BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY CENTRAL VALLEY AUDITORIUM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, APRIL 26, 2007 9:00 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Robert Sawyer, Chairperson Ms. Sandra Berg Ms. Dorene D'Adamo Dr. Henry Gong, Jr. Supervisor Jerry Hill Mrs. Barbara Riordan Supervisor Ron Roberts Dr. Daniel Sperling STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Tom Jennings, Chief Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Quetin, Ombudsman Ms. Catherine Witherspoon, Executive Officer Mr. Jim Aguila, Manager, Substance Evaluations Section Mr. Alavaro Alvarado, Staff Mr. Alberto Ayala, Staff Ms. Lori Andreoni, Board Secretary Mr. Bob Barham, Assistant Chief, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. Richard Corey, Chief, Research and Economics Studies Division Mr. Bart Croes, Chief, Research Division Mr. John DeMassa, Chief, Modeling and Meteorology Branch Mr. Bob Fletcher, Chief, Stationary Source Division Mr. Kurt Kaperos, Chief, Air Quality Planning Branch, PTSD Ms. Karen Magliano, Chief, Air Quality Data Branch Dr. Melanie Marty, Chief, Air Toxicology and Epidemiology Branch Ms. Cynthia Marvin, Assistant Division Chief, Planning and Technical Support Division Ms. Annmarie Mora, Air Pollution Specialist, Research Division Ms. Linda Murchison, Chief, Planning and Technical Support Division Dr. Brent Takemoto, Substance Evaluation Section, SSD ALSO PRESENT Mr. E.T. Altman, Hardwood Plywood & Veneer Association Mr. Dennis Bradley, Mannington Mr. Tim Carmichael, Coalition for Clean Air & ALA Ms. Joan Cassman, Hanson Bridgett, LLP Mr. John Chaffin, John Chaffin & Associates Mr. Jerald Cole, Hydrogen Vehicle Mr. Charlie Compton, Hambro Forest Products Mr. Tom Cooper, Kaiser Permanente PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED ALSO PRESENT Mr. Harry Demorest, Columbia Forest Products Mr. Pablo Dopico, Georgia-Pacific Corp. Mr. Edward Elias, APA, The Englewood Wood Association Mr. Rick Fields, Neil Kelly Cabinets Mr. Brian Gitt, Build It Green Mr. Charles Grabiel, United Soy Bean Council Mr. Wade Gregory, Sierra Pine Mr. Phil Guay, Columbia Forest Products Mr. Tom Higgins, Formaldehyde Free Coalition Mr. Pat Hooper, Hooperwolfe, LLC Mr. Jeff Hunt, Plywood & Lumber sales Mr. Tupper Hull, Western States Petrolium Association Mr. Tom Julie, Composite Panel Association Mr. Mark Kable, Setzer Forest Products Mr. Darrell Keeling, Roseburg Forest Products Mr. Doug Korthof, citizen Mr. Brock Landry, CPA & CWIC Mr. Tom Lent, Healthy Building Network Mr. Kaichang Li, Oregon State University Mr. Gene Livingston, CWIC Mr. Eli Makus, Children NOW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. Gary Marsh, University of Pittsburg Ms. Suzanne Morgan, International Wood Products Association Mr. John Morrison, Sunset Moulding Company Mr. David Mullen, Hercules Dr. Jay Murray, Murray & Associates Ms. Betsy Natz, FCI Mr. Bill Perdue, American Home Furnishings Alliance Mr. Steve Pung, Columbia Forest Products Mr. Bob Raymer, California Building Industry Association Mr. Mike Robson, Association of Woodworking and Furnishing Suppliers Mr. Richard Royce, Hercules Ms. Kelly Schroeder, Wood Moulding & Millwork Products Association Mr. Erwin Schutfort, Professional Service Industries, Inc. Dr. Lee Shull, Composite Panel Association & CA Wood Industries Association Mr. Richard Titus, Kitchen Cabinet Manufacturers Association Mr. Jerry Uhland, CalAG, LLC Mr. Bill Warberg, Plum Creek MDF Mr. Scott Watson, IPMG Ms. Elizabeth Whalen, Columbia Forest Products Mr. Ed Woods, Columbia Forest Products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX PAGE Pledge of Allegiance 1 Item 7-4-1 Chairperson Sawyer 3 Executive Officer Witherspoon 3 Staff Presentation 5 Mr. Kortoff 11 Item 7-4-2 Chairperson Sawyer 13 Staff Presentation 13 Q&A 16 Motion 18 Mr. Choquette 19 Mr. Korthof 20 Vote 23 Item 7-4-6 Chairperson Sawyer 23 Executive Officer Witherspoon 24 Staff Presentation 26 Q&A 40 Mr. Cole 53 Mr. Korthof 56 Mr. Carmichael 58 Item 7-6-3 Chairperson Sawyer 63 Executive Officer 63 Staff Presentation 64 Ombudsman Quetin 87 Q&A 89 Mr. Carmichael 110 Mr. Robson 113 Ms. Natz 114 Dr. Murray 117 Mr. Marsh 121 Dr. Shull 123 Mr. Gregory 126 Mr. Julie 129 Mr. Warberg 132 Mr. Keeling 135 Mr. Altman 137 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX CONTINUED PAGE Mr. Compton 138 Mr. Perdue 141 Mr. Elias 144 Mr. Zimmerman 145 Mr. Titus 148 Mr. Raymer 150 Mr. Landry 152 Mr. Livingston 155 Mr. Dopico 158 Mr. Kable 160 Ms. Morgan 164 Mr. Chaffin 167 Ms. Schroeder 169 Mr. Watson 173 Mr. Harmon 176 Mr. Korthof 178 Mr. Higgins 180 Mr. Demorest 181 Mr. Woods 187 Ms. Whalen 189 Mr. Guay 192 Ms. Cassman 195 Dr. Li 196 Mr. Gabriel 198 Mr. Royce 200 Mr. Mullen 202 Mr. Uhland 206 Ms. Hooper 208 Mr. Fields 211 Mr. Hunt 213 Mr. Gitt 214 Mr. Cooper 217 Mr. Lent 220 Mr. Makus 223 Mr. Pung 225 Mr. Bradley 226 Mr. Schutfort 230 Q&A 233 Motion 236 Vote 247 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 viii INDEX CONTINUED PAGE Item 7-4-5 Chairperson Sawyer 247 Executive Officer Witherspoon 248 Staff Presentation 249 Q&A 279 Mr. Korthof 287 Mr. Hull 290 Public Comment Mr. Choquette 293 Mr. Korthof 295 Ms. Whitman 298 Adjournment 302 Reporter's Certificate 303 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON SAWYER: Good morning. The 3 April 26th, 2007, public meeting of the Air Resources 4 Board will come to order. All please rise and join me in 5 the Pledge of Allegiance. 6 (Thereupon the Pledge of Allegiance was 7 recited in unison.) 8 CHAIRPERSON SAWYER: Thank you. 9 Will the Clerk of the Board please call the roll? 10 BOARD CLERK ANDREONI: Ms. Berg? 11 BOARD MEMBER BERG: Here. 12 BOARD CLERK ANDREONI: Ms. D'Adamo? 13 BOARD MEMBER D'ADAMO: Here. 14 BOARD CLERK ANDREONI: Dr. Gong? 15 BOARD MEMBER GONG: Here. 16 BOARD CLERK ANDREONI: Supervisor Hill? 17 BOARD MEMBER HILL: Here. 18 BOARD CLERK ANDREONI: Ms. Kennard? 19 Mayor Loveridge? 20 BOARD MEMBER LOVERIDGE: Here. 21 BOARD CLERK ANDREONI: Mrs. Riordan? 22 BOARD MEMBER RIORDAN: Here. 23 BOARD CLERK ANDREONI: Supervisor Roberts? 24 Professor Sperling? 25 BOARD MEMBER SPERLING: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD CLERK ANDREONI: Chairman Sawyer? 2 CHAIRPERSON SAWYER: Here. 3 BOARD CLERK ANDREONI: Mr. Chairman, we have a 4 quorum. 5 CHAIRPERSON SAWYER: Thank you. 6 I have a few opening remarks before we get 7 started. A closed session appears each month as a 8 standing item on our agenda to receive reports on the 9 various greenhouse gas lawsuits in which we are litigants. 10 Since there is nothing to report this month, the closed 11 session notice for today's meeting has been canceled. 12 Also, I would note that agenda item 7-4-4, Report 13 to the Board on Global Warming, Principles to Guide AB 32 14 Implementation, will not be heard today. Staff is still 15 working on this item, and we'll hear it at -- next month? 16 EXECUTIVE OFFICER WITHERSPOON: Next month, or 17 June, depending. 18 CHAIRPERSON SAWYER: Within the next two months. 19 Thank you. 20 Anyone who wishes to testify should sign up with 21 the Board Clerk and has the option to include his or her 22 name on the speaker card. Please see the Clerk of the 23 Board for further instructions. 24 Also, speakers, please be aware that the Board 25 will impose a three-minute limit. Please put your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 testimony into your own words. It's easier for the Board 2 to follow if you go straight to your main points. You do 3 not need to read your written testimony since it will be 4 entered into the record. 5 For safety reasons, please note the emergency 6 exits to the right of the hearing room and to the rear. 7 In the event of a fire alarm, we are required to evacuate 8 the room immediately. Evacuees will exit down the 9 stairways and possibly to a relocation site across the 10 street. When the all-clear signal is given, we will 11 return to the hearing room and resume the hearing. Thank 12 you. 13 Agenda Item 7-4-1, Health Update. Today's 14 presentation is a study by the Office of Environmental 15 Health Hazard Assessment and their collaborators about the 16 effects of fine particle species. PM2.5 is composed of 17 many different substances which may not be equal in their 18 health impacts. This study investigated the effects of 19 the individual components of PM2.5 on mortality in several 20 California counties. 21 Ms. Witherspoon, please introduce this item. 22 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 23 Sawyer. And good morning, members of the Board. 24 We know particle exposure is harmful, but we 25 still have much to learn about the effects of individual PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 PM 2.5 constituents. Today's study is valuable because it 2 investigates the association between daily mortality and 3 19 components of PM2.5. This kind of research may help us 4 in the future to focus our control strategies on the most 5 toxic components of fine particles so we can achieve the 6 greatest health protection. 7 Dr. Alvaro Alvarado will make today's 8 presentation. 9 (Thereupon an overhead presentation was 10 presented as follows.) 11 MR. ALVARADO: Thank you, Ms. Witherspoon. Good 12 morning, Dr. Sawyer and members of the Board. 13 In this health update, I'll discuss the results 14 of the recent study evaluating the association between the 15 components of fine particulate matter air pollution and 16 premature deaths in six California counties. 17 The Board has heard before of the association 18 between fine PM and adverse health effects such as asthma 19 symptoms, hospitalizations, and premature death. 20 Determining which components of PM are responsible for 21 adverse health effects is an active area of research and 22 the study represents one step on that path. 23 --o0o-- 24 MR. ALVARADO: The effect particulates have on 25 premature deaths is especially important to California, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 because we estimate that 8,200 premature deaths in 2 California each year can be associated with exposure to 3 fine PM. Both long-term and short-term health studies 4 show an increased risk of dying associated with exposure 5 to fine PM. Long-term studies like the American Cancer 6 Society Cohort followed approximately 500,000 adults for 7 20 years and examined the effect of PM on premature death. 8 They report a statistically significant increase in 9 mortality due to long-term exposure to PM. 10 This study presented you today evaluates 11 short-term impacts of exposure to fine PM. It 12 investigated the daily fluctuations in fine PM and its 13 components and their influence on daily tasks in six 14 California counties. People are exposed to a complex 15 mixture of PM from many sources. This type of study has 16 the advantage of helping to relate PM components to 17 sources. It helps us answer the question are some 18 particles more toxic than others and which components of 19 PM are most responsible for the associated premature 20 deaths. 21 --o0o-- 22 MR. ALVARADO: Today's presentation highlights a 23 recent publication by Dr. Bart Ostro and colleagues from 24 the Office of Environmental Health Hazard Assessment. Dr. 25 Ostro is scheduled to present these results in detail in a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 seminar later this year. 2 In order to study the relative toxicity of 3 components of PM, the researchers collected data on the 4 ambient concentrations of PM and their components and the 5 daily number of deaths from 2000 to 2003. Daily deaths 6 from all causes, heart and lung disease, and deaths in 7 persons greater than 65 years old were matched to fine PM 8 and their components. Death from accidents were not 9 included in the data. In this presentation, I will 10 highlight the link between fine PM components and death 11 from heart disease. 12 Fine PM samples were collected on filters and 13 analyzed for elemental carbon, organic carbon, nitrate, 14 sulfate, and various metals. They were selected in six 15 California counties: Fresno, Kern, Riverside, Sacramento, 16 San Diego, and Santa Clara County, which represents 8.7 17 million people and 25 percent of California's population. 18 People are not necessarily affected by PM on the 19 day of a high air pollution episode. There may be a lag 20 time between the exposure to high PM and the adverse 21 health effects. Many times people are affected one, two, 22 or even three days later. Therefore, the researchers 23 explored the risk of dying on the day of and up to three 24 days after measuring fine PM and its components. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 MR. ALVARADO: The advantage of studying the 2 components of fine PM is that you can investigate 3 chemicals that come from particular sources separately. I 4 want to highlight the results from components of fuel 5 combustion and wood smoke. Elemental carbon, organic 6 carbon, sulfate, and various metals are associated with 7 gasoline and diesel vehicles. Elemental carbon, organic 8 carbon, and potassium are markers for wood burning. 9 When we examine the components of fuel combustion 10 and wood smoke, they show a one to two percentage increase 11 from heart disease and a .5 to 1 percent risk of dying 12 from all causes. Interestingly, the effects are somewhat 13 stronger in the cool months, October through March. Fuel 14 and wood smoke components show an increased risk of dying 15 of a 1 to 3 percent from all causes and heart disease. 16 There are a couple of reasons why the cool season 17 results show a greater disk of dying. The concentrations 18 measured in the winter are higher overall. This may be 19 due to a lower inversion layer in cool months, which 20 limits the amounts of clean air that can mix with 21 pollutants. There are also different sources in the 22 winter. For example, more residential wood burning. 23 Another possibility is that more people die of influenza 24 during the cool months. It is possible some of the 25 increased risk of dying during the cool season may reflect PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 two unrelated events, an increase in PM concentrations and 2 increased dying from the flu. 3 --o0o-- 4 MR. ALVARADO: In contrast to the fuel combustion 5 and wood smoke, the components of natural particles such 6 as those from soil and sea spray show an increased risk of 7 premature death. Aluminum, silicon, and iron are 8 associated with soil. Bromine, calcium, and chlorine are 9 found in sea spray. 10 The data from the full four years of the study 11 for all the components of the soil and sea spray indicate 12 no increased risk of premature risk from all causes and 13 cardiovascular causes. In the cool season months, there 14 are no statistically significant increased risk of dying 15 from soil and sea spray components with the exception of 16 iron. 17 --o0o-- 18 MR. ALVARADO: The results from the study agree 19 with findings from previous research showing a 20 relationship between exposure to fine PM and combustion 21 sources and premature death. Intervention studies have 22 shown a decrease in premature deaths associated with the 23 introduction of low-sulfur fuel in Hong Kong and a coal 24 ban in Dublin. And traffic studies have shown premature 25 death and illnesses associated with living near a major PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 roadway. 2 The investigators found the strongest and most 3 consistent association with premature death in fine PM 4 components in elemental carbon, organic carbon, and mobile 5 sources related metals. The results also indicate 6 stronger associations between mortality and fine PM 7 components during the cool months. These results indicate 8 further confirmation that reducing particulate pollution 9 from motor vehicles and other PM combustion sources can 10 lead to health benefits. It also begins to address the 11 issue of relative toxicity of the components of PM which 12 could lead to regulations focused on most toxic components 13 of PM to better protect the public from harmful effects of 14 particles. 15 This concludes the health update. And we would 16 be happy to answer any questions. Thank you very much. 17 CHAIRPERSON SAWYER: Thank you, Dr. Alvarado. 18 Do Board members have questions? 19 Dr. Gong. 20 BOARD MEMBER GONG: Just another comment. Very 21 nicely done, Dr. Alvarado. 22 I would like to point out just a couple of 23 impressions I have from this presentation paper from Dr. 24 Ostro. Dr. Ostro has been very prominent in doing these 25 types of studies, and I'm actually -- his results are very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 illuminating. And actually there are some biological or 2 toxicological data that support what he's found here with 3 elemental carbon and some of the metals in animal studies 4 especially. 5 I would have some caveats. One is his study only 6 looks at deaths. And, of course, we're also interested in 7 what happens to living people who are exposed to similar 8 type of PM2.5, such as asthma attacks as you mentioned. 9 So I look forward to this next rendition. 10 Also in the real world, we are exposed to 11 mixtures. It's not just one compound, one metal such as 12 zinc or one elemental carbon. It's usually a mixture of 13 different particles and gases. And that complicates 14 matters. In a way, I was sort of pleasantly surprised he 15 was able to find these signals from large populations. So 16 I'm both pleasantly surprised and also further given more 17 confidence about the information we have about the health 18 effects of combustion-related particles. Thank you. 19 Oh, one last -- I'm sorry. One comment. For the 20 record, I wanted to congratulate Linda Smith for becoming 21 the -- better say this right -- Chief of the Health and 22 Exposure Assessment Branch in the Research Division. This 23 has been a recent transition. And also want to thank Dr. 24 Richard Bode for his contribution to the Research Division 25 in that same position for the years I've been on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 Board. I know I speak for the Board that we wish both of 2 them good stead in their new adventures. 3 RESEARCH DIVISION CHIEF CROES: Dr. Smith 4 couldn't be here today because she's doing a presentation 5 at the South Coast Asthma Forum. But I'll certainly pass 6 on your congratulations to her. 7 CHAIRPERSON SAWYER: Are there any other comments 8 or questions from Board members? 9 If not, we have one request from the public, Doug 10 Kortoff. 11 MR. KORTOFF: These kinds of valuable studies 12 validate and reinforce common sense, which is that the 13 pollution from diesels and refineries and other 14 particulate matter that lands in the air is a common 15 problem for all of us. And I really think we need to do 16 more, not just of quantifying these studies, but do more 17 to actually reduce the PM concentration. The studies are 18 dry and clinical. But the reality is that people are 19 unable to breathe. Kids wake up in the morning. "Mommy, 20 mommy, I can't breathe." And they're rushed to the 21 emergency room, which costs the public $1,000. All they 22 do is give them an asthma breather. 23 The reality is that there are people suffering 24 right now. We go through Wilmington at 2:00 in the 25 morning on the freeway, and you say, "Oh, my God. I can't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 breath." What about the people that have to live in that 2 area? What about their lungs? 3 I just want to quote something from a person who 4 wrote a letter to you. And she couldn't be here, because 5 she's working. She says: 6 "We need to take care of our environment, the 7 air we breathe, the water we drink, et cetera. 8 We don't have any other choice but to do 9 something. Our environment means sustains us, 10 and we must be good stewards of our beautiful 11 planet. That is not negotiable. What is worth 12 the health of our children? What possible 13 benefit could justify permanent lung damage to 14 our children, not to mention ourselves?" 15 This is from Monique Perez who lives in Los 16 Angeles. I please ask you -- ask more people who live in 17 the shadows of those refineries what they think. They 18 want more than just dry reports. They want action. Thank 19 you. 20 CHAIRPERSON SAWYER: Thank you. 21 Ms. Witherspoon, does staff have further 22 comments? 23 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 24 CHAIRPERSON SAWYER: Since this is not a 25 regulatory item, it is not necessary to officially close PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 the record. 2 Agenda Item 7-4-2, Consideration of Three 3 Research Proposals. The results of the research proposed 4 today will assist the Board in reducing greenhouse gases 5 that will strengthen the tools used in the Board's health 6 effects studies. Staff, please introduce this item. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 AIR POLLUTION SPECIALIST MORA: Good morning, Dr. 10 Sawyer and members of the Board. 11 Today we are presenting three research proposals 12 for your review and approval. These are the last 13 proposals that will part of the Board's 2006-2007 research 14 plan and have all been reviewed and approved by the 15 Research Screening Committee. 16 --o0o-- 17 AIR POLLUTION SPECIALIST MORA: The first project 18 is an inventory project focused on refrigerant emissions 19 from on- and off-road motor vehicles of all classes other 20 than light-duty vehicles. ARB has been at the forefront 21 of controlling emissions of greenhouse gases from motor 22 vehicles. Almost all motor vehicles made after 1994 use 23 HFC-134a, a potent greenhouse gas as the refrigerant. 24 In 2004, the ARB approved regulations pursuant to 25 AB 1493 to limit greenhouse gas emissions including PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 refrigerant from new light-duty vehicles sold in the state 2 beginning with the 2009 model year. The proposed 3 contractor has developed a methodology to perform a 4 detailed assessment of mobile air conditioning system 5 refrigerant emissions from heavy-duty on- and off-road 6 vehicles operating in California. 7 The proposed approach will provide ARB with a 8 comprehensive profile of air conditioning system 9 configurations currently in use in the state as well as 10 for systems expected to enter the market in the near 11 future. In addition, the contractor will facilitate an 12 iterative process incorporating input from industry and 13 other technical experts to develop a reliable, verifiable, 14 refrigerant measurement method for use in the project. 15 The results will support potential measures that would 16 extend greenhouse gas regulations to vehicles not 17 addressed by AB 1493, therefore, advancing our efforts 18 pursuant to AB 32. 19 --o0o-- 20 AIR POLLUTION SPECIALIST MORA: The next project 21 will investigate greenhouse gas emissions from 22 do-it-yourself mobile air conditioning servicing. As 23 mentioned in the previous project, the dominant mobile air 24 conditioning refrigerant in use is HFC134A. The climate 25 impacts from mobile air conditioning systems are due PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 mostly to indirect carbon dioxide and leakage resulting 2 from equipment energy demands. This project will focus on 3 the direct HFC134A emissions associated with the servicing 4 of mobile air conditioning systems by the vehicle owner 5 and on the leakage mechanism associated with those 6 practices. 7 The proposed research will determine: The 8 mechanisms responsible for the emissions associated with 9 do-it-yourself servicing; the total number of small cans 10 of HFC134A for retail sale to non-professionals in 11 California; the amount of HFC134A remaining in the can 12 heel after refrigerant transfer; the amount of refrigerant 13 that is emitted during the recharging process by the 14 non-professional; and the benefit of professional 15 servicing. These data are necessary to evaluate the 16 climate impact in California of do-it-yourself servicing 17 and inform regulation development specifically for early 18 action measures pursuant to AB 32. 19 --o0o-- 20 AIR POLLUTION SPECIALIST MORA: The last project 21 is an augmentation to an existing study that supports the 22 development of the versatile aerosol concentration 23 enrichment system, or VACES. VACES forms a critical 24 component of current ARB funded research on the adverse 25 health effects caused by PM. Studies have shown elevation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 in PM 10 and PM2.5 concentrations are correlated with 2 increases in acute morbidity and mortality. VACES allows 3 researchers to study such affects on animal models by 4 concentrating ambient particles. This technology is based 5 on inducing particles to grow by water condensation, 6 concentrating the droplets with the vertical impacter, and 7 drawing the particles back to their original size. This 8 method has been documented to preserve many particle 9 properties such as size, bulk chemistry, indicators of 10 single particle composition, and particle morphology. 11 Recent work, however, has indicated that although 12 VACES operates as claimed under most meteorological 13 conditions of southern California, the system failed to 14 concentrate aerosol conditions that are commonly 15 encountered in northern California. This project will 16 address these shortcomings by constructing improvements to 17 VACES that will enable the system to operate under a range 18 of ambient conditions than is currently possible and will 19 help support future health effects studies that utilize 20 improved VACES. 21 That concludes the presentation. We request that 22 you approve these research proposals for funding. We're 23 happy to answer any questions. 24 CHAIRPERSON SAWYER: Do Board members have any 25 questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 BOARD MEMBER SPERLING: Thank you, Dr. Sawyer. I 2 would like to advise the Board that I will be recusing 3 myself from the discussion and consideration and the vote 4 on the amendment to research proposal 04-332, improvements 5 to versatile aerosol concentration enrichment systems. 6 And I do so because of my affiliation with the University 7 of California Davis, which is the proposal proponent. 8 Thank you. 9 CHAIRPERSON SAWYER: Thank you. 10 The item on refrigerant 124a, did I get that 11 right, or is it 134? 12 AIR POLLUTION SPECIALIST MORA: 134a. 13 CHAIRPERSON SAWYER: I note that this possibly 14 will be on our list of early action items. Will the 15 results of this study be timely in terms of when we will 16 actually be considering regulations in the future if we do 17 so? 18 MR. AYALA: I can answer that question. This is 19 Alberto Ayala with the Research Division. 20 The answer is yes. This is essentially a 21 one-year project. And it's basically an expansion and a 22 refinement of a recently completed project sponsored by 23 the U.S. EPA, who has been working very closely with us on 24 this topic for about three to four years. 25 CHAIRPERSON SAWYER: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 Are there any other questions or comments from 2 Board members? 3 If not, let me remind you of our policy 4 concerning ex parte communications. While we may 5 communicate off the record with outside persons regarding 6 Board rulemaking, we must disclose the names of our 7 contacts and the nature of our communications on the 8 record. This requirement applies specifically to 9 communications which take place after the public agenda of 10 the Board hearing has been published. 11 Are there any communications that you need to 12 disclose? 13 Ms. Berg? No. No. No. 14 There being none, are there we ready to vote on 15 the approval of the research projects? 16 BOARD MEMBER RIORDAN: Mr. Chairman, I would move 17 the approval of Resolution 7-11, 7-12, and 7-13. 18 CHAIRPERSON SAWYER: I ask we do the first two 19 separately from the last one so we can record Professor 20 Sperling's recusal. 21 BOARD MEMBER RIORDAN: Certainly. 22 CHAIRPERSON SAWYER: So we have a motion to 23 adopt. And is there a second? 24 BOARD MEMBER GONG: Second. 25 CHAIRPERSON SAWYER: Resolution 7-11 and 7-12. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 All in favor, please indicate by saying aye. 2 (Ayes) 3 CHAIRPERSON SAWYER: These two Resolutions are 4 adopted. 5 And would the Clerk please call the roll on 6 Resolution 7-13? 7 CHIEF COUNSEL JENNE: Chairman Sawyer, I'd like 8 to bring to your attention, there are apparently two 9 witnesses who have signed up on this item. 10 CHAIRPERSON SAWYER: Excuse me. My apologies to 11 the two witnesses. The first is Francois Choquette, I 12 guess it is, and then Doug Korthof. Mr. Choquette. 13 MR. CHOQUETTE: Hello. That wasn't the purpose 14 of my visit here, but I was kind of shocked when I saw 15 this proposal here. 16 I really think this is a trivial study. We're 17 talking about the HFC-134, the replacement to the old 18 Freon R12, okay. This has been proven to be safe. I just 19 looked it up again. There's absolutely no problem with 20 ozone depletion with this. Okay. The only possible 21 affect is global warming. So these days, everything goes 22 into global warming. 23 And we're talking about the heel that's left in 24 the can after it's being used. We're spending $130,000 25 for this. We're sending this money to France. Come on. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 This is nuts. 2 This is also the same stuff that's in those air 3 cans that you use to clean your computers. It's the same 4 stuff we buy, you know, thousands of these cans, and we 5 let it out in the air, and nobody has a problem with this. 6 So I am completely against this study. It's just a big 7 waste of time. 8 All right. That's what I have to say. Thank 9 you. 10 CHAIRPERSON SAWYER: Thank you very much. 11 Mr. Korthof. 12 MR. KORTHOF: Well, these three studies are a 13 relatively minor amount of money and relatively minor 14 importance. And I would like to question why we need to 15 do this. I don't think it has much to do with the early 16 items for AB 32. We're really getting hung up here in 17 trivial items compared to the big issues. The big issues 18 are large pollution devices such as refineries, port 19 pollution, et cetera. Spending time and money on these 20 things seems to me to be just a cover for not doing 21 anything. 22 And as for the statement in the presentation that 23 the ARB has been in the forefront of efforts to control 24 pollution, I respectfully disagree. There's been no the 25 forefront of efforts to pretend to get rid of pollution. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 But as for accomplishments, there hasn't been a lot. 2 Since 1998, ARB has not done very much at all. That isn't 3 with any reflection on the current Board. What it is, is 4 a reflection we need to get going and do things instead of 5 doing more studies. AB spends $300 million a year. 6 Doesn't put one solar system on the roof. Doesn't stop 7 one refinery. We're letting the refineries pollute. 8 Let me read to you from someone who lives in Los 9 Angeles. "We know what the problems are. And we know how 10 to fix it. Not taking the action to keep our air clean is 11 irresponsible. Those not allowing the changes to occur 12 will be held accountable." This is by Mr. Thomas Hillard 13 who lives in Los Angeles in the heart of the beast. 14 And, please, I ask you if you do these 15 inconsequential studies, don't think you're doing 16 anything. This is spending more of the $300 million on 17 worthless squid jobs, paperwork that does nothing. 18 CHAIRPERSON SAWYER: Thank you. 19 Okay. Let's get back to where we were. For the 20 record, I think it's best that we vote again on Items 7-11 21 and 7-12. We have a motion to -- 22 BOARD MEMBER ROBERTS: Mr. Chairman, not to 23 ignore the public testimony, I'd like to hear a response 24 to the comments that were made regarding the 134(a). 25 Is this indeed the same chemical you're going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 find in the Aerosol that we clean our computers with? 2 RESEARCH AND ECONOMIC STUDIES BRANCH CHIEF COREY: 3 This is Richard Corey with the Research Division, Air 4 Resources Board. 5 The early action report that he referred to we're 6 workshopping looks at a very broad spectrum of strategies 7 for climate change reduction. The computer cleaner that 8 you're talking about, that's another strategy in terms of 9 we're looking at a range of other products that have high 10 GWP pollutants where there're alternatives. So when 11 calling out the 134(a) refrigerant is a specific strategy 12 that's called out as a line item, but there are others 13 that we're looking at as well. 14 In terms of the emissions from 134(a), the totals 15 that we're looking at on the order of one to two million 16 metric tons, not insignificant. They're actually rather 17 significant in terms of the overall -- making progress 18 towards the overall goal and also towards getting 19 reductions in the near term. 20 MR. AYALA: If I can simply add. It is true 21 there are many applications of the refrigerant 134(a), but 22 the great majority of the application is for rechanging 23 mobile air conditioning systems, hence our interest to 24 tackle this area first. But we are looking, as Richard 25 said, into the other products and what impact they have in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 the overall greenhouse gas inventory. 2 BOARD MEMBER ROBERTS: This isn't to the 3 exclusion of other efforts that will address this? 4 EXECUTIVE OFFICER WITHERSPOON: Also, Supervisor 5 Roberts, we identified this in 2006 as a strategy we 6 should pursue. And there has been extensive discussion 7 about whether our emission inventory is correct. So as a 8 first order of business, we need to go back and make sure 9 we're confident in the numbers before we bring you a 10 regulatory strategy and where we define there's no there, 11 there, we would pull it from the early action list. So 12 contrary to the speaker's representation, you should spend 13 the money in order to get to the bottom of this, because 14 there are financial interests at stake. 15 CHAIRPERSON SAWYER: Okay. Let's resume where we 16 were on voting on items number 7-11 and 7-12. All those 17 in favor please indicate by saying aye. 18 (Ayes) 19 CHAIRPERSON SAWYER: Opposed? 20 These two items are carried. And would the Clerk 21 please call the roll on Resolution 7-13? 22 SECRETARY ANDREONI: Ms. Berg? 23 BOARD MEMBER BERG: Aye. 24 SECRETARY ANDREONI: Ms. D'Adamo? 25 BOARD MEMBER D'ADAMO: Aye. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 SECRETARY ANDREONI: Dr. Gong? 2 BOARD MEMBER GONG: Yes. 3 SECRETARY ANDREONI: Supervisor Hill? 4 SUPERVISOR HILL: Aye. 5 SECRETARY ANDREONI: Mayor Loveridge? 6 BOARD MEMBER LOVERIDGE: Aye. 7 SECRETARY ANDREONI: Mrs. Riordan? 8 BOARD MEMBER RIORDAN: Aye. 9 SECRETARY ANDREONI: Supervisor Roberts? 10 BOARD MEMBER ROBERTS: Aye. 11 SECRETARY ANDREONI: Chairman Sawyer? 12 CHAIRPERSON SAWYER: Aye. 13 SECRETARY ANDREONI: Motion passes. 14 CHAIRPERSON SAWYER: Thank you. 15 Agenda Item 7-4-6, a Report from the Air 16 Resources Board Staff on the Status of the State 17 Implementation Plans for Federal 8-Hour Ozone and PM2.5 18 Standards. 19 After last month's briefing, and given the 20 importance of the State Implementation Plan, I have asked 21 staff to provide an update on the progress over the past 22 month. 23 Ms. Witherspoon, please introduce this item. 24 CHAIRPERSON SAWYER: Thank you, Dr. Sawyer. 25 Last month, staff briefed you on the issues PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 involved with the development of the State Implementation 2 Plans for ozone and PM2.5 in the South Coast and the San 3 Joaquin Valley. As you will recall, we spent a lot of 4 time talking about the challenge posed by the late timing 5 of federal emissions standards for diesel engines and the 6 resulting emissions reduction gap in the South Coast PM2.5 7 attainment demonstration for 2014. 8 Today, staff will update the Board on newly 9 identified PM control strategies that could fill that gap 10 in the South Coast. We'll also talk about the SIPs that 11 are due in other parts of the state. 12 Before we start the presentation, I want to let 13 you know about four upcoming events that are related to 14 SIP development. Today, we are releasing staff's latest 15 proposed state strategy for the SIP, which is a revision 16 to the draft strategy we released in January of this year. 17 The proposed strategy outlines all the new measures that 18 would be developed for Board consideration and specific 19 emission reduction commitments to achieve attainment. 20 Staff will bring that proposal to you for your 21 consideration at the June 21st/22nd Board meeting in Los 22 Angeles. 23 The second item is next Monday, April 30th, study 24 session on the South Coast SIP between representatives of 25 this Board, the South Coast Air District Board, and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 Southern California Association of Governments Board. Dr. 2 Sawyer and Board Member Kennard will be representing ARB 3 at this meeting. 4 The last two events are local hearings on the 5 SIPs for the San Joaquin Valley and the South Coast. The 6 San Joaquin Valley Board will be hearing the valley SIP 7 next Monday on April 30th, and the South Coast Board is 8 currently scheduled to hear its SIP next Friday on May 9 4th. ARB staff will be testifying at both hearings, and 10 you may read about them in the media. 11 With that, I'll ask Kurt Karperos, Chief of the 12 Air Quality Planning Branch, to update you on the progress 13 that has been made since last month in developing the SIP. 14 Kurt. 15 (Thereupon an overhead presentation was 16 presented as follows.) 17 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 18 MURCHISON: Actually, my name is Linda Murchison. I'm 19 Chief of the Planning and Technical Support Division. Mr. 20 Karperos this morning woke up with laryngitis, so I'm 21 going to give the presentation for him. Thank you, again. 22 Good morning, Chairman Sawyer and members of the Board. 23 Here at the staff table with me are Kurt 24 Karperos, who's Chief of our Air Quality and 25 Transportation Planning Branch; Karen Magliano, who's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 Chief of the Air Quality Data Branch; and John DeMassa, 2 Chief of the Modeling and Methodology Branch. 3 The scientific work of their staffs continue to 4 be the key to our efforts to sort through the remaining 5 technical challenges before the SIPs come before you for 6 your consideration. Last month's briefing focused on the 7 need to clean up the State's legacy diesel fleets and the 8 challenges that poses to attainment with PM2.5 standard in 9 the South Coast. Today, we'll talk about the status of 10 the SIPs in other areas of the state before coming back to 11 the South Coast PM2.5 attainment. 12 --o0o-- 13 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 14 MURCHISON: There are 19 air districts in California that 15 the U.S. Environmental Protection Agency has designated as 16 non-attainment of the federal 8-hour ozone standard: Of 17 course, the South Coast and the San Joaquin Valley; but 18 also the other major urbanized areas of the state, the Bay 19 Area, the Sacramento area, Ventura County, and San Diego 20 County. 21 Unlike the situation that we have with the 1-hour 22 ozone standard, the more stringent 8-hour standard is 23 exceeded in rural areas downwind of the state's urban 24 centers. 25 We didn't include a separate map for PM2.5, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 there are just two non-attainment areas: The South Coast, 2 and the San Joaquin Valley. Before going into each 3 special area, I'd like to address the Bay Area. The Bay 4 Area, because of its air quality status, has minimal SIP 5 planning requirements. Basically, it needs to only submit 6 an emission inventory. So Bay Area air quality planning 7 is focusing on the requirements of state law. This 8 includes meeting its obligation as an upwind transporter 9 of pollution to the Sacramento and San Joaquin Valleys. 10 --o0o-- 11 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 12 MURCHISON: Now, San Diego. San Diego is a success story. 13 It was originally non-attainment from the 1-hour ozone 14 standard. It now attains that standard. The region's 15 ozone levels are just a bit over the 8-hour standard, and 16 we expect it will be able to meet it by 2009. 17 Air quality is measured both by peak values and 18 the number of days over the standard is steadily 19 improving. Since 1996, San Diego's peak 8-hour ozone 20 level has dropped 15 percent, and days over the federal 21 8-hour standard have dropped 54 percent. 22 Based on the ARB and the Air District staff's 23 technical analysis, reductions from the local and State's 24 existing control program will provide all the reductions 25 needed for attainment. The San Diego Board will consider PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 the local SIP at their May hearing. Assuming they adopt 2 that plan, we will bring the plan to you the following day 3 in San Diego for your approval. 4 --o0o-- 5 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 6 MURCHISON: Like San Diego, Ventura is also a 1-hour 7 success story. 8-hour data is also improving. The design 8 value has declined by over 20 percent, and the number of 9 days over the federal 8-hour standard has dropped by 74 10 percent over the last ten years. The U.S. EPA assigned 11 8-hour attainment deadline for the district is 2010. Both 12 ARB and the South Coast Air District staffs are conducting 13 modeling for the area. ARB staff is also looking at air 14 quality data and emission inventory trends in combination 15 of the modeling results to support an attainment 16 demonstration. 17 While the air quality picture looks good and the 18 ARB staff's assessment is that existing controls will be 19 enough to bring the region into attainment, the district 20 is considering a voluntary reclassification. A 21 reclassification would extend the legal attainment 22 deadline given the certainty about its attainment 23 projections. 24 The District has released a draft plan and 25 intends to release a full draft with a full attainment PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 demonstration in late spring. Once the district acts, the 2 ARB staff will bring the plan to you for your 3 consideration. 4 --o0o-- 5 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 6 MURCHISON: Air quality trends for the Sacramento 7 metropolitan area have been relatively flat over the last 8 ten years. It will need reductions beyond those provided 9 by the existing control program to meet the ozone 10 standard. The U.S. EPA assigned 2013 deadline gives very 11 little time for new measures and their reductions to come 12 online. So the district is considering a bump up to a 13 severe classification. That would give the area a 2018 14 attainment deadline. 15 ARB air quality modeling shows by 2018 reductions 16 from the existing controls plus reductions from the new 17 SIP concept staff are developing will be enough for 18 attainment. Local adoption of the SIP is being postponed 19 to match with the adoption this summer of a new 20 metropolitan transportation plan. The region is pursuing 21 an ambitious regional planning effort called the blueprint 22 process that is trying to integrate air quality, 23 transportation, and smart growth planning principles. 24 Waiting until the end of the year to act on the local SIP 25 allows the region to reflect the outcome of the blueprint PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 process in its air quality plan. 2 --o0o-- 3 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 4 MURCHISON: As I said earlier, the more stringent 8-hour 5 standard brought a number of rural California areas into 6 the federal air quality planning process for the first 7 time. Butte County, western Nevada County, and Amador, 8 Calaveras, Tuolumne, and Mariposa Counties are all 9 downwind of large metropolitan areas in the Sacramento and 10 San Joaquin Valleys. Their air quality is almost 11 exclusively the result of unwind emissions. And upwind 12 emission reductions are key to the attainment. Although 13 not as obvious as a northern California downwind district, 14 east Kern County is downwind of the San Joaquin Valley and 15 is in the same situation. 16 These areas are in a unique situation. U.S. EPA 17 did not assign them a classification and a specific 18 attainment deadline. Instead, U.S. EPA used general 19 provisions of the Federal Clean Air Act to give these 20 areas five years to attain the standard. That's 2009. 21 Plus, the option to request up to five years more out to 22 2014. 23 However, a recent U.S. Circuit Court decision 24 rejected that deadline setting approach. U.S. EPA has 25 asked the court to clarify what the court meant in its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 ruling. Until that is sorted out, it is unclear what the 2 legal attainment deadline will be for these areas. 3 In the mean time, the districts are working with 4 the limited resources available to them to fill basic 5 Clean Air Act requirements that are independent of 6 classification. And since most of the upwind reductions 7 that will bring these areas into attainment will come from 8 mobile sources, ARB staff efforts to develop the new State 9 strategy is moving the most important planning effort 10 forward for these areas. 11 --o0o-- 12 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 13 MURCHISON: The Antelope Valley and Mojave Desert are the 14 two air districts immediately downwind of the South Coast. 15 Under State law, they are two separate air districts. 16 However, U.S. EPA grouped them together as one 17 non-attainment area since they share the same link to the 18 South Coast. U.S. EPA classified them as moderate with a 19 2010 attainment deadline. 20 --o0o-- 21 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 22 MURCHISON: The South Coast Air District includes these 23 regions within its regional modeling domain and is 24 providing the modeling support for the Antelope and Mojave 25 SIPs. Air quality in the high desert is heavily dependent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 on an improvement in the South Coast air quality. Given 2 the ozone attainment time line for the South Coast, U.S. 3 EPA's assigned 2010 deadline is not realistic. District 4 staff is evaluating the need to bump up to extend the 5 local deadline. Since those areas were already classified 6 as severe for the 1-hour standard, a bump up should have 7 no impact on federal requirements such as air quality 8 permitting thresholds. 9 --o0o-- 10 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 11 MURCHISON: On Monday of next week, the San Joaquin Valley 12 Air District Board will consider their staff's plan to 13 reduce ozone levels in the valley. The valley needs 14 significant NOx reductions: 490 tons per day from current 15 levels to attain the federal ozone standard. Because 16 current emission control technologies for both mobile and 17 stationary sources cannot achieve all the necessary 18 reductions, the district's plan proposes that the local 19 Board request a reclassification to extreme with a 2024 20 attainment deadline. 21 Under the Federal Clean Air Act, only areas 22 classified as extreme can rely on future 23 yet-to-be-developed cleaner technologies as part of their 24 SIPs. Both the district and the ARB staffs have done 25 analyses to assess whether the full cleanup of legacy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 fleets to the cleanest standards that will be coming 2 forward through 2017 can bring the valley into attainment. 3 The two independent analyses confirm that even cleaner 4 technologies are needed. 5 --o0o-- 6 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 7 MURCHISON: An extreme classification is not without 8 controversy. Community and environmental health activists 9 view any extension beyond the current 2013 attainment date 10 as a delay. And the business community faces the more 11 stringent permitting requirements of an extreme area. 12 The issue of the attainment deadline aside, the 13 district's proposed plan which reflects ARB staff draft 14 State strategy and relies heavily on emission reductions 15 from mobile sources under state and federal authority 16 provides over 400 tons per day of NOx reductions from 17 already adopted measures plus the new proposed measures. 18 Although the control strategies for PM2.5 and ozone will 19 be similar, the technical work for the valley's PM2.5 plan 20 is still on the way. That plan is due to U.S. EPA in 21 April 2008, twelve months from now. With the district 22 Board considering the plan next Monday, staff is scheduled 23 to bring the valley's ozone plan to you on June 14th. 24 That hearing will be in Fresno. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 2 MURCHISON: The South Coast District hearing on their 3 combined 8-hour ozone and PM2.5 plan is a week from 4 tomorrow, May 4th. U.S. EPA assigned the South Coast a 5 2021 attainment deadline. The district plan proposes an 6 extreme classification. As in the San Joaquin Valley, 7 current emission control technologies cannot achieve all 8 of the necessary reductions, and the district proposes to 9 rely on future yet-to-be-developed cleaner technologies to 10 get all of the reductions needed for attainment. With a 11 bump up, the reliance on future technology is approvable 12 in a SIP. 13 The district staff does not believe that the ARB 14 staff draft State strategy goes far enough in terms of 15 providing emission reductions for both PM2.5 by 2014 and 16 for ozone in the longer term. 17 --o0o-- 18 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 19 MURCHISON: In last month's SIP briefing, we described how 20 the South Coast staff modeling for PM2.5 shows that the 21 combination of proposed ARB and local district measures 22 leaves a gap in the attainment demonstration. That gap 23 will be central to your hearing on the State strategy. 24 From a legal perspective, an attainment demonstration with 25 a gap is not approvable. And State law charges ARB with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 reviewing SIPs and making findings with regard to whether 2 they meet the federal requirements before approving them 3 and directing staff to submit them to U.S. EPA. 4 --o0o-- 5 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 6 MURCHISON: This is a very similar chart you saw at last 7 month's briefing. The two columns on the left are actual 8 measured PM2.5 data at Rubidoux which is in Riverside 9 County. Rubidoux is where the highest PM2.5 levels in the 10 region are measured. The diagonal line between the two 11 columns represents the progress made so far in meeting the 12 2.5 standard. As you can see, progress has been good, 13 dropping about ten micrograms per cubic meter between 2001 14 and 2006. The columns on the right is where the South 15 Coast modeling predicts the area will be in 2014 with the 16 ARB staff's proposed State strategy and the district's 17 plan. 18 Again the diagonal line represents progress, in 19 this case the predicted progress. That progress should 20 slow down so dramatically is surprising given the NOx 21 reductions which are critical to reducing PM2.5 levels are 22 expected to accelerate, not slow down, doubling from an 23 average of three percent per year between 2001 and 2006 to 24 about six percent between 2006 and 2014. The dotted 25 horizontal line is the 15 micrograms per cubic meter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 federal standard, and that bubble on the right is the 2 attainment gap, 7/10s of a microgram. 3 --o0o-- 4 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 5 MURCHISON: ARB staff will release today a revised draft 6 of the proposed State strategy for the SIP. In the 7 document, staff has explored ways to close the 7/10s 8 microgram gap. 9 In doing that, staff took a step back from our 10 more recent focus on control strategy development to look 11 again at some of the basic science of the South Coast 12 PM2.5 chemistry. This chart shows a part of that science. 13 It shows an estimate of the make up of the annual average 14 PM2.5 at Rubidoux. It's the result of new work done over 15 the last several weeks. Staff has been reviewing emission 16 inventories, applied some new techniques to analysis of 17 measured data, and exercised the South Coast air quality 18 model. 19 There are two kinds of PM2.5. One is particles 20 formed in the atmosphere from reaction of precursor gases, 21 especially NOx and SOx. These particles are called 22 secondary PM. That's the right half of the pie. These 23 are mostly nitrates and sulfate particles. They are 24 particles that the staff's proposed strategy targets by 25 reducing NOx from diesel engines and SOx from fuels, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 especially in marine fuels. In fact, the State strategy 2 projects that NOx emissions will be dropped by 55 percent 3 and SOx emissions by 75 percent between 2001 and 2014. 4 The left half of the pie is called direct PM2.5. 5 Those particles are emitted directly into the air. ARB's 6 mobile source program is critical to attacking this part 7 of the pie as well. Toxic diesel particles and particles 8 from gasoline vehicles fall into this category. With 9 ARB's control program, directly emitted particles from 10 mobile sources are projected to drop by 35 percent between 11 2001 and 2014. However, there are direct PM categories 12 that are growing. Directly emitted PM2.5 sources under 13 South Coast Air District control are slated to increase, 14 not decrease, by five percent between now and 2014. This 15 includes smoke particles from residential wood burning and 16 commercial cooking and dust kicked up by vehicles and 17 construction equipment. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF 20 MURCHISON: This slide shows how ARB staff believes the 21 attainment gap can be feasibly closed. Let's start by 22 looking at the column on the left. The top slice of the 23 column shows how ARB's mobile source program and its NOx, 24 SOx, and diesel particle reductions will bring the region 25 95 percent of the way to attainment down from 30 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 micrograms in 2001 to just over the standard by 2014. So 2 the top slice is the pollution that the staff have already 3 identified takes out of the air. The slice at the bottom 4 is the 15 microgram standard. The thin red slice in the 5 middle is the 7/10s microgram gap. 6 Based on ARB staff's analysis, we have concluded 7 that to close the gap, it is critical to first stop and 8 then reverse the growth in the district's direct PM2.5 9 emissions. We believe that it can be done with aggressive 10 but feasible local measures. These are included in the 11 column on the right: A temporary moratorium on 12 residential wood burning, commercial cooking, smoke 13 controls, and dust reductions. 14 ARB staff used the South Coast air quality model 15 to estimate the impacts of reduction in residential wood 16 burning and concluded, based on the model, that as much as 17 9/10 of micrograms per cubic meter of PM2.5 was 18 attributable to residential burning. So a district rule 19 that was 80 percent effective in reducing wood burning 20 between November and February would close the gap by 21 itself. Additional rules to reduce smoke from commercial 22 cooking and to reduce dust could supplement a wood burning 23 program. 24 --o0o-- 25 PLANNING AND TECHNICAL SUPPORT DIVISION CHIEF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 MURCHISON: Finally, here again are the critical dates 2 coming up. Staff will release a revised State strategy 3 today that includes staff assessment of how to close the 4 South Coast PM2.5 gap. We'll bring the strategy to you 5 formally to our June 21st and 22nd hearing. 6 The San Joaquin Valley local board hearing on the 7 valley SIP is next Monday. You'll be considering approval 8 of that plan in Fresno on June 14th. 9 The South Coast Air District will take up the 10 local plan Friday of next week. Before that, on Monday, 11 Dr. Sawyer and Board Member Kennard will attend the study 12 session on the SIP between ARB, South Coast Air District, 13 and Southern California Association of Governments Board 14 members. 15 And then on June 21st and 22nd, you'll have both 16 the State strategy and the South Coast SIP before you. 17 That concludes my presentation. 18 CHAIRPERSON SAWYER: Thank you very much. 19 Do Board members have questions? Ms. D'Adamo. 20 BOARD MEMBER D'ADAMO: Thank you. Couple of 21 questions. 22 The wood burning measure, those measures on slide 23 13, are these measures that staff is proposing that the 24 South Coast would include in its plan? And are they not 25 now in the plan? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 AIR QUALITY PLANNING BRANCH CHIEF KARPEROS: 2 Sorry for my voice again. These were measures that we 3 evaluated from a technical perspective were they capable 4 of closing the gap and we determined that, in fact, they 5 could. How they are ultimately reflected in the local 6 plan would need to play out over time with the policy 7 decisions that are upcoming. 8 EXECUTIVE OFFICER WITHERSPOON: The short answer 9 is yes. We're advocating that these measures be included 10 in the plan, because it's the only feasible way to close 11 the gap as compared to the district's proposal of 70 tons 12 additional NOx reductions. And we note in order to get 13 the extension from 2010 to 2015, and then you have to come 14 in a full year early, you have to have what represents 15 best available controls for wood stoves. And the San 16 Joaquin Valley, as you know, already has a rule that 17 prohibits burning on high particulate days. 18 And South Coast is in the process of considering 19 a wood burning rule, but it is not representative of best 20 available control. 21 The commercial cooking reflects the use of 22 filters in some of the larger restaurant applications. 23 And the additional dust controls are of the nature that 24 the district has already imposed in the Coachella Valley 25 which has enormous dust issues. And if they brought some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 of those into the basin proper around Riverside, Pasadena, 2 Rubidoux that they could shave that last little peak even 3 more. They will be advocating that. If they want to 4 pursue the NOx-only strategy, we can't get there by 2014. 5 It would be a later attainment date. 6 BOARD MEMBER D'ADAMO: Going back to the wood 7 burning rule, is the rule that's envisioned in order to 8 get to the reduction of .9 similar to the rule that's 9 currently in the San Joaquin? 10 EXECUTIVE OFFICER WITHERSPOON: It has to be a 11 little bit different, because the San Joaquin's was aimed 12 at daily PM10 violations. So the district has a do not 13 light on violation days. And with respect to PM2.5, it's 14 an annual average standard. So in order to shave the 15 peak, you have to have a moratorium for the winter between 16 November and February. So we're talking about a pretty 17 aggressive measure right at the attainment window if it's 18 needed. 19 If the air quality is not responding to the other 20 controls, it would be the winter of 2013-2014 and the 21 winter of 2014-15 that the district might need to go to 22 the strategy. Right now, it's a way of closing the gap 23 legally in the plan, but I think you might have -- hope 24 you gathered from the presentation we think the model is a 25 bit pessimistic, and we will in fact be there. And they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 might never need to pull this trigger and impose the 2 moratorium. If they had to, it would close the gap. 3 BOARD MEMBER D'ADAMO: And the moratorium, it 4 sounds like it would be considered on an annual basis. 5 But then also what if it works in November and you get to 6 the levels you need, could you then waive it? 7 EXECUTIVE OFFICER WITHERSPOON: It wouldn't be an 8 annual moratorium. The concentration of direct PM on the 9 monitors is highest in the winter. So by -- 10 BOARD MEMBER D'ADAMO: I mean an annual decision 11 as to whether or not to pull the trigger. And if it works 12 in November and closes the gap, could the rule be waived 13 in, say, December or January because the flexible -- 14 EXECUTIVE OFFICER WITHERSPOON: Yes, because the 15 NOx and SOx reductions are continuing to pay off greater 16 and greater reductions on the order of six percent per 17 year. It's really just that key attainment year where we 18 have this little gap that that model says will be there. 19 BOARD MEMBER D'ADAMO: Okay. Then on slide six, 20 the downwind northern California districts, setting aside 21 the issue of the legal uncertainty, is the five-year 22 period of time or five plus five for a total of ten, would 23 that be enough time in light of the fact that the upwind 24 districts are primarily responsible for these downwind 25 areas? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 AIR QUALITY PLANNING BRANCH CHIEF KARPEROS: The 2 modeling results we so far confirmed for most of the 3 regions it looks very positive. Western Nevada County is 4 problematic. We're still trying to sort through the 5 technical data to identify what would be a realistic 6 attainment deadline. 7 EXECUTIVE OFFICER WITHERSPOON: What that means 8 is although it will take until 2018 in Sacramento and 2024 9 in San Joaquin Valley, the ozone cloud is shrinking and 10 not reaching all the way into the northern counties. 11 CHAIRPERSON SAWYER: Mayor Loveridge. 12 BOARD MEMBER LOVERIDGE: You know, four points. 13 First, I was going to leave to check, but I think the 14 South Coast District hearing has been changed from May to 15 June. But you may want to -- I was leaving to make that 16 call. But it seems to me in a flood of e-mails I received 17 that. I think I saw that note. 18 Second, I think we ought to ask Catherine to 19 frame what is to take place on April 30th. This is a 20 first of its kind that I know of where you've had members 21 of this Board and members of the South Coast Board and 22 members of the Regional Council of Southern California 23 Association of Governments gather. And I think I'd like 24 if Katherine could frame not only who the participants 25 are, but what the sort of agenda is and what the kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 differences to bring this -- call this meeting together. 2 EXECUTIVE OFFICER WITHERSPOON: Certainly. The 3 agreement is to have two members from each Board plus a 4 complement of staff. And the agenda is for each agency to 5 present its perspective. South Coast starts, then SCAG, 6 and then the Air Resources Board. And the goal is to 7 arrive at consensus of how to close the PM2.5 gap. 8 We were on a collision course where what had been 9 recommended as a NOx-only strategy was not feasible in the 10 view of ARB staff. And we would be unable to bring you a 11 legally approvable SIP and would recommend separating 12 ozone from particulate and continuing to work on 13 particulate. 14 The district is now examining our alternative 15 proposal for district PM controls. I suspect they'll 16 still be concerned that if we don't get as much NOx as 17 they were advocating, ozone attainment later could be 18 compromised. But we're trying to separate the issues 19 between what's a PM2.5 issue and what's an ozone issue and 20 when must each be resolved. 21 The Southern California Association of 22 Governments' greatest concern is that we have a legally 23 approvable SIP. Because if we don't, they won't be able 24 to show conformity, and the transportation side of the 25 house will grind to a halt. They're concerned how it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 might affect their leverage in bond negotiations, et 2 cetera. If they cannot expend funds, they cannot receive 3 them. 4 BOARD MEMBER LOVERIDGE: I thought that was 5 helpful to understand what is taking place. As a matter 6 of full disclosure, I'm representing SCAG on the 7 six-person panel. 8 Third, a matter of full disclosure, the Rubidoux 9 station, which has the highest measurements in the basin 10 and I think among the highest in the United States, is 11 within sight line of where I take a walk every morning. 12 The other quick I guess request is that there was 13 no written report for this Board. And I found the 14 comments to be helpful. But since there was -- I would 15 have preferred something in advance as opposed to simply 16 the briefing today so I could understand what was being 17 addressed. But will the comments today take written form? 18 EXECUTIVE OFFICER WITHERSPOON: Yes, they will. 19 In this proposed strategy, the SIP strategy that's being 20 released on the web where we lay out this alternative 21 attainment proposal and how we arrived at these findings. 22 BOARD MEMBER LOVERIDGE: That's being released 23 today? 24 EXECUTIVE OFFICER WITHERSPOON: It's a staff 25 document that you consider 45 days later. We're legally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 required to give notice before it comes to the Air 2 Resources Board for inclusion in any SIP. 3 BOARD MEMBER LOVERIDGE: So some of the comments 4 were based on what's going to be released today? 5 EXECUTIVE OFFICER WITHERSPOON: Yes. And we can 6 also provide you the text that went with these slides so 7 you have that before Monday. And we can give you an early 8 copy of the draft report. Staff is editing that as we 9 speak, trying to get that up on the web before the end of 10 the day. 11 DEPUTY EXECUTIVE OFFICER TERRY: I might add that 12 we did have a conference call with South Coast staff last 13 week with the folks at the table behind me and walked 14 through our technical analysis and the peer review and so 15 on. 16 CHAIRPERSON SAWYER: Ms. Berg. 17 BOARD MEMBER BERG: I would just like to echo 18 Mayor Loveridge's comments and thank the staff. This was 19 really helpful for me. And any additional information as 20 we walk through to help me keep things in order between 21 the various districts is really helpful. So I know it's a 22 lot of work, and I really appreciate it. Thank you. 23 EXECUTIVE OFFICER WITHERSPOON: Dr. Sawyer has 24 asked us to provide monthly briefings on the SIP status 25 until this is resolved. We had heard the district, South PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 Coast, might delay its hearing. And so that's actually a 2 good sign. It means they might be amending their plan. 3 CHAIRPERSON SAWYER: Dr. Gong. 4 BOARD MEMBER GONG: Pass. 5 CHAIRPERSON SAWYER: Supervisor Hill. 6 SUPERVISOR HILL: Thank you, Dr. Sawyer. 7 I just wanted to follow up on Ms. D'Adamo's 8 comment related to slide 13 in the commercial cooking. 9 Ms. Witherspoon, you said this would be related 10 to large commercial cooking. Are you referring to the 11 fast food charbroilers as well or just the larger -- 12 EXECUTIVE OFFICER WITHERSPOON: Restaurant 13 cooking. The district already has a commercial 14 charbroiler rule, but they don't employ the use of filters 15 in the ventilation system. And that would enable them to 16 get an additional control. Is that correct? In fact, I 17 was at the district when they adopted that rule. It was 18 quite controversial. 19 SUPERVISOR HILL: This would be adding filters -- 20 EXECUTIVE OFFICER WITHERSPOON: In the very 21 largest operations. But that's only -- these are really 22 all added insurance. They can go with wood stoves alone, 23 and that would close the gap. Or if they want more 24 insurance, they could add smoke controls. And more 25 assurance still, they could have dust control. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 AIR QUALITY PLANNING BRANCH CHIEF KARPEROS: If I 2 could add on to that just a little bit. 3 The rules that are out there in the air district 4 now target a relatively small fraction of the smoke from 5 commercial facilities. And it's not just the very 6 largest, but cooking in general from commercial 7 facilities. Anyway, the rules that are out there now with 8 the districts target a relatively small fraction. 9 I think in South Coast the rule covers about four 10 percent of the smoke emissions from commercial cooking. 11 The Bay Area District right now actually their staff is in 12 a process of investigating opportunities for additional 13 reductions from the other part of the category that's not 14 currently covered by rule. So it was actually there that 15 we looked -- that ARB staff looked to understand what 16 might be possible. 17 SUPERVISOR HILL: In South Coast? 18 AIR QUALITY PLANNING BRANCH CHIEF KARPEROS: Yes. 19 SUPERVISOR HILL: I do appreciate, as Ms. Berg 20 commented. This is so helpful and will set the stage for 21 the next few months of hearings. Thank you. 22 CHAIRPERSON SAWYER: Dr. Gong. 23 BOARD MEMBER GONG: I do have a question. Just 24 for my own education, residential wood burning in the 25 South Coast, how what's the magnitude of that? I must say PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 my first impression is I'm not impressed by a lot of wood 2 burning, at least in west Los Angeles. Is it a 3 significant issue and can it actually be reduced that 4 much? 5 AIR QUALITY DATA BRANCH CHIEF MAGLIANO: This is 6 Karen Magliano, Chief of the Air Quality Data Branch. 7 Our branch was responsible for looking at that 8 scientific information to better understand which sources 9 were actually contributing. And what we found is it is a 10 primarily a wintertime phenomena, especially in the 11 November through February time frame. And there are a lot 12 of different studies that have looked at this. But you 13 are looking at something on the order of a five to ten 14 percent contribution during that time period. Probably 15 more ambience associated with the holiday period, et 16 cetera. But because we looked at a large body of evidence, 17 it all did suggest it was something that should be looked 18 at. 19 EXECUTIVE OFFICER WITHERSPOON: By contrast, Dr. 20 Gong, in the San Joaquin Valley, they discovered it was 30 21 percent of the problem on their violation days. That's 22 why the San Joaquin Valley moved sooner than the South 23 Coast to an aggressive wood stove measure. 24 BOARD MEMBER GONG: For my further education, how 25 do you measure residential wood burning? I mean, there's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 no -- do you use a fingerprint marker in the atmosphere or 2 you go to see how many wood burning places there are, 3 chimneys or whatever? 4 AIR QUALITY DATA BRANCH CHIEF MAGLIANO: What we 5 did is looked at the chemical makeup at the monitor 6 itself. And from that and also looking at spacial 7 invariability and what time of year it occurs, you can 8 tease out from what the kind of sources and so you can see 9 things that indicate that it's residential wood burning. 10 There's also new work that's going on that actually do 11 start to target very specific markers as well that can be 12 used to better identify residential wood combustion. 13 BOARD MEMBER GONG: Thank you. 14 CHAIRPERSON SAWYER: I have one question. I 15 understand this is the first time that PM2.5 modeling has 16 been used in the development of a plan. Would somebody 17 sort of go over the history of that and how good these 18 models are and how confident we are that they are 19 projecting what will happen in 2014? 20 MODELING AND METEOROLOGY BRANCH CHIEF DA MASSA: 21 This is John DeMassa, Chief of the Modeling and 22 Meteorology Branch. 23 This is, indeed, the first time PM2.5 modeling 24 has been used for State Implementation Plan preparation 25 and developing the current capacities. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 I think in general the scientific community would 2 probably agree that we have a lot more confidence in ozone 3 modeling, because it has a history of 20 to 30 years of 4 practical application in the preparation of SIPs. 5 PM2.5 modeling is relatively new. It is based 6 somewhat on the techniques and methodologies that are used 7 for ozone modeling. But PM2.5, the fate and formation of 8 that particulate pollutant, is much more complex than 9 ozone both from an inventory perspective and from a 10 perspective of what happens in the air and chemistry 11 that's involved. 12 So in terms of confidence, it is an evolving 13 tool. It's hard to say at this point exactly how precise 14 and accurate it is. But that is something that we will be 15 investigating over the course of this process for 16 developing attainment strategies and over the course of 17 the next few years. 18 We have been working relatively closely with the 19 South Coast staff in the development of their tools and 20 also in peer review of the methodologies that they have 21 applied. But once again, it is an evolving science and 22 something we need to look at probably more closely. 23 EXECUTIVE OFFICER WITHERSPOON: As a legal 24 matter, we're required to use the best available science, 25 and this is it. Even though we have qualms about it, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 we're relying on this model to tell us what the gap is. 2 But our general sense is that the model is too pessimistic 3 that we're going to have cleaner air than the model says 4 in 2014. 5 CHAIRPERSON SAWYER: I certainly hope you're 6 correct. The model was developed jointly with the South 7 Coast -- 8 MODELING AND METEOROLOGY BRANCH CHIEF DA MASSA: 9 The application of the model was applied by the South 10 Coast. The model was applied by the South Coast. We were 11 involved in the review capacity, and we are independently 12 applying it in house. 13 The actual tool itself was developed by a 14 consulting group and has been widely used throughout the 15 country. The platform itself for ozone and some of the 16 additional modules for PM2.5 have been reviewed by EPA and 17 others. 18 CHAIRPERSON SAWYER: Thank you very much. I have 19 three witnesses who have signed up to speak: Jerald Cole, 20 Doug Korthof, and Tim Carmichael. Mr. Cole. 21 MR. COLE: My name is Jerald Cole. I'm an 22 independent consultant out of Long Beach, California, 23 specializing in energy and air quality issue. I thank the 24 Board for the opportunity to comment on this important 25 problem. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 What I'd like to address is focused on the 2 installation of new electric power generation capacity and 3 its impacts on air quality in California. There are two 4 issues I want to comment on. First is the installation of 5 simple cycle and combined cycle turbans and their impacts. 6 And the second has to do with great uncertainties in 7 particulate matter emissions. 8 Currently, there are about 22,000 megawatts of 9 planned installed capacity in California. In addition to 10 that, their existing capacity is about 30 percent 11 represented by stationary gas turbans. 12 Of the planned installed capacity, about 12 13 percent of those are simple cycle units. I'll cite some 14 specific examples. The emission energies in Walnut Creek 15 and Sun Valley projects, both those located in the South 16 Coast basin in which they plan to use five simple cycle 17 GELMS 100 turbines, each to provide 500 megawatts of power 18 at 45 percent efficiency. 19 Using a combined cycle arrangement, slightly more 20 electric power can be produced at a total cycle efficiency 21 of 57 percent, resulting in effectively a 20 percent 22 reduction in total pollutant emissions across the board 23 from each of these. Similarly, Southern California Edison 24 has four 45 megawatts simple cycle LM 6000 turbines going 25 in. If these were replaced with combined cycle units, we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 would see a 24 percent improvement in power and emissions. 2 I don't have South Coast specific numbers. But 3 for the state as a whole, all of the simple cycle units 4 were to be replaced with combined cycle. We'd see on an 5 annual basis as much as 140 tons of NOx, 235 tons of CO, 6 38 tons of VOCs, 95 tons of PM10. And while it doesn't 7 bear on air quality 12.3 million tons of CO2 reduced. 8 With regard to the particulate matter issue, what 9 I found in trying to establish the particulate matter 10 emissions from these turbines is that the emission factors 11 are relying right now on AP 42, the EPA document for 12 emission factors. AB 42 is based on very old information. 13 A review of emission factors -- particulate 14 matter emission factors was conducted and the report 15 authored in 2004 by Steve Lennier of GE energy, which 16 concluded in essence that we really don't know what the 17 emission factors are from these turbans. The technology, 18 the measurements that AP 42 is based on were largely taken 19 in the 1980s on old technology engines. Since then, we 20 have new technologies for back-end emission controls, new 21 technologies for combustors and new designs of engines. 22 So I believe that there is a need for recategorization of 23 the emission factors from these turbans that we can better 24 understand whether the situation has gotten better or 25 gotten worse. And more to the point, whether or not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 improvements in fine particulate matter may be causing 2 degradation and ultra fine particulate matter precursor 3 emissions. Thank you. 4 CHAIRPERSON SAWYER: Thank you very much. 5 Mr. Korthof. 6 MR. KORTHOF: The previous speaker is correct. 7 Also from the standpoint of infalls and outfalls, all of 8 the single-pass cooling, once through cooling systems 9 should be replaced. Instead, LA DWP, for example, is 10 spending $6 million to try to justify the fish gills and 11 ocean kills with single pass cooling at the Hanes Power 12 Plant in Los Alamitos complex. So all of these power 13 plants should be replaced by combined cycle power plants, 14 not just from an air quality standpoint, but 316(b) of the 15 Clean Water Act. 16 I attended the South Coast meeting of the SIP 17 workshop only because I'm in the South Coast air quality 18 basin. I'm concerned with improving the air down there 19 that is critical, but it's also all over. Someone from 20 Santa Clarita came by and said, "We're getting the Los 21 Angeles air up here, and it's terrible." Now that's just 22 an example. As your report states, there's blow over from 23 these basins into other areas. And they're really 24 innocent people are being harmed by it. 25 The problem with the SIP plan -- and the reason PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 I'm speaking in opposition is because I think it's sort of 2 giving an appearance of avoiding the significant problem, 3 which is mobile source and stationary source pollution 4 from oil burning cars and the refineries necessary to make 5 that. I think we need a combined analysis of the impact 6 on petroleum on air quality, not just from the mobile 7 source, which is all you do, and the stationary source, 8 which is all the air quality districts do, but the 9 combined impact. We need not only to do that, but to do a 10 comprehensive transportation plan which deals with airport 11 pollution and more sensible cities and the avoidance of 12 transportation and how you can do clean transportation 13 from a transportation plan standpoint. All this needs to 14 be done. I don't see it in the SIP plan. But I do think 15 it's a good idea to reduce smoke, and I would add to the 16 fact that wood burning smoke is a problem. 17 Mr. Mario Vochi of Seal Beach states he can't 18 even breathe. Because not only is the pollution from the 19 fireplace bad, but people use paint-coded wood in the 20 fireplace, and that creates terrible issues just in Seal 21 Beach. And that's not just in the wintertime. It's all 22 the time, people burn wood just because they like to burn 23 wood. 24 I would like to read in the defense of electric 25 cars, which should be in the SIP plan. This should be one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 of the strategies to reduce is to get electric cars, 2 zero-emission vehicles not just in the dozens or hundreds, 3 but in the millions and thousands. This is not a strange 4 technology. I drove to the South Coast workshop in a 5 Toyota RAV 4 EV. We could have had an EV 1 using improved 6 lead acid batteries that would give me that kind of range. 7 Why aren't we having these cars? Why isn't this in the 8 plan? Why aren't we talking about electric cars and solar 9 power to power them? Here's from Jessica, ten years old. 10 Hi -- this is a child. "You want human history" -- 11 CHAIRPERSON SAWYER: I must ask you to conclude, 12 please. 13 MR. KORTHOF: "You want human history to be 14 ended, then be my guest. But you killed electric cars. 15 This is a little bit dumb. Actually, very dumb. If you 16 want to have a peaceful world, then keep electric cars." 17 This is Jessica from Arleta. 18 And I think you should have that in the SIP plan. 19 I think you need to use far-reaching proactive strategies 20 and not just reactive strategies to the standards imposed 21 upon you. You have to look beyond that to cleaner air and 22 not just getting the funds for more transportation. 23 CHAIRPERSON SAWYER: Mr. Carmichael. 24 MR. CARMICHAEL: Good morning, Chairman Sawyer 25 and members of the Board. Tim Carmichael, the Coalition PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 For Clean Air. 2 I know there will be further opportunities to 3 engage on specifics relative to these plans. But I want 4 to take this opportunity to just share a little 5 perspective as you guys start to think about this more 6 intensely than you have maybe over the last year. 7 The environmental community and the public health 8 community in California are somewhere between strongly 9 opposed and very weary of extreme bump ups for two 10 reasons. One, it allows that provision in the Clean Air 11 Act -- there is a provision that allows for a black box, 12 which means a percentage of the reductions will come from 13 future strategies, future technologies, undefined. 14 Unfortunately, I think that measure went into the 15 Clean Air Act with good intentions. Unfortunately, it has 16 not worked in the 30-year history of the Clean Air Act. 17 And we're concerned it won't work again. And today, a 18 number of organizations in the valley including the 19 Coalition for Clean Air have taken out ads in the valley 20 papers to put a human face on what it means to attain 21 clean air in 2024. What that means is a baby born today 22 will not breathe clean air until they graduate from high 23 school. That is really powerful if you think about that. 24 And from our perspective, that's not good enough. 25 We have other concerns that we have raised with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 the staff, and we'll raise again with you: Lack of 2 specificity in the plans. The fact that most of the 3 emissions today and most of the emissions projected growth 4 are going to come from mobile sources. That means most of 5 the responsibility for future reductions rests with this 6 agency. The fact that the Air Resources Board could be 7 doing more to strengthen the district plans. There's in 8 fact a responsibility of this agency where they identified 9 weaknesses in the district plans to strengthen them to 10 ensure all feasible measures are being implemented. 11 Finally, I want to note I'm concerned that this 12 agency, even this administration, is not ceasing the 13 opportunity provided by all of the good things that are 14 going on relative to air quality in the world right now 15 and especially in this state. I think for a moment AB 32 16 implementation, the ZEV, zero emission vehicle, program 17 review, the low carbon fuel initiative, and the SIP review 18 so the SIP amendments. There are a lot of overlapping 19 synergies between those programs, and yet very little 20 being done to coordinate between those programs and make 21 the most of coordinated strategies. You will hear from us 22 again and many colleagues. 23 But I just want to take the opportunity to give 24 you some perspective. There are a lot of people working 25 hard on these plans to make them stronger, more health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 protective. And finally, I want to thank your staff, 2 especially in recent weeks. They have been working hard 3 to respond to a lot of questions that we have raised, 4 coalition for Clean Air and many organizations have 5 raised. And we appreciate the time they're putting into 6 that. Thank you very much. 7 CHAIRPERSON SAWYER: Thank you, Mr. Carmichael. 8 Ms. Witherspoon, does staff have any further 9 comments? 10 EXECUTIVE OFFICER WITHERSPOON: Well, I just want 11 to note we are working hard to integrate all these 12 programs. And the SIP strategy that's going out today 13 includes all the goods movement emission reduction 14 measures, all the diesel risk reduction plan measures, 15 what we think is necessary for attainment. And as we work 16 on early actions for you and longer-term measures for 17 climate change, we're doing the same integrated thinking. 18 CHAIRPERSON SAWYER: Let me add my own 19 commitment. I believe that as the Board that we are 20 indeed committed to working with the districts, especially 21 the South Coast and the San Joaquin Valley, to arrive at 22 plans which do deliver air quality and protect the public 23 health and the residents of California who live in those 24 districts. And I am sure that the staff is with us on 25 those goals. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 Mayor Loveridge. 2 BOARD MEMBER LOVERIDGE: Just for the record, the 3 South Coast will be in the first Friday in June, rather 4 than May. 5 EXECUTIVE OFFICER WITHERSPOON: That's good news. 6 We hope we'll still be able to bring you the plan at the 7 June hearing ourselves so that we can move expeditiously. 8 CHAIRPERSON SAWYER: Since this is not a 9 regulatory item, it is not necessary to officially close 10 the record. 11 We'll take a five-minute break at this time for 12 the court reporter, and then we will resume at 10:30. 13 (Thereupon a recess was taken.) 14 CHAIRPERSON SAWYER: 7-4-3, the Proposed Airborne 15 Toxic Control Measure to Reduce Formaldehyde Emissions 16 from Composite Wood Products. This proposed measure 17 addresses an important public health risk. 18 Ms. Witherspoon, please introduce this item. 19 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 20 Sawyer. 21 Formaldehyde was identified by the Board as a 22 toxic air contaminant in 1992 with no safe exposure level. 23 The Air Resources Board and the U.S. Environemental 24 Protection Agency have both established exhaust standards 25 to limit formaldehyde from motor vehicles and continue to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 conduct special testing as various vehicle types entering 2 the fleet to ensure those standards reflect best available 3 control. 4 On the stationary side, there have been several 5 voluntary efforts to reduce formaldehyde from various 6 products including composite wood. However, we have 7 reached a point where these controls are lagging behind 8 the best available control technology as demonstrated 9 elsewhere in the world and by leading U.S. companies. For 10 that reason, staff is proposing a new control measure to 11 reduce the public's exposure to formaldehyde emissions 12 from composite wood products. More specifically, we are 13 proposing to regulate the resins that bind the wood 14 products together, because depending on their make up and 15 chemical structure there can be more or less formaldehyde 16 emitted from raw unfinished wood products. The two 17 biggest issues you're likely to hear from staff's proposal 18 are that it costs too much and alternatively it doesn't go 19 far or fast enough and therefore doesn't truly represent 20 BACT. Staff will go over both of those issues in detail 21 in their presentation. 22 For now, I'll just say that staff has weighed all 23 of the options carefully and believe we've brought you a 24 balanced, cost effective, and health protective proposal. 25 If you approve this regulation, California will have the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 most stringent production standard in the world for 2 composite wood products. The staff presentation will be 3 made by Dr. Brent Takemoto of the Stationary Source 4 Division. Brent. 5 (Thereupon an overhead presentation was 6 presented as follows.) 7 MR. TAKEMOTO: Thank you, Ms. Witherspoon. Good 8 morning, Dr. Sawyer and members of the Board. 9 Today, we are proposing for your consideration an 10 Air Toxics Control Measure to reduce formaldehyde 11 emissions from composite wood products. 12 --o0o-- 13 MR. TAKEMOTO: Our presentation will cover the 14 topics on this slide. 15 --o0o-- 16 MR. TAKEMOTO: We begin with some background 17 information on the California's Air Toxics Program. 18 --o0o-- 19 MR. TAKEMOTO: This slide shows the conceptual 20 framework for California's Air Toxics Program. State law 21 requires the Air Resources Board to first identify a given 22 compound, such as formaldehyde, as a toxic air contaminant 23 in public hearings involving the State Scientific Review 24 Panel for toxic air contaminants. Subsequently, measures 25 such as this Air Toxics Control Measure to control PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 formaldehyde emissions from composite wood products are 2 developed to reduce emissions and public exposure. 3 --o0o-- 4 MR. TAKEMOTO: In 1992, formaldehyde was listed 5 as a toxic air contaminant with no safe level of exposure. 6 Formaldehyde causes damage to DNA, and inhalation causes 7 cancer in the region of the throat behind the nose. In 8 addition, formaldehyde has non-cancer effects. It is a 9 strong respiratory irritant that adversely affects lung 10 function. 11 For compounds of this kind, State law requires 12 the Air Resources Board to identify the sources of concern 13 and evaluate control options to reduce emissions to the 14 lowest level achievable through the use of best available 15 control technology, or BACT. 16 At this point, I'd like to turn the presentation 17 over to Dr. Melanie Marty, Chief of the Air Toxicology and 18 Epidemiology Branch in the Office of Environmental Health 19 Hazard Assessment. 20 Dr. Marty. 21 --o0o-- 22 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 23 MARTY: Good morning. I'm going to talk a little bit this 24 morning briefly about the health effects of formaldehyde. 25 You just heard from Brent that during the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 identification phase formaldehyde was shown to be a 2 carcinogen. And I want to point out that there are now 3 more studies and there's more evidence since that 1992 4 listing of formaldehyde as a toxic air contaminant with 5 regards to carcinogenicity. In particular, the 6 International Agency for Research on Cancer has now 7 upgraded the classification of formaldehyde from a 8 probable human carcinogen to a known human carcinogen. 9 That was done in 2004. They note there is sufficient 10 evidence in humans for nasopharyngeal cancer and that it 11 was improbable that all of the positive findings for 12 nasopharyngeal cancer could be explained by bias or 13 unrecognized confounding effects. They also noted there 14 was strong but not sufficient evidence for leukemia in 15 humans. And they noted the sufficiency of the evidence in 16 animal studies. 17 --o0o-- 18 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 19 MARTY: Also like to point out that IARC considers 20 supporting animal data including information on the 21 mechanism of action when they make their determinations. 22 Studies have demonstrated nasal cavity cancers in rats 23 from inhalation. There have been several studies that 24 showed that formaldehyde was a co-carcinogen by multiple 25 routes of exposure. That is to say, it synergizes with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 other carcinogens causing them to be more potent. And 2 formaldehyde damages the DNA. You can see this in animal 3 studies as well as in exposed workers. 4 --o0o-- 5 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 6 MARTY: There are a number of non-cancer health effects 7 primarily in the respiratory tract. It's an occupational 8 asthmagen that there is evidence that occupational 9 exposure induces asthma in workers and that these 10 individuals become sensitized. Subsequent exposures even 11 at low concentrations can cause these individuals to have 12 an asthma attack. 13 --o0o-- 14 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 15 MARTY: Many studies have shown that workplace exposure is 16 also associated with significant measured decrements in 17 lung function. So this is measured lung function with 18 wheezing and shortness of breath. In addition, it is a 19 respiratory eye, nose, and throat irritant and causes 20 rhinitis, which is a runny nose. 21 The long-term exposure in the workplace is 22 associated with persistent irritation and subsequent cell 23 damage in the nasal passages. And in fact, that health 24 effect is the basis of the chronic reference exposure 25 level for non-cancer health effects that OEHHA has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 developed. 2 --o0o-- 3 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 4 MARTY: There are some studies now which suggest that 5 there's potentially a higher risk of asthma in young 6 children exposed to higher levels of formaldehyde in the 7 home. So they compared kids with asthma and without 8 asthma, looked at the formaldehyde levels in the home, and 9 determined that the risk of being diagnosed with asthma is 10 higher with higher levels of formaldehyde. 11 There are also a few studies that looked at lung 12 function decrements in the kids in the homes and noted 13 that they were associated with the level of formaldehyde 14 in the home as well as lung inflammation. 15 And finally, there is a study -- actually now a 16 second study recently published looking at increased 17 allergic propensity in children in homes with increase in 18 formaldehyde. 19 --o0o-- 20 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 21 MARTY: And also an enhancement of their response to 22 allergens in humans. Animal models of asthma have also 23 shown that formaldehyde can cause bronchial constriction 24 and hyperactivity of airways. This is characteristic of 25 asthma. Subsequent increased airway resistance, so it's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 harder to breathe. And animal models have also show an 2 enhancement of response to allergens. 3 --o0o-- 4 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 5 MARTY: I wanted to make a few comments about what we 6 termed the unit risk factor, which is how we assess cancer 7 risk. In 1992, when we identified formaldehyde as a risk, 8 the Board did, we developed a quantitative risk estimate 9 for formaldehyde which has actually been the number used 10 in the assessment before you. In 2002, the Formaldehyde 11 Council petitioned ARB to reopen that risk assessment. 12 This is using this established process that exists in 13 California for doing that. The first step is that OEHHA 14 evaluates the petition material. We do our own analysis 15 of the petitioners' submitted materials. And then we 16 present that analysis to the Scientific Review Panel on 17 toxic air contaminants. The SRP then makes a 18 recommendation to reopen or not reopen the risk assessment 19 for the toxic air contaminants, in this case, 20 formaldehyde. 21 --o0o-- 22 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 23 MARTY: We determined that the evidence submitted with the 24 petition does not change the determination that 25 formaldehyde is a carcinogen. OEHHA's interpretation of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the data remains consistant with the International Agency 2 for Research on Cancer, U.S. EPA, and earlier OEHHA 3 evaluations. There was no new evidence submitted that 4 there is a threshold for carcinogenisis from formaldehyde. 5 And finally, the model that we used which was 6 developed by the Chemical Industry Institute for 7 Toxicology, we had concerns about the assumptions that 8 went into the model, which greatly affect the estimate of 9 potency at lower environmental concentrations. 10 --o0o-- 11 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 12 MARTY: The Scientific Review Panel looked at what we have 13 said, looked at the submitted materials, and noted 14 themselves that the assumptions in the model strongly 15 affect the inflection point of the hockey stick dose 16 response. This allows for large differences in potency 17 estimates at low formaldehyde levels depending on the 18 model inputs. Some of those model inputs we felt needed 19 more analysis to really make us comfortable with using a 20 model like that. And finally, the Scientific Review Panel 21 recommended that the petition be denied to reopen the risk 22 assessment. 23 --o0o-- 24 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 25 MARTY: So in summary, the International Agency for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 Research on Cancer has classified formaldehyde as a known 2 human carcinogen. That's something that's happened after 3 the identification of formaldehyde is attacked. 4 Formaldehyde is a strong respiratory irritant. Workers 5 show decrements in lung function, damage to the nasal 6 lining. It's an occupational asthmagin. 7 Possibly, there are associations between 8 formaldehyde exposure and environmental levels with 9 allergy enhancement, decrements in lung function, and 10 asthma. So overall, new data indicates that the health 11 effects are actually greater than previously documented 12 when formaldehyde was identified as a toxic air 13 contaminant. 14 I'll turn the microphone over to Brent. Thank 15 you. 16 --o0o-- 17 MR. TAKEMOTO: Thank you, Dr. Marty. 18 In the proposed Air Toxics Control Measure, the 19 source of concern is composite wood products which are 20 boards made with wood pieces, particles, or fibers bonded 21 with a resin. Presently, the vast majority of composite 22 wood products are bonded with resins that contain 23 formaldehyde. Formaldehyde emissions occur when unreacted 24 formaldehyde molecules in the resin are released to the 25 air. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 --o0o-- 2 MR. TAKEMOTO: The proposed control measure 3 focuses on formaldehyde emissions from hardwood plywood, 4 particle board, and medium density fiberboard. 5 --o0o-- 6 MR. TAKEMOTO: In California, we estimate that 7 there are about 900 tons per year of formaldehyde emitted 8 from these three composite wood products, representing 9 about five percent total statewide directly emitted 10 formaldehyde emissions. 11 --o0o-- 12 MR. TAKEMOTO: Formaldehyde emissions from 13 composite wood products are released from the moment the 14 panels are produced at manufacturing plants, and they 15 continue to occur when they make finished goods at 16 fabrication facilities or in home construction. Emissions 17 also occur during product transport from point to point in 18 the distribution chain and when formaldehyde containing 19 air from inside buildings moves outdoors. 20 --o0o-- 21 MR. TAKEMOTO: This graph shows some of the 22 measured formaldehyde concentrations compiled in the 23 report to the Legislature on indoor air pollution in 2005. 24 The bars at the left show the average and maximum 25 concentrations in ambient air measured in our air toxic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 sampling network. 2 In comparison, average formaldehyde 3 concentrations in classrooms, offices, manufactured homes, 4 and conventional homes are typically about five to ten 5 times higher than outdoor levels and maximum levels can be 6 100 times higher. Because Californians spend 85 percent 7 of their time indoors where formaldehyde concentrations 8 tend to be the highest, reductions in total daily 9 formaldehyde exposure from composite wood products would 10 have a significant public health benefit. 11 --o0o-- 12 MR. TAKEMOTO: The composite wood products 13 industry is a global multi-billion dollar industry. In 14 north America, billions of square feet of hardwood 15 plywood, particle board, and medium-density fiberboard is 16 produced each year with significant amounts also being 17 imported from Canada, China, and South America. 18 --o0o-- 19 MR. TAKEMOTO: This slide shows the initial steps 20 in the manufacture of hardwood plywood. Starting at the 21 upper left, logs are brought to the plants where they are 22 peeled and then made into long sheets of veneer that will 23 be glued together to make hardwood plywood. 24 --o0o-- 25 MR. TAKEMOTO: This slide shows how hardwood PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 plywood is laid up where a line of glue is applied to 2 sheets of veneer that are pressed together to form a 3 hardwood plywood panel. 4 --o0o-- 5 MR. TAKEMOTO: This slide shows a hardwood 6 plywood panel as it comes off the press. Hardwood plywood 7 is mainly used for interior application such as for 8 decorative paneling, cabinetry, and furniture and 9 flooring. 10 --o0o-- 11 MR. TAKEMOTO: This slide shows the wood 12 fragments that will be used to make particle board as well 13 as the glue that will be used to bind the particles. We 14 have provided you a sample of this material. 15 --o0o-- 16 MR. TAKEMOTO: Video clip shows the resin and 17 wood particle mixture that will be pressed into a particle 18 board panel as it moves through the manufacturing line. 19 --o0o-- 20 MR. TAKEMOTO: This slide shows particle board 21 panels being stacked for distribution which may be used to 22 build cabinets, countertops, floor underlay, or shelving. 23 --o0o-- 24 MR. TAKEMOTO: This is medium density fiberboard. 25 It has a smoother finish than particle board and is often PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 used to make the moulding and trim materials shown at the 2 right. 3 --o0o-- 4 MR. TAKEMOTO: Similar to hardwood plywood and 5 particle board, medium density fiberboard is used in 6 cabinet and furniture, but it is also used extensively in 7 the manufacture of doors and windows. 8 --o0o-- 9 MR. TAKEMOTO: The only U.S. standard limiting 10 formaldehyde emissions from composite wood products is for 11 plywood and particle board used in manufactured homes. 12 This standard limits surface emissions from plywood and 13 particle board and allows for much higher formaldehyde 14 emission rates compared to standards established in 15 Europe, Australia, and Japan. 16 --o0o-- 17 MR. TAKEMOTO: In other countries, the standard 18 limit of formaldehyde emissions from composite wood 19 products are lower than the current U.S. standard. In 20 this regard, programs in other countries where 21 formaldehyde emissions from composite wood products are 22 regulated are fundamentally different from the U.S. and 23 not directly comparable to what is being proposed here. 24 For example, in other countries, formaldehyde standards 25 are generally not emission caps. Averaging is allowed, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 and products can be made with emission levels above the 2 specified standard. 3 --o0o-- 4 MR. TAKEMOTO: We do not believe that the HUD 5 standard is protective of public health. We've shown that 6 the HUD standard had very limited applicability and is 7 behind Europe, Australia and Japan in stringency. We also 8 conclude that formaldehyde exposure from all sources in 9 California is too high. 10 This slide shows the estimated cancer cases per 11 million that result from this exposure. Although 12 manufacturers have made major strides in reducing 13 formaldehyde emissions since the 1980s, further reductions 14 are needed and feasible. 15 --o0o-- 16 MR. TAKEMOTO: Next I'll describe resin 17 technologies that we considered in our best available 18 control technology assessment. 19 --o0o-- 20 MR. TAKEMOTO: If you search the Internet or 21 contact companies directly, you will find that the most 22 commonly used composite wood product resins in the U.S. 23 are urea-formaldehyde, phenol formaldehyde, methalyne 24 diisocyanate, polyvinyl acetate, and soy resins. 25 From the literature and through discussions with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 interested parties from overseas, we learned that there 2 are a number of developing resin technologies that could 3 be used to make products with very low formaldehyde 4 emissions. 5 --o0o-- 6 MR. TAKEMOTO: With a developed understanding of 7 the types of resins that could be used to produce 8 composite wood products with lower formaldehyde emissions, 9 our determination of best available control technology 10 carefully considered what was the lowest level that was 11 achievable, the potential utility of resins presently used 12 commercially, and lab-tested products from the literature, 13 the increasing stringency of international standards for 14 composite wood products, and the cost of modifying the 15 existing resins or using alternatives. 16 --o0o-- 17 MR. TAKEMOTO: I'll now present an overview of 18 the main elements of the proposed ATCM. 19 --o0o-- 20 MR. TAKEMOTO: The air toxic control measure 21 applies principally to panel manufacturers who must 22 produce lower-emitting composite wood products. In 23 addition, the Air Toxics Control Measure applies to 24 distributors, importers, fabricators, and retailers who 25 must ensure that they procure and sell low-emitting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 products when the Air Toxics Control Measure takes effect. 2 The Air Toxics Control Measure also requires that finished 3 goods, such as furniture, be made with hardwood plywood, 4 particle board, or medium-density fiberboard that meets 5 applicable formaldehyde emission limits. 6 --o0o-- 7 MR. TAKEMOTO: The Air Toxics Control Measure 8 applies to hardwood plywood, particle board, and 9 medium-density fiberboard panels, and finished goods 10 containing those materials that will be sold, supplied, 11 used, or manufactured for sale in California. 12 Two phases of standards are proposed. Phase I in 13 2009 and Phase 2 beginning in 2011 with sell-through 14 provisions that allow for clearing of existing 15 inventories. Panel manufacturers will need to operate 16 routinely below the standards to ensure compliance. 17 In a following slide, I will describe the 18 selected applications that have been exempted from the Air 19 Toxics Control Measure as well as the provisions for 20 enforcing the Air Toxics Control Measure. 21 --o0o-- 22 MR. TAKEMOTO: In Phase I, we are setting a cap 23 standard that will effectively curtail the flow of 24 low-cost, high-emitting products into California. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 MR. TAKEMOTO: In Phase I, we are proposing to 2 establish new formaldehyde emission standards for hardwood 3 plywood made with the veneer core designated as hardwood 4 plywood VC, hardwood plywood made with a composite core 5 designated as hardwood plywood CC, particle board, 6 medium-density fiberboard, and thin, medium-density 7 fiberboard which has a maximum thickness of eight 8 millimeters. 9 The effective dates and proposed standards are 10 shown in this slide. The Phase I standard for hardwood 11 plywood composite core would take effect later to allow 12 for the use of Phase I compliant particle board and 13 medium-density fiberboard in the core of these products. 14 --o0o-- 15 MR. TAKEMOTO: We believe that all five products 16 can be made to meet the Phase I standard by modifying 17 presently used urea-formaldehyde resins either by adding 18 compounds like melamine or by using resins in the lower 19 formaldehyde content. 20 --o0o-- 21 MR. TAKEMOTO: In Phase 2, we are setting 22 technology-forcing cap standards which define best 23 available control technology. 24 --o0o-- 25 MR. TAKEMOTO: The effective dates and proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 standards for Phase 2 are shown in this slide. The 2 effective date for hardwood plywood composite core would 3 take effect later to allow for the use of Phase 2 4 compliant particle board and medium-density fiberboard in 5 the core. 6 --o0o-- 7 MR. TAKEMOTO: The numerical values of our 8 proposed Phase 2 standards are based on the use of best 9 available control technology, which differs from product 10 to product. As you can see, there's more than one option 11 to meet the proposed standards using best available 12 control technology. 13 --o0o-- 14 MR. TAKEMOTO: The proposed sell-through 15 provisions would allow for a timely transition to the use 16 of Phase I and Phase 2 products in future years. These 17 provisions specify the time allowed for manufacturers, 18 distributors, importers, and so forth to sell off their 19 inventories prior to the effective date for a lower 20 emitting product. The length of the sell-through periods 21 differ for distributors, importers, fabricators, and 22 retailers in consideration of how much time is typically 23 needed to carry out those activities today. 24 --o0o-- 25 MR. TAKEMOTO: In terms of exemptions, the Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 Toxics Control Measure does not apply to hardwood plywood, 2 particle board, or medium-density fiberboard or finished 3 goods made with those materials that are not offered for 4 sale in California. The Air Toxics Control Measure does 5 not apply to hardwood plywood and particle board installed 6 in manufactured homes that is subject to the federal HUD 7 standard, windows that contain less than five percent by 8 volume of the products subject to the rule, plywood made 9 to military specifications, or for products used in 10 vehicles. 11 --o0o-- 12 MR. TAKEMOTO: We are proposing a very strong 13 enforcement infrastructure for the Air Toxics Control 14 Measure. Third-party certification entails having the 15 formaldehyde emission levels of hardwood plywood, particle 16 board, and medium-density fiberboard panels, and the 17 manufacturing processes used to make those products 18 certified by an independent third-party testing 19 organization that must apply to and be approved by the Air 20 Resources Board. 21 For products sold to California, statements of 22 compliance must be transferred from buyer to seller to 23 ensure that California-compliant products are knowingly 24 being sold and purchased for sale in California. Records 25 of compliant product purchases and sales are required to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 be maintained by all parties. Products must also be 2 labeled as complying with applicable California standards. 3 Facilities, not only manufacturers, but also 4 distributors, importers, fabricators, and retailers will 5 be inspected to verify if they have proper documentation 6 for the products that they are offering for sale. 7 Lastly, the monitoring and laboratory division is 8 building chambers for emission testing that will allow us 9 to test and sample secured during inspections. 10 --o0o-- 11 MR. TAKEMOTO: As you know, the robust 12 enforcement program is critical to ensuring that we 13 achieve the public health benefits of the proposed Air 14 Toxics Control Measure. It is important for fair 15 competition in the marketplace between imported and 16 domestic products which is essential to the viability of 17 the industry as a whole. 18 --o0o-- 19 MR. TAKEMOTO: I will now discuss the benefits 20 and impacts of the proposed Air Toxics Control Measure. 21 --o0o-- 22 MR. TAKEMOTO: This slide lists the benefits of 23 the proposed Air Toxic Control Measure. If adopted, the 24 proposed Air Toxics Control Measure would achieve about 25 500 tons per year in formaldehyde emission reductions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 These reductions reduce exposure and ultimately lower 2 lifetime cancer cases per million people exposed from the 3 present level of 86 to 231 by about 12 to 35 cases in 4 Phase I and by about 35 to 97 cases in Phase 2. This 5 represents about 42 percent reduction in cancer risk. 6 --o0o-- 7 MR. TAKEMOTO: The cost of producing compliant 8 hardwood plywood, particle board, and medium-density 9 fiberboard is estimated to be less than one dollar per 10 four-foot by eight-foot panel in Phase I and from about $3 11 to $6 per four-foot by eight-foot panel in Phase 2. 12 For both Phase I and Phase 2, these cost 13 increases represent what we believe could be the high end 14 of the potential cost increases that manufacturers could 15 incur. 16 --o0o-- 17 MR. TAKEMOTO: To consumers, the increase in the 18 cost of a panel will be about 20 percent higher than the 19 estimated cost increases to manufacturer-compliant panel. 20 We estimate for large projects like an average new 2,000 21 square foot home in California, the incremental increase 22 in the cost of the hardwood plywood, particle board, and 23 medium-density fiberboard used to build the cabinets, 24 shelving, and other composite wood containing kitchen and 25 bathroom fixtures would be about $400 in Phase 2. If this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 home is at the medium price of $574,000, this represents 2 an increase in less than one percent. 3 On a smaller scale, applying the same incremental 4 panel price increases mentioned earlier, we estimate the 5 cost of a ready-to-assemble bookcase could increase by 6 about a dollar in Phase I or by about $8 in Phase 2. 7 --o0o-- 8 MR. TAKEMOTO: This slide shows the estimated 9 annual industry-wide costs. The major portion of the 10 regulatory costs will be borne by manufacturers of 11 particle board and medium-density fiberboard who sell the 12 largest volume of wood products to California and who must 13 achieve the largest emission reductions respectively. 14 --o0o-- 15 MR. TAKEMOTO: Our economic analysis indicates 16 that as many as 25 mills could be affected by the 17 regulation nationwide. The cost of compliance ranges 18 depending on the type of product that is produced as shown 19 in the slide. For this analysis, we assume that 20 businesses could not increase the prices of their products 21 nor lower costs through cost-cutting measures. We 22 estimate that the average change in return on owner's 23 equity is about 11.6 percent for the composite wood 24 products industry, which indicates a potential for 25 significant adverse economic impacts if businesses absorb PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 all the costs associated with the proposed Air Toxics 2 Control Measures. 3 --o0o-- 4 MR. TAKEMOTO: I will now go over the comments we 5 have received to date. 6 --o0o-- 7 MR. TAKEMOTO: We have received over 50 comments 8 on the proposed Air Toxics Control Measure. While we have 9 received comments stating that the proposed standards are 10 too stringent, we have also heard from many groups that 11 the standards are not stringent enough. There are also 12 comments asking us to accelerate the implementation of the 13 proposed Phase 2 standards. We've also heard the cost of 14 the Air Toxics Control Measure is underestimated, both in 15 terms of incremental prices of raw panels and to the 16 industry as a whole. 17 --o0o-- 18 MR. TAKEMOTO: We have been asked to exempt 19 exterior doors and garage doors from the proposed Air 20 Toxics Control Measure, clarify the definition of 21 architectural plywood, provide performance-based 22 compliance testing flexibility for manufacturers who 23 produce products whose emissions are consistently below 24 the Phase 2 standards and other clarification. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 MR. TAKEMOTO: I will know go over the proposed 2 modifications. 3 --o0o-- 4 MR. TAKEMOTO: We propose to move the effective 5 date of the Phase 2 emissions standard for hardwood 6 plywood veneer core up one year from January 1, 2011, to 7 January 1, 2010. We believe it is possible to meet the 8 hardwood plywood veneer core standards sooner given the 9 resin systems we are aware of today. We propose to exempt 10 fabricators of exterior doors and garage doors if they are 11 made with exterior grade composite wood products or 12 contain less than three volume percent of composite wood 13 products made with urea-formaldehyde resins. This 14 exemption is based on emission tests showing that exterior 15 grade composite wood products emit formaldehyde at levels 16 at or below the proposed Phase 2 standards. We are also 17 proposing that a performance-based compliance option for 18 very low-emitting formaldehyde resins be added to the Air 19 Toxics Control Measure if it can be demonstrated that 20 these resins consistently meet a level below the Phase 2 21 standard. Manufacturers that meet this criteria would not 22 be required to conduct emission tests as frequently. 23 --o0o-- 24 MR. TAKEMOTO: We are also proposing changes to 25 the sell-through provisions. We suggest revising the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 sell-through date for raw panel manufacturers from one 2 month to three months; the sell-through for importers of 3 raw panels from five months to three months; and the 4 sell-through for fabricators from 12 months to 18 months. 5 We are proposing this change to address 6 inconsistencies that would have given an unintended 7 competitive advantage to some parties over others. And 8 lastly, there are some clarifications that will be 9 addressed. 10 --o0o-- 11 MR. TAKEMOTO: We recommend that the Board adopt 12 the proposed Air Toxics Control Measure with the proposed 13 modifications suggested by staff. 14 Thank you. This concludes my presentation. And 15 we welcome any questions you may have. 16 CHAIRPERSON SAWYER: Thank you, Dr. Marty and Dr. 17 Takemoto. 18 Madam Ombudsman, please describe the public 19 participation process that occurred while this item was 20 being developed and report any concerns or comments you 21 may have with the Board. 22 OMBUDSMAN QUETIN: Thank you, Dr. Sawyer and 23 members of the Board. 24 This regulation has been developed with input 25 from composite wood product manufacturers, fabricators, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 importers, retail associations, resin manufacturers, 2 distributors, and other interested parties including the 3 Formaldehyde Free Coalition. 4 Staff began their efforts to develop this rule in 5 2001 and held the first public workshop in September of 6 2001. Since that time, they've held a total of eight 7 public workshops. Seven of the eight workshops were held 8 in Sacramento, and the final one was held in El Monte in 9 March 2007. 10 During the period of 2001 to 2005, staff 11 participated in over 20 face-to-face meetings and about 20 12 conference calls. In the 2006 to 2007 period, they 13 participated in over 30 face-to-face meetings and nearly 14 20 conference calls, approximately ten site visits, and 15 also made four presentations at national meetings of the 16 International Wood Products Association, Window and Door 17 Manufacturers Association, and the International Wood 18 Composite Symposium. On average, approximately 100 19 stakeholders attended their workshops and a dozen 20 participated on the conference calls. 21 The staff report was released for public comment 22 on March 9th, 2007. Notices were posted on the ARB 23 website. Hard copies were made available at the visitor 24 information center at Cal/EPA headquarters, and about 100 25 copies were mailed to the selected participants. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 In addition, an Internet message announcing the 2 availability of the staff report was sent to over 560 3 people representing thousands of businesses currently 4 subscribed to the composite woods list serve. 5 This concludes my comments. Thank you. 6 CHAIRPERSON SAWYER: Do any Board members have 7 questions? 8 Ms. D'Adamo. 9 BOARD MEMBER D'ADAMO: Thank you. I have a few 10 questions regarding what they're doing with the standards 11 in Europe, Australia, and Japan. Are those standards 12 amongst those three areas similar so that we can just 13 maybe make a comparison between what other nations 14 currently have that are aggressive on this and the 15 proposed Phase I and Phase 2 standards? 16 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 17 Yes. Hi. I'm Jim Aguila, Manager of the Substance 18 Evaluations Section. 19 Ms. D'Adamo, there are international standards. 20 But as one of the slides pointed out, it's very difficult 21 to compare what we're trying to do here with international 22 standards. One of the things that was pointed out in the 23 presentation is that for some of the standards that we 24 know of including the Japanese standards and the European 25 standards, those standards are average emission standards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 that are imposed at plants. 2 What we're trying to do here is we're trying to 3 impose a cap for the industry. So when we compare the 4 standards, we can't really compare directly the actual 5 standards. If we wanted to make a comparison, what we 6 should look at is where the average emissions would be 7 under our cap. If we do that, we could predict more or 8 less where the industry would target their production 9 values. And given those projections, what we can say is 10 the Phase 2 standards would be about half of the E1 11 standard. 12 And as far as Japan goes, it's very similar to 13 some of their standards. But I should explain for Japan, 14 it's quite complex, because Japan has actually a 15 multi-tiered emissions standard system in place, whereas 16 producers can produce composite wood panels to meet a 17 variety of different emission standards, but the amount of 18 the material that's produced is limited through their 19 building codes. So in Japan, it's more difficult to 20 compare. But if we were to look at more or less what is 21 the average typical Board in Japan, we would expect that 22 it would be right around the F3 standard which would 23 compare very closely to our Phase 2 standards. 24 So in summary, the Phase 2 standards, the best 25 comparison we can do in terms of emissions would be to say PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 the Phase 2 standard we are proposing is about half the E1 2 standard and is similar to one of the strictest Japanese 3 standards which is the F3. There's only one other 4 standard in Japan that's stricter, and that is the 5 Japanese F4 standard, which basically imposes deminimous 6 formaldehyde levels and does reflect background 7 formaldehyde concentrations. And we're not proposing that 8 strict of a standard in this regard. 9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: To summarize, 10 we believe our standards is as much or more health 11 protective as if we had either the European system or the 12 Japanese system. It can become very difficult to compare. 13 It looks like in Japan it's more like we have -- the 14 Energy Commission has energy standards for houses. You 15 can use large windows, small windows, combinations of 16 things so long as on net you achieve a certain result. 17 So some of the materials they require 18 formaldehyde free. But on the other hand, if you can use 19 materials that have higher level than would be permitted 20 here. But the bottom line is we've designed our standard 21 we think to meet our definition of best available control 22 technology. And in doing that, we've afforded equal or 23 greater health protection for Californians as we have it 24 done on the other systems. 25 BOARD MEMBER D'ADAMO: The reason I was asking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 the question is I think a lot of the product is coming in 2 from overseas. And if there are these higher standards in 3 other parts of the world -- clearly, for example, if the 4 product is coming from China, I imagine they're able to 5 meet the standards, these higher standards in Japan, and 6 therefore should facilitate the implementation of our 7 rule. 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We believe 9 so. And that's one of the reasons for the capping 10 standard early, because we understand manufacturers in 11 Asian countries can meet the European and Japan standards. 12 They're not required to ship those goods to California or 13 the U.S. And we have become an area where we get higher 14 emitting products, and there's no reason why we can't 15 insist upon the lower emitting ones. 16 BOARD MEMBER D'ADAMO: Just because we have the 17 market for the product. 18 DEPUTY EXECUTIVE OFFICER SCHEIBLE: They're 19 allowed and they're cheaper. So if you specify give me 20 something that meets the specification at the lowest price 21 and you don't have a formaldehyde standard, you're going 22 to get a higher-emitting product that can be produced more 23 cheaply. 24 BOARD MEMBER D'ADAMO: What about the concern 25 about enforcement if these variety of products are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 produced? Say, for example, in China where they're 2 shipping product to areas where there are no standards all 3 the way to the most stringent standards, how can we ensure 4 that we're getting the ones that meet our standard? 5 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Ms. 6 D'Adamo, the way we address that is by developing an 7 enforcement program that really imposes rather onerous 8 requirements on manufacturers themselves. What we 9 recognize is this ATCM is in effect a Board regulation. 10 It affects the quality of the emissions characteristics of 11 those composite wood products that are produced. That's 12 why we have imposed very specific and onerous 13 responsibilities in terms of third party certification and 14 also recordkeeping and labeling requirements which are 15 imposed directly on the manufacturers, because we 16 understand that we have to have some control in terms of 17 being able to document the emissions performance of these 18 products as they enter the market. 19 So one of the main strategies is to impose that 20 third party certification program on the international 21 producers. But in addition to that, we also have test 22 methods by which we can go and pull samples ourselves once 23 they arrive here and we can verify those emissions 24 ourselves. 25 BOARD MEMBER D'ADAMO: What measures has staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 included to ensure that third parties, distributors of the 2 product or cabinet makers, for example, that they can 3 actually rely on that certification. Could they be held 4 responsible if they end up utilizing a product that 5 doesn't meet the standard? 6 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 7 Under the regulations, fabricators, distributors, 8 importers, and even retailers are responsible to make 9 proactive efforts to be able to obtain complying 10 materials. The regulation requires they use reasonable 11 prudent precautions as they enter into these business 12 arrangements with the folks that they get supplied from. 13 In terms of liability, there is some liability in 14 that those groups need to comply with the provisions of 15 the regulation. Our expectation is if these parties 16 comply with the regulation, then liability could even be 17 reduced. And the reason why we say that is because the 18 way the enforcement program is structured in that if a 19 manufacturer does go through the steps of complying with 20 the regulation and is able to provide a product that 21 complies together with labeling requirements and 22 documentation, then it's more of a straightforward matter 23 for the people that are downstream in the distribution 24 chain to be able to maintain that documentation and any 25 integrity of the product. They should be together as they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 go down the commercial chain. 2 EXECUTIVE OFFICER WITHERSPOON: Ms. D'Adamo, this 3 is the same way we enforce our regulations for consumer 4 products, how districts do it for paints, for lawnmowers, 5 or motorcycles. Products are manufactured all over the 6 world. And we hold both manufacturers and the retailers 7 of those products and all intermediary parties responsible 8 if non-compliant products end up in California that are 9 sold, then we exercise enforcement discretion about 10 whether they were culpable or they were, in fact, sold 11 fraudulent products. 12 CHAIRPERSON SAWYER: Ms. Berg. 13 BOARD MEMBER BERG: Just to stay on the 14 enforcement issue, isn't the enforcement on the raw board 15 versus a finished good? 16 EXECUTIVE OFFICER WITHERSPOON: It's on both. 17 BOARD MEMBER BERG: It is on both. And how do we 18 test the finished good and the chamber? 19 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Ms. 20 D'Adamo, in the regulation we provided a test method, a 21 small chamber test method that we refer that we intend to 22 use for finished product testing. Finished products, as 23 it turns out, there's various grades of finished products 24 that would lend themselves more or less to testing. The 25 chamber itself does have some physical limitations in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 terms of the size of the sample that you would put into 2 this particular chamber that we're assembling ourselves. 3 But in terms of being able to do testing, we 4 recognize that there's going to be some challenges for a 5 certain portion of the finished goods, including those 6 that are fully laminated. What we're really trying to do 7 is trying to develop -- we have a test method we intend to 8 use that would give us the emissions characteristics of 9 the raw board. That is the intent. There is quite a bit 10 of furniture out there that's laminated just on one side, 11 and the regulation does provide an allowance for us to 12 take enough samples to put those samples back to back to 13 get a representative board sample. 14 BOARD MEMBER BERG: Do you see any products that 15 wouldn't be able to be tested because it would be too 16 difficult to get to the raw material? 17 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 18 Well, you know, obviously the potential use for composite 19 wood products, it's a vast array of finished goods that 20 could potentially be in the market. At this point, we 21 feel we could cover 80 to 85 percent of the products that 22 are out there. 23 BOARD MEMBER BERG: I do feel the success of the 24 enforcement will determine the success of the regulation 25 and also the even playing field for California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 manufacturers. So it's an extremely important component 2 that as we go down this road I think we really got to pay 3 attention to. 4 I just have a couple other questions. On slide 5 17, which is page 96 of our handout, when you talked about 6 the composite wood industry, it represented five percent 7 of the tons statewide. What are the other industries that 8 represent the other 95 percent? 9 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 10 Just give us one minute. We're going to look that up in 11 the staff report. 12 Essentially, most of the emissions are comprised 13 of motor vehicles on road and other mobile sources. And 14 we do have stationary source emissions including wood 15 burning, residential fireplaces, and wood stoves. 16 BOARD MEMBER BERG: I don't need to know the 17 exact percentages. Is there ambient formaldehyde in this 18 figure, in the 100 percent? 19 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: No. 20 There's not. Just direct emissions. 21 BOARD MEMBER BERG: When we talk about the 22 risk -- so on slide 31, the need for control, our slide 23 49, are those figures calculated on the 5 percent or the 24 100 percent? 25 EXECUTIVE OFFICER WITHERSPOON: On the 5 percent. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 BOARD MEMBER BERG: So it's 5 percent on the 2 cancer risk is on the 5 percent, 23? 3 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 4 Okay. Slide 31 shows the need for control. 5 BOARD MEMBER BERG: I'm trying just to make sure 6 that on the percentages that we're using that we are using 7 the correct numbers that apply to the composite wood 8 industry and not 100 percent of the formaldehyde risk. 9 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 10 Understand. The base line cancer cases are based on the 11 five percent direct emissions and the contribution to 12 total exposure. 13 BOARD MEMBER BERG: Thank you for that. 14 Ask then finally on the projected profitability 15 on slide number 53, we talk about the impact that it's 16 going to have nationwide, which is on the domestic 17 business. And what percentage of the business is domestic 18 and what percentage is import? And again, could you just 19 reassure me on how we're going to support our domestic 20 industry and make sure that we have a level playing field 21 for the imports that could theoretically provide whatever 22 paperwork we ask them to do and we need to make sure that 23 the regulation is being followed? 24 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Our 25 cost analysis was based on what we know about California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 consumption. What we've done is taken estimates to find 2 out what is our California consumption and what are the 3 production rates from various companies. 4 And we conducted a survey in 2003 to get a better 5 idea from the domestic producers what are the production 6 rates that are coming to California. However, we don't 7 have as clear a picture on the level of imports, 8 especially since the level of imports seem to be rising in 9 relation to the total consumption. 10 What this slide indicates is that of the mills 11 that we know could be impacted by this regulation, we 12 recognize that not all of the mills will opt to sell for 13 California. It is a California rule. It's not a U.S. 14 rule. And what we're showing on this slide is simply our 15 projection of what the impact would be on the mills that 16 would be necessary to make changes for this regulation to 17 be able to supply the same consumption estimates. 18 BOARD MEMBER BERG: Is it fair to make the leap 19 that when you look at the cost to consumer that really the 20 middle class and lower economic areas will pay the burden 21 of the cost because it is the lower fabricated products? 22 Is that a fair -- 23 EXECUTIVE OFFICER WITHERSPOON: Well, everyone 24 who has a home will pay the price. But if you think -- if 25 what you mean is that lower-income people are more likely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 to buy assemble yourself bookshelves, the composite wood 2 type products and the price differential on those, $8 to a 3 $27 purchase price in Phase 2 is a large jump, then, yeah, 4 they will see those kinds of price increases. But they're 5 defused throughout these categories. And you saw that MDF 6 is often used as trim and moulding and you probably 7 wouldn't get those trim and moulding in lower-end housing. 8 So it depends. I don't think we have that kind of detail 9 of the socioeconomic breakup. 10 BOARD MEMBER BERG: It's just an observation on 11 my part. I understand the health effects are much more 12 important. I just don't want it to be not looked at, 13 that's all. Thank you very much. And thank you for 14 helping me through this. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: One more 16 point in terms of competition. We believe that adopting 17 and setting a standard and enforcing that standard across 18 all products that are either manufactured in California or 19 imported from other parts of the U.S. or the world will 20 actually put the U.S. industry in a better competitive 21 advantage than they're in today, where there are no 22 standards and products that are much higher emitting than 23 the ones they choose to -- the U.S. manufacturers meet 24 because they are meeting voluntary standards or levels. 25 So we think that it will actually improve the ability of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 the U.S. manufacturers to compete with foreign goods, 2 because it will move everybody up to at least a common 3 level of emissions. 4 BOARD MEMBER BERG: And I'm in full agreement 5 with you on that as long as enforcement -- overseas 6 manufacturers have to know that we are testing and we are 7 going to catch them. You just have to catch a few, and 8 word will get around. But if we don't have the 9 enforcement, my sense is that cost will prevail. 10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And we are 11 dedicated to that. And that's part of why it took so long 12 to get you a proposal. That is we and the industry wanted 13 to have a method of enforcing for the product that doesn't 14 come as a raw board. 15 But the other thing is that a large, large 16 percentage of these products are imported through major 17 distributors and companies that if we show up and we 18 enforce a couple of times against them, they will ensure 19 that their procurement goes back to their suppliers. And 20 they have enough economic strength to make sure the 21 suppliers meet whatever specifications they set. 22 BOARD MEMBER BERG: Thank you. 23 CHAIRPERSON SAWYER: Supervisor Hill. 24 SUPERVISOR HILL: Thank you, Doctor. 25 I guess I would pause when I hear us talking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 about the onerous requirements that we're placing. I 2 guess it's just the word onerous. And I'm sure we've 3 looked at, but have we looked at any way of achieving the 4 same results we're looking for in terms of enforcement 5 without being as onerous or the obligation that this does 6 place on industry? 7 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 8 Yes, Supervisor Hill. I apologize for that unfortunate 9 use of words. I probably should have used comprehensive 10 instead. 11 SUPERVISOR HILL: I wouldn't have paused as much 12 on comprehensive. 13 EXECUTIVE OFFICER WITHERSPOON: What I would say, 14 Supervisor Hill, onerous in the eye of the beholder. And 15 always a rulemaking is a negotiation about how much time 16 we'll provide to comply with the requirements. So the 17 very fact that we have Phase I and Phase 2 is a sort of 18 gentle phase into a world-class standard. And we've tried 19 to provide sufficient time for people to make the 20 necessary investments and choices about the kind of resin 21 technology you wish to use and not be forced to make an 22 overnight conversion to the resin they're less comfortable 23 with. 24 SUPERVISOR HILL: I guess the certain is as much 25 the requirements to meet the standards. It's the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 enforcement and the third-party certifications and the 2 other things that are required. If we've looked at those 3 other options that may not be quite as comprehensive. 4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think 5 the -- actually we want the enforcement to be onerous on 6 those parties that deliberately violate the regulation. 7 Third-party certification is a way of I think conforming 8 our rules to what's done in the rest of the world where 9 there are certifications of these types of products for 10 formaldehyde levels. So it's using a system already in 11 place and probably makes the compliance with the 12 regulation less onerous. 13 In terms of enforcement, it's not a strict 14 liability issue. So the retailer who sells and the 15 importer who imports are responsible for compliance. But 16 if the records show they use reasonable caution and they 17 don't know they have a non-compliant product, that it had 18 a certification and they knew the certification was bogus 19 or the manufacturing was done wrong, that's same situation 20 we have with consumer products for gasoline sales. If a 21 refinery makes gasoline that's in violation and we find it 22 at a service station, we don't take on the service 23 station. We trace it back to wherever the violation 24 occurred. That's what we have to do. We like to have the 25 regulation be comprehensive so we can get those parties PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 where they are the actual person that's causing the 2 violation to be caught under the enforcement. 3 SUPERVISOR HILL: I agree with Ms. Berg. That's 4 the key to the success of this is the enforcement. Thank 5 you. 6 CHAIRPERSON SAWYER: Thank you. 7 Dr. Gong. 8 BOARD MEMBER GONG: Thank you, Dr. Sawyer. 9 The proposed emission standards for Phase I and 10 II, I wanted to make sure I understood the actual numbers, 11 what they represented. These are not average values, are 12 they? Or are they not to be exceeded values? 13 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 14 That's correct, Dr. Gong. Not to be exceeded. 15 BOARD MEMBER GONG: So basically any product that 16 is evaluated has to be below a certain threshold as you 17 have here? 18 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 19 That's correct. 20 BOARD MEMBER GONG: Could you elaborate a little 21 bit more on the sell-through phase? I didn't quite 22 understand. You said one to three months. Or could you 23 have a little more detail on that? 24 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 25 Certainly, yes. Actually, what you're referring to is our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 discussion of a comment and recommended changes that we 2 are presenting to you today. 3 But just in general, the sell-through 4 provisions -- the idea behind the sell-through provisions 5 is to provide for the clearing of inventories to allow a 6 smooth transition to the new quality boards, if you will. 7 What we were referring to in the presentation is a comment 8 that we had received that was related to a discrepancy in 9 our proposal that we had originally proposed. We had 10 given manufacturers of raw panels for importers more time 11 for theirselves. And whereas, we had given domestic 12 producers only 30 days. So what we opted to do is to make 13 them the same for importers and domestic and give them 14 both three months to clear their stocks. 15 BOARD MEMBER GONG: Thank you for that 16 explanation. 17 Could you walk me through this? A finished 18 composite wood product from a plant in China, they ship it 19 over to the United States. It goes to a Wal-Mart. It's a 20 generic Wal-Mart. Where would the inspection occur in 21 that sequence? Just so I have an idea how you're going to 22 do it. 23 ASSISTANT CHIEF BARHAM: Jim Ryden, Chief of the 24 Enforcement Division, will address that question. 25 ENFORCEMENT DIVISION CHIEF RYDEN: You finally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 got the cop on the mike here. This is the way we 2 typically would do an enforcement like this. And let me 3 reiterate Ms. Witherspoon's comment that this was 4 basically a consumer product enforcement strategy, 5 something which we've done well over ten years. Last 6 year, for example, we conducted almost 1800 consumer 7 product inspections through the state. 8 As far as the imports go, just to give you a 9 little heads-up, we are currently engaged in discussions 10 in joint inspections with U.S. EPA. And the importance of 11 that is that at U.S. EPA, the custom broker who manages 12 the import through the customs process is obliged to sign 13 a penalty of perjury document which indicate the product 14 they're importing complies with environmental regulation. 15 So the tricky part for California is when it 16 comes in through the import process, if it in fact it's 17 legal to sell in Nevada, it goes through. So what the 18 enforcement strategy is going to be is we will be retail 19 level. We'll go to Wal-Mart, a place we visit frequently 20 and probably believes we have onerous enforcement 21 policies. We'll purchase the product. We have screening 22 tests out in the field that we use. We'll screen the 23 product to determine if, in fact, it's a potential for the 24 more stringent enforcement test. We purchase the product. 25 We bring it back to the lab, analyze it, gets the results, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 indicates it's out of compliance. There's a paper trail 2 that's part and parcel of the regulation. 3 And this is very similar to like we do consumer 4 products investigations. We have not only right of entry, 5 but we have subpoena power to get the documents. So we 6 get the documents. We trace it through the distribution 7 line. And everybody up and down the distribution line 8 that didn't do the proper thing is on the hook in terms of 9 liability, individually on the hook for liability. So 10 basically we trace it back. And if we trace it back in 11 fact, we get to the point to where we trace it back to the 12 custom broker, that's where we get the U.S. EPA involved. 13 And what we will be able to do that -- and I don't see 14 that as a big problem, because like I said, we do it every 15 day. 16 So basically what we would do is focus on the 17 retail area which is places that we visit every day. In 18 the enforcement division, we have quite a few people out 19 there every day in all the retail outlets, in lumber 20 yards, and places like that throughout the state. And 21 basically, the papertrail allows us to trace it back. And 22 everybody up and down the line who is contributing to the 23 lack of compliance we'll take an enforcement action 24 against. 25 BOARD MEMBER GONG: Where in this process do you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 actually test the product though? 2 ENFORCEMENT DIVISION CHIEF RIDEN: Where we 3 actually test the product, we screen it out in the field. 4 My inspectors will be there with something called a fleck 5 chamber. And it's basically something that goes along 6 with them in their inspection vehicle. And we will go, 7 for example, into Home Depot, probably a better example, 8 and go and check out their plywood inventory. And we will 9 screen selected boards out of there. 10 And if in fact we find something the fleck test 11 indicates we should pay closer attention to, we purchase 12 the product which now becomes evidence. We bring it back 13 to our lab here in Sacramento, and we'll put it through 14 the small chamber process to determines if in fact the 15 emissions are such it's not in compliance. And once we 16 establish the numbers, then we go through the 17 investigation to see who touched this product. And that's 18 part and parcel of all the documentation that's required 19 to be processed along with the product. 20 BOARD MEMBER GONG: Thank you. I don't want you 21 on my back. 22 This is for my own education, but are many of 23 these products composed of different plywoods or composite 24 woods? I mean, in other words, you buy a product, but 25 it's not 100 percent plywood necessarily. Am I correct? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 Is that such an animal? 2 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Dr. 3 Gong, are you referring to finished goods? 4 BOARD MEMBER GONG: Yes. 5 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 6 Yes, it is feasible that certain furniture would have 7 components of all three of the regulated products. 8 BOARD MEMBER GONG: You get a bookcase. It's got 9 components of all three different types. It exceeds the 10 threshold for the worst one or for one of them or any of 11 them before you say it's in violation? 12 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 13 Under the regulation, the regulation requires that all of 14 the components needs to be complying. So given the 15 scenario as to the extent that this finished product would 16 lend itself to testing, we test the different components. 17 Any violation on any one of those would indicate a 18 violation. 19 BOARD MEMBER GONG: Tough. Okay. One last 20 comment. Is the melamine used in the resin, is that from 21 the pet food contamination, the same one? 22 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It is the 23 same chemical. Hopefully, it's not from pet food. 24 BOARD MEMBER GONG: Thank you. 25 CHAIRPERSON SAWYER: Okay. We will have the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 public comments at this time. We have a large number of 2 speakers which will take a fairly long period of time. 3 For those of you who are planning your day, it's my 4 intention to go until 1:00 and then take a 45-minute break 5 for lunch. That will put us maybe halfway through the 6 public testimony. If some of you have to leave before you 7 testify but come back afterwards, we will come back and 8 pick that up after the lunch break if that would be 9 helpful to you. So if you don't come up when I call you 10 after the lunch break I'll go back and call the people who 11 weren't available at that time. I hope that doesn't cause 12 everybody to leave now. 13 So the first three speakers are Tim Carmichael, 14 Mike Robson, and Betsy Natz. Mr. Carmichael. 15 MR. CARMICHAEL: Good morning again, Chairman 16 Sawyer, members of the Board. 17 Today, I have the honor of representing both the 18 Coalition for Clean Air and the America Lung Association 19 of California on this item. We submitted a joint letter. 20 I hope you had a chance to read that. If you didn't, I'm 21 going to highlight a couple of quick points. First of 22 all, I'm going to start with the health argument and end 23 with the cost argument. I think some speakers behind me 24 might flip that. 25 So starting with the health argument. This PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 compound was identified as a known human carcinogen in 2 2004. We're talking about a compound we know causes 3 cancer. The staff report I think did a good job of 4 highlighting where the exposure and risk are significant. 5 Mobile classrooms, kids; mobile homes, pre-fab homes, 6 low-income at least as a tenancy if not a broad brush 7 accuracy. 8 The Coalition for Clean Air and American Lung 9 Association support the staff proposal mostly. We support 10 the proposed standard levels. We support the cap 11 approach. We support the third party certification. We 12 support the labeling and other enforcement provisions. 13 Where we believe that the staff proposal should be 14 strengthened, and we're asking the Board to do that today 15 as part of adopting this program to better protect public 16 health, is in the timeline for the implementation of Phase 17 2. Our letter indicated, and we believe, that Phase 2 18 should be fully implemented by January 2010 for all wood 19 products covered by this program. Now the staff reported 20 to you today they're proposing to accelerate the time line 21 to January 2010 for one component of this program. We 22 believe it's feasible for all components of this program. 23 You will hear from some of the speakers behind me 24 that timeline is not feasible. In fact, the timeline the 25 staff proposed is not feasible. Our counter argument to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 that is this compound was listed as a toxic air 2 contaminant in 1992. That means for 15 years this 3 industry using formaldehyde and other users of 4 formaldehyde in California have known that they were going 5 to have to significantly reduce or eliminate the use of 6 this compound. That's the law. That's what it means to 7 be listed as a toxic air contaminant. This state, this 8 agency is going to take that on and do everything we can 9 to protect public health from that compound. So they've 10 known for 15 years. 11 And that didn't catch their attention in 1992, as 12 noted by Melanie Marty, in 2004, the international agency 13 on cancer identifies a known human carcinogen. That is 14 not a small red flag. That is a giant red flag. 15 Final point I want to make relates to the spirit 16 of innovation and competition. Not everybody agrees a 17 strong regulation will drive innovation. We believe that. 18 And we believe this agency has good history with that, and 19 it has a track record that shows that. But even if you 20 don't believe that -- 21 CHAIRPERSON SAWYER: Please conclude. 22 MR. CARMICHAEL: Last sentence. Thank you. 23 Even if you don't believe that, the fact is there 24 are producers in the market today producing compliant 25 materials. And even if there's only one, they are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 demonstrating it's doable. And by adopting this 2 regulation, you will enhance competition, and as was 3 pointed out by staff, enhance the American producers' 4 competitive advantage. 5 Thank you very much. We urge your support with 6 the accelerated time line. 7 CHAIRPERSON SAWYER: Thank you. 8 Mr. Robson. 9 MR. ROBSON: Hi. Thank you. Mike Robson on 10 behalf of the Association of Woodworking and Furnishing 11 Suppliers. 12 The Association of Woodworking and Furnishing 13 Suppliers is a California-based trade association of 14 manufacturers and distributors of machinery, hardware, 15 lumber, upholstery materials, bedding components, wood 16 products, and other supplies to the furnishings, cabinet, 17 and wood product manufacturers. Essentially, our 18 customers, the customers of the Association of Woodworking 19 and Furnishing Suppliers, are by and large a lot of 20 cabinet makers. There's thousands and thousands of 21 cabinet makers in California. Many small business owners. 22 And they are competing -- they are competing in a 23 marketplace against products that are made overseas. And 24 I can probably safely say most cabinet makers in this 25 state are completely unaware of this regulation. And they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 are buying. They will be forced to buy raw materials that 2 will comply with this standard and at a cost. 3 And you'll hear later that the Phase I 4 regulations are achievable. The Phase 2 regulations are 5 achievable at a premium or maybe nonachievable at all. 6 But the businesses in California, these cabinet makers, 7 will pay for that and the level of enforcement. And there 8 is even doubt by staff about how to enforce on the 9 finished products. If a cabinet can come overseas 10 finished and noncompliant at a cheaper cost, these cabinet 11 makers will go out of business. They won't be buying our 12 machinery. They won't -- if they're not buying our 13 machinery, we won't be selling the machinery. If we're 14 not selling the machinery, we won't be hiring people to 15 work in our facilities that make this machinery. 16 So simply put, you're going to hear later from 17 the Wood Industry Coalition that there's a standard in the 18 Phase 2 regulations that can be met. And we'd ask you to 19 seriously consider that proposal and thank you for your 20 time. 21 CHAIRPERSON SAWYER: Ms. Natz, and then Gary 22 Marsh, Jay Murray, and Lee Shull. 23 MS. NATZ: My name is Betsy Natz. I'm here today 24 as the Executive Director of the Formaldehyde Council, the 25 nonprofit association that represents leading producers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 and users of formaldehyde in the United States. Our 2 organization is focused on the relationship between 3 formaldehyde and the public health and assuring that the 4 utilization of formaldehyde and the public policies 5 governing its use are based on sound science. I thank you 6 for this opportunity to provide our perspective. 7 The members of the Formaldehyde Council are 8 concerned that with this proposed formaldehyde rule CARB 9 is embarking down on a path that is completely out of sync 10 with the current and best available science on 11 formaldehyde's potential human health effects. Today, you 12 will be hearing from experts who will point out the flaws 13 in both the analyses and the drafting of this proposed 14 rule. Simply put, we believe that this proposed rule to 15 reduce formaldehyde in wood products is not based on the 16 best available science and health effects data and will 17 not provide appreciable health protection to the people in 18 California. 19 Formaldehyde is a natural occurring chemical that 20 is found in abundance in the atmosphere and is produced by 21 the human body, among other sources. The chemistry of 22 formaldehyde makes it extremely versatile ingredient in 23 hundreds of different items that improve everyday life. 24 While little or no formaldehyde is present in most 25 finished products, the chemical is an essential component PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 to most common consumer goods, including medicines, 2 vaccines, furniture, cabinets, insulation, and other 3 building products as well as shampoos, deodorants, 4 toothpaste, et cetera. Formaldehyde's wide ranging uses 5 make it essential to the operations of nearly 50,000 6 facilities in 17 major industries, and it serves as a 7 basic raw material in another 70 industries. 8 The preponderance of the existing human health 9 research data demonstrates the risk of cancer associated 10 with relevant formaldehyde exposure is virtually nil. We 11 feel strongly that additional research being conducted by 12 government and industry will serve to further clarify the 13 level of understanding pertaining to the safety of 14 formaldehyde for consumers and industry workers. 15 The Formaldehyde Council urges CARB to consider 16 all relevant data on this important matter rather than 17 rush to bad judgment in this case. There is no credible 18 evidence that formaldehyde at common exposure levels 19 constitutes a significant health risk. Never the less, 20 the proposed CARB rule would throw out products made with 21 formaldehyde and necessitate the substitution with 22 chemical products whose impact on public health is 23 generally unknown. In essence, this rule would substitute 24 a huge question mark for the negligible health risks 25 associated with formaldehyde. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 CHAIRPERSON SAWYER: Would you please conclude? 2 MS. NATZ: Yes. As detailed in FCI's written 3 comments submitted previously, we strongly urge the Board 4 to direct the Air Resources Board staff to make extensive 5 revisions to the ISOR so that it is consistent with 6 current science and current risk assessment practices. 7 CHAIRPERSON SAWYER: Thank you. 8 Dr. Murray. 9 DR. MURRAY: Thank you. I've been asked to 10 comment by the Formaldehyde Council. I'm a Board 11 certified toxicologist and a former member of the 12 Governor's Scientific Advisory Panel for Proposition 65. 13 Bottom line, the proposed reduction in 14 formaldehyde emissions will not produce any meaningful 15 reduction in cancer in California. The staff report's 16 estimate of cancer risk is based on a cancer potency 17 factor from a 1992 risk assessment by OEHHA. And based on 18 this factor, for example, the staff report estimates that 19 the benefit of implementing Phase 2 is a theoretical net 20 reduction of 35 cancer cases per million people over a 70 21 year lifetime. 22 Now, there are inherent problems with estimating 23 a specific number of reductions in cancer cases based on a 24 95th percentile upper bound using a model with raw data. 25 And even back in '92, OEHHA acknowledged the risk could be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 lower and even be zero. 2 But setting these problems aside, there is an 3 even larger issue. You heard earlier this morning that 4 OEHHA's interpretation is consistent with U.S. EPA's and 5 others. Not true when it comes to risk assessment. More 6 recent sophisticated peer reviewed risk assessments by 7 other regulatory agencies including U.S. EPA, Health 8 Canada, World Health Organization predict the cancer 9 potency of formaldehyde is much lower than the estimate 10 relied upon in the staff report. By much lower, I'm 11 talking about 2,250 to 36,000 times lower. That's not 12 consistent with the risk assessment in this report. 13 If the staff report had run the same calculations 14 using these other cancer potency factors, it would have 15 predicted Phase 2 would prevent one to sixteen cancer 16 cases per billion, that's billion with a b, people over a 17 70-year lifetime. What this means is that implementation 18 of Phase 2 is unlikely to prevent even one cancer case in 19 the entire population in California over the next 70 20 years. 21 Why such a big difference in estimates? Well, 22 formaldehyde does not become 36,000 times more toxic when 23 it crosses the state border. Either the risk has been 24 greatly overestimated by OEHHA or greatly underestimated 25 by U.S. EPA, Health Canada, and WHO. OEHHA's cancer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 potency estimate does not rely on what U.S. EPA calls the 2 "best available peer reviewed science at this time." In 3 fact, OEHHA's risk assessment of formaldehyde does not 4 even mention the work these other agencies relied upon for 5 their risk assessments of formaldehyde. OEHHA responded 6 to this criticism in a letter dated April 13th which 7 essentially says that OEHHA is aware of and chose not to 8 use all the data used by the other agencies. 9 CHAIRPERSON SAWYER: Please conclude. 10 DR. MURRAY: Sure. I have a lot of respect for 11 OEHHA, but I disagree with its position on formaldehyde, 12 because it does not accept all the current science used by 13 these other agencies. You should carefully evaluate the 14 proposed reductions in light of the questionable 15 reductions in public health benefits. Given the fact that 16 roughly 25 percent of us are expected to die from cancer, 17 it's especially important to focus the State's resources 18 on actions that will result in real reduction in cancer 19 and improvement in public health. Thank you. 20 CHAIRPERSON SAWYER: Thank you. 21 The statement that the potency was based on the 22 95 percentile, could we have some comment on that, please? 23 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 24 MARTY: Sure. It's standard procedure for us to use the 25 95th upper confidence level on the slope of the dose PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 response curve for our unit risk factor to account for 2 variability in the experimental animals. That's all it 3 accounts for. 4 DR. MURRAY: What that means is the likely risk 5 is -- there's a 95 percent chance the actual risk is less 6 than that number. And the numbers that I cited you from 7 U.S. EPA, WHO, and Health Canada are also 95th percentile 8 upper bounds. So that's not the difference. 9 AIR TOXICOLOGY AND EPIDEMIOLOGY BRANCH CHIEF 10 MARTY: Actually, that's incorrect. Let me comment on a 11 few things if you wouldn't mind. 12 First of all, the maximum likelihood estimate for 13 formaldehyde is less than two folds lower than the 95 14 percent upper confidence bound. That's actually typical. 15 The EPA's official number, which is still on their website 16 under now integrated risk information system, is in fact 17 higher than OEHHA's number. U.S. EPA does not have a 18 consensus on the use of what is essentially the CIIT's 19 model. One office within EPA did use that. And that is 20 what these folks are citing. 21 The EPA is reevaluating formaldehyde's risk 22 assessment, but they have not yet met their first 23 milestone, which is an internal review draft. So they 24 won't be done for a few years if it follows the typical 25 procedure. So I'd just like to put that into the record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 DR. MURRAY: And that other U.S. EPA number that 2 Dr. Marty cited was from 1988, and U.S. EPA has 3 acknowledged it's out of date and it's being revised. 4 CHAIRPERSON SAWYER: Thank you. Thank you, Dr. 5 Marty. 6 Mr. Marsh, and excuse me for confusing the order 7 there. 8 MR. MARSH: Good morning, Mr. Chairman, members 9 of the Board. My name is Gary Marsh. I'm a Professor of 10 Biostatistics and Director of the Center for Occupational 11 Biostatistics and Epidemiology at the University of 12 Pittsburgh Graduate School of Public Health. 13 Since 1978, I have been involved in the design 14 and conduct of more than 25 occupational epidemiology 15 studies of health effects from various workplace 16 exposures. A major focus of my research has been the 17 evaluation of human health effects of formaldehyde 18 exposure. I'd like to give you my perspective on the IARC 19 reclassification primarily today. 20 Most of the epidemiology evidence for assessing 21 human cancer risk from formaldehyde exposure comes from 22 three large cohort studies of industrial workers: One in 23 Britain and two in the U.S; one by NIOSH, National 24 Institute for Occupational Safety and Health, and one by 25 the National Cancer Institute, or NCI. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 In 2004, the International Agency for Research on 2 Cancer, or IARC, reclassified formaldehyde as carcinogenic 3 in humans based largely on evidence from the NCI study 4 that the formaldehyde causes nasopharyngeal cancer as we 5 heard earlier. The NCI finding was based on only eight 6 NPC deaths among exposed workers, an increase of only two 7 NPC deaths from IARC's 1995 classification of formaldehyde 8 as a probable carcinogen, or 2A. Only one NPC death was 9 observed in the other two cohort studies combined. The 10 evidence that formaldehyde causes other cancers such as 11 leukemia was deemed nonsufficient by IARC. 12 Recent literature reviews and several published 13 re-analyses of the NCI cohort data conducted by my 14 research group have cast considerable doubt on the 15 validity of NCI's finding and IARC's reclassification. 16 For example, we showed that NCI findings for NPC were 17 driven entirely by an anomalous finding in one of their 18 ten study plants called plant one. Six of the eight NPC 19 deaths occurred among exposed workers in this single plant 20 resulting in a statistically significant ten-fold excess 21 in NPC compared to the 35 percent deficit in NPC death 22 among exposed workers in the remaining nine plants. 23 We have also conducted an independent and 24 expanded cohort study of this single plant. We concluded 25 in our latest paper -- actually accepted this week -- that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 the anomalous finding for plant one may be related to 2 previous work in this extensive local metal industry that 3 prevails in the area of plant one. These jobs in this 4 metal industry entailed possible exposures to several risk 5 factors for NPC including sulfuric acid mists, mineral 6 acid, metal dust, and heat. 7 So in summary, our reanalysis of the NCI cohort 8 data do not support their suggestion of a causal 9 association with formaldehyde and NPC. I believe that the 10 2004 decision by IARC to reclassify formaldehyde as a 11 group one substance was premature considering the small 12 number of NPC deaths, the missing evidence from the 13 British and NIOSH cohort studies, NCI's anomalous finding 14 for NPC in a single plant, and now our new evidence that 15 the NPC risk in this very influential plant may be related 16 to not formaldehyde but to previous work in the local 17 metal industry. Thank you for your time and attention. 18 CHAIRPERSON SAWYER: Thank you. 19 Dr. Shull, and then we will have Wade Gregory, 20 Tom Julie, and Will Warberg. 21 DR. SHULL: Thank you, and good morning. My name 22 is Lee Shull. I've been asked to comment on behalf of the 23 Composite Panel Association and the California Wood 24 Industry Coalition. I am a professional toxicologist and 25 risk assessor and former tenured professor of toxicology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 at the University of California Davis. 2 I completely agree with the comments just made by 3 Drs. Murray and Marsh, and my comments build on some of 4 the key points they had made. 5 I have a single point really to make, and it 6 relates to CARB's risk assessment. As risk managers 7 confronted with making a decision whether to implement the 8 proposed ATCM standard for formaldehyde, you must consider 9 a number of factors, including science, technology, 10 economics, public values, legal factors, and so on. Not 11 an easy job. 12 The description of the science you have been 13 provided in the March 2007 CARB report I believe is 14 incomplete, biased, and unfortunately I believe designed 15 to mislead you on the health effects of formaldehyde. You 16 have not been provided a full and unbiased picture of the 17 best available toxicology and risk assessment aspects 18 associated with human exposure to formaldehyde. Here's a 19 few examples. 20 First, as Dr. Murray has pointed out, the report 21 makes no mentions of the more recent scientific 22 evaluations and conclusions of several other prestigious 23 scientific bodies, you mentioned U.S. EPA and WHO, 24 documenting that carcinogenic potency of formaldehyde in 25 humans is much lower than OEHHA's 1992 conclusion. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 Also, the report makes no mention of the fact 2 that air concentrations less than about one to two parts 3 per million, much higher concentrations than indoor air 4 levels from manufactured wood products. The evidence 5 indicates formaldehyde is completely detoxified in the 6 body. Cancer really only occurs when you overwhelm these 7 natural systems at exposures much higher than the one to 8 two PPM. 9 Also, to my knowledge, the CARB has made no 10 attempt -- I could be wrong here. But made no attempt to 11 cross-check and/or report its risk estimates in the report 12 against actual incidents of upper respiratory cancer in 13 the segment of California's population that is not the 14 workforce and exposed to these very high levels of 15 formaldehyde. 16 Bottom line, in my opinion, the risk assessment 17 fails all the federal quality criteria for human health 18 risk assessment that is codified in federal guidance. 19 These criteria are transparency, clarity, consistency, and 20 reasonableness. And it fails all of those. 21 Why is it important for you to know and 22 understand the scientific elements of this issue? I think 23 that's obvious. Using the OEHHA cancer potency value, 24 CARB's risk assessment concludes the risk from 25 formaldehyde exposure in California is too high, thus the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 need for this proposed standard. What if the risks really 2 aren't too high? The more recent scientific evaluations 3 conclude it wouldn't be too high. What if OEHHA has 4 grossly overestimated the carcinogenic potency of 5 formaldehyde? As risk managers and decision makers, I 6 would think you would want to know and fully understand 7 the complete story on formaldehyde toxicology -- 8 CHAIRPERSON SAWYER: Please conclude. 9 DR. SHULL: So I ask you, if the objective of 10 risk reduction is removed from the decision-making process 11 because the risk is not too high from these sources in 12 California, would your consideration of this proposed 13 standard be different? I believe the answer is yes. 14 Thank you very much. 15 CHAIRPERSON SAWYER: Thank you. 16 Mr. Gregory. 17 MR. GREGORY: Thank you, Chairman Sawyer, members 18 of the Board. I'm Wade Gregory. I'm President of Sierra 19 Pine. We are one of the larger North America particle 20 board and MDF manufacturers. And we're a little unique in 21 that we're one of only two manufacturers in the state of 22 California. But even more so, we have two MDF plants, one 23 particle board plant and one MDF plant all within a 24 50-mile radius of this building. Needless to say, this 25 ruling and regulation will have a tremendous affect on our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 business. 2 A little bit about Sierra Pine, we employ about 3 400 people. We feel we offer a very good wage. In 4 addition to the wages, we also include benefits such as 5 pension plans, 401(k)s and as important in this state as 6 well as others, health insurance. 7 We fully support -- you haven't heard 8 representatives from the California Wood Industry 9 Coalition, but we certainly support their position on this 10 regarding the details of that. 11 And another thing that I'd like to say is that we 12 are also unique because costs have come up. We have 13 extensive experience in the use of alternatives to urea 14 formaldehyde resins. We acknowledge that. Those include 15 polymeric MDI, phenyl formaldehydes, and melamine 16 fortified UFs. We are also quite aware of the additional 17 costs of those resin products as well as the problems that 18 they can result in when trying to run -- more difficulties 19 in trying to run them in our facilities. 20 All this leads to additional costs. We are not a 21 high profit industry. The assessment was mentioned early 22 by the CARB staff. Eventually, these costs would have to 23 be passed on to our customers and eventually beyond that 24 or we would simply go out of business. 25 The issue that I have there leads me right into PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 the next point is when we pass those costs on to our 2 customers, they are competing with a lot of imported 3 products, as we do. And you spend a lot of time earlier 4 talking about enforcement. I won't belabor that point. 5 Enforcement is vital to this. 6 You can regulate as our doors are open. We've 7 worked with staff throughout this process. You can come 8 in and get your products or you can go to Home Depot and 9 buy our products. The products such as ours or products 10 that are fabricated with products like ours overseas where 11 formaldehyde is not a concern, that concerns me. Because 12 if we go away, then you're at the mercy of those people 13 and products that are harder to control. And you can -- 14 eventually, the situation could even become worse than 15 what it is today. 16 With that said, I thank you for the time. 17 CHAIRPERSON SAWYER: Thank you. 18 BOARD MEMBER HILL: Mr. Gregory, could I ask one 19 question, please? Do you currently have any products that 20 you claim or that are CARB compliant? 21 MR. GREGORY: I don't believe we've ever made 22 that statement, CARB compliant. We do make and have 23 manufactured for a number of years products that would 24 meet the Phase I and Phase 2 CARB standard. We use no 25 added formaldehyde -- we call them no added formaldehyde PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 in this case. We used a polymeric MDI. We've used this 2 for about 20 years. We'll be the first one to say it is 3 quite a bit of additional cost, and we have done that into 4 nitch markets, particularly for green building and such. 5 SUPERVISOR HILL: You are making that today? 6 MR. GREGORY: We do make that today. The costs 7 are more and it is sold at a premium. 8 SUPERVISOR HILL: Thank you. 9 CHAIRPERSON SAWYER: Mr. Julia. 10 MR. JULIA: Thank you, Mr. Chairman and members 11 of the Board. I'm Tom Julia, President of the Composite 12 Panel Association, a trade association representing about 13 95 percent of the particle board MDF and hard board made 14 in the U.S. and Canada and Mexico. CPA is also a member 15 of the California Wood Industry Coalition. I'm here to 16 support the written comments of both the CPA and CWIC. 17 CPA is proud to represent one of the greenest 18 industries in the world. More than 90 percent of the raw 19 material that we use in products manufactured from our 20 members comes from recycled or residual wood, agricultural 21 byproducts, or consumer waste wood. 22 We make possible much of the furniture, 23 cabinetry, and other wood products that Californians enjoy 24 every day. We do so by optimizing the forest resources 25 and mitigating the amount of waste that goes into our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 landfills. Few major industries can make a statement like 2 that. And I ask that you not lose sight of that 3 stewardship as you consider this rule and the impacts that 4 it will have on our industry. 5 CPA represents many companies that use UF 6 technology as well as companies that use other 7 technologies. Our members use UF technologies and 8 adhesives with confidence. And in most cases, their 9 products are subject to CPA's rigorous grade mark 10 certification program. So we know from which we speak 11 here. 12 At the same time, CPA fully supports the 13 development of all viable adhesive technologies. As an 14 industry, our record and the reduction of formaldehyde 15 emissions is compelling. Over the past 30 years, about an 16 80 percent reduction in levels. Almost all of that on a 17 voluntary basis. Our grade mark certification program is 18 the largest and most stringent of its kind in North 19 America, and indeed model upon which staff has based its 20 program. 21 We sponsor the NC standards for particle board 22 MDF and hard board and are leaders in offering proactive 23 approaches to environmental stewardship and product 24 efficacy. 25 So it should come as no surprise to you that in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 part we commend the staff for much of what is in this 2 proposed rule. The staff has worked hard to do the right 3 thing, has invited considerable industry input, and has 4 been particularly responsive on our desire, CPA's desire, 5 for a rigorous enforcement regime for both domestic and 6 imported products. I would say to you based on earlier 7 comments, CPA absolutely supports that rigorous 8 enforcement regime. We think that's key if this rule is 9 to be effective. 10 But at the end of the day, CPA must oppose the 11 rule as it's drafted. As overreaching and unwarranted on 12 the basis of the facts, specifically Phase 2 emission 13 levels are premised on erroneous assumptions about what is 14 necessary and feasible and what it costs. The 15 recommendations are based on technology that in some cases 16 do not exist for all regulated products and in other cases 17 on those that are cost prohibitive on a mass production 18 basis. 19 You are about to put in place the toughest 20 production standard in the world for emissions from 21 composite panel products. And that's if you adopt the 22 levels proposed by the CPA and CWIC. The Phase 2 levels 23 that we proposed so close to what the staff proposes would 24 result in the most dramatic reduction in formaldehyde 25 emissions from our products ever over the next few years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 They would stretch us to expand our R&D and to innovate 2 still further. 3 So today I urge you to adopt those levels. Why 4 go beyond this with Phase 2 levels that cross the economic 5 tipping point for much of our industry and put 6 particularly small businesses at risk? 7 I ask you to take a well-reasoned approach to 8 this rule making to resist the calls for those who might 9 seek lower levels or have individual business motivations 10 to advance a particulate product here. 11 CHAIRPERSON SAWYER: Please conclude. 12 MR. JULIE: Vote today based on sound science and 13 verifiable facts and do so with the confidence that CFA 14 has pledged to you we will work with you cooperatively on 15 implementation of this rule. Thank you. 16 CHAIRPERSON SAWYER: Thank you. 17 Mr. Warberg, then Darrell Keeling, Bill Altman, 18 and Charlie Compton. 19 MR. WARBERG: Thank you, Mr. Chairman, members of 20 the Board. I'm going to give you a panel producer's 21 prospective on this ruling today and speak in favor of the 22 CWIC's position. 23 We operate at Plum Creek MDF. By the way, my 24 name is Will Warberg. And we operate a very highly 25 productive and state-of-the-art MDF plant in western PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 Montana. Our products are green products. They're made 2 from 100 percent recovered and recycled wood raw 3 materials. Our products are recognized by the U.S. EPA as 4 being environmentally preferred products. We have a huge 5 stake in the state of California. We sell here to 6 distributors, fabricators, and manufacturers of finished 7 products statewide. 8 When CWIC put forth its numbers, we, the 9 industry, walked right up to the edge of the cliff with 10 respect to what we thought was feasible with UF based 11 resins. And our numbers are fairly close to what staff 12 has come up with. Our numbers are .13 for MDF in Phase 2 13 compared to .11 for staff numbers. 14 These might look very close to you. However, 15 even at these levels, a .01 PPM change is huge when it 16 comes to a manufacturer. And to get to the CARB Phase 2 17 numbers, we as a manufacturer believe we are going to have 18 to implement a complete change in the resin technology we 19 use and the way it's delivered. 20 And recognizing that there is a small market for 21 ultra-low emission products, we as a company set out to 22 evaluate what might be required to operate below the CARB 23 Phase 2 numbers just to see what it would take. And 24 because of the variability in our process -- and this is a 25 very important point. We have variations in wood species, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 wood moisture content. We have various temperature in our 2 manufacturing process. There are a number of things that 3 create variability. 4 In order to achieve the .11 PPM ceiling imposed 5 by CARB Phase 2, we're going to have to average operating 6 rates of .06 to .07 PPM, extraordinarily low numbers. And 7 the only resin formulation that we're able to use to 8 achieve this is phenyl formaldehyde. And here are the 9 results that we got from actual production trials. It did 10 slow our press speeds down by 25 percent or more. It did 11 nearly double our resin costs of not readily available 12 resin formulation. It did result in quality and 13 performance issues that were not resolved, primarily water 14 absorption in the panels. And it did result in a 70 15 percent plus increase in our manufacturing costs that 16 we'll be forced to pass along to our customers and our 17 consumers. 18 And also it creates operational concerns. It 19 will significantly create capital challenges to put in the 20 equipment to store, to convey, and to apply phenyl resins 21 to our production process. And it will require much 22 higher press and drier temperatures, which means burning 23 more natural gas, more emissions. We believe it will lead 24 to press temperatures under operations that will 25 significantly increase the risk of fire in our plants -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 CHAIRPERSON SAWYER: Please conclude. 2 MR. WARBERG: -- and increase the risk of safety. 3 In conclusion, we ask you to please consider 4 adopting the CWIC proposal as it stands. We're a green 5 industry, an industry the state of California needs. 6 Thank you. 7 CHAIRPERSON SAWYER: Thank you. 8 Mr. Keeling. 9 MR. KEELING: I was hoping to say good morning, 10 but good afternoon. My name is Darrell Keeling. I work 11 with the Composite Panel Manufacturing Division for 12 Roseburg Forest Products. I appreciate the opportunity to 13 address the Board. 14 Roseburg manufacturers particle board, 15 medium-density fiberboard, hardwood plywood, all the 16 products under review here. We're a leader in 17 low-emission products. We offer some of those as well. 18 We also offer FSC certified plywood products. We have 19 operations in California. And we also have FSC certified 20 forest lands in California. 21 We're here to support the CWIC position in 22 opposition to the Phase 2 levels of this rule. And as it 23 relates to our composite manufacturing operations, we just 24 grew fairly considerably here at the end of the year. But 25 we have approximately 1500 employees currently engaged in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 the manufacture of these products, hardwood, plywood 2 particle board, MDF. We consider them part of our family. 3 Roseburg is a family-held company. It's 4 privately owned in Southwestern Oregon again. We consider 5 all of our employees our family members. And it's 6 inconceivable we would expose them to anything that we 7 thought would put them in danger. We would take all 8 measures to protect them. We have rigorous health and 9 hygiene programs in effect and all of our facilities and 10 follow them without question. 11 We're also the producer of Sky Blend and SkyPly, 12 and that product has been utilized as for comparative 13 purposes of products that do currently meet CARB Phase I 14 or Phase 2 levels. They do. But this is a nitch product. 15 It was never designed or developed for that. It's not 16 marketed as such. It's a nitch product. It is very 17 expensive to make, experiences similar to my colleagues 18 Mr. Gregory and Warberg expressed to you. 19 We worked together with the resin supplier and 20 formulated a product that we thought had a market appeal 21 for a very small nitch. And in fact, if you look at our 22 total production today, our Sky Blend product, SkyPly, 23 accounts for two percent of our product. That is all the 24 demand that we have. We would make more, but the market 25 demand is just simply not there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 The cost of this product is very high. Our cost 2 premium for the product is 60 percent. The resin is 70 3 percent higher in cost. Manufacturing process slows down 4 at least 40 percent. That's on a good day. Our business 5 and wood product business in general is a low margin 6 business. An example of that is look at the exodus of 7 public companies from wood products in the wood products 8 business. There's only two public companies left. 9 CHAIRPERSON SAWYER: Would you please conclude? 10 MR. KEELING: Yes, sir. 11 We believe we can meet Phase I. And Phase 2 will 12 be a daunting task. We would ask you to adjust those 13 numbers, go with the CWIC proposal. And that concludes my 14 remarks. Thank you. 15 CHAIRPERSON SAWYER: Thank you. 16 Mr. Altman. 17 MR. ALTMAN: Thank you, Chairman and members of 18 the Board. Good afternoon. I'm Bill Altman. I work for 19 the Hardwood Plywood and Veneer Association. 20 Although HPVA is on record with written comments, 21 we'd like to emphasize today to you that the acceleration 22 of the Phase 2 limits for hardwood plywood by one year 23 unfairly singles out our products and extraordinarily 24 gives them technological and economic burdens. And I 25 didn't use the word onerous. CARB's own fact sheets point PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 out that testing and product variability will require 2 manufacturers faced with a .5 PPM emission limit in Phase 3 2 to target a range of .02 to .04 PPM. That's if they're 4 going to make sure they're complying. 5 Errors in the H1 loading rate table of the staff 6 report make it clear that the emission reductions in Phase 7 I for hardwood plywood is 77 percent rather than the 53 8 percent reported in the staff report. In Phase 2, the 9 reduction is 86 percent rather than the 71 percent as 10 reported. These are dramatic changes, and they're 11 difficult goals to meet. 12 I will call your attention today to a slide that 13 you've seen that says that the change in owners' equity 14 averages 11.6 percent. I call your attention to a table 15 on page 187 of the staff report that reflects that the 16 reductions in owner equity for hardwood plywood as a 17 product is 64 percent, again, indicative of the financial 18 burden that's borne by hardwood plywood products. It is 19 unfair after considerable time and rule development to 20 have a last-minute acceleration of the one year for Phase 21 2 requirements. And we respectfully request that the 22 Phase 2 .05 PPM emission level requirements be returned to 23 January 1st, 2011. Thank you. 24 CHAIRPERSON SAWYER: Thank you. 25 Mr. Compton, and then Bill Perdue, Edward Elias, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 and Mike Zimmerman. 2 MR. COMPTON: Chairman Board, members, thank you. 3 My name is Charlie Compton. I am with Hambro Forest 4 Products. We own two of the five composite panel 5 manufacturing plants in California. I'm Vice President. 6 We're located in Crescent City. We're an employee-owned 7 ESOP company. We have about 300 companies. 8 You don't know me, and I don't know you. And I 9 sat around trying to figure a better way to introduce 10 myself. And maybe I can do that by sharing a little bit 11 about myself with you. 12 I turned 59 this month. I have a daughter that 13 will be three in May. I have a five-year-old son. I was 14 co-founder of Habitat for Humanity in Del Norte County. 15 And I'm highly involved with the Four Score Christian 16 Church in Crescent city. I feel like I'm a morally and 17 socially responsible person in my community. 18 This month, I celebrated my 40th anniversary of a 19 composite panel industry. I've turned down numerous 20 opportunities to speak in public and with education on 21 trade associations, because I've always felt that I really 22 didn't need to do that under those circumstances. The 23 composite panel industry really could go a step further 24 and meet what they were requesting to do. 25 Today, I do not feel that way. Today, I'm PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 compelled to share with you a little bit about our 2 business. Hambro Forest Products is the last operating 3 wood processing facility located in Del Norte County out 4 of approximately 50 that were in operations prior to 1970. 5 In Humboldt County, we have one of the few operating wood 6 processing facilities out of over 100 that were in 7 operation prior to 1970. 8 These proposed regulations -- and I will use the 9 word onerous, because to me they are -- seriously 10 jeopardize our business, particularly Phase 2 levels. The 11 cost models are not realistic. They're not accurate and 12 relative to alternative resin technologies are wrong. 13 Both of our plants have probably the greatest 14 experience running alternative resin systems of anybody in 15 the United States. The Arcada plant at one time in the 16 mid '70s developed Red X, which was a PF bonded product. 17 We discontinued it in the '80s because of the instability 18 of the product and continuing product claims. At Crescent 19 City, we developed a product called Cres X. That was 20 developed in about 2000. We discontinued it in 2006 21 because of instability and product claims. Both of those 22 products, the production rates were 50 percent longer, 23 which means we would have a 50 percent reduction in our 24 production capacity. The resin costs were 50 percent 25 higher. It was only for nitch markets. We could not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 operate our plant running those products. We would be out 2 of business today based on the CARB proposals. 3 One of the things we've been disappointed in is 4 nowhere during the process of review and development of 5 the proposal has anybody on the CARB staff contacted our 6 company to discuss with us our experience, the results of 7 these runs, nor our opinions on this issue. And yet, 8 we're a California based organization. 9 CHAIRPERSON SAWYER: Would you please conclude? 10 MR. COMPTON: Well, let me go -- Del Norte has 11 one of the highest rates of unemployment, alcoholism, and 12 drug abuse. We need the businesses. We need wage-paying 13 businesses. We will not be able to maintain them. 14 One final thing I do have to say. As a 15 California taxpayer and resident, frankly I find the 16 proposed regulations, the complexity and the cost of them 17 are appalling to me as a taxpayer. I don't think anybody 18 has addressed it as a taxpayer. I urge you to reject this 19 proposal, send it back to staff for modifications that 20 would simplify compliance, reduce cost and permit industry 21 recommended emission levels. Thank you. 22 CHAIRPERSON SAWYER: Thank you. 23 Mr. Perdue. 24 MR. PERDUE: Dr. Sawyer, members of the Board, 25 good afternoon. I am Bill Perdue. I am Vice President of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 Environmental Safety, Health, and Technical Standards for 2 the America Home Furnishings Alliance. We are the world's 3 largest and most influential trade association for the 4 home furnishing industry. We were founded in 1905 and 5 AHFA active represents 475 leading furniture 6 manufacturers, importers, distributors, retailers, and 7 supplier members. 8 Members of the AHFA account for over 200,000 9 employees and 75 percent of the total furniture shipments 10 in the United States. AHFA members are located in 32 11 states with 30 members residing in the state of 12 California. 13 Total U.S. sales of household furniture for 14 fiscal year 2006 were $34 billion. And sales in the state 15 of California alone were 4.6 billion, or 13.2 percent of 16 the total sales in the United States. 17 AHFA estimates that approximately 1.1 percent of 18 all furniture sold in California originates in non-store 19 retailers. 20 Clearly, staff is a critical market for AHFA 21 members, and the economic impact of the proposed ATCM 22 cannot be ignored. We believe that the economic impact 23 has been underestimated and believe that this is a very 24 overreaching regulation. Our industry, we are assemblers 25 of finished products. We purchase these materials that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 are in question. We take these products and make 2 furniture, furniture that I'm sure all of you in the state 3 of California enjoy in your homes currently. 4 We are a very price point sensitive industry. 5 Our margins are very thin. You've heard a lot of these 6 folks talk behind me about the potential cost increase 7 this will be incurred. We will then in turn have to pass 8 that along to the consumer. We are very concerned with 9 how the consumer will react and respond to this price 10 increase, especially if material cost force our members to 11 be moved out of their price point. By moving one of our 12 manufacturers out of price point, you will put them out of 13 business. This is a real concern of ourselves. 14 We're also very concerned about the enforcement 15 mechanism within this particulate rule. We know that 16 there's a lot of work that's been accomplished and 17 progress made during the last four-and-a-half years. 18 There are a lot of unanswered questions and details to 19 work through. As Ms. Berg indicated, we too are very 20 reliant upon the chain of custody and feel the chain of 21 custody will become one of the most important aspects of 22 this particulate enforcement protocol. 23 We encourage CARB staff to stay engaged with key 24 stakeholders and work on the enforcement mechanism with 25 the same focus and attention to detail used to establish PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 what I call the front end of the ATCM. There is simply 2 too much at stake and the potential impact too great to 3 relax and develop a marginal and ineffective enforcement 4 program. Let's stay the course and be diligent on the 5 back end of the ATCM as well. Thank you very much. 6 CHAIRPERSON SAWYER: Thank you. 7 Mr. Elias. 8 MR. ELIAS: Good afternoon. Thank you to the 9 Board to let us make these presentations today. I'm Ed 10 Elias. I'm the secretary for APA, The Englewood 11 Association. 12 What I'd like to first say I'd like to appreciate 13 and recognize the staff and their recommendations that 14 they've made to clarify what products are included in the 15 composite wood definitions and particularly the 16 recognition of the updated references to national 17 consensus standards for our industry. 18 Second, I'd like to offer our support for the 19 definitive processes being proposed for the recognition of 20 third party certifiers of composite wood panels and the 21 recognition that this regulation and subsequent 22 enforcement is a mandatory requirement. 23 However, as you've heard from the previous 24 speakers, the American composite wood panel industry 25 remains very concerned over the ceiling levels that are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 being proposed for Phase 2 and the timing of these 2 measures and particularly how these measures will be 3 equitably applied to both the domestic manufacturers and 4 those of the imported panel producers. Particularly, 5 imported panel products that actually come to these shores 6 with misleading or fraudulent marking indicating 7 compliance to these standards. 8 The other concern we also have is the ability to 9 actually recognize and identify products in composite or 10 secondary materials such as furniture or cabinetry that 11 are finished goods and how you actually deconstruct those 12 products and be able to identify the products that are 13 nonconforming. I think this is very onerous, very 14 ambitious activity to try to pursue. As a participant in 15 the California Wood Industry Coalition, we offer our 16 support to the previous testimony by the Coalition 17 members. And thank you for your time this afternoon. 18 CHAIRPERSON SAWYER: Thank you. 19 Mr. Zimmerman, and then we will have Richard 20 Titus, Bob Raymer, and Brock Landry. 21 MR. ZIMMERMAN: I represent Sauder Woodworking 22 Company, which would be a fabricator in your regulation. 23 We produce nearly 25 percent of all the RTA, or 24 ready-to-assemble furniture, sold in the United States. 25 Our furniture is primarily made of particle board and MDF, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 making us one of the largest consumers of composite panels 2 in North America. We sell to retailers such as Wal-Mart 3 and Office Depot, as we discussed here earlier. 4 First, let us say, we fully support CARB's 5 efforts to ensure that we and others are responsible 6 stewards of the environment. However, the keys are to do 7 so in ways that maintain a level playing field and in ways 8 that does not damage the overall furniture market. With 9 these goals in mind, we are asking CARB to consider a 10 number of significant concerns we have with your 11 regulation. 12 Our main concern is enforcement, as has been 13 discussed much here. Although we recognize that CARB has 14 tried to maintain a level playing field, we have grave 15 concerns about the measurement and enforcement of the 16 proposed regulation. The enforcement test method for 17 finished products is complicated. It's unproven. Our 18 furniture is finished on one or multiple sides all within 19 the same unit. 20 Formaldehyde can be found in the paper. It can 21 be found in the environment. It can be found in our 22 adhesives. It can be found in all levels throughout our 23 production. Composite panel can act as a sink and absorb 24 formaldehyde from surrounding environment. Becomes 25 virtually impossible whether or not formaldehyde came from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 the non-compliant panel or from the environment. It 2 concerns us no work has been done to validate the finished 3 product testing that's being proposed. 4 Another issue of enforcement is the shear volume 5 of products and increasing global nature of the furniture 6 industry which creates a daunting challenge for 7 enforcement. Producers and users of composite panels 8 represent multi-billion dollar global industries with tens 9 of thousands of participants. Even if reliable test 10 methods were available, the shear volume of products and 11 sources would make for the effective auditing and 12 enforcement extremely difficult. 13 You've heard a lot about cost. And I don't 14 really want to dwell on it, but the CARB document did not 15 state fully an $8 roll-up on a bookcase would not be true. 16 If you had a 30 percent cost in panel increase, cost to 17 us, it would be 15 percent cost to the consumer. As you 18 know, increasing prices decreases demand. It would 19 certainly shrink our markets drastically. A good example 20 of this, last year, 2006, we had a dramatic increase in 21 board prices. We had units selling for $300 at Office 22 Depot and went to 315, five percent increase. We saw a 23 dramatic reduction in sales of our products. So going 24 back to the less unfortunate people who have to buy these 25 products, they will be impacted greatly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 Economic impact of enforcing the regulation is 2 dramatic. The impact of ineffective enforcement is 3 devastating to us. 4 CHAIRPERSON SAWYER: Would you please conclude? 5 MR. ZIMMERMAN: In summary, while mentioned, this 6 regulation will create the environmentally -- well 7 intentioned, this regulation will fail to create the 8 environmentally responsible playing field that CARB 9 intended. Thank you. 10 CHAIRPERSON SAWYER: Thank you. 11 Mr. Titus. 12 MR. TITUS: Thank you, Mr. Chairman and members 13 of the Board. I'm Richard Titus, Executive Vice President 14 for the Kitchen Cabinet Manufacturers Association. We're 15 headquartered in Northern Virginia, so this is a treat to 16 come to California. Again, sometimes more of a treat than 17 others, I might add. 18 Kind of at that point in the process where I know 19 what I want to say, what I need to say, but the trick is 20 how do I say it that hasn't already been stated? Much of 21 the impact you have heard on small business, we are 22 terribly concerned about that. You've heard numbers. We 23 know of at least 1200 small cabinet establishments in 24 California. And anything that changes their supply chain, 25 their margins could mean the end of the business for them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 So I implore you to take that into account as you look at 2 it. 3 Also enforcement, we want to compliment the staff 4 this has been an open process. They've listened. I 5 compliment them. They put a lot of work into this. But 6 as with everything, there are holes. And we think 7 enforcement is a place where we will work with them. 8 There needs to be some serious work done there. The 9 questions that you have raised are great. I think you're 10 heading to the point I would tell you that. 11 For example, I think the question was raised 12 about low end and impact on low income. I would just tell 13 by a study that we've done, a laminated cabinet as you 14 have the report gives the lowest emissions. And I mean 15 the lowest, from anything you heard about, the green 16 cabinets, et cetera, et cetera. This is lower. And we 17 perform the tests, same standards, et cetera, et cetera. 18 I give you a little reinforcement on the numbers. 19 We think take into account these CWIC numbers. 20 They are our suppliers. We have worked with them closely. 21 I supplied you with the information that our product's 22 surprisingly enough on the highest of list what lasts in 23 the kitchen, 50 years. We have developed that because of 24 our close relationships with our suppliers and the 25 materials we use. It is for a reason that we use the urea PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 formaldehyde glues with the way they have performed for 2 us. 3 There has been no discussion in this of 4 performance. We're all focused on emissions, rightly so. 5 But let's keep in mind so what's the performance. How is 6 the marketplace going to react to it? And still the green 7 products, we are making progress in that area with our own 8 ESP program, environmental stewardship program, to move 9 forward with our industry. But it's still a nitch 10 product. So we need time and we need to do it in a way 11 that we won't have these serious negative impacts on an 12 important part of the state's economy. Thank you very 13 much. 14 CHAIRPERSON SAWYER: Thank you. 15 Mr. Raymer. 16 MR. RAYMER: Thank you, Mr. Chairman, Board 17 members. I'm Bob Raymer, Technical Director and Staff 18 Engineer for the California Building Industry Association. 19 Our association is comprised of seven-and-a-half-thousand 20 member companies in California. And each year, we build 21 about 85 percent of the new residential dwellings that go 22 up every year in California. So as you can see, we're a 23 major user and purchaser of all the products that are 24 being discussed today. 25 CBIA supports the comments submitted by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 California Wood Industries Coalition. However, I would 2 like to focus my comments solely on the issue of 3 enforcement that was discussed extensively earlier. And 4 more importantly, I'd like to focus on the enforcement on 5 the short term as opposed to the long term. I'm focusing 6 on the short term primarily because it would appear that 7 over the long haul things will work out. You will work 8 the bugs out of the system. And we know there will be a 9 number of very public enforcement actions against 10 importers of products made in foreign countries. And that 11 will get people's attention and hopefully they'll learn 12 from those actions. But that doesn't happen overnight. 13 If you're a California manufacturer or 14 fabricator, you know full well that ARB or the local air 15 quality management district is closeby, perhaps pulling 16 into your parking lot at any given time. The same cannot 17 be said for a manufacturer located in a couple hundred 18 miles outside of Beijing. So at least in California, 19 noncompliance from the start is simply not an option. It 20 is a bad business plan. You want to be in compliance 21 right away on the effective date or before. 22 On the other hand, you've got an unscrupulous 23 foreign-based supplier of product, knows full well their 24 product represents a few grainsof sand in that beach of 25 shipping containers entering the country. Eventually, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 these unscrupulous individuals can expect to get caught. 2 But what about the short term, the next two to three years 3 after the standards kick in? Consequently, it's not 4 overreaching to suggest there will be a great deal of 5 lower cost, noncompliant product that will have to be 6 competing with the California manufacturers who have gone 7 forward and made the upgrades necessary to comply with 8 ARB's proposal. And therein lies the problem. 9 Over the long haul, it will work its way out. 10 The Contractors' State License Board has had very public 11 enforcement actions. These have been immensely effective 12 over the years of getting people to play straight, get the 13 proper licenses, et cetera. But it always takes times to 14 do that. If you're an out-of-country manufacturer, you 15 can depend on the fact that it will take a gear-up time 16 for California's enforcement action to really kick in. 17 CHAIRPERSON SAWYER: Please conclude. 18 MR. RAYMER: A California manufacturer can't take 19 that for granted. He has to expect you at the front door 20 the first day the standards take effect. 21 Thank you very much. 22 CHAIRPERSON SAWYER: Thank you. 23 Mr. Landry. 24 MR. LANDRY: Mr. Chairman, members of the Board, 25 I'm Brock Landry. I'm a partner with Venable Firm Law in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 D.C. For 30 years, I've been privileged to represent the 2 wood products industries in various proceedings regarding 3 environmental matters, including formaldehyde. 4 I'd like to put a couple of themes in context 5 that have been mentioned already. First of all, you've 6 heard that the CWIC Coalition has proposed some higher 7 numbers for Phase 2. You may be asking why is it so 8 important we have one one-hundred or two one-hundreds of a 9 part per million higher level. Well, for instance, for 10 particle board, which is now at .09 in the staff proposal, 11 we estimate with the variability we would have to produce 12 around .05. 13 Consider this if you will. The base test for 14 this regulation, E 1333, has a section that says the 15 repeatability of the test is 0.03. Various tests that 16 have been made on raw wood, various species find in some 17 species the formaldehyde content naturally occurring is 18 .02. And then you put on that the variability that Mr. 19 Warberg talked about different species about urban wood 20 and how the resins interact with those. Please keep that 21 in mind. 22 Another issue is cost. This is an incredibly 23 costly rule. The staff proposal estimates in Phase 2 it 24 will have a $127 million annual cost. Based on the 25 reduction in formaldehyde, it's $127 per pound, which I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 believe is a huge multiple over most of the rules that the 2 Board has adopted. Indeed, in our comments we pointed out 3 in most rules there's comments about a common factor being 4 $5 a pound, some go to 20. $127 a pound by the staff's 5 estimate. 6 We would submit, however, that that proposal is 7 tremendously overstated for a number of reasons. First of 8 all, it takes into account only a very limited part of the 9 industry. We believe that industry throughout the country 10 will not be able to create double inventories when they're 11 selling, for instance, to furniture manufacturers in North 12 California who would be selling their product back into 13 North Carolina. The purpose of enforcement would drive 14 many manufacturers whether in California or not to have 15 one approach, and therefore higher costs. 16 Look too at some of the numbers that have been 17 estimated: 30 percent increase in cost for particle 18 board; 40 percent increase for cost of medium density 19 fiberboard. Look at the staff report that says for 10 20 percent of increasing cost, you can expect between a 1 to 21 2.7 percent reduction in demand for that product. 22 We have proposed or submitted an economic model 23 based on the Department of Commerce Bureau of Economic 24 Analysis input/output model. We believe the true cost for 25 California alone will be over $500 million a year and that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 nationwide it will be much higher. 2 I'd also like to talk very briefly about the 3 incentive for mischief by the unscrupulous. The people 4 you've been talking to, they're going to find a way 5 somehow to do this. Phase 2 is going to be incredibly 6 hard. But with these kinds of cost differentials, there 7 is an incredible incentive for people to try to avoid it. 8 CHAIRPERSON SAWYER: Would you please conclude? 9 MR. LANDRY: I will, sir. We talked about 10 enforcement of finished goods. What hasn't been said when 11 you get a piece of furniture under this provision, you 12 will deconstruct it, take it apart, take the laminate off, 13 and then put it in a chamber. Now we've suggested, we've 14 supported that. But the point is that this is going to be 15 an incredibly difficult rule to enforce, and the prospect 16 for mischief for the unscrupulous is extraordinarily high. 17 Thank you. 18 CHAIRPERSON SAWYER: Thank you. 19 Next will be Gene Livingston, Pablo Dopico, and 20 Mark Kable. 21 MR. LIVINGSTON: Dr. Sawyer, members of the 22 Board, I'm Gene Livingston. I represent the California 23 Wood Industries Coalition. The Coalition is composed of 24 panel manufacturers, resin producers, cabinet, and wood 25 makers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 The Coalition is not opposed to this Board 2 regulating formaldehyde emissions from their products. 3 The Coalition, however, is opposed to the specific 4 standards that staff has proposed in Phase 2. This 5 industry is not a stranger to formaldehyde emissions 6 standard. Twenty years ago, the industry adopted the 7 first standard to apply to the industry in the country. 8 They put, in fact, a very comprehensive compliance 9 certification program. 10 As a consequence, when we sat down with your 11 staff five-and-a-half years ago to start talking about the 12 development of this rule, we had a lot of information, 13 data, and experience to share, and we shared it all. And 14 when it came time to develop a proposed standard, we 15 convened scientists, engineers, panel manufacturers, resin 16 producers to talk about the lowest feasible standards that 17 we can come up with that can reasonably be achieved. We 18 put together a number, not to negotiate, but we put 19 together a number to implement what staff said was its 20 stated intent, to allow panel manufacturers to continue 21 using their existing resin systems and equipment. 22 Unfortunately, after we proposed our numbers, 23 staff came up with lower numbers. And the matrix that I 24 handed out that hopefully you have before you sets out the 25 numbers staff has proposed, and juxtaposed to that are the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 numbers that industry has proposed. As you'll see, we 2 have virtual agreement in Phase 1. The problem does exist 3 in Phase 2. 4 And you may ask what is the significance and the 5 difference between, for example, in particle board, .09 6 versus .1. As Mr. Landry has just pointed out, the 7 variability will require manufacturers to aim much lower 8 than that standard. So what you may be looking at is 9 what's the difference between a .05 and a .06. Well, the 10 number is very small in terms of emissions and probably 11 will make no difference at all as you have heard in terms 12 of public health. It has a significant technical 13 complexity and a great increase in cost. In fact, our 14 conclusion is that panel manufacturers will not be able to 15 continue to use the existing resin systems and equipment. 16 And you saw some very, very large numbers about what mills 17 will have to invest in order to achieve the Phase 2 18 levels. 19 The cost, as Mr. Landry pointed out, is 20 extraordinary. I don't know of any rule this Board has 21 ever adopted that equals $127 a pound to reduce one pound 22 of emissions. And also as you've heard no impact 23 certainly between the numbers that industry has proposed 24 and staff's numbers in terms of health impact. We would 25 urge you to amend the regulation to reflect the numbers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 that CWIC has proposed for Phase 2 and to do that with the 2 recognition that if technology evolves and in years in the 3 future you can see that there is a way to lower the 4 numbers even further, you can come back and take another 5 look at this regulation. On the other hand, if we're 6 right and if we have to expand those enormous sums of 7 money to try to achieve this, then as you have heard, 8 there are many people whose businesses are jeopardized 9 during that process, and there's no opportunity for us to 10 come back. 11 CHAIRPERSON SAWYER: Would you please conclude? 12 MR. LIVINGSTON: So again, I would urge you to 13 take those factors into account and to reflect in this 14 regulation the proposed numbers that CWIC has submitted. 15 Thank you. 16 CHAIRPERSON SAWYER: Thank you. 17 Mr. Dopico. 18 MR. DOPICO: Good afternoon, Mr. Chairman, 19 members of the Board. My name is Pablo Dopico, and I'm 20 addressing the Board on behalf of my employer, 21 Georgia-Pacific Chemicals, LLC, and on behalf of the 22 Hexion Speciality Chemicals in north America which are the 23 three largest suppliers of resins for the manufacture of 24 composite wood products in north America. 25 We also submitted our suggestions in writing and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 reviewed them with staff. We appreciate staff's proposed 2 modifications based on our comments, but we have some 3 remaining concerns. 4 We believe that a discrepancy remains between the 5 intent of this regulation based on emissions testing and 6 third-party certification and its language with regards to 7 the exemption from ongoing quality assurance through 8 third-party verification that is available to boards made 9 with no added formaldehyde binders and which is not 10 equally available to boards made with formaldehyde based 11 binders regardless of their emissions level. 12 We believe that this discrepancy may have an 13 unintended consequence, as it incents the use of 14 non-formaldehyde binders without ongoing quality assurance 15 even if the emissions from boards made with those binders 16 are higher than the emissions of boards made with 17 formaldehyde-based binders. 18 Furthermore, the language in the regulation that 19 would create the exemption does not specifically require 20 demonstration of compliance with the regulation based on a 21 CARB-approved third-party certifier. We proposed a level 22 playing field be established for all binders which is 23 based on emissions performance. And we believe such a 24 level playing field would encourage technology 25 developments. Specifically, we recommend that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 no-added formaldehyde language be removed from the 2 regulation. And we propose if an exemption from ongoing 3 third-party quality assurance is available in the 4 regulation that it be based on emissions performance and 5 not on adhesive formulation. We also propose that 6 qualifying for such an exemption should require the same 7 high standards of quality of data based on CARB approved 8 third-party certifiers that are upheld as in the 9 regulation. 10 Thank you for your consideration. 11 CHAIRPERSON SAWYER: Thank you. 12 Mr. Kable, and then Suzanne Morgan, John Chaffin, 13 and Kelly Schroader. 14 MR. KABLE: Chairman Sawyer, my name is Mark 15 Kable. And I work for Setzer Forest Products. We are 16 located at 3rd and Broadway in Sacramento and have 17 continuously operated there since 1927. 18 We started out in business as a wooden box 19 manufacturer, and now our sole product is MDF mouldings. 20 Our raw material, the MDF boards, come 100 percent from 21 domestic MDF board plants. And without these board 22 plants, we will be out of business. We have tried to 23 diversify our supply using internationally made boards. 24 But in all cases, what we have found these manufacturers 25 want to support their own domestic moulding plants and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 have declined to sell us outright or charge us more for 2 the board than they would charge us for the finished 3 product. I believe you may be creating an uneven playing 4 field for domestic MDF board manufacturers, because the 5 enforcement approach suggested by ARB will not effectively 6 verify compliance by the off-shore suppliers. 7 Furthermore, ARB staff has admitted they won't be 8 able to test finished MDF mouldings, instead focusing on 9 panels used in furniture and cabinetry. Without 10 enforcement, we will surely face further erosion in our 11 ability to compete with the imported MDF mouldings. 12 Domestic bills are committed to the U.S. market. And 13 being forced to comply with these regulations will lead to 14 higher costs, which we, their customers, will not be able 15 to absorb and remain competitive in an international 16 market. 17 I also believe the rules will allow domestic 18 distributors to stock and sell cheaper non-performing 19 foreign products for longer period of time than domestic 20 MDF plants can manufacture the similar performing 21 products, further making domestic plants less competitive 22 compared to international plants. 23 The CARB Board must make sure that they don't 24 inadvertently favor international MDF board plants over 25 domestic board plants. For if they do, this will clearly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 affect, their customers, and put our Sacramento MDF 2 moulding plant out of business. 3 So I just sort of summarize, please do not put us 4 at a competitive disadvantage with the international 5 mills. When I talk about the international mills, I am 6 not talking about Japan or Europe. I'm talking about 7 China and South America. So please don't inadvertently 8 put us in a difficult position. Thank you very much. 9 CHAIRPERSON SAWYER: Thank you. 10 Would staff comment on the testability of the 11 products that were mentioned and whether it's indeed 12 impossible or you will work on this over the next years. 13 STATIONARY SOURCE ASSISTANT CHIEF BARHAM: Dr. 14 Sawyer, this is Bob Barham. I'm the Assistant Chief of 15 the Stationary Source Division. 16 We've looked into the testing ability of MDF and 17 all kinds of forms, including incorporated into furniture 18 and such. And as it's been noted earlier, we will have to 19 deconstruct the furniture in some cases to do the testing. 20 We believe we can do the testing in all cases. 21 CHAIRPERSON SAWYER: Including for moulding? 22 STATIONARY SOURCE ASSISTANT CHIEF BARHAM: 23 Including mouldings. 24 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Dr. 25 Sawyer, if I might add something here. During our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 meetings and our conference calls, we haven't really 2 mentioned to anybody we cannot do MDF moulding. 3 Configuration is going to be a challenge for us, but we 4 recognize that we need to work on that to be able to 5 develop proper sampling protocols. But certainly even in 6 spite of the fact there is curvature in the moulding, 7 there's a flat backside. So we simply need to do chamber 8 studies to understand what's the most appropriate way to 9 test those particulate types. At this point, we feel we 10 can test those. 11 BOARD MEMBER RIORDAN: Mr. Chairman, if I might. 12 It occurred to me as I've been listening to the testimony 13 that what the Board might like to do at the end of the 14 hearing and as we're in discussion about our actions is to 15 ask staff at the appropriate time to bring back a report 16 to us about the testing and how it is going. In other 17 words, there's a time frame you can get a pretty good feel 18 of how your testing is going. And then maybe it would be 19 of some comfort to those in the audience -- because I 20 don't think that there's any intent on this Board's part 21 to pit the California industry at a less than level 22 playing field with the world market. 23 And at this time of the report, then you as 24 people who are stakeholders in this project can comment to 25 the Board if you see or have experienced some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 difficulties. And I think this might be a way of giving 2 you a comfort level that we are serious about our 3 enforcement. The staff is very serious about our 4 enforcement, and that we will be double checking it. It's 5 not something we're going to pass and then forget. And I 6 think at the appropriate time it would be well to calendar 7 that, Mr. Chairman. I really do. We've done this before 8 for other things, and there's no reason we can't do it for 9 the enforcement on this particular item. 10 EXECUTIVE OFFICER WITHERSPOON: I think that's a 11 very good suggestion. And we would be happy to do that. 12 I wanted to mention, too, as I've been listening 13 to the testimony, there's a range of different standards 14 that have been proposed, everything from accelerating all 15 Phase 2 to 2010 to the CWIC proposal that has various 16 dates and various numbers. 17 Over the lunch hour, staff is going to assemble a 18 slide or two for you that compares our proposal to going 19 faster and going somewhat slower and higher levels, the 20 difference in cost, in risk, and in tons so that you can 21 have that before you later this afternoon as you weigh 22 your decision. 23 CHAIRPERSON SAWYER: Thank you. 24 Ms. Morgan. 25 MS. MORGAN: Good afternoon, Mr. Chairman and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 Board members and staff. Nobody ever welcomes them or 2 wishes them good morning or good afternoon, so I will. My 3 name is Suzanne Morgan, and I'm affiliated with the 4 International Wood Products Association. We're based in 5 Alexandria, Virginia. IWPA represents 220 U.S. importers, 6 manufacturers, transportation companies, port authorities, 7 customs brokers, and overseas producers of quality 8 hardwood plywood lumber, lumber, and other wood products. 9 Many of our members import and manufacture hardwood 10 plywood and other wood products for distribution in 11 California as well as the rest of the United States. 12 Imported woods are enhancing the U.S. wood 13 products industry with a quality value added complement to 14 the marketplace. Leading manufacturers and distributors 15 in the U.S. are easily incorporating imported woods along 16 domesticly-produced woods as these woods meet all existing 17 quality standards. California retailers and consumers are 18 demanding imported woods for their quality and their price 19 competitiveness. 20 We have submitted written comments, but I'd like 21 to touch on a couple things. We urge ARB to reconsider 22 the requirement for third-party testing and chain of 23 custody. This regulation can be judged on its 24 effectiveness as a performance-based standard only. In 25 other words, give us a standard. We will meet it. And if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 we do not meet the standard -- if we do meet a standard 2 and we do not have the third-party testing requirement or 3 the documentation, then we will be considered not in 4 compliance. We still feel like that is a tall order to 5 achieve. I'll be followed by Mr. Chaffin who is a 6 California-based member of IWPA who will discuss this 7 further. 8 But if we do have to meet the requirement of 9 third-party testing and certification and chain of custody 10 documentation, we urge that you push back the effective 11 dates to: Phase 1, January 1, 2010; and Phase 2, January 12 1, 2012, so that we might become on line. 13 The other concern we have is with the 14 sell-through dates that apply to importers. We believe 15 that they should be extended and not decrease like they 16 have been in the past couple days to a twelve-month 17 period, not three months. Imported hardwood plywood go 18 through a series of stages before it reaches the U.S. 19 shores. The order is placed. Material is produced 20 overseas, if not already in inventory. Material is then 21 shipped. And that means there has to be available vessel 22 to be loaded and shipped. Material arrives in the U.S. 23 That could be after four to five weeks in transit, longer 24 if it's delayed or if it's a break bulk shipping 25 container. Material is then held at a U.S. port. And in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 most cases, it's outside of California until it is cleared 2 by the U.S. government which would be one week or longer 3 depending upon the backup. 4 CHAIRPERSON SAWYER: Would you please conclude? 5 MS. MORGAN: Material will be held at a warehouse 6 and then it will be sent to a distributor. So you have to 7 understand the difference between importers and domestic 8 manufacturers in this case, because importers do buy on 9 speculation. And we request that the sell-through period 10 be increased to twelve months. Thank you. 11 CHAIRPERSON SAWYER: Thank you. 12 Mr. Chaffin. 13 MR. CHAFFIN: Good afternoon, Chairman Sawyer and 14 Board. Thank you for giving me the opportunity to give 15 you these comments. My name is John Chaffin. I'm an 16 attorney. My firm is John E. Chaffin and Associates. 17 I'm a resident of California and have been for 18 the last 17 years. And during that same period, I've been 19 active in the importation of hardwood plywood. I visited 20 mills in China, Malaysia, Brazil, and the U.S., and I'm 21 familiar with the difference, and there are many. 22 I would respectfully offer the following 23 comments. First of all, the staff report does not 24 adequately address the impact of this regulation on 25 importers and overseas mill suppliers. In fact, out of a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 225-page report, there was one page, page 210, that 2 addresses the effect on importers. 3 The question was raised earlier by what 4 percentage of hardwood plywood or what percentage of the 5 composite wood products are imported. I can tell you 6 according to the U.S. Department of Agriculture that 60 7 percent of the hardwood plywood consumed in California is 8 imported. So what we have is a report from staff that 9 only takes into account 40 percent of the hardwood 10 plywood. 11 I'm also here speaking on behalf of IWPA and its 12 members. We did reach out to importers and ask questions 13 about how this would affect them. We received resounding 14 responses that even though they could overtime meet the 15 requirements with regard to formaldehyde levels, Phase I 16 and Phase 2, the chain of custody, labeling, and the 17 third-party certification was indeed a difficult task. 18 So we've asked the Board to spend some -- direct 19 the staff to spend some time talking to importers and 20 overseas suppliers and get a realistic approach for that. 21 The next concern was with regard to third-party 22 certifiers. It is difficult at this point to determine 23 who will do third-party certification for mills in, for 24 example, Malaysia. We assume the third-party certifier 25 has to be someone in country, and there are not enough PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 third-party certifiers in Malaysia today to handle the 2 requirements of this particular proposal. 3 The chain of custody documentation is also 4 difficult for importers and doesn't take into account the 5 difference between domestic plywood business and imported 6 plywood business. Imported plywood changes hands numerous 7 times in between the time it's produced and by the time it 8 reaches its ultimate customer. Generally, importers 9 consider their source as proprietary information. They 10 don't want to share that information with their customers. 11 And their customers, the distributors and wholesalers, 12 don't want to share the name of their supplier to their 13 customers. This is a unique feature with regard to 14 imported business. 15 In conclusion, I would ask that the Board 16 seriously consider direction to the staff to spend some 17 time before acting on this regulation to find out 18 something about how the imported plywood business works. 19 Thank you. 20 CHAIRPERSON SAWYER: Thank you. 21 Mr. Schroeder, and then we will take our break -- 22 Ms. Schroeder. And when we resume, the first three 23 speakers will be John Morrison, Scott Watson, and David 24 Harmon. 25 MS. SCHROEDER: Good afternoon. I'm Kelly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 Schroeder, and I'm the Executive Director of the Wood 2 Moulding and Millwork Producers Association, headquartered 3 in Woodland, California. The Wood Moulding Association is 4 a nonprofit international trade association consisting of 5 secondary wood manufacturers. The Wood Moulding 6 Association is a part of the California Wood Industry's 7 Coalition and supports all testimony presented by CWIC 8 today. 9 My membership manufactures moulding and millwork 10 to include trim product such as baseboards, casing, and 11 crown moulding. These products are made in solid waste 12 and MDF. Eighty-six percent of my membership is located 13 within North America. Sixty-five percent of my membership 14 deals is MDF moulding and millwork. Member companies 15 located within California output millions of board feet of 16 MDF product each month. They are responsible employers 17 with an average wage range of $16 an hour, full health 18 care benefits with no premiums, and 7.5 percent 19 contribution to employee retirement accounts. 20 Please bear with me as I've listened to the 21 testimony here today and have edited my notes so that I 22 would not repeat what had been put forth before. 23 But, first, as presented earlier, moving this 24 regulation forward will increase the cost of MDF mouldings 25 and millwork. MDF moulding manufacturers are asking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 themselves how Phase 2 of proposed regulations will be met 2 and have pressed their suppliers for answers. The 3 response is alternative resins during the manufacturing 4 process of the MDF board at significantly higher cost to 5 the MDF manufacturer. MDF moulding manufacturers will 6 lose their competitiveness in the market against solid 7 wood mouldings immediately. 8 MDF moulding and millwork was born in the 9 marketplace years ago as a high quality economical 10 alternative product to solid wood. The cost associated 11 with new regulations will disseminate the advantages of 12 MDF mouldings to compete on the open market. 13 Second, procedures on how compliance will be 14 carried out is questionable to us. My membership is also 15 concerned there is not sufficient staff in place to 16 oversee and enforce the testing and compliance procedures 17 of the proposed regulations of all products coming into 18 California. 19 Our major concern and focus is finished mouldings 20 from off-shore manufacturing plants shipped to California 21 marketplace. We are of the mind that a piece of paper 22 stating compliance is easy to come by in China without a 23 certification process ever taking place. 24 Mr. Morrison, John Morrison, of Sunset Moulding, 25 located in Live Oak, California, who is on your speakers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 list, was called away back to his plant over an hour ago. 2 So we can strike him from the speaking list later. 3 But what John was going to present to you today 4 was his experience firsthand in trying to supply raw 5 material from China to be brought into California so he 6 could manufacture it. What he discovered was he was 7 seeking FSC certified wood from a Chinese manufacturer. 8 Now, this would be from non-old growth forest or 9 non-threatened forest, and the certification process is 10 stringent. 11 When seeking this raw material, Mr. Morrison was 12 confronted by the President of the Chinese company that 13 said, "Whatever certification that you need or piece of 14 paper that you require, fax me a copy and we will make 15 sure that you have your paperwork." Mr. Morrison went on 16 to explain the process would have to come from the Forest 17 Stewardess Council and they would have to be inspected. 18 The President of the Chinese company explained, "No. No. 19 No. Sir, all we need is what you need from us. Send us a 20 copy, we will get you the paperwork." 21 That right there in itself scares us out of our 22 wits. Being able to ship on shore into California without 23 having the certification in place of an FSC certified wood 24 product and selling it as such is taking place right now. 25 Without the certification being taken from Chinese on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 Chinese side -- I'm just lost. I'm sorry. 2 I'll just conclude. Our point is that you can 3 obtain the paperwork that you need. Enforcement is our 4 number one issue. If you can enforce it and get the staff 5 in place, we would be much better off. Thank you. 6 CHAIRPERSON SAWYER: Thank you very much. 7 We will take our break now, and we are running a 8 little bit late. We'll resume in five minutes to 2:00. 9 (Thereupon a recess was taken.) 10 CHAIRPERSON SAWYER: We will resume the testimony 11 with the next three speakers being Scott Watson, David 12 Harmon, and Doug Korthof. I believe John Morrison has 13 left. 14 Mr. Watson. 15 MR. WATSON: Thank you, sir. And thank you to 16 the staff and everybody assembled here. 17 I had to fill out the yellow slip, because I 18 don't entirely agree with the staff representation or the 19 recommendation of this. But there wasn't a colored slip 20 for somebody that wanted to support a compromise. 21 So I'm not a scientist. I am not a VP. So I 22 don't know all the technical mumbo jumbo. You're asking 23 yourselves why am I here. I'm a sales guy. I sell 24 plywood. I sell domestic plywood. I sell imported 25 plywood. I happen to live in California. So I'm a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 taxpayer as well. 2 But the reason that I'm really here is that I 3 started attending the workshops on this a couple of 4 sessions ago. And the reason I am here is because I had 5 no idea it was going to be such an easy task to accomplish 6 this. Simple; actually, that's the characterization that 7 I get from the CARB staff. Nothing is a problem. It's a 8 piece of cake. We can enforce it. We can test it. We 9 can do anything we need to do. And as a taxpayer of 10 California, I find that a very, very big charge. 11 You've seen my written comments perhaps. I think 12 I called it facetiously the California Panel Police. 13 Because I think it's such a gigantic undertaking to try to 14 be able to regulate all this that the taxpayer money might 15 fall by the wayside. 16 My impression of the workshops that we had with 17 the CARB staff was that the industry poured out the 18 information, the best available science. And what did we 19 get back for that effort? We got back a proposal for the 20 most restrictive formaldehyde emissions standard in the 21 world. And I don't get it. Is that because we're 22 Californians and we have to show the rest of the world? 23 Is it because we're behind the curve? I just don't get 24 it. 25 Another part of this that was interesting was the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 HUD standard, the mobile home and RV standard, which as I 2 understand it is the only U.S. standard on the emissions 3 of formaldehyde, it's exempted from the CARB regulation or 4 proposal. And that says to me we've already got a 5 functioning standard. 6 But all of you folks are in a difficult position, 7 because this is a noble pursuit. I support the idea of 8 trying to limit the formaldehyde emissions. But I'd like 9 us to do it in a fashion that makes sense. If HUD is 10 exempt, that means it's good enough, apparently. 11 So here's my proposal for you folks today. If 12 the HUD standard is acceptable -- because what we're 13 fighting about here is we're fighting about off-gassing 14 limits of formaldehyde. And we're fighting about the 15 regulation of it. And I want both. I say the regulation. 16 I should say the enforcement. Excuse me. Adopt the HUD 17 standard. Let CARB prove to us that they can truly 18 regulate it. And let's table the final decision for the 19 required levels of compliance. 20 CHAIRPERSON SAWYER: I must ask you to conclude, 21 please. 22 MR. WATSON: That interesting, am I? 23 In any case, that is my proposal to you. Adopt 24 the HUD standard. It's apparently good enough for CARB 25 now. Adopt it. Let them go work. Prove to all of us PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 they can enforce it. If you want to come back and 2 continue this work and come back with a .18 gazillion 3 parts per million, I'll be the first one to support it. 4 Thank you. 5 CHAIRPERSON SAWYER: Thank you, Mr. Harmon. 6 BOARD MEMBER RIORDAN: Mr. Chairman -- 7 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Just to 8 clarify, the HUD standard isn't really acceptable. We 9 have a case where federal law preempts us from regulating 10 any manufactured home, because the federal standards are 11 preeminent. So we cannot regulate that source, so we 12 therefore cannot try our standards to it. 13 CHAIRPERSON SAWYER: Mr. Harmon. 14 MR. HARMON: Thank you. My name is Dave Harmon. 15 I employed by Hexion, but I'm making this clarification 16 statement on behalf of the major formaldehyde producing 17 resin companies in North America. That is Hexion, GP, and 18 Dynea. 19 I think something that we haven't really gone 20 into very much is what kind of resin product volumes are 21 we talking about that are available in North America being 22 used now and may come under impact by this proposed 23 regulation. There's around three billion pounds of UF 24 resin and around five billion pounds of phenyl 25 formaldehyde resin. Depending upon how far this proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 regulation would domino, it could impact 10, 25 percent, I 2 don't know. Depends on the business response to it. 3 Trying to replace that magnitude of product volume 4 currently available with available manufacturing capacity 5 and technology is truly a formidable undertaking, huge 6 capital investments. Could be foreseen if there were a 7 need to undergo a major shift. 8 What happens to raw material supplies to meet 9 whatever technology is the chosen or the group that are 10 chosen. These are really major considerations. Even 11 among the existing technologies, a major shift in 12 emphasize on product sales there could have far-reaching 13 impacts because of the supply and demand nature of raw 14 material cost could have huge impacts. 15 Then there is another very real consideration is 16 if there is a need and usually is to obtain an operating 17 permit to run the manufacturing for the resin and for the 18 composite wood panel products, again that is no less than 19 a two-year process. So we have some very real constraints 20 that we have to look forward to as we judge whether the 21 proposed regulation is doable in the time frames if it 22 pushes things into brand-new territory. 23 That's all I have to say. Thank you. 24 CHAIRPERSON SAWYER: Thank you very much. 25 Doug Korthof, and then we will have Tom Higgins, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 Harry Demorest, and Ed Woods. 2 MR. KORTHOF: I want to thank the Board for their 3 indulgence in listening to all this and also commend you 4 on your strict adherence to the Brown Act and principles 5 of the open meeting law. Thank you very much for doing 6 that. 7 This kind of regulation that you're considering 8 today is indoor pollution. This is the kind of thing in 9 my opinion you should be doing. It's not covered by some 10 of the external stationary source regulations. And it's a 11 big thing for people in inner cities, for instance, that 12 have to keep their windows closed and have formaldehyde 13 inside. 14 I know an eco therapist in Long Beach, Andrea 15 Bell, who won't have volatile paint or formaldehyde or 16 composite board in her house. She knows something. She's 17 a certified health professional. She knows something that 18 a lot of people don't know. 19 What about those who don't know? Well, we're 20 kind of interested in having a life cycle costing, not 21 just looking at the cheapest cost. Because what we're 22 looking at here, can we put out furniture at the very 23 cheapest cost? Is there a benefit to that? 24 But you look at this costing and really the 25 person that's doing the manufacturing is not looking at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 the origination cost. What does it cost for the people 2 that make this product? We have to look at that. Maybe 3 somebody cut off their arm and doesn't have workers' comp. 4 That's not a fair competition with somebody in this 5 country that has to pay workers' comp. 6 And we have to look at a sunset chart. What's 7 our plan for getting rid of this thing? What's our 8 logistical plan for disposal of it? What's it going to 9 cost? Like cigarette butts, it's not considered by the 10 cigarette industry. Cigarette butts all over the place. 11 They don't worry about who picks it up. We, the taxpayer, 12 pay for it. 13 So what we're really talking about here is the 14 voided cost that these people that are looking for the 15 cheapest possible manufacturing are skirting. They're 16 avoiding the health care costs. They're avoiding some of 17 the other costs connected with the formaldehyde leaking. 18 Now we've heard conflicting testimony that 19 formaldehyde is good for you. It really isn't that bad. 20 Cancer isn't such a bad thing. This is something you have 21 to consider. But it's clearly formaldehyde does not exist 22 in nature in this same way. And I think it's legitimately 23 something you have to regulate. I think if it's difficult 24 to regulate, put more resources on it. This is the kind 25 of thing we want the Board to do as the general public. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 And I think that the industry will cope with it. 2 If they need help coping with it, we need to get some help 3 from the state government. But I think this is the kind 4 of thing you have to do to set a standard, make sure 5 everybody follows it, create a level playing field, and 6 get rid of some of this pollution. There's just too much 7 of it. Thank you. 8 CHAIRPERSON SAWYER: Thank you. 9 Mr. Higgens. 10 MR. HIGGENS: Thank you, Chairman Sawyer, members 11 of the Board. My name is Tom Higgins. I'm a member of 12 the Formaldehyde Free Coalition, which is an Ad Hoc 13 Coalition that has come together around this issue. It's 14 a broad-based coalition, striking in some respects for its 15 diversity. We've got green manufacturers and builders and 16 design professionals and advocates for children and 17 environmental organizations and health organization. 18 You're going to hear from representatives of each of those 19 groups. I won't try to give their testimony for them. We 20 speak with multiple voices. But we are united on a couple 21 of important principles, and I guess that's what I would 22 like to underscore. 23 First of all, this is not a new issue. It has 24 been around since 1992. More recently, in 2004, as you 25 heard earlier in the staff presentation, there has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 ample time for the industry to address this concern. I 2 think you'll hear that it's imminently doable now in the 3 market. That's one of the reasons why the Council, 4 despite the fact that we have a great deal of admiration 5 for the work product of the staff, the time, care, and 6 attention they put into this proposed measure, we have 7 nothing but praise for. 8 Not withstanding that, however, on the crucial 9 issue of timing, we believe it is imminently doable now, 10 accessible now to move the timing forward. And we believe 11 there is an urgency to that, as the previous speaker 12 alluded to. When you have a known carcinogen with 13 deleterious affects on the environment and the safety and 14 the health of Californians, then I think it's incumbent on 15 us to take all responsible measures to advance this 16 timetable responsibly. And we believe that that can be 17 done. Indeed, we believe that the solutions which are 18 affordable, assessable, and market competitive are there 19 today. So we certainly believe we could advance this to 20 2008 and we think Phase 2 can be completed by 2010. 21 In an earlier part of my career, I was the public 22 health official for many years. I'm a businessman now. I 23 recognize that you have to weigh benefits and cost, but 24 I'm confident that if you take all of the costs to society 25 into consideration, you will see the justification for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 moving forward aggressively now. Thank you very much. 2 CHAIRPERSON SAWYER: Thank you. 3 Mr. Demorest. 4 MR. DEMOREST: Hi. My name is Harry Demorest. 5 I'm the CEO of Columbia Forest Products. And on behalf of 6 4,000 employees of our employee-owned business, I'm 7 pleased to testify before you today. 8 Our company is a 50-year-old company. We're the 9 largest North American manufacturer of hardwood plywood 10 and veneer. We have approximately a 40 percent market 11 share. Being the market leader is in large measure due to 12 our strong commitment to environmental stewardship. We 13 know that smart business practices and smart environmental 14 practices go hand in hand. So it was natural for us to 15 partner with Dr. Kaichang Li of Oregon State University to 16 develop and bring to market an innovative soy-based 17 adhesive that could replace traditional urea formaldehyde 18 resins, creating a superior product while eliminating the 19 toxic air contaminants associated with formaldehyde-based 20 glues. We've encountered additional benefits, protecting 21 the health of our workers and lowering the cost at our 22 plants to comply with green air regulations. 23 We believe the staff report presents overwhelming 24 evidence for their conclusion. But at the same time, 25 because what we know about the industry, we urge CARB to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 be more aggressive in establishing a California background 2 standard and swift implementation time line before the end 3 of this decade. 4 For me, the issue you have before you is simple. 5 Your staff determined that formaldehyde is a dangerous 6 toxic air contaminant. There's no safe threshold to 7 exposure for this known carcinogen, and we know how to 8 eliminate it at a negligible cost to our consumer. We 9 just need to do it. 10 Now, I've sat on public boards like you have, and 11 I know the mind-numbing experience of sitting through a 12 day's worth of testimony. So if you only hear what I say 13 in the next 30 seconds, I would really appreciate it. 14 We have 4,000 employees that are making 60,000 15 panels of hardwood plywood a day. That's one and a half 16 million panels a month, close to 20 million panels a year. 17 And for the last two years, the very large majority of 18 those have been made with resins that do not contain 19 formaldehyde. And our bond rates for that period of time 20 have been -- the claims for bond rates have been less than 21 .2 percent. So we know we have a product that works and 22 it's a superior product. 23 So you know that 40 percent of our industry is 24 compliant with Phase 2 standards right now. And the next 25 step that we have taken is we've offered to the rest of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 our industry that we will sell them our resin system at a 2 nominal cost above what they're paying now, certainly less 3 than a dollar a panel. So I'm here to tell you that our 4 industry, the hardwood plywood industry, can be 5 100 percent compliant before the end of this year if they 6 choose to do so. 7 I thank you and your staff for your courage and 8 commitment to take bold steps to improve human health and 9 the environment, enhance the competitive position of our 10 domestic composite wood products industry, and help 11 California position itself for future leadership in the 12 green building economy. Thank you. 13 CHAIRPERSON SAWYER: Thank you very much. 14 I have a question. I assume that you started out 15 with urea formaldehyde as a resin originally when you 16 started your business, or not? 17 MR. DEMOREST: Yes. For 40 plus years. 18 CHAIRPERSON SAWYER: When did you make the shift 19 over to the soy based? 20 MR. DEMOREST: Two years ago. But we were -- 21 first of all, it goes to the issue that you're facing now. 22 We could see that formaldehyde was going to be regulated. 23 So we started to try to do something about it. And we 24 heard Dr. Li make a presentation. He made a presentation 25 where all of our competitors were present at. We were the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 only ones that went up and talked to him about it. And 2 consequently, we started to work with him and helped fund 3 his research at Oregon State University. And the resin 4 was developed two plus years ago. And we've been using it 5 in our business for two years. 6 CHAIRPERSON SAWYER: And this was accomplished 7 without using or losing price advantage? 8 MR. DEMOREST: No. We started out being cost 9 neutral. We're pretty certain that our resin costs are 10 lower now than our competitors are. And we know that our 11 cost to comply with clean air regulations are going to be 12 lower. 13 CHAIRPERSON SAWYER: Thank you. 14 Ms. D'Adamo. 15 BOARD MEMBER D'ADAMO: I actually have a question 16 of staff, but maybe you'd have something to say. First of 17 all, your company deserves to be complimented. It's 18 amazing what you're able to accomplish and because your 19 vision and seeing where this was headed. 20 We did meet a couple of weeks or a month and a 21 half ago, I don't remember. But I was very intrigued by 22 what you had to say and talked with staff afterwards. And 23 I think it would be helpful for me to hear this again and 24 maybe for the benefit of the other Board members. I wish 25 it were as easy as just selling your product at a nominal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 cost. But isn't there some retooling that would also have 2 to be done in order to meet Phase 2 standards? It's not 3 as easy as just selling the product. 4 MR. DEMOREST: From my point of view, you're 5 right. We did go through retooling and in our seven 6 plants spent somewhere in the five to seven million 7 dollars to put in the new systems. We felt it was 8 worthwhile to do so. Technology has advanced in those 9 two years, and it would cost nowhere near that today for a 10 plant to convert to that resin system. It's actually 11 relatively simple. 12 BOARD MEMBER D'ADAMO: Before staff gives its 13 point of view, there was a slide here on the cost to 14 retool. I wish I could find it. 15 MR. DEMOREST: It was somewhere between zero and 16 seven million. I am at the zero end of it. 17 BOARD MEMBER D'ADAMO: Maybe if staff could 18 comment on that, you know, how far off you are on the 19 figures to retool. 20 MR. DEMOREST: By the way, I think you're going 21 to hear testimony from Steve Pung later who was very 22 instrumental in installing these in our plants, and he can 23 speak more authoritatively than I can. 24 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: In 25 response to the question, Ms. D'Adamo. What we recognize PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 in the staff report is that for Phase 2 standards there's 2 going to be an array of products that are going to be 3 available for manufacturers to look into. What we heard 4 right now is one example, the soy resin, which is now 5 available, the Pure Bond. And Mr. Demorest has shared 6 some of his costs. Those would be in the range. In fact, 7 in the slide that you're referring to, we had shown there 8 was a zero to seven million dollar cost for hardwood 9 plywood. Those costs are closely tied to the type of 10 resin technology you use. Certainly in the case of phenyl 11 formaldehyde, as you heard earlier, there is a slow down 12 in protection rates, and we factored that into some of our 13 costs as well. 14 But in addition to that, there's a need to have a 15 lower moisture content for phenyl formaldehyde. So the 16 slides indicated a range that would be indicative of the 17 type of capital investment that might be required given 18 the array of resins available. But again, the soy resin 19 would be on the cheaper side. 20 CHAIRPERSON SAWYER: Mr. Woods. 21 MR. WOODS: Good afternoon. My name is Ed Woods. 22 I'm an Executive Vice President at Columbia Forest 23 Products. I've been working the hardwood plywood industry 24 for over 30 years mostly in sales and marketing roles. 25 I also am here to assure the Board that this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 regulation is moving in the right direction. The demand 2 for formaldehyde-free building products is already growing 3 nationally throughout North American markets. And 4 currently there are at least four non-UF resin 5 technologies available to all plywood producers that are 6 already Phase 2 compliant for veneer core hardwood 7 plywood. 8 Around 2002, green building programs began to 9 emerge, the most notable now being LEED. At that time, we 10 started seeing customers specifying urea formaldehyde-free 11 or no added UF hardwood plywood panels. Most commonly 12 started out in commercial casework but quickly expanded to 13 other sectors such as laboratory furniture and cabinets 14 for hospitals and schools. Green building issues are now 15 expanding rapidly into residential home introduction. 16 The emergence of LEED and other green programs in 17 late 2002 pre-dated the development of our Pure Bond soy 18 technology. During '03 and '04, those products were 19 completely satisfied as specified with the use of other 20 non-UF resin systems, namely PVA and combinations of PVA 21 plus phenolic resins in the two-step process. These are 22 mature resin technologies still available today to all 23 producers. 24 In 2005, when we began the commercialization of 25 Pure Bond as Harry described and converted all of our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 plywood plants, and as Harry mentioned, we've offered to 2 license this technology to others in our industry. In 3 fact, we're in discussions with two manufacturers in that 4 regard right now. 5 In addition to that, we are offering to sell Pure 6 Bond veneer core blanks to competing stock panel 7 manufacturers and have already started shipping these Pure 8 Bond veneer core blanks to smaller architectural plywood 9 producers. Subsequent to our commercialization, at least 10 one other major competitor is now advertising their own no 11 added UF hardwood plywood, utilizing yet another soy resin 12 solution. 13 So now there are at least four different non-UF 14 resin approaches for hardwood plywood, all available in 15 the marketplace today and all are Phase 2 compliant for 16 veneer core hardwood plywood. So the CARB staff 17 appropriately recognized this and moved Phase 2 18 implementation for veneer core hardwood plywood floors to 19 January 2010. And we predict that the emission testing 20 data that CARB will be collecting starting with Phase I 21 will further motivate you to continually strengthen this 22 long-awaited regulation. Thank you. 23 CHAIRPERSON SAWYER: Thank you. 24 The next speakers will be Elizabeth Whalen, Phil 25 Guay, and Joan Cassman. Ms. Whalen. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 MR. WHALEN: Good afternoon. My name is 2 Elizabeth Whalen. I'm the Director of Corporate 3 Sustainability for Columbia Forest Products. I have been 4 closely involved in the progression and development of 5 this ATCM since CARB staff first contacted us about our 6 formaldehyde-free technology in May of 2005. We have 7 witnessed firsthand the tireless commitment, thoroughness, 8 and professionalism of the staff working on this 9 regulation, and we commend them for a job well done. 10 One of the primary arguments the opposition has 11 brought forth relates to the economic devastation this 12 regulation will have on California's wood products 13 fabricators and consumers' pocketbooks. Your staff did 14 not believe these claims, and neither should you. Based 15 on Columbia's extensive experience manufacturing and 16 selling formaldehyde-free hardwood plywood, we contend 17 that any cost increase driven by this regulation will be 18 negligible at best. 19 Representing 40 percent of the veneer and core 20 market, Colorado is already supplying cost neutral 21 formaldehyde-free plywood to California. And before we 22 developed our Pure Bond technology, we utilized a readily 23 available and widely used PVA adhesive to satisfy demand 24 for non-UF panels. 25 Our business records confirm the increased cost PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 for PVA plywood compared UF plywood represents a cost 2 increase of no more than 15 percent to our distributor 3 customers. When we use PVA glues to achieve formaldehyde 4 free, our average UF panel price was $38. With this cost 5 increase, a PVA panel would sell for $44, a $6 per panel 6 increase. Translating that into a consumer impact, the 7 average kitchen remodel is about $25,000. And new 8 cabinets used on average 15 panels to build these. At $6 9 more per panel, the cost impact of those 15 panels on this 10 kitchen remodel would be only $90. This represents less 11 than a one percent increase for the entire kitchen 12 remodel. 13 The staff report corroborates our figures from 14 their own research on PVAs an alternative to urea 15 formaldehyde. And these figures don't take into 16 consideration the economies of scale or manufacturing 17 advantages to switching from UF resins. For example, 18 Columbia reduced air emissions by as much as 95 percent at 19 our mill locations, negating the need for additional 20 pollution equipment to converting to formaldehyde-free 21 manufacturing. 22 The staff report has more than adequately 23 addressed the economic impact of this regulation on the 24 industry. And there is ample testimony in the record that 25 this regulation will have negligible impact on consumers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 Moreover, there is abundant evidence and testimony 2 demonstrating the cost to public health by not regulating 3 this carcinogen will be far greater and should be the 4 primary concern. Thank you. 5 CHAIRPERSON SAWYER: Thank you. 6 Mr. Guay. 7 MR. GUAY: Thank you. I'm Phil Guay, Vice 8 President of Business Strategy for Columbia Forest 9 Products and in that role focus on our global environment. 10 As I speak, consider me not an employee-owner of North 11 American's largest manufacturer, but an employee-owner of 12 one of North America's largest importers as well. 13 I'm going to talk to you about the huge impact 14 off-shore hardwood plywood has on the health and safety 15 risk of Californians. When the most recent on this 16 regulation began three years ago, domestic manufacturers 17 made nearly all of the hardwood plywood consumed in 18 California. Last year, in 2006, of the 5.2 million cubic 19 meters of hardwood plywood consumed in the United States, 20 only 1.4 million cubic meters of that was manufactured in 21 North America. It's a number you heard earlier. About 70 22 percent of the hardwood plywood consumed in this state 23 comes from off-shore, mostly from China. Most of it ends 24 up in California's end products. These are numbers that 25 we consider stunning, a complete change in the industry in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 three years. 2 So while we'll heard this regulation be debated 3 very strenuously by those in this room and certainly 4 others, by a very wide margin, the biggest impact on 5 health and safety for Californians will come by its 6 implementation off-shore. 7 One of the affects of the domestic manufacturing 8 decline is that the U.S. and California have become a 9 dumping ground for products with high UF emissions, 10 products that cannot be sold anywhere else in the 11 developed world. I cannot emphasize that enough to the 12 Board. California has become a global dumping ground. 13 The E1 rule in the European Union when its UF in that 14 area. Japan has its strong 3 and 4 standard. Even China 15 itself for domestic consumption requires E1. 16 By far, China is the biggest supplier of hardwood 17 plywood to the UE. It supplies almost all of Japan's F3 18 and 4 stock, as well as that for California. 19 At Columbia Forest Products, we test for UF 20 emissions on our own imports and others. We don't 21 consider testing onerous. We consider it a good business 22 practice. 23 In the test submitted in the record that you all 24 have, we tested a range of imports. They came in from .29 25 parts per million to 3.0 parts per million. That's not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 .3. That's 3.0 parts per million. Keep in mind the same 2 factories that are sending this unsafe plywood to 3 California are supplying most of Europe's E1 and nearly 4 all of Japan's F3 and 4 star. It can be measured, 5 complied, and enforced. Those two parts of the world get 6 their plywood from China using standards that are 7 dramatically different from those in the United States. 8 We think your implementation plan to focus on the 9 import and the manufacturer is an excellent start. It 10 will only take a few rejected loads or heavy panels for 11 the unscrupulous importer to begin to specify the new 12 levels. After all, the off-shore suppliers build to order 13 specifications, rarely to inventory. When you control the 14 importer and their direction to the manufacturers, you 15 will ultimately affect a huge change on this industry 16 off-shore. It can be done. It's happening today. We 17 strongly encourage you to act today to stop this 18 unnecessary dumping of unhealthy imports in California by 19 adopting the proposal as amended. Thank you. 20 CHAIRPERSON SAWYER: Thank you very much. 21 To the staff, do we have our own data on the 22 formaldehyde levels of imported particle board? 23 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: Dr. 24 Sawyer, we do have data on imports. Most of the data we 25 received we received from Columbia Forest Products. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 CHAIRPERSON SAWYER: But we haven't been testing 2 ourselves again? 3 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: No, 4 sir. 5 CHAIRPERSON SAWYER: Ms. Berg. 6 BOARD MEMBER BERG: Mr. Guay, could you comment 7 then since there are imports that are formaldehyde-free 8 what the cost difference is? If they're already making 9 formaldehyde-free products, are you aware of what the cost 10 differences are or percentage is? 11 MR. GUAY: Ms. Berg, the only thing I can comment 12 on, because we don't bring in formaldehyde-free from China 13 and we don't export to Japan where that goes, we bring in 14 E1 to Europe and E1 to the United States, and it's costing 15 us 2 percent more than if we were bringing in unregulated 16 formaldehyde into either of those areas. 17 BOARD MEMBER BERG: Thank you very much for that 18 information. 19 And secondly, do you do particle board? What's 20 your percentage of business in the particle board or MDF 21 market? 22 MR. DEMOREST: Off-shore, we don't manufacture or 23 source particle board. We have a small particle board 24 plant in Canada. 25 BOARD MEMBER BERG: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 CHAIRPERSON SAWYER: Ms. Cassman, and then we 2 will have Dr. Kaichang Li, Charles Gabriel, and Richard 3 Royce. 4 MS. CASSMAN: Thank you. Good afternoon, members 5 of the Board, members of the staff. My name is Joan 6 Cassman. I'm a partner with the law firm of Hanson 7 Bridgett Marcus Vlahos & Rudy. We represent Columbia 8 Forest Products. Ed Howard of Howard Advocacy is a member 9 of our legal team as well. 10 We have carefully reviewed the staff report from 11 the CARB and applaud the manner in which the CARB staff 12 has addressed both the policy and the legal issues for 13 this ATCM. We have submitted for the record a letter 14 brief that reinforces the staff's legal findings and 15 demonstrates how the salient facts in the record support 16 these findings. 17 In short, statutory authority for this Board to 18 adopt the proposed regulations is clear and unequivocal. 19 Indeed, it is our opinion and we are convinced that the 20 Tanner Act directs and requires this Board to adopt the 21 recommendation that is before it or to adopt even more 22 stringent regulations given the factual predicates in this 23 record. And I thank you for this opportunity to comment. 24 CHAIRPERSON SAWYER: Thank you. 25 Dr. Li. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 DR. LI: Good afternoon. My name is Kaichang Li. 2 I'm an Associate Professor in the Department of Wood 3 Science and Engineering at Oregon State University. I'm 4 the inventor of the formaldehyde-free adhesive used for 5 making Pure Bond plywood. And I invented the adhesive 6 technologies through mimicking marine organism muscles. 7 Muscle stick to rock, wood, or any other substance they 8 can get in sea water so it's secreting a protein, muscle 9 adhesive protein. Muscle adhesive protein is very strong, 10 water resistant, and environmentally friendly adhesive. 11 Unfortunately, it's not ready available. 12 And soy bean contain very high amount of protein. 13 But the wood composite panel bounded with soy protein 14 suffer from low strength, low water resistancy. So using 15 the muscle adhesive protein as a moulder, I was able to 16 invent soy-based adhesive from ready available abundant 17 soy flower, the soy bean flower. It's not pure soy 18 protein. 19 And the oldest wood composite panel bonded with 20 soy-based adhesive had excellent strength property, 21 excellent water resistancy. 22 And the adhesive basically can bond already. It 23 doesn't matter the wood is in the form of veneer, 24 particle, or fiber. And for example, our adhesive can 25 bond pine to pine together, but the urea formaldehyde PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 cannot. So our adhesive is very robust and water adhesive 2 technology. 3 So after I invented adhesive technology about 4 five years ago, I disclose that technology at a 5 professional meeting and approached adhesive 6 manufacturers, some wood composite companies. And 7 Columbia Forest Product was the only one at this time that 8 was interested in this technology and took effort to 9 commercialize it. 10 So I still remember what my department head told 11 me about three years ago when we have four successful 12 application of our soy technology. He said, "Kaichang, 13 we'll be really lucky if you can hold -- our adhesive can 14 hold technology advantage for five years." He was right. 15 We didn't see less than three years. Look at all this 16 advertisement. Many panel from different company with 17 formaldehyde-free adhesive only to flood the market. So 18 this tell you how adhesive technology can be advanced, how 19 fast it can be advanced and how well the wood industry can 20 respond potential alternation of formaldehyde issue. 21 Thank you. 22 CHAIRPERSON SAWYER: Thank you very much for your 23 contribution. 24 Mr. Gabriel or Grabiel. 25 MR. GRABIEL: Grabiel does it. Just don't call PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 me late for dinner. 2 Dr. Sawyer and Board, I am Charles Grabiel. I'll 3 say it, Charles Grabiel. I represent the United Soy Bean 4 Board, which was established by the U.S. Congress in 1992 5 to represent the 670,000 soy bean farmers in America. And 6 I'd like to clarify the supply and the pricing situation 7 for soy bean meal, which is a major constituent of the 8 formaldehyde-free adhesive being used by Columbia Forest 9 Products. 10 Now, you've had testimony submitted into the 11 record which tries to cast doubt on the availability of 12 the soy beans as an alternative adhesive. I stand here to 13 assure you that the amount of soy beans available is fully 14 ample to supply these adhesive requirements. Manufacture 15 of all composite wood panels with a soy adhesive would 16 require 80 million bushels -- 8-0 billion bushels of soy 17 beans every year. Current U.S. production is 3200 million 18 bushels. That's over 3,000 million bushels a year. U.S. 19 consumption is about 2,000 million. And the other 20 thousand million is exported. In other words, only eight 21 percent of the exported beans would be required for total 22 adhesive market. So there is no shortage of soy beans to 23 supply the adhesive market. 24 Now as for price. Soy meal, the part of the soy 25 bean that's used in adhesives, has been in the eight to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 twelve cent a pound range for the last seven years. 2 During this period, the prices of petroleum derived 3 adhesives of raw materials such as phenyl and urea which 4 are used in formaldehyde containing adhesives have 5 increased drastically. 6 Because of the growing demand for soy bean oil as 7 a substitute for petroleum in biodiesel fuels, soy bean 8 production is expected to increase, thereby providing 9 additional supplies of soy meal. And the ensuing 10 over-supply of soy meal will serve to maintain a low price 11 for the soy meal. As I stated at the outset, the adequate 12 supply and the low price of soy meal in the future is 13 indeed assured. 14 And just to leave you with a reminder that this 15 approach that we're talking about is only one of the 16 solutions for achieving a low or a no formaldehyde 17 emitting adhesive that your staff has in their report. So 18 I thank you. 19 CHAIRPERSON SAWYER: Thank you. 20 Mr. Royce, and then we'll have David Mullen, 21 Jerry Uhland, and Pat Hooper. 22 MR. ROYCE: Thank you, Mr. Chairman. I'm Richard 23 Royce, Director of Technology for Hercules, Incorporated. 24 In other words, I'm responsible for my company's approving 25 and funding every research project with which my group is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 involved. We don't take this responsibility lightly. We 2 review many projects every year, and we invest our time 3 where we think we can make an impact for a company and our 4 customers. 5 The sales of over $2 billion, Hercules 6 Incorporated is a global supplier of specialty chemicals 7 and services to a variety of markets. We currently invest 8 over $65 million in research and technology with a goal to 9 maintain a pipeline of new innovations. Today, we have 10 more than 50 ongoing research programs, and the soy-based 11 adhesive technology that you've heard about just recently 12 first developed by Dr. Kaichang Li of Oregon State and 13 currently being practiced commercially in hardwood plywood 14 is by far our company's largest technology project and 15 look to further improve the system. 16 Part of the soy-based adhesive is a curing agent, 17 which is a well known, well understood material that has 18 been widely used commercially for 50 years. Although 19 Hercules first developed the curing agent, we are only one 20 of several suppliers today. The point is there's a 21 readily available supply chain to this critical component. 22 This particular curing agent has an interesting history 23 and has many important commercial applications, fabric 24 treatments, manufacturer of super-absorbent polymers and 25 disposal diapers, food industry, other applications. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 However, its largest and most important application is in 2 the paper industry where this resin is used to provide wet 3 strength properties in grades such as paper towels, facial 4 tissues, juice and milk cartoons, coffee filters, t-bags, 5 and currency paper. 6 The key point is that in the paper industry, this 7 curing agent replaced both urea and melamine formaldehyde 8 chemistry several decades ago, although the industry also 9 dealt with similar change issues we're looking at today. 10 By the mid-1980s, resins based on this curing agent had 11 all but replaced UF resins in those markets for wet 12 strength and paper at equal to or lower costs. Those new 13 resins afforded the industry proven and well-documented 14 benefits in terms of paper properties and paper machine 15 productivity gains that have gone far beyond simply the 16 elimination of formaldehyde. We're seeing similar trends 17 today, even in the early stages. In hardwood plywood 18 where these new resins systems in combination with soy are 19 providing not only the elimination of formaldehyde, but 20 also the potential to improve both water properties and 21 plant productivity. 22 Based on the worldwide availability of these 23 curing resins and their nearly 50-year history of 24 widespread use and commercial acceptance, our industry is 25 well positioned to meet the needs of the wood composite PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 industry. Thank you. 2 CHAIRPERSON SAWYER: Thank you very much. 3 Mr. Mullen. 4 MR. MULLEN: Good afternoon, Chairman and Board. 5 Appreciate the opportunity to speak with you today. 6 Part of my discussion here today is to confirm 7 that soy-based no added formaldehyde adhesives is a 8 practical approach for the wood products market to achieve 9 CARB regulations. 10 You may have several questions such as: What is 11 the technology availability? How difficult is it to 12 implement? Are we meeting our customers' performance 13 expectations? Is it cost effective? 14 My name is David Mullen. As the business manager 15 for Hercules Incorporated, I am responsible for product 16 launch of our technologies to the building product market 17 segment. I work closely with our R&D teams as well as 18 customers that are actually using and implementing this 19 technology today. 20 As described by our Director of Research, 21 Hercules has been driving the product development 22 innovative for more than five years in conjunction with 23 the Oregon State University. I can assure you that we 24 have a practical approach for the wood industry and 25 community. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 The learning curve is behind us. Hercules R&D, 2 Oregon State University, and industry supporters have 3 spent thousands of hours to validate and commercialize the 4 soy adhesive technology for plywood and particle board 5 processes. Let me share briefly what we know today. Yes, 6 Hercules soy-based adhesives can be successfully utilized. 7 To date, we have produced several million -- I mean 8 several million -- hardwood decorative plywood panels over 9 the past two years for commercial sale. 10 Word is out, and we received numerous inquiries 11 from the global wood products community. Further, 12 development is underway to ensure that this technology can 13 be transferred to particle board and other composite panel 14 segments. 15 Yes, Hercules has successfully converted several 16 hardwood plywood mills, cost neutral, to urea formaldehyde 17 adhesives. Yes, we have developed and validated a second 18 generation adhesive that is sprayable and effective for 19 the particle board composite panel. Minimal capital 20 investment is required for second generation technology. 21 Commercial particle board results are positive, and we are 22 close to meeting all performance targets. We are 23 committed to achieving a minimal cost premium versus urea 24 formaldehyde. 25 I want to be very clear here. Hercules intends PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 to make soy adhesive technology available to the entire 2 global wood products community. Initial validation of the 3 technology with the key industry leader is critical to 4 ensure its long-term viability. 5 CHAIRPERSON SAWYER: I need to ask you to 6 conclude, please. 7 MR. MULLEN: Thank you. Hercules has 23 sites 8 around the world with enough capacity to handle our global 9 customer needs, including China. Hercules looks forward 10 to our global reach to make an impact in California and 11 the wood-based community. Thank you. 12 CHAIRPERSON SAWYER: Thank you. 13 Ms. Berg. 14 BOARD MEMBER BERG: Excuse me, sir. Does 15 Hercules have a part of the current market? Do you make a 16 current resin in the formaldehyde? 17 MR. MULLEN: The arrangement is we have exclusive 18 licensing rights for Oregon State patented technology. 19 And we have established a sublicensing agreement with 20 Columbia Forest Products. 21 BOARD MEMBER BERG: Do you have any position in 22 the market with the current resin system or just with the 23 new resin system? 24 MR. MULLEN: We are the new incumbent to 25 innovative technology with this resin, yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 BOARD MEMBER BERG: Do you have any market 2 percentage for the particle board and the MDF, or is that 3 new technology that you're bringing on? 4 MR. MULLEN: The particle board resin adhesive is 5 in development. And the MDF at this point in time we have 6 not pursued that. 7 BOARD MEMBER BERG: Thank you very much. 8 CHAIRPERSON SAWYER: Thank you. 9 Mr. Uhland. 10 MR. UHLAND: Good afternoon. Plenty of soy beans 11 and plenty of rice straw, I can't think of two better 12 ingredients for making composite panel boards. My name is 13 Jerry Uhland, and I'm President of and co-founder of CalAG 14 MDF. 15 This summer, CalAg will be breaking ground on a 16 $250 million rice straw-based MDF facility in Willows, 17 California located 70 miles north of Sacramento. One 18 month ago on March 24, the California State Treasurer's 19 Office approved the allocation of $175 million in 20 pollution control bonds in support of a formaldehyde-free 21 MDF plant. 22 I'm here today to lend my support to CARB's comp 23 wood ATCM as a composite panel manufacturer. When the 24 CalAg plant opens in 2008, we will produce a true MDF 25 using a formaldehyde-free MDI adhesive that can be sold at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 a price that is competitive with conventional wood-based 2 MDF, a product that's currently manufactured with urea 3 formaldehyde. 4 We have read and heard a great deal of testimony 5 that CARB's comp wood regulations will cause MDF prices to 6 skyrocket. And I'm here today to tell you that CalAg will 7 sell formaldehyde-free MDF at a price that is very 8 competitive to its urea formaldehyde based counterparts. 9 Distributors, fabricators, and customers will not be 10 significantly affected, if affected at all, by production 11 costs. 12 As for product performance, CalAg MDF has 13 exceeded wood-based MDF standards in every end use 14 application everywhere MDF is used. This is moulding, 15 cabinetry, laminate flooring, millwork, office, home 16 furniture, everything. To approve this, Metsil Panel 17 Board, the world's largest equipment supply company within 18 the forest products industry, is guaranteeing with their 19 balance sheet that this plant produce such a product. 20 California currently consumes approximately 400 million 21 square feet of MDF annually. Our plant will produce 150 22 million square feet representing approximately 30 percent 23 of the California market. 24 CalAg will be the single largest MDF plant in the 25 state of California. We'll be formaldehyde free. We will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 not be incurring higher cost to provide the health 2 benefits that come with sustainable green manufacturing. 3 The CalAg plant will employ 115 full-time workers with an 4 annual payroll up to 10.5 million. There will be 400 5 part-time employees created during the straw collection 6 period. And the State has estimated 1200 ancillary jobs 7 will be created by this mill. 8 I'm telling you to make this point, that 9 sustainable environmentally friendly manufacturing is not 10 only socially responsible, but economically viable. As a 11 side bar, this first CalAg plant will operate producing 12 one-tenth of the air pollutants produced by a conventional 13 wood-based MDF plant of similar size. And I'm not talking 14 about formaldehyde emissions. By using 120,000 acres of 15 rice straw each year, we'll be preventing 120,000 tons of 16 methane gas from being freely released into the 17 atmosphere. 18 It's ironic, California rice industry was here in 19 1991 telling CARB that if the rice straw burning became 20 illegal, the industry would become bankrupt. Sixteen 21 years later, and after a prohibition of burning rice 22 straw, I'm happy to say we're producing more rice in 23 California in the Sacramento Valley than we ever have 24 before. California rice industry is very robust. Change 25 might not be comfortable, but it is inevitable as an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 industry we must be ready to adapt. Thank you very much. 2 CHAIRPERSON SAWYER: Thank you very much. 3 Ms. Hooper and then Rick Fields, Jeff Hunt, and 4 Brian Gitt. 5 MS. HOOPER: Good afternoon. My name is Pat 6 Hooper. I'm the principle with Hooperwolfe. We're 7 environmental consultants based in California. Our firm 8 has done extensive work with a variety of manufacturers in 9 the development of sustainable products. Our work over 10 the last 15 years, however, has put us in very, very close 11 touch with the commercial, architectural, and design 12 community here in California and across the nation. 13 Now, over the last ten years, as you have heard 14 previously, there have been a variety of sustainable 15 standards and environmental rating systems addressing 16 product emissions developed and applied in the commercial 17 design market. These include the U.S. Green Building 18 Council's LEED rating system. The State of California 19 initiated section 1350 testing requirement, which is part 20 of the special environmental requirements, and the 21 Collaborative for High Performance Schools which also 22 includes section 1350. 23 The building in which this hearing room is 24 located, as a matter of fact, has wood panels in your 25 lobby that are made with no urea formaldehyde in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 product. These rating systems have requirements for 2 low-emitting products, requirements that are actually far 3 more stringent than what is being proposed by CARB. 4 The City of Los Angeles including the L.A. 5 Unified School District and most other large cities in 6 California mandate that their public buildings are 7 designed to LEED guidelines. Commercial architects and 8 designers in California designing public buildings and 9 private buildings routinely select and specify no added 10 urea formaldehyde and low-emitting composite wood products 11 and related furnishing systems which often must pass 12 Section 1350 emission tests. That test limits 13 formaldehyde emissions to 0.0145 parts per million, 14 considerably lower than what CARB is looking at in their 15 regulations. 16 The commercial design market is already driving 17 the demand for low-emitting composite wood products. 18 There are composite wood products out on the market that 19 do meet their specifications, but there is not enough. 20 And you have heard from some manufacturers earlier today 21 that it's a small nitch. The commercial designers are 22 struggling to find products to meet their specifications. 23 This rulemaking will create a large number of products in 24 which they can specify cost competitively. 25 So I want to thank you. I want to offer on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 behalf of commercial designers and architects around 2 California for the work you've done on this regulation. 3 And I can tell you these regulations will go far beyond 4 the green design sector. It's going to protect the health 5 of all Californians. Thank you. 6 CHAIRPERSON SAWYER: Thank you very much. 7 Mr. Fields. 8 MR. FIELDS: Mr. Chairman, Board, staff, thank 9 you for the opportunity to speak today. My name is Rick 10 Fields, and I'm the co-owner and President of Neil Kelly 11 Cabinets and we're headquartered in Portland, Oregon. I'm 12 one of those poor little cabinet makers everybody is 13 trying to defend today. But I can tell you that we 14 pioneered green and health cabinetry back in 1998. And 15 our company is now seven times larger than it was before. 16 We've signed up an OEM manufacturer down the street from 17 us in Oregon, and I'm on my way to the east coast to find 18 capacity there. 19 We have never had in these nine years a warrantee 20 issue or health liability issue using the 21 formaldehyde-free Pure Bond products and other alternative 22 supplies available in my industry. The growth is 23 absolutely phenomenal. And the suppliers of these 24 materials are sitting in this room, some on the other side 25 of the argument, which I have a hard time understanding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 why they manufacture and advertise those products and I'm 2 making money at it. So there is some part of that 3 argument we need to re-study. 4 But let there be no mistake, urea formaldehyde is 5 a known human carcinogen and concerns many us. You've 6 heard a lot of testimony about market share and cost. I'd 7 like to add a little 13-year-old face to that. My wife 8 and I have five sons. And I played football at the 9 University of Nebraska, and all these boys are big, 10 strapping, stud football players. Two were All-Americans 11 right here in California. My wife is an ex-army 12 paratrooper, and she's in the college Who's Who for 13 athletics. What my point is is our gene pool is pretty 14 healthy. 15 I've got a 13-year-old, my youngest, who was born 16 after I retired from 30 years in the army and has lived in 17 two brand-new homes since he was born. He has asthma and 18 incredible allergies, spends the vast majority of his time 19 heavily medicated and he's trying to grow up in the shadow 20 of his big brothers with all these illnesses. He's in an 21 energy-efficient air-tight new home we build nowadays. 22 I'm here to tell you I think I will spend the remainder of 23 my professional life trying to find ways our children can 24 be healthier than the studies that you have that indicate 25 they've never been sicker than any time before in our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 history. 2 As I said, I'm a retired army colonel with over 3 30 years of service. I'm aware of the harm of man-made 4 chemicals such as agent orange and napalm and CS gas. I 5 don't mean to alarm anyone, but these are man-made 6 chemicals we're trying to argue by a point about today. 7 Neil Kelly has shown sustainable, 8 environmentally-friendly, and healthy cabinetry is not 9 only feasible but readily available today. I urge the 10 Board to impose the highest standards in pulling your 11 timelines, and let's get started fixing up not only 12 California, but the rest of the United States as they 13 follow your trail. Thank you. 14 CHAIRPERSON SAWYER: Thank you very much, Mr. 15 Fields. 16 Mr. Hunt. 17 MR. HUNT: Good afternoon. My name is Jeff Hunt. 18 I represent Oakland-based Plywood and Lumber Sales. We 19 are a distributor of wholesale forest products. We became 20 a FSC certified chain of custody member in 1997, chain of 21 custody number 7. Our customer base is predominantly 22 furniture makers and cabinet makers and domestic. 23 Shortly after we received our chain of custody 24 number, we became more and more in dealing with directly 25 with architects and designers. What followed was an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 increasing demands for urea formaldehyde-free FSC products 2 such as hardwood plywood. Almost from the beginning, we 3 were able to obtain these products. First through States 4 Industries and then through Columbia Forest Products. We 5 tried to have them made through company called Mount Baker 6 Plywood, but they were unable to get the glue to make 7 these products until about three months after we stopped 8 buying from them and started buying from Columbia, which 9 is kind of a sad thing, but nonetheless. 10 I just want to say that we have not had trouble 11 in getting supply from most of the large companies. Most 12 of the large companies that are making plywood today are 13 also advertising they have formaldehyde-free products and 14 they're selling it to people like me. Thank you. 15 CHAIRPERSON SAWYER: Thank you. 16 Mr. Gitt. And then we will have Dana Porteous, 17 Tom Cooper, and Tom Lent. 18 MR. GITT: Good afternoon. Thank you for giving 19 me time to speak today. My name is Brian Gitt. I'm 20 Executive Director of Build It Green. Build It Green is a 21 nonprofit membership organization based here in 22 California. We're unique in this crowd, because we 23 represent all sides of the spectrum. We have over 800 24 certified green building professionals. These are 25 architects and builders, engineers that we work with here PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 in California that we've certified in these best 2 practices. 3 We have over 300 company members. These are 4 suppliers, several of whom are in this room today. These 5 are builders, architects, public agencies, including over 6 80 public agencies here in California as well as other 7 nonprofits. So I speak here today on behalf of this broad 8 coalition that crosses this public/private sector line. 9 And here representing industry, the NGO sector, as well as 10 the public sector. 11 I want to applaud the leadership of not only the 12 Board and the staff here for moving this forward. This is 13 a really important issue. And as green building emerges 14 in California as a major economic force, this is not about 15 having economics in conflict with best practices and 16 protecting human health and the environment. Green 17 building and utilizing technology in products like this is 18 an opportunity to synergize those two, to bring them 19 together, to make more money. All of those hundreds of 20 companies I'm talking about, they're doing this because 21 they're making money doing it. They're not sacrificing 22 the bottom line. They're increasing profit margins. 23 They're increasing market share and making more money 24 doing this. 25 So although we're leading here in California, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 nationally, we're really a little bit behind as we heard 2 before. The European Union, Japan, Australia, they're 3 leading. We're playing catch up. As a speaker mentioned 4 earlier, we don't want to be the dumping ground of China 5 and other imports. We owe our kids better than that. We 6 owe ourselves better than that. 7 So there is immense consumer demand for this 8 product out there. I can speak to that, because we have 9 our pulse on the ground of what's going on in California. 10 Talking with consumers directly, talking with architects 11 and builders. We get hundreds -- actually thousands of 12 calls. We have a hot line. We have serviced over 5500 13 calls just in the last couple years of people asking for 14 products such as this. And oftentimes, you know, there's 15 a few companies that are doing it. 16 I found it interesting that a couple of companies 17 here talking on the other side actually are selling 18 compliant products today that meet the quality. 19 Supervisor Hill asked a really relevant question earlier. 20 Do you sell a product today that complies? And the answer 21 was yes. If they're selling product today, they're 22 meeting the quality standards in those issues that are 23 there. They're not having those kinds of quality 24 problems. So, you know, home builders, cabinet makers, 25 manufacturers are to benefit by this regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 CARB under its legislative mandate, as you all 2 know, has to impose the strictest regulations possible to 3 limit and ultimately eliminate the dangerous and 4 unnecessary toxic from kitchen cabinets and other 5 composite wood products. That's what we're here today, 6 and that's what I'm urging you to do. 7 The other thing I want to mention is there's a 8 couple of things about taxpayer costs. As a taxpayer of 9 California, I can say the costs of enforcement are so 10 dwarfed by the health care implications to taxpayers in 11 California, it wouldn't even stand up in comparison. 12 Because what about all those extra trips to the hospital 13 for that kid that has asthma trigger that has to go and 14 they don't have insurance or cancer treatments, things of 15 that nature? 16 CHAIRPERSON SAWYER: I must ask you to conclude, 17 please. 18 MR. GITT: Absolutely. So in conclusion, I would 19 urge the Board to actually shorten that time frame for 20 implementation. We have the product today. It's a 21 quality product. Industry can do it. Let's really show 22 the leadership that California can do. Thank you. 23 CHAIRPERSON SAWYER: Thank you. 24 Dana Porteous. 25 Tom Cooper. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 MR. COOPER: Good afternoon, Mr. Chairman, Board, 2 and especially staff. My name is Tom Cooper, and I'm here 3 today representing Kaiser Permanente as the Chairperson of 4 Kaiser Permanente's High Performance Building's Committee, 5 also known as our Green Building's Committee. 6 Our Committee researches, tests, and implements 7 sustainable design standards for Kaiser Permanente's 8 facilities on a national basis. The Committee falls under 9 the authority of the Environmental Stewardship Council of 10 which I am also a member and guides all Kaiser Permanente 11 efforts related to sustainability and reports the our CEO, 12 George Halvorson. 13 On behalf of Kaiser Permanente, I would like to 14 thank the Board and especially the staff for their 15 excellent work in researching the issues associated with 16 formaldehyde exposure and risk. As one of the largest 17 employers in California and with more than 6.3 million 18 members of our health plan, Kaiser Permanente is extremely 19 concerned with the health impact of toxic materials to our 20 staff, patients, and the communities that we serve. 21 We commend the CARB for raising the dangers of 22 formaldehyde exposure to the light of public discourse. 23 Kaiser Permanente has long understood the connection 24 between environmental hazards and health outcomes. As a 25 pre-paid health plan, our business model dictates we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 strive to keep our members healthy so that they don't need 2 acute medical care. 3 A core aspect of our corporate culture and 4 practice is to promote healthy lifestyles and seek to 5 minimize exposure to potential health hazards for our 6 staff and health plan members. We have been very active 7 in our attempts to remove toxic materials from our 8 facilities that pose a risk to our staff and patients. We 9 have been diligent in our efforts to evaluate the products 10 we purchase, the materials we use for the impact on 11 workplace, patient, and environmental safety. 12 The result of this effort is that all of our 13 facilities are virtually mercury free, and we have removed 14 other persistent biocumulative toxins, such as DEHP and 15 polyvinyl chloride from most of the products that we 16 purchase. Where less toxic alternatives have not existed, 17 we have pushed the marketplace to develop safer products. 18 Based on the plethora of information raising concerns 19 about formaldehyde exposure in optional settings, in 20 buildings and in ambient air, Kaiser Permanente has taken 21 a position it's one of our chemicals of concern. This has 22 meant that Kaiser Permanente has researched alternative 23 products that do not contain formaldehyde. Our overall 24 goal has been to replace products that pose a danger to 25 our staff, patients, and the public with safer materials PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 without added cost. 2 We have an active campaign to reduce formaldehyde 3 in the furniture, fabrication, casework, and building 4 insulation we use in our facilities. However, the cost of 5 many of the alternative materials is significantly higher 6 than those products containing formaldehyde. We find this 7 primarily due to the fact that these alternatives do not 8 have a significant enough market share to be cost 9 competitive with those products that pose a health risk. 10 If we look at the larger picture and include the health 11 care costs to the state as a whole in treating cancer 12 patients in particulate and others whose condition may be 13 impacted to their exposure to formaldehyde, the cost of an 14 action is far greater to all of us -- 15 CHAIRPERSON SAWYER: Would you please conclude? 16 MR. COOPER: Sure. We urge CARB to adopt 17 stricter guidelines for formaldehyde levels as this will 18 set the climate for manufactures to develop 19 formaldehyde-free alternatives that can be competitive in 20 the marketplace. 21 Thank you very much. 22 CHAIRPERSON SAWYER: Thank you. 23 Tom Lent, and then we will have Eli Makus, Linda 24 Wiener, and Steve Pung. 25 MR. LENT: I'm Tom Lent, an environmental analyst PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 specializing in evaluating the health and environmental 2 and social impact of building technologies for over 25 3 years. I have heard a lot of arguments in other cases for 4 energy and health of industries that are concerned about 5 the cost that's going to be incurred by making a 6 transition to a safer alternative and undermining the 7 health basis of the standards. And I complement the CARB 8 staff on your good work documenting the actual story. 9 I coordinated the development of the Green Guide 10 for Health Care, which is a standards document for health 11 construction of hospitals and other health care facilities 12 and have been an advisor on LEED and several other green 13 building standards and worked with architects and 14 designers, manufacturers, specifiers, and building owners 15 from large corporate owners to homeowners on healthier 16 approaches to building. 17 I've submitted testimony already on a wide range 18 of issues, but I want to focus of two things in my short 19 time today: Context and market failure. 20 First the context. You are not acting in a 21 vacuum. Kaiser is not alone. This is a movement that's 22 spreading throughout health care. We've seen many of the 23 major systems like Catholic Health Care West, Sutter, John 24 Muir, California Pacific all taking similar actions to 25 what Mr. Cooper described just now to improve the health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 impact by eliminating the chemicals of concern often with 2 a focus on formaldehyde. 3 In our green guide for health care, over 110 4 pilot projects participated last year. In piloting this, 5 three-quarters of them took the action of going added 6 formaldehyde-free in their products they installed in 7 their building. The concern is deep and wide for the 8 issues that are raised by this action, and you'll get a 9 lot of support for doing it. 10 Last year, in the course of just a couple of 11 weeks, I circulated a letter of support for this action. 12 In very short time, we had 84 organizations to sign on to 13 that letter that was submitted to you earlier. These 14 represented a wide range of industry and public support 15 including 56 firms that design, construct, and sell 16 buildings. These are the users of these products that 17 you're about to regulate. They're the ones that are going 18 to pay the most for the cost of these regulations and they 19 want to see the regulation happen. 20 They are joined by 50 individual signers who make 21 their living in the industry along with many other 22 concerned citizens and 25 nonprofit organizations who have 23 been studying the health impact of chemicals like 24 formaldehyde. We're strongly supportive of your action, 25 and several local government agencies signed on as well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 The vast majority of these were California-based 2 organizations, though you gain national attention in 3 support for your actions. 4 So why are they doing this in the face of the 5 blitz of warnings prices are going to go up for the 6 product? Because they recognize that their workers and 7 their customers are suffering now from the impact of this. 8 These actions as the CARB staff -- statistics have shown 9 we're talking about thousands of cancer cases here and a 10 wide range of other impacts. 11 And the people who have signed that letter 12 recognize that we're not going to get this change in the 13 industry through the green building movement alone or 14 through individuals concerned. So we have a classic case 15 of market failure here where people don't get to choose 16 the casework that they're exposed to -- 17 CHAIRPERSON SAWYER: Would you please conclude? 18 MR. LENT: They don't get to choose the casework 19 they're exposed to in their offices, homes, and schools. 20 The ones who pay for health impacts are not the ones 21 necessarily making the most of the decisions. So this is 22 a public health issue that requires your action. I thank 23 you for your action and encourage you to take the 24 strongest standard to keep the air ambient and to act as 25 quickly as possible. Thank you for your attention. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 CHAIRPERSON SAWYER: Thank you. 2 Mr. Makus. 3 MR. MAKUS: Good afternoon, members of the Board. 4 My name is Eli Makus, attorney with the law firm of Hanson 5 Bridgett Marcus Vlahos and Rudy. Ted Lempert, President 6 of Children NOW, was not available to attend this hearing 7 but has authorized this testimony. And I think it is 8 important to put before you to talk about this 9 particularly in light of what Mr. Lint just said. 10 Children NOW's mission is to protect the health 11 and welfare of children, a group of our society that 12 really needs more of a voice in our government. And 13 importantly, these regulations will make great strides in 14 advancing this mission. Formaldehyde emissions 15 particularly prey on health of the most vulnerable members 16 of our society, our children. 17 Recent OEHHA studies suggest the formaldehyde 18 likely presents differential health impacts on infants and 19 children from carcinogenicity to respiratory effects 20 including decreased lung function and exacerbated asthma. 21 Children NOW will soon report in its California county 22 data book 2007 its 16 percent of California's children, 23 over 1.5 million youth, have been diagnosed with asthma. 24 Moreover, it is estimated that health risks from 25 total daily average formaldehyde exposures in California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 from all sources are estimated to range from 23 to 63 2 excess cancer cases per million for children. What is 3 especially tragic about this disproportionate health 4 impact is that children have very little control over 5 their environment. They seldom exercise any choices to 6 where they live, where to attend school, or what materials 7 are utilized or located in their surroundings. They must 8 breathe in the environment in which others place them. 9 Further, the many children in our state from 10 low-income families are far more likely to be exposed to 11 environment with higher levels than formaldehyde emissions 12 which raises the profound issue of environemental justice. 13 Therefore, I urge this Board to accept and adopt 14 the regulations as amended. Thank you. 15 CHAIRPERSON SAWYER: Thank you. 16 Ms. Wiener. 17 Mr. Pung. 18 MR. PUNG: Good afternoon. My name is Steve 19 Pung. I'm the Vice President of Technology for Columbia 20 Forest Products. As VP, one of my responsibilities has 21 been to lead the soy-based adhesive initiative for 22 Columbia for the past three years, nearly four years now. 23 But most of the things that I was going to point out 24 really have already been said, so I'm not going to repeat 25 what you have already heard. But I will make a couple of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 points on cost, because it's been brought up so many 2 times. 3 First on the conversion costs, or what you call 4 the tooling cost. We paid a lot of money to tool up our 5 mills. But most of that cost I'll attribute to the cost 6 of education. It was a learning experience. It was 7 development cost. We know so much more today than we knew 8 three years ago. And now we can implement systems much 9 less expensively than we did in our first efforts. 10 You heard Dave Mullen from Hercules mention 11 second generation. There's some formulations that are now 12 coming along that are going to take that capital cost down 13 even further. 14 The second is operating costs. All our seven 15 hardwood plywood plants are running soy-based adhesives 16 today. One of these locations is running on a cost 17 neutral basis with UF. The other six are all running at 18 costs below current UF operating costs. So I am not 19 suggesting all the alternatives can be as cost effective 20 as this. I guess my point is it's possible. And we've 21 done it. We've shown it can be done. Thank you. 22 CHAIRPERSON SAWYER: Ms. Berg. 23 BOARD MEMBER BERG: Can I just ask you, when 24 you're talking about the tooling costs, are there 25 suppliers or manufacturers of those equipment that is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 available to all the industry? 2 MR. PUNG: There is now. 3 BOARD MEMBER BERG: Thank you. 4 CHAIRPERSON SAWYER: Our last two speakers will 5 be Dennis Bradly and Erwin Schutfort. 6 Dennis Bradly. 7 MR. BRADLY: Good afternoon. We represent 8 Mannington, who is -- we make finished flooring products. 9 And really what we were looking for was really 10 clarification on a couple things. One is it's a small 11 minor point, but within the proposed regulations, it 12 references several ASTM standards, E 1333-96. If you're 13 dealing with ASTM standards, the review process says you 14 need to review it within five years. If it's not updated 15 within eight years, it's out the door. So it just needs 16 to really be reflected to say being E 1333 and leave off 17 the year so it defaults to the most current version. 18 Minor point, but just wanted to reference. 19 In terms of, you know, one of the things that has 20 been brought up in terms of enforcement was being able to 21 use the fleck to then screen to be able to then use the 22 small chamber for determination in terms of compliance. 23 What we would ask for is since obviously that correlation 24 to the large chamber 1333 must exist whether or not that 25 would remove the requirement to go ahead and ask for that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 correlation. So if it would allow the small chamber -- 2 and we heard earlier the testimony that said with what is 3 going on with CHPS, the California High Performance School 4 systems, there are several products that are complying to 5 lower thresholds and they are using the small chamber. 6 They are third party certified. What we were asking is 7 basically if that would provide the compliance 8 considerations to the 1333. 9 And finally, in terms of the Section 93120.1, the 10 definition number 20, what we would suggest is or ask for 11 clarification is that it includes flooring. And what 12 we're thinking and our position is that finished product 13 flooring really puts us more into the category of a 14 fabricator, not in terms of a manufacturer of composite 15 products. And really would ask for that clarification. 16 And the only thing that would be required would be to 17 simply remove that one word, flooring, out of that 18 definition and then it would basically describe hardwood 19 plywood. 20 I think that's the clarification that we're 21 looking for. Any questions? Thank you. 22 CHAIRPERSON SAWYER: Thank you. 23 Does staff note all of those, because they sound 24 like details which will need to be reviewed? Am I 25 correct? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: 2 Yes, Dr. Sawyer, we'll look at those. Would you like for 3 me to respond? 4 CHAIRPERSON SAWYER: If you wish. 5 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: I 6 can on a few of those. 7 Mr. Bradley suggested that we may want to 8 consider adding the year of the ASTM test method. We did 9 consider that, but we opted not to do that and to be 10 specific on the version of the test method so that we 11 control the test method. We don't want to get into a 12 situation where we leave it open where another 13 organization can change the test method without us 14 knowing. 15 CHIEF COUNSEL JENNINGS: In addition, the 16 California Administrative Procedures Act specifically 17 prohibits doing that unless the statute authorizes 18 incorporating the most recent version which it doesn't on 19 this. 20 SUBSTANCE EVALUATION SECTION MANAGER AGUILA: In 21 addition, there was a question about the fleck chamber. I 22 wanted to point that out and clarify what that meant. 23 Previously you heard testimony from our Chief of the 24 Enforcement Division, Mr. Ryden. He kind of indicated 25 that his enforcement staff would be using the fleck PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 chamber. 2 Let me just be clear. In terms of the regulation 3 in terms of being able to determine what a violation is, 4 it's very clear that the violations will be based on the 5 large chamber or the small chamber as defined in the 6 regulation. But in addition to that, we're also exploring 7 other test methods that one could use on a particular 8 basis that would further enhance enforcement activities. 9 So what we're doing is in addition to looking into the 10 sample procedures for the test for finished products, 11 we're also evaluating these hand-held devices that would 12 greatly enhance the enforcement capabilities that we have, 13 be able to get more out of the staff that we have on the 14 field. So anyway, that's -- 15 CHAIRPERSON SAWYER: Thank you. 16 Mr. Schutfort. 17 MR. SCHUTFORT: Thank you very much. Like to 18 introduce myself and thank you for the opportunity, 19 Chairman Sawyer, to bring up a couple of points with 20 regards to third-party testing and certification. 21 My name is Erwin Schutfort. I work for 22 Professional Service Industries, which is a 23 privately-owned engineering company. I work for 24 Pittsburgh Testing Laboratories, which is a division of 25 that company. Pittsburg Testing Laboratories is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 third-party certifier and is primarily concerned about 2 forest products. I also represent the 3 Wilhelm-Klauditz-Institut in Germany doing E1 4 certifications in North America. 5 I'm a chemist. I graduated from Oregon State, 6 and I love the both of best worlds, the best of both 7 worlds, Germany and Oregon. I missed the golden state by 8 a few hundred miles only. 9 I wanted to give you a perspective on how the 10 other side of this works how -- and Board Member Berg and 11 D'Adamo brought this out very nicely. There is the 12 question about the level playing field and can we do 13 actually -- does this regulation actually do what it 14 intends to do? And if we aren't able to do it, then do we 15 actually create a worse situation than before? 16 I'm also the only I think one that is neutral on 17 this. So I want to highlight to you how I certify. As 18 part of Pittsburg Testing Laboratory, I am the registered 19 oversee certification body for the Ministry of 20 Agricultural Fisheries, and Forestry in Japan. And I do 21 certify North American producers under the four star 22 system. 23 I think what we need to do is learn from the 24 failures of the other two systems, the four star system 25 and the E1 system in Europe. There are -- at least both PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 models and systems that are in place in a long time. And 2 you know, being a citizen of Germany, I can tell you they 3 work in Germany very well. As a resident of Oregon, they 4 enjoy a free and non-regulatory environment. 5 The systems where they have difficulties with is 6 in the enforcement. And I think this needs to be very 7 clear to you that in the European system there is 8 virtually no enforcement of the regulation. That is the 9 market itself has regulated itself, and the market only 10 accepts product that are actually tested. Manufacturers 11 in the European system aren't required to do any testing. 12 They could say they dreamt and felt the product was E1 13 compliant, and they could stamp that actually on their 14 product. 15 By and large, the market has sort of taken care 16 of that. I think the one thing that worked in the 17 European system very well is that the concept of notified 18 bodies, that the third-party creditors or testing 19 laboratories must be within the reach of the jurisdiction 20 of the state of California, must be accredited and must 21 have the 17 or 25 ISO and 17 20 ISO certification. 22 Otherwise, you will get people all over the world who will 23 certify things without an accreditation. And I think the 24 staff has done a very good work also working with the 25 Japanese ministry and one of the German ministries. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 And I must say that your staff here does an 2 outstanding job and is probably among all of the agencies 3 I've worked with one of the easiest and most responsive 4 ones to work with. So I'd like to thank the staff. And I 5 recommend the Board to look into what worked in the 6 European system, what worked in the Japanese system and 7 what fails in those systems. 8 CHAIRPERSON SAWYER: Thank you very much. 9 I would like to thank all of our speakers today. 10 Your testimony has been very informative and helps us 11 understand the problem and the industry especially. And 12 I'm sure it will be very valuable in making the decision 13 on this issue. 14 Ms. Witherspoon, do you or your staff have any 15 further comments at this time? 16 EXECUTIVE OFFICER WITHERSPOON: Well, we did over 17 the lunch hour prepare a chart which will illustrate the 18 difference between formaldehyde-free alternative, which 19 was advocated by many speakers, compared to the staff 20 proposal, compared to the CWIC proposal so you can see the 21 range of options before you. 22 Time lines aren't on this chart, so we need to 23 spend a little more time talking about that. Whether or 24 not they're all to be applicable in 2010 or in a staggered 25 fashion, as both we and CWIC have proposed. But this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 gives you a sense of the cost range, the emissions range, 2 the tons achievable, and the risk reduction and cancers. 3 These are California-only numbers. A lot of the testimony 4 talked about the fact they would ripple across the nation. 5 They may or may not. But for the purposes of the reg 6 before you, we've characterized just the California cost 7 for what is currently purchased in this state. 8 CHAIRPERSON SAWYER: Are there any questions on 9 this by the Board members, this particular chart? We'll 10 discuss it after -- 11 BOARD MEMBER D'ADAMO: I have a question on cost. 12 And I really appreciate all the witnesses, especially from 13 industry, because I think their perspective is very 14 important and that the CWIC, the concern about cost, I 15 think we have to be very mindful of that. 16 But at the same time, there was some testimony 17 from Columbia Products in particulate, and I'm just 18 wondering how solid are those cost figures. For example, 19 I think it was the Vice President who testified if they 20 were to retool again, it would be cheaper for them because 21 so much went into development of those figures that we 22 have on cost. Does it assume the first round that 23 Columbia went through, or does it count for a decrease? 24 EXECUTIVE OFFICER WITHERSPOON: It's a range. 25 Actually recall it was zero to 7 million on the hardwood PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 plywood category, which is what Columbia's testimony was 2 there. So their cost was five million for seven plants. 3 And they're surmising that to do the same number of plants 4 today would cost something less than that. We also had a 5 cost that showed how many mills there are in North America 6 supplying California. So you could look at those. 7 BOARD MEMBER D'ADAMO: This would be the -- of 8 course, you don't have a range here in this chart. It's 9 just 115, 127, et cetera. So would this be conservative, 10 this would be worse-case scenario under this column, or is 11 it the middle ground? 12 EXECUTIVE OFFICER WITHERSPOON: Well, I think the 13 doubling of cost is more in the particle board and MDF as 14 opposed to the hardwood plywood. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Columbia only 16 has transferred the technology for the hardwood plywood. 17 So it's the other two sectors their experience we don't 18 know how it will carry over. And clearly our costs do 19 not -- if it turns out that there's low capital investment 20 and no net manufacturing costs, then we're high. But we 21 didn't predicate our estimates on that. We gave you the 22 best estimate we thought it would come out at including 23 capital and ongoing costs. 24 CHAIRPERSON SAWYER: I now close the record on 25 this agenda item. However, the record will be reopened PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 when the 15-day Notice of Public Availability is issued. 2 Written or oral comments received after this 3 hearing date but before the 15-day notice is issued will 4 not be accepted as part of the official record on this 5 agenda item. 6 When the record is reopened for a 15-day comment 7 period, the public may submit written comments on the 8 proposed changes, which will be considered and responded 9 to in the Final Statement of Reasons for the regulation. 10 We'll take our ex parte statements now. 11 Ms. Berg. 12 BOARD MEMBER BERG: Yes. I participated in a 13 tour of Sierra Pines in Martell, California on April 25th. 14 And attending that tour was Wade Gregory, President of 15 Sierra Pines, along with several of his staff including 16 the Vice President of Marketing and Sales and the plant 17 manager. 18 Also attending that tour was Gene Livingston and 19 Brock Landry, lawyers representing the California Wood 20 Industry Coalition. 21 BOARD MEMBER GONG: Yes. I met with Gene 22 Livingston and Lee Shull, both of whom spoke today and 23 this was on March 22 in this building. And our discussion 24 reflected their discussion this morning. 25 Subsequently, on March 6th, I met in my office in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 Los Angeles, the Columbia Forest Products group beginning 2 with Harry Demorest, Phil Guay, Ed Woods, Elizabeth 3 Whalen, and I think Leonard Berkstein. And their 4 discussion with me reflected what they said today. 5 That's all. 6 BOARD MEMBER D'ADAMO: I met with Harry Demorest, 7 Ed Woods, Elizabeth Whalen, and Phil Guay with the 8 Columbia Forest Products at my office in Modesto on March 9 5th. And prior to the period which we must provide ex 10 parte communications, I did meet with Gene Livingston with 11 the California Wood Industry Coalition in Sacramento. 12 SUPERVISOR HILL: On April 23rd, I met with Gene 13 Livingston in Redwood City and represents the California 14 Wood Industry Coalition, and he spoke of the same issue he 15 spoke of today. 16 CHAIRPERSON SAWYER: On the 26th of April, I 17 joined Ms. Berg in meeting with Wayne Gregory, Chris 18 Leffil, Elaine Atkinson, Gene Livingston, and Brock Landry 19 during a visit to the Sierra Pine facility in Martell, 20 California. Our discussion at that time reflected their 21 statements here today. 22 BOARD MEMBER RIORDAN: On March 12th, by phone I 23 spoke to Tom Higgens with Formaldehyde Free Coalition, and 24 that conversation mirrored very much what was said today 25 in his testimony. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 On April 5th, I met with Gene Livingston. He 2 represents the California Wood Industry Coalition, and 3 that conversation mirrored very much what was testified 4 today by that gentleman. 5 CHAIRPERSON SAWYER: The Board has before it 6 Resolution Number 7-14. Do I have a motion to adopt and a 7 second? 8 SUPERVISOR HILL: Mr. Chair -- 9 CHAIRPERSON SAWYER: We will discuss after that. 10 BOARD MEMBER D'ADAMO: I'm prepared to make a 11 motion that we adopt Resolution 07-14, but to include the 12 recommendation that Ms. Riordan made regarding a report 13 back from staff on enforcement. I don't think we settled 14 on a date. Maybe if we could hear from staff. 15 CHAIRPERSON SAWYER: We can discuss these issues 16 after. 17 BOARD MEMBER RIORDAN: I'll second the motion. 18 CHAIRPERSON SAWYER: Okay. Now, further 19 discussion. 20 Ms. D'Adamo, do you want to expand on what we'd 21 like to instruct the staff to do on the enforcement? 22 BOARD MEMBER D'ADAMO: I'd like to hear from 23 staff. I think that Ms. Berg said it best. And that is 24 the success or failure of this is going to hinge on 25 enforcement, and it's something that we have to -- would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 be resolute in all of our efforts. 2 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We agree, and 3 that was a constant theme. There's a conference going on. 4 BOARD MEMBER RIORDAN: While the conference is 5 going on, maybe I can speak to Mr. Scheible on the same 6 subject. 7 I felt that in the testimony that was provided by 8 one of the last speakers, if not the last speaker, was 9 particularly important for learning from the other areas 10 of the world, particularly Europe and Japan on their, you 11 know, experiences with enforcement or lack thereof or 12 however it would work. And I thought that was a -- I 13 hadn't thought of that until it was spoken to here. And I 14 thought, you know, maybe we can learn something. It might 15 be valuable. 16 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We can follow 17 up on that. That was on the certification issue. How do 18 we make sure that people who are out there and hired by 19 firms with third-party certifiers are doing the job right. 20 And we need to get that process right, because we need to 21 make it as easy as possible for the manufacturers who want 22 to make complying products to make them and know they made 23 them. 24 EXECUTIVE OFFICER WITHERSPOON: On the 25 enforcement report, the conference -- the conclusion of it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 was we would be ready to report back in one year for our 2 first report. We can perhaps report annually as we move 3 into actual -- 4 BOARD MEMBER RIORDAN: I think it would be good 5 to make it an annual report, at least in those first few 6 years. 7 CHAIRPERSON SAWYER: Supervisor Hill. 8 SUPERVISOR HILL: Thank you, Dr. Sawyer. 9 Appreciate that. It's interesting. The last couple of 10 months -- and really appreciate the onerous amount of 11 material that I've been reading today and over the last 12 few weeks. It was really quite fascinating and extremely 13 thorough and comprehensive. And it was interesting today 14 to have of the 52 or so speakers it was almost split 50/50 15 in those opposed and those in favor of the resolution. 16 But what I heard today, which I think was kind of 17 interesting, is that there's some manufacturers that a 18 number of them that are able to meet the standards that 19 we're talking about today, and that the Phase I and Phase 20 2 requirements, and that heard that those even with the -- 21 they could make more of those products more compliant wood 22 products if the demand was there, which indicates that 23 obviously if we were to pass this today, the demand will 24 be there and they will be able to make it. 25 We also heard that formaldehyde-free MDF will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 available soon. And that I thought was interesting. And 2 didn't get that in the amount of material that I read in a 3 lot of these things that came out of the testimony today 4 that wasn't presented in the written material, which I 5 found very interesting and enlightening. 6 And because of that, I think it would be 7 important for us to as we look at the best available 8 control technology, which is available and could be 9 available tomorrow -- I mean, it could be utilized 10 tomorrow, that perhaps we should look at moving that date 11 to 2010 rather than 2011 for implementation. That one 12 year could make a difference in terms of those lives that 13 we're talking about down the road. But I think it's an 14 obligation and a responsibility that we have to make that 15 decision and move forward with that since that technology 16 is available and is utilized and is something that is 17 marketable today. I would like to ask that -- 18 BOARD MEMBER BERG: May I ask clarification? If 19 you're talking about the hardwood plywood that is in the 20 15-day changes already? 21 SUPERVISOR HILL: The hardwood plywood is in the 22 15-days. I was referring to the other. 23 BOARD MEMBER BERG: It's interesting, because I 24 was going bring up the concern that I'm not hearing in the 25 other areas that it is still brand-new and the technology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 is unproven and especially in the particle board arena. 2 And in looking at even the standards that from the .09 to 3 what is being requested by industry the .1, are we setting 4 technology-forcing limits that are beyond the technology 5 even at the date. And so we come from kind of two 6 different -- same question, but two different 7 perspectives. Especially in the plywood arena would be my 8 concern. 9 SUPERVISOR HILL: I was looking at it if we were 10 to move forward with the acceleration of the date for the 11 other areas that, just as we did last month on the 12 off-road diesel equipment, if we get to that point in time 13 and the technology isn't there, where there are issues 14 raised that the manufacturers cannot comply, then we can 15 look at it again. But we will have made that statement 16 and made that initiative and I think been as responsible 17 as we could. 18 CHAIRPERSON SAWYER: Would staff like to comment 19 on why they limited it to the single product, the moving 20 up by one year? 21 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, quite 22 frankly, the hardwood plywood is far ahead of the other 23 products in showing substantial market share, clearly 24 proven options, and newly discovered various option 25 routes. So that evidence came in fairly late. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 Columbia Forest Products, for example, relatively 2 late in the process says, by the way, we'll make this 3 simple for other people to get the technology we use. So 4 that combination convinced us it was at hand and the 5 transition could be made in the shorter period of time. 6 We have not seen the evidence on the others. We 7 believe it will be there. We believe it was prudent to 8 allow the phase-in that we've proposed. That would be 9 great if it happened early, but we can't assure you that 10 we'll have the confidence that that will be successful 11 like we do for the one category. 12 EXECUTIVE OFFICER WITHERSPOON: I'd like to 13 remind the Board what was the staff recommendation was on 14 the time line. For hardwood plywood with a veneer core, 15 which is the thin strips of wood glued together, we're 16 proposing January 1st, 2010. In 2011, again January 1st, 17 it would be the particle board and general MDF. In 2012, 18 in January, it would be thin MDF. And in July of 2012, it 19 would be hardwood plywood with a composite wood core. 20 And the WIC proposal agrees on all of those 21 timetables but seeks a slight adjustment in the emission 22 levels. If we were to accelerate, they would probably 23 want the reopen on what the emission levels are achievable 24 in a faster time frame. Because some of this has to do 25 with what you expect the technology will turn out to be, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 whether it's a drop-in system or a mill change out. And a 2 lot of the industry is hoping for drop-in. Some will 3 choose the soy route and do the full change out, but 4 others will wait and see if they can make it with a 5 drop-in system that is less capital intensive. 6 So those are sort of the issues we have to weigh. 7 And we do have them all over the map between 2010 and July 8 of 2012. 9 BOARD MEMBER RIORDAN: Also I would say that in 10 my experience sometimes it's better not to anticipate some 11 change later, but to draft reasonable requirements 12 initially so you don't have to go back. Because I'll tell 13 you the hearing on going back is sometimes worse than the 14 hearing going forward. 15 So I think sometimes you give a little to assist 16 an industry that has to change perhaps a whole process to 17 achieve our requirements. And it would seem to me we want 18 them to succeed. I want them to succeed in this. And so 19 if we allow for one additional year, it's really going to 20 perhaps make the difference if they succeed or not 21 succeed. 22 BOARD MEMBER BERG: The other thing we're looking 23 at is it will also give us an opportunity to get the 24 inspection and the enforcement down. I'm still very 25 encouraged at how committed staff is, but I do agree with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 some of the speakers we heard and what staff is also 2 saying, and that is it's going to be a yoman's job getting 3 the enforcement in place. And I think that's a critical 4 aspect. 5 And so for that, I would agree to the year on the 6 hardwood plywood for exactly what you said, Professor 7 Hill, and I agree with you 100 percent. But I would be 8 really a little bit hesitant to be pushing any of the 9 other limits at this time. 10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Another point 11 to make. This is the first time this industry has faced 12 regulation by the Air Resources Board, a regulation of 13 this type. So it takes longer when it's the first time 14 around. 15 I was just thinking to myself this is also in 16 terms of the industry working with us and showing good 17 faith, usually when it's the first time we regulate 18 somebody, it's very, very difficult. But this industry 19 has turned around. And, you know, everyone has pulled in 20 with a proposal and tried to say we have to improve and 21 how are we going to do it. So I think that we've started 22 off successfully. And we really do want it to work out 23 and be successful so that businesses aren't displaced and 24 yet we achieve the goals that we need with the products. 25 SUPERVISOR HILL: Thank you for the discussion. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 CHAIRMAN SAWYER: I have a couple of issues which 2 maybe one of them is just a matter of clarification. We 3 heard from one speaker that the sell-through time for the 4 import market of three months was not adequate. I would 5 guess that since there's a lead time on the implementation 6 of all of these rules by several years that's really not 7 an issue, or is it an issue? 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, we hope 9 it's not an issue. We had differential lead times, and we 10 had some complaints from the domestic manufacturers it 11 should be the same. And I think we agreed by putting them 12 together. And just means it's a fact of life if you're 13 going to land your product three months early, you have to 14 comply. But that's no different than auto manufacturers 15 or other people have to do. 16 CHAIRPERSON SAWYER: I, too, have some concerns 17 about the development of the test method and precision and 18 variability, which at these very low levels may be 19 inherent in that test. This is just a matter of 20 instruction of staff to work on that, and we'll try to get 21 you the resources and make sure you can do it that and do 22 it right. Because it's going to be the standard and 23 therefore very important it be done correctly. 24 Are there any other comments by the Board? 25 BOARD MEMBER RIORDAN: Just one, Mr. Chairman. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 just think staff did a very good job. This has been a 2 long process. And your responses today were just 3 excellent for I think helping us to understand with some 4 clarity this issue. And this is not an easy one to 5 understand. Because there's a lot of nuances I'm sure in 6 some of the things that we're looking at. So I appreciate 7 your work. 8 CHAIRPERSON SAWYER: Ms. Berg. 9 BOARD MEMBER BERG: While we're through the 10 development stage, if we do run into any issues that we 11 did not anticipate, will you be able to bring those back 12 to the Board? 13 EXECUTIVE OFFICER WITHERSPOON: Absolutely. 14 BOARD MEMBER BERG: Thank you. 15 CHAIRPERSON SAWYER: And I believe there was a 16 commitment to come back to us to report regularly 17 especially on the enforcement part of it. 18 EXECUTIVE OFFICER WITHERSPOON: Annually. 19 CHAIRPERSON SAWYER: Okay. Are we ready to vote 20 on this item? All those in favor please indicate by 21 saying aye. 22 (Ayes) 23 CHAIRPERSON SAWYER: Opposed? 24 Motion is carried. Thank you very much everybody 25 in the room for contributing to this motion. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 The last agenda item today -- maybe it would be a good 2 idea to take a five-minute break for our court reporter. 3 (Thereupon a recess was taken.) 4 CHAIRPERSON SAWYER: The last agenda item is 5 7-4-5, it's the update on the Goods Movement Reduction 6 Emission Plan which was approved by the Board one year ago 7 on April 20th, 2006. 8 Reducing emissions from international and 9 domestic goods movement is a high priority for the Air 10 Resources Board. As we heard in the SIP update, 11 controlling these sources is essential for attainment of 12 the federal ambient air quality standards. Reducing goods 13 movement emissions is also critical to protect the health 14 of communities that are highly impacted by goods movement 15 activities. 16 Many positive actions are underway. New Air 17 Resources Board regulations, effort by the ports and 18 private sector, and upcoming bond expenditures will all 19 contribute to the solution. 20 Ms. Witherspoon, please introduce the staff 21 presentation. 22 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 23 Sawyer. We are continuing to make progress in reducing 24 goods movement emissions, and that is reflected in your 25 Board hearing calendar for the balance of this year. In PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 the next few months, staff will be bringing you several 2 items related to marine vessels, harbor draft, drayage 3 trucks, and other source categories. 4 The first round of health risk assessment for 5 major rail yards is also nearing completion and will be 6 available for review next month. In the last update, we 7 highlighted local initiatives at the sea ports in Los 8 Angeles and the Bay Area. Today, we'll turn our attention 9 further south to examining the issue of goods movement 10 through our land ports and entry in San Diego and in the 11 California/Mexico border region. 12 Ms. Marvin of the Planning and Technical Support 13 Division will make the staff presentation. 14 (Thereupon an overhead presentation was 15 presented as follows.) 16 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 17 DIVISION CHIEF MARVIN: Good afternoon, Dr. Sawyer, 18 members of the Board. This is our second report back to 19 you on implementation of the Emission Reduction Plan. And 20 in last November's report, we recapped all of the actions, 21 all of the progress to date. In this report, we'll focus 22 more specifically on what's new since November and what's 23 hot right now. 24 During the last report, Dr. Gong asked us to 25 characterize the challenges we're facing to achieve the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 goals of the plan, and Supervisor Roberts urged us to give 2 the goods movement issues in the San Diego border area 3 more visibility. We will address both of those requests 4 in this presentation. 5 I'll begin by highlighting the major development 6 since the November report and provide a very brief 7 reminder of why the Board has made goods movement such a 8 high priority. Then we'll move to updates on each region 9 and move along to what's happening in each source sector. 10 I'll conclude with a review of progress on developing 11 funding to support this whole program. 12 --o0o-- 13 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 14 DIVISION CHIEF MARVIN: Since the last update, ARB has 15 begun implementing rules adopted by the Board for ship 16 auxiliary engine fuels and on-board incineration for cargo 17 equipment and for international trucks. 18 In December, the Pacific Merchant Shipping 19 Association filed suit with the federal district court in 20 Sacramento against ARB to have the Board ship auxiliary 21 fuel rule declared invalid and also to establish an 22 injunction against ARB from enforcing it. ARB's view is 23 that we will prevail on this suit, and we feel confident 24 we do have the authority to enforce it. 25 In January, the Administration released the final PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 Goods Movement Action Plan developed jointly by the 2 Business, Transportation, and Housing Agency and the 3 California Environmental Protection Agency. This plan 4 identifies priorities for infrastructure and securities 5 improvements. As part of the environmental mitigation 6 component, it relies on and appends ARB's Emission 7 Reduction Plan to simultaneously cut the air pollution 8 impacts from goods movement. 9 The drayage trucks that serve our port and 10 intermodal rail yards are one of the most challenging and 11 complex sectors in goods movement. ARB staff has been 12 developing the rule described in the Emission Reduction 13 Plan for over a year. There are new a total of four 14 drayage truck proposals in circulation including the most 15 recent one from the ports of Los Angeles and Long Beach. 16 Their proposal would complement ARB staff's approach. 17 We'll examine each of these approaches later as part of 18 the truck update. 19 U.S. EPA also issued its proposal for the next 20 round of national locomotive and marine engine standards. 21 EPA needs to strengthen and accelerate these proposals to 22 help California attain air quality standards by federal 23 deadlines and to cut the existing health risk in 24 communities near rail yards and ports. 25 At the same time, we want to recognize U.S. EPA's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 leadership in developing and presenting a new U.S. 2 proposal for more effective worldwide shipping standards 3 through the International Maritime Organization. Dr. 4 Sawyer provided a letter of support on behalf of ARB. 5 And finally, we have been working within the 6 Administration on the Governor's forthcoming budget and 7 legislative proposals to implement the billion dollar bond 8 program. We anticipate these proposals will be released 9 in May. 10 --o0o-- 11 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 12 DIVISION CHIEF MARVIN: A very quick reminder of why 13 diesel pollution from ports and goods movement remains 14 high on our priority list. 15 --o0o-- 16 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 17 DIVISION CHIEF MARVIN: The ships, harbor craft, cargo 18 equipment, trucks and locomotives that move goods through 19 California's ports and rail yards and along our trucking 20 corridors accounts for a majority of the diesel 21 particulate matter emissions in the state, plus about 22 one-third of the nitrogen oxides and one-third of the 23 sulfur oxides. 24 --o0o-- 25 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 DIVISION CHIEF MARVIN: This diagram of truck traffic 2 illustrates that California is literally the heart of 3 international and domestic goods movement in the U.S., 4 with transportation arteries and veins reaching out to the 5 entire country. On this graphic, the thicker the red 6 line, the greater the amount of cargo transported by 7 truck. 8 --o0o-- 9 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 10 DIVISION CHIEF MARVIN: The same relationship is apparent 11 for goods moved by rail between California and the hub in 12 Chicago for connection to the rest of the U.S. 13 --o0o-- 14 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 15 DIVISION CHIEF MARVIN: At the meeting over a year ago, 16 the Board adopted several public health goals for ports 17 and goods movement in California. You directed staff to 18 vigorously pursue the actions needed to meet the goals 19 shown here for the entire state. Let's start the look 20 back and the look ahead at the regional level. 21 --o0o-- 22 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 23 DIVISION CHIEF MARVIN: This map shows the four priority 24 trade corridors in California as identified in the 25 Administration's Goods Movement Action Plan. Starting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 from the north, these include the bay area, the central 2 valley, the Los Angeles Inland Empire area, and the San 3 Diego border area. 4 --o0o-- 5 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 6 DIVISION CHIEF MARVIN: In northern California, more 7 agencies are going to develop proposals to address the air 8 quality impacts of goods movement. The inset photo here 9 shows the three source areas covered by the health risk 10 assessment for diesel PM in West Oakland. ARB and the Bay 11 Area District are developing this assessment with the 12 participation of the port and the UP rail yard. 13 I'd like to recognize the growing level of 14 communities, academic, and government interest in this 15 project that has strengthened it. Over 70 people 16 participated in the last community meeting. Several of 17 them continue to work through issues with us on a regular 18 basis and to challenge us to do even better. 19 With the complex meteorology and extensive 20 emissions information, this assessment will be the most 21 comprehensive evaluation of its kind anywhere. To give 22 you a sense of the richness of data that the partners have 23 developed, the computer run time has risen to over two 24 months for the air quality modeling element alone. This 25 expanded scope has pushed back the delivery date, and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 now expect to release the combined emission inventories in 2 the next month and have draft results early this fall. 3 The inventory and the risk assessment results 4 will also inform the revamped planning effort for the port 5 of Oakland. The port and the Bay Area District restarted 6 development of their air quality planning process with 7 more extensive community participation. The current 8 target is to develop a set of emission and exposure 9 reduction strategies for consideration by the port 10 commissioners in mid 2008. At the same meeting, the Bay 11 Area discussed its new initiative to develop a rule 12 establishing an emissions cap for each port in the region. 13 Travelling inland, the San Joaquin Valley 14 District has proposed a major expansion of its incentive 15 programs to meet air quality goals subject to the 16 availability of funding. The proposal includes truck and 17 locomotive elements. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 20 DIVISION CHIEF MARVIN: In southern California, the ports 21 of Los Angeles and Long Beach are moving quickly to 22 implement their first-year commitments in the San Pedro 23 Bay Ports Clean Air Action Plan. The ports are working on 24 a 2007 update, but the majority of the attention is on 25 launching the port truck program that accounts for most of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 the emission reductions and most of the cost in the 2 adopted plan. 3 In its draft Air Quality Management Plan, the 4 South Coast District has proposed several actions to 5 address goods movement, which include measures for the 6 ports that go beyond their commitments in the Clean Air 7 Action Plan. In February, the port of San Diego launched 8 its own clean air planning effort targeting completion at 9 the end of this year. This port handles about five 10 percent of the ship calls in California. Now we'll move 11 to the international land ports of entry in the 12 California/Mexico border area. 13 --o0o-- 14 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 15 DIVISION CHIEF MARVIN: In this segment of the 16 presentation, I'll focus on goods movement issues and 17 solutions in this region. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 20 DIVISION CHIEF MARVIN: Starting with air quality, ozone 21 levels in San Diego's eastern region specifically at the 22 Alpine monitor shown here in bright blue violate the State 23 ozone standards. Alpine is the only site in San Diego 24 that exceeds the federal standard as well. The chart also 25 shows the lower ozone levels with the biggest commercial PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 truck crossing at Otay Mesa in purple and in downtown San 2 Diego near the port in green. 3 --o0o-- 4 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 5 DIVISION CHIEF MARVIN: For the inhaleable particulate 6 matter or PM10 standard, the high site in San Diego County 7 is at the Otay Mesa border crossing. This site far 8 exceeds the daily PM10 standard set by the Air Resources 9 Board. The downtown site in green tends to run above the 10 State standard except in 2003 when values spiked during 11 the massive wildfires. 12 --o0o-- 13 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 14 DIVISION CHIEF MARVIN: These pies show how goods movement 15 emissions in San Diego County break down by source sector. 16 Like other coastal areas, trucks dominate the inventory 17 today, but by 2020, truck emissions decline due to 18 controls, while ship emissions continue to grow. 19 The 2020 pie illustrates the importance of the 20 Board's requirement for cleaner fuel in ship auxiliary 21 engines. Without the benefits of that rule, diesel PM 22 emissions in San Diego would have climbed to more than 23 four tons per day by 2020. This rule eliminates just over 24 half of these emissions and results in a net reduction, as 25 total emissions are projected to drop down to 1.8 tons per PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 day instead. 2 --o0o-- 3 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 4 DIVISION CHIEF MARVIN: For NOx, the same trends are 5 apparent, truck dominance in 2005, ship dominance in 2020 6 with a small net emissions increase. Full implementation 7 of the strategies in the ARB Emission Reduction Plan can 8 shrink the 2020 NOx pie to less than half the size of 2005 9 levels. 10 --o0o-- 11 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 12 DIVISION CHIEF MARVIN: This map shows the international 13 ports of entry between California and Mexico. From San 14 Ysidro and Otay Mesa and Tecate and San Diego County over 15 to Imperial County's two border crossings at Calexico and 16 to the far east just off the map at Andrade. 17 --o0o-- 18 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 19 DIVISION CHIEF MARVIN: Over 600 trains cross from Mexico 20 into California each year primarily at Calexico and San 21 Ysidro. For comparison, over 400,000 trains go through 22 Barstow each year and 200,000 through Roseville. Trucks 23 are the predominant mode for freight movement across the 24 border into California. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 2 DIVISION CHIEF MARVIN: This chart shows about 3,000 3 trucks crossing from Mexico into California each day in 4 this case for all the stations combined. Otay Mesa is 5 clearly the major commercial truck crossing with about 6 2,000 trucks a day remaining fairly constant over the six 7 years shown. Right now, trucks based in Mexico, even 8 those with dual Mexico/U.S. plates are limited to travel 9 within the commercial zone, about 25 miles or 20 miles or 10 so inside California. 11 --o0o-- 12 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 13 DIVISION CHIEF MARVIN: Commercial trucks entering 14 California from Mexico have to pass security and safety 15 inspections, while truck drivers entering the U.S. are 16 screened by U.S. customs and border protection officers. 17 The California Highway Patrol performs safety checks. If 18 ARB truck inspectors are deployed to that crossing, the 19 trucks also need to pass ARB smoke and visual inspections. 20 In the top left photo, you can see the long line 21 of trucks idling in the cue on the Mexico side of the 22 border waiting to pass through U.S. customs at Otay Mesa. 23 The average wait time is reported to be about two hours, 24 with waits as long as four hours reported. The result of 25 this is that about half of the diesel PM emissions from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 trucks within three miles of the border are attributable 2 to time spent idling in cue. 3 --o0o-- 4 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 5 DIVISION CHIEF MARVIN: To better understand the nature of 6 the trucks making border crossings now, ARB staff 7 conducted a survey of truck drivers in late 2006 and early 8 2007. One of the objectives was to obtain a pre-NAFTA 9 baseline for comparison when the commercial zone 10 restrictions are removed. We will be repeating and 11 expanding this survey as NAFTA is implemented. 12 One of the findings from the survey is that about 13 80 percent of the truck traffic crossing into the U.S. is 14 travelling just on the other side of the border to a vast 15 complex of warehouses to drop off their load for pick up 16 and distribution by U.S. trucks. 17 --o0o-- 18 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 19 DIVISION CHIEF MARVIN: Border trucks based in Mexico may 20 have been certified to Mexico's emission standards or they 21 may be trucks purchased from the U.S. From an emissions 22 standpoint, Mexico requirements for trucks and fuels have 23 a direct impact on air quality in the border regions. The 24 first Mexican truck emission standards were implemented 25 with the 1994 model year. For the next ten years, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 Mexico's standards aligned with the U.S. standards. But 2 from model years 2004, '07, and 2010, U.S. EPA and this 3 Board racheted down the U.S. standards. Mexico hasn't 4 made corresponding reductions in its standards. This 5 clearly needs to change. 6 U.S. EPA and ARB's border coordinators have been 7 urging their counterparts in Mexico and the state of Baja, 8 California to pursue standards equivalent to the U.S. 2007 9 and 2010 truck standards. As the Board is well aware, one 10 barrier to advance truck control technology is the need to 11 ensure that only low-sulfur diesel fuel is used in those 12 vehicles. Our understanding is some fueling stations 13 south of the border are offering low sulfur diesel fuel 14 today, but we have not been able to confirm this is the 15 only diesel fuel being sold to truckers in the region. 16 --o0o-- 17 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 18 DIVISION CHIEF MARVIN: The California Legislature and 19 this Board have established two key requirements that 20 apply to international trucks operating in California. 21 The prohibition on visible smoke and tampering has been in 22 place for over a decade. More recently, state law has 23 changed to prohibit international trucks that don't meet 24 U.S. emissions standards for the corresponding model year. 25 The Board adopted changes to the truck inspection program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 to implement this provision. 2 When the regulation became effective on February 3 15th of this year, ARB's inspectors began reviewing the 4 engine labels and other identifiers to determine 5 compliance. One of the challenges is the variation in the 6 condition of the engine labels, as you can see from these 7 photos. 8 --o0o-- 9 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 10 DIVISION CHIEF MARVIN: ARB inspected trucks at border 11 crossings and in the commercial zone to determine 12 compliance with these requirements. In the commercial 13 zone, ARB inspects both big diesel rigs and smaller 14 commercial vehicles like both diesel and gas panel vans 15 and flatbed trucks. 16 The primary reason for violations is excess smoke 17 from fuel system failure for tampering. The violation 18 rate in the commercial zone is higher than it is in the 19 border crossings at roughly 15.9 percent versus 12.3 20 percent. These numbers are both a bit higher than the 21 statewide failure rate of ten-and-a-half percent. 22 --o0o-- 23 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 24 DIVISION CHIEF MARVIN: Several programs are in place or 25 are needed to reduce the air quality impacts of border PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 trucks. First, full implementation of Mexico's fuel 2 sulfur standards is vital to support trucks with the 3 aftertreatment base controls. Concurrently, Mexican 4 emission standards for new trucks need to be aligned with 5 U.S. standards. ARB's private truck fleets rule in 6 development would address Mexican and other international 7 trucks operating in California requiring the same upgrades 8 as California and U.S. trucks. Of course, continuing 9 ARB's truck inspection program is critical to this entire 10 effort. 11 There's also a project in San Diego where the 12 district is working under a U.S. EPA grant to retrofit 13 about 50 Mexican trucks in the region with diesel 14 oxidation catalysts. Finally, since trucks waiting in the 15 cue on the Mexican side of the border are a substantial 16 source of emissions, reducing the wait time at the border 17 would also provide air quality benefits. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 20 DIVISION CHIEF MARVIN: To wrap up this element of the 21 presentation on the border, I'm also going to touch on two 22 other issues that are fairly controversial in the area at 23 this time, certainly as Supervisor Roberts knows as we 24 discussed the other day. 25 This February, the Secretary of the U.S. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 Department of Transportation announced an agreement with 2 Mexico for a pilot program that would allow 100 companies 3 from both sides of the border to freely cross and drive 4 beyond the commercial border zone. This program would 5 include a more extensive safety audit as well. But 6 proposals in the U.S. House and Senate, including one by 7 Senator Feinstein, are designed to delay implementation of 8 this pilot program while seeking public comment and 9 greater assurance about Mexican truck safety and 10 enforcement of U.S. laws. 11 --o0o-- 12 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 13 DIVISION CHIEF MARVIN: The other major happening in the 14 area of the proposal is for a new port south of Tijuana. 15 Private investors have been advocating creation of a new 16 mega port. It would divert some of the projected growth 17 in Asian trade from the ports of L.A. and Long Beach, and 18 the consumer goods coming through the new port would 19 primarily serve the U.S. market. They're proposed to be 20 shipped via a new rail line to the U.S., and the Union 21 Pacific Railroad has proposed a line that would go from 22 the port directly to Huma, Arizona, bypassing California. 23 The government is soliciting bids for the port 24 and the rail line now, but funding for this four to five 25 billion dollar project has not been secured. Until that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 happens, the reality of Punta Colonet is uncertain. 2 --o0o-- 3 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 4 DIVISION CHIEF MARVIN: Moving from the regional focus to 5 a statewide look at the progress in each source sector, 6 we'll go through what's been accomplished and what we're 7 working on beginning with the largest source of goods 8 movement emissions today, trucks. 9 --o0o-- 10 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 11 DIVISION CHIEF MARVIN: ARB expanded its team of truck 12 inspectors last year to 21 field staff with 14 in-office 13 staff following up on citations and pursuing fleet cases. 14 Last year, the inspectors checked for compliance with the 15 Board's requirements for software upgrades, aka chip 16 reflash, to reduce the excess NOx on the 1990 zero trucks 17 until the court suspended the regulation in mid-October. 18 Failure to comply with the reflash regulation was the 19 number one cause of violations followed by excess smoke. 20 In 2006, ARB teams also began enforcing the 21 Board's five-minute limit on truck idling. We've targeted 22 enforcement in areas with the highest rates of community 23 complaints near the ports of Los Angeles, Long Beach, and 24 Oakland, plus the Mira Loma area with its high 25 concentration of warehouses. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 In the last update, we mentioned an upcoming risk 2 assessment for warehouse distribution centers. This work 3 is still underway, including projections of how the risk 4 will change as ARB adopted rule for transportation 5 refrigeration units is fully implemented. We're also 6 looking at what would be done in the near term to 7 accelerate risk reduction in communities near these 8 sources. We anticipate a release of the draft report this 9 summer. 10 --o0o-- 11 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 12 DIVISION CHIEF MARVIN: Our priorities for trucks this 13 year is two rules in development that would bring the rest 14 of the on-road diesel vehicles under the Board's programs 15 to clean up existing fleets. This comprehensive rule 16 would cover all of the trucks that operate on California's 17 roads regardless of whether they're based in California, 18 in other states, or in other countries. 19 This rule faces many of the same issues as the 20 construction equipment rule that the Board will hear next 21 month. These include the timing and higher cost for truck 22 replacement to gain both the NOx and PM reductions that 23 are needed to attain the PM2.5 standards. Retrofits alone 24 could effectively reduce the diesel PM health risk, but 25 without the significant NOx benefits that are needed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 ARB staff is evaluating the ability of the 2 smaller fleets to bear these costs, and we're also 3 exploring possible low-interest loan subsidies that could 4 improve access to financing for these upgrades. Staff is 5 currently expanding the public process to try to reach the 6 broad scope of affected truck owners, and we expect to 7 bring you a proposal for consideration early next year. 8 --o0o-- 9 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 10 DIVISION CHIEF MARVIN: For the subset of drayage trucks 11 serving the sea ports and intermodal rail yards, there are 12 four proposals on this street. Before we get to the 13 specifics of the proposal, there are two points that are 14 important to know. 15 The first is the current business model for port 16 trucking, which has shippers contracting with primary 17 motor carriers licensed by the federal government to move 18 freight to and from the port. These primary motor 19 carriers are often paper operations that dispatch truckers 20 but own no trucks and employ no drivers. These carriers 21 use truck owner/operators as independent contractors to 22 provide the transport services. 23 There's also a pending action that will have a 24 significant impact on port trucking in the next year. 25 Under the 2002 Marine Transportation Securities Act, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 U.S. Department of Homeland Securities will require the 2 port truck drivers to pass background checks and obtain 3 transportation worker identification cards. We only have 4 anecdotal information about how many current truck drivers 5 may not be able to attain the cards. 6 The loss of current drivers is expected to be the 7 highest at the ports of L.A. and Long Beach. The ports 8 told us two weeks ago that they've been informed their 9 drivers will need to enroll in this program over the 10 summer and that the federal government expected to start 11 enforcing it at those ports by January of next year. 12 --o0o-- 13 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 14 DIVISION CHIEF MARVIN: The rule being developed by ARB 15 staff for drayage trucks is based on many of the concepts 16 described a year ago in the Emission Reduction Plan and a 17 staff white paper. The regulatory proposal set emission 18 performance standards for trucks serving the sea ports and 19 intermodal rail yards. This current draft calls for two 20 phases of modernization, as you can see on this slide. 21 One of the current challenges is define the most 22 appropriate roles and responsibilities for each player in 23 the drayage truck industry. The economic viability of the 24 current owner/operators is another challenge. The State 25 Bond Program and port proposals could help fund the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 transition to cleaner equipment. ARB staff is also 2 working to coordinate this regulatory proposal with the 3 emerging port initiatives and incentive programs for your 4 consideration later this year. 5 --o0o-- 6 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 7 DIVISION CHIEF MARVIN: The Coalition for Clean and Safe 8 Ports has introduced another proposal. This Coalition 9 includes the Teamsters Union and the Natural Resources 10 Defense Council as two of its most well-known members, 11 along with many of the environmental justice advocates who 12 regularly work with the Air Resources Board. 13 The Coalition proposes a fundamental change to 14 the business model in place of the ports based on the 15 concession model used at airports where companies bid to 16 provide services. The truck drivers would become 17 full-time employees of the motor carriers that would bid 18 to service the ports. Port access would be restricted to 19 companies that meet more stringent standards defined by 20 the port. These can include environmental standards, 21 security, labor, business, and community standards. The 22 Coalition has been promoting this approach at the biggest 23 ports in the U.S., most successfully in Los Angeles and 24 Long Beach where the harbor commissioners have supported 25 the concept. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 --o0o-- 2 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 3 DIVISION CHIEF MARVIN: On April 12th, the ports of L.A. 4 and Long Beach unveiled the details of their joint 5 proposal to implement the truck measure in the Clean Air 6 Action Plan. This proposal would allow only licensed 7 concessions to serve the ports with motor carriers 8 assuming truck ownership and independent owner/operators 9 moving to employee status. 10 The ports would impose two types of fees to 11 support this and other programs. The ports have assumed 12 that the financial assistance grants to help implement 13 this program would be funded by a combination of the $200 14 million the ports have pledged, and assumption of 400 15 million from ARB's freight bond moneys, and the combined 16 benefits of the funds raised by impact fees under trucks 17 during this transition period. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 20 DIVISION CHIEF MARVIN: The most recent proposal to be 21 introduced came from an industry coalition and largely in 22 response to concerns about the concession air models I 23 just described. This fourth proposal comes from a 24 national group of railroads, marine shippers, retail 25 association, and the waterfront coalition. They advocate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 a combination of ARB regulation, a statewide ban on 2 registering older trucks, an industry program to generate 3 funding, and state tax incentives to subsidize compliance 4 with the ARB standard. The ports themselves would not 5 play an active role under this approach. 6 --o0o-- 7 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 8 DIVISION CHIEF MARVIN: Moving on to locomotives, ARB 9 staff is focused on implementing the 2005 MOU with 10 inspection of the major designated rail yards. Of the 33 11 violations found in 2006, 32 were for excess idling and 12 one for excess smoke. 13 --o0o-- 14 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 15 DIVISION CHIEF MARVIN: Continuing the report on MOU 16 progress, the health risk assessment Ms. Witherspoon 17 mentioned will be released this spring starting with the 18 launch in commerce. Roughly 65 percent of the captive 19 intrastate locomotives are now equipped with idle 20 reduction devices with 100 percent required by mid next 21 year. 22 The same captive fleet is using 100 percent 23 low-sulfur diesel fuel, and the railroads report that 95 24 percent of the fuel being supplied to their interstate 25 line haul locomotives is currently low sulfur. They PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 required to contiguously supply 80 percent or better under 2 the MOU. 3 The fleet of switcher locomotives operating in 4 California's rail yards number about 440. But the end of 5 this year, we expect that over 80 new low-emission 6 switchers will be operating in California. These are 7 primarily in the South Coast, followed by the Bay Area, 8 Sacramento, and the San Joaquin Valley. 9 --o0o-- 10 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 11 DIVISION CHIEF MARVIN: Locomotive emissions are projected 12 to decrease through 2010 on the strength of the Board's 13 two agreements with the railroads, then start rising again 14 as growth overcomes the benefits of control. 15 U.S. EPA released its proposal for new national 16 locomotive standards in March. The emission reduction 17 plan and the SIPs rely heavily on new locomotives with the 18 sophisticated aftertreatment technology being phased in 19 for diesel trucks and off-road equipment to meet clean air 20 goals. 21 Both plans anticipate production of these 22 technologies by 2012 with a California-specific program to 23 concentrate those locomotives here. U.S. EPA's proposed 24 Tier 4 standards would ultimately require the desired 25 technology but not soon enough. California needs U.S. EPA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 to accelerate the implementation dates for the proposed 2 standards to support the state's critical public health 3 and attainment deadlines. 4 --o0o-- 5 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 6 DIVISION CHIEF MARVIN: Moving on to ships. The major 7 accomplishments since the last report is implementation of 8 the Board's fuel sulfur limits for auxiliary engines. In 9 the first quarter, staff boarded 28 ships at dock in four 10 ports, reviewed the fuel records, and took fuel samples 11 for analysis in ARB's lab. There were no violations found 12 at this time period. And this is the regulation that 13 we're being sued on. 14 --o0o-- 15 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 16 DIVISION CHIEF MARVIN: In addition to defending the 17 Board's fuel rule, we're developing a complementary 18 proposal to extend lower sulfur standards to the fuel used 19 in the main propulsion engines of ships. This is a 20 critical control for sulfur oxides to help cut PM2.5 21 levels, especially in the South Coast. Since ships would 22 need to switch the main engines over to cleaner distillate 23 fuels near the California coast, they would also need to 24 carry a greater supply of that fuel. Based on an industry 25 survey, we're evaluating the need for ship modification to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 accommodate new or larger tanks to provide that supply. 2 We are also accessing the availability of 3 distillate fuels to develop an appropriate schedule for 4 the transition. 5 Another priority is to eliminate ship emissions 6 at dock through the use of shore-side electrical power. 7 ARB's rule development process is developing 8 cost-effective applications for shore power as well as 9 alternative technologies that might achieve the same 10 benefits. 11 This year, staff is also evaluating the benefits 12 of expanding the current voluntary vessel speed reduction 13 program in southern California. 14 And finally, this rule and development for 15 commercial harborcraft is focusing on the ferry, tug and 16 tow boats that represent just 15 percent of the fleet but 17 produce 70 percent of the emissions in this category. The 18 approach to clean up these craft is to replace their 19 existing diesel engines with new models. And all of these 20 rules are slated to come to you later this year. 21 --o0o-- 22 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 23 DIVISION CHIEF MARVIN: U.S. EPA's March proposal includes 24 standards for the smaller marine engines used to provide 25 auxiliary power on ships and to propel harborcraft. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 proposed Tier 3 and 4 standards would provide the expected 2 level of control for new emissions but would apply to a 3 limited scope of engines. To meet California's needs, 4 U.S. EPA should apply the proposed Tier 4 standards to 5 engines below 80 horsepower and develop effective 6 standards for remanufactured engines. 7 --o0o-- 8 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 9 DIVISION CHIEF MARVIN: Emissions from ocean-going ships 10 need to be addressed with tough international standards as 11 well as state and port initiatives. We depend on the 12 International Maritime Organization to establish these 13 standards. While this process is ultimately the most 14 effective solution, it is exceedingly slow as well. 15 The U.S. EPA has developed and presented a new 16 U.S. proposal to start cleaning up ships over the next 17 several decades. ARB has supported these recommendations. 18 --o0o-- 19 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 20 DIVISION CHIEF MARVIN: Cargo handling equipment is the 21 last sector. This year, staff began implementing the 22 Board's rule for diesel equipment at ports and intermodal 23 rail yards. This equipment was the number two source of 24 diesel health risk in our assessment for the ports of L.A. 25 and Long Beach. The regulation will substantially cut the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 health risk to communities near these ports and other 2 facilities. 3 --o0o-- 4 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 5 DIVISION CHIEF MARVIN: The final element of the 6 presentation takes a brief look at the development of 7 funding sources to support the Board's emission reduction 8 goals for ports and goods movement. 9 --o0o-- 10 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 11 DIVISION CHIEF MARVIN: ARB, air districts, ports, U.S. 12 EPA, and others continue to provide incentive funding to 13 replace or retrofit old diesel engines used in goods 14 movement. Looking ahead to new moneys, we have the 15 billion dollars in bond funding directed to ARB to cut 16 emissions from freight movement. As previously described, 17 the ports of L.A. and Long Beach have proposed new tariffs 18 to support the trucking program. And of course, there are 19 multiple legislative proposals to implement the bond 20 funding for both air quality projects and transportation 21 infrastructure projects. 22 There's also a container fee on the proposal, the 23 table, again this year. In the fall update, we'll report 24 back on how the final legislative outcomes will impact 25 California's air quality program for goods movement. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 --o0o-- 2 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 3 DIVISION CHIEF MARVIN: In November, we identified these 4 example candidates for near-term incentives including the 5 bond program. Staff continues to believe that this 6 combination of projects could achieve cost effective 7 emission reductions to substantially reduce the health 8 risk from goods movement and to aid attainment of air 9 quality standards. 10 --o0o-- 11 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 12 DIVISION CHIEF MARVIN: In the final Goods Movement Action 13 Plan, the Business, Transportation, and Housing Agency and 14 the California Environmental Protection Agency included 15 recommendations directed to this Board regarding 16 principles to guide spending under the billion dollar bond 17 program. The plan indicated funds should be targeted in 18 the four priority trade corridors, and the agencies 19 further recommended that allocation of funding should 20 maximize emission reductions and provide early reductions, 21 reduce the community health risk, assist with 22 implementation of ARB Emission Reduction Plan, and 23 maximize the co-funding from private and other public 24 sources. 25 Staff will develop proposed program guidelines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 and a draft funding plan consistent with these principles, 2 plus the criteria and conditions established in 3 legislation. We'll work these proposals through the 4 public process and present them to you for consideration. 5 The final version of the action plan also 6 included recommendations for infrastructure projects that 7 would benefit air quality. The first recommendation is 8 that the total cost of the proposed infrastructure project 9 should include the cost of required project-specific 10 mitigation, and the second recommendation is that green 11 construction equipment be used to the extent feasible and 12 cost effective. 13 --o0o-- 14 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 15 DIVISION CHIEF MARVIN: This slide notes some of the 16 policy issues that will need to be addressed to implement 17 a trade corridors emission reduction incentive program 18 with bond funding. Staff is working on these within the 19 Administration. The Legislature is wrestling with many of 20 the same issues. And our stakeholders are offering their 21 recommendation as well. 22 In January, Governor Schwarzenegger issued an 23 Executive Order which directs all of the agencies 24 responsible for the November bond package to provide 25 accountability and transparency in implementing those PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 programs. ARB bond program guidelines will also need to 2 ensure the funds are used for sustainable investments and 3 as the resulting benefits stay in California. 4 There's also discussion about how best to 5 maximize the amount of program co-funding and how the 6 dollars should be allocated across source sectors and 7 geographic regions. The implementing legislation may 8 include general or specific direction on these issues. 9 --o0o-- 10 PLANNING AND TECHNICAL SUPPORT DIVISION ASSISTANT 11 DIVISION CHIEF MARVIN: Between now and the next update 12 this fall, the hot items for goods movement will be the 13 rulemakings coming before you, the continued evolution of 14 the port truck program, hopefully the strengthening of 15 U.S. EPA's proposal for new emission standards, the 16 release of ten major health risk assessments for the West 17 Oakland area and nine rail yards, and development of the 18 legislation and staff proposals to implement the bond 19 program. All these actions will further the Board's 20 progress to protect Californians from the harmful effects 21 of pollution from this growing goods movement industry. 22 That's a lot of slides. Thank you for your 23 attention. 24 CHAIRPERSON SAWYER: Thank you very much, 25 Ms. Marvin. Very comprehensive review of what's ahead for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 us in the goods movement area. 2 How do you anticipate that the port truck 3 programs will be worked out with the multiple 4 jurisdictions having an interest in it? 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Time will 6 tell. 7 EXECUTIVE OFFICER WITHERSPOON: The person with 8 the most money will win. 9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Our efforts 10 to set a rule kind of pushes everyone that said at least 11 achieve this. The L.A. ports want to go further than that 12 and are trying to raise money so that rather than 13 transiting through retrofitted trucks with low PM, they 14 try to go directly to new trucks with low PM and much 15 lower NOx. 16 Quite frankly, we're rooting heavily for the 17 business model to change, because I think that will make 18 implementing an approach that gets cleaner trucks much 19 easier and can change the economic status of the trucking 20 industry that deals with the ports and rail yards. 21 There's a lot of effort being put in, seems like a lot of 22 support. We're going to do what we can to move it along 23 and make sure as it's being done that we're using our 24 regulatory proposal to help do that. 25 CHAIRPERSON SAWYER: Do we know what happened PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 with the IMO meeting last week in London? 2 EXECUTIVE OFFICER WITHERSPOON: We heard a report 3 actually at our Early Action Workshop the same week that 4 the IMO voted to study for another year whether there 5 should be international standards on lower sulfur fuel so 6 it wasn't as positive an action as we might have liked. 7 And I didn't hear what happened on the new engine 8 standards, but I can't imagine it was more radical. 9 CHAIRPERSON SAWYER: Ms. D'Adamo. 10 BOARD MEMBER D'ADAMO: Any words from the 11 railroad companies about whether we can get new 12 locomotives placed in California early on when the EPA 13 rule goes through? 14 EXECUTIVE OFFICER WITHERSPOON: They understand 15 that is our fervent desire, and they have committed to 16 open those negotiations with us once the matter of EPA's 17 rulemaking is settled. We're not talking about it a lot 18 right now because it all hinges on the time line for how 19 quickly the new engines will phase in. 20 BOARD MEMBER D'ADAMO: And then a couple 21 questions on border trucks coming in from Mexico. What 22 percentage of trucks do we inspect? Is it a lot of 23 traffic coming through? 24 MOBILE SOURCE ENFORCEMENT BRANCH CHIEF JACOBS: 25 Paul Jacobs, Chief of Mobile Sources Enforcement. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 We have about 3,000 trucks crossing a day. And 2 on average, we inspect about 100 to 150 trucks a day at 3 the border crossing. 4 BOARD MEMBER D'ADAMO: But you're there every 5 day? 6 MOBILE SOURCE ENFORCEMENT BRANCH CHIEF JACOBS: 7 Pretty much, yes. If we are not physically at one of the 8 fixed CHP border crossings, we're in the commercial zone. 9 BOARD MEMBER D'ADAMO: What are the sanctions if 10 they don't meet our standards? 11 MOBILE SOURCE ENFORCEMENT BRANCH CHIEF JACOBS: 12 They get an initial civil penalty of $300, which can 13 increase to $800 if not cleared within 45 days. If we 14 capture them a second time in a twelve-month period, it 15 goes up to $1800. And also they're subject to being 16 removed from service or impounded by the highway patrol. 17 BOARD MEMBER D'ADAMO: Are we getting second 18 violations and third violations? 19 MOBILE SOURCE ENFORCEMENT BRANCH CHIEF JACOBS: 20 Yes. 21 BOARD MEMBER D'ADAMO: Okay. And so if in the 22 event that the Mexican government does not adopt the same 23 standards that we have federally, the 2007 standards, is 24 it the idea that the inspection program would be a back 25 door way of achieving those standards in Texas? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 MOBILE SOURCE ENFORCEMENT BRANCH CHIEF JACOBS: 2 Yes. That's why we have the new provisions under AB 1009 3 where they have to demonstrate equivalency to U.S. EPA 4 emission standards. And if not, they're cited and subject 5 to removal from service. 6 EXECUTIVE OFFICER WITHERSPOON: I wouldn't call 7 it a backdoor way of changing the standards. They'll be 8 refused entry. They'll be driven in Mexico and not in 9 California. We're already seeing Mexican fleet owners own 10 two kinds of trucks, U.S. capable trucks that come in for 11 greater distances, and then the Mexican trucks are being 12 reassigned inside their own country. 13 BOARD MEMBER D'ADAMO: When do you expect once 14 they can go further? Right now they can only go 20 miles, 15 and they're going back to Mexico empty. Do you expect 16 they'll be local runs in the United States? And how far 17 beyond that 20-mile zone? 18 EXECUTIVE OFFICER WITHERSPOON: We don't know the 19 answer to that question. So we're committed to doing 20 periodic surveys to see how that is developing. 21 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Our 22 understanding is that they would be allowed in to take 23 their load to wherever it's going to be dropped off and 24 then returned. They're not really allowed in to do 25 commerce here. Whether or not that's observed all the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 time will be the issue. 2 EXECUTIVE OFFICER WITHERSPOON: If they drop at 3 the ports, they can't pick up another load and take it up 4 to Ukiah. They turn around and go back to Yreka. 5 BOARD MEMBER D'ADAMO: And then, Rob, I don't 6 know if you feel comfortable answering this, but a sneak 7 peak on what you think is going to come out of the 8 Legislature. Do you think we're going to end up with 9 direction on sources and regions on the bonds? 10 LEGISLATIVE DIRECTOR OGLESBY: Sources and 11 regions, there's certainly been a debate about 12 allocation -- this is Rob Oglesby, Legislative Director 13 for the Air Resources Board. 14 There's been a lot of discussion and interest in 15 different formulas. There's a number of the legislation 16 related to the bonds is falling into two general groups. 17 One being the allocation of funds for the one billion 18 that's specifically dedicated to reducing emissions from 19 goods movement activities. The discussions on those 20 bills -- and I don't get to use this word very often, but 21 there's a plethora of bills related to that subject. And 22 there is a consensus on the sources and the types of 23 emissions that needs to be reused for bond funds. It's 24 yet to be gelled into one or two vehicles. 25 The second group of bills relate to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 infrastructure projects which are the road building, the 2 trade corridor improvements. And the discussions related 3 to those will include how to green them up, what kinds of 4 conditions should be attached to the expenditure of bond 5 funds related to, for example, the construction equipment 6 that would be used. That's also a fluid situation. 7 There's a third important bill that is part of 8 the debate and the discussion, not directly related to 9 allocation of bond fund, but it plays into it and it is 10 the reintroduction of Senator Lowenthal's bill which would 11 impose a $30 fee on cargo containers, and that's a 12 significant part of the mix. 13 EXECUTIVE DIRECTOR WITHERSPOON: One consistent 14 thread we've seen is a desire for large private industry 15 match at least one to one. And as staff, we have 16 advocated that the match be in the aggregate. Because if, 17 for example, on drayage trucks we can't change the 18 business model, there's nobody to match funds with unless 19 it's the port of L.A. and they do tariffs or something 20 else. 21 So we're looking, if we are obliged to come up 22 with match, that it's across the whole billion, not 23 project by project by project. We'll see how that one 24 goes too. 25 CHAIRPERSON SAWYER: Supervisor Hill. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 SUPERVISOR HILL: It was a great report. And 2 coming from the Bay Area, we really appreciate the efforts 3 on the risk assessment and we're looking forward to it as 4 soon as possible. I know we talked in the fall, and 5 anything you can do to expedite it, that would be 6 wonderful. Thanks. 7 CHAIRPERSON SAWYER: Supervisor. 8 BOARD MEMBER ROBERTS: I just want to thank you 9 for acknowledging Lamport as part of this. And there was 10 a lot of good information in that. 11 CHAIRPERSON SAWYER: Are there any other comments 12 by Board members? 13 BOARD MEMBER RIORDAN: Just one, Mr. Chairman. 14 And wondered, you know, in the backup of trucks that are 15 sitting there at Otay Mesa, it would seem to me that 16 someone would get really smart and have some more gates. 17 Is it truly only the four gates that are there? 18 BOARD MEMBER ROBERTS: There is a plan right 19 now -- that's one of the things that's well along. You'll 20 hear another bit just to the east that would relieve the 21 conjunction. All of the trucks that some time ago were 22 also coming across the border at the western crossing are 23 no longer doing that. So everything is at this one point. 24 And part of the proposal and hopefully perhaps part of the 25 solution to some of the bonds would be to assist in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 getting the second border crossing which will actually be 2 a third border crossing. 3 BOARD MEMBER RIORDAN: I think that would help. 4 And you do tend to idle as you're -- because you inch kind 5 of forward and turn off, turn it on. The logic is you're 6 going to keep it on and inch forward. So I would hope 7 that that is successful in building some more places that 8 they can cross. 9 BOARD MEMBER ROBERTS: We're also looking at 10 solutions where you wouldn't have -- right now, you have 11 operations, functional things that are happening on one 12 side of the border only to cross the border and have the 13 same set of things happen. So you wait and then you wait 14 again to have duplicate checks and things going on. And 15 we thought that perhaps in our infinite wisdom maybe 16 there's a way we can do that once and be able to move 17 people and trucks through the process a lot quicker. So 18 there's a number of creative ideas that are out there that 19 are being considered right now. 20 CHAIRPERSON SAWYER: I have two witnesses 21 desiring to speak on this subject, Doug Korthof and Tupper 22 Hull. Mr. Korthof. 23 MR. KORTHOF: Doug Korthof. 24 This is a good and worthy project. And you're 25 engaged in a valuable activity here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 I was once a part-time longshoreman and carpenter 2 on the docks and I know something about it. And I lived 3 at B or C Street in Figeuroa down in the heart and shadow 4 of the refinery there. I know a little bit about the 5 port. At that time, we used to have to break down the 6 ship, break down the load, and pack it up with dunnage and 7 all that. And when the ship came in, we have to carry the 8 bananas off to the shore. 9 And there was a six times the load was broken 10 down and palletized, you know, for the things that we did. 11 Containers made a huge difference in that. And then 12 cranes and the container handling. Now two people can 13 unload a ship, and we don't have to have ships waiting in 14 the harbor. All these things are new technology and 15 create new possibilities. 16 And I want you to think, too, of this is port 17 modernization. I want you to think of a concept called 18 the radius of practicality. Where do we break down trucks 19 and trains? It turns out there's a thing called radius of 20 practicality where it makes sense to use trucks. And 21 right now, you know, that depends on the price of diesel 22 and a lot of other things, the difficulties of building a 23 train, how longs it takes, when the load is necessary. 24 Right now that radius of practicality is between 500 and 25 1,000 miles. It doesn't make sense to bring a truck PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 across the country if you can put it on a train, because 2 you can take the time to make a train up and it's much 3 more efficient. 4 So we need to sort of get this kind of planning 5 into the whole mix and look at something, you know, 6 concerning where do we want to break down the trains, 7 where do we want to have the trucks. Because this is a 8 new conceptual arrangement. The containers, and now we 9 have trains that are capable of some day we can electrify 10 the Alameda Corridor. We have to come up with a 11 comprehensive transport plan for goods in this area, 12 because right now we're impacting areas in Pomona where 13 the train yards are. There's a terrible grade crossing 14 issue. 15 Senator Lowenthal, who's sponsoring this bill, is 16 very concerned about the impact on the Inland Empire and 17 huge trains congestion that we have. Why don't we have 18 more smooth movement the containers from the port to the 19 trains and, you know, do it in such a way that it uses 20 electrified machinery as much as possible? 21 He also completely analyzed the fee, the $30 fee, 22 that's completely legal. It's going to be used for good 23 purposes. And there's no problem with collecting it. I 24 don't think there will be any opposition. We're all 25 behind this you. It's a key issue. And for people who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 live in the Long Beach/Wilmington area, it's a long time 2 coming. We really appreciate it. 3 CHAIRMAN SAWYER: Thank you. 4 Mr. Hull. 5 MR. HULL: Thank you, Mr. Chairman and members of 6 the Board. I'll be brief. You've had a very long day. 7 My name is Tupper Hull. I am here on behalf of the 8 Western States Petroleum Association. Our Chief Operating 9 Officer, Catherine Reheis-Boyd, was planning to make these 10 comments today. She fell ill today, so apologizes for her 11 not being able to be here. 12 I know much of what I might say you have heard, 13 but we believe it's so important it bears repeating. My 14 comments will also largely address the ongoing interest 15 that our members have on how the various initiatives, both 16 local and your initiatives, to address air quality may 17 impact the petroleum marine infrastructure at the ports. 18 That infrastructure plays an absolutely critical role in 19 California's economy and energy future. And in fact, it's 20 becoming more and more important every day. Two-thirds of 21 the crude oil that is refined in California today is 22 imported, and that number is expected to grow as our 23 California production declines. 24 Of course, we are an energy island in California, 25 which means our refinery complexes are not connected by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 pipeline to the other refinery complexes throughout the 2 United States. Consequently, every drop of crude oil and 3 increasingly petroleum products to supply this market must 4 come here through the ports of California. 5 The California Energy Commission's 2005 6 integrated energy policy report identified the ability to 7 expand the marine infrastructure, the petroleum marine 8 infrastructure, in order to meet projected growth as a top 9 priority. And that's why we believe the impact of the 10 various efforts to address air quality at the ports remain 11 a top priority for our industry and something that we're 12 very concerned about. 13 In addition, the IPER identified or concluded 14 that the marine petroleum infrastructure was at or near 15 its capacity and needed to be expanded. Additionally, 16 California's refineries are running at capacity to the 17 point that today in order to meet on an average basis 18 California's gas and diesel demands, we are now importing 19 approximately three-and-a-half million gallons of gasoline 20 and other petroleum products every day. So consequently, 21 the role of the ports, as I mentioned, are becoming more 22 and more important every day. 23 WSPA has been an active participant in goods 24 movement planning in California and will continue to do 25 so. We are dedicated and committed to working with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 Air Resources Board, the local ports, and other 2 jurisdictions to address the air quality and other 3 environmental issues present at the ports and hopefully 4 help develop ways to do that that do not further constrain 5 California's supply of crude oil and petroleum products. 6 Thank you. 7 CHAIRPERSON SAWYER: Thank you very much. 8 I have a question. With the difficulty we're 9 having in dealing with ship emissions, is the petroleum 10 industry willing to work with us to clean up that sector? 11 Some of the ships are owned by your industry and other 12 ones are -- 13 MR. HULL: As I mentioned, Katherine was planning 14 to be here to speak to you today and could probably 15 provide a more cogent answer. 16 I mean, I think that our industry has 17 demonstrated a willingness to work collaboratively with 18 the Board. One of the key items that was identified in 19 the staff report, of course, and a very hopeful fact was 20 the introduction of ultra-low sulfur diesel. And our 21 industry, of course, worked very, hard, invested a huge 22 amount of money in order to make ultra-low sulfur diesel 23 available exclusively in California and elsewhere. And I 24 think as we go forward, particularly now as it relates to 25 trucks, that is a truly very promising and exciting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 development. 2 CHAIRPERSON SAWYER: We appreciate that. We'd 3 like to see a fuel of similar quality used on the ships. 4 Thank you. 5 Ms. Witherspoon, any further comments? 6 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 7 CHAIRPERSON SAWYER: The next item are comments 8 by Board members. Do any Board members have anything 9 they'd like to say or discuss at this time? 10 If not, we have as our final agenda item the 11 public comment period. I have three requests of 12 individuals to speak: Francois Choquette, Doug Korthof, 13 and Deborah Whitman. 14 MR. CHOQUETTE: Hello. I really enjoyed the day. 15 I particularly enjoyed the Board discussion. I changed my 16 mind completely between the morning and the afternoon. I 17 knew nothing about the subject. Was very interesting. 18 In the interest of air quality, I'd like to 19 reiterate my affection for electric vehicles. I've read 20 the electric ZV review there and all the battery 21 technology in there. It's a very good report and 22 incredible amount of work, lots of detail. Good 23 rationals. 24 But I just think that it's a little short-sighted 25 when we compare electric vehicle just based on cost. You PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 know, we're showing here that battery vehicles are not 2 quite cost effective compared to gasoline. Because like, 3 for example, the high target for gasoline is at $3.40. On 4 our way here, the price of gas was actually higher than 5 the high estimate for batteries. So I think we need to 6 look at much more things than just the cost of gasoline, 7 you know. We need to look at real cost of oil, the 8 foreign oil dependency, the fact it's not renewable to 9 energy. We need to look at emissions, of course you guys 10 look at a lot. 11 I really think you need to put a lot more 12 research on plug-in hybrids. I believe that looks to me 13 as the choice for the near term. And instead of making 14 goals for 2015 and stuff, how about 2009? A thousand cars 15 on the road by 2009. The small milestones I think are a 16 lot easier to meet. 17 Also, plug-in vehicles are full battery vehicles 18 with roof top solar are really cost effective. I've seen 19 the numbers. They make a lot of sense and that helps cure 20 your problem of emissions. Serial hybrids, basically 21 electric cars with a small motor just to, you know, help 22 you to finish the trip are I think a good choice. And 23 personally, I would like to see a lot less done with 24 hydrogen vehicles. I really don't see this as viable for 25 cars. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 That's basically -- I think we need to 2 concentrate on the big picture refineries, gas guzzlers, 3 emission tests, diesel retrofit like you're doing, and a 4 lot on electric vehicles and plug-in. 5 All right. Thank you. 6 CHAIRPERSON SAWYER: Thank you very much. 7 Mr. Korthof. 8 MR. KORTHOF: I'm Doug Korthof. I come all the 9 way from Seal Beach to put Western States Petroleum out of 10 business. 11 The use of electric cars and solar power can 12 eliminate Western States Petroleum. No need for 13 refineries if we don't need gasoline. We can drastically 14 reduce our gasoline by getting rid of Western States 15 Petroleum, all the refineries and their ships that carry 16 stuff in, oil in and use electric cars and solar power, 17 like I do. 18 I was reading the staff report on the ZEV 19 mandate, the battery technology assessment. And the idea 20 incorporated in that that the batteries for full function 21 electric vehicle at 7 to $9,000 or 14 to $18,000 is too 22 expensive or more expensive than a fuel cell is ludicrous. 23 A fuel cell is going to be $300,000 for the fuel cell. 24 You can't bring that price down because it's got platinum 25 in it and it also needs hydrogen infrastructure which we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 don't have. My electric car plugs in anywhere as they did 2 before. And 14 to $18,000 for a full-function electric 3 vehicle does not account for a small plug-in hybrid. A 4 PHEV 20 could use lead acid batteries or a $4,000 battery 5 pack. 6 Why aren't we doing this? If we had the 7 willpower, if we had the leadership, we could do this and 8 eliminate 80 percent of our gasoline usage. Why can't we 9 do this? This it a great county. Look at the initiative 10 we took with the formaldehyde. If we wanted to, we could 11 get rid of our oil dependence. 12 Now I want to call back in 2003 at the time that 13 the Air Resources Board killed the electric vehicle 14 component of the ZEV mandate. There were 1165 ED1's made, 15 465 nickle metal hydrids which had 160-mile range. There 16 were hundreds of lead acid, 110-mile range with a 17 Panasonic battery. They plugged in anywhere. Once we got 18 the batteries straightened out with lead acid batteries, 19 we don't need nickel metal hydride. That 110 plug is 20 something my wife loved. That little car, she loved to 21 plug in it at work. She could plug it in any place. She 22 could drive 110 miles in it. It never failed after we had 23 the good batteries. Contrary to Supervisor Roberts' 24 experience with the bad Delco batteries. 25 There were 330 Honda ED Plus, 328 RAV 4 EVs last PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 sold in November 2002, 328 of those in the hands of the 2 public. Hundreds more in fleets, which Toyota was going 3 to crush which we saved. And Toyota listened to the 4 customers, and now Santa Monica is acquiring more RAV4 5 EVs. DWP is keeping theirs. Everybody wants them. 6 And now by getting rid of this winning 7 technology, we tied our horse to fuel cells, and what do 8 we have? One fuel cell car in the hands of the public. 9 The guy can't drive more than 50 miles from his house, 10 because there's no hydrogen, and 92 others in the hands of 11 fleets in all of California. And now we get the report 12 that since fuel cells are impossible, we have to postpone 13 the step increases from 2015 to 2025. This is 14 unacceptable. 15 We need to return to the winning technology, 16 plug-in hybrids, plug-in serial hybrids that can drive 17 just like an EV in all speed ranges up to 80 miles an hour 18 for 40 or 80 miles depending on the battery option 19 purchased by the individual and not wait until 2015. 20 The key thing is put it on the free market at a 21 fair price. Let the market find the price. If somebody 22 wants to pay $42,000 for a RAV4 EV -- there was subsidies 23 that brought that price down in the 29,000. I bought one. 24 And, see, people will buy it. Eventually they'll produce 25 more of them. But make it available in the free market. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 By tying our hopes to the fuel cells, we're eliminating 2 the possibility that some day gasoline will be unavailable 3 or too high or cut off or somebody will use the oil weapon 4 against us. We are not laying a prudent foundation for 5 dealing with this emergency. We are tying ourselves to 6 oil. And when doing that is like a farmer who he throws 7 away his seed stock. We have nothing for the next growing 8 season. 9 CHAIRPERSON SAWYER: Thank you very much. 10 And Deborah Whitman. 11 MS. WHITMAN: Good afternoon. I want to thank 12 you very much for giving me the opportunity to speak 13 today. 14 I'm just going to go over briefly the letter that 15 I handed out to you. This is regarding fireworks. And 16 fireworks have been an American tradition for many years. 17 However, it's time to take a stand to protect our 18 environment and health against heavy metals and toxic 19 chemicals and fireworks. 20 People are now suffering from multiple chemical 21 sensitivities, asthma, lung, heart diseases and other 22 chronic illnesses. 23 I wanted to go on and list some of the toxic 24 chemicals and heavy metals that are in these fireworks. 25 And there's barium, aluminum, titanium, lithium carbonate, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 cryolite, incandescent of iron with carbon and charcoal, 2 chloride, chlorine, copper. 3 I just have some recommendations that I wanted to 4 make. First of all, I understand that the EPA does not 5 monitor fireworks or pyrotechnics anything under an hour. 6 So since most of the fireworks a couple times a year are 7 well under an hour, they're not being monitored. So I'm 8 encouraging the Board to start monitoring those chemicals. 9 Also to educate the public about the toxic chemicals. If 10 they have children that maybe have asthma or elderly 11 people that have chronic health problems, maybe they don't 12 want to go and stand underneath the fireworks. 13 There's fireworks that go on. I was in the Bay 14 Area last year, and I was standing in Emeryville, and I 15 watched four firework displays around the bay. I have 16 gone up to Tahoe and gone from one firework to the next, 17 to the next, three in one year that I've watched at 18 different times f up in Lake Tahoe. Just the whole state 19 is on fire two times a year with toxic chemicals. 20 I'm encouraging you to do public service 21 announcements, press releases, whatever you can to warn 22 the public about the dangers of these toxic chemicals. 23 And to just in closing on this issue, I just want 24 to cover again that to start monitoring these fireworks, 25 to educate the public about the toxic chemicals. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 And talking about education, I want to bring up 2 the issue regarding Earth Day. And I was at Earth Day 3 here at Sac State this year. It was last Sunday. And I 4 didn't see anybody from the Environmental Protection 5 Agency there that had boothes. And I had them check on 6 the list, and they didn't have anybody listed. 7 So I would really encourage the Department to at 8 least once a year to provide funding for staff to go and 9 have a booth. It would probably be no more than a couple 10 hundred dollars. But at least in our State Capitol to 11 have representation there on Earth Day. 12 And I'd like to make it mandatory that the 13 counties have some type of booth or something set up in 14 their county when there's Earth Day, especially for the 15 big cities like Los Angeles and San Francisco and that 16 type of thing. 17 And also I found out when I called -- because I'm 18 thinking about going back to work for the State and coming 19 to work here. And I thought I would like to get into 20 education. And I found out that -- I was told there was 21 only one person in that office for education here. So I 22 started thinking, well, maybe I could volunteer. I'd love 23 to go out and educate, go to the schools, you know, 24 represent Earth Day. And I was told there's no type of 25 volunteer program. So I'd like you to look into maybe PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 having some type of volunteer program with people like me 2 or college students that would like to come and give 3 presentations or set up things, especially for Earth Day. 4 So I'm encouraging you to do that. 5 And then the last thing is I want to remind you 6 when you leave today to go outside and look in the sky 7 about the sun and look at the white silvery haze in the 8 streaks in the sky from the chem trails, because I drove 9 up from Davis. They were going at 9 o'clock in morning 10 and they're still going at lunchtime. So the chem trail 11 is still an issue with toxic chemicals in the air. And I 12 just want to remind you to check on that when you go 13 outside and go home today. So thank you very much. And 14 do you have any questions? 15 CHAIRPERSON SAWYER: Well, thank you very much 16 for your continued interest in the work and for the 17 environment and for pointing out the deficiency in our 18 educational program. 19 MS. WHITMAN: Yes. I was really surprised to 20 hear that. 21 CHAIRPERSON SAWYER: Do I have a motion for 22 adjournment at this time? 23 SUPERVISOR HILL: So moved. 24 BOARD MEMBER RIORDAN: Second. 25 CHAIRPERSON SAYWER: All in favor? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 (Ayes) 2 CHAIRPERSON SAWYER: We stand adjourned. 3 (Thereupon the California Air Resources Board 4 adjourned at 5:03 p.m.) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, 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 hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 8th day of May, 2006. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345