.) 3 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 4 Sawyer. 5 The Harbor Communities Monitoring Studies are 6 addressing topics of high interest, including 7 environmental justice, the Diesel Risk Reduction Program, 8 and goods movement. We want to know whether people living 9 or going to school near the major freight corridors or 10 industrial sources are exposed to significantly higher 11 concentrations. To do this, we're using an electric 12 vehicle as a platform to carry realtime pollution monitors 13 over a wide area in a short time, enabling us to map 14 localized pollution sources which may not be adequately 15 captured by our fixed-site ambient monitors. We're also 16 using fixed monitors in conjunction with the mobile 17 platform to distinguish regional from local source 18 contributions. 19 Lastly, we're testing easy-to-use tools which, if 20 proven successful, would be ideal for community groups to 21 use. We're trying to reach a point where we can 22 prioritize our resources to focus on emissions that are 23 most significant from a health impact standpoint. 24 Kathleen Kozowa, a doctoral candidate at UCLA -- 25 who we hope to hire -- and a member of the Research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 Division, will make the staff presentation. 2 Kathleen. 3 MS. KOZOWA: Thank you, Ms. Witherspoon. 4 Good afternoon, Dr. Sawyer and members of the 5 Board. 6 Today we will present an overview of the Harbor 7 Communities Monitoring Study, which begins next month in 8 the communities of Wilmington, West Long Beach, East San 9 Pedro, and South Carson. 10 --o0o-- 11 MS. KOZOWA: The overall goal of the Harbor 12 Communities Monitoring Studies is to develop improved 13 technical tools for assessing exposure in California 14 communities. Traditional fixed site monitoring stations 15 are expensive to operate, and as a result they are widely 16 spaced and not suitable for finding pollution "Hot Spots". 17 We are testing easy-to-use sampling devices that can be 18 cheaply deployed in the community for this purpose. 19 When we find "Hot Spots," we hope to separate the 20 influence of local and regional emission sources. Our 21 study will also establish current pollution levels in 22 these communities which we can revisit to determine the 23 effectiveness of the goods movement emission reduction 24 plan adopted by the Board. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 MS. KOZOWA: The harbor communities were selected 2 as our area of focus because it contains a wide variety of 3 pollution sources: The harbor communities areas adjacent 4 to the ports of Los Angeles and Long Beach, as well as 5 several freeways, and contains several industrial 6 facilities. Community involvement was an important aspect 7 in our study design, as I will discuss in a later slide. 8 The Harbor Communities Monitoring Studies consist 9 of three projects: A passive monitoring network, a 10 particle counter network, and a mobile monitoring 11 platform. 12 These studies will proceed concurrently over the 13 course of an entire year. Year-long monitoring is 14 important, as PM2.5 health effects are driven by the 15 annual average exposure and air toxics cancer risks are 16 also based on long-term exposure. 17 A full year of monitoring also allows us to 18 evaluate seasonal differences. 19 --o0o-- 20 MS. KOZOWA: The passive monitoring network, or 21 the saturation monitoring project, is being conducted by 22 Professor Eric Fujita of the Desert Research Institute, or 23 DRI. This project will involve placing passive samplers 24 in 23 locations throughout the community to test if they 25 are sensitive and accurate enough to detect pollution PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 concentration gradients and if they are suitable to use to 2 predict yearly averages. Passive samplers require no 3 pumps, so they were easy to sight and may be a useful 4 measuring tool for community groups. 5 A photograph of the passive sampler is shown on 6 the right-hand side of this slide. It measures about two 7 inches long and does not require a pump to sample air. 8 Measurements include about a dozen different air 9 pollutants. 10 --o0o-- 11 MS. KOZOWA: This map of the study area shows 12 locations of the passive monitoring sites. Included in 13 this map are fixed site ambient monitors run by the ports 14 of Los Angeles and Long Beach and the South Coast Air 15 Quality Management District. 16 Some passive monitoring sites will be co-located 17 with the South Coast AQMD sites for comparison purposes. 18 Otherwise sites were selected specifically to look for 19 gradients from sources such as the freeways, the ports, 20 and were also informed by measurements taken by the mobile 21 platform. Cooperation with the community was required to 22 place the passive samplers and many have volunteered space 23 on their property. 24 --o0o-- 25 MS. KOZOWA: Initial results from laboratory and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 field evaluations of the passive samplers show that 2 several passive samplers demonstrated good precision. 3 This was the case for nitrogen dioxide, nitrogen oxides, 4 sulfur dioxide, formaldehyde, and acetaldehyde. 5 However, results for other air toxics are still 6 in the process of being evaluated. Lab and field setups 7 for the testing of passive samplers are shown in the 8 photographs on the right. 9 --o0o-- 10 MS. KOZOWA: The particle counter network is 11 being conducted by Dr. Katharine Moore and Professor 12 Constantinos Sioutas from the University of Southern 13 California. A network of 13 particle counters will be 14 placed in the harbor communities area. Particle number is 15 dominated by ultrafine particles that have a diameter of 16 less than one micron, about 1,000 to 10,000 times smaller 17 than that of a human hair. Thus, ultrafine measurements 18 do not correlate well with PM mass. 19 Ultrafine particles are also a good indicator of 20 combustion sources and have been linked to death and 21 disease. The goal of the particle counter network is to 22 determine local versus regional source contributions and 23 how weather and seasonal changes influence particle number 24 concentrations. 25 The study will be conducted for three months in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 the winter and summer seasons in the harbor communities 2 area. 3 --o0o-- 4 MS. KOZOWA: The photograph on the left shows a 5 picture of a particle counter, which is the size of a 6 large shoe box. The photograph on the right shows the air 7 conditioned shelter which houses it. 8 In addition to particle counts, meteorological 9 measurements will be taken at these shelters as well. 10 Cooperation from community members was also required to 11 place these shelters, which require power and take up a 12 large amount of space. 13 Particle counter locations will be co-located 14 with DRI, South Coast AQMD, and port monitoring sites 15 whenever possible. 16 --o0o-- 17 MS. KOZOWA: The final component of the Harbor 18 Communities Monitoring Project is the mobile monitoring 19 platform. This project is being conducted by myself and 20 Professor Arthur Winer at UCLA and Scott Fruin from the 21 ARB's Research Division. 22 The mobile platform is a zero emission vehicle 23 equipped with realtime and near realtime instrumentation. 24 And I would like to acknowledge Toyota Motor Corporation 25 for their generous loan of a RAV4 electric vehicle. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 The mobile platform can cover large areas in a 2 short period of time, providing good spatial and temporal 3 resolution that can help identify areas of pollution "hot 4 spots" in the harbor communities area. 5 --o0o-- 6 MS. KOZOWA: The following is a list of air 7 pollutants and other measurements measured or recorded by 8 the mobile platform. Particle measurements include PM2.5 9 mass, black carbon, and particle-bound polycyclic aromatic 10 hydrocarbons, both good indicators for diesel particulate 11 matter, particle count and particle size distribution. 12 Carbon monoxide, carbon dioxide, and nitrogen 13 oxides are key vehicle related pollutants, while VOCs and 14 hydrogen sulfide measurements will be used to identify 15 impacts from refineries and waste water treatment 16 facilities. 17 --o0o-- 18 MS. KOZOWA: Measurements were taken on fixed 19 routes in the harbor communities area. Five routes were 20 mapped for the Wilmington pilot study, and each route was 21 designed to measure impacts from ports, freeways, 22 refineries, rail yards, and heavy-duty diesel truck 23 traffic on surface streets. Potential pollution "hot 24 spots" were investigated while driving in residential 25 areas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 Several factors were considered when developing 2 these routes. First, areas often downwind of sources were 3 emphasized, particularly if residential. 4 Second, input was provided by the community 5 residents. Many of the suggestions from the community 6 were regarding additions to the routes that included 7 certain schools, community centers, industrial facilities 8 and streets with heavy truck traffic, areas where 9 exposures to children and residents may be high. 10 Low income neighborhoods were weighted more 11 heavily than higher income areas. 12 Traffic count data and modeling, results from 13 dispersion modeling, electric vehicle range, and road 14 access were also considered when developing these routes. 15 --o0o-- 16 MS. KOZOWA: Here is an example of a route to 17 determine if some areas are more heavily impacted by 18 sources compared to others, pollution "hot spots" that are 19 not being identified by traditional monitoring sites. 20 We used this residential route in our pilot 21 study. We divided the residential portions of this route 22 into eight separate sections as seen on this map. Data 23 from each of these sections were compiled for two sampling 24 days, for morning and afternoon runs, and the results were 25 as follows: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 --o0o-- 2 MS. KOZOWA: Black carbon concentrations from a 3 sampling day are shown in this figure. For reference, the 4 average annual concentration of black carbon for the Los 5 Angeles area is 2 micrograms per meter cubed. 6 The highest concentrations of black carbon 7 observed on the sampling day were in the residential 8 neighborhood near the intermodal container transfer 9 facility, or ICTF, during the morning hours at 4 10 micrograms per meter cubed. 11 This area is likely impacted by diesel truck or 12 diesel locomotive plumes from activities at the ICTF. In 13 general, it appears neighborhoods near diesel engine 14 sources, such as the rail yard, freeway or busy surface 15 streets, are more impacted than those neighborhoods 16 further from those sources. 17 Morning concentrations are also generally higher 18 for most residential sections shown here. However, some 19 sections do not exhibit this pattern. Variables such as 20 meteorology and source strength may explain deviations in 21 the patterns we see between the morning and afternoon. 22 --o0o-- 23 MS. KOZOWA: This next figure shows black carbon 24 data for another sampling day. Although the same sections 25 are shown here, they display a different pattern. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 The highest black carbon concentrations were 2 observed in the Santa Fe E section, almost 5 micrograms 3 per meter cubed, which is adjacent to the 710 Freeway. 4 The Wilmington section saw an increase in black 5 carbon, while the ICTF neighborhood and Carson residential 6 sections saw decreases in black carbon compared to sample 7 day 1. This illustrates the variability of data that is 8 observed from day-to-day sampling and points to the need 9 for more days to be analyzed to establish patterns present 10 in the Wilmington area. 11 --o0o-- 12 MS. KOZOWA: This next figure illustrates the 13 effect of road types and time of day for black carbon. 14 Here we show average black carbon concentrations for 15 varying road types for morning and afternoon sampling 16 times for a single sampling day. 17 The data presented in this figure indicate there 18 is a difference between road types, with freeways having 19 the greatest concentrations of black carbon, an average of 20 12 micrograms per meter cubed; followed by surface streets 21 and residential areas, which show similar concentrations 22 for morning and afternoon sampling periods. 23 Also, the trend of higher black carbon 24 concentrations in the morning is seen in this figure as in 25 previous slides. Again, these results may be due to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 meteorological conditions such as low wind speeds or 2 increased diesel truck traffic in the morning hours. 3 More sampling needs to be conducted to verify 4 these preliminary findings. 5 --o0o-- 6 MS. KOZOWA: In summary, the Harbor Communities 7 Monitoring Program will provide useful information on the 8 impacts of pollution sources on residential communities 9 near the ports of Los Angeles and Long Beach. We have 10 found that easy-to-use monitors are good for some 11 pollutants which will allow communities to self-assess 12 their risk to pollution sources. 13 In addition, ultrafine counters will help us to 14 determine regional versus local influence of combustion 15 sources. 16 And, lastly, the innovative mobile platform can 17 identify pollution "hot spots" in communities. 18 However, due to the significant variability in 19 pilot study results, we need to continue monitoring in 20 2007. 21 --o0o-- 22 MS. KOZOWA: Lastly, here are some important 23 dates to remember for the three studies discussed today. 24 The three studies are set to begin winter monitoring in 25 February of 2007. Monitoring in the spring, summer and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 fall seasons will also be conducted over the course of 2 this year. Results are expected to be publicly available 3 starting in early 2008, and we will be happy to provide 4 the Board with an interim update. 5 Thank you for your attention. And I am ready to 6 address any questions that the Board may have. 7 CHAIRPERSON SAWYER: Thank you very much. 8 Do the Board members have questions? 9 Dr. Gong. 10 BOARD MEMBER GONG: Very nice presentation. 11 I was wondering about the black carbon. You 12 showed results on that in several slides. I may have 13 missed this, but is there significance to black carbon 14 versus just measuring PM2.5 or other size ranges? And is 15 black carbon a particular size? I know you have mass 16 there, but -- 17 MS. KOZOWA: Yes, there is significance to black 18 carbon measurements. In this study we are using it as a 19 surrogate for diesel PM, which has been labeled as a toxic 20 air contaminant. 21 BOARD MEMBER GONG: The PM 2.5 doesn't capture 22 all that then? Or the ultrafines too, for that matter. 23 It's just -- I guess it's another metric you can use, 24 another agency. But -- 25 RESEARCH DIVISION CHIEF CROES: Yeah, Dr. Gong, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 we are measuring PM 2.5 along with a dozen other 2 pollutants. We just demonstrated the results for black 3 carbon because of the proximity of diesel sources in the 4 community. 5 BOARD MEMBER GONG: Good enough. 6 RESEARCH DIVISION CHIEF CROES: But certainly 7 we'll be able to identify whether or not there are "hot 8 spots" for PM 2.5 as well. 9 CHAIRPERSON SAWYER: Mrs. Riordan. 10 BOARD MEMBER RIORDAN: I just need a little bit 11 of help with the Google map that you have. And what I'm 12 trying to understand in my own mind is, where would the 13 710 be on that map? Or is it even on that map? 14 MS. KOZOWA: Yes, it is on this map. The 710 is 15 the major arterial you see that runs in the middle of the 16 slide. 17 BOARD MEMBER RIORDAN: Is it sort of this light 18 green there? Is that it? 19 MS. KOZOWA: Yes, it runs right through the 20 middle of the slide. 21 BOARD MEMBER RIORDAN: Okay. My question is this 22 then, if that -- and I thought that might be it: We 23 obviously have concentrated a lot of effort on one side of 24 the 710 and not a lot of effort, with the exception of the 25 South Coast perhaps for tentative spots, on the other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 side. Help me understand the reasoning for that. Just 2 lack of resources? Or is there a -- is there a reason 3 we're not on the other side a little bit more? 4 MS. KOZOWA: From what I understand, that the 5 study is focusing on the Wilmington area because of the 6 proximity of sources in that area. West Long Beach is an 7 important area that we are looking at. But we are not 8 concentrating any resources east of the 710. 9 BOARD MEMBER RIORDAN: Okay. 10 MS. KOZOWA: The mobile monitoring platform, 11 however, will do monitoring on the east side. 12 BOARD MEMBER RIORDAN: Okay. So you'll take the 13 mobile monitoring over there. 14 But I'm still going back. Don't we want to know 15 what's happening over there? And aren't those residential 16 areas as well? 17 EXECUTIVE OFFICER WITHERSPOON: They are, Mrs. 18 Riordan. And we have done analyses of the entire basin 19 surrounding the Port of L.A.-Long Beach for the purposes 20 of risk assessment and the goods movement report the Board 21 approved last April. This is a drilling down that's a 22 special environmental justice project. And Wilmington has 23 an array of project types that are not present to the 24 east. And so we drew a grid for walking in the streets 25 and plotting every emission source and validating our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 emission inventory. And then we've overlaid that with 2 this harbor monitoring project, so that we just can keep 3 deepening in understanding. 4 We have a similar activity going on in Commerce 5 further inland, though without all this monitoring. And 6 the idea is that once we've figured out what we think is 7 going on here, we'll test it in other communities and then 8 make presumptions about various communities around the 9 state. But we're sort of building the model here of how 10 to analyze these kinds of near-source problems. 11 BOARD MEMBER RIORDAN: Okay. Well I'm more 12 comfortable if you're going to take mobile monitoring. 13 Because I think, you know -- and I recognize Wilmington 14 needs a lot of assistance and there are a lot of, you 15 know, issues. But I suspect that they're across that 16 freeway as well. I mean then we want -- 17 EXECUTIVE OFFICER WITHERSPOON: There's pollution 18 sources everywhere in southern California. 19 BOARD MEMBER RIORDAN: We want to know -- we want 20 to know where they're moving to, I think -- also, I would 21 think. 22 But thank you. 23 DR. FRUIN: If I could add to that. I think 24 the -- oh, I'm Scott Fruin from the Research Division. 25 The thinking was also that the cargo traffic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 impacts on arterial roads and rails much more heavy in the 2 Wilmington area compared to Long Beach. So it's very 3 focused -- 4 BOARD MEMBER RIORDAN: So they're -- 5 DR. FRUIN: -- on those impacts. 6 BOARD MEMBER RIORDAN: They're all on the west 7 side of the 10? 8 DR. FRUIN: For the most part, yes. 9 BOARD MEMBER RIORDAN: Okay. Thank you. 10 CHAIRPERSON SAWYER: Ms. Berg. 11 BOARD MEMBER BERG: I was wondering, with the 12 preliminary results that we do get on the black carbon, if 13 we'll also be tracking the truck traffic and other type 14 factors. It's kind of interesting that the two results 15 really aren't very similar and they have different results 16 in different areas even though we did full day samplings. 17 And so will we be tracking the truck traffic and other 18 types of events that might be happening in the area so 19 we'll be able to say why there's differences? 20 EXECUTIVE OFFICER WITHERSPOON: Yes, we will, 21 because we were working for several months with the 22 Business Transportation and Housing, CalTrans and the two 23 ports to get an accurate count of trucks at the ports of 24 L.A. and Long Beach, and we're going to continue working 25 on that for the implementation of the bond. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 And also one of the biggest issues in the state 2 implementation plans and our motor vehicle inventory is 3 whether our VMT for trucks is accurate and whether it is 4 allocated appropriately across the highway system in 5 California. And so the Southern California Association of 6 Governments is working on a special study to get realtime 7 counts on key corridors that we can correlate with the 8 data we've been using for several years now, so that we 9 have the emissions gridded in the right place. 10 Both of those activities, you know, will probably 11 be concluded by the end of this year. 12 BOARD MEMBER BERG: Thank you. 13 MS. KOZOWA: I would also like to add to that, 14 UCLA has just completed a traffic count study in the area. 15 And those results will inform some of the data analysis 16 that we conduct for the mobile platform. 17 BOARD MEMBER BERG: I mean is it reasonable to 18 look at on the Santa Fe East on the significant difference 19 between the two days? Would one -- I mean weather could 20 be an issue. But also would one assume that maybe there 21 was more truck traffic on the second day than the first? 22 EXECUTIVE OFFICER WITHERSPOON: Could be. 23 BOARD MEMBER BERG: Yeah. So those are the type 24 of things that would be helpful, I mean as long as we're 25 still in the process of defining, if we knew that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 information. 2 Thank you. 3 CHAIRPERSON SAWYER: Since this is not a 4 regulatory item, it is not necessary to officially close 5 this record. 6 We'll take a ten-minute break at this time for 7 our court reporter and the rest of us. 8 (Thereupon a recess was taken.) 9 CHAIRPERSON SAWYER: Agenda Item 7-1-9, update on 10 the implementation of the 2005 Statewide Railroad 11 Agreement, which occurs every six months. This item 12 fulfills the Board's request for a semi-annual progress 13 report. 14 Ms. Witherspoon, please provide additional 15 background on this agenda item. 16 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 17 Sawyer. 18 The staff presentation on our biannual update 19 will be made by Mike Jaczola of the Stationary Source 20 Division. 21 (Thereupon an overhead presentation was 22 Presented as follows.) 23 MS. KOZOWA: Thank you, Ms. Witherspoon. 24 Good afternoon Dr. Sawyer and members of the 25 Board. Staff is here today in response to the Board's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 direction to provide an update on the implementation of 2 the ARB/Railroad Statewide Agreement. 3 --o0o-- 4 MR. JACZOLA: Today's report addresses how the 5 ARB and the railroads have met their obligations to 6 install idling reduction devices, use of low sulfur fuel, 7 compliance rates, status of health risk assessments and 8 status of locomotive remote sensing pilot program, and 9 other activities. 10 --o0o-- 11 MR. JACZOLA: The agreement requires UP and BNSF 12 to install idle reduction devices on their 13 California-based fleet by June 30th, 2008. 14 Currently UP and BNSF operate about 438 15 interstate or California-based locomotives. Under the 16 agreement annual increments of progress are required for 17 the installation of idle reduction devices each year on 18 June 30th from 2006 through 2008. At the time the 19 agreement was signed in 2005 -- June 2005, 117 20 California-based locomotives already used idle reduction 21 devices. In our report last July, the total was up to 22 230. Since our July 2006 update to the Board 61 23 additional idle control devices have been installed, 24 bringing the new total to 291. 25 Both railroads are currently on schedule to meet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 the next requirement of 342 idle reduction device 2 installations by June 30th, 2007. 3 --o0o-- 4 MR. JACZOLA: Because of the agreement, the rate 5 of idle reduction device installations in California are 6 more than twice the level of the rest of the country. 7 --o0o-- 8 MR. JACZOLA: With respect to locomotive diesel 9 fuel requirements, both railroads are currently complying 10 with the ARB regulation which mandates the use of CARB 11 diesel fuel for intrastate locomotives by January 1st, 12 2007. 13 As required under the agreement, the railroads 14 also met the requirement to dispense a minimum of 80 15 percent low sulfur diesel fuel, either U.S. EPA on-road or 16 CARB diesel, to interstate locomotives fueled in 17 California by January 1, 2007. 18 --o0o-- 19 MR. JACZOLA: As mentioned in the previous 20 updates, the railroads established employee training for 21 the idling and visible emission reduction programs. This 22 training consists of visual materials, such as videos and 23 presentations, as well as printed materials for the use in 24 the field. 25 Since July 2006 the railroads combined have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 trained over 11,000 employees on both idle reduction and 2 visible emission program requirements, bringing the total 3 employees training since the agreement was implemented to 4 about 18,000. 5 --o0o-- 6 MR. JACZOLA: As specified in the Visible 7 Emission Reduction and Repair Program element of the 8 agreement, UP and BNSF are required to perform inspections 9 to identify and repair smoking locomotives. During the 10 last six months of this calendar year the railroads 11 conducted over 13,800 visible emission inspections, 12 bringing the 2006 total number of visible emission 13 inspections to over 22,000, with a 99 percent compliance 14 rate. 15 --o0o-- 16 MR. JACZOLA: Under the agreement, health risk 17 assessments will be performed at 16 designated rail yards. 18 The risk assessments will quantify the community risk 19 resulting from diesel emissions resulting from activities 20 at these rail yards. The risk assessments will be based 21 on guidelines prepared by the Air Resources Board. Staff 22 released the draft guidelines last July for public 23 comment. In August, staff held two workshops in northern 24 and southern California to consider public comments on the 25 draft guidelines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 ARB issued the guidelines last September. The 2 guidelines are consistent with the risk assessment 3 guidelines published by the Office of Environmental Health 4 Assessment and are based on staff experience with the UP 5 Roseville rail yard risk assessment. 6 --o0o-- 7 MR. JACZOLA: At the January 2006 Board meeting, 8 ARB and the rail roads proposed and agreed upon an 9 accelerated schedule for completing the rail yard health 10 risk assessments. Under the accelerated schedule, nine 11 draft rail yard health risk assessments were scheduled to 12 be completed by December 31st, 2006. An additional seven 13 draft health risk assessments would be completed by 14 December 31st, 2007. 15 Both railroads were on schedule when ARB staff 16 made a significant request for a change in inventory 17 methodology. In August 2006 staff requested that both 18 railroads update their rail yard emission inventories with 19 2006 updates to impact off-road and cargo handling 20 equipment emission inventory methodologies. 21 --o0o-- 22 MR. JACZOLA: Staff requested these emission 23 inventory updates to ensure that the best and most current 24 data are included in the rail yard health risk 25 assessments. The effect of the request was to delay the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 schedule about two months. 2 ARB staff now anticipates the completion of the 3 first nine draft health risk assessments in March 2007. 4 The remaining seven yards are scheduled for completion at 5 the end of the year. 6 --o0o-- 7 MR. JACZOLA: As required under Assembly Bill 8 1222, and as referenced in the agreement, ARB staff, the 9 railroads, South Coast and Sacramento Air Quality 10 Management districts, and several community 11 representatives have devoted considerable effort to 12 develop and implement a pilot program to evaluate the 13 feasibility of using remote sensing devices to identify 14 high emitting locomotives. Staff in consultation with the 15 advisory committee were required to submit a report to the 16 Legislature on the feasibility and cost effectiveness of 17 the use of the remote sensing by December 31st, 2006. 18 --o0o-- 19 MR. JACZOLA: However, all members of the 20 advisory group expressed a desire to take time necessary 21 to implement an effective and comprehensive pilot program. 22 The existing remote sensing technology needed to be 23 adapted to measure locomotive emissions and a three-phase 24 test program was identified as necessary to meet the 25 intent of the legislation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 In the fall of 2006, the advisory group agreed on 2 the details of a three-phase pilot program: 3 Phase 1 will consist of adapting the remote 4 sensing equipment for use with locomotives and will be 5 conducted at the TTCI facility in Pueblo, Colorado, in 6 February 2007. 7 Phase 2 will consist of an actual field testing 8 in northern and southern California in the spring of 2007. 9 And Phase 3 will consist of correlation and 10 accuracy testing with the federal locomotive test 11 procedure. 12 These three phases are now scheduled for 13 implementation this spring, with the report to the 14 Legislature completed this summer. 15 --o0o-- 16 MR. JACZOLA: A number of locomotive technology 17 assessments are also underway. For example, the Roseville 18 Hood project. This project is designed to prove the 19 concept to mitigate local emissions from rail yards or 20 locomotive test facilities. Testing is completed and the 21 Placer County Air Pollution Control District staff expects 22 that the report for this demonstration project will be 23 released early this year. 24 U.S. EPA and UP developed a joint testing program 25 to evaluate the use of a diesel oxidation catalyst on an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 older line haul locomotive. Now retrofitted, this 2 locomotive has been placed into California service for 3 evaluation in Los Angeles. 4 The ARB and the railroads have been participating 5 over the past five years in the California Emission 6 Program. This program has resulted in two older switch 7 locomotives being retrofitted with diesel particulate 8 filters and placed in the California Services. 9 Under the agreement ARB and the railroads also 10 agreed to hold technical evaluation meetings with the 11 public every six months. U.S. EPA, locomotive engine 12 manufacturers, the railroads, community members, and local 13 air districts and interested parties have attended and 14 offered their perspectives at these meetings. 15 The first technology assessment was held this 16 past spring in Los Angeles and the second technology 17 assessment meeting was held in Sacramento this past July. 18 A report summarizing the two symposiums was released in 19 December 2006. 20 The next technology symposium is scheduled for 21 the spring of 2007. 22 --o0o-- 23 MR. JACZOLA: There have been a number of other 24 activities that have occurred to reduce the number of 25 emissions -- locomotive emissions and support the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 implementation of the agreement: 2 Modernizing both the line haul and switch 3 locomotive fleets that operate in California. In 4 particular, both railroads have acquired over 800 new Tier 5 2 locomotives over the past two years and more than 80 low 6 emitting switch locomotives. 7 --o0o-- 8 MR. JACZOLA: Regarding ARB enforcement 9 activities. Since July 2006, ARB Enforcement Division 10 staff trained 25 local air district staff, bringing the 11 2006 total of ARB and local air district staff trained to 12 conduct railroad inspections to 70. In addition, 13 13 employees from BNSF and UP received the same training. 14 In October and November 2006, ARB Enforcement 15 Division staff visited 31 designated and covered rail 16 yards and inspected 645 locomotives and issued nine 17 notices of violation for improper idling. This compares 18 favorably to the earlier May and June 2006 enforcement 19 inspections where ARB enforcement staff inspected 675 20 locomotives and issued 23 notices of violation for idling 21 and one notice of violation for visible emissions. 22 Also, the number of smoking locomotives 23 identified during the inspections was consistent with the 24 railroad's determined compliance rate of 99 percent. 25 ARB enforcement staff will conduct future PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 inspections at the designated and covered rail yards about 2 ever six months. 3 --o0o-- 4 MR. JACZOLA: The railroads have continued to 5 implement and improve the community complaint process and 6 continue to work with the ARB staff and the public to 7 improve the responsiveness of the system. 8 --o0o-- 9 MR. JACZOLA: In summary, the agreement is being 10 successfully implemented on schedule to achieve the 11 anticipated emission reductions. Lower emitting 12 locomotives continue to enter California service. 13 Technology evaluations and health risk assessments are 14 underway, with the first nine rail yard health risk 15 assessments to be released this spring. Enforcement 16 efforts are ongoing and show compliance with the 17 agreement. Staff will return in six months with the next 18 update. 19 This concludes the presentation. And I would be 20 glad to respond to any questions. 21 CHAIRPERSON SAWYER: Thank you. Do Board members 22 have questions? 23 If not, we have public testimony. 24 The first three speakers are Barry Wallerstein, 25 Mike Harris, and Mark Stehly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 Dr. Wallerstein. 2 DR. WALLERSTEIN: Good afternoon, Dr. Sawyer, 3 members of the Board. 4 First, I'd like to congratulate you on your 5 adoption of the dry-cleaning Perc phaseout and also to the 6 staff. It's a marvelous step forward. 7 I have a different tie on today. This isn't deja 8 vu, although you're going to see a parade of speakers 9 that's going to make you maybe feel that way. 10 What we want to do today is update you on where 11 we are. We've had many months of discovery in the 12 litigation between us and the railroads, where they are 13 suing on the basis of us adopting three regulations. And 14 at this point we've even been through the trial. So Mike 15 Harris, who will follow me, will specifically describe to 16 you some of the things that have come out during the 17 trial. 18 And our position is still the same. We know your 19 staff tried the best they could to negotiate a good 20 agreement. But we still believe that in fact it isn't a 21 good agreement. It's not as advertised. 22 One of the things that we had cautioned you all 23 about early on was the so-called poison pill would be used 24 against us and others who might try and move forward with 25 necessary local requirements. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 And in fact, if you look at the two briefs filed 2 in the case, the 2005 MOU is cited on 25 occasions by the 3 railroads. If you look at the supporting declarations in 4 the case, it's cited over a hundred times to say that what 5 we're doing is not necessary and shouldn't proceed. 6 So our fears have been borne out in the case. 7 I want to clarify a few points regarding the 8 various elements and our view. And I'm just going to do 9 this in a very general manner. I'm not going to try and 10 go point by point. 11 Relative to the inspections, it's our 12 understanding that many of the inspections have been 13 announced. And while we understand safety concerns in 14 certain types of facilities such as rail yards, the 15 customary procedures for stationary sources is certainly 16 not to announce the inspection. But that was the 17 staff-to-staff communication we had. 18 If a source knows you're coming, it allows them 19 to prepare. And we think that in the future, if that has 20 been occurring, we would encourage that you not have 21 announced inspections. 22 Secondly, on the anti-idling devices, according 23 to the MOU -- and if you look at the staff presentation -- 24 the statistics are a combined statistic for both railroads 25 combined. We think you ought to look at the data by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 railroad so that you have a clear understanding as to what 2 each railroad is doing. And the public ought to have 3 access to that data. 4 And I would remind the Board that the anti-idling 5 device requirement is only for intrastate locomotives. Of 6 course the majority of them are interstate, and so there's 7 no requirement in your program in that regard. Whereas we 8 are seeking in our rules to facilitate interstate or at 9 least give credit for interstate locomotives bearing 10 anti-idling devices. 11 On the remote sensing project, our staffs are on 12 the same page today, as are the railroads. But I have to 13 tell you, over the last few months it's felt like going to 14 the dentist once a week. It has been a torturous path. 15 But I do believe the workplan at this point is a good one. 16 The last is just simply an observation that I 17 made about a month ago. I noticed that the fine for a 18 solo driver in the diamond lane went up to $365. The 19 penalty for the MOU, for a violation is $400. Think about 20 a train, 100 cars' long, full of containers and the value 21 of that to the railroads. How much of a deterrent is a 22 $400 penalty? 23 With that, what I'd like to do is have Mike share 24 with you some of the specific testimony from the trial. 25 And after that we'll be happy to answer any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 questions. 2 (Thereupon an overhead presentation was 3 Presented as follows.) 4 MR. HARRIS: Good afternoon, Chairman Sawyer, 5 members of the Board. 6 7 MR. HARRIS: My name is Mike Harris and I'm an 8 attorney with the South Coast Air Quality Management 9 District. 10 Our agency has testified before you before and 11 we've primarily raised two concerns. First is that the 12 MOU, particularly Element 1, is ineffective and 13 unenforceable and, 2, that, as Barry said, that the poison 14 pill would raise problems and discourage efforts to reduce 15 railroad emissions in other forums. 16 --o0o-- 17 MR. HARRIS: What I'd like to do today is address 18 how a litigation has reinforced these concerns. 19 At a prior hearing, Dr. Gong, you had a very 20 important question that you raised. And that is: Should 21 the Board be concerned if the MOU was rescinded, would we 22 lose emission reduction benefits? In other words, is a 23 less than fully effective MOU at least better than the 24 status quo? 25 Well, as a result of the litigation between the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 railroads and the South Coast, new lessons have been 2 learned that help provide a response to this question. 3 What we have learned is that the MOU delivers nothing in 4 the way of additional emission reductions, because the 5 railroads had already implemented prior to the MOU idling 6 restrictions as part of their internal fuel conservation 7 program. In other words, the claimed emission reductions 8 are actually part of the pre-MOU status quo. 9 --o0o-- 10 MR. HARRIS: The first lesson that we learned is 11 that the railroads have made no changes to their 12 operations since execution of the MOU in June of 2005. We 13 learned this from the testimony of several officials at 14 BNSF and UP. In the back of the handouts you have there's 15 some excerpts from some of the deposition and trial 16 testimony of these officials. 17 --o0o-- 18 MR. HARRIS: This testimony includes Mr. Chris 19 Roberts. He's a vice president at BNSF, who testified 20 that BNSF implemented no operational change as a result of 21 the MOU. 22 --o0o-- 23 MR. HARRIS: Mr. Mike Brazytis. He's the UP 24 General Manager of a crew -- excuse me -- the UP Director 25 of Crew Management, who gave similar testimony: No PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 changes to their operational procedures. 2 --o0o-- 3 MR. HARRIS: And this is my personal favorite, 4 Mr. Douglas Wills. He's the Senior Director of Operating 5 Practice for UP. I believe he's actually retired now. 6 But at the time he testified that prior to his deposition 7 he had never even read the MOU. 8 --o0o-- 9 MR. HARRIS: What this all means is that since 10 June 2005 railroad crews have not been given further 11 instructions to reduce their idling. 12 --o0o-- 13 MR. HARRIS: The next lesson that we have learned 14 is that the railroads -- that through the MOU the 15 railroads merely codified their existing fuel conservation 16 rules. This was the testimony of Mr. Mark Stehly, who's 17 here to testify today as well. 18 He also testified that the MOU adopted the 19 60-minute idling limitation because, quote, "It was our 20 current rule," closed quote, and, quote, "was something we 21 were comfortable with," closed quote. 22 In short, the railroads repackaged their internal 23 fuel conservation programs and offered it up as the MOU. 24 --o0o-- 25 MR. HARRIS: The third lesson that we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 learned is that the railroads did not tell ARB that the 2 2005 MOU would not result in any operational changes. In 3 fact, it's clear from testimony from ARB's own staff that 4 it was contemplated that the railroads would in fact do 5 more than maintain the status quo. 6 --o0o-- 7 MR. HARRIS: So in closing, I would just urge you 8 to reconsider the MOU. It's not too late to pursue 9 effective and enforcement measures. And the status quo is 10 insufficient given the need to protect air quality and 11 public health. 12 Thank you. 13 CHAIRPERSON SAWYER: Questions? 14 BOARD MEMBER BERG: I do have one question. 15 Since you've gone through the trial, then what 16 was the result of that? What is the current status of the 17 rules in South Coast Air Quality and what rules will you 18 be considering as a result of the trial? 19 DR. WALLERSTEIN: Number of us that are here in 20 the room today have mediation tomorrow in San Francisco. 21 The judges has heard the case. The judge is holding back 22 on issuing a decision at the trial court level pending 23 this last attempt at discussion between the parties. 24 If we are not successful tomorrow, then we would 25 expect that the judge would rule relatively quickly. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 parties have both indicated, and the judge has indicated 2 in expectation, that no matter what way he rules, that 3 both sides are ready to pursue this thing not only to the 4 appellate court but to the U.S. Supreme Court if 5 necessary. 6 So we're expecting a decision in the trial court 7 soon. And we felt the case went well for us. I'm sure 8 they'll get up here and say that they felt that the case 9 went well for them. Do we don't know yet in terms of the 10 judge's decision. 11 BOARD MEMBER BERG: In the meantime are the three 12 South Coast Air Quality rules in effect or not in effect? 13 DR. WALLERSTEIN: They are not in effect at this 14 moment until the judge rules, because we wanted additional 15 time for discovery. So on a voluntarily basis, we 16 withheld implementation of the rules so that we could have 17 an extended discovery period, not be rushed into trial and 18 put ourselves at a disadvantage in the trial. 19 BOARD MEMBER BERG: Thank you. 20 CHAIRPERSON SAWYER: Mr. Stehly. 21 MR. STEHLY: Chairman Sawyer, Board members. I'm 22 Mark Stehly. Thank you for letting me present to you. I 23 will only talk about one thing about the trial to discuss 24 what came up. Otherwise I'll talk about technology and 25 where we are. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 I'm the Assistant Vice President of Environment 2 and Research & Development at BNSF Railway. 3 As your staff has noted, the 2005 railroad MOU is 4 working well. And it's pulling in a great deal of new 5 technology, reducing emissions in California. And I'd 6 like to tell you a little about how the MOU and other 7 programs have helped to do this in the past six months. 8 But first I want to address one thing that Barry 9 said about our internal policy and how there weren't 10 changes. And while in general there weren't changes, 11 there was our internal policy. But when we have an 12 internal fuel policy and when we have service problems 13 that require locomotives to idle, then we change our fuel 14 policy because the service is more important. And so from 15 time to time we would not enforce our own fueling 16 policies, our shutdown policies on our employees. We 17 would tell them, "Keep the engines running. They're 18 needed for service," and that gave us operational 19 flexibility. 20 When we entered the MOU we did away with that 21 operational flexibility. We could no longer tell our 22 employees that service is more important than idling. And 23 it's a big deal. And we did train thousands and thousands 24 of people to exactly what the rule was and that compliance 25 was expected 100 percent of the time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 And so while on the surface it may seem that we 2 didn't do much, we really gave up a lot with a policy that 3 we could no longer change as times dictated and as needs 4 dictated. 5 Our intermodal yard contractor, Parsec, has 6 purchased ten road-legal yard tractors for cargo handling 7 equipment that are spark ignited LNG engines. They've 8 been delivered and we will use them at our Commerce 9 Eastern facility. Partial funding for these vehicles came 10 from the Carl Moyer Fund. 11 In Seattle, we're installing the first ever 12 electric crane to move containers at a rail yard from rail 13 equipment to trucks. And it's totally electric. As you 14 can imagine the size of an air modal yard and the length 15 of the tracks, you can imagine the size of the take-up 16 reel next -- needed to manage the length of the extension 17 cord. It's pretty huge. 18 The system's been in use in Hamburg, Germany, for 19 a while. It's the first application ever in the U.S. Our 20 first one was delivered in December, and we have more 21 coming through March. It's a trial run for our use of the 22 technology for SCIG, our proposed near-dock facility. And 23 it represents the ultimate in reducing emissions from this 24 cargo-handling equipment. 25 You may have read of our development of a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 1 fuel-cell-powered switch locomotive that's fueled by 2 hydrogen. We're doing that in conjunction with the 3 military. 4 In addition, as noted in some of the materials 5 that we provided to the Board, within a month the 6 railroads will have as many as ten of the multi-engine 7 gen-sets in operation in California as the newest 8 technology for switch locomotives. Our first five, two 9 are going to be in Stockton and three of them will be in 10 Fresno. They were helped paid for with Carl Moyer funds 11 from the San Joaquin Valley. 12 By the end of 2007 approximately 60 percent of 13 the switch locomotives in California will emit at the 14 ultra-low emissions level, with 60 percent lower emissions 15 than the current Tier 2 line haul locomotives that we're 16 now buying. 17 We have four spark-ignited LNG locomotives. 18 There will be 91 new genset switchers and the 12 green 19 goat type hybrid switchers. This is reduce NOx and diesel 20 particulate by about 90 percent compared to the older 21 uncontrolled engines. They operate almost exclusively 22 around yards, so they really do affect their neighbors 23 that need the help the most. And your staff has talked 24 about the number of Tier 2 locomotives that we've been 25 purchasing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 1 As you can see, the voluntary but enforceable 2 MOUs are having the intended effects. BNS has installed 3 automatic start/stop devices on more than 3100 of our line 4 haul interstate locomotives. That's nearly 50 percent of 5 our fleet. They operate -- 6 CHAIRPERSON SAWYER: I need to ask you to 7 conclude please. 8 MR. STEHLY: Pardon? 9 CHAIRPERSON SAWYER: I need to ask you to 10 conclude please. 11 MR. STEHLY: I will. 12 At the last update I mentioned that our change in 13 train operations in Yorba Linda necessitated using 14 locomotives to charge our air brakes. The wayside air 15 compressors and air manifolds will be operational by 16 mid-April, allowing us to use wayside compressors to 17 charge the airline so that we won't need to do locomotives 18 idling adjacent to Yorba Linda. 19 I want to thank you for all of the efforts that 20 we've made together. And I'll answer any questions if 21 there are any. 22 CHAIRPERSON SAWYER: Apparently not. 23 Thank you. 24 Lanny Schmid. 25 MR. SCHMID: Thank you, Dr. Sawyer. My name's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 1 Lanny Schmid. I'm Director of Environmental Operations, 2 Union Pacific Railroad in Omaha. I'd like to build on 3 what Mark had laid out and enumerate a little bit more on 4 some of the accomplishments under the MOU during the past 5 six months. 6 As Mike Jaczola correctly outlined in a thorough 7 staff report, we finished the proof of concept testing of 8 the locomotive -- the advanced locomotive emission control 9 system at Roseville, finished that last September. 10 Technology may have some cost effective 11 applications at a limited number of larger facilities. 12 There are some key technical, legal and financial issues 13 that have to be resolved. There's a few more supporting 14 details in the materials that we turned in earlier this 15 morning. There are hurdles. But there were certain 16 portions that functioned very well. 17 As Mike had also indicated, we've got two 18 locomotive emission reduction projects that are ongoing in 19 the state now. 20 The diesel particulate filter unit was a 21 cooperative effort with CARB. We introduced the first one 22 I believe it was in December in Oakland. It's running. 23 We're going to evaluate the durability and the in-use 24 performance over the next year. Because locomotives bang 25 together frequently, there are G forces that have to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 1 considered that are unique. That's one of the major 2 concerns. 3 Last week, I think it was, we introduced the 4 oxi-cat in commerce. It's a 3600 horsepower locomotive 5 that's been retrofitted with oxidation catalysts to reduce 6 particulate emissions in the range of 50 percent. 7 Again, those events are described -- the news 8 accounts are described in the packet as well. 9 Next week we'll introduce the first production 10 unit, a genset switcher in commerce -- it's a three-engine 11 genset -- a little over a year ago. I think it was a year 12 ago last week we introduced the prototype in Roseville. 13 That was a two-engine unit. It continues to operate in 14 southern California. 15 One correction on -- or one note on the testimony 16 of Doug Wills during the trial. It dealt with crew 17 management and the fact that we had not changed crew 18 management practices as a result of the MOU. 19 Crew management to a railroader is putting crews 20 on and off the locomotives. They have hours of service 21 that they have to honor. Once they exceed their hours of 22 service, by law they cannot operate a train. Crew 23 management to a railroader is totally different than 24 operational practices. 25 So when Doug correctly testified that we haven't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 1 changed our crew management practices, he was telling the 2 truth. 3 Have we changed our operational practices 4 regarding shut down and other efforts? You bet. 5 Finally, I wanted to invite you and remind most 6 of you regarding our upcoming locomotive technology tour 7 on -- after the next Board meeting, February 22nd, I 8 believe it is. We'll be showcasing four locomotives with 9 cutting-edge control technologies. It will be touring the 10 state, but it will be in Roseville on the 22nd. The tour 11 is designed to allow local elected officials, air 12 regulators, members of the public to examine the equipment 13 and learn about the technology and the emissions reduction 14 efforts that we have ongoing. Formal invitations will 15 follow. 16 In closing, we're proud to be a partner with ARB 17 and the three local air districts as we implement the MOUs 18 and the other agreements that we've committed to. 19 We are ahead of schedule on each of the elements 20 in the MOU. And we continue to expand the number of 21 implementation protocol agreements that we have signed 22 with local air districts. 23 We look forward to returning next July with 24 further updates. 25 Be happy to answer any questions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 1 CHAIRPERSON SAWYER: Thank you very much. 2 No questions. 3 Lupe Valdez. 4 MS. VALDEZ: Lanny's a lot taller than I am, so I 5 have to shrink the mike. Excuse me. 6 Good afternoon, Chairman Sawyer and members of 7 the ARB Board. For those of you who may not know who I 8 am, my name is Lupe Valdez and I am back in front of you 9 today to give you an update in terms of the community 10 outreach activities. 11 I serve as the Director of Public Policy for 12 Union Pacific. And previously I served as a deputy 13 executive officer for the South Coast AQMD as well as 14 Public Affairs Administrator for MetroLink, which is the 15 commuter rail down in southern California. 16 Today I wanted to bring you up to date of some of 17 the news and developments. We are continuing to see, as 18 you've seen in your slide presentation, a downward trend 19 in terms of our complaints. While we have seen seasonal 20 issues that arise -- and obviously whenever we have major 21 maintenance projects, we do tend to see some increases in 22 calls of complaints -- we do tend to see a downward trend 23 overall. 24 Both railroads continue to be involved with 25 various local efforts such as the City of Commerce's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 1 Railroad Task Force, the AQMD Port Monitoring Project, the 2 City of Riverside's Transportation and Accountability 3 Performance Group as well as numerous numbers of goods 4 movement initiatives in southern California. 5 Meetings. Given our history with the first 6 series of meetings that we had with the MOU, we're going 7 to continue on that progress and focus our attentions on 8 our efforts with the HRAs as they come out. So that is 9 something that we are committed to doing, again going back 10 to those communities that we went through the first time. 11 We continue to be involved with various local 12 folks that attended the MOU meetings and make sure to 13 outreach them as regularly as possible with any activity 14 that is being held in the communities where they live. 15 Both railroads hope to expand our outreach base with the 16 first series of meetings around the HRAs. 17 We are not resting on our accomplishments and our 18 improvements to date. We are committed to working with 19 community groups and local elected official to get them 20 answers to their questions and to address their problems 21 in a timely fashion. The quicker we hear of a problem, 22 the quicker we can fix it. 23 As members of our communities, UP is committed to 24 continuing to do our fair share as we improve the 25 environmental performance of our locomotive fleet and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 1 effects of our overall railroad operations. 2 Thank you. And I would be happy to answer any 3 questions you might have. 4 CHAIRPERSON SAWYER: Thank you. 5 Apparently there are no questions. 6 Kirk Marckwald. 7 MR. MARCKWALD: Thank you, Mr. Chairman and 8 members. Kirk Marckwald for the Association of American 9 Railroads. 10 I just want to touch on two or three items 11 briefly. 12 The first is, in addition to the successful 13 implementation of the MOU, the railroads have worked with 14 several air districts to sign implementation protocols. 15 These protocols allow the air districts and the ARB and 16 the railroads to work together to bring their resources 17 and their interests and their special concerns into play 18 as we implement and further implement the MOU, engaging in 19 training of additional air resources personnel, discussing 20 additional yards if there are any coverages appropriate, 21 and providing a forum to ensure that community activities 22 are able to be convened or co-convened, if you will, 23 between the railroads and some local air districts. 24 There are three of them: The Bay Area. Since we 25 last were with you, the Bay Area district and the Placer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 312 1 district had signed implementation agreements with us -- 2 or implementation protocols. We're talking with two or 3 three other air districts. We expect by the time we come 4 back before you, we hope, that they will have signed on as 5 well. 6 Secondly, I think that it's important to note -- 7 and I trust that you all got the materials, the background 8 materials from the clerk. In that is a chart that we've 9 used before to kind of update and track the investment and 10 emission reductions driven by both the 2005 and the '98 11 MOU. And I think it's instructive to note that ultra-low 12 emitting switchers were -- as we talked to you before, six 13 months ago, nine were in service. We now have 18 in 14 service. And we were projecting about 50 percent of the 15 fleet would be done by the end of next year. And now 16 we're projecting about 60 percent of the switching fleet 17 will be rated ultra-low emitting. 18 These investments by the railroads are driven in 19 large part by both the '98 MOU and the 2005 MOU. And to 20 the extent that these are the units that are doing the 21 work immediately adjacent to people who live near the rail 22 yards, they are the real beneficiaries of it. 23 So, when Dr. Wallerstein says it's not as 24 advertised, I would suggest to you it's better than 25 advertised, because the MOUs are driving these kinds of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 313 1 investments and they're making a big difference right in 2 the communities adjacent to them. 3 We will continue to work hard to improve on the 4 community complaint process. The 800 numbers are clearly 5 working. A broad group of people are calling in to that. 6 And both railroads have sharpened their response, have 7 shortened their response, and have aligned the interest 8 of -- while freight can keep moving. But if there are 9 units that are out of compliance or not working or idling 10 too long, they are addressing them and addressing them 11 effectively and efficiently. 12 So we look forward -- any of us would be happy to 13 answer any questions. And we look forward to giving you 14 another report six months from now. 15 Thank you so much. 16 CHAIRPERSON SAWYER: Thank you. 17 Doug Korthof. 18 MR. KORTHOF: Hi. Doug Korthof. I don't really 19 mean to shout. 20 I find this whole thing sort of disturbing as a 21 member of the general public. 22 The railroads down through the decades have 23 received subsidies, indulgences, and deferrals and land 24 subsidies. Just recently Catellus Corporation and the 25 ghost of Southern Pacific had just destroyed the west PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 314 1 bluffs over at Ballona, a beautiful natural field, which 2 they were given as part of their railroad emoluments. 3 So I would expect the railroads, you know, to do 4 a lot more than they're doing now. We're in the midst of 5 a 3,000 megawatt port electrification project. The 6 railroads to me have not been part of this project. They 7 have not done their part. 8 As Commissioner Riordan said, the prevailing 9 winds blow east. I know the harbor. When I was a kid I 10 used to work on the docks down there and I lived in the 11 shadow of the refinery for a year, and I know what the air 12 is like there at midnight when they let all that stuff 13 out. And I know what the railroads do and I know the long 14 lines of trucks that sit there idling. And we have a 15 severe problem in the harbor. And in my view, the 16 railroads aren't doing anywhere near enough. 17 And all that stuff, which is blown over to join 18 the debris from the Long Beach Airport and goes all over 19 east Long Beach, all over communities up towards Downey, 20 blowing all the way into San Joaquin Valley and -- San 21 Gabriel Valley, and no one is even monitoring it. 22 Mr. Don May did do monitoring of the airport 23 versus diesel pollution. And I don't know the results of 24 that study. But I know there were some problems because 25 he didn't have the resources. But he did put a monitoring PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 315 1 device in the Long Beach Airport to try to distinguish 2 between the diesel emissions from the port and the airport 3 emissions. 4 More of that needs to be done. I mean this is a 5 severely impacted community, and nothing is being done to 6 help these people. You're doing studies and the harbor 7 people are doing nice things about getting the community 8 involved. But these are severely impacted people. At 2 9 o'clock in the morning it's awful. 10 The trains, as you know, are diesel 11 locomotives -- diesel electric. They're all diesel 12 electric. But they don't have batteries. And the Green 13 Goat is a good idea. We need thousands of those. With 14 all the benefits the railroads have received and all the 15 indulgences and the money that they're making with the 16 great idea of taking trucks off the road, they need to 17 make these investments. The rest of us are making these 18 investments. And the railroads need to step up and do 19 more. 20 To see that there's litigation or controversy, 21 it's just shocking to me as a member of the general 22 public. I bet 99 percent of the people would be shocked 23 that the railroads are that ungrateful as to come back and 24 not do more than their share for all we've given them. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 316 1 Does staff have any further comments? 2 EXECUTIVE OFFICER WITHERSPOON: Well, just for 3 the record, it's not correct to say nothing's being done. 4 This Board adopted a comprehensive emission reduction 5 program in April and the voters approved a billion dollars 6 in bond funds to assist us in implementing that. And 7 we'll be using both incentives and the power of 8 regulations to bring about cleaner air in the port 9 communities. 10 CHAIRPERSON SAWYER: Thank you. 11 Since this is not a regulatory item, it is not 12 necessary to officially close the record. 13 The last agenda item today a 7-1-10, a report on 14 the Carl Moyer Program through the first six years of 15 funding. 16 The Carl Moyer Program has been very successful 17 in reducing emissions beyond regulatory requirements. The 18 Legislature recognized the program's success in 2004 by 19 providing sustained funding of up to $140 million a year 20 through 2015. 21 Staff is required to report to the Board annually 22 on program implementation. 23 Ms. Witherspoon, please introduce this item. 24 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 25 Sawyer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 317 1 The Carl Moyer Program reduced more than 18 tons 2 per day of emissions during its six years of operation. 3 This status report describes the types of projects funded, 4 number of engines replaced or retrofitted, total 5 expenditures and total emission benefits. 6 Incentive programs must be reviewed periodically 7 to ensure funds are being spent appropriately, and the 8 Carl Moyer Program is no exception. Last year ARB staff 9 and the Department of Finance conducted audits of four 10 local district programs. Concurrently ARB was audited by 11 the Department of Finance and is currently being audited 12 by the Bureau of State Audits. The results of these 13 investigations were largely positive and are included in 14 the report. 15 The staff presentation this afternoon will be 16 made by Joe Calavita of the Mobile Source Control 17 Division. 18 (Thereupon an overhead presentation was 19 Presented as follows.) 20 AIR POLLUTION SPECIALIST CALAVITA: Thank you, 21 Ms. Witherspoon. Good afternoon, Chairman Sawyer and 22 members of the Board. 23 Today we're going to provide you with a brief 24 status report on the Carl Moyer Program. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 318 1 AIR POLLUTION SPECIALIST CALAVITA: Since its 2 inception in 1998 the Carl Moyer Program has provided 3 incentive grants to help California meet its commitments 4 under the federally mandated State Implementation Plan, or 5 sip. The Carl Moyer Program complements California's 6 regulatory strategy by funding the incremental cost of 7 technologies which achieve extra or early emission 8 reductions beyond what is required by regulation or other 9 legal mandates. The program's cost-effectiveness limit 10 also ensures projects achieve a certain bang for the buck. 11 The program is implemented as a partnership 12 between ARB and the local air districts. ARB develops and 13 adopts guidelines which, along with state law, define the 14 minimum program requirements and allocate state program 15 funding to local air districts. 16 Air districts implement the program on the 17 ground, evaluating and selecting projects and contracting 18 with vehicle and equipment owners. 19 --o0o-- 20 AIR POLLUTION SPECIALIST CALAVITA: Over the past 21 few years the Carl Moyer Program has expanded 22 significantly, both in scope and resources. In 2004, the 23 Legislature and Governor boosted program funding from 24 about $25 million per year in Years 1 through 6 to up to 25 $141 million annually beginning in Year 7. Legislation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 319 1 also added two new eligible pollutants, particulate matter 2 and reactive organic gases, and several new eligible 3 source categories. 4 In 2006, the Governor and Legislature recognized 5 the need for additional resources to implement the 6 expanded program and increased allowable funding for 7 program administration and outreach. 8 --o0o-- 9 AIR POLLUTION SPECIALIST CALAVITA: State law 10 requires Carl Moyer Program projects be complete two years 11 after funds are made available to districts by ARB. 12 Districts are now in the process of funding Year 7 and 8 13 projects. ARB has contracted with a rural air district 14 liaison to aid smaller districts, some of which have asked 15 for help, in soliciting and funding projects. 16 For the Year 9 funding cycle ARB has made $78 17 million in state Carl Moyer Program funds available to air 18 districts this month. ARB also has $8.5 million in Year 9 19 Moyer funding part of its 10 percent multi-district 20 allocation. The majority of multi-district funding will 21 be expended as it has in the past, focusing on goods 22 movement activities and construction equipment. We'll 23 also be focusing on retrofits as we have in the past. But 24 this year we're specifically setting aside $1 million of 25 the funds for a pilot retrofit voucher program. We're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 320 1 also allocating $500,000 for a small business construction 2 equipment voucher program that will allow us to develop 3 criteria for streamlining the project application and 4 funding process. 5 --o0o-- 6 AIR POLLUTION SPECIALIST CALAVITA: Finally, 17 7 air districts have adopted a $2 DMV fee which will provide 8 them with almost $50 million in annual incentive funding 9 that can be used for the Carl Moyer Program, lower 10 emission school buses, or ag assistance projects. 11 Each year's funding is comprised of these two 12 sources of funds: Steep funds which ARB grants to air 13 districts, and 10 percent of which ARB keeps for 14 multi-district projects; and motor vehicle funds air 15 districts receive directly. State law vests ARB with 16 oversight responsibility for all Carl Moyer Program 17 projects regardless of the funding source. 18 --o0o-- 19 AIR POLLUTION SPECIALIST CALAVITA: Now, on to 20 review of program benefits. 21 In its first six years the Carl Moyer Program has 22 reduced NOx emissions by about 18 tons per day and PM by 23 about one ton per day, with a favorable cost effectiveness 24 of about $2600 per ton of NOx reduced. This has helped 25 significantly reduce cases of premature deaths, asthma PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 321 1 attacks, and lost work days. These and other health and 2 welfare benefits have an economic value of almost $800 3 million, representing over $5 in benefits for each dollar 4 of program costs. 5 --o0o-- 6 AIR POLLUTION SPECIALIST CALAVITA: Carl Moyer 7 Program projects have also provided significant benefits 8 in environmental justice areas. Since Year 4 California 9 Health and Safety Code has required at least 50 percent of 10 statewide incentive program funds in large air districts 11 be spent in environmental justice areas or areas 12 disproportionately impacted by air pollution. 13 The five districts subject to this requirement, 14 listed here, have cumulatively spent more than 70 percent 15 of their Carl Moyer Program funds in environmental justice 16 areas. 17 Projects in environmental justice areas were also 18 found to be slightly more cost effective than projects in 19 non-EJ areas. 20 --o0o-- 21 AIR POLLUTION SPECIALIST CALAVITA: The Carl 22 Moyer Program has funded a wide variety of source 23 categories over its first six years. These projects 24 typically involve: 25 Replacement -- or repower -- of an old diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 322 1 engine with a newer, cleaner engine; 2 Purchase of a cleaner-than-required new vehicle 3 or piece of equipment; or 4 Installation of a ARB-verified retrofit device. 5 Let's take a look at some typical projects. 6 --o0o-- 7 AIR POLLUTION SPECIALIST CALAVITA: Most on-road 8 projects involve purchase of a cleaner-than-required 9 alternative fueled trash truck or transit bus. These 10 projects typically cost between 12 to $25,000, with a cost 11 effectiveness of about $7,000 per ton of NOx reduced. 12 As we saw in the previous pie chart, an average 13 of 29 percent of Carl Moyer Program funds went to on-road 14 projects in Years 1 through 6. 15 --o0o-- 16 AIR POLLUTION SPECIALIST CALAVITA: This graph 17 shows the percent of total program funding each year that 18 went for on-road projects. As you can see, the percent of 19 total program funding for these projects started much 20 higher than 29 percent and shows a general downward trend 21 over the program's first seven years. 22 These projects may be impacted by new in-use 23 fleet rules since emission reductions are no longer 24 surplus and eligible for Carl Moyer Program funding once 25 they're required by regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 323 1 --o0o-- 2 AIR POLLUTION SPECIALIST CALAVITA: The average 3 off-road equipment project involves repowering of a 300 4 horsepower or larger engine at a cost of $40,000, with a 5 $3400 per ton NOx cost-effectiveness. The largest 6 off-road category by far is construction equipment, such 7 as scrapers and graders, followed by farm equipment and 8 cargo-handling equipment. 9 Off-road projects received an average of 17 10 percent of Carl Moyer Program funding in Years 1 through 11 6. As you'll see in the next slide, however, this only 12 tells part of the story. 13 --o0o-- 14 AIR POLLUTION SPECIALIST CALAVITA: Relative 15 funding for off-road projects has increased significantly 16 since Year 1. We're currently seeing demand increase even 17 more in anticipation of ARB's upcoming off-road equipment 18 fleet rule. 19 --o0o-- 20 AIR POLLUTION SPECIALIST CALAVITA: Agricultural 21 irrigation pump engine projects are generally 22 diesel-to-diesel repowers that typically cost from 5 to 23 $20,000, depending on the engine size. They're generally 24 very cost effective. Ag pump projects received 31 percent 25 of Carl Moyer Program funding in Years 1 through 6. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 324 1 --o0o-- 2 AIR POLLUTION SPECIALIST CALAVITA: Funding for 3 these projects has remained relatively steady, although 4 you are seeing a dip in Year 7. 5 --o0o-- 6 AIR POLLUTION SPECIALIST CALAVITA: Most marine 7 vessel projects involve tugboat or fishing vessel engine 8 repowers. These projects have an average cost of $50,000 9 and an excellent cost-effectiveness of about $1800 per ton 10 NOx reduced. Twenty-one percent of Carl Moyer Program 11 funding in Years 1 through 6 went to marine vessel 12 projects. 13 --o0o-- 14 AIR POLLUTION SPECIALIST CALAVITA: Relative 15 funding for marine projects shows a downward trend. This 16 may be because many of the most cost-effective marine 17 vessel projects have been funded already, particularly in 18 the South Coast. 19 --o0o-- 20 AIR POLLUTION SPECIALIST CALAVITA: The Carl 21 Moyer Program has helped fund several types of alternative 22 technology locomotives, such as this switcher that's 23 powered by three Tier 2 off-road engines. These projects 24 are generally very expensive but provide large 25 cost-effective emission reductions. Locomotive projects PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 325 1 in Years 1 through 6 received only 2 percent of total 2 program funding. 3 --o0o-- 4 AIR POLLUTION SPECIALIST CALAVITA: While funding 5 for these and other locomotive projects remains low, it is 6 trending upward. 7 --o0o-- 8 AIR POLLUTION SPECIALIST CALAVITA: In Years 1 9 through 6 the average cost-effectiveness of the Carl Moyer 10 Program held steady between 2,000 and $3,000 per ton NOx 11 reduced. Preliminary project information indicates this 12 increased to about $3800 per ton in Year 7. 13 This could be due to several factors, including a 14 change in the program's project mix and a trend towards 15 shorter project lives. Average project life, which was 16 about ten years in Years 1 through 6, declined to about 17 seven years in Year 7. Everything else being equal, 18 projects with a shorter project life are less 19 cost-effective. 20 The current cost-effectiveness limit for the Carl 21 Moyer Program projects is $14,300 per ton of NOx -- per 22 ton and includes NOx, ROG, and PM emission reductions. As 23 you can see, the program remains well below this cap. 24 --o0o-- 25 AIR POLLUTION SPECIALIST CALAVITA: Significant PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 326 1 emission reductions will be needed for California to 2 attain the federal 8-hour ozone and PM 2.5 standards, 3 particularly in the South Coast and San Joaquin Valley. 4 With up to $141 million annually, the Carl Moyer Program 5 can provide between 10 and 30 tons per day NOx emission 6 reductions and almost 2 tons per day PM reductions 7 statewide. The quantity of SIP emission reductions 8 achieved depends both on the cost-effectiveness and 9 project life of projects selected by air districts. For 10 example, a project funded in 2007 with a three-year 11 project life won't help a district attain a standard in 12 2014. 13 Air districts retain the flexibility to implement 14 the Moyer program locally in a way that maximizes SIP 15 benefits in each area's attainment year. 16 --o0o-- 17 AIR POLLUTION SPECIALIST CALAVITA: In 2006, ARB 18 adopted more structured audit procedures and audited Carl 19 Moyer Program implementation at Ventura, Sacramento, South 20 Coast, and Butte County air districts. These audits 21 focused on program Years 5 and 6. 22 ARB staff found that the Ventura, Sacramento, and 23 Butte County air districts run efficient and effective 24 programs and concerns were limited to minor administrative 25 issues. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 327 1 The South Coast audit found that the district had 2 not yet expended about $10 million out of $15.6 million in 3 Year 5 and 6 program funding as required by state law. 4 Since that time the South Coast district has 5 increased staff resources, streamlined its project 6 selection and funding process, and implemented other 7 program improvements to ensure funds are spent 8 expeditiously. ARB will return to the district later this 9 year to conduct a follow-up audit and will report to the 10 Board on its findings this fall. 11 --o0o-- 12 AIR POLLUTION SPECIALIST CALAVITA: Last year ARB 13 also requested the California Department of Finance 14 conduct an evaluation of ARB's oversight of the Carl Moyer 15 Program. The DOF evaluation report, completed last month, 16 includes suggestions for improving program effectiveness 17 and accountability and indicates program areas that should 18 be more prescriptive, such as the timing and protocol for 19 an air district to return unspent funds. The report also 20 suggests increasing ARB audits of district programs. 21 Finally, the California Bureau of State Audits 22 began a performance audit of the ARB, Bay Area, 23 Sacramento, San Joaquin Valley, and South Coast programs 24 in October 2006. These audits were requested by the 25 California Senate Joint Legislative Audit Committee and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 328 1 focus on program effectiveness, efficiency, outreach and 2 other issues. The BSA audit is expected to be complete 3 this spring. 4 --o0o-- 5 AIR POLLUTION SPECIALIST CALAVITA: I'd like to 6 conclude with a look at some of the changes that might lie 7 ahead for the Carl Moyer Program. One thing is certain: 8 The mix of projects funded will continue to evolve. New 9 regulations for in-use on-road vehicles, off-road 10 equipment, ag pumps, and marine vessels will impact 11 eligibility for these categories for Moyer funding. Staff 12 anticipates there will still be opportunities for funding 13 these categories by targeting early reductions, reductions 14 which go beyond regulatory requirements, and sources 15 potentially exempt from regulations, such as small 16 businesses. 17 ARB staff must ensure the billion dollar goods 18 movement emission reduction bond, approved by California 19 voters last November, complements rather than competes 20 with the Carl Moyer Program. 21 We're also initiating pilot programs to evaluate 22 new source categories which could achieve real, surplus, 23 quantifiable, and enforceable emission reductions and 24 therefore be included as eligible program categories. 25 Demand for Carl Moyer Program funds continues to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 329 1 exceed available funding. Given the cost of cleaning up 2 California's in-use diesel engine fleet, we expect demand 3 for funding to remain high through the Carl Moyer 4 Program's 2015 sunset date. 5 --o0o-- 6 AIR POLLUTION SPECIALIST CALAVITA: Finally, in 7 2007, we'll also be working with air districts and other 8 stakeholders to update the Carl Moyer Program guidelines. 9 The updated guidelines will include program criteria for 10 any new eligible source categories, and will update 11 administrative requirements based on what we've learned 12 from the districts and this year's audits, update emission 13 factors and other technical information, and incorporate 14 other program improvements. 15 As part of the guideline revisions, we'll be 16 focusing on mechanisms to improve program effectiveness, 17 efficiency, and accountability. We'll be holding our 18 kick-off workshop for the guideline revisions in March, 19 and we'll bring the draft guidelines to you for your 20 consideration this November. 21 --o0o-- 22 AIR POLLUTION SPECIALIST CALAVITA: And that 23 concludes our presentation. 24 We'll now be happy to take any questions you may 25 have. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 330 1 CHAIRPERSON SAWYER: Thank you. 2 Are there questions from members of the Board? 3 Mrs. Riordan. 4 BOARD MEMBER RIORDAN: Mr. Chairman, if I might. 5 I want to build on a bit of information that was 6 in our packet and came from the Air Pollution Control 7 District for the County of San Luis Obispo. And 8 essentially what they were asking for was an opportunity 9 and our encouragement to work with our Chief 10 Administrative Officer to discuss some of the concerns 11 that they might have about implementing the program. 12 And I want to build on that just a little bit to 13 say that when the Chairman, myself and Member Berg were in 14 some of the very small districts, there are some issues 15 that are out there. I can't speak to them specifically. 16 But I think what you are doing to help the small 17 districts, particularly in the north part of the state, we 18 need to remember there's East Kern and some of those 19 little districts that really could use our assistance. Or 20 at least we need to be talking to them, because at least 21 it was expressed at our meeting that they might not opt 22 into the program. 23 And so looking out and seeing CAPCOA in the 24 audience, I want to encourage you -- I don't think the 25 issues are all the same in each district. And I look PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 331 1 at -- here are two big districts, South Coast and Bay 2 Area. I mean you may have problems, folks, but you have a 3 depth of staff to go out and resolve those issues; where 4 these smaller districts don't have that depth of staff. 5 And I want to be sure at the upcoming meeting that their 6 issues are represented. 7 So I'm now looking to the President of CAPCOA to 8 say, "Please be sure that they're there and that they have 9 an opportunity to express some of their issues to our 10 staff." I think that's really important, because we want 11 to make this program work and work well. And I think 12 there are different issues out there that the districts 13 have. And I want to be sure that we hear those issues and 14 then think creatively how to resolve them. 15 EXECUTIVE OFFICER WITHERSPOON: Yeah, we were 16 very fortunate to hire Stu Wilson, the former executive 17 secretary of CAPCOA, to be our northern California liaison 18 and assist northern California districts in spending their 19 Carl Moyer funds. 20 It occurs to me that there are some retired APCOs 21 in southern California -- Tom Paxon just stepped down at 22 Kern -- or other individuals like that, who might be well 23 suited to conduct the same activity in southern 24 California. 25 BOARD MEMBER RIORDAN: Right. Because, you know, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 332 1 we can't forget those folks. 2 And eastern Kern is one of the real keys there. 3 Thank you very much. 4 CHAIRPERSON SAWYER: We have two requests to 5 speak, dr. Wallerstein and Jack Broadbent. 6 Dr. Wallerstein. 7 DR. WALLERSTEIN: Thank you, Chairman Sawyer, 8 members of the Board. Given the late hour, I will be very 9 brief. Just a few observations and a couple of 10 clarifications. 11 We're having our third state audit on Moyer in a 12 12-month period right now. And while that's sometimes a 13 difficult thing to go through, three different audits by 14 three different groups where you have to come up the 15 learning curve, there are lessons learned. And so I think 16 there are things that we have done in response to the 17 audits that will improve our program. Changes in state 18 law allow us to better finance the staffing for our 19 program, which will make a big difference. 20 There are elements in your staff's audit that we 21 have a disagreement with. We articulated our response in 22 the formal letter that came to the staff. 23 But, for example, the $10 million. We don't want 24 you to have an impression that we didn't go through a 25 funding process with the $10 million, because we did. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 333 1 did an RFP, we went to our board, we awarded the monies, 2 and then the projects fell through. And that's a problem 3 with Moyer. 4 Now, we've solved it in a way that small 5 districts would have difficulty doing it. We now have an 6 automatic backup list and a backup list to the backup 7 list, to be able to move more quickly and reissue the 8 contracts and timelines for people to either accept or not 9 accept the monies. But our joint staffs have visited 10 Texas. They have the same problem. 11 There is an issue, however, that's pointed out in 12 the Department of Finance's audit of the Moyer program, 13 including talking to your own staff, about the two-year 14 period. And that's a very crucial one. And we have a 15 legal disagreement over how you define that two-year 16 period. 17 But what I would like to do is, first of all, 18 thank Catherine, because she's agreed to meet with CAPCOA 19 in two weeks to go over issues. 20 But, secondly, request of the Board -- that you 21 initiated a stakeholder group that was chaired by former 22 board member Mark DeSaulnier, who is now obviously a 23 member of the Assembly. And we think it would be quite 24 timely for the Board to appoint a replacement for the 25 Assemblyman and to assemble the stakeholder group. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 334 1 we've had conversations with both the business sector and 2 environmental groups, and they agree that it would be good 3 to bring that group back together, especially as you 4 embark on refinements to the guidelines. 5 Lastly, and not least, the $1 billion. Our 6 district believes you should adhere to the Moyer 7 guidelines for expending that 1 billion. We shouldn't be 8 having competition between the Moyer program and how you 9 expend that 1 billion. It could lead to further delays in 10 project awards and some really conflicting situations. 11 And I thank you for your attention to this 12 matter. 13 CHAIRPERSON SAWYER: Thank you. 14 Jack Broadbent. 15 MR. BROADBENT: Yes, Mr. Chairman, members of the 16 Board. Also, just real brief comments on behalf of the 17 Bay Area Air Quality Management District. 18 We actually have three ongoing audits right now 19 at the Bay Area district. And, you know, in the interest 20 of not surprising Catherine or her staff, I wanted to 21 highlight for the Board really that these audits, one by 22 the Department of State Audits, Department of finance, and 23 then of course CARB's audit, takes a tremendous amount of 24 resources for the district. 25 I am all for accountability. I believe that it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 335 1 makes a lot of sense to have the state audit how these 2 funds are being spent. But I wanted the Board to 3 understand though that there is a considerable amount of 4 auditing that goes on if you take -- if you just take for 5 just a moment from a perspective of sort of from the 6 district up towards the state, that we're a little bit 7 feeling a little inundated with respect to these programs. 8 And they're taking very needed resources for us to 9 interact with the cities and counties and hopefully 10 private interest in terms of receiving these funds and 11 really getting this money expended quickly. 12 The recent state law that allows for additional 13 percentages to be used for administrative -- to cover 14 administrative costs is very welcome. We need that 15 increase and we're in the process right now of trying to 16 actually hire just one or two more staff just to be able 17 to help us administer the Carl Moyer Program. 18 Finally, I wanted to echo Dr. Wallerstein's 19 comments with regard to establishing some kind of 20 stakeholder group or reestablishing that stakeholder 21 group, because there are a number of issues that I think 22 we would like to highlight for CARB and the staff with 23 respect to refinements to the guidelines. You know, time 24 has kind of evolved with respect to the "I" bonds. And 25 there's that, along with just other issues that have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 336 1 surfaced through the work that we have undertaken so far 2 in response to the audits. And just the more and more we 3 learn in terms of working with our applicants, I think 4 it's probably time that we reinitiate that effort so that 5 we can have a stakeholder group to highlight what those 6 issues are and hopefully make some changes to the 7 guidelines. 8 So with that, Mr. Chairman, those are my 9 comments. 10 CHAIRPERSON SAWYER: Thank you very much. 11 EXECUTIVE OFFICER WITHERSPOON: Just a quick 12 comment about the inundation of audits. 13 Year 5 and Year 6 was funded by bond revenues. 14 And they carry with that always a Department of Finance 15 audit. 16 Then environmental groups took to the Legislative 17 Audit Committee concerns that they would like money to be 18 spent differently than it's being spent right now. That 19 was in the San Joaquin Valley. It blossomed into an audit 20 of four major air districts, which is on top of the 21 Finance audit. 22 And then we've had since the beginning audit 23 responsibilities under Carl Moyer. 24 We agree it's excessive. But it's also kind of 25 what's coming. And the Governor issued an Executive Order PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 337 1 yesterday about the bonds. I think I mentioned it in my 2 action plan report. And so by March we have to have sort 3 of our strategic plan about how the bonds are going to get 4 audited. And it's really not up to us whether they're 5 going to follow the Carl Moyer format or not. Separate 6 state legislation will be adopted indicating what the 7 criteria for those bond expenditures are. We will be 8 making -- the Administration will be making an opening 9 proposal. And, you know, dialogue and negotiations with 10 the Legislature will go on after that. 11 CHAIRPERSON SAWYER: Doug Quetin. 12 MR. QUETIN: Doug Quetin with the Monterey Air 13 District and CAPCOA. Squeezing me in here with these 14 large districts. 15 (Laughter.) 16 MR. QUETIN: The evolution of the program with 17 the smaller districts looks very promising from a year or 18 so ago. ARB has put together I think an excellent program 19 using the past CAPCOA executive director to oversee the 20 grants in a number of those small districts. And I'll bet 21 that expands and I bet it'll be very successful. 22 I don't want to repeat what was said before. But 23 you heard Barry talking about the bonds and how we want to 24 use a Moyer model. Well, that's being spoken of a lot. 25 All of a sudden Moyer is becoming the model for other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 338 1 funds in the state. And so we really have to, for many 2 reasons, work out what is an adequate audit, what is an 3 adequate program, how many times should we double-check an 4 inspector, and on and on and on. There needs to be a lot 5 of standardization; not just audits, but how you audit. 6 And that's where I think we need to get to in really a big 7 hurry. Because all the money we spend administering the 8 program is money that doesn't clean the air. And it's one 9 of the reasons why we cut the Monterey district's 10 administrative staff by 20 percent a couple of years ago. 11 We wanted to put the money where our mission was. 12 So, anyway, I'm excited to meet with ARB as well, 13 and look forward to the reestablishment of the, what we've 14 so called, DeSaulnier Committee. 15 Thank you. 16 CHAIRPERSON SAWYER: Thank you very much. 17 And I want to thank the three air pollution 18 control officers who spent most of the day with us. 19 Appreciate that very much. 20 Does staff have further comments? 21 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 22 CHAIRPERSON SAWYER: Okay. We have just a couple 23 of more items to take care of. 24 Since this is not a regulatory item, it's not 25 necessary to officially close the record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 339 1 All right. Do any of the Board members want to 2 comment on any items of interest to them at this time? 3 If not, this is the time for open comment period 4 for the public. And we have two requests, Doug Korthof 5 and Lisa Rosen. 6 Doug Korthof, who has spent the day with us also 7 I think. 8 MR. KORTHOF: I admire the steadfastness of the 9 Board. And I don't know how you do it, but I've seen all 10 these public-spirited people and I admire -- I say I 11 admire what you do. You know, we come here for three 12 minutes. But you're up there all the time and you have 13 significant decisions to make. So we, the public, 14 appreciate all the people that do that. 15 I'm going to talk about the ZEV mandate. 16 Allowing the alternative path zero emission vehicle 17 compliance in 2003 led to the end of the battery electric 18 vehicle programs and the demise of the electric cars. 19 Commissioner D'Adamo is to be congratulated, 20 along with the other two heroic Commissioners who voted to 21 try to save the electric cars, unsuccessfully, out-voted 8 22 to 3. That vote doomed us. 23 ZEVs that were existing were taken -- forcibly 24 taken from drivers and willing buyers and crushed, leaving 25 us, the public, with nothing more than promises dated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 340 1 2014, which may or may not be kept. 2 In the aftermath Toyota became the only modern 3 car maker to offer the last 328 RAV4-EVs, the only modern 4 electric car to ever be offered for sale in the open 5 market. 6 These ZEVs, together with hundreds of 2001 7 fleet-leased -- or RAV4-EV are still in high demand. 8 Virtually all run everyday on their original battery pack 9 of nickel metal hydride NIMH batteries. 10 Most ZEV drivers in the spirit of the Governor's 11 initiative have installed solar electric PV systems on 12 their homes, channeling some of their fuel expenditures 13 from fossil fuel to help amortize their solar investment. 14 Many of these ZEVs have odometers around 90,000 15 miles, even more. Some -- you know, some few have less. 16 And they're running fine, mostly on the original battery 17 packs. 18 Conversely, many lower income people and other 19 solar homeowners continually express the desire to have a 20 plug-in electric car. You know, whatever it is, they'd 21 love to have a full function electric car so they can use 22 some of the credits they get from their solar system. For 23 instance, we, with a relatively small solar system, 24 donated $89 in excess electric last rear after powering 25 two electric cars 15,000 miles a year, 80 miles an hour, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 341 1 120 miles range, and donated $89 in excess electric and 2 helped the grid by meeting their peak daytime needs. 3 Conversely, GM has announced the practicality of 4 the Volt of serial electric -- serial plug-in hybrid 5 configuration similar to RAV4-EV with a small gas engine. 6 GM should be allowed more ZEV credits for the serial 7 plug-in hybrid configuration. 8 I will e-mail this to you in addition. So I'm 9 going to have to cut it a little short. 10 GM has embarked in research to make lithium 11 batteries. They're saying they can't do the Volt and so 12 they have lithium batteries. Well, the ARB battery 13 workshop certified in 2000 that nickel metal hydride 14 batteries were not an unfair requirement to -- the upfront 15 expense was not an unfair requirement for electric cars. 16 These nickel metal hydride batteries last longer than the 17 life of the car. Completely reliable. Failure rates in 18 the single digits per million cells. And they're reliably 19 running today. 20 General Motors could issue the Volt, not just 21 with the nickel metal hydride. Even with the lead acid 22 batteries that were in the 1997 ED-1, the Panasonics. 23 They could do this. 24 They should be encouraged to do this. We should 25 help General Motors to meet its ZEV requirement by issuing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 342 1 the Volt now, not in 2012 when they want to do it. Now. 2 Because they can. We know they can do it. They've said 3 that there is such a car. Please, you know, work with the 4 people to make this car available. 5 This is the way that people can live oil free. 6 And people who find out that they can do it want to do it. 7 They want to get an electric car and charge it up from 8 their solar system. Everybody who learns about it wants 9 to do it. Please help these people do this. All you have 10 to do is assist General Motors in releasing the Volt ahead 11 of time. 12 Thank you. 13 CHAIRPERSON SAWYER: Thank you. 14 Lisa Rosen. 15 And thank you for your stamina, persisting to the 16 end of the day. 17 MS. ROSEN: Chairman and members of the Board and 18 staff. Thank you so much for your patience in hearing me. 19 I was one of those EV skeptics who became an 20 advocate by driving them. My problem wasn't range or 21 battery performance. It was that Honda, GM, and Ford took 22 away our vehicles. There was that brief reprieve when 23 Toyota briefly sold a few. 24 All told, our family has driven production -- 25 electric vehicles 470,000 miles since 1997. Except for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 343 1 that first EV-1, all the batteries were nickel metal 2 hydride and they were fine. 3 I hope that all your future programs require that 4 vehicles be sold. Particularly when we're talking about 5 the high cost and the level of technical expertise that 6 has to go into the fuel cell and hydrogen vehicles, this 7 becomes even more important, in my opinion. If you create 8 a program, make sure that the means exists also to 9 maintain it. I think that's one of the lessons we as 10 drivers have learned. 11 Spikes in gas prices have finally got a whole lot 12 more people thinking about the future of gasoline. Our 13 solar customers are almost unanimous in wanting to install 14 solar to offset future energy use of a plug-in car they 15 hope to buy. That could really help some of the lower 16 income citizens afford solar power. 17 I think this trend in consumer thinking suggests 18 the time has come to reconsider the place of the gas 19 plug-in hybrid on your path to zero emissions. I know in 20 the past that has been a barrier in your thinking. I 21 think that this trend causes new opportunities to think. 22 Your present plan has allowed for postponed 23 compliance to enable hydrogen and fuel cell research. 24 Several years into this program, it appears that the 25 research will not result in cost effective transportation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 344 1 systems any time real soon. Despite a lot of public 2 outcry about the cost of research and the development of 3 the electric car, I have noted no similar complaints 4 regarding the expense of fuel cell research. 5 Recent GM announcements about this Volt offer 6 another opportunity to improve results of the ZEV mandate. 7 GM indicated that their main obstacle to production is 8 battery technology, and they propose this additional 9 research into lithium batteries. This may add little to 10 real-world assessments of lithium and the findings of the 11 ARB battery group. I repeat that the existing nickel 12 metal hydride and even lead batteries have been produced 13 and are capable of range up to 100 miles, much more than 14 the required 40-mile range suggested for the Volt. 15 The track record so far indicates that further 16 progress is unlikely without regulatory action. The auto 17 industry bitterly -- but is ultimately benefited from the 18 environmental oversight provided by this Board. 19 We don't have to wait until the year 2012. With 20 the right combination of incentive and credits, production 21 could occur sooner. What is needed is for ARB to allow 22 plug-in hybrids to comprise a significantly larger 23 percentage of the ZEV requirement. 24 Please, make the requirements as simple as 25 possible. I know that's hard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 345 1 But it is really essential to get this program 2 out of the stratosphere of theory and into the atmosphere 3 of reality where we really need it. 4 Thank you. 5 CHAIRPERSON SAWYER: Thank you very much. 6 We're seeing the run-up to our ZEV review. 7 (Laughter.) 8 EXECUTIVE OFFICER WITHERSPOON: The opening bell 9 has rung. 10 CHAIRPERSON SAWYER: I would like to adjourn the 11 meeting. Do we have a motion for adjournment? 12 BOARD MEMBER GONG: So moved. 13 CHAIRPERSON SAWYER: And a second? 14 BOARD MEMBER RIORDAN: Second. We'll support 15 you. 16 CHAIRPERSON SAWYER: The January 25th, 2007, Air 17 Resources Board meeting is now adjourned. 18 Thank you. 19 (Thereupon the Air Resources Board meeting 20 adjourned at 5:30 p.m.) 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 346 1 CERTIFICATE OF REPORTER 2 I, JAMES F. PETERS, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing California Air Resources Board meeting was 7 reported in shorthand by me, James F. Peters, a Certified 8 Shorthand Reporter of the State of California, and 9 thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said meeting nor in any 12 way interested in the outcome of said meeting. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 9th day of February, 2007. 15 16 17 18 19 20 21 22 JAMES F. PETERS, CSR, RPR 23 Certified Shorthand Reporter 24 License No. 10063 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345