BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 1990 EAST GETTYSBURG AVENUE FRESNO, CALIFORNIA THURSDAY, JUNE 14, 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. Judith Case Ms. Dorene D'Adamo Supervisor Jerry Hill Ms. Lydia Kennard 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 Ms. Lori Andreoni, Board Secretary Mr. Steve Brisby, Manager, Fuels Section, SSD Mr. Adrian Cayabyab, Air Resources Engineer, Fules Section, SSD Mr. Bob Fletcher, Chief, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. Kurt Karperos, Chief, Air Quality and Transportation Planning Branch, PTSD Mr. Jeff Lindberg, Air Pollution Specialist, Air Quality & Transportation Planning Branch Ms. Shelby Livingston, Air Pollution Specialist, Environmental Justice and Special Projects SEction, PTDS Ms. Linda Murchison, Chief, Planning and Technical Support Division Mr. Dean Simeroth, Chief, Criteria Pollutants Branch, SSD ALSO PRESENT Mr. Kevin Abernathy Ms. Shirley Batchman, California Citrus Mutual Ms. Nidia Bautista, Coalition for Clean Air Mr. Michael Becker Mr. Ben Benivides Ms. Liza Bolanos, Central Valley Air Quality Coalition Mr. Jim Compton-Schmidt Mr. Paul Cort, Earth Justice Mr. Manuel Cunha, Nisei Farmers Mr. Bill Davis, CIAQC Ms. Teresa DeAnda, Comite Bienestar de Earlimart Ms. Lori de Leon, Dolores Huerta Foundation Mr. Sean Edgar, Clean Fleets Coalition Ms. Ashley Fairburn, No Compromise in Defense of the Earth PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED ALSO PRESENT Senator Dean Florez Ms. Michelle Garcia, ALA Ms. Sandra Garcia, Campesinas Unidas Mr. John Grant Mr. Tom Grave, Merced Alliance for Responsible Growth Ms. Margarita Guzman, Comite ASMA Mr. Gary Herwick, Transportation Fuels Consulting Mr. David S. Hirshfeld, CEC Mr. Albert Hochhauser, Fuels and Vehicle Research Consultant Ms. Dolores Huerta, Dolores Huerta Foundation Mr. Roger Ison, CA Cotton Growers Association Ms. Sarah Jackson, Earth Justice Mr. Bill Jones, Pacific Ethanol Ms. Lisa Kayser-Grant, Moms Clean Air Network Ms. Gabrielle Kirkland, CA Grape & Tree Fruit League Mr. Rey Leon, Latino Issues Forum Mr. Robert Mansfield Mr. George Merced Mr. Brent Newell Ms. Melissa Kelly-Orega, Merced/Mariposa County Asthma Coalition Mr. Jamie Ortega Ms. Roshani Parekh, CDPE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. James Patterson, Mitsubishi Rev. Walt Perry, Local Health Care Coalition Ms. Mary-Michal Rawling, Golden Valley Health Centers Ms. Cathy Reheis-Boyd, WSPA Mr. Seyed Sadredin, SJV APCD Ms. Jenny Saklar, Fresno Metro Ministry Mr. Gordon Schremp, California Energy Commission Ms. Sarah Sharpe, Coalition for Clean Air Ms. Ellen Sharpiro, Alliance of Arts Manufacturers Mr. David Smith, BP Ms. Christina Stove, Earth Justice Mr. Darren Stroud, Valero Ms. Daniela Simunovic, Center for Race, Poverty, and the Environment. Ms. Rebecca Taylor, Earth Justice Ms. Kim Thompson, Fresno-Madera Medical Society Ms. Vishinna Turner, C.A.F.E. Mr. James Uihlein, Chevron Ms. Pamela Van Camp Mr. Paul Wuebben, SC AQMD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX PAGE Pledge of Allegiance 1 Item 7-6-2 Chairperson Sawyer 4 Executive Officer Witherspoon 5 Staff Presentation 6 Senator Florez 28 Q&A 35 Mr. Sadredin 42 Q&A 62 Ms. Rehies-Boyd 72 Mr. Grave 74 Mr. Newell 78 Ms. Kayser-Grant 84 Mr. Benevides 86 Ms. Garcia 88 Mr. Compton-Schmidt 89 Ms. Rawling 90 Ms. Kelly-Orgeta 92 Ms. Guzman 95 Mr. Merced 96 Ms. Saklar 98 Ms. Fairburn 100 Mr. Mansfield 101 Ms. Parekh 104 Mr. Becker 105 Mr. Ortega 110 Ms. Bolanos 110 Mr. Leon 112 Ms. Sharpe 114 Mr. Cort 117 Ms. Taylor 120 Ms. Jackson 123 Ms. Stove 130 Ms. DeAnda 132 Ms. Garcia 136 Ms. Huerta 137 Ms. de Leon 139 Mr. Grant 141 Ms. Simunovic 144 Ms. Thompson 150 Ms. Turner 153 Mr. Cunha 155 Ms. Batchman 157 Mr. Abernathy 159 Mr. Davis 161 Mr. Ison 163 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX CONTINUED PAGE Ms. Kirkland 166 Ms. Van Camp 168 Rev. Parry 170 Ms. Bautista 172 Mr. Edgar 176 Q&A 184 Motion 209 Vote 210 Motion 210 Vote 211 Item 7-6-1 Chairperson Sawyer 212 Executive Officer Witherspoon 212 Staff Presentation 213 Ms. Kirkland 215 Ms. Cunha 215 Ms. Cort 216 Item 7-6-3 Chairperson Sawyer 217 Executive Officer Witherspoon 217 Staff Presentation 220 Ombudsman Quetin 240 Q&A 241 Mr. Schremp 253 Mr. Hirshfeld 260 Mr. Wuebben 268 Ms. Reheis-Boyd 277 Mr. Hochhauser 280 Mr. Smith 284 Mr. Uihlein 290 Mr. Herwick 294 Mr. Stroud 297 Mr. Jones 301 Ms. Shapiro 304 Mr. Patterson 306 Mr. Davis 308 Ex parte 310 Motion 318 Vote 318 Adjournment 321 Reporter's Certificate 322 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON SAWYER: Good morning. The 14th of 3 June 2007 public meeting for the Air Resources Board will 4 come to order. Please rise and join me in the Pledge of 5 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: Supervisor Case? 15 BOARD MEMBER CASE: Here. 16 BOARD CLERK ANDREONI: Dr. Gong? 17 Supervisor Hill? 18 BOARD MEMBER HILL: Here. 19 BOARD CLERK ANDREONI: Ms. Kennard? 20 BOARD MEMBER KENNARD: Here. 21 BOARD CLERK ANDREONI: Mayor Loveridge? 22 Mrs. Riordan? 23 BOARD MEMBER RIORDAN: Here. 24 BOARD CLERK ANDREONI: Supervisor Roberts? 25 Professor Sperling? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER SPERLING: Here. 2 BOARD CLERK ANDREONI: Chairperson Sawyer? 3 CHAIRPERSON SAWYER: Here. 4 BOARD CLERK ANDREONI: Mr. Chairman, we have a 5 quorum. 6 CHAIRPERSON SAWYER: Thank you very much. 7 Let me first of all note that all meeting 8 attendees are advised that pagers, cell phones, PDAs, 9 laptops, and any other electronic communication-powered 10 devices should be powered off, not just silent, as these 11 devices interfere with the audio equipment in the room. 12 If you'd please do that, thank you very much. 13 It is my pleasure to introduce our newest Board 14 member, Fresno County Supervisor Judy Case, to the Air 15 Resources Board. Supervisor Case was elected to the 16 Sanger City Council in 1994 and to the Fresno County Board 17 of Supervisors in 1998 where she served as Chairman in 18 2000 and 2005. Clearly, Supervisor Case brings much local 19 government experience to this role. And certainly she is 20 well aware of the air quality issues in the San Joaquin 21 Valley through her service on the San Joaquin Valley Air 22 Quality Management District Board. 23 Supervisor Case is a registered nurse and has a 24 Masters in public administration. Her public health 25 experience is a great addition to the Board. I'm sure Dr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Gong would second that if he were here today. 2 Supervisor Case and her husband work an active 3 ranch in Sanger, California, and also operate a bed and 4 breakfast inn. 5 Please, Judy, would you like to say a few words? 6 BOARD MEMBER CASE: Only that it's a great honor 7 to be able to join this Board. I think the work we do is 8 really important for all Californians. And it's a great 9 opportunity. I look forward to working with you. 10 CHAIRPERSON SAWYER: We're delighted to have you 11 as our eleventh Board member. 12 (Applause.) 13 CHAIRPERSON SAWYER: There will be an adjustment 14 to the order of today's agenda. We will start with Agenda 15 Item 7-6-2, the San Joaquin Valley State Implementation 16 Plan. 17 Following that, the Board will take up Agenda 18 Item 7-6-1, a discussion of the procedure for considering 19 concurrence with the agricultural burning rules in San 20 Joaquin Valley. Finally, we will consider the proposed 21 changes to the predictive model for reformulated gasoline. 22 Anyone who wishes to testify should sign up in 23 the lobby area. You have an option to include your name 24 on the speaker card. Please see the Clerk of the Board 25 for further instructions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 Speakers, the Board will impose our usual 2 three-minute time limit. Please put your testimony in 3 your own words. It is easier for the Board to follow if 4 you go straight to your main points. You do not need to 5 read your testimony since it will be entered into the 6 record. 7 We have translation services available in Spanish 8 for those who need it here and in Bakersfield. And 9 headsets are available. Please see one of the Clerks of 10 the Board for further assistance. 11 Could we have our translator to repeat -- yes, 12 please. 13 (Thereupon it was translated into Spanish.) 14 CHAIRPERSON SAWYER: Thank you. 15 For safety reasons, please note the emergency 16 exists to your right and rear and left of the hearing 17 room. In the event of a fire alarm, we're required to 18 evacuate this room immediately. When the all clear-signal 19 is given, we return to the hearing room and resume the 20 hearing. Thank you. 21 Agenda Item 7-6-2, the San Joaquin Valley State 22 Implementation Plan. This is the plan which lays out the 23 attainment of the federal eight-hour ozone standard. 24 I'm pleased that we will review this plan here in 25 Fresno and would like to thank the District for its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 hospitality in making arrangements for the holding of our 2 meeting here. 3 Ms. Witherspoon, please introduce this item. 4 EXECUTIVE OFFICER WITHERSPOON: Thank you, 5 Dr. Sawyer, and good morning, members of the Board. 6 Last month you approved the first of several 7 eight-hour ozone plans in California when you approved the 8 2007 State Implementation Plan for San Diego County. That 9 was a very positive story, since San Diego has already 10 attained the one-hour federal ozone standard and is well 11 on its way to achieving the more stringent eight-hour 12 standard on the strength of existing regulations alone. 13 Today, we are turning your attention to the far 14 more serious and persistent air quality problem in the San 15 Joaquin Valley. This Valley is rich in natural cultural 16 and agricultural resources. Unfortunately, it also has 17 extremely adverse meteorological conditions that cause 18 ozone to form much more readily than it does elsewhere in 19 the state. Because of those conditions, this region needs 20 to be the cleanest place in California in terms of 21 emissions per square mile just to have healthy air. 22 The San Joaquin Valley Air District adopted its 23 207 ozone SIP at the end of April. At that time, the 24 District requested that U.S. EPA reclassify the Valley 25 from serious to extreme in recognition of the enormous PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 challenge facing this region. 2 The District believes, and ARB staff concurs, an 3 extreme classification is the only realistic course of 4 action for the Valley to have a federally-approveable 5 attainment plan. This plan relies on the State's existing 6 program, reductions from local district measures, and the 7 anticipated benefits of several aggressive new state 8 measures that staff will be proposing for your 9 consideration next week in Los Angeles. 10 Taken together, these measures provide nearly 85 11 percent of the emission reductions needed to attain the 12 eight-hour ozone standard. These measures will improve 13 air quality substantially while we continue working on 14 advanced technologies and other innovative strategies to 15 close the remaining gap. 16 At this time, I'd like to ask Jeff Lindberg to 17 begin the staff presentation. 18 AIR POLLUTION SPECIALIST LINDBERG: Thank you, 19 Ms. Witherspoon. Good morning, Dr. Sawyer and members of 20 the Board. 21 This morning, I want to talk about ARB staff's 22 analysis of the Valley's 2007 ozone plan for achieving the 23 federal eight-our ozone standard. The San Joaquin Valley 24 Unified Air Pollution Control District adopted its ozone 25 plan on April 30th and has submitted it to ARB for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 inclusion in the California State Implementation Plan, or 2 SIP. 3 The Valley, along with the South Coast, presents 4 one of the two greatest air pollution challenges in the 5 nation. So to set the stage, I'll first briefly describe 6 the nature of the Valley's ozone plan. I'll then go over 7 the plan itself, including the District's request for an 8 extreme non-attainment classification. 9 The District's plan relies heavily on the 10 emission reduction proposals in the State strategy for 11 mobile sources, which we will bring to you next week for 12 your consideration. So I'll provide an overview of the 13 proposed State measures. 14 --o0o-- 15 AIR POLLUTION SPECIALIST LINDBERG: Finally, a 16 number of issues have come forward during the public 17 process. And I'll highlight them for you before turning 18 to staff's recommendation. 19 I'll start with the overview of the ozone 20 challenge we face in the San Joaquin Valley. 21 --o0o-- 22 AIR POLLUTION SPECIALIST LINDBERG: Considerable 23 research conducted over the past 35 years has shown that 24 ozone can lead to inflammation and irritation of the 25 tissues lining the human airways. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 Symptoms and responses to ozone exposure vary 2 widely, even when the amount inhaled and the length of 3 exposure is the same. Typical symptoms include cough, 4 chest tightness, and increased asthma symptoms. 5 Ozone in sufficient doses can also compromise the 6 body's ability to fight infection. 7 Medical studies of large populations have found 8 that ozone exposure is associated with an increase in 9 hospital admissions and emergency room visits, 10 particularly for lung problems such asthma and chronic 11 obstructive pulmonary disease. Several studies have also 12 associated exposure with high ozone levels with increased 13 premature mortality in elderly people with chronic 14 diseases of the lungs and circulatory system. 15 --o0o-- 16 AIR POLLUTION SPECIALIST LINDBERG: These maps 17 show historical eight-hour ozone limits. The map on the 18 left is for 1995. The map on the right is for 2005. The 19 darker color represents higher ozone levels 20 CHAIRPERSON SAWYER: Excuse me. I think there is 21 still a problem with people hearing. Could you move to 22 the podium? Is it possible for you to give the 23 presentation there? And maybe we'll need to do that 24 regularly throughout the day. See if that helps. 25 AIR POLLUTION SPECIALIST LINDBERG: Those maps PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 show historical eight-hour ozone levels. The map on the 2 left is for 1995. The map on the right is for 2005. The 3 darker colors represent higher ozone levels. The lighter 4 colors are lower levels. 5 As you can see, the majority of the Valley 6 exceeds the federal ozone standard. But there has been 7 much improvement over the past decade. Far fewer areas 8 are experiencing the peek levels seen in the past. The 9 ozone cloud is shrinking, and more people are breathing 10 cleaner air more often. 11 --o0o-- 12 AIR POLLUTION SPECIALIST LINDBERG: Downwind 13 areas are the most heavily impacted. And the community of 14 Arvin, which is the located southeast of Bakersfield, is 15 downwind of the entire Valley. Arvin is home to about 16 15,000 people. The air quality monitor near Arvin 17 routinely records the highest eight-hour ozone levels in 18 the Valley and has the most days when the ozone standard 19 is exceeded. 20 --o0o-- 21 AIR POLLUTION SPECIALIST LINDBERG: Because of 22 this, Arvin is called the Valley's design site and has 23 been the focus during plan development. 24 However, it is important to note that there are 25 other urbanized and downwind areas with similar challenges PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 when we look at the measured ozone levels and the number 2 of days the health-based standard is exceeded. 3 --o0o-- 4 AIR POLLUTION SPECIALIST LINDBERG: Stepping back 5 from the specifics of Arvin, one way of looking at overall 6 progress is population exposure trends. Unlike other 7 indicators that track progress at individual locations, 8 the population weighted exposure consolidates daily ozone 9 monitoring data from all sites within an air basin into a 10 single exposure value. It indicates how many people are 11 breathing dirty air and for how long. 12 Over the past 15 years, Valley population 13 weighted ozone exposure levels have dropped by 50 percent. 14 Most of this improvement has been in recent years. Staff 15 analysis of the Valley weather patterns indicates that 16 this is true progress due to emission reductions, not the 17 result of favorable weather. 18 --o0o-- 19 AIR POLLUTION SPECIALIST LINDBERG: Summarizing, 20 we are seeing real air quality improvement, but peek 21 levels remain high and progress is slower downwind of the 22 urbanized areas. 23 Why this challenge? The surrounding mountains 24 combined with the Valley's long, hot, dry summers, create 25 an environment very conducive to ozone formation, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 especially in the southern end of the Valley. 2 The Valley is home to two of the state's major 3 transportation corridors, Highway 99 and Intestate 5. And 4 a growing population offsets some of the benefits of our 5 control programs. 6 So the Valley must be the cleanest place in the 7 nation per square mile to attain the standard. 8 --o0o-- 9 AIR POLLUTION SPECIALIST LINDBERG: I'll discuss 10 the technical underpinnings of the District's attainment 11 strategy. 12 --o0o-- 13 AIR POLLUTION SPECIALIST LINDBERG: There have 14 been many air quality health studies completed or underway 15 that look especially at Valley residents. While certainly 16 not an exhaustive list, I'd like to make note of two 17 important studies. The Fresno Asthmatic Children's 18 Environment Study, or FACES, is investigating the 19 potential impacts of particulate matter, gasses including 20 ozone, and allergens on asthmatic children. The initial 21 phase of the FACES study funded by the ARB has been 22 committed. The FACES program will continue until 2010 23 with additional funding thorough the National Institute of 24 Health. 25 Professor Jane Hall of the California State PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 University Fullerton analyzed the economic benefits of 2 meeting the federal air quality standards for PM2.5 and 3 ozone. Her work indicated more than $3 billion annually 4 in potential benefits from improved health, prevention of 5 premature deaths, and fewer missed school and work days. 6 --o0o-- 7 AIR POLLUTION SPECIALIST LINDBERG: The Valley 8 has been the focus of considerable air quality research. 9 A public/private partnership has funded and conducted two 10 major multi-year multi-million-dollar studies of the 11 physical and man-made environments in the Valley that 12 together form ozone and particulate matter. 13 Of greatest relevance today is the Central 14 California Ozone Study, or CCOS, which has provided the 15 scientific heart for the 2007 ozone plan by exploring the 16 how's, why's, and when of ozone formation in the Valley. 17 The California Regional Particulate Air Quality 18 Study, or CRPAX, has looked at particulate matter 19 formation. This will be the foundation of the upcoming 20 PM2.5 plan. 21 Both of these studies have provided state of the 22 science air quality models. But equally important are the 23 large air quality databases and the emission inventory 24 information that feed into these air quality models. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 AIR POLLUTION SPECIALIST LINDBERG: ARB staff 2 using CCOS air quality model to do two things: First, to 3 investigate the relative impact on expected ozone levels 4 of NOx and ROG; and second, to identity the absolute NOx 5 and ROG emissions levels needed for attainment, the 6 so-called carrying pattern. 7 This chart reflects the information gained from 8 both of these analyses. The heights of the column 9 represent total emission levels in 2006. The 10 cross-hatched portion of the columns are the emissions 11 that must be eliminated to get to the carrying capacity 12 which is the solid blue portion at the bottom of the 13 columns. 14 The model showed clearly that NOx reductions are 15 relatively more effective in reducing Valley ozone levels 16 than are ROG reductions. 17 CHAIRPERSON SAWYER: Excuse me. I notice a 18 number of people have come in after we made the 19 announcement about the translation services. So I'd like 20 to repeat that. 21 We have translation services available today in 22 Spanish for those who need it, both here and at the 23 Bakersfield location. Headsets are available if you'd 24 please see the Clerk of the Board just to your left in the 25 front for assistance. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 THE TRANSLATOR: Just as a suggestion, could I 2 have them raise their hand, and then I can go ahead and 3 provide them the headsets? 4 CHAIRPERSON SAWYER: Yes, we can assist you with 5 that. Do you want to give the announcement again in 6 Spanish? 7 (Thereupon the announcement was translated into 8 Spanish.) 9 CHAIRPERSON SAWYER: If you just keep your hands 10 up. 11 Again, a reminder on the cell phones. 12 Apparently, there was -- there are a still few on. They 13 need to be turned off completely, not just silenced. 14 Okay. 15 AIR POLLUTION SPECIALIST LINDBERG: So the key to 16 ozone attainment in the Valley are large NOx reductions as 17 shown on this chart. 18 ROG reductions are still important however, and 19 early ROG reductions will help ensure progress. 20 --o0o-- 21 AIR POLLUTION SPECIALIST LINDBERG: By 2014, the 22 emission reduction strategy in the District plan would 23 reduce NOx emissions by nearly 50 percent and will achieve 24 all of the necessary ROG reductions. 25 By 2020, NOx emissions in the Valley will be 60 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 percent lower than they are today. And by 2023, with the 2 benefits of advancements in emission control technologies, 3 the Valley-wide NOx emissions will be just one quarter of 4 what they are today, meeting the attainment target and 5 bringing the whole Valley into attainment. 6 --o0o-- 7 AIR POLLUTION SPECIALIST LINDBERG: So where will 8 these emission reductions come from? 9 As you can see, the overwhelming sources of NOx 10 emissions are mobile sources. They will need to provide 11 most of the NOx reductions. 12 Nearly half of the total NOx emissions in the 13 Valley are from heavy-duty commercial trucks alone. 14 Together with cars and other on-road vehicles, 15 these make up 55 percent of NOx emissions. Off-road 16 equipment is 25 percent of the NOx emissions. 17 While stationary sources under Air District 18 authority contribute only 20 percent of the NOx emissions 19 today, their relative contribution will grow as the mobile 20 fleet is cleaned up, and we'll need to look for additional 21 reductions from this sector in future SIPS. 22 --o0o-- 23 AIR POLLUTION SPECIALIST LINDBERG: Large 24 stationary and smaller area-wide facilities account for 25 slightly more than half of the total ROG emissions in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Valley. 2 These sources are under the direct regulatory 3 authority of the Valley Air District. The other half of 4 the ROG sources, the on- and off-road mobile sources, 5 pesticides, and consumer products are regulated by the 6 State. 7 Pesticide emissions are under the authority of 8 the California Department of Pesticide Regulation. 9 --o0o-- 10 AIR POLLUTION SPECIALIST LINDBERG: Knowing that 11 reducing NOx emissions is critical for attainment in the 12 Valley, early in the SIP development process, ARB staff 13 explored what it would take in terms of technology 14 penetration and development to bring the Valley into 15 attainment. 16 ARB staff asked, what will NOx emission levels be 17 once all of the vehicles and engines in use meet the 18 cleanest adopted standards? 19 When every passenger vehicle in the Valley is 20 ten years old or younger, and all heavy-duty trucks meet 21 2010 standards, and all of construction and farm equipment 22 meet the cleanest standard in place by 2014, and all 23 locomotives meet the U.S. EPA standards proposed for 2017. 24 In short, are the cleanest adopted standards 25 clean enough, or are even cleaner emission standards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 needed? 2 The answer was cleaner emission standards will be 3 needed. 4 The result demonstrates the need for the Valley 5 to rely on advancements in emission control technologies 6 for part of the emission reductions needed for attainment. 7 Under federal law, only areas classified as extreme can 8 rely on technology advancements in their SIP. 9 --o0o-- 10 AIR POLLUTION SPECIALIST LINDBERG: Now I will 11 discuss the strategy to achieve the needed emission 12 reductions. 13 --o0o-- 14 AIR POLLUTION SPECIALIST LINDBERG: The lyon's 15 share for the plan's reductions come from mobile sources, 16 the rules and regulations already in place, plus the 17 benefits for the new measures in ARB staff's proposed 18 State strategy. 19 The local SIP element provides additional 20 reductions. Most of these are ROG reductions. 21 As I just described, the plan relies on future 22 technology advancements for the final increment of NOx 23 reductions needed for attainment. 24 Finally, the local plan sets out policy 25 initiatives that the District will pursue in order to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 supplement the defined control strategy, reduce emissions, 2 and improve air quality more quickly. 3 --o0o-- 4 AIR POLLUTION SPECIALIST LINDBERG: This chart 5 shows the impact of the plan's ROG measures over time. It 6 represents the benefits of both State and Air District 7 emissions. 8 As I mentioned a moment ago, with these measures, 9 the Valley will meet its ROG goal early by 2014. 10 --o0o-- 11 AIR POLLUTION SPECIALIST LINDBERG: ROG emissions 12 will decline from existing mobile source regulations and 13 from the development of new emission controls on mobile 14 sources and consumer products and pesticide applications. 15 --o0o-- 16 AIR POLLUTION SPECIALIST LINDBERG: This chart 17 shows the combined impacts of the State and local strategy 18 for NOx reductions. 19 Near-term measures in the 2007 ozone plan would 20 result in significant air quality progress, reducing 21 emissions nearly 50 percent by 2014. 22 By 2023, with the benefits of near-term measures 23 in the District and the proposed State strategy, emissions 24 will be 64 percent lower than today's levels. 25 A final 11 percent increment is needed from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 advanced technologies for a total of 75 percent reductions 2 from today's levels. This equals 80 tons per day of NOx 3 emissions from long-term measures by 2023. 4 --o0o-- 5 AIR POLLUTION SPECIALIST LINDBERG: By far, most 6 of the emission reductions in the Valley will come from 7 California's existing mobile source control program, 340 8 tons per day by 2023. 9 ARB staff is proposing to add 46 tons per day 10 reductions to this with new measures. 11 Finally, mobile sources will have to provide some 12 of the 80 tons per day long-term reductions. 13 As mobile sources become cleaner through the 14 proposed State strategy, the relative proportion of 15 emissions from stationary sources will grow. Therefore, 16 we will also need to identity advancements in stationary 17 control technology to provide part of the needed 80 ton 18 reduction. 19 --o0o-- 20 AIR POLLUTION SPECIALIST LINDBERG: The core of 21 the new NOx emission reduction measures is the clean-up of 22 the legacy diesel fleets. These are aggressive, 23 groundbreaking rules unique in the world. 24 First is the construction equipment rule which is 25 before you under active rulemaking, with your first PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 hearing in May and your second hearing in July. 2 ARB staff has begun work on the private truck 3 fleet rule. That proposal will come to you in 2008. 4 The projected emission reductions from the 5 measures are large. This is the single largest new 6 measure in the San Joaquin Valley: 61 tons per day of NOx 7 by 2014. 8 We need to get reductions from all diesel fleets. 9 Following the trucks fleet rule will be an agricultural 10 fleet rule. 11 The strategy includes two measures to reduce NOx 12 from passenger vehicles, smog check improvements, and 13 increased scrappage. Finally, we will pursue efforts to 14 clean up locomotives tied to U.S. EPA action on setting 15 new locomotive standards. 16 Now let's look at the local elements in more 17 detail. 18 The District plan includes commitments to develop 19 new NOx measures for sources under local measure. 20 --o0o-- 21 AIR POLLUTION SPECIALIST LINDBERG: In addition 22 to near-term measures, the District has committed to 23 identity and develop long-term advanced technology 24 opportunities for NOx sources under its regulatory 25 authority. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 Finally, the local strategy also includes 2 important local policy initiatives which will help bring 3 the Valley into attainment early, but which don't need the 4 detailed criteria for inclusion in a federally approved 5 SIP, such as a policy initiative to pursue increased 6 funding for incentive-based emission reduction programs. 7 --o0o-- 8 AIR POLLUTION SPECIALIST LINDBERG: The District 9 plan sets out a suite of new emission control measures 10 with an adoption and implementation schedule to have them 11 in place by 2012. 12 By 2023, these measures will reduce NOx by nine 13 tons per day and ROG by 47 tons per day. 14 The District has also quantified the emission 15 reductions which will be achieved through the use of 16 already secured incentive funds. 17 The district has been very successful in putting 18 State Carl Moyer funds into use to reduce emissions. They 19 have also developed other local sources of funding 20 including motor vehicle registration fees and voluntary 21 emission mitigation agreements to reduce emissions beyond 22 what is required by State regulation or local rule. 23 While I will not go over this list in detail, the 24 District staff identified and committed to developing 20 25 new measures to control emissions under their authority. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 In terms of emission reductions, the largest are controls 2 on composting operations. 3 --o0o-- 4 AIR POLLUTION SPECIALIST LINDBERG: The District 5 staff recognized early in the development of the 2007 6 ozone plan that there were limits to what they could 7 include in a federally approvable SIP. For example, U.S. 8 EPA limits the emission reduction benefits of 9 incentive-based programs to money in hand. 10 Never the less, incentive-based programs are 11 critical. They give the District a tool with which to 12 reduce emissions, especially from sources not under their 13 direct regulatory authority. 14 --o0o-- 15 AIR POLLUTION SPECIALIST LINDBERG: The plan sets 16 out a path that builds upon the success the District has 17 had in using incentive programs in order to attain the 18 standard more quickly. The District is already working 19 locally to build the partnerships to address the need. 20 This effort is already well underway, driven by the work 21 of the California Partnership for the San Joaquin Valley. 22 --o0o-- 23 AIR POLLUTION SPECIALIST LINDBERG: In order to 24 help shape the air quality environment in the Valley, the 25 District has identified other important policy initiatives PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 beyond incentives. Here's a list of the local initiatives 2 included in the District plans. I'll highlight a few of 3 them. 4 One would change the way local government does 5 business through green contracting. The District would 6 also continue to be an important partner in the long-term 7 blueprint growth planning process that has been occurring 8 in the Valley. 9 --o0o-- 10 AIR POLLUTION SPECIALIST LINDBERG: In closing my 11 review of the District plan, I'd like to briefly go over 12 several additional planning requirements. 13 The federal Clean Air Act requires areas to make 14 steady progress toward attainment. The Act also requires 15 that an area include contingency measures. As you have 16 seen, the San Joaquin Valley's Attainment Plan will result 17 in steady emission reduction progress, with most of the 18 reductions coming in the first seven years of the plan. 19 The Valley meets the federal progress and 20 contingency requirements through the rules and regulations 21 in place today. The Valley's plan also includes county 22 level transportation budgets which ensure that growth in 23 motor vehicle activity does not consume the air quality 24 progress that the plan would otherwise achieve. 25 In September 2006, the District approved and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 submitted an analysis for the existing rules indicating 2 they met the requirements for Reasonably Available Control 3 Technology, or RACT. 4 The submission reflected the requirements in 5 place at the time and demonstrated RACT for all sources 6 greater than 25 tons per year. With an extreme 7 classification, that threshold would be lowered to 10 tons 8 per year. The District staff is in the process of 9 updating the RACT determination which will be due to U.S. 10 EPA after reclassification. 11 Finally, the District held multiple public 12 workshops since plan development began in earlier 2006 and 13 provided extensive opportunity for public input during the 14 development and adoption of the Valley's 2007 Ozone Plan. 15 --o0o-- 16 AIR POLLUTION SPECIALIST LINDBERG: A number of 17 issues have come forward during the District public 18 process and an ARB staff discussion with members of the 19 public about the District's plan. We consolidated them 20 into three major themes that I'll cover for you. 21 --o0o-- 22 AIR POLLUTION SPECIALIST LINDBERG: By far, the 23 largest issue is the District's decision to request a 24 reclassification to extreme. This moves the attainment 25 date to 2023 and is seen as a delay in clean air progress. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 With the extra time, there is concern that the 2 District, ARB, and U.S. EPA will not move forward as 3 aggressively as they would if the attainment date were 4 sooner. 5 In my presentation earlier, I described staff's 6 rational for concluding that advanced technologies are 7 needed to provide emission reductions. And I pointed out 8 that advanced technology measures are only allowed for 9 areas classified as extreme. Urgent action is needed, and 10 rulemaking on the largest emission reduction measures is 11 already underway. 12 --o0o-- 13 AIR POLLUTION SPECIALIST LINDBERG: The second 14 big issue is, is there a control strategy that can get 15 there more quickly? 16 An alternative proposed strategy relies on the 17 use of high-efficiency NOx retrofits. The proposed 18 alternative also relies on operational controls to spur 19 the use of these technologies. 20 While staff is optimistic about technology, we 21 believe there is very large uncertainty in the 22 availability of these types of retrofits. 23 --o0o-- 24 AIR POLLUTION SPECIALIST LINDBERG: Finally, a 25 number of general comments have been received related to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 the nature of the plan. 2 One, there was concern that the measures to 3 accelerate attainment should be enforceable. 4 Two, that the local district should do more. 5 And finally, while there is general agreement 6 that more incentive funding is needed, there's concern 7 that the plan is not specific enough about how much is 8 needed and what it should be spent on. 9 --o0o-- 10 AIR POLLUTION SPECIALIST LINDBERG: In making 11 staff's recommendations, I will ask you to consider three 12 minor updates to element of the District Plan. 13 ARB staff has identified the need to make three 14 minor updates to the plan adopted by the District. In 15 April, the California Department of Pesticide Regulation, 16 or DPR, made changes to how they estimate pesticide 17 emissions. ARB staff is proposing to replace the 18 pesticide emissions inventory in the district's plan with 19 the updated emission projections. To reflect these 20 updates, staff updated the reasonable further progress and 21 contingency measure calculations. 22 Finally, staff is proposing to update the 23 transportation conformity budgets for Madera County to 24 reflect data that was not available at the time the 25 District published their final draft plan and to correct a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 data entry error discovered in San Joaquin County's 2008 2 budget. 3 --o0o-- 4 AIR POLLUTION SPECIALIST LINDBERG: Staff 5 recommends that you approve reclassification and that you 6 approve the local plan elements. The San Joaquin Valley 7 2007 ozone plan relies on emission reductions to be 8 achieved from the proposed State Strategy, which will be 9 brought to you for consideration next week. 10 The SIP for the Valley is not complete until the 11 State Strategy is added to the local elements. Therefore, 12 we are recommending that you direct staff to submit the 13 complete SIP to U.S. EPA following action on the State 14 Strategy next week. 15 --o0o-- 16 AIR POLLUTION SPECIALIST LINDBERG: With the 17 near-term measures, we will achieve two-thirds of the NOx 18 reductions and all of the ROG reductions needed for 19 attainment by 2014, and the air will be cleaner Valley 20 wide. 21 By 2023, with the benefits of advanced 22 technology, we will have full attainment Valley wide. 23 Thank you. That concludes my presentation. 24 CHAIRPERSON SAWYER: Thank you, Mr. Lindberg. 25 I note that Senator Florez has joined us. Thank PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 you very much for coming this morning. We would be 2 delighted to hear a statement from you at this time. 3 SENATOR FLOREZ: Thank you very much, Dr. Sawyer 4 and members of the Board. 5 First and foremost, thank you for coming to 6 Fresno. And we also look forward to attending your 7 meetings in the near future as you move on next week as 8 well. 9 First and foremost, let me say there is a wide 10 disagreement on whether or not the current Board in 11 pushing this forward to you did so prematurely. And the 12 reason we say that is there is plenty of time given some 13 of the deadlines to allow for more of a go-between between 14 the Board's strategy and ultimately the local San Joaquin 15 Valley Pollution Board strategy. 16 So I would say that as you consider your action 17 next week, I would ask you to please consider the fact 18 that there are additional items that may be helpful for 19 the Board, and particularly as you mentioned some minor 20 updates. I can imagine there are other types of updates 21 that are absolutely important. 22 And we would hope that you would -- I know you're 23 going to be taking an action on this today. I 24 obviously -- my own personal feeling is that the Board has 25 moved prematurely -- the local Board has moved PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 prematurely. There is still lots of dialog continuing, 2 and there were a slight amendments made to it based on new 3 information which we think are positive. I hope that you 4 consider the action as just a request from a Senator from 5 this area. 6 The second is that I'd also note that you are 7 going to be discussing concurrence with the agricultural 8 burning rules in a later agenda item. I do want to say 9 that we very much appreciate CARB's participation in that 10 when we created the legislation, the entire discussion in 11 negotiations in that legislation was always a go-between 12 between the CARB and the local district. And we look 13 forward to hopefully the Board appointing a Subcommittee 14 that will look into whether or not the current Board's 15 decision was the right decision given all of the 16 information put before it. 17 And I do know, Dr. Sawyer, as you start to and 18 staff starts to recommend the process for this, when we 19 talk about current, we really do need that process in 20 place so everyone understands what it is. 21 I would also ask as you formulate -- and I assume 22 maybe a Subcommittee of this on this particulate rule, 23 that the people who are on the Subcommittee not have taken 24 a vote on it as well. Be clear that you don't take sides 25 on Subcommittee prior to, in essence, figuring out what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 ultimately the rule looks like. 2 Let me also say if I could that on your agenda 3 today is the reformulation of gas regulations. I am very 4 appreciative of your staff giving us a briefing on this 5 model. We're very excited about it. We're glad we have 6 actually re-looked at this. We're very excited about the 7 model moving forward, because we think ultimately as we 8 start to look at reformulated gasoline, that is going to 9 be a huge driver in terms of getting cleaner burning fuel 10 here in the Central Valley and make sure we're moving on 11 the other side, if you will, to make sure the NOx issues 12 are not overwhelming. So we're very appreciative that 13 model is now updated. 14 We had a good opportunity to talk to staff. 15 We're very excited about it. A lot of our work went into 16 it. I want to congratulate your staff. It is a very good 17 model as we move forward. 18 Lastly, I would simply -- don't want to take a 19 lot of your time, but today there was an audit released by 20 the State Auditor that talked about the Carl Moyer 21 Program. And one of the highlights of that audit centered 22 on the fact that we are handcuffing this Board, if you 23 will, with only a ten percent cap. And we will be 24 introducing legislation later in the session to the Board 25 20 percent, if you will, for more inner-district projects. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 And it was amazing that the audit pointed out the emission 2 reductions we can get when we give you more money and we 3 have more inner-district programs, we are astounded to 4 note many times four or five times factors come into play. 5 So I think hopefully we'll get your support on that in the 6 Legislature as well. 7 The audit in a very clear way said we had in many 8 cases in the South Coast, even in your local air district 9 as you sit here, we had some funds that were not expended. 10 For example, in the San Joaquin Valley Air Pollution 11 Control District, 20 percent of all the Moyer funds that 12 could have been spent, weren't. And I think that's very 13 disturbing when you start to think about trying to get all 14 of the emissions, trying to get all for the types of 15 things necessary, wood chippers and other types of things 16 the subcommittee will look at. Those are types of 17 stationary moneys we shouldn't have laying around. We 18 should be putting them to work. 19 Obviously, most of the work needs to be placed in 20 South Coast, according to the audit. We have a lot of the 21 issues there. And it tells us at least at the legislative 22 level that giving you a ten percent cap has not worked 23 well for the Legislature. Giving you more flexibility 24 with a higher percentage absolutely will be a better plan. 25 And so hopefully we'll work with your Executive Director PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 to see ultimately what the right mix is. At this point, 2 say 20 percent. Who knows. Maybe it's 15 or 13. But 10 3 percent is not workable. 4 Dr. Sawyer, that's really all I have to say. I 5 do appreciate our go-between and our conversations. Very 6 much appreciate the opportunity to also address the Board 7 and the members. You guys obviously have big decisions to 8 make. Obviously, the biggest decision today is the 9 approval of the San Joaquin Valley's 2007 Ozone Plan. 10 And as you see by the folks behind me, they 11 obviously have a public health concern with moving of a 12 plan that doesn't necessarily have to be moved so quickly, 13 if you will. In many cases, at least for some folks 14 including myself are raising a white flag too soon, too 15 fast. And it's sending a signal that we may not be doing 16 everything we can be doing and should be doing. And there 17 is a lot of work to do. 18 And I can tell you that we appreciate the Board's 19 action so far. But we never believe that everything is 20 perfect. We never believe we can't do better. And I 21 think as I told the Chairman of the Board in my office a 22 few days ago that at the end of the day -- turning to a 23 sports analogy, even Michael Jordan needs a coach. 24 Everyone is good, and they could be the best, perfect. 25 But at the end of the day, everybody needs to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 coachable. And even this Board, our current Board, they 2 still can do better. And that's all we're asking for is a 3 little more time to see if there are more around the edges 4 we can do. 5 So as you consider that, I would appreciate that 6 you have a long agenda item before you and lots of folks 7 talking that you consider that, Dr. Sawyer. I appreciate 8 the time. I appreciate the Board. And I look forward to 9 seeing you in the State Senate. And obviously the 10 confirmation is coming soon. We have lots of questions. 11 We look forward to seeing you and discussing ultimately 12 the type of Board member you'll be here as well. 13 With that Dr. Sawyer, I'll end. 14 I would like to say one thing, if I could. We 15 have a very good advocate in Sacramento. Rob Oglesby has 16 tirelessly gone to I don't know how many meetings on air 17 quality. Today's his birthday. We got him a birthday 18 cake. So at the end of all this, at the end of all this 19 outside -- here it is so. You know, we wanted to be sure 20 Rob is recognized for his birthday. 21 EXECUTIVE OFFICER WITHERSPOON: We should sing. 22 SENATOR FLOREZ: I would like to say, if I could, 23 it is hard, as Catherine knows, it's hard to be between 24 the Legislature in many cases, your Board, and the local 25 district. And I would say as someone who's worked with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 Rob throughout my whole legislative career, he has always 2 been -- many times we haven't agreed. Many times he's 3 always been available, always there to brief us. Quite 4 frankly, we wanted to say thank you to him and we wish him 5 a happy birthday on behalf of our staff and, of course, 6 your staff as well. Happy birthday. 7 We'll let you proceed on with your meeting. 8 Thank you, Dr. Sawyer. 9 CHAIRPERSON SAWYER: Thank you so much for coming 10 to talk with us this morning. 11 I know that Rob is trying to hide out in the 12 corner, but he should say a few words in response to the 13 Senator. We all wish you a happy birthday, Rob. 14 OFFICE OF LEGISLATIVE AFFAIRS DIRECTOR OGLESBY: 15 Thank the Senator. There's nothing like being webcast to 16 God knows how many. And thank you very much for the very, 17 very, very kind words. I don't have much more to say than 18 that. On with the hearing, please. 19 CHAIRPERSON SAWYER: Thank you very much. And we 20 certainly share the Senator's feelings about your service 21 to the Board and to the State. Thank you. 22 Do Board members have questions at this time for 23 the staff? 24 Ms. Berg. 25 BOARD MEMBER BERG: I just needed to understand PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 if you look at the difference between slide number 18 and 2 slide number 25. On the SIP strategy overview versus the 3 new local commitment, were those additional commitments to 4 the State Strategy overview? 5 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 6 CHIEF KARPEROS: Could you repeat the question? It was 7 slide -- 8 BOARD MEMBER BERG: Slide 18 and on slide 25. On 9 slide 18 we have the State strategy overview, which states 10 the proposed reductions of the ROG and the NOx. And then 11 jumping to slide 25, we have new local commitment. And I 12 was just confused as to how those numbers relate to one 13 another. 14 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 15 CHIEF KARPEROS: The new local commitments relate to new 16 emission reductions from the measures that the District is 17 proposing. On the SIP strategy overview, we're also 18 reflecting the impacts of growth as well. So in some of 19 these categories, particularly in ROG categories, you see 20 growth in the base line inventory over time. So the 21 numbers don't also add up to the same. 22 BOARD MEMBER BERG: The numbers within slide 25 23 are incorporated in 18? 24 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 25 CHIEF KARPEROS: Yeah. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 BOARD MEMBER BERG: I was confused as to whether 2 they were additional. 3 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 4 CHIEF KARPEROS: They net out in slide 18 because of 5 growth. 6 BOARD MEMBER BERG: Thank you for that 7 clarification. 8 CHAIRPERSON SAWYER: I have a question. We're 9 going to be receiving a whole series of SIPS. I think the 10 next one is the PM2.5 annual average one, and then we'll 11 be getting a 24-hour; is that next? 12 DEPUTY EXECUTIVE OFFICER TERRY: No. That's 13 years away. 14 CHAIRPERSON SAWYER: It is out there in the 15 future? 16 DEPUTY EXECUTIVE OFFICER TERRY: Probably 2011. 17 CHAIRPERSON SAWYER: And there will be another 18 federal ozone standard probably? 19 DEPUTY EXECUTIVE OFFICER TERRY: U.S. EPA is 20 considering the adoption of a new ozone standard, perhaps 21 to be finalized by the end of this year. 22 CHAIRPERSON SAWYER: When would action on that 23 begin? 24 DEPUTY EXECUTIVE OFFICER TERRY: They would go 25 through designation process. So it's typically three to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 four years before SIPS are developed and presented. 2 CHAIRPERSON SAWYER: Okay. Getting back to the 3 most immediate one, the annual PM2.5 SIP. Would we 4 anticipate yet additional measures in the basin to meet 5 that plan when it comes to us next year? 6 DEPUTY EXECUTIVE OFFICER TERRY: Early next year 7 is our expectation. The preliminary assessment is that 8 the State strategy the Board will consider next week 9 combined with the local actions and the existing programs 10 provide what is necessary for that standard. But as yet, 11 the technical analysis is not complete. So we would bring 12 back to the Board additional proposals if they were needed 13 to deal with 2014 particulate pollution. But this SIP 14 emphasizes NOx so heavily and purposefully so because of 15 the anticipated NOx reductions needed for the PM2.5. 16 CHAIRPERSON SAWYER: Thank you. 17 Supervisor Hill. 18 SUPERVISOR HILL: Thank you, Mr. Chair. 19 One question, Jeff. On slide 23, where you 20 mentioned the cleanup of existing diesel fleets, you 21 mentioned 60 tons per day as a reduction. I believe that 22 was reference to diesel trucks. And -- 23 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 24 CHIEF KARPEROS: Correct. 25 SUPERVISOR HILL: My question is regarding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 agricultural equipment. How much was the reduction from 2 the strategy? 3 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 4 CHIEF KARPEROS: Staff haven't yet quantified emission 5 reductions from the agricultural fleet rule. We're teeing 6 those up in order -- so right now the construction fleet 7 rule is in front of you. Staff have begun the technical 8 work on the truck rule. Next up after that will be the 9 agricultural equipment rule. We want to keep it on the 10 list. It's important we do need to clean up the entire 11 diesel legacy fleet. But we're not in a position yet. We 12 need to do more technical work on the inventory before we 13 can fully quantify a commitment. 14 CHAIRPERSON SAWYER: Ms. D'Adamo. 15 BOARD MEMBER D'ADAMO: A couple of questions 16 regarding -- well, first of all, in follow-up to 17 Supervisor Hill's question on construction equipment. 18 Just trying to put things in better perspective for me 19 here. 20 It was mentioned 61 tons per day, that the 21 current rule would result in a 61 ton per day reduction. 22 And that's in San Joaquin Valley? 23 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 24 CHIEF KARPEROS: Yes. Yes. The truck fleet rule that ARB 25 staff is envisioning as we've quantified it for the SIP PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 would be 61.4 tons per day of NOx reductions by 2014 in 2 San Joaquin Valley. 3 EXECUTIVE OFFICER WITHERSPOON: The truck rule. 4 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 5 CHIEF KARPEROS: Sorry, the truck rule. And the 6 construction rule that's in front of you provides by 2014, 7 3.7 tons per day of NOx. 3.7. 8 BOARD MEMBER D'ADAMO: And the local measures 9 combined would result in what reduction? Just to put it 10 into perspective of our responsibility as compared to the 11 local district. 12 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 13 CHIEF KARPEROS: Staying with NOx, the NOx local rules are 14 nine tons per day. Much more active, the District, right 15 now on ROG reductions. The number is 46 -- our slide 28, 16 25 issue. 47 tons per day of ROG under the District's 17 current and near-term rulemaking. 18 EXECUTIVE OFFICER WITHERSPOON: The total NOx 19 from ARB are -- 20 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 21 CHIEF KARPEROS: Total NOx tons from ARB from all the new 22 proposed measures in the plan we'll bring for you next 23 week is 76 tons per day of NOx by 2014 in the new 24 measures. 25 DEPUTY EXECUTIVE OFFICER TERRY: And the total PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 measures is on the order of 280 tons per day of NOx when 2 you combine existing programs. 3 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 4 CHIEF KARPEROS: It's critical to understand the existing 5 control program builds over time and truly is the 6 foundation of all the SIP and attainment strategies going 7 forward. 8 BOARD MEMBER D'ADAMO: And then on the issue 9 section, I think extreme classification and also 10 alternative strategy -- I suspect that some of the 11 witnesses will be talking about this. But I understand 12 that the District had before it a report with a different 13 viewpoint on how the District could come into attainment 14 sooner. Could staff comment on that, or would you prefer 15 to wait until one of the witnesses brings it up? 16 DEPUTY EXECUTIVE OFFICER TERRY: Perhaps, 17 actually, the Executive Director for the Valley District 18 is going to present a few remarks and will cover that. So 19 perhaps you might want to ask him some of those questions. 20 And we'd be of course happy to comment as well. 21 BOARD MEMBER D'ADAMO: Yeah. I am interested in 22 your opinion on that. All right. Thank you. 23 CHAIRPERSON SAWYER: Ms. Berg. 24 BOARD MEMBER BERG: I also just would like to 25 clarify that the charts on 19 and 21 which show the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 emission ozone strategy plan that the actual rules that we 2 will be adopting or have been adopting will do the step 3 down. 4 This isn't a case where if we go to extreme 5 non-attainment that we are delaying any rules to that 6 "last minute." That we will be showing over between now 7 and 2014 this 50 percent reduction, and the ROG will be 8 within containment with 2014. And then in 2020, we'll 9 have the additional reduction to 64 percent. And it is in 10 fact the last three years that we're looking eleven 11 percent of the NOx. Do I understand that correctly? 12 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 13 CHIEF KARPEROS: Absolutely. The rulemaking calendar that 14 staff has mapped out in the proposed strategy in fact 15 completes -- goes through 2010. So when we're talking to 16 you next week about that strategy, we are talking about 17 actions that are right in front of you right now with the 18 construction rule and actions we bring to you in terms of 19 rules really over the next couple of years. 20 Those charts that you were referring to, those 21 are, in fact, the composite emission reductions from the 22 existing control program and the new proposals. So, yes, 23 those are all on track and included within the proposal 24 that we brought before you. 25 BOARD MEMBER BERG: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 CHAIRPERSON SAWYER: Are there any other 2 questions from Board members? If not, we'll begin the 3 public testimony as soon as the Clerk gives us the list. 4 Thank you. 5 DEPUTY EXECUTIVE OFFICER TERRY: Dr. Sawyer, 6 Seyed Sadredin with the District is first on the list. 7 CHAIRPERSON SAWYER: Oh, okay. 8 (Thereupon an overhead presentation was 9 presented as follows.) 10 MR. SADREDIN: Good morning, Mr. Chairman, 11 members of the Board. I'd like to welcome you to Fresno. 12 It's a pleasure to have you here. 13 And I also want to congratulate our very own 14 Supervisor Judy Case for her appointment to the Board. 15 And I also want to thank her for taking on the 16 responsibility of volunteering for this great sacrifice 17 with her time and her family. So we're fortunate to have 18 you. And we are confident that you will serve the Valley 19 and the State of California well. 20 And I also want to thank your staff, 21 Mr. Chairman. This has truly been a team effort. We have 22 worked well together. This has been a long extensive 23 process over the course of over a year. And as we put 24 together a plan that was the first of its kind in the 25 nation when our Board adopted it, and we believe it's a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 plan that warrants your support. 2 --o0o-- 3 MR. SADREDIN: I'd like to start by what is the 4 most important factor for all of us as public health 5 agencies. We believe the air quality impact, the major 6 problem that the Valley faces with respect to air 7 pollution impact has to be at the top of our concern for 8 all of us, all the policy makers, and all the decision 9 makers. We certainly appreciate any coaching from the 10 State Legislature and any tools they can give us to help 11 us do our job better. 12 But I think it is incumbent on all of us to 13 really take a close look at the price that the Valley 14 residents are paying for the air pollution that we have in 15 the Valley. 16 We have made major progress which I will talk 17 about in a minute. If you look at 460 premature deaths 18 per year, if this was a hurricane that every year resulted 19 in so many people dying, there will be no doubt that this 20 is a crisis, a health crisis, we need to deal with. As we 21 go about implementation this plan, we are hoping that you, 22 the State Legislature, the federal government, really look 23 at this as a serious issue where we need a lot of 24 assistance and help, both in the regulatory format as well 25 as incentive funding to do our job. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 As you can see here, there is also an economic 2 impact related to the health cost. The cost of these 3 various consequences of our air pollution in the Valley 4 are estimated to be at about three billion dollars per 5 year, as was mentioned by ARB. I should point out that of 6 that three billion dollars, only 30 million is attached to 7 ozone consequences. The rest of it is attached to the 8 PM2.5. And the plan that is before you by 2015 will bring 9 the Valley into attainment with PM2.5, and thereby 10 eliminating many of these harmful consequences that we've 11 listed there. 12 --o0o-- 13 MR. SADREDIN: I think it's important, as ARB 14 staff pointed out, to take a look at the natural 15 conditions that the Valley faces that make our job more 16 difficult than any other area in the nation. The 17 geography, topography, meteorology really makes our 18 challenge the toughest in the nation. 19 I have said many times, and ARB staff agrees with 20 that, that for the Valley to come into attainment with the 21 new standard, the one that is before you today, we have to 22 be the cleanest place on earth. Not just the nation. 23 Given that as you can see by this picture, we basically 24 have the bowl of the lead on top of it all year. 25 This is a picture of the wintertime pollution in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 the Valley. We have the same phenomenon occurring in the 2 summertime. It is not visible like it is with the fog. 3 Basically, if you wanted to build a perfect laboratory 4 dish to generate and trap ozone, you would build something 5 like the Valley. And unfortunately, we are the victims of 6 geography and topography when is comes to air pollution. 7 --o0o-- 8 MR. SADREDIN: As was mentioned by your staff, 9 the amount of pollution that the Valley can tolerate is 10 much lower than many other areas. 11 This is one way of illustrating for you the 12 amount of pollution that the Valley has with respect to -- 13 in comparison to Los Angeles and Bay Area. The small 14 graph that you see, the bar on the left, purple or the 15 light blue chart is the pollution density in the Valley, 16 the amount of pollution that is released into the air per 17 square mile. 18 The middle chart is Bay Area, and the one to the 19 right is South Coast. 20 As you can see, Bay Area's pollution density is 21 six times higher than San Joaquin Valley's, but they have 22 essentially clean air. Fortunately, for them, the nice 23 ocean breeze flushes that area. And unfortunately for us, 24 many times we're the victims and the recipient of that 25 pollution. Thirty percent of our ozone problem up north PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 is attributed, according to our studies, to the pollution 2 from Bay Area and down south where we have the most severe 3 programs. About ten percent of our problem is attributed 4 to pollution from Bay Area. 5 And then on the right, as you can see, South 6 Coast has about ten times more pollution per square mile 7 than we do. And their air quality is only marginally 8 worse than ours. So when you look at our progress and 9 what we have done, that's an important factor to keep in 10 mind. 11 --o0o-- 12 MR. SADREDIN: Now, as you've seen the numbers, 13 South Coast air quality has improved to much higher, 14 faster rate than ours. Although as you can see by the 15 graph, the amount of pollution we have reduced in the 16 Valley since 1990 is actually greater than what South 17 Coast has been able to do. 18 As you can see from the graph, this is the ARB's 19 2006 Almanac information. Since 1990, we've reduced 20 emissions by over 40 percent. South Coast has reduced 21 their NOx emissions by about 37 percent. So we have 22 reduced air pollution about the same or more than what 23 South Coast has done. 24 And what is more important and what's more 25 remarkable to note also is that the Valley, as you know, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 has experienced a much higher rate of growth. Our growth 2 during that time has been 60 percent higher than the 3 State's average. So even though we have experienced a 4 much higher rate of growth, we have been able to reduce 5 pollution both through local measures and the State 6 measures in a way that has brought the Valley's pollution 7 down even at a faster rate than South Coast. 8 --o0o-- 9 MR. SADREDIN: Now, as we go about talking about 10 this new plan, I believe it's important to look at our 11 past efforts on cleaning the air. And as we go to the 12 industry, to the businesses to ask them to spend billions 13 of dollars more to control air pollution, I believe it's 14 important to point out what has happened to the billions 15 of dollars that they have spent already. I think it is 16 important for the credibility and to be able to with a 17 straight face ask these businesses to spend billions of 18 dollars more to show the work we have done already has 19 produced some results. 20 And I think looking at the Valley's situation, we 21 have a record that we could be proud of and something we 22 can point to as having worked and ask more of the same. 23 As you can see from this overhead, since 1980, we 24 have reduced stationary source pollution by 80 percent in 25 the Valley. And also corresponding to the ozone PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 concentrations, the number of exceedances that we've had 2 for the one-hour ozone standard has also been reduced by 3 80 percent since 1980. 4 We are non-attainment for PM10, as you recall. 5 We were non-attainment -- serious non-attainment, and we 6 have been able to actually go five years of having no 7 exceedance. And EPA has made a statement and formally has 8 acted on our request to be considered in attainment. 9 With respect to PM2.5 for the 1997 standard, the 10 Valley meets the daily standard. And we have also reduced 11 the concentrations of the annual PM2.5 standard, which we 12 will bring to you a new plan by next April. 13 In 1990 or 1997 when we began monitoring the 14 PM2.5, our peak concentrations were about 80 percent above 15 the standard. Today, we are only 30 percent above the 16 standard when it comes to the annual concentrations. 17 With respect to the eight-hour ozone standard 18 that is before you, there has been significant reduction, 19 as Jeff's chart showed, that colorful chart, that shows 20 the concentrations going down in the value. But that is a 21 problem area for us. Eight-hour ozone with its longer 22 term nature. The progress has been sort of stopped 23 essentially. We haven't made a lot of progress in terms 24 of reducing the number of days that we are in exceedance 25 since 1990. And although a lot of reduction in air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 pollution has been made, the eight-hour ozone standard has 2 proven to be very challenging to us. 3 --o0o-- 4 MR. SADREDIN: Now, we have talked about the 5 Valley needing about 75 percent reduction in air 6 pollution, something in the order of 460 tons a day of 7 reductions in NOx. Sometimes when you present that to 8 people, they have no idea or a good concept of how 9 difficult that might be. 10 What I'd like to do in this overhead is show you 11 some what-if scenarios to put that into perspective and to 12 point out there is no silver bullet we could use and come 13 into attainment magically. 14 --o0o-- 15 MR. SADREDIN: The line, the horizontal line 16 here, is the attainment target. We have to reduce our NOx 17 emissions to 160 tons per day to come into attainment with 18 eight-hour ozone standard. This is where we are. This 19 bar is where we are today in terms of NOx emissions. 20 This is where our emissions will be in 2013 if 21 all of the existing measures are both -- at the local 22 level and the State level are implemented, we will make 23 major progress as you can see reducing the emissions. 24 So what does it take to get below that attainment 25 line? What if I have to -- look at my slide so I can read PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 it. 2 What if we remove all the light-duty vehicles? 3 Just told everybody in the Valley you cannot drive any 4 more in the Valley. Shut down I-5 and 99. Tell everybody 5 just bike to work. Unfortunately, as you can see, the 6 passenger vehicle emissions having already reduced 7 emissions significantly will not bring us below that line. 8 Diesel trucks, as you know, that's a huge source 9 category. What if we got rid of all the trucks in the 10 Valley. Would that bring us into attainment? Forget 11 about retrofit and replacement. What if we just got rid 12 of all trucks in the valley? As you can see, we still 13 will not be able to come into attainment. 14 What if we got rid of all mobile sources, the 15 trucks and passenger vehicles? As you can see, we are 16 still above the standard. 17 What if we shut down all businesses, all the 18 stationary sources in the Valley that we have authority 19 over? What if we told them you cannot any longer operate 20 in the Valley? As you can see, we are still above the 21 standard. 22 And what if we did away with all agriculture? 23 As you can see, all of these what-if scenarios. 24 I want to point out we did not consider these as realistic 25 measures to pursue. None of those will really bring us PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 into attainment. So hopefully that gives everyone a 2 better sense of how difficult it is to really bring about 3 the reductions that we need to make the Valley the 4 cleanest place on earth to come into attainment. 5 Now the other point of this overhead is to point 6 out that there is no silver bullet. And everyone has to 7 do their fair share regardless of private sector, public 8 sector, and also the business side and the general public 9 really needs to take part in this and bring the emissions 10 down. 11 One for the exercises that we engaged in and put 12 in this plan together is -- 13 --o0o-- 14 MR. SADREDIN: -- a no constraints analysis. And 15 for that analysis, we assume that there is no financial 16 constraint, no logistical constraint. What if we could 17 just apply the best available technology as soon as it 18 becomes available? Can you get enough reductions to come 19 into attainment at any time before 2020 and before 2023? 20 As you can see in this graph or in this table, 21 the reductions that we need to come into attainment are 22 about 464 tons a day. From the District plan, as you can 23 see during the various years the increments we've listed 24 here in 2012, the plan will produce 263 tons a day in 25 reduction in NOx. In 2017, 270; and 2020, 311; and in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 2030, 337. 2 Now we went through a whole host of exercises 3 that are not doable. They take about $61 billion to do 4 it. But what if money were no object and there were no 5 logistical constraints? For instance, we assume we will 6 replace 134,000 trucks in the Valley. We would stay at 7 the gates to the Valley at the weigh station with new 8 keys. As you come into the Valley, hand you a new truck. 9 We will do the same thing with all the vehicles. We will 10 take it to the passenger vehicles. We will replace 2.6 11 million vehicles in the Valley with the cleanest 12 technology available. 13 We would do the same thing with construction and 14 mining. The rule that you're talking about right now, 15 what if we assume we will get hundred percent penetration 16 in terms of replacing all construction equipment with the 17 cleanest technology that is available? 18 Farm tractors be put on the best control that is 19 available; locomotives, even assume that EPA might come 20 through by 2012 and have Tier 3 engines for locomotives, 21 which we really know is not going to happen at this point. 22 We're hoping we get it done before 2017, but we assume 23 that would happen. A whole host of other measures such as 24 electrifying all ag engines. Every other diesel source of 25 emissions would be replaced. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 As you can see, with all of that at $61 billion, 2 we still end up 50 to 60 tons a day short of what we need 3 to do. So hopefully when we tell people that going to 4 extreme was the only option, they understand that and they 5 take this into account that there is really no physical -- 6 there's no possible way that we can come into attainment 7 with today's technology and with the technology that is on 8 the horizon in the foreseeable future. 9 --o0o-- 10 MR. SADREDIN: Now as we put our plan together, 11 we had to look at where the emissions are and what we can 12 do. As you can see, mobile sources which fall under yours 13 and EPA's control make up 80 percent of the total NOx 14 emissions. 15 The top part of the bar is the stationary sources 16 over which the District has control. 17 I need to point out that -- I'm sure you know -- 18 these sources have already been subject to several 19 generations of rules and regulations. Our district has 20 some of the toughest stationary source regulations in the 21 nation and the state. In this new plan, as was mentioned, 22 we will still go after these sources and squeeze as many 23 ounces as we can from them. And opportunities today with 24 technologies that are available having done already so 25 much these source categories are limited. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 But I'd like to point out the heavy-duty truck 2 contribution. As I said, we don't have any silver 3 bullets. But if you only had one bullet in the Valley, 4 that's where you want to spend it, on truck replacement. 5 We're hoping for your assistance as you look at 6 regulations. And also later on as you are involved in 7 divvying up the Prop. 1B funding, which we're hoping you 8 have a big role in doing. 9 --o0o-- 10 MR. SADREDIN: This is a quick summary of our 11 plan. I will not go through it in detail. Jeff and your 12 staff has already ably described that. 13 The plan calls for 75 percent reductions in NOx 14 emissions. I need to point out that all local measures 15 for stationary sources that we have control over will be 16 in place actually by 2010. The only thing that will hold 17 up attainment is reductions from mobile sources and what 18 you can do for us at the State level, what EPA can do for 19 us with the locomotives, and other sources they have 20 control over. 21 I need to point out we are not simply turning 22 our -- raising a white flag and saying it's all the State 23 and federal government's responsibility. We have a number 24 of measures to actually help you with getting reductions 25 from the sources that we don't have direct control over, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 such as incentive measures, green contracting, and a whole 2 list of measures Jeff talked about and I will briefly 3 mention later on. 4 Compliance costs of this plan in our estimate -- 5 and this is a low estimate -- will be about $20 billion. 6 This is what the business community will have to spend on 7 mobile and stationary sources. So this is really not a 8 free pass or something that delays attainment cost to the 9 business community. 10 And as I'm sure you heard the last month when you 11 were looking at the construction industry rule, the cost 12 for that rule alone is estimated at $3 billion, and 13 industry said it's $13 billion. So the $20 billion that 14 we estimated is actually on the low side. But it's really 15 a major, major investment that we are expecting the 16 business community to make. 17 Our plan does calls for $200 million a year in 18 incentive funds. We have been lobbying heavily at the 19 federal and State level. We've got commitments from the 20 federal government they will come through with $100 21 million a year if we are able to secure matching funds at 22 the State and local level for the other $100 million. We 23 have already secured $40 million locally through the DMV 24 surcharges and our indirect source review mitigation rule 25 for development. And we are counting on the State to come PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 through with the remaining $60 million a year that we 2 need. 3 This plan in our view is the most expeditious 4 path to attainment. It will bring the 50 percent of the 5 Valleys population into attainment by 2015; 90 percent by 6 2020. And remember, in this exercise we are judged by not 7 having a single day of non-attainment anywhere in the 8 Valley. So when we say it will take until 2023 to bring a 9 couple of hot spot areas in the Valley into attainment, we 10 are talking about Arvin and northwest Fresno having a few 11 days left they are still exceeding. All of the Valley 12 will see a dramatic reduction in ozone concentrations 13 quickly and over time as this plan is implemented. 14 And finally, the most important consequence of 15 this plan is that the measures that we have identified 16 already based on our preliminary analysis will bring the 17 Valley into attainment with the PM2.5 standard by 2015. 18 That's essentially the $3 billion in health cost we have 19 been talking about. 20 --o0o-- 21 MR. SADREDIN: I want to finish up by describing 22 the dual path strategy that our Board put in place. 23 We were not happy that we had no other option 24 than opposing the SIP that calls for an extreme 25 designation. What I have told our Board, our public, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 will only recommend an extreme designation if all other 2 findings were physically impossible. And unfortunately, 3 that's what we did find out. 4 But our Board was not satisfied with that. They 5 wanted to adopt a dual path strategy that will actually 6 put new measures, innovative measures that at this point 7 cannot be completely and well defined that will beat the 8 deadline. And we have a good track record to be able to 9 do so. 10 Our PM10 plan called for attainment by 2010. We 11 were able to do some innovative measures, such as with 12 fireplace rule, which I'm glad to hear South Coast is 13 going to copy in their new plan. And a few other measures 14 with the farmers, with conservation management practices 15 that actually brought us into attainment five years ahead 16 of time. So we're hoping to repeat that example. And we 17 are listing a whole host of strategies to be able to do 18 that. 19 But basically, the SIP track we have to abide by 20 the legal federal requirements on the fast track path as 21 we like to call it now. There are three components to 22 that. 23 The first component is to pressure ARB and EPA 24 for aggressive regulations on the sources that you have 25 control over. Now we will do it cordially. We will do it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 cooperatively. There will be no civil war. But we will 2 definitely hold your feet to the fire and really ask you 3 to do the best that you can to help us, as we're doing 4 right now with the construction rule. 5 I know the business community is complaining that 6 the rule that is proposed by your staff is too tough and 7 it needs to be relaxed. We hold a different view on that, 8 and we presented our comments in writing and verbally to 9 you at your Board meeting. 10 We are actually recommending that you strengthen 11 that rule and raise its effectiveness from 60 percent to 12 75 percent. This is a major source category. As you 13 know, we need 75 percent reduction in emissions. If we do 14 miss out on a major source category like that, it will be 15 difficult to make it up with other smaller source 16 categories. 17 So when you act on this rule next month, please 18 remember this hearing and our need for more reductions and 19 resist any temptation or demands to relax the rule. In 20 fact, we want you to strengthen the rule and take it to 75 21 percent. 22 And then the other component of our plan is 23 incentive funding. Regulations alone will not do the job 24 in this case. They certainly will not do it in a timely 25 fashion. And we need significant increase in funding to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 be able to get there. 2 And then we also have proposed a number of 3 innovative fast track measures. I will quickly go over 4 that. 5 --o0o-- 6 MR. SADREDIN: But basically these are measures 7 that we want to pursue. They were included in our plan. 8 But at this point, you cannot define them in a complete 9 way to make them SIP credible. But once we are able to 10 develop these measures further and have them SIP ready, we 11 will bring them back and put them in our SIP. And we will 12 come back to you for revising our plan. 13 Green contracting, we will require or ask that 14 local jurisdictions voluntarily incorporate green 15 contracting. To the extent permissible by law, we will 16 make it a mandatory component that when they hire vendor 17 services that they give preference to people that use 18 clean equipment and clean vehicles. 19 We have a whole host of goods movement measures 20 that require really changing the way we move goods and 21 people in the state in a major way which requires 22 participation by the State, federal government, 23 variations courts. 24 One key area that we want to focus on is short 25 sea shipping. I know our friends on the coastal lines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 will have some issues with that. The ports has a huge 2 impact on them. But basically we are looking for a model 3 that would move trucks and goods from southern California 4 to northern California using water carriers instead of 5 doing it on I-5 and 99. 6 And we believe if we could only transfer 20 7 percent of the truck vehicle to that mode of 8 transportation, that will get us 40 tons a day. Of 9 course, as you can see, this is not something I could 10 today put in a SIP plan, given all the work it takes to 11 really change in a major way what we have to do. 12 Alternative energy -- and I just want to quickly 13 touch on episodic and regional controls. In the offset, 14 people had asked that we impose operational controls. We 15 had pointed out too some of the legal constraints that 16 exist with respect to interstate commerce, but we really 17 want to pursue this other control. 18 We have controls now through expanding our Spare 19 the Air program. We want to pursue those cleaner day 20 concepts where we will perhaps ask on certain days ask you 21 not have drive-through windows open or don't use leaf 22 blowers and a whole host of measures like that initially. 23 When we reduce emissions to a manageable level, 24 we want to expand on this idea of episodic controls and 25 regional controls to strategically target our reductions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 in the areas and during the times of the year that we need 2 those reductions. 3 --o0o-- 4 MR. SADREDIN: This is my last overhead. 5 Our recommendation to you is to adopt the 2007 6 Ozone Plan. We also want you to remember our needs along 7 the lines of what South Coast needs and pursue an 8 aggressive regulation regime to bring about the reductions 9 that we need. Again you have control over 80 percent of 10 the emissions that need to be controlled. 11 We want you to play a big role in making sure the 12 District gets its fair share of Prop. 1B funding. 13 We are lobbying the State Legislature. And from 14 everything that we are hearing, the way it's going to turn 15 out, they will give you some general guidelines, but it 16 will be left up to ARB to decide where the need is. And 17 we believe based on our severe needs and the health crisis 18 we face the District should really get their fair share of 19 the funding. 20 We also want you to review the Moyer guidelines. 21 There are some administrative obstacles in being able to 22 use that fund appropriately. And hopefully we can work on 23 that also. 24 Thank you for the time, Mr. Chairman. I'd be 25 happy to answer any questions you might have. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 CHAIRPERSON SAWYER: Thank you, Mr. Sadredin. 2 Do Board members have questions? 3 Ms. D'Adamo. 4 BOARD MEMBER D'ADAMO: Well, thank you very much. 5 I've heard parts of this presentation before, but 6 never the entire presentation. And what it really cements 7 in my mind is just the need for us to be honest about the 8 facts. We all want to have clean air as soon as possible. 9 But I think that to say that we can do it with a silver 10 bullet is just being disingenuous to the public. 11 So I really appreciate this analysis, especially 12 no constraints and then taking entire sectors out of the 13 picture. And seeing that there's no easy answer. So I 14 applaud you for your efforts. 15 Having said that, however, I'd like to ask you 16 about the report that was presented to the District that 17 had a different point of view. And I haven't read the 18 report in its entirety, but I understand there was a 19 different analysis. So I'd like to get your comment on 20 that and also hear from staff. 21 MR. SADREDIN: I'd like to publicly thank Mr. 22 Lents, Nicole Davis, ISSRC for putting that plan together. 23 I think it was good for having some debate and discussion 24 about various options that might be available. 25 Unfortunately, this was a huge task that could PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 have been done better had they prepared that report in 2 communication with the District staff and with ARB staff 3 where we have the data and the information. 4 I think having gone back and forth with them a 5 couple of times, they ultimately conceded they could not 6 get enough reductions to bring the Valley into attainment. 7 That wasn't really the question. 8 It really came down to can you make additional 9 reductions to get some incremental improvements before you 10 reach attainment? And ultimately, really the only thing 11 that wasn't in that plan that is not a part of our plan 12 are the so-called operational controls, where they 13 suggests that on high ozone days, which in the Valley will 14 be about 100 days a year or so at this point, that we 15 would prohibit farming, impose driving restrictions, and 16 the way they characterize was that we would not allow high 17 polluting equipment to operate. 18 Our analysis showed even if you do that, if you 19 did get beyond the legal and economic implications of such 20 measures, they will not produce enough reductions in 21 emission to come into attainment. 22 So we did get some good ideas out of that plan, 23 and we did incorporate some additional measures from that 24 plan into our plan. 25 But the only thing that we left out was the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 so-called operational controls at this point. As I said, 2 we are looking at episodic controls when we reduced the 3 domain-wide emissions to a manageable level where maybe 4 we're down to a few days a year of having problems. And 5 then we will find a way to deal with the legal constraints 6 that obviously interstate commerce clause in the 7 Constitution is a big problem when you deal with mobile 8 sources with that respect. 9 CHAIRPERSON SAWYER: Ms. Berg. 10 BOARD MEMBER D'ADAMO: I think staff was going to 11 respond. 12 DEPUTY EXECUTIVE OFFICER TERRY: Just a brief 13 update for the Board. 14 We did have a meeting with Dr. Lents and Ms. 15 Davis also about three weeks ago to walk through the 16 technical basis of their analysis and compare it with our 17 no constraints analysis and the Districts. And 18 fundamentally, we saw it as very positive to have three 19 independent technical staffs looking at the same problem 20 and essentially coming to the same conclusion about which 21 sectors are critical to control and how difficult it will 22 be to get there. And what was different is the overlay of 23 what could additional money provide, what could additional 24 operational controls potentially provide? 25 The exercise is not finished, and Dr. Lents PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 conveyed that they planned to work some more on this too 2 by the end of the summer, produce a final document with 3 additional ideas that more flushed out, in consultation 4 with ARB staff and the District staff as well, is our 5 goal. And so that we can have a very clear technical 6 grounding in what will be the effect of ARB's measures, 7 what we anticipate the effect of the proposed measures in 8 our state strategy, and then what more could be done 9 beyond the proposed state strategy in a complimentary 10 fashion. And that's the goal. 11 BOARD MEMBER D'ADAMO: And Dr. Sawyer, I would 12 just like to add to it, I see we have a lot of people here 13 that are going to be speaking out against adoption of this 14 plan, and so I would just like to ask the District if it 15 would be willing to commit to continuing to work with 16 those community groups as we move forward in further 17 analysis of the plan and see what can be done. I think 18 I've heard the phrase, "Beat the SIP." What can be done 19 working, not just on the technology side, but fostering 20 better communication so that we can all work together in 21 areas where the SIP can be beaten. 22 MR. SADREDIN: Absolutely, I think that's 23 essential because there is no doubt that our Board, the 24 staff at the local level, and I know the ARB, both the 25 Board and the staff, we are sincere when we talk about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 wanting to do everything possible to that SIP deadline, 2 and being optimistic that we can do it. 3 Just a couple of bits of information for you 4 regarding our so-called fast track path. I have already 5 formed a task force with representatives from the 6 environmental community, from the business community, the 7 Governor's partnership, and other local agencies. We have 8 already had a few meetings. In fact, we've scheduled 9 meetings every Tuesday, so we'll have Tuesdays with Seyed 10 going on for a long time to come into attainment. 11 And we like to ARB, depending what decision you 12 make on this plan, to also join us on that task force. 13 And we are open to any ideas. In fact, you know, I think 14 a good question to be asked today of people that say don't 15 adopt this plan, is what more do you want us to put in 16 this plan that is not already there? I mean, it's easy to 17 make statements, rhetorical claims, that we went to the 18 moon, why can't you come into attainment, and then, and 19 ideas like that. 20 Unfortunately, we have SIP obligations, legal 21 obligations, that we need to meet now, and then we can 22 work on getting the plan improved as time goes on. If you 23 wait for a perfect plan, you'll never do anything. We're 24 anxious to get on with the implementation and cleaning the 25 air as opposed to just talking about a plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 CHAIRPERSON SAWYER: Ms. Berg. 2 BOARD MEMBER BERG: I was wondering in the 3 suggestion on the operational controls, if also the 4 passenger cars were going to have some restrictions within 5 that alternative plan. Not only businesses, but also the 6 community being willing to not have no-drive days. 7 MR. SADREDIN: The alternative plan suggests 8 that, that we impose no-drive days on older cars only, 9 initially, and then later on, I think they revised that 10 without giving any details on it. But we had a problem 11 with that. First of all, there was still, even for 12 passenger vehicles, interstate commerce. Our attorney 13 tell us that it does apply. But we didn't feel it would 14 be fair to essentially tell poor people, you cannot drive, 15 people that drive older cars, if that's something that's 16 doable and something that we want to pursue, we just have 17 no-drive days for everybody and that's, in our view, it's 18 certainly the local district has no authority to impose 19 such a restriction, but that's up to your staff to see if 20 that's something they want to. 21 BOARD MEMBER BERG: Well, I wasn't suggesting it 22 as an alternative. I just wondered, in the alternative 23 plan, how far reaching they were looking outside the box. 24 Please don't misconstrue my comment as a suggestion that I 25 feel that that would be an alternative to look for. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 Thank you. 2 CHAIRPERSON SAWYER: Supervisor. 3 BOARD MEMBER CASE: Just a comment on the dual 4 path strategy. And I will share with you, it was a 5 commitment for the San Joaquin Board to pursue a dual path 6 to really make me finally decide that we needed to move 7 forward on that ozone plan. I thought it was very 8 important. I did have the opportunity to read that 9 alternative plan that was proposed from cover to cover. 10 There were things in there that had already been done. 11 There were some creative ideas in there, but 12 unfortunately, they were not ideas that were, from what I 13 understood, they were not things that could be federally I 14 will approvable because they didn't have the detail, they 15 didn't have all of the elements that were there. But I 16 think the San Joaquin Board is really committed to a dual 17 path. 18 There are a lot of other ways to approach this. 19 When you talk about clean air days or days when there's 20 operational restrictions, maybe there are places and I 21 think just the audience here shows that the public is 22 willing to participate. They want somebody to say what 23 they need to do at a higher level. Maybe that needs to be 24 discretionary activity versus things that need to happen 25 in our society, but we all makes choices on a day-today PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 basis, and sometimes we can forego some things during a 2 period of bad air. So I would like to see that pursued. 3 I think we also need to have a heavier focus on 4 episodic and regional controls. Looking at ways that we 5 can target reductions of emission to places such as Arvin, 6 or another hot spot happens to be Parlier which is in the 7 District I serve as the county supervisor. So I think 8 it's a really important element and how do we get those in 9 the plan so that there's some assurances to the public 10 that there's an enforceability. But that was the 11 commitment on the part of the San Joaquin Board, and I 12 think we should, I think we need to pursue it in a 13 subcommittee working with that would be very appropriate. 14 CHAIRPERSON SAWYER: Supervisor Hill. 15 SUPERVISOR HILL: Thank you, Mr. Chair. You know 16 it's interesting, and I share Ms. D'Adamo's concerns about 17 the future of looking at the, you know, we're making, if 18 we go forward and adopt this plan we're making some 19 assumptions and one of the assumptions for me certainly is 20 the dual strategy that everything will be done to bring 21 attainment at the earliest possible date and not wait 22 until 2024. I mean that's an outrageous date and time 23 frame. 24 But understanding that the, there's no, you know, 25 severe or any other designation will not allow for us to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 get some approval. And that I think is, or adopt a plan 2 that would be approvable. But the concern is, are there 3 guarantees? Are there ways that we can look to the future 4 to see that we have that relationship established in the 5 dual path and the dual strategy where we're working with 6 the community, and especially with the District working 7 with the staff of ARB, that, that their feet are to the 8 fire and that we are going to see some results. And if 9 there are, I mean if we're talking about clean air days or 10 what other types of operational controls that can be in 11 place, that we can get the results necessary and that we 12 can see the improvement. And how can we, can we guarantee 13 that that relationship will be sustainable and, hopefully, 14 successful, but at least that it will work forward? 15 EXECUTIVE OFFICER WITHERSPOON: Well, Supervisor 16 Hill, Seyed has already promised to help hold your feet to 17 the fire because 80 percent of the reductions have to come 18 from the actions of this Board. And so during the 19 construction rule making in July, the on-road truck making 20 next spring, and then the agricultural truck fleet rule 21 sometime in '09, 2010 -- '09, that's where the big payoff 22 is. And then you certainly have staff's commitment for 23 the things outside our regulatory power for which we seek 24 additional controls, such as locomotives. We're still 25 exploring the extent of power on vessels, which doesn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 benefit the Valley so much, but certainly South Coast. We 2 will continue pressing aggressively and using the bond 3 funds strategically. 4 This October, you'll be having a hearing on the 5 criteria for expending the bond funds, not just fair share 6 allocation, but how to them strategically to get the 7 greatest return on the dollar ton by ton. So that's 8 really the way. 9 And then, for the public at-large, we need to 10 create the forums at which they can hear how it's going 11 and I'm amazed that Seyed is doing it weekly. But 12 certainly we can brief you year by year or more frequently 13 than that where we are. Every three years plans have to 14 be updated, sort of a cycle of federal law already and in 15 conformity. So there's a gathering in of what we've been 16 doing, what's changed. And adding measures into the plan. 17 And we'll be back before you triennially as we go forward. 18 MR. SADREDIN: Just to add to that. In addition 19 to the ongoing process, our Board, in adopting that dual 20 path strategy, also committed the District to take annual 21 report to the public and to all interested parties 22 regarding the progress and where we are. So we need 23 everybody, really, to hold everybody's feet to the fire. 24 I would be open with signing an MOU with your staff to 25 sure we do it. But believe me when I say there is no lack PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 of sincerity. This was not just a gimmick to get the plan 2 approved. We've already been doing the task force meeting 3 and we are committed to do this. 4 CHAIRPERSON SAWYER: Others? 5 All right. I want to thank the audience for 6 their patience in listening to this. I think it's 7 important that we all be educated. 8 All right. We will take a ten minute break now 9 for our court reporter. Then we will beginning the public 10 testimony. 11 (Thereupon, a recess was taken.) 12 CHAIRPERSON SAWYER: The first three speakers who 13 signed up today are Cathy Rehies-Boyd, Tom Grave, and 14 Brent Newell. I would remind you again we will be 15 applying our three-minute limit to speakers. 16 Ms. Rehies-Boyd. 17 CHAIRPERSON SAWYER: Please go ahead. 18 MS. REHIES-BOYD: Chairman, members of the Board, 19 my name is Cathy Rehies-Boyd, I'm the Chief Operating 20 Officer of the Western State Petroleum Association, and we 21 represent petroleum companies that produce, refine, market 22 and transport petroleum products certainly in the San 23 Joaquin Valley and we also cover five others states in the 24 west. 25 We've been a very active planned stakeholder and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 we certainly appreciate the District's cooperative, 2 transparent and interactive process in preparing this 3 plan. We're very pleased with the clarity and focus of 4 the plan. We recognize this has been a very difficult 5 task for all involved, including all the stakeholders and 6 the staff. But we do applaud the District's effort to 7 what we call think out of the box, because we think they 8 have, and they are trying to seek some really creative 9 solutions to a really difficult, complex problem. 10 But make no mistake please, this plan, the 11 regulated community will be hit hard by this plan. We 12 understand our role in the community. We understand that 13 we need to do our fair share. We're committed to do that. 14 We absolutely believe that environmental preservation goes 15 hand in hand with economic stability and sustainability. 16 And we really believe that the balance of those two is the 17 only way that we will maximize the economic assets that we 18 have in supporting environmental vitality. And we feel 19 the ozone plan crafted has been written in that spirit of 20 balance between the two. 21 That being said, we think it's now time for this 22 plan to move forward and we move your approval. This is 23 not the first time we've faced an ozone plan where we had 24 to deal with a reclassification. 25 And furthermore, as you all know, we are not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 alone in this. The South Coast will be doing the same 2 thing this summer when they have to deal with the bump up 3 and approving their ozone plan for the same extreme 4 classification. 5 We understand that the extreme reclassification 6 is not a choice of the ARB staff. It is truly the action 7 available under the Federal Clean Air Act. And delaying 8 the approval of this ozone plan will not change that fact. 9 So we need to get the plan in place. We need to start 10 making progress toward attainment. There will be plenty 11 of time to get data, to work on technological options, to 12 the right plan reviews that need to be done. But we think 13 it's very important to get on with business and we move 14 your approval. 15 Thank you. 16 CHAIRPERSON SAWYER: Thank you. Mr. Crave. 17 MR. GRAVE: Good morning, my name is Tom Grave. 18 I don't think I wrote that clearly. It's Grave as in a 19 cemetary. I'll accept Dr. Sawyer, your recommendation 20 that we not reiterate what we may have submitted for the 21 record by way of e-mail prior to yesterday at noon. But 22 by way of mentioning that, I'm wondering if Board members 23 had a chance to review all of those comments that were 24 submitted. Was that the case, that they were all 25 available in a timely manner and they could be reviewed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 prior to the vote? 2 CHAIRPERSON SAWYER: That's correct. 3 MR. GRAVE: Thank you. The other thing along 4 those same lines. Respectively, we have six, seven, 5 eight hours of testimony by caring people who gave up time 6 to be here today and it seems premature to take a vote on 7 this item without taking into consideration certainly 8 several of these people who will bring up something that 9 bears further scrutiny and thought, questions of staff and 10 so forth and so on. So it's hard to imagine five or six 11 or seven, whatever it's going to be, of testimony and you 12 go ahead and vote without questioning what I am sure will 13 be some interesting items coming up here today. 14 I represent the Merced Alliance for Responsible 15 Growth. And we're against your taking action to this 16 plan. We don't think that under the guise of 17 impracticality and expenses we can toss out the health 18 concerns, the threat to this Valley. 19 Also mention that I'm not sure how we're going to 20 track talented people and their familieses to high-paying 21 jobs. Physicians is the most one that comes to mind most 22 rapidly, but there are certainly many other categories of 23 people who won't want to locate in this Valley. They 24 already don't want to because of the threatening health, 25 the compromised situation with respect to air. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 I'm concerned about this whole matter of urgency. On the 2 one hand, there's urgency, we're the first in the nation 3 to submit a plan. I didn't realize this was a race. The 4 real urgency is the health urgency and you're going to 5 wait 17 years to deal with that. I'm afraid that the 6 matter that was on one of the overlays, this urgency 7 reduction matter, we're not going to the urgency if we've 8 got 17 years. Even though I realize they're incremental 9 steps, we're all working together, it cost billions of 10 dollars, I just think the pressure is going to be off 11 citizens, businesses, legislators, if we have that much 12 wiggle room on this project. 13 Getting near the end here, I realize. It was 14 mentioned the ISSRC was reworking data. There was a 15 fruitful relationship with staff members. There's going 16 to be a final report in the fall. Why can't we wait for 17 that final report? 18 And for those of you who haven't had a chance to 19 read the ISSRC report, I would urge you to do so and not 20 just accept one person's view this morning of how flawed 21 that report was. 22 In closing, I'm wondering if this matter were -- 23 if this were a matter of our water resources and our 24 drinking water, would we be as slow to respond as we have 25 been to the ozone condition? Would we drink a glass of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 water if we knew there would be 460 premature deaths per 2 year or whatever it is. 3 Thank you very much. 4 Again, we go on record as being opposed to your 5 taking action to approve of this plan today. Thanks, 6 again. 7 CHAIRPERSON SAWYER: Thank you. 8 Mr. Newell, and then we'll have Lisa 9 Kayser-Grant, Ben Benavidez, and Michelle Garcia. 10 Mr. Newell. 11 MR. NEWELL: Mr. Chair, thank you. I was just 12 submitting some exhibits to the comment letter that I 13 filed yesterday. I also sent in exhibits to your e-mail 14 account, and Ms. Witherspoon's. 15 CHAIRPERSON SAWYER: I received it. 16 MR. NEWELL: Good. My name is Brent Newell. I'm 17 with the Center on Waste, Proverty and the Environment. 18 Before I start with my remarks, I want to answer 19 Supervisor Hill's question about mobile ag equipment. You 20 were asking about that particulate category and its 21 relation to the plan. 22 The statewide strategy commits to adopt a rule 23 but it does not commit to adopt any reductions as part of 24 that rule. The statewide strategy says we're going to 25 decide how many reductions we need based on the PM2.5 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 plans needs. And what you heard from Ms. Terry and what 2 you heard from Mr. Sadredin this morning is that no one 3 needs any more additional reductions for PM2.5. What that 4 tells me is that staff is washing their hands of the 5 mobile ag equipment political problem. They are not 6 committing to a strategy now in ozone even though 52 7 percent of the needed NOx reductions are going in the 8 black box. This category, the mobile ag equipment 9 category, has more than 60 tons per day of NOx reductions. 10 It must be part of this strategy, cannot be punted to 11 PM2.5 at which time staff will say: We don't need any 12 more reductions. We don't need to impose strict controls 13 on that category. 14 Seriously have to that issue before you utilize 15 the black box. Utilizing the black box, not addressing 16 that source category, is going to violate the Federal 17 Clean Air Act. 18 Now, I want to ask the Board to show some 19 leadership here. Under California law, you have the duty 20 under the Health and Safety Code to amend a plan submitted 21 by an air district that does not meet the Federal Clean 22 Air Act requirements. 23 I submitted a Public Records Act request last 24 summer, a copy of which I just submitted to the clerk, 25 that asked how much times this Board has utilized that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 authority in the last 17 years. The answer I got back, 2 which is another document I submitted, was zero. I also 3 submitted some documents I got from the U.S. EPA showing 4 how many times EPA has disapproved rules or plans that 5 have come from this Board. More than a hundred. This 6 Board needs to stop being a rubber stamp. It needs to 7 start showing some leadership when it comes to air quality 8 in this state. 9 Now, the second point I want to make is that this 10 Board needs to keep promises. You need to the Governor's 11 promise to cut air pollution by 50 percent between 2003 12 and 2010. Delaying the attainment date for this plan 13 further undermines that promise that he made to the people 14 in 2003. 15 Another promise that you need to keep is a 16 promise made in the 1994 Ozone Plan, at which you promised 17 to regulate pesticides as a smog forming agent. That 18 promise was not kept. My clients had to take you to 19 court, had to take Ms. Witherspoon to DPR director to 20 court, and the secretary of the California Environmental 21 Protection Agency to court. We had to fight you for 22 two years before we got a court order from the District 23 court requiring you to keep that promise. 24 Now, you've appealed that order. And right now, 25 staff is asking you to change the VOC inventory for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 pesticides. The reason we won that lawsuit in the 2 District court is because of manipulation of the 3 inventory. If you manipulate the inventory again, now, 4 that's going to violate the court order. We will enforce 5 that court order. 6 CHAIRPERSON SAWYER: Would you please conclude. 7 MR. NEWELL: So I want you to keep your promises. 8 Don't adjust the inventory. I want you to amend the plan. 9 That is, do your duty to amend the plan. 10 We met at the end of April, Mr. Chairman, at 11 which time we discussed the clean air days concept. 12 Ms. Witherspoon was there and Ms. Terry was there in that 13 meeting. You asked them to bring that idea and that 14 concept to the Board at this hearing and I've reviewed the 15 materials. I haven't seen the discussion of that concept 16 or whether it's an option that's coming to the Board now. 17 But I was in that room and you asked her to bring it to 18 you. And I want to make sure that that issue and the 19 concept of clean area days is considered by the Board as 20 an alternative, because it's not no farm days, it's not no 21 drive days. It's a very reasonable carrot and stick 22 approach that combines incentive funding and mandatory 23 restrictions on people who continue to own and operate 24 dirty diesel equipment. We need to accelerate the fleet 25 turnover in this Valley if we are going to get clean air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 faster. 2 Thank you for the extra time. 3 CHAIRPERSON SAWYER: Mr. Newell has raised a 4 number of issues. Would staff like to answer any of them? 5 EXECUTIVE OFFICER WITHERSPOON: I'll start and 6 then ask for Bob Jenne's help on the pesticide lawsuit. 7 With respect to agricultural trucks, it's not 8 correct that the plan commitment is premised on PM2.5 9 attainment only. We're going to need reductions in NOx 10 for ozone attainment in the 2023 time frame. And the 11 reason, you've already heard from Kurt Karperos the reason 12 why we hadn't put tonnage, the rule structure is the same 13 as every other diesel rule we've brought you with 14 retrofits and retirement and repowerig, but the 15 agricultural sector is so different from any sector we've 16 ever done, that the transferability cannot be presumed. 17 The availability of kits for those kinds of pieces of 18 equipment, et cetera, the cost, all the rest of it. So 19 we're just not prepared to tell you when we apply the 20 model you've now devised for diesel controls, what will we 21 get in the sector? So that's why we left the tonnages 22 blank and we need to leave the tonnages blank. But it 23 will be the maximum feasible cost effective as ever other 24 diesel rule is. 25 On SIP approval, Mr. Newell is correct that we do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 not exercise change of district plans lightly. We work, 2 instead, in a collaborative fashion with the District 3 before the plan reaches you. And if conflict resolution 4 is needed, and we're going through that exercise with the 5 South Coast, it's done before the hearing, so that we 6 don't bounce documents back and forth and waste time. We 7 try to get to the bottom of the issues. 8 On pesticides, it's not this Board's authority to 9 how many pesticide reductions will be required. We can 10 identity what is needed. But the Department of Pesticide 11 Regulation has sole authority to determine what is 12 feasible and cost effective, and so they are in the 13 process of complying with the court order and seeking 14 partial amendments to it. We do believe that the change 15 in emission inventory is appropriate. We adjust 16 inventories all the time as we learn more. 17 And on operational controls, yes, Dr. Sawyer did 18 instruct me and staff to look into those opportunities and 19 that's been a great part of our conversation with Jim 20 Lents and his other consultants. And it really comes down 21 to what exactly is the proposal and can we figure out how 22 to implement it, how to enforce it, and what impact it has 23 on people's daily lives and businesses? So we're still 24 exploring that whole category. 25 We do not agree with the notion that if you put PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 so much restriction on the system, new technology will 2 arrive, retrofit technology that isn't here today. That 3 hasn't been our experience in 30 years of how technologies 4 advance and what our verification process is and how 5 markets are created. So we're less optimistic about a 6 dramatic change coming out of operational controls. But 7 we do think they could be beneficial in smaller ways and 8 we're looking at which are the most reasonable ones to 9 pursue. 10 And do did you want to say more about the SIP 11 lawsuit? 12 CHIEF COUNSEL JENNE: Very quickly. Mr. Newell 13 raised -- said that the proposed revision to the pesticide 14 inventory would violate the court order. The short answer 15 is that it will not. The court order was basically to the 16 Department of Pesticide Regulation and us to go -- for 17 them to adopt the new pesticide emission reductions that 18 change the inventory that you have in front of you today. 19 It doesn't have anything to do with that court order. 20 He's also raised an issue whether revision to the 21 Ventura SIP will -- for pesticide emission reductions will 22 violate the court order. We don't -- we're convinced it 23 won't. That's not before you today, that will be heard 24 next week, and we'll probably deal with that then. 25 CHAIRPERSON SAWYER: Okay. Ms. Kayser-grant. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 And please excuse me if I mispronounce your 2 names. Partly it's my inability to figure out how to 3 pronounce, and partly it's your handwriting which gets 4 translated wrong. So correct me. 5 MS. KAYSER-GRANT: You did a good job. My name 6 is Lisa Kayer-Grant. I represent the Mom's Clean Air 7 Network which is being started in Merced. 8 The Valley Air Board some serious opposition to 9 this ozone plan at this April 30th where they were asked 10 to delay approving the plan and make a better plan. In 11 order to approve this plan, which is clearly the most 12 politically comfortable to the Board members, they needed 13 some tough sounding excuses in order to be able to say to 14 us: We're really sorry about your health problems, but we 15 just had no other choices. And the air district staff 16 provided. I hope you don't plan to use any of these same 17 excuses, because when they are exposed to the light of 18 reason and fact, they really just start falling apart. 19 First of all, they are being given by the APCO 20 who, five weeks ago, came to Merced City Council and stood 21 there, reassured the Council, Merced's air is, quote, 22 virtually clean, and, another quote, we have about -- had 23 about five bad air days last summer. District's own 24 statistics shows we had 19 Spare the Air Days last summer 25 and there are going to be more unhealthy orange days on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 top of that. 2 These statements are consistent with the 3 District's current position of making the air pollution 4 problem go away with a public relations campaign. You're 5 concerned that the District needs to work well with the 6 community on this dual path, and I think your concerns are 7 real. They're such a large disparity between the 8 perception of what's going on in air pollution between the 9 community and the District. 10 The no constraints analysis presented to you 11 where, even if all the driving was cut off, even if we 12 never had any diesel trucks, we'd never reach attainment 13 before 2024, so let's don't even try. This is pop 14 statistics and is no substitute for science. It reveals 15 the bias for all new technology above operational 16 controls, education, and careful planning. The District 17 staff warned the Board that if it failed to this flawed 18 plan immediately, we would suffer sanctions related to 19 conformity and the Valley would lose millions in highway 20 funds. The reality of conformity is that this is an issue 21 for municipal transportation departments who want some of 22 our emissions data to help them acquire new funds for 23 highway projects. Whose job is this? It's never the job 24 of the air district to promote transportation concerns 25 above its own public health responsibilities. And I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 submit to you again, we have a serious problem of 2 priorities at our local air district. 3 We have seen scientific proof that a plan for 4 clean air is possible well before 2024. And without the 5 black box escape clause. We thank the ISSRC for a very 6 good plan in that direction. And we also thank Air 7 District staff themselves who have told us of programs and 8 ways they were sure the District could reach attainment 9 before them, including a member of the senior air 10 pollution staff who had to read -- didn't have to the 11 April 30th vote. The air district is losing people who do 12 not agree with its priorities. 13 We know it's possible to have clean air before 14 2024. And what's more, we know that you know. So what 15 are we going to do about it? We all pay for air pollution 16 with our money, with our health, and with our lives. And 17 here we are. We've had enough. And we're not going away. 18 We ask you to amend the plan or return it to the 19 District. Clean the air sooner and with no black box. 20 Thank you. 21 CHAIRPERSON SAWYER: Thank you. 22 Mr. Benavidez. 23 MR. BENAVIDEZ: Sir, my name is Ben Benavidez. I 24 was with -- Association, national and state, and I was 25 that for 13 years in this great Valley. Members of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 Board, that is a word of contradictory -- control. 2 I oppose the plan. It is flawed. I've lived in 3 my home for 40 years, my wife of 40 years and now I have a 4 grandchild. And I definitely don't want a premature 5 death. I would rather die before her, Aleta Benavidez. 6 So we have to make sure we're doing this plan. We can't 7 wait 17 years. 8 In my 30 years of advocacy, I fought for civil 9 rights, education, and equity. Police wrongful death. 10 And I battled the McFarland water issue, Kettleman City 11 water issue. The toxic waste. Jessie Jackson's Chavez 12 march. We're still there. We're still there. 13 I do not have any confidence in a Board that 14 doesn't reflect the community. Our Valley is the western 15 Appalachia, in Tulare, the poorest county in the state. 16 You have great farmers, but you have poor farm workers. 17 Who is their voice? My brothers and sister are. 18 So I tell you, if you have kids, how can you wait 19 17 years? Ms. D'Adamo, you say honesty. I say honor and 20 honesty. Let's be honest for the sake of our children. 21 And if you don't reflect our community, then you reach out 22 more to the community. You reach out more to. If you 23 don't have hearings, in Paisley, McFarland, you're not 24 doing the job. 25 Go out with the people. Go and talk to them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 These guys all know about this report. I can't understand 2 it myself, I'm a simple man, too many words. These people 3 get paid for it. These people get paid for it, so they 4 are supposed to take it out to the community in voices 5 that can be understandable. We don't want no more death. 6 We don't want no more billions of dollars, we ain't got no 7 money. My people don't have money. What they do have, 8 they have a sane mind. They have noble face. And they 9 have firm heart. And they won't quit. They'll fight you 10 to the end. 11 Thank you. 12 CHAIRPERSON SAWYER: Thank you very much. 13 Ms. Garcia, and then will have Joan 14 Compton-Schmidt, Mary Michal Rawling, and Lupe Martinez. 15 MS. GARCIA: Good morning, Chairman Board 16 members. My name is Michelle Garcia, and I am a staff 17 person for the American Lung Association of California and 18 a Valley resident. 19 As a staff person and an individual who lives 20 here in the Valley, I would like to express my great 21 concern for the plan presented to you today. It is very 22 rushed and unacceptable. The health of millions of 23 Californians is at risk. We need stronger, more immediate 24 action to be taken sooner rather than later. I ask that 25 you not approve the plan and that you ask staff to improve PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 the plan. We're not asking for a perfect plan, but an 2 improved plan. By inclusion of many of the feasible 3 solutions that have been presented to you. 4 Thank you. 5 CHAIRPERSON SAWYER: Thank you very much. 6 Ms. Compton-Schmidt. 7 MR. COMPTON-SCHMIDT: That would be Jim 8 Compton-Schmidt. 9 CHAIRPERSON SAWYER: Excuse me. 10 MR. COMPTON-SCHMIDT: But Ms. is fine. 11 CHAIRPERSON SAWYER: Obviously not Joan. 12 MR. COMPTON-SCHMIDT: I'm from Fresno, 13 California, and I come to you as a recover public 14 relations person. And I say the following words to you. 15 I would ask you to do what the San Joaquin local 16 district under heavy lobbying on the part of well financed 17 special interest groups could not do. That is to listen 18 to the people of this Valley and pay specific attention to 19 the environmental groups who are willing and able to the 20 pants off the local Board, to delay the decision on this 21 issue until the people and the environmental groups can 22 make their proposals heard by the local Board. Delay your 23 decision, please. That delay might just speed up clean 24 air in this Valley. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 CHAIRPERSON SAWYER: Thank you very much. 2 I'm really hesitant now, but Ms. Rawling. 3 MS. RAWLING: I think you said it right the first 4 time. 5 Good morning, Chairman Board members. My name is 6 Mary Michal Rawling. Welcome to and our first Spare the 7 Air Day of the year. I am with the Merced/Mariposa County 8 Asthma Coalition. And I just wanted to take the 9 opportunity today to urge you to consider the health 10 impacts of the decision before you regarding the Valley's 11 eight-hour ozone plan. 12 The plan is of great concern to coalition's 13 members and our friends, given the 11-year extension to 14 reach these health-based standards. The 22 percent or one 15 in five children in the Valley suffering from asthma and 16 limited availability of health insurance coverage, our 17 local communities are heavily impacted with the care of 18 over half a million Valley residents that suffer from this 19 and other is respiratory diseases. Economic and emotional 20 distress is felt every day by our families that must 21 purchase medication to help them catch their breath. The 22 Hall study, as was mentioned this morning, determined that 23 we're privileged as Valley residents to pay over three 24 billion dollars a year in health costs or about a $1,000 a 25 person, with some daily medications costing hundreds of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 dollars a month, if you don't have insurance, like about a 2 third of the residents in Merced County. You start to way 3 the cost of being sick with the other essentials of 4 living. That's very sad, in my opinion. 5 Or maybe you can get the medication, but you 6 don't have the $70 to pay the pharmacy for that antistatic 7 spacer which means you render your medications pretty much 8 ineffective. I've seen it time and time again with my own 9 eyes. 10 We know that, by way of much scientific research, 11 much of which was funded by your own Board, the ozone 12 pollution triggers asthma attack, the development of new 13 onset asthma as well as breathing difficulties in the 14 general population. 15 Valley residents including health care 16 professionals such as respiratory specialists, nurses and 17 physicians, as well as farmers, business owners, 18 engineers, and parents, all came together on April 30th to 19 ask the Valley Air District Board for a better plan that 20 would clean the air sooner. Given that the air district 21 is a public health agency as is your Board and the stakes 22 were so high regarding health consequences, those who 23 attended that day were highly disturbed that would seeing 24 like what was such clear consensus of the public was so 25 overwhelmingly and disicively discounted and ignored by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 their own leaders. 2 We now look to your Board for help and for hope. 3 We believe it does exist. The mention today in the 4 presentation that some of the issues that came up that day 5 were this extension would limit urgency, and I just want 6 to tell you that that wasn't a minor certain. Actions 7 speak louder than words, I think is really applicable the 8 that. And the public is really not willing just to take 9 the word of an agency that it's going to happen sooner. 10 Some may consider this today a formality, but in 11 reality, this decision will cost lives. Thank you so much 12 for keeping the needs of the people that live here in the 13 Valley that are here in this room today foremost in your 14 minds as you consider the plan that will effect them and 15 their livelihoods for the next 17 years. 16 Thank you. 17 CHAIRPERSON SAWYER: Thank you very much. 18 Ms. Martinez, and then we will have Melissa Kelly 19 Ortega, Charlie Eaton, and Margarita Guzman. 20 Ms. Martinez, Lupe Martinez. All right. If not, 21 Melissa Kelly Ortega. 22 MS. ORTEGA: Good morning. My name is Melissa 23 Kelly Ortega, and I've just started a new group called 24 PO'd Parents. Why are we so angry? When we first heard 25 about this ridiculous idea of not having clean air until PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 2024, we were in disbelief. We learned as much as 2 possible and as quickly as possible in order to understand 3 the implications of our unthealthy air. And what we 4 learned is that people are dying due to breathing this bad 5 air. A friend's father has lung cancer that spread to 6 never smoked. He didn't work with toxic fumes. What was 7 his crime? He chose to live in Bakersfield. 8 People are wearing black today as a symbol of the 9 deaths and what extreme extension classification will mean 10 which is why we want you to amend the plan. We learned 11 about the Clearing the Air report, a report that gave 12 specific actions that can be taken to clear the air by 13 2017. We were hopeful. We hoped that not only would the 14 air district appreciate the help they're always asking 15 for, we hoped they would actually implement the strategies 16 in the plan to reach clean air attainment in the most 17 expeditious way possible. And then we got angry. Why? 18 Because the Districts spent more time running around the 19 Valley spending their excuses on why we couldn't reach 20 clean air until 2024. A lot of time wasted. 21 For quite a few years, the Board's gotten a lot 22 of pressure from agriculture and industry and now you're 23 about to feel the pressure from PO'd Parents. Give us 24 back our hope, amend this plan, tell the District to do 25 their job and bring dependability to the air district. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 Get us clean air faster. 2 Mr. Sadredin, if you need someone to go ask 3 businesses to do more with a straight face, I volunteer. 4 I'm tired of empty promises. I want to see a real plan 5 with benchmarks. I want to see our leaders do their job, 6 and until we see that we will continue to keep our leaders 7 accountable for the health of our Valley children. 8 Also I want to make a formal request that 9 Mr. Roger McCoy return my sign. He did not talk to me 10 personally before he took it off the wall. And if he 11 doesn't want to get it out of the trash, if he just would 12 tell me which trash can he put it in, I would appreciate 13 it. 14 And I'll end with a quote on that note. 15 What we need to search for and find and to 16 perfect into a magnificent and shining thing is a new kind 17 of politics. Not the politics of governance, but the 18 politics of resistance, the politics of opposition, the 19 politics of forcing accountability. The politics of 20 slowing things down, the politics of joining hands across 21 the world and preventing certain destruction. In the 22 present circumstances, I'd say the only thing worth 23 globalizing is dissent. R. and Dotty Roy. 24 Thank you very much. 25 CHAIRPERSON SAWYER: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 Mr. Eaton. Ms. Guzman. 2 MR. LEON: I will translate for her. 3 CHAIRPERSON SAWYER: Thank you. 4 MS. GUZMAN: Thank you for being here today. My 5 name is Margarita Guzman. I come representing the Comite 6 ASMA, which stands for Addams for Health and a Better 7 Environment. The reason why I am here is to speak on 8 behalf of my community and share with you that we don't 9 want to wait 'tll 2024 for clean air. And the -- there is 10 a possibility to have it by 2017, and that's what we would 11 like. 12 In the Jane Adams Elementary School in my 13 community, it has the third highest asthma rates in the 14 Fresno Unified School District. Many children are not 15 able to go to school many times, and it's a problem in our 16 community. 17 It is important to strengthen regulations on 18 industrial pollution because we understand that there are 19 resources out there to help that happen. I know that 20 sometimes the air district cannot provide all the 21 information because we requested information on inventory 22 of pollutants near Jane Adams Elementary School, but they 23 provided us with inventory for gas stations that were far 24 away from the elementary school. 25 The reality is that many of you do not live in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 communities like my own of low income where there are many 2 sources of pollution surrounding our school and our homes. 3 And you don't understand that reality, that, that 4 communities like ours really have a lot of sufferage and 5 hundreds of people die per year. 6 Thank you very much. 7 CHAIRPERSON SAWYER: Thank you very much. 8 The next three speakers are George Merced, 9 Jenny Saklar, and Nancy Waldtlow. 10 Mr. Merced. 11 MR. SEIBERT: Good morning. My name is George 12 Seibert. Thank you for taking the time to hear our 13 comments. 14 I am a Valley resident. I grew up in Merced. 15 And my whole life, I've lived there and had asthma my 16 entire life. The air in the Valley has been dirty as long 17 as I've been alive. I am 23 now. Under the current plan, 18 the air is not going to be clean until I'm 40. Forty 19 years of toxic air is unacceptable. After, about six 20 years ago I nearly had an asthma attack, or no, I nearly 21 died. I've been hospitalized, I think, less than ten 22 times, maybe eight times. If I do not carry this around, 23 I die. This is $70. 24 Everything I've heard or read about this plan 25 does not address the real issue. The issues are the fuels PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 that we are using. This plan relies heavily on technology 2 that does not yet exist and ignores technology that has 3 existed for over a hundred years, such as biodiesel and 4 biomass ethanol. These are the fuels that were created to 5 run diesel engines. The diesel engine was created by 6 Rudolph Diesel to run off peanut oil. If we grow these 7 fuels, which we can domestically, that brings all the 8 money back home. All the money can be brought from Saudi 9 Arabia back to the Valley, if we use biofuels. 10 This plan talks about using advances in engine 11 technologies to burn the same dirty fuel. Clean 12 technology does and has existed for years, in fact, 13 decades. In reality, this plan is not talking about 14 cleaning up our air. It is talking about not polluting as 15 much. That's reverse logic. You clean up diesel fleets 16 now with bio diesel and petro diesel blends. To implement 17 on a fleet scale would be easily attainable. You could 18 use the CVN California Fueling Network to one pump per 19 station per city and that would be very easy and very 20 attainable and very affordable. 21 I also don't hear or read anything that's planned 22 about reduction in power produced by coal fired power 23 plants. About 40 percent of our power in California comes 24 from coal power plants, and that is also unacceptable. 25 That is not sustainable. By definition, we cannot sustain PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 that and it must change. Solar and wind technologies are 2 making advances in leaps and bounds. Efficiency is 3 increasing exponentially. Wind energy is the fastest 4 growing power source in the world and these energy sources 5 will not ever run out. 6 Let's move toward sustainable sources while we 7 still have functioning power grids. You must understand, 8 attainment does not mean clean air. Attainment means it's 9 not as horrible. 10 Thank you. 11 CHAIRPERSON SAWYER: Thank you very much. 12 Ms. Saklar. 13 MS. SAKLAR: Good morning. I'm Jenny Saklar with 14 Fresno Metro Ministry. 15 Today, I can only speak what I truly feel in my 16 heart. Since April 30th, our local hearing, since that 17 ultimate disappointment, I have been struggling on what to 18 say while I'm here at my chance before the State Board to 19 tell my concerns about our filthy air and here I am. I'm 20 speechless. I can't express to you what I'm feeling 21 inside. And I can hardly even formulate into words what, 22 how important this decision is to our community and what 23 is going on with this. 24 To know and understand that 52 percent of our 25 emissions, the technology that is going to get us there, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 is in a black box, I cannot even fathom what that means 2 and what that is going to result in, in our community. I 3 just am struggling. 4 And so to summarize, if I can just summarize 5 what -- where I am with this, how I'm wrapping my head 6 around and my heart around this today, is fear. I am 7 afraid that our leadership is going to fail the Valley. I 8 am afraid for our lungs and our bodies and that the 9 decision today is going to lead us to a plan that doesn't 10 get us clean air till 2024. That's on all I can say, is 11 that I am afraid and that this decision is in your hands. 12 And I ask you to send this plan back to our local agency 13 and rework it. There are so many things that can be 14 added, and there's so much, we were talking -- you were 15 talking about guarantees, that we can have a plan that 16 includes commitments to things like clean air days and 17 commitments. Maybe it can't be SIP approvable, but we can 18 have firm commitments that will get us there and this plan 19 doesn't do it. I am afraid. 20 CHAIRPERSON SAWYER: Thank you. 21 Ms. Waldtlow. 22 The next three speakers are Ashley Fairburn, 23 Robert Mansfield and David. 24 Ms. Fairburn. Thank you. 25 MS. FAIRBURN: My name's Ashley Fairburn, and I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 have grown up in the Valley my entire life. And I love 2 where I live. And I would like to be able to live here, 3 probably the rest of my life, and, hopefully, that will be 4 a long time and I won't suffer one of these premature 5 death that we've been talking about. That's in your 6 hands. 7 What I want to know today, is this extension plan 8 a joke? Is it a very, very cruel joke, because every time 9 I've come to hearing there's been a roomful of people who 10 are saying that they're completely against this and the 11 Valley resident are against this. 12 So for the people who are for this and the people 13 who have gotten this, this plan this far, who the hell are 14 they listening to because they're not listening to the 15 Valley residents. And that is your job, right, is to the 16 Valley residents. 17 I'm under the impression that we live in a 18 democracy and that when the people speak, the so-called 19 leaders are supposed to listen, but at this point, I'm 20 seriously questioning the use of the word "leaders," that 21 so many people have used today, because if you're our 22 leaders, then you need to listen to the people. And I 23 mean, really, leaders are supposed to be, I guess, more 24 followers. You're supposed be to the people have said. 25 And that's how you lead in a democracy, is you lead by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 doing and you lead by doing what the people have asked 2 you. The people not allow this plan to go through and if 3 you let let the plan go through, then, well, you're not 4 our leaders. And it's just, this is really cruel joke. 5 You've had a lot of people say this is unacceptable, and 6 if you don't listen to them, then how are you going the 7 face yourselves? So please, please, please listen to 8 everybody who has come out here time and time again and 9 said that this is ridiculous. 10 So that's really all I have to say. 11 CHAIRPERSON SAWYER: Thank you very much. 12 Mr. Mansfield. 13 MR. MANSFIELD: My name is Robert Mansfield, and 14 I'm a resident of the city of Merced. 15 I'm here representing cancer and dialysis 16 patients in the Valley. I have had the unique honor to 17 fight bone cancer 15 years ago and beat it. And now, 18 because of all the medication, I have now succumbed to and 19 kidney failure. 20 Yesterday, walking out of my dialysis center, I 21 was weakened from the dialysis. But I wasn't able the 22 breathe. I can't catch my breath. And it was -- it's 23 scary. And I have a huge fight in front of me and I have 24 a long road to go. And to be able to in the future I will 25 be able to breathe in the future, the children will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 able to breathe, will make this fight easier on me. 2 I thank you for your time. 3 CHAIRPERSON SAWYER: Thank you very much. 4 Ms. Waldtlow. 5 The next three speakers are Ashley Fairburn, 6 Robert Mansfield, and David. 7 Ms. Fairburn. 8 MS. FAIRBURN: I can go again if you want me to. 9 CHAIRPERSON SAWYER: Oh, I'm sorry. David. 10 BOARD MEMBER RIORDAN: We don't have David's last 11 name. 12 CHAIRPERSON SAWYER: David with no last name. 13 MR. BECKER: Is it possible to have a person 14 speak for him? 15 CHAIRPERSON SAWYER: No, I'm sorry. 16 MR. BECKER: You're not allowing them to speak 17 through someone else? 18 CHAIRPERSON SAWYER: No. We want to hear from as 19 many people as possible. And we do that by imposing 20 uniformly a three-minute rule. We to that from General 21 Motors on down to Ms. Saklar. 22 MR. BECKER: She's not at the bottom. 23 CHAIRPERSON SAWYER: She's absolutely not, I 24 agree with you on that one. David is not -- 25 MR. BECKER: I'll speak up for David, and I'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 come back up when it's my turn. 2 CHAIRPERSON SAWYER: No. Sorry. We cannot allow 3 that. 4 MR. BECKER: You won't let him speak? 5 CHAIRPERSON SAWYER: Well, I don't know who David 6 is. Somebody signed up with the name David. Do you not 7 wish to speak? 8 MR. BECKER: He wishes to give his time to -- 9 CHAIRPERSON SAWYER: You may sign up and we'll 10 hear from you. 11 MR. BECKER: He signed up and I signed up. 12 CHAIRPERSON SAWYER: Okay. We'll get to it. 13 Okay. The next speakers are Roshani Parekh, 14 Michael Becker, and James Ortega. -- 15 You know, if you weren't here when we called your 16 name, the process is to go back to the Clerk of the Board 17 and get relisted to speak in order, later then. So if 18 somebody, if you've been out and you come back and 19 somebody tells you that your name was called, that's the 20 process on what you do. 21 All right. Mr. Parekh. 22 MS. PAREKH: Hi, my name is Roshani Parekh. I'm 23 with the Center on Race, Poverty, and Environment. 24 Pesticide use is not simply a toxics issue. It 25 is an ozone issue. In the Central Valley, pesticide use PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 contributes to overall poor air quality which has a 2 significant negative effect on health. ARB should not 3 approve the Department of Pesticide Regulation and ARB 4 staff's proposal to adjust the pesticide VOC emissions 5 inventory. Adjusting the inventory will substantially 6 overestimate the emissions reductions since 1991. Staff 7 proposes to include an application use factor into the 8 emissions estimate, but there are four fundamental 9 problems with this reduction estimate. 10 First, the application method adjustment factors 11 are based on unrepresentative studies. These studies were 12 conducted in other states with cooler soil conditions, 13 which are not comparable to Central Valley conditions. 14 Second, these studies will not provide an 15 accurate measure of actual emissions. Because of the 16 natural variability in the rate at which fumigant escapes 17 from the soil, even using several studies will not 18 necessarily ensure a more accurate measure. 19 Third, DPR has no data whatsoever to support its 20 estimates of historical fumigant application methods. The 21 DPR claims that estimates are based on information 22 collected from growers and agricultural commissioners, but 23 the methods for obtaining this information are too 24 informal and unscientific to be of any use. 25 Fourth, revising the inventory now is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 procedurally defective. DPR's comment period is still 2 open. It's still open until July 13th. These problems 3 with the reduction estimate will artificially decrease the 4 1991 baseline inventory which will decrease the amount of 5 reduction required. And that means more emissions and 6 adverse health effects. Therefore, ARB include protect 7 public health by rejecting the staff's inventory 8 adjustments. 9 Thank you. 10 CHAIRPERSON SAWYER: Thank you very much. 11 Mr. Becker. Thank you for being patient. 12 MR. BECKER: I don't mean to argue with you, 13 Chairman Sawyer, with anyone on the Board. It's just that 14 he doesn't feel particularly comfortable speaking in 15 public, I thought I might add a few comments on his 16 behalf. If that's not acceptable, I understand. 17 I'm since the public hearing began, and I see one 18 industry lobbiest in favor of the plan. And it's 19 impossible to determine how many people are opposed to the 20 plan through this public hearing because each person here 21 that's been speaking again it represents hundreds, if not 22 thousands, of others. 23 So, so far it seems to me the count is at least 24 thousands to one against the plan. And I do reiterate 25 Ms. Fairburn's comments that you consider the views of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 public in this. 2 I wonder if I might ask a few questions of the 3 Board. Is that possible? 4 CHAIRPERSON SAWYER: We can except them, but as 5 part of your testimony. 6 MR. BECKER: Okay. Chairman Sawyer, in your 7 personal statement on the CARB web page, you said that the 8 purpose of the California Air Resources Board is, quote, 9 to promote and orotect public health, welfare, and 10 ecological resources through effective reduction of air 11 pollutants while recognizing and considering effects on 12 the economy, unquote. 13 I wonder if you stand by that? 14 CHAIRPERSON SAWYER: That is the statement of the 15 Air Board's mission that was there when I arrived. 16 MR. BECKER: I understand. 17 And on the San Joaquin Valley Pollution Control 18 District, on their website, it says: The purpose is to 19 provide active and effective air pollution control efforts 20 with minimal disruption to the Valley's economic 21 prosperity. Minimal disruption to the Valley's economic 22 prosperity. So I'm wondering if, when you look at this 23 plan, you take into consideration the fact they made the 24 plan with that in mind, minimal disruption; is that, are 25 you looking at the plan that way? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 CHAIRPERSON SAWYER: This is an interesting 2 exchange, the speaker, about I rather like that, actually. 3 Our primary responsibility, and I'll not count 4 your time in my answer, I guess. 5 MR. BECKER: Thank you. 6 CHAIRPERSON SAWYER: -- is to predict the public 7 health. And that is number one. Everything else is 8 second to that. 9 MR. BECKER: Then insofar as you do take economic 10 considerations under advisement from businesses and agri 11 business and oil people and whatnot, I wonder how, just 12 generally, if you could characterize how you go about 13 that. How do you weigh the economic costs against the 14 public health costs? 15 CHAIRPERSON SAWYER: That's, of course, the 16 difficult job of making policy decisions. 17 MR. BECKER: So in other words, if there were a 18 suggestion that you use the latest catalytic converters 19 for diesel trucks, you would look at the cost to the 20 trucking industry and you would weight that against public 21 health in some fashion; is that correct? 22 CHAIRPERSON SAWYER: We use cost effectiveness, 23 that is, we look at the benefits of public health versus 24 the cost of the rules and in all cases that we've dealt 25 with, including this one, the benefits to public health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 clearly outweigh the costs. 2 The area in which I think you're headed is the 3 retrofit of NOx catalytic, cyclic catalytic converters for 4 the heavy-duty truck fleet. And this is the technology 5 which really does not exist at the present time. And 6 that's our issue. 7 MR. BECKER: I understand the Europeans use that 8 technology. 9 CHAIRPERSON SAWYER: They have begun to introduce 10 that technology. It's not available for the, across the 11 range of equipment which is in the California fleet. And 12 I think we stopped your clock. I see, but, okay. My 13 clock. 14 MR. BECKER: I'm concerned about these matters 15 and it's not just with regard to the diesel truck fleet, 16 it's replacing diesel pumps and ag fuels, for example. 17 Doing things like making sure that the pesticide rule is 18 as strict as it can possibly be with clear, quantifiable 19 degrees of reductions from that pesticide rule. So it 20 goes to a whole range of things. 21 I'm particularly interested in this issue because 22 the perception, if not the the reality, is that our local 23 Air Board is highly responsive to the interests of 24 business and they keep rejecting our words and our 25 concerns. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 And I want to go a bit further with that if I 2 have 26 seconds. Okay. A bit further with that. It's 3 come to my attention from several previous staffers, 4 senior staffers, I understand about 60 have resigned in 5 last couple of years. It's come to my attention that the 6 director has actually required them to alter their data or 7 to purge data sets from their record because, in their 8 view, it didn't favor the views of the business lobby that 9 was coming to the air Board. So I want to get that on the 10 record. 11 And, finally, the Air District and the Air Board, 12 you're right, the Air District Director was directing them 13 to do that. The Air Board apparently accepted that. I 14 understand they heard some testimony in that regard 15 previously. 16 I have a three-year-old daughter. I don't know 17 what to say. I don't know what to say. If you think this 18 is the best plan, then approve it. But on her behalf and 19 on our behalf, if you don't think this is the best plan, 20 then let's please go back to the drawing board. 21 Thank you. 22 CHAIRPERSON SAWYER: Thank you very much. 23 Mr. Ortega. And then we'll have Liza Bolanos. 24 MR. ORTEGA: I submitted written testimony 25 earlier, so I'll just stand by that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 CHAIRPERSON SAWYER: Fine. Thank you very much. 2 So Ms. Bolanos. And then we'll have Rey Leon, 3 Sarah Sharpe, and Paul Cort. 4 Ms. Bolanos. 5 MS. BOLANOS: Good morning. Chair and members, 6 my name is Liza Bolanos. I'm the coordinator for the 7 Central Valley Air Quality Coalition. We are a coalition 8 of over 70 different organizations and over 150 residents 9 of the San Joaquin Valley united in our efforts to clean 10 our air for all Californians. Many of which are present 11 here today and have given testimony. 12 I am proud to born and raised in the San Joaquin 13 Valley, Visalia to be specific, and I plan to the rest of 14 my life here. I often tell my friends, Valley natives who 15 have left because of the lack of economic opportunities, 16 that they need to come back. We need them here. But 17 lately, I have been wondering if I can stay here. My 18 mother, who is 57 years old, had to visit the ER, not 19 once, but twice in less than three days. This was two 20 weeks ago. Because despite medication, despite a 21 controlled indoor environment, her asthma is not 22 controlled. She was hoe alone and my eight-year-old 23 nephew with her in one incident. He later told me he was 24 scared because my mother was unable to speak. He had to 25 call 911 at 3:00 in the morning. And the operator PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 couldn't understand him. He told me that he was scared 2 about the way his allelita looked. Her eyes were full of 3 tears. Her face was red. She was gasping for air and she 4 was shaking violently. He thought she was going to die. 5 Now he's scared to go the sleep because who's going to 6 take care of grandma. Not too long ago, I used to be that 7 scared little child. And unfortunately, the only thing 8 that has changed is that now I am older and able to stand 9 in front of you and ask you to clean up our air. 10 I'm reminded of something I learned in college. 11 It was called the defusion of responsibility theory. One 12 of the few things that did stick. The defusion of 13 responsibility theory stated that when people in a group 14 setting and in the presence of an emergency will not act 15 because they think that someone else was going to already 16 has or someone else more capable will. These people are 17 often referred to as passive bystanders. In this case, 18 the air district has claimed it has done its part and ARB 19 staff has accepted that they have taken all measures to 20 emergency. Yet, Valley residents continue to for help. 21 On April 30th, over a hundred community members came and 22 pleaded to our local air district, not to delay attainment 23 of clean air. Much to the dismay of the community, those 24 pleas fell on deaf ears. Those recommendations were 25 dismissed and not integrated into the plan. And, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 therefore, not enforceable as we see with the dual path. 2 Today, we ask you to step up as our leaders. 3 Exercise your legal authority, not be passive bystanders, 4 as residents of this Valley risk their lives. We ask that 5 you ensure transparent process by making a commitment to 6 that any and all submissions, revisions and corrections 7 that go to EPA, go through a public notice and public 8 hearing process and be posted on the ARB website. 9 Perhaps, an ARB resolution would be in line for that. 10 Thank you very much. 11 CHAIRPERSON SAWYER: Thank you. 12 Mr. Leon. 13 MR. LEON: I'm work with the Latino Issues Forum, 14 but I am also a native and resident of the San Joaquin 15 Valley, born in Fresno, raised in the farmworker community 16 of Heron and very proud of being a native of the Valley. 17 And I am here today to share with the Air 18 Resources Board that this is going to be a tough decision 19 for you, I hope. I hope that you realize that we haven't 20 been in compliance with a lot of our criteria pollutants 21 for a very long time. Actually, it's been since inception 22 of the Air District Board. And to have a plan that has a 23 black box, to me, that sounds like an excuse to hold off 24 on really doing the duty that needs to be done. 25 Especially what we're talking about a lot of communities PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 in the Valley that are heavily impacted, by pollution, by 2 illnesses due to that pollution and communities like the 3 Adams community who was here earlier today and there's 4 hundreds of them, if not thousands of them in the Valley 5 that are low income communities, people of color, hard 6 working communities that are surrounded by pollution. 7 More than the usual amount of pollution. And so a lot 8 times, the Air District tells the people that the air is 9 getting cleaner. But if you ask individuals that live in 10 these communities, they'll let you know that last week a 11 new company with 12 more diesel trucks or a non-mobile 12 diesel engine equipment has moved into their neighborhood. 13 So it's not getting cleaner. 14 So to, if you need to make the decision, black 15 box is not going to cut it. To assume that technology 16 will come about and to allow more voluntary measures to 17 play in the plan is not going to deal with the problem 18 that we have. It's not going to clean our air. And the 19 fact is that voluntary measures have never worked. And 20 they are not going to work any time soon. But that seems 21 to be the culture here on how industry is treated. 22 And so a plan without substantive accountability 23 measures is merely a mask for progress that will not be 24 tangible for the 3.4 million residents in the Valley and 25 much less for our lungs. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 So without saying much more, because I think a 2 lot of the community residents that are here have shared 3 their heart, with their heart in their hand, they've 4 shared their testimony. And hopefully, you hear that as 5 the officials that you are and the responsibility that you 6 have to not be a passive bystander. 7 We welcome you to our Valley, but we need you to 8 be courageous to confront this pollution that is killing 9 our residents. We need accountability measures, not 10 excuses and not black boxes. 11 Thank you. 12 CHAIRPERSON SAWYER: Thank you very much. 13 Ms. Sharpe. 14 MS. SHARPE: Good morning, Chairman Sawyer and 15 Board members. My name is Sarah Sharpe. I am a third 16 generation Fresno resident and I was recently diagnosed 17 with asthma. And I also work for the Coalition for Clean 18 Air here in Fresno. I also have about 50 letters that I 19 would like to submit on behalf of people who submitted 20 them to us who are not able to be here, also in support of 21 taking -- amending the plan. 22 I really want to focus today on one part of what 23 we've been asking you for, although there's a million 24 things I would love to say if I had an hour. 25 A clean air day strategy. Best described as the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 carrot and stick approach. You've heard them talk about 2 it here. And I've brought carrots and a stick for you 3 because I think that they go hand in hand. We cannot have 4 one without the other. And we're here asking you to 5 please make sure that that stick is involved in the plan. 6 We don't want just carrots, even though they taste better 7 than sticks. Here, I'll submit them for the record. 8 Anyway, we believe that the clean air day 9 strategy is a reasonable strategy that we urge you to 10 include in our plan. The Valley could clean up diesel 11 pollution a lot faster than the District staff have led 12 residents to believe. By offering incentives for diesel 13 operators to use cost effective retrofit technologies and 14 then phasing in clean air days, which would establish 15 reasonable guidelines on extreme diesel polluters who 16 choose not to develop a cleaner fleet. 17 Why should Valley residents continue to owners of 18 dirty diesel equipment with their lungs? I know I 19 don't -- I shouldn't have to. Valley families already 20 smog check their cars, and we don't use our fireplaces. 21 Funding will be available to help industry adjust 22 and those who choose not to participate will have no 23 reason to complain on clean air days. These clean air 24 days would start approximately five years after the 25 incentives are available. Independent experts, as we've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 talked about before, estimate extreme diesel polluters who 2 choose not to retrofit their equipment will not be allowed 3 to operate roughly 30 days per year. These are the days 4 when school children here in the Valley are kept in from 5 recess and soccer games are canceled. 6 District staff have never refuted the ability of 7 clean air days to get additional emission reductions. 8 Instead, they just cite that it's politically unfeasible 9 as the barriers to why these types of operational controls 10 are in from the plan. 11 We believe this approach must be used to 12 incentivize and accelerate fleet turnover. That will make 13 much reductions to and be a technology driving measure to 14 speed up our smog clean up. 15 Just to, there are a variety of ways that clean 16 air days could work and we are not only endorsing the way 17 that the ISSRC report would put them forth, but we want 18 your staff to look at other days that operational controls 19 could be used to accelerate our cleanup. As Supervisor 20 Case and Mr. Sadreden mentioned, in the dual path that 21 they've included that's not a commitment in the plan, but 22 it is a part of the plan, they have mentioned that 23 operational controls could help us. We don't understand 24 why that can't be a commitment involved and in the SIP for 25 SIP credibility. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 Finally, we know that there are many possible 2 sources of incentive money from state and federal 3 government, including the infrastructure bond, Senator 4 Florez's bill, and other things, that could allow the 5 District to take consider for more of the reductions that 6 they would get after the incentives are offered. But we 7 ask you to wait for the time to find out if these monies 8 are going to come to the Valley, which we should know at 9 least some of the money will be coming and we will find 10 out in a couple of months. 11 So please direct staff to make amendments to the 12 plan the San Joaquin Valley District submitted to you to 13 include this carrot and stick approach, which are up here, 14 clean air days. We, which is what all Valley residents 15 deserve. 16 Thank you. 17 CHAIRPERSON SAWYER: Thank you. 18 Mr. Cort. And then we'll have Rebecca Taylor, 19 Sarah Jackson, and Christina Stove. 20 (Thereupon an overhead presentation was 21 presented as follows.) 22 MR. CORT: Good morning, my name is Paul Cort. 23 I'm an attorney with Earth Justice. 24 We urge the Board not to approve this weak 25 attempt to address a very, very serious problem here in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 the Valley. 2 This plan does little more than the status quo to 3 reduce emissions here in the Valley. 4 --o0o-- 5 MR. CORT: This first graph that you have shows 6 how, according to the District, the inventory of NOx 7 emissions will need to be reduced to attain the ozone 8 standard in 2023. You can see in the bottom line the path 9 the District needs to be on. And the top line where we 10 would be in 2023, if we did nothing more. And then, in 11 the middle, where the District's plan will leave us. This 12 simply is not an aggressive plan. 13 --o0o-- 14 MR. CORT: The next table shows you where NOx 15 inventories for the different categories of sources will 16 be in 2023, again, if we did nothing and under the 17 District's plan. Most notable is the failure to really 18 reduce NOx in stationary sources. The sources clearly 19 under the District's jurisdictions. 20 --o0o-- 21 MR. CORT: By comparing the reductions, the plan 22 will achieve over the 2023 baseline inventory to the 23 shortfall remaining under the status quo, the do nothing 24 option, it is clear that this plan is not a meaningful or 25 aggressive attempt to address that shortfall. If we did PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 nothing, we would need, again, according to the District, 2 another 135 tons per day of NOx reductions. The proposed 3 reductions in the plan make only a small dent in that 4 shortfall. In the end, over 60 percent of the shortfall 5 predicted for 2023 is left to someone else to figure out. 6 --o0o-- 7 MR. CORT: Instead of exploring solutions, the 8 District has focused on trying to move that a bump up to 9 extreme was the only option. Both the District and the 10 ARB prepared what they called a no-constraints analysis 11 and both concluded that even if money was no object, the 12 Valley would still need another 60 tons per day of NOx 13 reduction in 2020. Actually slides, I think. 14 --o0o-- 15 MR. CORT: When we dug into these analyses, we 16 found that the District used the wrong number to estimate 17 possible reductions from mobile sources. We realize this 18 because ARB's analysis and the District's analysis in 19 coming to the conclusion that there was a shortfall of 60 20 tons, shouldn't have been the same because ARB's analysis 21 looked at only four categories of mobile sources, while 22 the District puported to also include several stationary 23 engine categories. ISSRC prepared its own no-constraints 24 analysis, which is shown here, for the year 2012 covering 25 all of the same sources including the District's analysis PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 and then correcting the District miscalculations. You can 2 see that where ARB provide, the ISSRC's numbers agree. 3 The conclusion from ISSRC was, in fact, that attainment 4 even as early as 2012 is possible. 5 Now, the point of this exercise is not to a plan 6 that ignores technical and financial realities. The 7 purpose is to move the agencies away from these claims of 8 impossibility and back to their job of driving what is 9 possible. A severe area plan with a 2019 deadline is 10 possible and would be approveable by EPA. 11 CHAIRPERSON SAWYER: Would you please conclude. 12 MR. CORT: We urge this Board to show the 13 leadership that the District has not. 14 Thank you. 15 CHAIRPERSON SAWYER: Thank you very much. 16 Ms. Taylor. 17 MS. TAYLOR: Good morning. My name is Rebecca 18 Taylor and I'm also here with Earth Justice. 19 The Clean Air Act requires state plans to require 20 reasonable further progress towards attainment, and the 21 purpose of reasonable further progress is to ensure that 22 states are, in fact, on track to meet their attainment 23 deadlines by achieving annual incremental reductions in 24 emissions. The Air District's proposal claims to 25 demonstrate reasonable further progress, even though the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 demonstrated path falls short of achieving attainment. 2 The District demonstration is unreasonable and it fails to 3 comply with the Clean Air Act. 4 The District's plan claims to satisfy reasonable 5 further progress because the Clean Air Act only requires a 6 three percent reduction in VOCs a year. The Clean Air Act 7 is clear that plans must at least reduce VOC emissions by 8 three percent. 9 The District's approach ignores the purpose of 10 reasonable further progress as well as EPA's guidance. As 11 EPA has explained, the attainment strategy requirements 12 must be met in addition to the RFP condition. Total 13 emission reductions are determined by the attainment 14 demonstration, implying that reductions averaging greater 15 than three percent per year are required, if shown to be 16 necessary by the model demonstration. The three percent 17 per year RFP requirement is, thus, a minimum requirement. 18 Even if one were to three percent reductions as 19 legally sufficient, the District's approach to meeting 20 this requirement should still be rejected as unreasonable. 21 First, the District recognizes that NOx is the 22 real problem behind ozone in the Valley, yet the 23 District's demonstration relies on VOC reductions that 24 claim that progress is being made. Moreover, the math 25 used in the plan to support its three percent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 demonstration makes no sense. Instead of showing how 2 total emissions will be reduced by three percent, the plan 3 adds the percentage reduction of VOCs to the percentage 4 reductions of NOx, and EPA has already deemed this 5 mathematical approach to be unacceptable and incorrect 6 when the District attempted the same approach to 7 demonstrate progress for particulate matter. 8 With respect to that, on the slide, EPA said: To 9 say that two percent of 100 units of one pollutant and 10 three percent of 200 units of another equals five percent 11 of one or the other or both is simply improper. EPA 12 contends that Congress cannot have intended application of 13 the statute in a way that is inconsistent with basic 14 mathematical principles, so this approach is not 15 acceptable. 16 As you've already seen on this graph, the 17 District's plan to reduce NOx emissions falls short of 18 where emissions need to be to attain the ozone standard. 19 This is simply not reasonable progress towards attainment. 20 Moreover, even if the target was only a three percent NOx 21 reduction, the plan would still fall short. 22 We urge you not to except a plan that relies on 23 slight of hand, shakey math and other dubious assumptions 24 to meet the minimum Clean Air Act requirements. The 25 purpose of the Clean Air Act is to reasonable further PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 progress towards attainment, and this plan does not do 2 that. 3 Thank you. 4 CHAIRPERSON SAWYER: Thank you. 5 Ms. Jackson. 6 MS. JACKSON: Is this for the slides? 7 CHAIRPERSON SAWYER: The slides continue from a 8 couple speakers back. 9 MS. JACKSON: Her slides didn't show up. 10 (Thereupon an overhead presentation was 11 presented as follows.) 12 MS. JACKSON: Good morning. My name is Sarah 13 Jackson. I am a research associate with Earth Justice, 14 and I just want to add that in addition to the plan's 15 failure to demonstrate progress that's truly reasonable, 16 the plan also fails to specific RFP milestones required by 17 the Clean Air Act. This is because the District and the 18 ARB staff have improperly calculated adjustments for 19 what's called the Federal Motor Vehicle Control Program 20 for chip reflash and the anti-idling rule. A failure to 21 demonstrate RFP makes the plan unapprovable by EPA, and if 22 it's not corrected, could result in a transportation 23 conformity lapse. 24 So we urge the Board not to approve this plan 25 based on that, and also because there is so much more that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 could be done to achieve cleaner air sooner. 2 Throughout the plan development process, the 3 public has made extraordinary and unprecedented efforts to 4 present the District with reasonable, feasible ways of 5 achieving more emission reductions. Yet, the District 6 consistently ignored, rejected or mischaracterized these 7 efforts. This is a list of just some of the measures 8 presented to the District that were not made enforceable 9 elements of the plan. That's the whole list. 10 Just as a few, members of the public suggested 11 controlling NOx emissions from refinery flares using flare 12 minimization plans requiring tighter limits on NOx limit 13 for glass melting furaces and requiring tighter NOx limits 14 for solid fuel fired boilers. 15 The first two were put off for further 16 consideration, although the Bay Area and the South Coast 17 both have flare minimization plan rules. The last was 18 rejected even though Sacramento has a -- had a similar 19 requirement with NOx limits that were lower than the 20 District's. 21 Many of these others were rejected, ignored or 22 put off for further this consideration. 23 All of these measures are reasonable, feasible 24 and, most importantly, could bring the Valley into 25 attainment well before 2024. In fact, with the use of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 such measures, we could achieve the eight-hour ozone 2 standard by 2013 in 95 percent of the Valley. But in 3 virtually every instance, the District took a pass on the 4 suggested control measures by either shunting them to the 5 further consideration column or rejecting them outright, 6 while still others were completely ignored. 7 At the April 30th Board hearing, District staff 8 tried to characterize the public's efforts as emotional, 9 and thus, unreasonable. Yet, it is the District that has 10 rejected proven, feasible controls in favor of delay and 11 denial. 12 We've asked -- we ask -- we come before you to 13 ask you not to approve this plan. It is not the best 14 effort the Valley can make to reduce air pollution. A 15 more aggressive plan is out there and we're asking this 16 Board not to turn a blind eye to the opportunities that 17 exist to help the Valley reach attainment in less than 17 18 years. 19 As you've already heard, the challenges facing 20 the Valley will only get more difficult. If we don't act 21 aggressively now, we doom the people of the Valley to 22 breathe dangerous levels of area pollution for many more 23 years. 24 Please amend this plan and make it better. 25 CHAIRPERSON SAWYER: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 Ms. Stove. 2 Yes. Excuse me, Ms. D'Adamo. Or Supervisor 3 Hill. 4 SUPERVISOR HILL: Well, I -- thank you, 5 Mr. Chair. I guess the question would be of staff. 6 If you've looked at the more could be done column 7 here in the, in the presentation, I mean, are these 8 feasible? Have they been looked at as something that 9 could be added? And I know the Bay Area District is 10 working on our flare minimization plans right now and the 11 requirement of the refineries. And could this have been 12 some of those issues? I know that Senator Florez was 13 talking about, what was the word he used here? Moving, I 14 can't think of the word it was. The small items that we 15 could bring forward that could possibly bring us some into 16 some closer range in getting us outside of the extreme and 17 perhaps into the severe range, and taking us out of the 18 black box. Have these been looked at all, and if they 19 haven't, maybe, perhaps, staff could look at them and give 20 us some summary of that later on. 21 DEPUTY EXECUTIVE OFFICER TERRY: I'll give you a 22 short summary. Yes, we have looked at all of these 23 suggestions as the local SIP development process has 24 proceeded. Our technical staff and our stationary source 25 division take the lead on reviewing all district rules on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 an ongoing basis. And so what that means is, as a rule is 2 developed at the local level, there's benchmarks for best 3 available retrofit control technology. And we have a back 4 and forth with our technical staffs and we write comments 5 to the District to say, yes, in our technical view, this 6 does or does not meet current technology benchmarks. 7 However, those are always subject to evolution 8 with time. And that's why we have these triennial plan 9 review processes so that we, every three years at a 10 minimum, are revisiting the effectiveness of stationary 11 rules throughout the state of California. 12 Now, that isn't to say that there might be some 13 small incremental benefits from tightening these rules 14 because in the state of California, there's been 15 regulation of stationary sources for many years. So we're 16 talking about tightening incrementally individual rules. 17 And those are small things. And those are, generally fall 18 in this further study category. 19 But our concern is that for stationary sources, 20 there needs to be a next increment of NOx control 21 technology to really get the substantial reductions that 22 could play a significant role in closing the gap to avoid 23 a bump to extreme. And we, again, consulted with our 24 staff this week on whether there is that next generation 25 of NOx control strategy that could provide really PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 substantial NOx reductions. Unfortunately, that's not 2 here today. 3 But our staff proposal, and you'll hear more next 4 week with our state strategy, is we want to embark on a 5 process to set technological benchmarks for each sector, 6 whether it's mobile or stationary, for both the South 7 Coast and the Valley, so that we really do move the 8 technology forward to get those large reductions that can 9 fill the gap. 10 And any other comments you want to make on the 11 specifics that we might have looked at? 12 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 13 CHIEF KARPEROS: Some of the lists, this list that is in 14 front of you, had come forward, at least parts of it, 15 through the comment period, some of these measures were in 16 the IRSSRC report. And there are -- these were, some of 17 them were added to the District's list. So the process 18 that Ms. Terry was describing is ongoing. The ones that 19 the District felt were mature enough to move on the rule 20 making calendar, they were moved in and ARB staff reviewed 21 that and thought that was appropriate. 22 MS. JACKSON: May I answer two of the -- 23 CHAIRPERSON SAWYER: Yes, please. 24 MS. JACKSON: Some of these measures were, in 25 fact, even recommended by the ARB staff to the District, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 but were also rejected. 2 CHAIRPERSON SAWYER: Of the list, you say some of 3 them are in the plan and some already, but which is the 4 case? 5 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 6 CHIEF KARPEROS: Glass melting and flares are two that 7 jump off immediately. To my eye. 8 BOARD MEMBER D'ADAMO: What do you mean "jump 9 off"? 10 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 11 CHIEF KARPEROS: Oh, I'm sorry. There are two suggestions 12 on the list. There's one, glass melting furnaces. Excuse 13 my eyes here as I look down, I'm trying to find it. 14 BOARD MEMBER D'ADAMO: The second one. 15 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 16 CHIEF KARPEROS: The second one, that's on the District's 17 rule making calendar for 2008. The third quarter. 18 Flare, flares, that's on the District's rule 19 making calendar for 2009. 20 SUPERVISOR HILL: Minimization plan for flares or 21 just flare rule. 22 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 23 CHIEF KARPEROS: Yes. 24 CHAIRPERSON SAWYER: Ms. D'Adamo, did you have 25 additional questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 BOARD MEMBER D'ADAMO: No. 2 CHAIRPERSON SAWYER: Ms. Stove. 3 And then we'll have Teresa DeAnder, Sandra 4 Garcia, and Dolores Huerta. 5 MS. STORES: Good afternoon, my name is Christina 6 Stores. I'm also here with Earth Justice. Before I 7 begin, I just want to comment that the new measures added 8 for further consideration don't count towards attainment. 9 As you have already heard, why this plan is not a 10 meaningful strategy for addressing the serious ozone 11 problems of the Valley, I would like to much on two more 12 the technical defects that undermine the approvability of 13 this plan under the Federal Clean Air Act. 14 First, the plan fails to assess and adopt 15 reasonably available control technology for sources 16 emitting ten tons per year or more of smog forming 17 chemicals. Under section 182(E) of the Clean Air Act, the 18 threshold for major sources in extreme areas is ratcheted 19 down to ten tons per year. The requirement to evaluate 20 reasonably available control technology applies, at a 21 minimum, to these major sources. 22 The District prepared its analysis of reasonably 23 available control technology last September. The District 24 only looked at controls on sources with actual emissions 25 over 25 tons per year. Earth Justice commented on this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 analysis, noting that the analysis must include controls 2 on sources having a potential to emit ten tons per year. 3 The District dismissed these comments claiming that it was 4 not designated an extreme ozone non-attainment area. In 5 response to EPA comments that the reasonably available 6 control analysis now must be expanded to consider these 7 ten ton sources, the District has merely offered to lower 8 the applicability thresholds of its existing rules. This, 9 however, is not good enough and misses the point. 10 It is not enough to identity reasonable controls 11 for industries with 25 ton sources and sweep more of these 12 same types of sources into the existing rule. The 13 analysis must identity these industrial categories that 14 may not include any 25 ton sources and that have not been 15 evaluated to date. Whole new industries that are 16 currently unregulated will need to be subject to controls. 17 Until the District prepares this analysis, the plan cannot 18 be approved as complying with the Clean Air Act 19 requirement for reasonably available control technology. 20 The second defect that has been raised to the 21 District is the failure to down the federal new source 22 review requirements to cover sources of ten tons per year 23 or more. The District acknowledges that this change is 24 required, but says that it will not make this change for a 25 year and then will not let this change become effective PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 until EPA aproves the ozone plan. Such an attempt to 2 delay the required tightening of new source review program 3 violates the deadline of the Clean Air Act. Moreover, it 4 shows a lack of interest in achieving reductions as soon 5 as possible. 6 We urge the Board not to reward these attempts to 7 delay complying with the Clean Air Act. More can be done 8 if the Board shows leadership. 9 Thank you. 10 CHAIRPERSON SAWYER: Thank you very much. 11 In addition to the three speakers that I 12 announced, we will also take Lori de Leon. These four 13 speakers are in Bakersfield. So if we could have the 14 Bakersfield camera. The new experience so we're learning 15 how to handle this. And the first speaker is Teresa 16 DeAnder. Thank you very much. 17 MS. DeANDA: Good morning to everybody, to all my 18 colleagues and to the very distinguished Air Resources 19 Board. My name Teresa DeAnda. I'm the leader of El 20 Comite Para el Bienestar de Earlimart. And I'm really -- 21 I have to fight back the tears when I speak here and I 22 just hate that, that I'll be starting the cry. I hope 23 not. 24 But I'll just start from the beginning. In 1999, 25 we had a big pesticide accident, and after that I started PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 learning more about pesticides. And, so, I said, well, 2 pesticides is air pollution. I thought it was all the 3 same thing, which it is to our lungs because our lungs 4 can't tell the difference, and it is to our kids. 5 So I began calling the Air District to complain. 6 This farm over here is spraying pesticides and it's air 7 pollution, can you do something about it? 8 The Air District would send me to DPR. The then 9 DPR said they don't control air rules. So, then, I went 10 back to the Air District and they send me to CARB. And 11 then CARB sent me back to DPR. And so, to make a long 12 story short of all the weird phone calls back and forth, 13 we finally had to sue Air Resources Board, DPR, and 14 Cal/EPA. Through the help of Brent Newell, we sued for 15 you all to keep the promise to VOC emissions from 16 pesticides. 17 Now, the promise was made in 1994, the state 18 promise to cut VOC's from pesticides by 20 percent from 19 1990 levels by 2005 in five air basins including the San 20 Joaquin Valley. This promise was broken. So now you're 21 subject to keep a court order to make your, to keep your 22 promise. But instead of keeping the promise, you all have 23 appealed. I don't understand why you would appeal, seems 24 like you would just want to do what the judge demanded. 25 As a mother and grandmother, I am particularly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 concerned with the quality of air we are breathing. If a 2 harm was coming directly to my kid, such as a car that was 3 going to or somebody was going to hit them with a stick or 4 something, I would jump and I would try to my kids. If 5 their arm was broken or their finger was cut off, it would 6 be considered mayhem. Well, by the air pollution kids' 7 lungs are being damaged and it is deforming the lungs of 8 kids. They're being, they're littler than other kids' 9 lungs in other parts of the Valley. And I think that's 10 just wrong. 11 I cannot tell you how defensive I get when you 12 mess with my kids. I get really defensive. I'm in the 13 saying you directly, but the Air District has been putting 14 this off and putting this off, and then, on April 30th, a 15 roomful of people there were just asking them to delay and 16 study this alternate plan that we had come up with through 17 a consultant that they worked very hard on, studying all 18 the science, all the pollution, and all the categories 19 where they can reduce stuff, and it's still not -- they 20 still approved to wait till, for the air to be cleaned up 21 by 2024. 22 CHAIRPERSON SAWYER: Ms. DeAnder. 23 MS. DeANDRA: I just want to show you some 24 pictures. 25 CHAIRPERSON SAWYER: Ms. DeAnder, it's a little PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 bit complicated because I realize you don't have a timer 2 in Bakersfield. I must ask you to conclude. I was 3 wondering if it's possible to show the time. Do you have 4 a screen which shows me, right? That you can see? 5 MS. DeANDRA: We have a clock here. I'm just be 6 two more minutes. 7 CHAIRPERSON SAWYER: You've gone beyond the three 8 minute limit, but I would you ask you to include, please. 9 MS. DeANDRA: Okay. Well, let's, and then the 10 way that the thing was done today, we usually do three in 11 Fresno, three in Bakersfield, three in Modesto, but that 12 wasn't done today. So it's kind of different than it's 13 usually done. 14 But this is Brian at his tenth birthday, he'll be 15 26 by 2024. This is Emily. She's two right now. She'll 16 be 18 years old. She's my granddaughter and Brian's my 17 grandson. 18 My grandkids like to play sports and having them 19 play out there in the summer is actually hazardous to 20 their health. When it's a bad air quality day. And that 21 that's Nicholas, my son, Christian, my nephew, Brian, my 22 grandson and Lucas, my nephew. Here come the tears. And 23 this is Junior. He's two. He'll be 18. 24 So I really ask the Air District or the CARB to 25 delay approving the plan that the Air District has put PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 forward. If you make up rules, industry will step up to 2 the plate. They'll be innovative and invent better ways 3 to do business. It was done with lead, where industry 4 said that they could not make cans without lead and they 5 did it. Industry will step up to the plate. 6 So please delay approving the plan today. Thank 7 you. And I apologize for going over. 8 CHAIRPERSON SAWYER: Thank you very much. 9 Ms. Garcia. I'll let you know when you have 30 10 seconds. Well, you'll have a longer time if it's going to 11 be translated. 12 MS. GARCIA: Good afternoon. My name is Sandra 13 Garcia. And for 35 years, I've been working the fields of 14 California. I -- little by little, I developed asthma. 15 Now my grandchildren also have asthma. I'm telling you 16 that you're building a generation of sick people. With 17 all this contamination. I'm asking you not to wait until 18 2024. To clean the air. Because, little by little, 19 you're killing the farmers. Put the food on our tables. 20 Who's going to put food on your table if you finish us? 21 Thank you. 22 CHAIRPERSON SAWYER: Thank you very much. 23 Ms. Huerta. 24 MS. HUERTA: Hello, my name is Dolores Huerta. 25 I'm representing the Foundation of Dolores Huerta and our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 project of Campesinas Unidas, which is a project in both 2 LaMont and Arvin of farm workers. 3 I just want to say I hope that you can bring this 4 meeting to Arvin. I think it's a dubious honor that Arvin 5 has got this incredible horrible pollution which is now a 6 national scandal. And we are in a crisis mode and it 7 doesn't seem to me that this Board realizes when you have 8 witness after witness after witness that comes here and 9 tells you of the illnesses that are happening in their 10 community. And I have to add my two cents to that. Eight 11 of my grandchildren, great-grandchildren also have asthma. 12 We have no history of asthma in our family, because we 13 have lived here in Kern County. 14 Kern County is going to continue to. All of the 15 projections are that the whole Central Valley is going to 16 continue to. So to put off and say that we cannot make 17 any real major changes in the air quality till 2024, it's 18 absolutely ridiculous. It is outrageous. 19 Your plan is totally unacceptable. Would 20 those -- those who are polluting our air have got to 21 responsible. It is not a question of cost. Here, you 22 have our major industries; the oil industry, the 23 agricultural industry. These are not impoverished 24 industries. These are industries that have multi millions 25 of dollars in profits, and I do not know exactly what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 legal pressure that you can put on these industries, but 2 definitely those that have stood here today are saying to 3 you, we have to put moral pressure. We've got to go to 4 those to say: You have got to do something about cutting 5 down the pollution immediately. This is not rocket 6 science. This is human behavior that we are talking about 7 that is polluting our air. Our children are getting sick, 8 we cannot -- you cannot sit there and not listen to the 9 voices that have come before you and say, yeah, we're 10 going the except this plan and may be we'll do something 11 about our air to 2024. 12 This is not acceptable. I urge you to to reject 13 this plan. Listen to the experts of people that have come 14 here before you that are showing you other ways this can 15 be done. We can do it. We can do it together. 16 And please come to Arvin. Tell the people there 17 in Arvin that you don't want to do anything until 2024. 18 Thank you very much. 19 CHAIRPERSON SAWYER: Thank you. 20 Ms. de Leon. 21 MS. DE LEON: Good afternoon. My name is Lori de 22 Leon, and I work with the Dolores Huerta Foundation. I am 23 also a Board member of the Northern California Grass Roots 24 Environmental Justice Fund, and we are an funder that 25 gives many grants to grass roots organizations, basically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 tabletop organizations, that want to do work for 2 environmental justice and better air quality. 3 And as a Board member, we have funded many 4 groups, small groups throughout the San Joaquin Valley who 5 are citizens taking up action themselves to try to address 6 these programs. And as Dolores previously stated, we 7 could get the industries involved, you know, if we made 8 certain mandates. We could have them cover their costs 9 and take responsibility for the pollution that they are 10 causing. 11 And in regard to the pesticide use, the growers 12 are making millions of dollars off of the work of the 13 farmworkers and it's the farmworkers who are suffering as 14 a result of asthma. 15 I am a San Joaquin Valley resident. I've lived 16 here all of my life. I was born in Stockton, and I've 17 lived in Kern County since I was 12 years old. I am also 18 Dolores Huerta's daughter. 19 As she mentioned earlier about the number of our 20 family members that suffer from asthma, I have four 21 biological children. My four children have, at one time 22 or another, have suffered asthma attacks. Two of my 23 children who, and they are now adults, suffer from asthma. 24 Two of my grandchildren continue to suffer from asthma. 25 With this plan, my daughter who is now 34 years PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 old, with this plan she would be close to 60 years old if 2 you were to go ahead and implement, you know, postpone the 3 implementation as requested. 4 And listening to all of the testimony and a lot 5 of rhetoric from the staff, it really seems to me that the 6 cart is being put before the horse, if you plan to adopt 7 this plan today, before taking everything into 8 consideration, into the hearings in October. 9 And so, on that note, I would ask that you please 10 postpone the implementation of the plan. Please take 11 seriously the Clean Air Day plan and those requests that 12 are being implemented by the communities throughout the 13 Valley here on behalf of the organizations. 14 Also, I would like to say, it's a disappointment 15 to see that the San Joaquin Valley Air Quality Pollution 16 Control Board does not, is not actively participating in a 17 lot of the hearings that a lot of these communities 18 members have, such as with DPR hearings and, as Dolores 19 said, are not really going into the community and speaking 20 to the individuals from the community who are going to be 21 affected by your decisions here today. 22 Thank you. 23 CHAIRPERSON SAWYER: Thank you very much. 24 We will be taking a lunch break at this time. I 25 would like to thank all of the speakers this morning for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 being succinct and clear and carrying the message to the 2 Board, I think, in a very effective way. 3 We will, as a Board, adjourn for lunch break, but 4 we will reconvene in a closed session to discuss a 5 personnel matter as is indicated on today's agenda. I 6 anticipate that we will resume, I don't know, probably 7 about 1:15. It could be earlier than that if we are 8 efficient, but about that time. Let's say 1:15, for those 9 of you who want to plan your own lunch break. 10 Adjourned. 11 (Thereupon, a lunch recess was taken.) 12 CHAIRPERSON SAWYER: We will resume the public 13 testimony at this time. 14 And the next three speakers are Lupe Martinez, 15 John Grant and Francisco Luca. 16 Mr. Martinez. 17 Mr. Grant. 18 MR. GRANT: Good afternoon. Thank you for the 19 opportunity to speak this evening. 20 As you look out at the group that's been speaking 21 to you, I hope you're picking up on the fact we've really 22 worked hard, months going through the CEQA documents, 23 going through the research, going through Mr. Sadredin's 24 efforts, to try to figure out how we can advance this 25 proscpect of clean air in the Valley. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 I have some documentation I would like the Board 2 to have. Basically it's a subanalysis of Mr. Sadredin's 3 science. If I can get somebody bring that up, and maybe 4 the Clerk of the Board can hand them out to the Board 5 members. It's just a breakdown of the data that he's 6 presented and how it was presented. It was highly 7 selective. Let's start with that. 8 Things were not if that could have been in it 9 that might have shifted the viewpoint. It started off 10 with a straw man. That is to say, you present something 11 impossible and then you knock it over very easily and 12 everybody says, "of course." The straw man is Arvin. The 13 whole Valley doesn't have to come into compliance with 14 Arvin. That was a way of setting up a notion in the mind 15 of the readers on the Board that we have no choice but to 16 delay, because it can't be done. 17 This is an area where, for 37 years, nothing 18 significant has been done. There isn't a single 19 acceptable plan that has been forwarded in all of this 20 time. This is why the Board's reputation is what it is. 21 I'm talking about Air Board's as well as CARB. You people 22 have suffered from the misdirected activity of those who 23 preceded you. 24 And now we see a 500 or a $680,000 budget and 25 what is it for? Image repair. To try to put this money PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 in this thing to buy off a very poor record of 2 non-accomplishment. 3 $680,000 can go along way. For example, in 4 helping erect asthma clinics in the Valley. Better to use 5 that money for that than to actually get the job of 6 cleaning the air up done than looking like you're getting 7 it done. 8 These numbers that you will see on these papers 9 that are being distributed are skewed for a reason. This 10 is an apologia for the agency. The agency has earned its 11 miserable reputation by inactivity, by blocking. The EPA, 12 which sits on top of the whole mess, has been sued 13 successfully that I know of seven straight times to force 14 them to do what they should have been doing without 15 citizens having to take their time to force them to do it. 16 I regard this as part of a conservative effort to 17 block the whole environmental thing, because it's bad for 18 business. That's what it looks to me. And it still looks 19 that way, particularly when you see this chamber of 20 commerce mentality running boards that ought to be 21 defending the health of citizens for which you are paid to 22 defend. 23 CHAIRPERSON SAWYER: I need to ask you to, 24 please. 25 MR. GRANT: Thank you. I will. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 I ask you to look inside. Do you have children 2 as I do? Do you want asthma as I have it? I'm getting 3 ready to pull out of the Valley because I have a wonderful 4 daughter. And by the way, the statistics on that is 20 5 percent loss of lung function over 12 years of school in 6 this Valley, irreparable damage. 7 Think about that, instead of money. 8 Thank you very much. 9 CHAIRPERSON SAWYER: Thank you. 10 For the record, I need to report that the Board 11 met in closed session to discuss a personnel matter. No 12 action was taken by the Board. 13 Francisco S? 14 Okay. The next three are Daniela Simunovic, 15 Andrea Perez, and Kim Thompson. 16 Daniela, introduce yourself, please. I obviously 17 made a mess out of your last name. 18 MS. SIMUNOVIC: Good morning. I'm Daniela 19 Simunovic with the Center on Race, Poverty and the 20 Environment. 21 I'm here before you today, for the last two years 22 since I moved back from college into the Valley, I've been 23 following air quality issues trying to come to a solution. 24 Part of that has involved being very involved in the 25 processes of rule development here at the District. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 And at the beginning two years ago when I was 2 coming, we as a health community were asking where the 3 health analysis was in these cost analyses that we were 4 seeing. We were seeing how much industry was going to be 5 burdened by the rules that was being made, but we weren't 6 seeing what the benefit to the residents would be by 7 stricter rules. 8 So all of a sudden, we had the Jane Hall study. 9 3.2 billion dollars a year we find. Well, what happens 10 with the Hall Study? We were told before that those 11 numbers weren't quantifiable so that's why they couldn't 12 be used. Now, we have this study and while we see it and 13 slides and Power Point presentations, that has not been 14 put into the calculation of what the health benefit of 15 stricter rules will be, which I think was a point 16 Mr. Becker was trying to get at earlier in his testimony. 17 With the SIP, with the ozone process, I've been 18 involved from the townhall where they were scoping for the 19 idea of this plan and from the very first workshop. All 20 of the workshops, actually. At those workshops, people, 21 regular citizens, turned out to share their daily reality 22 of living with asthma, with inhalers. Like this. To get 23 from the staff that, well, your comments aren't technical 24 enough so we can't do anything about it. We're sorry that 25 you're suffering, but there's nothing we can do. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 So, we get the ISSRC report that shows that the 2 Air District can strengthen the rules and get a quicker 3 attainment date than 2024. What happens? Well, we have 4 ARB staff, who I would like to ask after my time is up to 5 report to us, who have said that it's a scientifically 6 sound report. Whereas, we have an Air District who goes 7 on a road show to discredit this report. 8 From the citizens' standpoint you had hundreds of 9 citizens get trained in trainings across the Valley on 10 this plan, on the technical points, so we can come here 11 today and hearings like on April 30th, to provide that 12 technical factual commentary that we were told was 13 lacking, that's why the decisions weren't going our way. 14 Well, guess what? We've combined the emotions, 15 we've combined the facts, and we're still being told by a 16 Board, our local Board who is going back to their local 17 communities and their supervisors, they're telling us here 18 that it's too hard of a problem to reduce pollution. We 19 have too much. But, yet, they are going back to their 20 districts and applying, and approving Vanguard raceway 21 speedways, which are going to be a huge source of NOx 22 pollution, mega dairies that are going to be huge and 23 increase the amount of VOC's in our air. They are going 24 and approving these decisions in their backyards, making 25 this job harder. And then they're coming here and telling PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 us 2024 is the best we can do. 2 My question is to you is what's going to happen 3 when we get to 2024 and we're asking for another delay? 4 We've come to you today appeal to you because 5 this, we are, we feel like we've been shut out of the 6 discussion at the Air District level and by the Board and 7 we feel that we need you. You are, in this government of 8 checks and balances, our check, and so we're coming to 9 appeal to you to please, to listen and to regain the trust 10 of the public which, quite frankly, this Air District has 11 now lost. 12 And if I could get on the record from ARB staff 13 that you guys, in private meetings with John Lents, did 14 say that his data and his scientific process was sound. 15 DEPUTY EXECUTIVE OFFICER TERRY: We walked 16 through the fundamental analysis of the issue of 17 retrofits, replacements of engines, and what could be 18 potentially achieved through mandatory technology-based 19 regulations. That -- those analysis, we use the same 20 types of assumptions. 21 Now, Dr. Lents was more optimistic in terms of 22 retrofits that have not yet materialized and being on the 23 horizon. So there were differences in assumptions about 24 future technologies. But in terms of current 25 technologies, yes, we use the same technical foundation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 And then overlaid on the issue of future 2 technologies is the issue of operational controls. And 3 those are concepts that, as he conveyed them to us, should 4 be explored but there was not a strong quantification of 5 those because this of interplay between layering on 6 operational controls over rule makings that this Board 7 will be considering over the next few years. And so that 8 is the one of the complications in trying to assess not 9 only what the ideas for operational controls might be, but 10 what their relative value would be in terms of tons. 11 BOARD MEMBER BERG: I have a question. 12 CHAIRPERSON SAWYER: Ms. Berg. 13 BOARD MEMBER BERG: I believe I heard in some of 14 the exchange during the staff report that Dr. Lenz did 15 agree that there was a shortage of emissions to be 16 obtained, even with his report or our report; is that 17 correct? 18 DEPUTY EXECUTIVE OFFICER TERRY: And I'll look to 19 staff. But in our last discussion, that was my 20 understanding, that there still would be a gap in terms of 21 what it would take to get to full attainment. So, then, 22 the shift in focus was to say, well, what more can we do 23 to accelerate progress apart from the issue of what the 24 formal legalistic attainment date is? Let's work on 25 additional ideas. And that was going to be the focus of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 his work over the next couple of months. That was my 2 understanding. 3 BOARD MEMBER BERG: And, then, I just want to 4 clarify that there is no activity within the Air Resource 5 Board, either on a state level or on a district level, 6 that approves incoming businesses. We're not an agency 7 that gives approval for incoming businesses to any area; 8 is that correct? 9 DEPUTY EXECUTIVE OFFICER TERRY: I'll ask my 10 legal counsel. 11 CHIEF COUNSEL JENNE: The districts regulate 12 stationary sources, so we aren't going to be the agency 13 issuing permits to businesses that want the come into an 14 area, that's the District's job. 15 BOARD MEMBER BERG: So it's not this Board, it's 16 the District's call whether to issue a permit or not? 17 EXECUTIVE OFFICER WITHERSPOON: Air districts and 18 local land use authorities in deciding what are 19 appropriate land uses in different parts of their 20 jurisdictions. So, for example, the speedway that was 21 referenced, whether that's an appropriate land use or it's 22 been proposed or whether dairies should be where dairies 23 are proposed to go. 24 BOARD MEMBER BERG: Thank you. 25 CHAIRPERSON SAWYER: Ms. Perez. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 All right. Kim Thompson. 2 MS. THOMPSON: Good afternoon. My name is Kim 3 Thompson, and I'm the Air Quality Director at the 4 Fresno-Madera Medical Society. The Fresno-Madera Medical 5 Society is a membership organization of 1500 physicians in 6 the Fresno Madera areas and is one of six medical 7 societies that comprise the Valley region of the 8 California Medical Association. 9 The position that I serve in is the first of its 10 kind throughout any medical society in the state, which 11 represents that physicians, among others, as well as 12 others, feel that the air quality has reached a 13 compelling, a level of compelling urgency and that new 14 measures should be taken. 15 We work in partnership with the Air District, 16 in partnership with the San Joaquin Valley Partnership, a 17 air quality working group, as well as the Central Valley 18 Air Quality Coalition. Physicians were present here at 19 the Air District on April 30th, to ask that the plan wait 20 to be approved so that measures could be taken to have an 21 earlier official deadline. And I am simply here to 22 symbolize their earlier request and to your attention to 23 the relationship between our Valley's air quality and 24 physician shortages in the Valley. 25 All eight counties in the Valley are designated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 medically underserved areas and populations. Six of our 2 eight counties have a shortage of primary care physicians, 3 and overall the Valley has the lowest physician to patient 4 ratio in the state, with only 173 physicians per 100,000 5 residents. This is also, by way of comparison, the Bay 6 Area has 415 physicians per 100,000. Sacramento, 310, 7 South Coast, Southern California, 294. Again, we are 173 8 versus the state average of 302. 9 I mention this because, because it's well known 10 that it's difficult to retain and recruit new physicians 11 to the Valley. Physicians in this area are working very 12 aggressively to recruit the needed specialists. For 13 example, John Tellus, a cardiologist that I work with, 14 served on a team of physicians to recruit two 15 neurosurgeons to come to the Fresno area to slowly 16 regenerate the pack of retiring neurosurgeons that we 17 have. They were successful in their efforts and were able 18 to recruit two neurosurgeons to come with their families. 19 But within just a year's time, both those neurosurgens 20 left the Valley because their families were suffering 21 because of the air pollution. 22 The recent figures of 3.2 million dollars in 23 health care costs spent annually for air pollution in the 24 Valley are substantial, and, yet, still cannot get 25 entirely to the cost that we have to articulate the strain PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 that the health care system faces because of our air 2 pollution. We are committed, physicians are committed to 3 working in partnership. And toward that end, we are on 4 the Air District's task force for fast track attainment. 5 But physicians do feel that if there is any way possible 6 to come to have an official deadline that is earlier than 7 the 2024, physicians must be in support of that because of 8 the tremendous burden that we are now bearing, both in 9 terms of resident health and our capacity to provide for 10 Valley residents. 11 Thank you. 12 CHAIRPERSON SAWYER: Thank you. 13 The next three speakers -- 14 MS. THOMPSON: Pardon me, I have one 15 clarification question, if I could beg your patience. 16 That is, it was mentioned earlier that, of course, there 17 will need to be necessary revisions to the plan in the 18 process, however this goes forward. How will those 19 revisions to the plan, corrections, submissions, be 20 represented publicly? 21 Thank you. 22 CHIEF COUNSEL JENNE: I can answer that. If the 23 District makes revision to the plan, they would just adopt 24 that at a noticed public hearing, and they'd adopt it as a 25 SIP revision in the same way they adopted the plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 If we make revisions, it's the same process. We 2 would have a hearing and it would be public, opportunity 3 for public comment. 4 CHAIRPERSON SAWYER: The next three speakers are 5 Joan Poss, S. Poss, and Vishinna Turner. 6 Joan Poss. 7 UNIDENTIFIED SPEAKER: I think she left. 8 CHAIRPERSON SAWYER: All right. 9 S. Poss. 10 Vishinna Turner. 11 The next three speakers are Manual Cunha, 12 Shirley Batchman, and Rob Webster. 13 Manual Cunha. 14 MS. TURNER: Vishinna Turner's here, sorry. 15 CHAIRPERSON SAWYER: All right. Vishinna, 16 please, certainly. 17 MS. TURNER: Hi. I'm Vishinna Turner, and I'm 18 with C.A.F.E., Collective for Arts, Freedom and Ecology. 19 I'm here basically on behalf the my nieces and 20 nephews, Ashley Smith, Marshay Holloman, Kayla Holloman 21 and Javon Embers. 22 Now, basically you've heard the community's voice 23 on this issue and the tremendous opposition to the delay 24 of cleaning the air up in Fresno. And basically, since 25 you've heard so many things like that today, I'm going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 talk about personal issues. And basically, I have a niece 2 that's ten years old and she goes to Elementary. And she 3 is the MVP of her soccer team. Now, they have 45 minute 4 games schedules that they play in and in that 45 minutes 5 she has to take one to three puffs of her inhaler before 6 she can continue playing a game that she loves and that 7 she's really good at. 8 I personally have programs breathing. And I live 9 downtown on Tulare and F Street and so I'm surrounded by 10 and highways, Highway 99, Highway 41, and 180. And, also, 11 the Fresno, basically the fire station building that they 12 burn regularly as a, you know, like a routine practice for 13 themselves. And basically the reason why I'm here 14 speaking about it is because I, I suffer myself, my 15 families suffers, these people here that you've heard also 16 suffer. And I mean really can't sum up much more of how, 17 you know, I feel about it, other than we need clean air 18 now and not in 2024. I just really can't stress that 19 enough. 20 That's all I have. Thank you. 21 CHAIRPERSON SAWYER: Thank you very much. 22 Manual Cunha. 23 MR. CUNHA: Thank you, Mr. Chairperson. Good 24 afternoon, Board members and staff of the California Air 25 Resources Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 My name is Manual Cunha, I'm president of the 2 Nisei Farmers League, as well as serve on the USDA Air 3 Quality Task Force which represents agriculture across the 4 U.S. And on that Board are a variety of qualified people 5 from medical to engineers to farmers to scientists and a 6 lot of folks. 7 But, today, I come here because this is not a 8 plan that agriculture can live with. But, we have no 9 choice. 10 Being heavily involved with your staff over the 11 past 16 years of the California Air Resources Board, the 12 federal EPA, the Bay Area, the Sacramento Air District, 13 and the San Joaquin Valley, encompassing upon the most 14 largest research studies, from the PM10 study that helped 15 guide this Air District with its PM10 plan, which, by the 16 way, we are the only Air District that is in a PM10 17 attainment status. We had that this the last December of 18 '06. That was all done by the science. The staff that 19 worked hard with all parties to have the best science and 20 agriculture agreed to that. And we will live by the sword 21 and move by the sword of whatever the results were. 22 And in many of that PM10 work, agriculture has 23 done a lot. 24 Now we are on the ozone study. And the ozone 25 study is helping to guide this district as well as the Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 Resources Board on what things we need to look at from the 2 basis of what works, what does not work as far as 3 modeling, trying these type of factors, I think our staff 4 at the Air District has done an excellent job of holding 5 public workshops on this issue alone. 6 I am not happy because ag is going to pay a very 7 dear, high price on this issue. Because we have a bill 8 that passed that was SB 700. Agriculture will be 9 50 percent less of all other industries in threshold 10 numbers. So if everybody else is ten ton, we've got to go 11 to five ton. So the technology alone for agriculture, and 12 let me tell you this, I've been in communications with 13 major engine manufacturers, even Catepillar. John Deere. 14 And there are no Tier 4s going to be available until 2015. 15 And that will be a Tier 4 that's 300 horsepower and 16 greater. And greater. And many farm tractors today, our 17 farm tractors that our farmers drive, the small farmers, 18 the engine is part of the tractor. It's part of the 19 frame. It's not where you drop an engine in. The engine 20 is hooked to the rear-end, it's hooked to the axles, it's 21 hooked to the front axles. So it's not easy just to 22 retrofit a device. 23 I'm hoping, today, that you move forward with 24 this plan. We continually work with the Air Resources 25 Board, EPA, and this District. When we find newer, modern PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 technologies available, we implement those. 2 And again, I thank you for coming to the 3 San Joaquin Valley again. And we look forward to 4 continually working with your staff on the future issues 5 that confront my industry called agriculture that feeds 6 this world. 7 Thank you. 8 CHAIRPERSON SAWYER: Thank you. 9 Shirley Batchman. 10 MS. BATCHMAN: Good afternoon, Mr. Chairman and 11 members of the Board. And once again, you've heard many 12 welcomes to the Valley and I echo those also. 13 I work on behalf of the California Citrus 14 Industry and I am here to tell you today that we do 15 support this rule. But let me, first of all, tell you 16 this is not something that we just took very lightly. As 17 when this rule came out and part of the rule is going to 18 extreme non-attainment, as Manual just said, this 19 industry, agriculture, will now be under a five-ton 20 threshold. Anything over five tons, we then begin to 21 permit condition and many other requirements. Yet, we 22 recognize that we have a major role to play in this rule, 23 I think, and we have been there. We have been there and 24 the voluntary mode. I would like anyone to challenge what 25 this industry has done in the Carl Moyer program, with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 engines that we have replaced voluntarily. 2 Look at what we have done with the PUC in 3 developing a program so that we can convert to electric 4 engines. There are many more programs. I am not going to 5 go into them today. I'm sure you're familiar with them. 6 But I must tell you, we will be there. We are 7 being regulated. I take great exception today, when I 8 continue to hear that we are not going to be required to 9 do anything. Until 2024. 10 Please come and examine the regulations that we 11 are currently under and the deadlines that are on the 12 horizon. 13 With that, we look forward to doing our part. 14 But I will tell you, this is going to take billions of 15 dollars. And I hope every single person in this room who 16 has spoke against this rule is also actively working to 17 secure the funding that is going to be necessary for 18 industries and business to come into attainment in a 19 stronger and a faster fashion. 20 With that, I ask that you support the rule. 21 Thank you. 22 CHAIRPERSON SAWYER: Thank you. 23 Rob Webster. And then we'll have Loren Weidman, 24 Elizabeth Threlkeld, and Kavin Abernathy. Kavin Abernathy 25 is in Modesto. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 Rob Webster. 2 Okay. Loren Weidman. 3 All right. Elizabeth Threlkeld. 4 Kavin Abernathy. Are you with us in Modesto? 5 MR. ABERNATHY: Yes, Mr. Chairman. 6 CHAIRPERSON SAWYER: Here we go. 7 MR. ABERNATHY: Good afternoon, Mr. Chairman and 8 members of the Board. 9 I was actually in the office this afternoon 10 spending hours putting together new reports because of the 11 new regulation that has been imposed on the capital 12 industry in the state of California. So I, too, take 13 extreme opposition in people saying that we are doing 14 nothing. Where we have moved in a short period of time is 15 extremely overwhelming, especially from a person in my 16 position. And I'm going to make this real short. 17 It seems that the Board has really two choices. 18 One, to make an emotional decision that satisfies a very 19 small minority's ego, or, number two, make a logical 20 decision that is based on the reality of the facts. And 21 quite frankly, the majority of folks don't like what the 22 facts say. But quite simply, we have to it. And I 23 personally don't see how anyone with any amount of common 24 sense could look at what the Air Pollution Control 25 District has put together in their 2007 Ozone SIP and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 would say anything other than we have to go to from severe 2 to extreme. 3 I like -- my immigrant Portugese father-in-law 4 always makes the comment, especially in the event of 5 insurmountable obstacles: That's life. He also tells 6 you, stay focused because what seems insurmountable today 7 will. Pretty short, sweet and simple. 8 In agriculture, we all agree that this is an 9 extremely difficult plan. It's going to be extremely 10 difficult for agriculture to come in, to come into the 11 five-ton threshold. It's going to create a lot more work 12 on our part which we stand ready to support. And I would 13 simply urge the CARB governing Board to support staff's 14 recommendation to support the Air Pollution Control 15 District's 2007 Ozone SIP in support of that. 16 Also, I would also challenge the CARB Board to go 17 back and go to work on the large, largest percentage of 18 regulated entities under your control and also do your 19 part. And through that, quite simply, having numerous 20 entities working together for a cumulative common goal, I 21 think we can get this thing done. 22 Thank you. 23 CHAIRPERSON SAWYER: Thank you very much. 24 Next will be Bill Davis, Roger Ison, and, and 25 Gabrielle Kirkland. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 Mr. Davis. 2 MR. DAVIS: Dr. Sawyer and Supervisor Case, 3 welcome to the game. Is it what you expected or is it 4 worse? 5 SUPERVISOR CHASE: I'm not at all bored. Let's 6 say that. 7 MR. DAVIS: We actually salute all of you for 8 your service. We know it's not easy for you to go 9 through. And it's not easy for the rest of us, either. I 10 also want to thank your Executive Officer. Yesterday, she 11 had the courage to go in front of a room of about a 12 hundred or so construction people and explain the 13 contractors, to the contractors what their rule is going 14 to look like and we appreciate her time and service as 15 well. 16 When William Shakespeare wrote in Henry V that 17 France was the great garden of the world, it was obvious 18 that he had just not visited the Central Valley. But God 19 does have a sense of humor. On one end of the Valley, He 20 places the Sierra; on the other side, He places the 21 Coastal Range, and then He puts the heat in the middle. 22 These conditions that no one has any control over are the 23 reason that we have these air quality problems here. I 24 spend virtually ever weekend in Fresno or up in the 25 mountains and I, I enjoy the area, but I know that there PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 are problems. 2 I work with a variety of trade associations in 3 the construction industry. And as an industry, we want to 4 thank the San Joaquin Valley Air Pollution Control 5 District for their demonstration of courage to face the 6 reality that the technology required to meet the goals 7 that you all have and that they have is not available 8 today. We, in the construction industry, have been 9 discussing with you these technology realities as well. 10 And in the case of our rule. Our industry stands ready to 11 meet the goals that you're setting for us. We need the 12 technology. We need the time for the technology to get in 13 the market. That's exactly the same position that the 14 San Joaquin Board has put before you in their plan. 15 And, as you know, and as your staff knows, 16 deadlines on technology have a tendency to creep or slip. 17 In the case of engine technology in the construction 18 industry, today's best available technology is supposed to 19 be a Tier 3 engine. But if you go to a construction 20 dealership and try to buy a new Excavator, you're going to 21 find one that has a Tier 1 engine in it. So this 22 additional time for the technology, the Tier 4 technology 23 in our case, to get into the marketplace is critical. 24 Thank you again. Thanks for your service. And 25 thank those of you who have been meeting with members of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 our industry to discuss the construction rule, we 2 appreciate it. 3 Thank you very much. 4 CHAIRPERSON SAWYER: Thank you. Mr. Ison. 5 MR. ISON: Good afternoon, Dr. Sawyer, members of 6 the Board. My name is Roger Ison, representative of the 7 California Cotton Ginners and Growers Association 8 representing over 1200 cotton growers and over 60 cotton 9 gins throughout the state. 10 Let me start by saying that, first, for the first 11 time in all of these workshops and hearings, I finally 12 heard a suggestion from the other side of this argument 13 and that's an actual suggestion of what this Board or the 14 Valley Air District could do and that was on farm 15 equipment. And let me assure you two things. 16 First of all, the Air Resources Board has already 17 taken some action in that we are the only state that 18 requires farm equipment to ultra low sulpher diesel, we've 19 been doing so or over a year. My brethren in other states 20 throughout the south, unfortunately, still burn the high 21 sulpher diesel and that's a competitive disadvantage for 22 us out here. But that's something that should be known. 23 In addition, the rule that was brought up by 24 Brent Newell is already, unfortunately for us, underway 25 because the ARB staff has already been in contact with us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 They've got our farmers in a study right now trying to 2 determine hours of operation, how old the engines are and 3 the tractors. Can they be retrofitted? Can they be 4 replaced? That type of stuff. They've already started 5 that rule development process, so it's well underway. 6 Let me start and echo some early comments, and 7 that, you know, I don't know if they'd let me have one, 8 but I would, too, carry that 2024 sign. This plan is not 9 good for the ag community. We're talking about hundreds 10 more farms are going to have to permits. And pay more 11 fees just for the benefit of being classified as extreme. 12 That's not good for us. That doesn't clean up the air. 13 It just makes more fees and more permits. 14 Let me also remind everyone of what we're already 15 doing because that also seems to be the concept that's 16 being portrayed today, is delay, delay, delay, we're not 17 going to do anything until 2024. Let me remind everyone 18 that we are now in the third year of the cotton gin rule 19 requires my cotton gins here in the Valley to replace 20 their control equipment. The third year, and this control 21 equipment costs $300,000 per gin, and no way to recover 22 that cost. My gins are in the second year of a six-year 23 rule to retrofit all of our 1990 and newer forklifts. Our 24 farms are in the second year of an eight-year process to 25 replace or retrofit all of their natural gas and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 diesel-fired engines. Every one of them above 50 2 horsepower. We're in the third year of our conservation 3 management practice rule which will replace or require us 4 to reduce operations on the farms. 5 Let me also remind you we have gone beyond there. 6 The ag program was mentioned where we replaced over 1800 7 diesel engines over to electric. Our organization right 8 now is working with the PUC to also add on natural gas to 9 electric, and we have a thousand engines there that we 10 could replace and go the electric, where it's available. 11 Our organization is also carrying legislation, 12 and I would ask any of the people that spoke here today to 13 in support of that, to do solar aggregation. Right now, 14 if we put solar on our farm, it's only applicable to one 15 individual pump. I can't spread that benefit across to 16 all my pumps. Basically I just give that power to PG&E. 17 This legislation would allow me to spread it across all of 18 my pumps, and there you don't have a power plant that 19 you're going to offset some of those emissions reductions 20 you would get. It's a total benefit for everyone. 21 CHAIRPERSON SAWYER: Would you please conclude. 22 MR. ISON: Sure. Yesterday, and this is the most 23 important point, we met with CAPCOA. All of the air 24 pollution control officers for the major air districts and 25 some of the small ones. One simple, single theme: More PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 money. They all agree that the only way that this Air 2 District, that the South Coast and any of the 3 non-attainment areas in this state are going to get into 4 attainment is funding for incentive programs. That was 5 universal, and I would ask that everybody put all of this 6 other rhetoric and attacks aside, come together. I'd love 7 to take this roomful of people up to the State 8 Legislature, find another way to improve and increase Carl 9 Moyer funding, go back to the federal government and do 10 the same thing and try the get additional funding there. 11 That really is the only solution and it's one we can all 12 agree upon. 13 Thanks. 14 CHAIRPERSON SAWYER: Thank you. 15 Ms. Kirkland. And then we'll have Pamela Van 16 Camp, Reverend Walt Parry, Nidia Bautista, and Sean Edgar. 17 MS. KIRKLAND: Good afternoon. Members of the 18 Air Resources Board and Chairman Sawyer. My name is 19 Gabrielle Kirkland and I work for the California Grape and 20 Tree Fruit League, and my job is to communicate in between 21 regulatory agencies and our members who are growers, 22 shippers and packers, about the different regulations and 23 how they need to comply with those rules. 24 I'm here today to support the ozone plan, and not because 25 it adds a one cure-all solution to the entire air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 pollution problem, but because it is the best solution 2 that we have available. Obviously the black box 3 encompasses a large percentage of the reductions that have 4 to be made and I think that is the big focus, where we 5 need to be working is to put our heads together, as the 6 public, as industry, as agency, on how we can encourage or 7 move the new technology process along so that that black 8 box can eventually be filled up with how exactly we're 9 going to reach those additional emissions. 10 And, you know, it's important too to know that 11 the Districts, as you know, their jurisdiction is limited 12 to being stationary sources. And because of that, you 13 know, they've incorporated in their incentive programs so 14 they could offer funding as opposed to they can't offer a 15 rule, they could offer funding to have people to make 16 changes on things that are outside of their jurisdiction 17 such as mobile items. 18 And the last thing I wanted to say is that, as 19 comments are made in opposition to this plan, I would like 20 to point out what feasible and realistic solutions are 21 being put on the table. And I understand there is a 22 health crisis. And I live in this Valley, too, as most of 23 the people in this room. But we also have to have 24 reasonable and sound solutions in moving forward. We 25 can't just magically say we're going to do this and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 somehow it's going to happen. We have to have to have a 2 workable plan and that's what the District has put 3 together. 4 And with that, I just hope you will be able to 5 vote in support of the ozone plan. 6 CHAIRPERSON SAWYER: Thank you. 7 Pamela Van Camp. 8 Reverend Parry. 9 Oh, excuse me. 10 MS. VAN CAMP: I have laryngitis, please forgive 11 me. 12 CHAIRPERSON SAWYER: Please get close to the 13 microphone. 14 MS. VAN CAMP: I came to this Valley for the 15 first time in '72, could see the beautiful mountains. I 16 could see trees on those mountains, and snow. I can't see 17 but a shimmer over them on a good day now. And I think 18 that there's a big problem with us not really reaching for 19 the technology, not taking that extra stretch. 20 Right now, we're talking about, GM is saying they 21 can't meet miles per gallon standards and they are 22 fighting it. And in the Sacramento Bee, they have 23 something where GM is cooperating on a minivan in China, 24 it gets 40 miles to the gallon in the city and costs 25 $3,500. It carries eight passengers, can be used as a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 work truck. 2 The technology is there. And they're not 3 utilizing it until you push them. They aren't going to do 4 it. It's marketing. It's all about marketing and the 5 market here is that people can afford a little bit about 6 more, so they are not going to make the compromise. So 7 you're going to have to be the ones that push this 8 through. 9 This -- these people here are great people in the 10 Valley. And they don't deserve to be the canary in the 11 cage for the rest of this nation. 12 This plan can go back and it can get 13 improvements. It needs to get improvement by reaching to 14 those places that we think we can't reach. We have all 15 this air coming in to our Valley that's polluted. And 16 we're never going to reach the standards if we can't stop 17 it coming in. So why can't we go back and have more of a 18 comprehensive plan. Go back and correct it and make 19 agreements with these communities so that maybe they can 20 carry some of the burden. We're not doing that. 21 This plan can be improved, it just can be 22 improved. We can reach out. We can bring in other 23 technology. We can push a little, push it to the edge a 24 little bit harder. We have to do it. Because by 2024, if 25 we don't make these standards, and there is a possibility, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 we're really going to be in trouble. And nobody is going 2 to be able the breathe. 3 They said there was no revolution coming. It 4 would not be a revolution. There is a revolution. GM has 5 a seven percent drop in their sales. We are losing people 6 in this Valley. These are symptoms. You have a lot of 7 people complaining. Lots of people. And these are just 8 the ones that stand up. You go into a grocery store, and 9 I bet you can't talk to two people that aren't going to 10 say the same thing. We have to stop this now. 11 It's your responsibility. You're the only ones 12 that can push it for us. I'm just asking you to put a 13 little more oomph in it. 14 CHAIRPERSON SAWYER: Thank you. 15 Reverend Parry. 16 MR. PARRY: Good afternoon, I'm Walt Parry 17 speaking for the local health care coalition, a community 18 coalition of organizations working to increase health care 19 access and improve public health. 20 The local District Board had a clear choice and 21 they made a poor choice, as the plan they adopted condemns 22 our Valley residents to 16 more years of deteriorating de 23 public health and many of the thousands of the victims of 24 our infected air do not have the health insurance to even 25 treat their illness that is fostered by further delay in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 making our air less dangerous and less deadly. 2 Fortunately, there are two new members of our 3 local Board from city of Fresno and Arvin that voted 4 against moving towards this poor plan. The plan rejected 5 by our local Board from the beginning was the reliable 6 plan that would meet attainment for all of the community 7 of Arvin in six years and would reach attainment in Arvin 8 from ten to 12 years. This is augmented plan was a far 9 healthier plan than the one adopted by the local Board. 10 The Dr. Jim Lents plan would augment the 11 District's plan and would clean our air ten years faster. 12 It was based upon incentives, new technology, and supply 13 and demand, if we demand it, it will be there. And 14 retrofitting equipment. It also had a needed component 15 that high polluting machinery whose operators who had 16 refused the incentives for retrofitting a new technology 17 would have a 30-day window each year where they might not 18 be able to use their equipment on extreme bad pollution 19 days. 20 When you consider those factors, opposed to 21 endangering the health of our residents, the choice should 22 have been clear to our local Board that is entrusted to 23 the public's health. They are not protecting the public's 24 health with the delay path they have wrongly chosen. We 25 hope that you will predict the public health by rejecting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 this delay plan before you. There is great financial as 2 well as to trauma to are affected by the poor health that 3 is either triggered or caused by our bad air. The 4 financial and human cost for the keeping our bad air is 5 great. 6 Please send this plan back to the drawing board. 7 These diseases triggered or caused by bad air are 8 preventable. And we've talked a lot about preventing 9 disease. Please be on the side of preventing disease, not 10 causing or triggering it and helping it to continue. 11 Business as usual is immoral from the standpoint 12 of the illness that it is causing and the plan before you 13 is primarily business as usual. 14 Thank you. 15 CHAIRPERSON SAWYER: Thank you. 16 Ms. Bautista. 17 MS. BAUTISTA: Good afternoon, Chairman, members 18 of the Board, members of the staff and breathers, fellow 19 breathers. 20 My name is Nidia Bautista, and I'm with the 21 Coalition for Clean Air, a statewide environmental 22 nonprofit with offices here in Fresno, Sacramento and Los 23 Angeles. And what you're receiving right now is a summary 24 of the points we would like to make. And there's three 25 main ones. And, then on the third one, I want to go a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 little bit more indepth. And these are very much in line 2 with the Clearing the Air Report. 3 Let me just state the facts. It seems we're in a 4 society of politics of omission. That report attains the 5 current standard which is 2013, it shows that we can get 6 there 95 percent of the way by 2013. What the ARB staff 7 and the authors of that report are doing, has committed to 8 my understanding, that they would continue to work 9 together to see if we can do it even sooner. Therefore, 10 that's one of the reasons we're asking for you to just 11 take that additional time to actually review the plan, 12 review the opportunities there, before you actually rush 13 to make a judgment and pass a very incomplete plan from 14 our perspective. 15 First of all, we would ask for you to consider 16 the value that retrofit technology can play in improving 17 our air quality. Our local -- the local Air District 18 right now is really not relying on this technology, 19 they're actually using the more expensive route, which is 20 to replace the full engines. But, in fact, there is 21 retrofit technology that's just about to go on the market, 22 hopefully, with the ARB'S verification. And that second 23 handout shows you that technology, that SCR. It's a 24 California based company. We would be supporting 25 California economy here. It's a retrofit that can work on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 many different uses. It's not just solely for trucks, but 2 also for busines, for haulers. Please direct your staff 3 and ask them to investigate this further. We shouldn't 4 rush to judgment without saying that there are no 5 retrofits available. In fact, there will be and there 6 are. 7 Also, other folks have already spoken to this, 8 but the carrots and sticks. Just can't raise it enough. 9 We need those clean air days. Please direct your staff, 10 as you've done already, to research that further. And 11 until they come back to you with that research, then make 12 a decision. Again, don't rush to make a decision without 13 full information. 14 Lastly, this local Air District has really failed 15 the Valley. And I think a lot of the comments from the 16 community members have really illustrated that. But I've 17 added -- that document shows you the many rules that this 18 local Air District has really weakened; whereas, that's 19 not been the case in the South Coast, it's not been the 20 case in the Bay Area. And you have specific examples of 21 that for both, for flaring, for, also for glass furnaces, 22 and even at the ARB recommendations to those rules, this 23 board of the local Air District has chosen not to. And, 24 in effect, has resulted in passing rules that are really 25 just paperwork. They actually don't do anything to clean PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 up the air. And to me, personally, I think that's an 2 assault, both for industries and for those of us who 3 really care about clean air. Because there's nothing 4 worse than having regulatory agencies just push paperwork 5 on us. We're trying to achieve something here. And so 6 the local air district is really thumbing its nose, 7 really, at clean air by doing that. 8 If you look at the specific measures here -- 9 CHAIRPERSON SAWYER: Would you please conclude. 10 MS. BAUTISTA: Absolutely. But I want to just 11 let you know, there was a statement made earlier that a 12 lot of these rules were already in the plan. Let me just 13 say that when the District says it has included all of 14 these suggested measures in the plan, it's very 15 misleading. The plan lists these ideas for further 16 consideration. There is no specific commitment made so 17 far in the plan that they will actually adopt these 18 measures. 19 So please look those over very closely and ask 20 the questions. That's just a sample of what this district 21 has shoved on this community. Even at the request of the 22 ARB to actually do more. 23 You know, a little goes a long way. And these 24 people are looking for a magic bullet. It may not be 25 arriving. My niece is learning that when you collect five PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 cents there, ten cents there, your piggy bank can grow. I 2 ask you to collect those pennies that that district owes 3 us, collect those nickles and those dimes and those 4 dollars that they are hiding in those rules. 5 Thank you very much. 6 CHAIRPERSON SAWYER: Thank you. 7 Mr. Edgar. 8 MR. EDGAR: Chairman Sawyer and Board members, 9 Sean Edgar on behalf of the Clean Fleets Coalition, asking 10 for more carrots and sticks on the menu this afternoon. 11 I serve as Executive Director of a statewide 12 trade association that provides environmental services. 13 Many of you have had the privilege to I've had the 14 privilege to meet and testify before, and I did not come 15 here with a specific plan to either in support or against 16 the plan. I came here to be educated and, hopefully, in 17 the two minutes and thirty-six seconds that I have, 18 perhaps I can add a little education, because ultimately 19 what I would like to see is the same enthusiasm that's in 20 the room on both sides here, being able to help the folks 21 I work for sell the program to our customers. And by that 22 what I mean is that we've managed to solid waste hauling 23 industry, both here in the Valley as well as throughout 24 California. Your Board in 2003 gave us a landmark rule, 25 the first private carrier rule, that at a cost of -- we're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 still calculating -- somewhere between 100 and 300 million 2 dollars, it's in that price range. Many of you are 3 familiar with the rule, because many of you sat on the 4 Board and heard that rule. 5 And I'm here to speak a little bit about what it 6 means to be a practitioner of diesel clean up. I've heard 7 a lot of information relative to technology that may be 8 available now, and what I can share with you is that it 9 takes a month of Sundays to figure out how to retrofit 10 vehicles. It takes a tremendous, significant amount of 11 resources and money. And that's okay. From the 12 standpoint of having the support of your customer to do 13 that. 14 And so we're at the mid-point on a calendar of a 15 seven-year rule that your Board gave us. That rule 16 required the retrofit or replacement of 12,000 trucks 17 throughout the state of California. At the mid-point, 18 we've got about 4,000 trucks that have been retrofit. 19 About 3,000 of those trucks will be dealt with during this 20 year alone. And I would estimate that that cost, many of 21 those will be replacement vehicles, I think that that cost 22 will exceed 50 million dollars this year alone. 23 And because we function as a public utility, we 24 asked your Board to help us point the rule toward the 25 people that we work for. Your Board, as counter to some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 of the perception that your Board or the Air District 2 Board are really industry-friendly, you said, good luck, 3 please go and figure it out and come back to us if you 4 have real problems. We've had some successes. We've had 5 a few failures. 6 But what I'm here to really say to you today is 7 it really comes down to this Air District's Board has 8 really been the force here in the Valley that has helped 9 us sell this program, particularly Supervisor Barbara 10 Patrick, recently departed from this Board, Supervisor 11 Judy Case, you're the folks with the courage that went up 12 in front of -- when we came forward to ask for what was 13 needed in terms of a rate and the ability to our customer, 14 we're a rate-regulated, you're the folks, Supervisor Case 15 and Supervisor Patrick, that provided us the certainty 16 that we need. 17 I think that we need more carrots and sticks if 18 we're going to make this happen. This is a tough task and 19 neither this Air District Board, nor Mr. Sadredin, I 20 think, are a shield, neither are your Board a shield to 21 public health. You take it seriously, and we're a couple 22 hundred million dollars down the road implementing your 23 vision. We don't necessarily like it, but we're doing it. 24 The theory that industry is getting away with 25 murder I don't think is justified. But we're going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 need everybody's enthusiasm here in the Valley and 2 throughout the state to continue to sell the program that 3 you gave us. It's worth the challenge. And we're up to 4 the challenge. But we're right in the mid-point, and we 5 continue to need your help. 6 So with that, thank you, Mr. Chair. 7 CHAIRPERSON SAWYER: Thank you very much. 8 That concludes the public testimony. 9 Ms. Witherspoon, does staff have further 10 comments? 11 EXECUTIVE OFFICER WITHERSPOON: Over the break, 12 Chairman Sawyer, staff did go over the list of recommended 13 regulations in the Districts. Especially Paul Cort's 14 testimony and the table of individual measures he 15 proposed, and they are prepared at this time to walk you 16 through exactly what is in the SIP and where there are 17 regulatory commitments and tonnage commitments assigned to 18 those rules. I think we can take quite a number of them 19 off the table. 20 So, Kurt, you can do that at this time. 21 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 22 CHIEF KARPEROS: Yeah, I'll go in the order that you have 23 in front of you the slides that Mr. Cort used. It was the 24 slide titled at the top "More Could be Done." 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 AIR QUALITY AND TRANSPORTATION PLANNING BRANCH 2 CHIEF KARPEROS: The first item is require flare 3 minimization plans to control NOx emissions from refinery 4 flaring. That is in the plan as a rule commitment in the 5 second quarter of 2009. 6 The second one is require tighter NOx limits for 7 glass melting furnaces. That also is in the plan as a 8 rule making commitment, second quarter, 2008, providing 9 two tons per day of NOx reduction in 2023. 10 The third is require tighter NOx limits for solid 11 fuel fired boilers. The District rule right now 12 represents the technology limit in this, for those types 13 of sources. The District is committed to a further study 14 measure that they would complete in 2009 to explore 15 whether or not there were future cleaner technologies, 16 particularly selected catalytic reduction for those types 17 of sources. 18 The fourth, remove exemptions for certain 19 stationary gas turbines. That is current -- that rule is 20 currently under, under active rule making in front of the 21 District. It's to be completed third quarter in 2007. 22 The request, as I said, was for, related to exemptions. 23 And that rule, as in the plan, produces .7 tons per day of 24 NOx in 2023. 25 Coming up next is adopt a mitigation fee program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 for residential water heaters. The District has a rule 2 for water heaters at this point. They have a commitment 3 in their plan for rule making to be completed the first 4 quarter of 2009. That rule would look for opportunity to 5 push technology beyond what their current rule is, and as 6 we understand it, they are -- there would be, perhaps, an 7 opportunity for a mitigation fee, if the technology to 8 meet that limit that they could potentially set couldn't 9 be met. 10 Requires 70 to 80 percent reductions in emission 11 from composting facilities. The District has adopted a 12 composting rule for bio solids. There -- the issue is 13 effectiveness of the rule. The current rule is about a 30 14 to 40 percent effective, emission reduction effectiveness 15 and the suggestion here was just 70 to 80 percent 16 effectiveness. 17 The District has a rule making commitment, first 18 quarter of 2009, for green waste composting. Again, the 19 issue there would be the effectiveness of the rule. The 20 suggestion calls for 70 to 80 rule effectiveness. The 21 District plan at this point is somewhat less than that. 22 The next one up is require 80 percent, 86 percent 23 control of both wine and brandy production. The District 24 has a commitment in their rule for a backstop rule for 25 brandy facilities, third quarter of 2009. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 I'll take the next two together which are by 2 2013, it says, the operational control concept, the first 3 one for off-road equipment, and the second one for farm 4 equipment. Restrict the operation of the use of the 5 dirtiest equipment starting in 2013. 6 As we described to you earlier, ARB staff is 7 exploring the overlay of operational controls with ARB 8 rule making, the private fleet rules that are in front of 9 you now, how those would play together, what the 10 appropriate role of those types of operational controls 11 could play in an attainment plan. 12 Next is expand applicability of the graphics art 13 rule that is in the plan commitment for rule making, 14 fourth quarter, 2008, provides .1 tons per day of ROG 15 reductions in 2023. 16 The next suggestion is reduce the applicability 17 threshold for large combined animal facility rules and 18 combine aggressive emission reduction targets. 19 The District has a commitment for rule making to 20 consider a new a threshold, second quarter, 2012. They 21 have identified 23 tons per day of ROG reductions in 2023 22 from that rule. 23 Next is increase rule stringency for agricultural 24 irrigation pumps and internal combustion engines. The 25 goal, of course, as articulated in the plan, as we've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 discussed with you, overtime is Tier 4 and 2 electrificiation where appropriate for those categories. 3 The dual path and the concept of incentives in the plan 4 address those types of goals. 5 And then, finally, the revise to NSR, the new 6 source review rule, to reflect the extreme designation and 7 prepare a RACT analysis down to ten tons per year. Those 8 are requirements that are subject to under the extreme 9 classification, and ARB staff would expect the District to 10 be completing that shortly. 11 That completes the list on the suggestion in the 12 testimony. 13 BOARD MEMBER RIORDAN: Thank you. That's very 14 helpful. 15 CHAIRPERSON SAWYER: Other comments from the 16 staff? 17 EXECUTIVE OFFICER WITHERSPOON: No. We'll just 18 wait for your questions, Dr. Sawyer. 19 CHAIRPERSON SAWYER: Okay. Since this is not a 20 regulatory item, it is not necessary to officially close 21 the record. 22 Do I have comments from Board members? 23 Ms. Kennard. 24 BOARD MEMBER KENNARD: I have a couple comments 25 and then some questions. First of all, I'm very, very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 impressed -- I'm so impressed with the number of people 2 that took their time out of their day to come and the 3 numbers of people and the very thoughtful comments. And 4 certainly the community here has been very engaged, not 5 only in the substance of it, but the content as well. 6 By way of background, I live in Los Angeles. I 7 grew up in Los Angeles. But I am not unfamiliar with the 8 Central Valley. My grandparents owned a ranch here and I 9 spent my very hot summers here in Tulare. And it was not 10 only hot, but I remember it not being very clean in terms 11 of the air as well. So I'm extremely sympathetic to the 12 air quality issues here in the Central Valley. 13 And I know that the local District and our staff 14 have worked really hard and with great intent. We're all 15 on the same page and this Board is certainly committed to 16 the mission of cleaner air. But based on the commentary 17 here, I'm sure we've reached that goal. 18 And so my question to staff is, what would be the 19 consequence of us delaying action on this and could we, if 20 there were more time, come up with a more aggressive 21 program? 22 EXECUTIVE OFFICER WITHERSPOON: Ms. Kennard, I 23 would say there's three consequences. 24 The first is the longer you spend on plans, the 25 less you spend on regulations. Of course, we have to do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 both. The second is a conformity consequence which hits 2 later in the fall that there is a drop-dead date by which 3 the regional transportation plans have to with the air 4 plans or the flow of federal funding can be jeopardized. 5 And then the last consequence, which is not so serious, 6 that it eats into the EPA's review time before the 7 sanction clocks begin, though, EPA takes what time they 8 take. We've dealt with that many times before. 9 If Lynn could comment a little bit more on 10 conformity and what the sort of real drop-dead dates are 11 in the Valley, that would be helpful. 12 DEPUTY EXECUTIVE OFFICER TERRY: Sure. Just 13 briefly, ARB has responsibility for the mobile source 14 inventory that must be used under federal requirements for 15 transportation conformity purposes. We adopted a new 16 model at the end of last year and so, by this summer, that 17 model must be used under federal requirements for 18 transportation conformity analyses. And the most 19 immediate impact is relative to new transportation 20 projects that, in the region, that would be added. 21 Whenever that happens, there has to be a new conformity 22 analysis. And the new analysis would be required to use 23 the new emission inventory, the new model. And because 24 the old one is so much older and there's such a 25 disconnect, there is basically no way that a conformity PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 analysis could be accomplished without a new budget, and a 2 new budget can only be approved by EPA if it's linked to 3 an attainment demonstration. And so the timing is, any 4 new projects that would want to be added after the new 5 model must be required to be used, could not. 6 EXECUTIVE OFFICER WITHERSPOON: So realistically, 7 we have about six months before we go critical on 8 transportation budgets and conformity and just have to 9 have all of the documents match up. We, of course, have 10 all the time ahead of us. We work every day on this 11 question of how to accelerate emission reductions and 12 clean the air. 13 BOARD MEMBER KENNARD: Is there a sense, if there 14 was a period of months, not a few months, you said six 15 months, but a few months, that the staffs worked together 16 with the community, do you believe that more can be put 17 into this SIP to accelerate the time? 18 EXECUTIVE OFFICER WITHERSPOON: We don't believe 19 it would accelerate the attainment timetable or change the 20 extreme classification. We do think there's a chance we 21 could chip away here and there, and like the second to 22 last witness talked about pennies in the piggy bank adding 23 up to nickles and dimes. So certainly, you know, anytime 24 you spend, the more effort looking for every last ton, 25 you're going to find some. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 CHAIRPERSON SAWYER: Supervisor Hill. 2 SUPERVISOR HILL: Thank you, Chair. 3 It was interesting, Ms. Kelly Ortega mentioned 4 planning with benchmarks. And I guess I'm going back to 5 the issue of, I feel almost as if I'm in a black box. 6 We're kind of stuck, and if we don't go with the extreme 7 because we're allowed to have the black box, we can't go 8 with something less because there's no provision for a 9 black box or for future technology, which seems to put us 10 in a Catch-22 situation. 11 So, I mean, I'm prepared to not support the plan 12 because of that situation and the difficulty of it. 13 However, the issue of planning for the future, or at least 14 planning some benchmarks or enforcing some benchmarks that 15 could, if that's possible in some way, to be able to go 16 forward with some of the issues that we'll have in the 17 future, some of the technology that we could have or that 18 we have today, looking at the clean air days as a 19 possibility, some of those particular situations that 20 could be enforced, could be implemented in the future, 21 that could cut that attainment date from 2024 to 2017, or 22 something like that. 23 I guess what I'm looking for is some enforceable 24 mechanism to do that. 25 EXECUTIVE OFFICER WITHERSPOON: Supervisor Hill, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 let me, let me help with that, because the plan is very 2 enforceable. And this is a feature in federal law that 3 does not exist in state law. 4 Once EPA acts on the commitments of this Board 5 and the commitments of the local District, they are 6 federally enforceable by EPA and independently enforceable 7 by a citizen lawsuit. So if you promise to take up a rule 8 by a year certain, and you do not, you can be sued. 9 SUPERVISOR HILL: Yes, what I'm saying is, we're 10 not -- then we have until 2024, is what we've -- 11 EXECUTIVE OFFICER WITHERSPOON: No. No. Each, 12 each milestone is independently litigatable and 13 enforceable within the SIP. So every year, there are 14 tonnage commitments, every year there are regulatory 15 commitments. 16 SUPERVISOR HILL: I guess I'm looking at the dual 17 path, which is outside of the SIP. 18 EXECUTIVE OFFICER WITHERSPOON: Okay. That's 19 different. To set limits that are not part of the 20 attainment demonstration, they are not acted upon by EPA 21 and they do not carry. 22 SUPERVISOR HILL: Right, which could bring us a 23 closer date of attainment. 24 EXECUTIVE OFFICER WITHERSPOON: Not to a closer 25 date, but reduce emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 SUPERVISOR HILL: Exactly. 2 EXECUTIVE OFFICER WITHERSPOON: Right. 3 SUPERVISOR HILL: And that's what I am looking 4 for, is something that could enforce that as we go 5 forward, so that we can get those emission reductions at 6 an earlier date than 2024. I mean, the thought of 2024 as 7 a date, and I realize a lot of the comments in the 8 audience, and thank you all for making them, it's been a 9 wonderful presentation. But the issue of that we're not 10 going to have clean air until 2024, I know that's not 11 true. We're going to have cleaner air every year until 12 then. But if we can expedite that process in some form 13 and in some enforceable manner, that can be done working 14 together with the Air District. 15 EXECUTIVE OFFICER WITHERSPOON: I'll let the 16 Chief Counsel try. 17 CHIEF COUNSEL JENNE: Well, one issue you may 18 want to get a certain number of extra tons by a certain 19 date and then we don't get that, get the tons because the 20 technology isn't available, say, the -- what can happen is 21 you get a citizen suit and the, a federal judge would 22 order us to get those tons even if it wasn't particularly 23 feasible. That would mean we'd have to get the some tons 24 somehow, if it meant no drive days or shutting down a 25 certain industry. If the commitment was to get the tons, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 the federal case law is very clear that you have to get 2 them, period. There's no other option besides compliance. 3 So that is the downside of having an enforceable 4 commitment that we aren't, that we don't know for sure if 5 we can get. 6 SUPERVISOR HILL: Just finish up on that. You're 7 talking about the enforceable commitment under the 8 attainment, under the plan and the SIP, I'm talking about 9 outside of that. 10 EXECUTIVE OFFICER WITHERSPOON: He means that to 11 make it an enforceable committment, you have to turn it 12 into tons and a date. And so if we were to do that, if we 13 were to surmise that operational controls could deliver an 14 additional five tons by 2013, let's just say as an 15 example, that's what could be enforced against us by a 16 federal judge. And we would, upon the arrival of that 17 date, either have to those controls or come up with a 18 substitute measure that accomplishes the same emission 19 reductions. 20 SUPERVISOR HILL: Thank you. 21 DEPUTY EXECUTIVE OFFICER TERRY: I am not an 22 attorney, but I'll make one other quick comment on this 23 because the SIP is one thing, and as you point out, there 24 are some constraints that are a very uncomfortable place 25 to be. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 We also have the California Clean Air Act, 2 however. And districts have their own authority to adopt 3 rules and regulations apart from SIPS. And so if the 4 District were to determine that there is an operational 5 strategy, you work through the numbers, that it is 6 possible for the District to adopt a rule to implement an 7 operational strategy, that may or may not meet the 8 constraints of federal SIP planning, but would be a 9 district rule, that, under state law. Is that okay, 10 Counsel? 11 CHIEF COUNSEL JENNE: Yes. 12 CHAIRPERSON SAWYER: Ms. D'Adamo. 13 BOARD MEMBER D'ADAMO: Well, I'd like to throw my 14 two cents in here. 15 I think that as I hear the comments from my other 16 Board members, I'm struck with, you know, are there ways 17 out that we can put some meat on the bones of beating the 18 SIP. I hear a lot about beating the SIP. And wondering 19 if there's a way that we can make it real, rather than 20 just a slogan. 21 And also on the dual path. We can talk about 22 having a dual path, but I think that we, as a Board, need 23 to get a little bit more engaged in what's been going on 24 in the Valley. And I know that the District has been 25 working very closely with the California Partnership on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 it. But what concerns me is that there's so much energy 2 in this room that's been focused on this plan. 3 And I really have to compliment the stakeholders 4 for your comments today and for really sticking with it. 5 You've spent a lot of time before the local Board. Now 6 you're here today. And I'm going to ask and suggest that 7 you maybe do more because this dual path, what's going to 8 get us there on this dual path is some tough rules on our 9 end. 10 Some tough rules through our obligations and also 11 a big ask before the State Legislature and before 12 Congress. And I can say this because I work for a member 13 of Congress, and I am also on the Partnership Board. A 14 hundred million dollars from Congress is a huge ask. And 15 we really do we need to be working together arm in arm, 16 the community groups, the local District, the other 17 stakeholders, and have ARB and the California Partnership 18 in order to pull off a hundred million dollars. So we 19 really, we do have a tough road ahead of us. 20 And what I'd like to do, with your permission, 21 Mr. Chair, is suggest an amendment to the Resolution that 22 might get us a little more clear on this dual path and an 23 opportunity for us as a Board to work more closely with 24 the local district as we move forward. 25 I do think, as I said earlier today, that we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 to be honest about the numbers. And even though I would 2 give anything to come into attainment sooner, I live in 3 the Valley and I have three kids. So for those of you who 4 are moms and grandmothers out there, you know, you really 5 you tug at my heart because I think about it all the time 6 when I look at my three children. But I think we have to 7 be honest when we talk to the public and tell them about 8 what deadline is feasible. 9 And so what I would suggest that we do is adopt 10 the Resolution, but have a serious dual path, have a 11 serious effort at beating the SIP by the following changes 12 to our resolution. 13 First of all, that we give ourselves a six-month 14 deadline, us, the Board here, to determine what more can 15 be done in working with the local District. And basically 16 leave no stone unturned. Go back and look at the list 17 that Mr. Karperos just went through. See if there's 18 anything that can be done to beef up that list. 19 What more can be done on financial incentives? 20 What more can be done at the state level and at the local 21 district level? 22 Secondly, that we direct staff to carefully 23 review the final report that I understand is coming back 24 from Dr. Lents, that will be coming out in, I believe it 25 was August. And to have staff conduct their own PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 evaluation of all feasible additional measures and to work 2 closely with the stakeholders as they review that and to 3 work closely with the local District. 4 Thirdly, I'd like to suggest that we form our own 5 task force through ARB, which I'd be happy to participate 6 in or even Chair. I've done this sort of thing in the 7 past with the agricultural stakeholders and I really felt 8 it was quite helpful. 9 And that that task force would be responsible to 10 go out into the communities and go out and conduct 11 townhall meetings with community members and stakeholders 12 so that we could discuss possible measures with the idea 13 toward getting increased communication and partnership 14 with the communities. 15 And that we invite you all, all the stakeholders, 16 to participate in our regulatory proceedings. I wish you 17 were all in San Diego last month when we were talking 18 about the construction rule. We really do need to hear 19 from you when we adopt those measures. I think it was 20 mentioned 3.7 tons per day, and the on road diesel rule, 21 61 tons per day. That is significant. We need your help. 22 So again, inviting you to participate in our 23 regulatory measures. 24 And anything we can do to facilitate involvement 25 of stakeholders by conducting public hearings in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 Valley. And I do think it would be a good idea when we 2 take on -- take up our on-road heavy-duty truck rule that 3 we consider having a hearing here in the Valley where you 4 all are so impacted. 5 And, then, finally, that the staff summarize the 6 conclusions of this work at an upcoming hearing, maybe in 7 December would be a good time, and to propose whatever 8 revisions to this SIP that would be appropriate at that 9 time. 10 So in conclusion, we move forward today, but we 11 look seriously about improvements at a future date. 12 CHAIRPERSON SAWYER: And how would we give this 13 the force of the commitment of the Board? 14 CHIEF COUNSEL JENNE: Well, what I heard -- and 15 tell me if I've got this right -- is that the Board could 16 move forward today with approving the plan -- or, 17 actually, what it would be, because we haven't approved 18 the statewide strategy yet, it would be delegating 19 delegated aproval after we've done that next week, 20 assuming you do. 21 And then, so this plan could go forward to U.S. 22 EPA. And then we would come back in six months to see if 23 any amendments could be made to strenghen it even more. 24 And that would be submitted as a separate SIP submittal. 25 Is that the gist of your motion? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 BOARD MEMBER D'ADAMO: Yes. So we don't lose 2 time. We move forward. And if there's, you know, more, 3 as someone said, pennies in a jar that we can find, so be 4 it. And we seriously look at those opportunities. 5 CHAIRPERSON SAWYER: I didn't hear you mention 6 the word "operational measures." 7 BOARD MEMBER D'ADAMO: Well, I think that would 8 be included under regulatory. 9 CHAIRPERSON SAWYER: I would certainly want them 10 to be there. 11 BOARD MEMBER D'ADAMO: Under regulatory measures, 12 yes. 13 BOARD MEMBER CASE: If I might ask one question. 14 How does that come enforceable within this Board? 15 I'm a little unfamiliar with the potential for a 16 revision to a SIP, if that's appropriate. My 17 understanding was some of the proposals with the local air 18 district was many of them were not federally approvable, 19 and that was part of the problem. And my discussions with 20 the counsels of government was that a delay would actually 21 start impacting any of their transportation plans as early 22 as August. So that doesn't give us a six-week window -- 23 or a six-month window. That gives us a six-week window. 24 EXECUTIVE OFFICER WITHERSPOON: Certainly, 25 Supervisor Case. That's why Ms. D'Adamo is proposing a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 dual track, so that the existing plan would go forward to 2 not create a conformity problem. And then we would work 3 quickly on finding additional measures to determine who 4 should be adopting them, the Air Resources Board or the 5 local district. And the District, they would bring it 6 before your Board for consideration. And then if it was 7 ours, we would bring them and amend them here. 8 This Board does have the authority to amend the 9 local plan as it comes before or to supplement and revise 10 it with the 45-day notice requirement. But we can't 11 impose measures upon the local district they are not 12 authorized to implement. So it would be a dialogue 13 between us as we do this analysis of how to revise the 14 plan and who takes up the responsibility. 15 BOARD MEMBER CASE: The question really becomes I 16 think in the testimony today in the testimony that 17 happened with the local Air Board was a sense of many 18 individuals giving testimony was fear that it would be 19 discussed and wouldn't go any further. 20 How do we find a way that there's some assurances 21 to them that this is something that no stone will be 22 unturned, that we'll look for the nickels and dimes that 23 makes quarters and dollars? How to we put that in a 24 position -- is there something we can do between this week 25 and next week that would actually put some teeth in that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 process so that they have a sense there's a reality to it? 2 Because I still hear a real concern about will this really 3 happen. Is this just pushing off -- 4 EXECUTIVE OFFICER WITHERSPOON: You certainly can 5 instruct us in your resolution or amendment to Ms. 6 D'Adamo's resolution any suggestion made to us by the 7 community we thoroughly analyze. And as part of our 8 report back to you in December or January in six months' 9 time, we tell you whether we can do it or not. That is 10 what has been going on. 11 I think the community hasn't seen us do it and 12 open the books and show them our analysis and introduce 13 them to our engineers and go through it together. So if 14 we start having those conversations, not just in our 15 cubicles, but out in town halls that we'll be able to come 16 to some more meeting for the minds about what is and isn't 17 feasible and in what time frame. 18 The hard choices on things like operational 19 controls, those will come back to be political questions 20 of do governing Boards, be they this Board or the local 21 Board, feel it's a reasonable imposition upon whomever is 22 being asked to cease their activity here for however much 23 period of time. Those are our tough policy calls. 24 And we, the staff, can't make them for you. We 25 can analyze them for you. If you undertook a certain kind PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 of operation control, how many tons would you get on a 2 single day? If you had 80 percent compliance with it or 3 90 percent compliance, what would that do? We'll tell 4 you. And what would it cost? And then you, the Board, 5 can decide if you want to pursue it. 6 BOARD MEMBER BERG: What would be the 7 enforcement? 8 EXECUTIVE OFFICER WITHERSPOON: If you tell us to 9 pursue it, we would adopt it as a rule. 10 BOARD MEMBER BERG: If you have one day where you 11 say no whatever operations day, what's going to be the 12 enforcement in that 24-hour period to assure it's going to 13 be done? Does it look better on paper, or does it really 14 happen? 15 EXECUTIVE OFFICER WITHERSPOON: It will depend. 16 There are no burn days right now. If you see smoke, you 17 go cut a citation. 18 So we need to figure out how to enforce whatever 19 it would be. That's one of the key issues. 20 BOARD MEMBER CASE: The fireplace rule really 21 allowed the Valley to get to attainment of particulate 22 matter. And, yes, it was very controversial and there 23 were those who really didn't like it. 24 But it became a community enforcement, not just 25 the District's enforcement. Because the community started PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 to recognize the need for people not to light up their 2 fireplaces when the particulate matter was high. So it 3 really became a community issue, not just a regulatory 4 issue. But there was a piece of regulation to it also. 5 CHAIRPERSON SAWYER: Supervisor. 6 SUPERVISOR HILL: Thank you, Bob. 7 A question, this is the follow up to DD's 8 comment. The six-month review, which would take close to 9 that six months and to look at this and analyze it with 10 the stakeholders, I guess what I'm looking for is it 11 doesn't end at six months. And I don't think you were 12 implying that. It would be an annual review and 13 amendments could be initiated at that time on a regular 14 basis, if necessary, after the stakeholder meeting. And I 15 think that's what you're indicating in here. I think we 16 could conceivably get greater results and benefit then 17 changing the attainment date that we are talking about 18 today. 19 EXECUTIVE OFFICER WITHERSPOON: That's a very 20 good point. And Seyed Sadredin indicated they have been 21 put on an annual reporting schedule. And we could do the 22 same thing as your staff reporting on our progress and 23 meeting our SIP commitments every year. 24 SUPERVISOR HILL: I would be happy to support the 25 motion on that basis. I think we can get results and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 emission reductions quicker that way. 2 CHAIRPERSON SAWYER: Professor Sperling. 3 BOARD MEMBER SPERLING: Just one little thought. 4 One thing that's sort of missing from the discussion is 5 what I saw here is a real tension or even mistrust between 6 a lot of the community groups and the District. 7 And it seems like at a minimum, you know, we want 8 to suggest, encourage a better level of interaction and 9 communication. 10 And I don't know if we put that into any 11 amendment or how we handle it. 12 But I think, you know, it's clear that there can 13 be a better relationship here and better input into the 14 process and better sharing of information and so on. So 15 not being experienced in how that actually works, I think 16 it's important if anyone here has any other ideas they can 17 add. 18 CHAIRPERSON SAWYER: Well, I think Ms. D'Adamo's 19 suggestion there should be established a task force to 20 deal directly with the affected community in this area, 21 task force of the Board, that means Board members, is one 22 approach. Probably a very strong way to handle that. 23 Ms. Berg. 24 BOARD MEMBER BERG: I would just like to make the 25 observation and the comment for myself, personally, that I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 just echo all of the Board members' feelings and 2 observations about the community's involvement. 3 I sit up here extremely conflicted, because I 4 know that some of the rules coming up are really, really 5 tough. The off-road rule that is coming up, I'm working 6 with customers, little, small family companies in your 7 neighborhoods that trying to work the numbers on this 8 off-road rule where an $11 million before will have $10 9 million of debt in five years in order to -- they can't 10 stay in business. 11 So I get very conflicted because I have a 12 daughter with asthma. I live in the South Coast Air 13 Quality District. But I learned to roller skate here in 14 Fresno. So I really do sympathize. 15 But on the other hand, I'm really worried about 16 the unintended consequences. I fear, too, as a voting 17 member up here to make sure that somehow the balance of 18 this absolutely cleans up the air first and foremost, but 19 leaves you with an economy that allows you to eat and to 20 make your house payments and thrive. 21 And I really get nervous, because I take this 22 stuff extremely seriously about not overpromising and yet 23 working tirelessly to try to find the solutions. 24 So I concur 100 percent. The more that we can 25 work together -- and I'll volunteer to also be on the task PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 force. But we have to get the information out to you so 2 you can also look at the consequences of what you are 3 asking for. Because we really do have to find the 4 solutions together. And I would really encourage that. 5 So thank you. 6 CHAIRPERSON SAWYER: Ms. Riordan. 7 BOARD MEMBER RIORDAN: I just want to underscore 8 Ms. Berg's intention. 9 And I think that task force means to go out and 10 meet not only with those who have shared their concerns 11 about health and the welfare of people here in the Valley, 12 but the business community, too. So I'm looking at the 13 business community out there to be part of those 14 discussions and those workshops and whatever outreach the 15 task force chooses to do. Because there are many sides to 16 this issue. And when you all come together and you all 17 express yourselves without a lot of emotion but 18 understanding the realism of each side, then is when 19 you're going to best I think create the regulations that 20 are going to have air quality attainment in the Valley. 21 So I encourage everybody to participate. Thank 22 you. 23 CHAIRPERSON SAWYER: Let me understand where we 24 are with the resolution. 25 We have a proposal to amend the resolution, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 basically. And I really think there are two major items 2 there. One is that we would instruct the Board to come 3 back to us in no less than six months with an assessment 4 of additional measures which could be accomplished before 5 the current 2024 deadline. 6 Based upon the list which we were given, other 7 items, the ISRC report, which will be coming in and will 8 be reviewed thoroughly through that time, and I assume 9 working with Dr. Lents and his people as part of that. 10 And that the Board would form a task force of 11 Board members to work with the community, all segments of 12 the community, in this area to review these options, to 13 deal with the local situations at the local sites. 14 And was there more to it? 15 BOARD MEMBER D'ADAMO: I think you've pretty much 16 encapsulated. The only thing I would add is the task 17 force be directed to foster better communication between 18 ARB, the District, and the local communities and 19 stakeholders. 20 That pretty much would incorporate all the steps 21 that need to be taken in between. 22 SUPERVISOR HILL: And annual review. 23 BOARD MEMBER RIORDAN: Annual review. 24 CHAIRPERSON SAWYER: Annual review. 25 BOARD MEMBER RIORDAN: Follow up by staff to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 Board. 2 CHAIRPERSON SAWYER: Mr. Jenne, is that 3 sufficiently precise to be voted upon? 4 CHIEF COUNSEL JENNE: I think it is. And we'll 5 look at the transcript of the proceedings to make sure 6 we've got everything just right before we reduce it to 7 final wording in the resolution. 8 I also want to mention before you vote two 9 additional procedural matters. 10 One is to call for ex parte communications on the 11 record. 12 And second is that because this meeting is being 13 teleconferenced at several different locations, the 14 California Open Meeting laws require that for resolution 15 be voted on by a vote of individual memberships -- roll 16 call vote instead of voice vote. 17 CHAIRPERSON SAWYER: Can we do this in the 18 sequence of voting on the amendments to the resolution and 19 then taking the ex parte and then taking the vote on the 20 resolution? Is that sequence okay? 21 CHIEF COUNSEL JENNE: Ordinarily, you could 22 declare ex parte communications before you take action on 23 anything. 24 CHAIRPERSON SAWYER: Let's go through the ex 25 parte process. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 BOARD MEMBER RIORDAN: Would you like me to 2 start? 3 CHAIRPERSON SAWYER: Why don't we start with 4 Professor Sperling. 5 BOARD MEMBER SPERLING: On June 12th, I had a 6 conference call with Nidia Bautista, Sara Sharpe, both 7 from Coalition for Clean Air; Paul Cort from Earth 8 Justice; Rey Leon from Latino Issues Forum; and Betsy 9 Reifsnider from the Diocese of the Stockton Environmental 10 Justice Program basically talking about the issues that we 11 discussed here for the SIP. 12 BOARD MEMBER CASE: On June 11th, I had a meeting 13 with Daniela Simunovic and Liza Bolanos for the Center of 14 Race, Poverty, and the Environment talking about the ozone 15 plan as it moves forward. 16 BOARD MEMBER RIORDAN: I had a telephone 17 conversation on June 11th with Brent Newell, a lawyer 18 representing the Center for Race, Poverty, and the 19 Environment. And that discussion mirrored very much his 20 testimony here today. 21 I spoke with Catherine Philips of the 22 Environmental Defense on June 12th. And her concern was 23 the communication between the stakeholders and the local 24 district and encouraging us to encourage them to do more 25 outreach. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 CHAIRPERSON SAWYER: On the 9th of May -- 2 MR. NEWELL: I'd like to make a point of order. 3 I want to make it clear for the record I did not talk with 4 the Board member about the pesticide issue at all. 5 BOARD MEMBER RIORDAN: That's correct. And you 6 stated that initially in our conversation. Thank you. 7 CHAIRPERSON SAWYER: On the 9th of May, I met 8 with Jerry Secundy of the California Council of 9 Environmental and Economic Balance. And he presented a 10 broad view of the issues we're acting on today. 11 On the 7th of June, I met with Paul Cort of Earth 12 Justice and Tim Carmichael with Coalition for Clean Air, 13 also joining by phone were Sarah Sharpe and Nidia Bautista 14 of the Coalition for Clean Air; Liza Bolanos, of the 15 Central Valley Air Quality Coalition; and Mary 16 Michals-Rawling of the Merced/Mariposa Asthma Coalition. 17 And they expressed views very similar to what was 18 expressed by the same group here today. 19 Supervisor Hill. 20 SUPERVISOR HILL: On June 12, I had a conference 21 call with Nidia Bautista, Coalition for Clean Air; Sarah 22 Sharpe, Coalition for Clean Air; Kevin Hamilton, Medical 23 Advocates for Healthy Air; and Brent Newell, Center for 24 Race, Poverty, and the Environment; Liza Bolanos, Central 25 Valley Air Quality Coalition; Rey Leon, Latino Issues PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 Forum; and Betsy Reifsnider from the Diocese of Stockton 2 Environmental Justice Ministry. 3 BOARD MEMBER D'ADAMO: On June 12th, I 4 participated in a conference call with Kevin Hamilton, 5 Medical Advocates for Healthy Air; Rey Leon, Latino Issues 6 Forum; Liza Bolanos, California Central Valley Air Quality 7 Coalition; Brent Newell, Center for Race, Poverty, and the 8 Environment on Daniela Simunovic, Center for Race, 9 Poverty, and the Environment. 10 Also on June 12th, a conference call with 11 Katherine Philips with Environmental Defense. 12 Yesterday, here in Fresno, I spoke with Seyed 13 Sadredin with the local area district and also Fresno City 14 Council Member Henry Parera. 15 On June 14th, today, spoke briefly with Tom 16 Crave, Merced Alliance for Responsible Growth regarding 17 the ISSRC report. And these conversations mirrored their 18 testimony today, with the exception of Brent Newell did 19 not speak to me about the pesticide suit. 20 BOARD MEMBER BERG: I participated in a 21 conference call on June 11th with Nidia Bautista, 22 Coalition for Clean Air; Sarah Sharpe from Coalition for 23 Clean Area; and Kevin Hamilton, Medical Advocates for 24 Healthy Air. And our conversation mirrored the testimony 25 that was here today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 CHAIRPERSON SAWYER: Thank you. 2 Do I have a motion to adopt the amendments to the 3 resolution as outlined by Board Member D'Adamo? 4 BOARD MEMBER BERG: So moved. 5 CHAIRPERSON SAWYER: Is there a second? 6 SUPERVISOR HILL: Second. 7 CHAIRPERSON SAWYER: We will take a roll call 8 vote on this. Will the Clerk please call the roll? 9 SECRETARY ANDREONI: Ms. Berg? 10 BOARD MEMBER BERG: Aye. 11 SECRETARY ANDREONI: Ms. D'Adamo? 12 BOARD MEMBER D'ADAMO: Aye. 13 SECRETARY ANDREONI: Supervisor Case? 14 BOARD MEMBER CASE. Aye. 15 SECRETARY ANDREONI: Supervisor Hill? 16 SUPERVISOR HILL: Aye. 17 SECRETARY ANDREONI: Ms. Kennard? 18 BOARD MEMBER KENNARD: I'm going to vote no. But 19 could I explain why I want to oppose this? It's not 20 because I'm not supportive of Ms. D'Adamo's initiatives on 21 the task force. I think it's very important and very 22 positive. 23 But I believe in setting high expectations. And 24 as a fully recovered lawyer, I'm not particularly daunted 25 by the prospect of a conformity lawsuit. I think if we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 don't set the high expectations up front, we're not being 2 aggressive on behalf for the community. 3 SECRETARY ANDREONI: Ms. Riordan? 4 BOARD MEMBER RIORDAN: Aye. 5 SECRETARY ANDREONI: Professor Sperling? 6 BOARD MEMBER SPERLING: Aye. 7 SECRETARY ANDREONI: Chairman Sawyer? 8 CHAIRPERSON SAWYER: Aye. 9 SECRETARY ANDREONI: The motion passes seven to 10 one. 11 CHAIRPERSON SAWYER: Okay. We have now an 12 amended motion at this time we should consider the 13 resolution as amended. 14 Do I have a motion to adopt it? 15 BOARD MEMBER D'ADAMO: So moved. 16 CHAIRPERSON SAWYER: And a second? 17 SUPERVISOR HILL: Second. 18 CHAIRPERSON SAWYER: We're ready to vote. 19 SECRETARY ANDREONI: Ms. Berg? 20 BOARD MEMBER BERG: Aye. 21 SECRETARY ANDREONI: Ms. D'Adamo? 22 BOARD MEMBER D'ADAMO: Aye. 23 SECRETARY ANDREONI: Supervisor Case? 24 BOARD MEMBER CASE: Aye. 25 SECRETARY ANDREONI: Supervisor Hill? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 SUPERVISOR HILL: Aye. 2 SECRETARY ANDREONI: Ms. Kennard? 3 BOARD MEMBER KENNARD: No. 4 SECRETARY ANDREONI: Mrs. Riordan? 5 BOARD MEMBER RIORDAN: Aye. 6 SECRETARY ANDREONI: Professor Sperling? 7 BOARD MEMBER SPERLING: Aye. 8 SECRETARY ANDREONI: Chairman Sawyer? 9 CHAIRPERSON SAWYER: Aye. 10 SECRETARY ANDREONI: Motion passes seven to one. 11 CHAIRPERSON SAWYER: Thank you very much. 12 I want to thank everybody who has come for this 13 part of the meeting today for your participation. 14 I think we will take a short break about five 15 minutes for the court reporter and for the rest of us at 16 this time. 17 (Thereupon a recess was taken.) 18 CHAIRPERSON SAWYER: Agenda Item 7-6-1, report 19 for the Board's information on a staff rule underway to 20 meteorology a requirement of state law. Senate Bill 705 21 authored by Senator Florez, who was here this morning, 22 requires the phase out of agricultural burning in the San 23 Joaquin Valley. However, the legislation provides that 24 the San Joaquin Valley Air District may postpone the 25 restrictions under certain circumstances provided the Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 Resources Board concurs. 2 Over the past several months, staff has monitored 3 the development and adoption of a district rule that 4 includes postpone amounts acquiring concurrence. Staff 5 have kept me apprised of their review following the May 6 17th of the adoption of the rule by the District Board. 7 In addition, I have asked two Board members to 8 work with staff on the review process. Ms. D'Adamo has 9 taken the lead over the past two weeks, and Ms. Riordan is 10 also reviewing staff's assessment. I appreciate your 11 efforts and expect that a response to the district will be 12 forthcoming shortly. 13 What we'll be considering is concurrence with the 14 process for dealing with matters of this sort. 15 Ms. Witherspoon, please introduce the staff 16 discussion. 17 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 18 Sawyer. Staff has just a brief presentation that will 19 describe the statutory requirements and ARB's review 20 responsibility. 21 Shelby Livingston will provide this brief report. 22 (Thereupon an overhead presentation was 23 presented as follows.) 24 AIR POLLUTION SPECIALIST LIVINGSTON: Chairman 25 Sawyer, members of the Board, today's presentation will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 provide a brief update on ARB's review of the latest 2 amendment to and San Joaquin Valley's agricultural burn 3 rule. 4 First some background on the requirements of 5 Senate Bill 705, which was enacted by the Legislature in 6 2003. AB 705 sets forth a series of dates by which the 7 open burning of crops and agricultural waste must be 8 generally phased out and requires the district to revise 9 its rule accordingly to implement these provisions. SB 10 705 allows the district to postpone the prohibitions on 11 open burning where necessary if the district determines 12 that certain criteria are met. 13 --o0o-- 14 AIR POLLUTION SPECIALIST LIVINGSTON: So the 15 criteria -- I'll jump back just a bit. 16 SB 705 allows the district to postpone the 17 prohibition on open burning where necessary if the 18 district determines that certain criteria are met. These 19 criteria are that there are no economically feasible 20 alternatives to burning, that there is a lack of long-term 21 State and federal funding for the operation of biomass 22 facilities or for the development of alternatives to 23 burning, and that the continued issuance of burn permits 24 will not cause or substantially contribute to a violation 25 of a federal air quality standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 In addition to these requirements, ARB must 2 concur with the district's determination. The 3 requirements of SB 705 have been incorporated into the 4 district's rule 4103 which addresses open burning. 5 Prohibitions have been phased in by crop category 6 beginning in 2004. Most recently, in May of this year, 7 the district adopted amendments to address orchard 8 removing and should be a phase down schedule for rice 9 stubble. The District Board also approves some limited 10 postponements. 11 --o0o-- 12 AIR POLLUTION SPECIALIST LIVINGSTON: ARB staff 13 has been following the rule development process and are 14 reviewing the final documentation prepared by the district 15 on the postponements. The district had a public review 16 process in its development of the rule. Therefore, the 17 purpose of determining concurrence the ARB review focused 18 on what the district's determination are consistent with 19 the criteria specified in SB 705. ARB staff will be 20 completing this review quickly, and we appreciate the 21 assistance of Board Members D'Adamo and Riordan in this 22 effort. 23 Thank you. 24 CHAIRPERSON SAWYER: Do Board members have any 25 questions at this time? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 If not, we have two requests to speak, Gabrielle 2 Kirkland and Manuel Cunha. Ms. Kirkland. 3 MS. KIRKLAND: Hello, again. Gabby Kirkland with 4 the California Grape and Tree League. 5 I want to comment in support of this rule and 6 hopefully that the ARB will be able to conditioning occur 7 seen with the rule and that we worked with staff over 8 quite a long period of time almost one year in looking at 9 the different findings that were available and seeing that 10 the bio ass facilities that there wasn't the capacity that 11 could handle all of the orchard removal and then also 12 seeing that there were some types of wood that would be 13 accepted at the biomass facilities. We appreciated 14 staff's time and their effort in considering all the 15 alternatives and doing a thorough analysis. That's it. 16 CHAIRPERSON SAWYER: Mr. Cunha. 17 MR. CUNHA: Board members, staff just wanted to 18 thank you very much looking forward to working on the burn 19 rule as we move forward with the rest of the 705 for the 20 year 2010. Those efforts by on all of us are working hard 21 to reduce burning in agriculture. I appreciate ARB staff 22 working with our staff here at the district, but at least 23 with agriculture and looking at other things as with 24 future comes in to reduce agricultural burning in the San 25 Joaquin Valley as well as I hope down the road. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 We look at other industries other than 2 agriculture that do burn such as our parks and forest 3 prescribed burns because that's part of the major 4 inventories. Sometimes we always excuse the farmers of 5 just being the burning of waste. 6 And again, I want to thank the staff very much 7 for moving forward, and we continually will work with your 8 staff very hard to reduce our burning in this valley. 9 Thank you. 10 CHAIRPERSON SAWYER: I have an additional request 11 to speak from Michael Cort. 12 MR. CORT: It's Paul Cort from Earth Justice. 13 And it's just a quick request. And that is if the Board 14 through this task force evaluates its own analysis of 15 whether there are economically feasible alternatives, I 16 hope that you will do that through a public process 17 recognizing this is final agency action that would be 18 reviewable. I think based on the record before you from 19 the district, there's no way that you could concur. So I 20 expect that you may end up sort of developing your own 21 record to support your decision. Thank you. 22 CHAIRPERSON SAWYER: Excuse me, Paul. 23 Further comments from Board members on this item 24 and the process which has happened to deal with such 25 measures? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 Since there is not a regulatory item, it's not 2 necessary to officialy close the record. And I don't have 3 any formal action on any list. Is that an error? 4 CHIEF COUNSEL JENNE: No. That's correct. This 5 is an informational item the Board does not need to take 6 any action on. 7 CHAIRPERSON SAWYER: Okay. I heard no dissent, 8 so I guess we are comfortable to move through this 9 process. 10 EXECUTIVE OFFICER WITHERSPOON: We need a couple 11 minutes to move staff around. 12 CHAIRPERSON SAWYER: Item 7-6-3, Proposed 13 Amendments to the California Phase III Reformulated 14 Gasoline Regulation. 15 Since the Governor's proposal for a low carbon 16 fuel standard has received so much attention in the media, 17 I want to clarify that this gasoline rulemaking does not 18 deal with greenhouse gas emissions. Rather, we are 19 addressing old business from the phase out of methyl 20 tertiary butyl ether in 1999. State law requires that 21 excess criteria pollutant emissions caused by that phase 22 out be mitigated, which is what staff is proposing today. 23 The low carbon fuel standard is on the immediate 24 horizon and will effect some of the choices refiners make 25 as they decide how to comply with this regulation. But PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 again, our objectives for criteria pollutants and 2 greenhouse gasses will be compatible, and the two will not 3 come into conflict. We're committed to making sure that 4 is the case. 5 Ms. Witherspoon, please introduce this item. 6 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 7 Sawyer. 8 Over the past 16 years, the Board has adopted 9 Phase I, Phase II, and Phase III reformulated gasoline 10 regulations, with the last set of amendments occurring in 11 1999. At that time, the Board was under Executive Order 12 to phase out methyl tertiary butyl ether, or MTBE, from 13 gasoline due to water contamination concerns. At the same 14 time, legislation passed requiring ARB to preserve all the 15 emission benefits we had achieved with the Phase II 16 gasoline rule. 17 The Board did the best it could at the time to 18 mitigate known NOx emission impacts, but we didn't know 19 enough at the time to set appropriate specifications to 20 offset the permeation of ethanol blends through gasoline 21 hoses. 22 Last February, staff presented vehicle testing 23 data to the Board that show that ethanol and gasoline 24 significantly increases evaporative emissions. 25 Accordingly, today we are proposing regulatory amendments PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 to close that gap. Today's proposal modifies the Phase 2 III gasoline regulations and the California predictive 3 model based on latest vehicle test data and a thorough 4 analysis of the scientific foundation for the predictive 5 model. And I might add staff prepared a primer for this 6 on the predictive model. You should have received it. 7 The changes staff are proposing make it very 8 likely that fuel producers will increase the amount of 9 ethanol in gasoline from about six percent today to 10 10 percent in 2010 when producers must use the updated 11 predicted model and mitigate their excess emissions. 12 Unfortunately, we're still not able to quantify 13 the impact of permeation emissions from off-road sources 14 so our work is not finished. We've begun a number of 15 emission studies to help us estimate those impacts and, as 16 necessary, will come back to the Board with a proposal to 17 mitigate the remaining emissions next year. 18 Adrian Cayabyab of the Fuel Section will make the 19 staff presentation. 20 (Thereupon an overhead presentation was 21 presented as follows.) 22 AIR RESOURCES ENGINEER CAYABYAB: Thank you, 23 Ms. Witherspoon. Good morning, Dr. Sawyer -- good 24 afternoon, Dr. Sawyer and members of the Board. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 AIR RESOURCES ENGINEER CAYABYAB: This slide 2 presents the topics I will cover in today's presentation. 3 --o0o-- 4 AIR RESOURCES ENGINEER CAYABYAB: The next few 5 slides provide a brief overview of the staff's proposal. 6 --o0o-- 7 AIR RESOURCES ENGINEER CAYABYAB: State law 8 requires that the Phase III reformulated gasoline 9 regulations which removed MTBE from California gasoline 10 preserve the environmental benefits achieved under the 11 Phase II reformulated gasoline program. 12 Since that time, various studies have found that 13 the presence of ethanol in gasoline increases evaporative 14 hydrocarbon emissions through a process known as 15 permeation. 16 To comply with state law, the reformulated 17 gasoline regulations must be updated to ensure the 18 emission benefits of the program are preserved. 19 --o0o-- 20 AIR RESOURCES ENGINEER CAYABYAB: Staff is 21 proposing to amend the reformulated gasoline regulations, 22 including provisions to mitigate permeation emissions 23 associated with ethanol use in gasoline and update the 24 California predictive model. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 AIR RESOURCES ENGINEER CAYABYAB: Staff expects 2 that the proposed amendments will result in mitigation of 3 the increase in evaporative hydrocarbon emissions caused 4 by the replacement of MTBE with ethanol in California's 5 reformulated gasoline from on-road motor vehicles. 6 Based on meetings with the California refining 7 industry, staff believes that the proposed changes will 8 lead to an increase in ethanol use and a decrease in fuel 9 sulfur levels. Some producers will be able to supply 10 complying fuels by 2010, while others will need until 11 2012. 12 --o0o-- 13 AIR RESOURCES ENGINEER CAYABYAB: Staff is 14 proposing that all fuel producers mitigate the increase in 15 evaporative emissions by 2010 by either producing 16 complying gasoline or using an alternative emission 17 reduction plan. Staff's proposal will require all fuel 18 producers to mitigate emission increases using fully 19 compliant fuel by 2012. 20 --o0o-- 21 AIR RESOURCES ENGINEER CAYABYAB: The benefit of 22 staff's proposal include preserving emission benefits of 23 gasoline use in on-road fleet vehicles, improving and 24 updating the predictive model, making it easier to use 25 higher levels of ethanol in California gasoline, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 providing additional flexibility to fuel producers to 2 comply with the regulations. 3 --o0o-- 4 AIR RESOURCES ENGINEER CAYABYAB: While some 5 producers can make compliant fuel today, others will need 6 to make modifications to their refineries. 7 Based on our individual discussions with the 8 California fuel producers and pipeline companies, staff 9 estimates that the total capital cost of improvement will 10 likely be between 400 million and one billion dollars. 11 This equates to an increase in production cost of an 12 additional .6 to 2.1 cents per gallon. 13 In addition, since ethanol has lower energy 14 content than gasoline, its increased use will result in a 15 site decrease in fuel economy of about 1.3 percent. The 16 combination of production costs and increased fuel 17 consumption in average consumer cost of about 2 percent, 18 or $50 per year. 19 --o0o-- 20 AIR RESOURCES ENGINEER CAYABYAB: I will now 21 provide some additional background on today's proposal. 22 --o0o-- 23 AIR RESOURCES ENGINEER CAYABYAB: The Phase II 24 reformulated gasoline regulations were implemented in 25 1996. These regulations set specifications for eight fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 properties. The regulations provided several basic 2 mechanisms for complying with the regulations: Produce 3 fuel to a pre-determined flat or averaging limits, or use 4 the California predictive model to set an alternative set 5 of limits. 6 These regulations also set an absolute cap for 7 the value of each fuel property not to be exceeded 8 throughout the fuel distribution system. The Phase II 9 regulations also resulted in increased also use of 10 oxygenate methyl tertiary butyl ether. 11 --o0o-- 12 AIR RESOURCES ENGINEER CAYABYAB: Soon after the 13 Phase II reformulated gasoline program was implemented, 14 the presence of MTBE began to be reported in groundwater 15 due mostly to leaking storage tanks. 16 In 1999, the Sheer bill directed ARB to phase out 17 MTBE from California gasoline while preserving the 18 emission benefits of the program. This bill also required 19 that any other oxygenate use in California gasoline must 20 be approved by the California Environmental Policy 21 Council. At that time, the federal reformulated gasoline 22 oxygen content mandate required that if California phased 23 out MTBE, it must be replaced with another oxygenate such 24 as ethanol. In 2000, the Environmental Policy Council 25 approved ethanol as the oxygenate for use in California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 gasoline. 2 --o0o-- 3 AIR RESOURCES ENGINEER CAYABYAB: The Phase III 4 reformulated gasoline regulations were approved in 1999 5 and amended in 2002. These regulations prohibit the 6 addition of MTBE to California gasoline in 2004 and lead 7 to a significant increase in the use of ethanol. 8 In addition, the predicted model was updated to 9 reflect the latest available motor vehicle emissions test 10 data. As part of the Board's approval of the Phase III 11 reformulated gas regulations, staff was directed to 12 investigate the impact of increased ethanol use on 13 evaporative emissions. 14 --o0o-- 15 AIR RESOURCES ENGINEER CAYABYAB: To investigate 16 the impact of ethanol in gasoline on evaporative 17 emissions, the Air Resources Board co-funded a study with 18 the Coordinating Research Council. This study found 19 compared to MTBE or non-oxygenated gasoline, ethanol 20 increases permeation emissions from on-road motor vehicles 21 by 65 percent. 22 Permeation plays a significant role in 23 evaporative emissions. It is the portion of the 24 evaporative emissions where fuel molecules migrate through 25 the polymeric material of the fuel system. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 --o0o-- 2 AIR RESOURCES ENGINEER CAYABYAB: To estimate the 3 effect of ethanol on evaporative emissions, staff 4 incorporated the results from the Coordinating Research 5 Council study in the mobile source emission inventory 6 model, EMFAC. This allowed staff to calculate the 7 increase in emissions for future years. As can be seen 8 from this table, while permeation emissions decreased over 9 time due to fleet turnover, they remain significant for 10 many years to come. 11 --o0o-- 12 AIR RESOURCES ENGINEER CAYABYAB: Ethanol 13 tendency to increase evaporative emissions is not limited 14 to on-road motor vehicles. Ethanol also increases 15 permeation emission from off-road sources such as lawn 16 mowers, pleasure craft, and portable fuel containers. 17 Unfortunately, at this time, there is 18 insufficient information to adequately quantify ethanol 19 effects on permeation emissions from off-road 20 applications. Staff has initiated several studies both 21 in-house and through contractors to quantify this impact. 22 Initial results are expected in early 2008. 23 Staff will return to the Board with recommendations as 24 appropriate. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 AIR RESOURCES ENGINEER CAYABYAB: I will now 2 describe the predictive model. The predictive model was 3 introduced with the Phase II reformulated gasoline program 4 and updated as part of the Phase III effort. 5 The model provides flexibility to take advantage 6 of the unique operating characteristics of the individual 7 refineries while preserving the emission benefits of the 8 program. Today, almost all fuel is produced through use 9 of the predictive model. 10 --o0o-- 11 AIR RESOURCES ENGINEER CAYABYAB: The predictive 12 model is a mathematical equation that relates the emission 13 rates of key pollutants to changes in fuel properties. It 14 is based on a database of over 10,000 emission tests of 15 vehicles that span the range of available emission control 16 technologies. It allows a producer to certify an 17 alternative formulation to the basic flat or averaging 18 limits. To pass, the alternative formulation must achieve 19 the same or better emission benefits for ozone forming 20 hydrocarbon and carbon monoxide, oxides of nitrogen, and 21 potency weighted toxics. 22 --o0o-- 23 AIR RESOURCES ENGINEER CAYABYAB: I will now 24 present staff's proposed changes to the predictive model. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 AIR RESOURCES ENGINEER CAYABYAB: The most 2 significant revision of the predictive model is the 3 inclusion of permeation emissions from on-road sources. 4 As shown previously, permeation in 2010 is about 18 tons 5 per day and 12 tons per day in 2015. 6 --o0o-- 7 AIR RESOURCES ENGINEER CAYABYAB: This slide 8 summarizes the technical update to improve the predictive 9 model. These updates add new emissions test data, adjust 10 the vehicle age distribution, and incorporate a full 11 carbon monoxide model, as well as other improvements. 12 --o0o-- 13 AIR RESOURCES ENGINEER CAYABYAB: Relative to the 14 current model, the effects of the proposed update allow 15 refiners and reducers to offset permeation emissions by 16 altering fuel parameters. In the new model, emissions of 17 hydrocarbons and carbon monoxide are more sensitive to 18 changes in oxygen content. Increasing fuel oxygen content 19 will result in decreases in exhaust hydrocarbon and carbon 20 monoxide. NOx emissions are also more sensitive to 21 changes in fuel sulfur levels. This combination of 22 changes allows compliant fuel to be produced. 23 --o0o-- 24 AIR RESOURCES ENGINEER CAYABYAB: Staff expect 25 that most refiners will comply by increasing fuel ethanol PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 levels from the current 6 percent upwards to 10 percent 2 and reducing sulfur from ten parts per million downwards 3 to levels of about five parts per million. 4 To produce compliant fuels, most refiners will 5 need to make capital investments. Some producers can make 6 complying fuel with only minor modification. Pipeline and 7 terminal operators also need to make modifications such as 8 increasing ethanol storage and blending capacity. 9 --o0o-- 10 AIR RESOURCES ENGINEER CAYABYAB: I will now 11 present staff's proposed amendments to reformulated 12 gasoline regulations. 13 --o0o-- 14 AIR RESOURCES ENGINEER CAYABYAB: The proposed 15 amendments require fuel producers to mitigate permeation 16 emissions beginning in 2010. There are two options for 17 complying: Use the updated predictive model or use an 18 alternative emission reduction plan. 19 In 2010, permeation emissions are estimated to be 20 18 tons per day. Beginning in 2012, producers must use 21 the updated predictive model to certify alternative 22 formulations of reformulated gasoline. 23 --o0o-- 24 AIR RESOURCES ENGINEER CAYABYAB: Staff's 25 proposal includes an alternative emissions reduction plan PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 that will allow a producer the option of creating emission 2 reductions from other sources to mitigate emissions not 3 mitigated through the producer's fuel formulation. 4 The emissions debit that must be offset will be 5 determined through use of the updated predictive model. 6 The burden is on the producer to describe and demonstrate 7 the type of program that will provide the necessary 8 emission reductions. 9 --o0o-- 10 AIR RESOURCES ENGINEER CAYABYAB: Alternative 11 emissions reduction plan applications will be submitted to 12 the Executive Officer for approval and will be available 13 for a 30-day public comment period. This option sunsets 14 in 2012. Producers would be allowed to apply for a 15 one-year extension if circumstances are warranted. 16 --o0o-- 17 AIR RESOURCES ENGINEER CAYABYAB: Staff is 18 proposing to lower the sulfur cap from 30 parts per 19 million to 20 parts per million. Current sulfur levels 20 average about 10 parts per million with 95 percent of 21 production being below 18 parts per million. 22 For ten percent ethanol blends, producers are not 23 expected to certify fuel formulations with sulfur levels 24 above 20 parts per million. The lower cap will increase 25 enforceability, protect performance of sulfur sensitive PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 emission control components, and allow for introduction of 2 new technology. 3 --o0o-- 4 AIR RESOURCES ENGINEER CAYABYAB: As mentioned 5 previously, staff expects producers to increase ethanol 6 content in gasoline and to decrease sulfur to very low 7 levels to offset the NOx increase due to increased ethanol 8 use. 9 At those low levels, the compliance margins are 10 tight. Some refiners may find at times these very low 11 sulfur levels may be hard to maintain. Therefore, staff 12 is proposing to provide a flexibility option that would 13 allow producers to use emissions averaging, provided that 14 they offset the debit within 90 days. 15 The reporting and enforcement of the emissions 16 averaging is very similar to that of the existing sulfur 17 averaging provisions. 18 --o0o-- 19 AIR RESOURCES ENGINEER CAYABYAB: Staff is also 20 proposing to change the maximum ethanol denaturants 21 specification and to adopt the current ASTM 10 test method 22 for determining oxygen consent in gasoline. 23 --o0o-- 24 AIR RESOURCES ENGINEER CAYABYAB: Next, I will 25 discuss the impacts of the proposed amendments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 --o0o-- 2 AIR RESOURCES ENGINEER CAYABYAB: The main 3 impacts of the proposed amendments on emissions are that 4 they mitigate the increase of permeation emissions from 5 on-road sources. They require mitigation as early as 6 possible beginning in 2010. And they help enable the low 7 carbon fuel standard. 8 --o0o-- 9 AIR RESOURCES ENGINEER CAYABYAB: The secondary 10 impacts are that there are small increases in criteria 11 pollutant emissions from additional truck traffic around 12 terminals delivering ethanol and there may be a slight 13 increase in CO2 equivalent emissions from refiners due to 14 additional energy to produce fuel. 15 Overall, due to increased ethanol blending, staff 16 expects there will be a decrease in CO2 equivalent 17 emissions. 18 --o0o-- 19 AIR RESOURCES ENGINEER CAYABYAB: To determine 20 the impacts of proposed amendments on production, staff 21 along with the California Energy Commission held meetings 22 with individual refiners. 23 Staff learned the production could decrease about 24 four to seven percent without refinery modifications. 25 With refinery remodifications, production would likely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 increase about three to ten percent. Refinery 2 modification may take up to four years to be complete. 3 Preliminary modeling results from Mapco, 4 California Energy Commission's modeling consultant, are 5 consistent with staff's estimates for production and near 6 the lower end of staff's estimated cost range. 7 --o0o-- 8 AIR RESOURCES ENGINEER CAYABYAB: The alternative 9 emissions reduction plan was developed to enable earlier 10 mitigation of permeation emissions and to facilitate 11 compliance. The alternative emissions reduction plan 12 allows for mitigation of permeation as early as 2010. 13 Without the alternative emissions reduction plan, full 14 mitigation would be delayed until 2012 to allow for a 15 refinery modification to be completed so there would be no 16 reduction in production. 17 --o0o-- 18 AIR RESOURCES ENGINEER CAYABYAB: To determine 19 the effect of the staff's proposal on cost and production, 20 staff from the Air Resources Board and the California 21 Energy Commission held two rounds of meetings with 22 producers. In the first meetings with producers, staff 23 estimated capital costs to be about 200 to $400 million. 24 Based on the second round of meetings with more 25 of the issues defined, a more precise cost estimate was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 determined. Staff estimated that capital costs would be 2 about 400 billion to $1 billion depending on refinery 3 investments. 4 --o0o-- 5 AIR RESOURCES ENGINEER CAYABYAB: As mentioned 6 before, ethanol use is expected to increase in gasoline. 7 There is about a 1.3 percent fuel economy penalty 8 associated with ethanol blends of 10 percent due to 9 ethanol's lower energy content. This fuel economy penalty 10 could cost consumers about four cents per gallon, or 15 to 11 $30 per year. 12 --o0o-- 13 AIR RESOURCES ENGINEER CAYABYAB: Staff estimated 14 costs associated with implementing an alternative emission 15 reduction plan. Staff used an example refiner having ten 16 percent of California gas production and assumed the use 17 of the accelerated vehicle retirement program for emission 18 credits. 19 In 2010, to mitigate the 1.8 ton per day 20 obligation, the example refiner would have to retire 21 approximately 29,000 vehicles. At a total of $750 per 22 vehicle, this would cost about $22 million, or about half 23 a cent a gallon. 24 --o0o-- 25 AIR RESOURCES ENGINEER CAYABYAB: The economic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 impact to a typical driver would be about 30 to $50 a 2 year. 3 --o0o-- 4 AIR RESOURCES ENGINEER CAYABYAB: A multi-media 5 evaluation was completed in January 2000 for California 6 reformulated gasoline ethanol blends up to 10 percent. 7 The proposed amendments do not change either the flat or 8 averaging limits and do not change fuel formulations to 9 the Extent they would not be covered under the multi-media 10 evaluation completed in 2000. Therefore, staff has 11 determined no new multi-media evaluation is needed. 12 --o0o-- 13 AIR RESOURCES ENGINEER CAYABYAB: I will now 14 provide a brief overview of comments received. 15 --o0o-- 16 AIR RESOURCES ENGINEER CAYABYAB: The first two 17 bullets on the slide identify the comments to delay the 18 implementation of the regulation until 2012 and the 19 removal of the alternative emission reduction plan. Staff 20 feels that the alternative emission reduction plan 21 provides the most adequate solution for early 22 implementation. 23 The next two bullets on the slide identify 24 comments concerning the proposed reduction of the sulfur 25 cap and the sulfur cap implementation date. Cases have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 been made for both raising and lowering the sulfur cap. 2 Staff feel the proposed cap provides adequate 3 flexibility for refiners while sufficiently capping 4 excessive sulfur in gasoline. 5 Extending the sulfur cap compliance date to allow 6 refiners to complete modifications is a proposed 7 modification to the original amendments that will be 8 discussed later. 9 The last two bullets on the slide discuss 10 allowing early blending of higher ethanol blends and 11 consideration of the impact of the California Energy 12 Commission's ongoing refinery modeling work. Staff has 13 proposed modifications to the proposal to allow for 14 earlier blending of higher ethanol blends and will be 15 discussed later. 16 In regards to the Energy Commission's refinery 17 remodeling work, staff felt that the information acquired 18 through individual producer meetings was adequate to 19 estimate cost and production effects needed for this 20 regulation. 21 --o0o-- 22 AIR RESOURCES ENGINEER CAYABYAB: The next two 23 bullets refer to suggested statistical modeling approaches 24 for updating the predictive model. Staff feels the 25 statistical approach used in developing the proposed model PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 updates is most representative of real world emissions. 2 The last two bullets on the slide are requests 3 that ARB work with companies on CEQA and permitting issues 4 and review the regulations as part of the low carbon fuel 5 standard rulemaking. These requests are reasonable, and 6 staff will work diligently to accomplish both. 7 --o0o-- 8 AIR RESOURCES ENGINEER CAYABYAB: To evaluate the 9 scientific basis of the rule, staff contracted with the 10 University of California to conduct a peer review of the 11 amendments. The researchers selected for this process are 12 shown here on the slide. 13 --o0o-- 14 AIR RESOURCES ENGINEER CAYABYAB: The reviewer 15 agreed in general with ARB staff's discussion of the 16 scientific basis supporting the proposed amendments and 17 the staff's estimates of emission impacts. 18 One reviewer suggested to incorporate a more 19 thorough study of the impact of California reformulated 20 gasoline on greenhouse gas emissions, which staff will do 21 as part of the low carbon fuel standard initiative. 22 Another suggestion was to quantify the 23 uncertainty of the model itself. 24 --o0o-- 25 AIR RESOURCES ENGINEER CAYABYAB: The next slide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 presents staff's proposed modifications to the original 2 proposal. 3 --o0o-- 4 AIR RESOURCES ENGINEER CAYABYAB: The following 5 are staff's suggested modifications to the original 6 proposed amendments. 7 Allow third parties who are not producers or 8 importers to enter into an alternative emission reduction 9 plan by obtaining emission reduction offsets on behalf of 10 producers or importers. 11 Implement the lower sulfur cap in 2012, rather 12 than 2010 to allow refiners to complete refinery 13 modification. 14 --o0o-- 15 AIR RESOURCES ENGINEER CAYABYAB: Allow early 16 access to proposed amendments for parties wishing to 17 increase ethanol blending, provided emission impacts are 18 mitigated. 19 Update the predictive model procedures guide to 20 be consistent with the modification to the proposed 21 amendments. 22 --o0o-- 23 AIR RESOURCES ENGINEER CAYABYAB: Next are 24 staff's recommendations. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 AIR RESOURCES ENGINEER CAYABYAB: We recommend 2 the Board approve the proposal with staff's proposed 3 modifications. 4 --o0o-- 5 AIR RESOURCES ENGINEER CAYABYAB: In addition, we 6 recommend that the Board direct staff to: 7 Complete off-road permeation studies that take 8 appropriate action based on the results; 9 Review the regulation as part of the low carbon 10 fuel standard rulemaking; 11 Work with the companies on CEQA and permitting 12 issues; 13 Propose amendments if legislation is enacted to 14 provide alternatives to the alternative emission reduction 15 plan; 16 And develop a certification fuel using ethanol. 17 Thank you very much. That completes staff's 18 presentation. 19 CHAIRPERSON SAWYER: Thank you very much. 20 And I would like to compliment the staff for 21 their superb engineering work on developing this very 22 complicated regulation. 23 During the first month I was Chair of the Board, 24 I sat in on one of the workshops which they held. I know 25 it was one of many workshops held over many years on this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 issue. 2 BOARD MEMBER RIORDAN: Mr. Chairman, speaking of 3 engineering, I think there's somebody still with a cell 4 phone on. And you need in this room to turn it totally 5 off. It's really annoying to the speakers and to me. I 6 guess I'm hearing frequency is really -- 7 CHAIRPERSON SAWYER: It's characteristic in the 8 room the phone has to be fully off, not just silent. 9 BOARD MEMBER CASE: If you have a PDA, it's not 10 just turing off the display. It's keeping your finger on 11 the bottom until you cannot receive any messages going 12 over the air waves. Not even text messages. 13 CHAIRPERSON SAWYER: Thank you. 14 SUPERVISOR HILL: Mr. Chair, I have a question. 15 CHAIRPERSON SAWYER: Let's get the Ombudsman 16 statement first. 17 Madam Ombudsman, please describe the public 18 participation process that occurred while the item was 19 being developed and share and report any concerns or 20 comments you may have to the Board. 21 OMBUDSMAN QUETIN: Dr. Sawyer, members of the 22 Board, this regulation has been developed with input from 23 the representatives from the petroleum, refiners, 24 producers, and importers, automobile manufacturers, 25 environmental justice groups, the ethanol industry, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 federal and local regulators. 2 Staff began their efforts to develop this rule in 3 February of 2006. They held a total of fifteen workshops, 4 most of which were held in Sacramento. On average, 50 5 people attended each meeting with 50 percent participating 6 over the phone. 7 Four expert working groups comprised of expert 8 stakeholders and ARB staff were also formed to aid in the 9 development of this regulation. These working groups met 10 on numerous occasions, usually via teleconference. 11 Also, more than 20 individual meetings were held 12 with stakeholders. 13 The staff report was released for public comment 14 on April 27th, 2007, and ARB staff's released a message to 15 the fuel's list serve notifying its 3438 subscribers of 16 the report availability. Thank you. 17 CHAIRPERSON SAWYER: Board members have 18 questions? 19 Supervisor Hill. 20 SUPERVISOR HILL: Thank you, Mr. Chair. 21 I had one question on slide 45 when you discussed 22 the reviewers agreed in general with ARB staff evaluation. 23 Were there any areas of disagreement? 24 FUELS MANAGER BRISBY: Nobody disagreed. Several 25 reviewers thought we should have gone much further in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 terms of describing uncertainty estimates. 2 We did provide those to our advisor, Dr. David 3 Block from the University of California Davis. He did 4 review it. 5 One person found our spreadsheet difficult to 6 use. 7 But in general, they've just provided areas where 8 they thought we could improve. There was no contradiction 9 to the support of the staff. 10 SUPERVISOR HILL: Thank you. 11 CHAIRPERSON SAWYER: Ms. D'Adamo. 12 BOARD MEMBER D'ADAMO: Have we done anything to 13 look at permeation on fuel tanks as part of this process 14 or ongoing process? 15 CRITERIA POLLUTANTS BRANCH CHIEF SIMEROTH: Could 16 I ask to clarify? Do you mean vehicle fuel tanks? 17 Yes, the Coordinating Research Council studies 18 were done on the vehicle fuel tanks and the associated 19 fuel lines and carbon canister with that. That was the 20 basis for it. 21 We have from our monitoring laboratory division 22 where they looked at the portable fuel containers in the 23 permeation effects there as well. 24 BOARD MEMBER D'ADAMO: Well, I don't mean just in 25 terms of monitoring or incorporating it into the model of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 permeation emissions. But as a regulatory measure to 2 include requirements as part of a certification. 3 CRITERIA POLLUTANTS BRANCH CHIEF SIMEROTH: We've 4 been -- the Stationary Source Division has been in contact 5 with the Mobile Source Control Division. And since we're 6 now in an ethanol world and we're going to stay there, 7 there's some doubt in the past, we're going to be 8 developing and will be proposing a certification fuel with 9 ethanol as the oxygenate to the Board in the future. 10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And to meet 11 the Board's low emission vehicle standards for evaporative 12 emissions, all manufacturers have had to change to very 13 low permeation systems. So that's why you see such a 14 decrease in emissions as time goes by. New vehicles have 15 permeations, but at much, much lower levels than previous 16 ones. 17 BOARD MEMBER D'ADAMO: On slide 16, it listed 18 permeation emissions from off-road sources. Is staff 19 considering regulations for those sources as well? I see 20 lawn mowers and gas cans. 21 CRITERIA POLLUTANTS BRANCH CHIEF SIMEROTH: We'll 22 be entering into a test program with Southwest Research 23 Institute and other interested stakeholders to try to 24 quantify those so we can develop recommendations. 25 At this point in time, the range of estimates PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 goes from I think it's approximately fifteen tons per day 2 to over double that. That's the bad news. 3 The good news is that ethanol and gasoline has a 4 very good effect on reducing exhaust hydrocarbon emissions 5 from these sources. And the uncertainty there is it may 6 be adequate to offset the increase in permeation and it 7 may be only partially adequate. 8 So the test program will be to quantify not only 9 the increase in permeation but also the effect on exhaust 10 emissions from the oxygenated fuels. 11 With that, we can come back with a 12 recommendation. 13 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And new gas 14 cans and new evaporative systems must also be designed 15 with lower permeable materials. That's been addressed. 16 A lot of the issue is what about the older pieces 17 of equipment that are out there and how much emissions is 18 coming from them. 19 BOARD MEMBER D'ADAMO: So the regulation we 20 adopted several years ago on portable containers should 21 address this. 22 DEPUTY EXECUTIVE OFFICER SCHEIBLE: The reduced 23 permeation from normal gasoline in general and when you 24 reduce permeation from gasoline, you also reduce 25 permeation from the ethanol by the same percentage more or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 less. 2 EXECUTIVE OFFICER WITHERSPOON: Ms. D'Adamo, 3 just to be clear. The law requires if there's a net 4 emission increase once we have accounted for evaporative 5 decrease and permeation increase, the Board must adopt a 6 regulation to mitigate it. 7 We've established as a principle the burden will 8 be on the oil industry to make up that difference 9 potentially through an expansion of the alternative 10 emission reduction program, because we're not sure if it's 11 very large they'll be able to do much more to the fuel 12 itself to make up the difference. 13 But in our conversations with environmental 14 groups, they are very concerned that we maintain the 15 principle that if it comes out of the gasoline formulation 16 that the mitigation burden be borne by the fuel industry. 17 BOARD MEMBER D'ADAMO: I would think we can go 18 further in certain cases if it's not -- even if it is a 19 wash, it's an opportunity for us to find further 20 reductions. 21 EXECUTIVE OFFICER WITHERSPOON: We could. Yes. 22 CHAIRPERSON SAWYER: Professor Sperling. 23 BOARD MEMBER SPERLING: Let me just add the 24 comment to Chairman Sawyer about how impressive it is that 25 ARB staff is able to develop a sophisticated model that no PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 one seems to quibble over very much. I mean, I think that 2 really adds to the credibility of the ARB in terms of its 3 scientific capabilities. 4 Couple of small questions. On slide 47 and a 5 couple other places, this idea of what I assume are 6 offsets, allow third-parties who are not producers to 7 enter into alternative reduction plans. Is that what -- 8 what are we talking about here? 9 STATIONARY SOURCE DIVISION CHIEF FLETCHER: This 10 is Bob Fletcher. 11 What we're talking about is an option that would 12 allow, for instance, blenders of fuel that they can add 13 additional ethanol earlier than what we had originally set 14 forth. So the regulation kind of kicks in in 2010 in the 15 2008 and 2009 time frame. What we're proposing is to 16 allow an option to blend at higher ethanol, providing they 17 mitigate the likely NOx increase they get from that. 18 BOARD MEMBER SPERLING: There's no offset program 19 except through the AERP for those couple of years? 20 STATIONARY SOURCE DIVISION CHIEF FLETCHER: 21 Right. There isn't one now. Although the refiners can 22 choose to opt in to use the new predictive model any time 23 they want, they are not required to do that until they 24 start in 2010. 25 BOARD MEMBER SPERLING: We're not setting any new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 precedents with offsets? 2 STATIONARY SOURCE DIVISION CHIEF FLETCHER: 3 Correct. 4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We would be 5 setting the precedent by establishing them as part of the 6 2010 date. But extending it to producers or blenders or 7 other parties, I don't think that would set an additional 8 precedent. 9 What we're saying is we're trying to provide as 10 much flexibility so long as emissions are reduced to the 11 amount required. 12 BOARD MEMBER SPERLING: And the word 13 "flexibility" also interests me. How robust is this model 14 in terms of new liquids, bio butyl, for instance, if that 15 were used or to go above 10 percent, for instance? Is the 16 model robust enough to deal with that? 17 STATIONARY SOURCE DIVISION CHIEF FLETCHER: No. 18 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, well, 19 well, wait a minute. If we have something with bio butyl, 20 we likely have to do an environmental analysis to make 21 sure we didn't have another MTBE problem. 22 STATIONARY SOURCE DIVISION CHIEF FLETCHER: We 23 would also need to -- right now, the only oxygenate that's 24 approved for use in California gasoline is ethanol. So we 25 have to go through a multi-media evaluation and get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 reviewed by the Environmental Policy Council before we 2 could add that in. 3 DEPUTY EXECUTIVE OFFICER SCHEIBLE: But in terms 4 of the performance, if it lowers sulfur and fuel, lowers 5 aromatics, effect the other properties if those are 6 beneficial, then it's an attractive thing to blend into 7 the fuel. If for some reason they move the property in a 8 way that increases emissions, then it means there's a 9 burden if you put it in. 10 BOARD MEMBER SPERLING: Like take butyl, for 11 instance. Could you just take the attributes of butyl and 12 put it into the model? Does it capture all of the effects 13 that you could -- 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It would 15 capture the effects on the T-90, T-50, sulfur, yes. 16 BOARD MEMBER SPERLING: And the 10 percent, going 17 above 10 percent? 18 CRITERIA POLLUTANTS BRANCH CHIEF SIMEROTH: The 19 predictive model was based on ethanol concentrations up to 20 10 percent. The cap for oxygen content is 3.5 oxygen with 21 10 percent ethanol. There was virtually no data above 10 22 percent from the exhaust emissions. 23 The one question on the iso butyl for the impacts 24 and with the model could we characterize the exhaust 25 emissions or partial products that complete combustion PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 from the iso butyl as compared to MTBE and DTB and ethanol 2 we have available to us to develop that model. So a lot 3 of aldehydes, but it would result in or potentially other 4 compounds of interest to us that would result in 5 combustion. We may have to have some additional testing 6 of the vehicle to answer those questions. 7 BOARD MEMBER SPERLING: Thank you. 8 CHAIRPERSON SAWYER: Ms. Berg. 9 BOARD MEMBER BERG: Thank you, Mr. Chairman. 10 On the cost impacts to the consumer, do we have a 11 mechanism which we do follow the price increases of the 12 gasoline to ensure that we're not taking some little 13 mark-up license to increase our gallon of gas? 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, it's 15 very difficult to follow what has caused the price changes 16 we've seen in gasoline. For example, we know the price of 17 crude is a far bigger determinant of what the price of 18 gasoline is going to be. 19 The second largest factor is probably just the 20 production situation at the California refineries and 21 refineries in the U.S. If other refineries go short, we 22 end up supplying some of our fuel to those markets. So 23 it's very hard to trace. 24 The numbers are big in terms of the cost impacts. 25 We're talking about a billion dollars in investment and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 hundreds of millions of dollars a year in consumer 2 expenses. 3 But that I think is a factor of gasoline -- 4 consumers spend $150 million a day on gasoline in 5 California. So even a small percent change in fuel prices 6 or fuel cost ends up being a large number. So everything 7 is big in this area. It's on the order of 50 billion 8 gallons a year fuel cost at current prices. 9 BOARD MEMBER BERG: I would hope we would 10 essentially be attentive to what we're hearing in the 11 marketplace as to what is driving up the cost. And if it 12 is being attributed to the regulation, that we would just 13 be sensitive. Because this is an area that effects the 14 economy a great deal. And albeit a necessary evil, we do 15 need to be sensitive I believe. 16 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We will be. 17 And we follow it closely. And the Energy Commission that 18 will speak next follows it very closely. 19 And part of that is why we're very sensitive to 20 impacts on production. And we have long lead times for 21 final compliance. 22 BOARD MEMBER BERG: I think there is some 23 mistrust. Whether earned or not earned, the perception is 24 there that sometimes the gas is driven by opportunity. 25 CHAIRPERSON SAWYER: I have some additional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 questions on the cost figures on Figure 39. I may not 2 have been listening too carefully, but did I hear 3 something like a half a cent a gallon? 4 STATIONARY SOURCE DIVISION CHIEF FLETCHER: Yes, 5 you did. There is a couple different costs that are 6 involved. There's production cost. There's the cost to 7 consumers, and then there's the cost of the alternative 8 emission reduction plan. And the half-cent is the cost 9 for the alternative emission reduction plan. 10 CHAIRPERSON SAWYER: Okay. And what did you 11 assume about the cost of ethanol? I believe at the 12 present time it's cheaper than gasoline. Did you assume 13 that savings would be passed on to the customer? 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We assume 15 increasing ethanol would not change the price that the 16 consumer pays for the gasoline. And sometimes it will 17 probably decrease the cost, because it will increase 18 production. Other times it may increase the cost. Other 19 times it may be irrelevant. Other factors are setting the 20 marketplace cost. So the ethanol cost is not going to be 21 a factor. 22 So we took a fairly conservative point of view in 23 terms of estimating the cost in that it would not lower 24 the net cost of gasoline paid by the consumer. One will 25 hope over time we'll find the opposite, because biofuels PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 are cost competitive in the long term with petroleum 2 produced fuels that those benefits will be passed onto 3 consumers of fuels. 4 CHAIRPERSON SAWYER: I had an ethanol producer 5 tell me -- it sounded like a commitment -- that the 6 decreased fuel economy which the motorists would 7 experience because of the ethanol having less energy per 8 gallon would be compensated for in the market price of the 9 fuel. Do you think that's likely to happen? 10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It's 11 possible. And like I say, I think if we start producing 12 very large amounts of ethanol like as a national program 13 and it may very well happen. It also depends on what the 14 oil price is and how that compares to oil prices. 15 BOARD MEMBER SPERLING: And subsidies. 16 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Dr. Sperling 17 probably has some people that are more adept at analyzing 18 that than we are. But I don't think they are going to 19 reach a conclusive answer. 20 CHAIRPERSON SAWYER: This of course will be more 21 important with the E85 then with E10. But I suspect some 22 who are schooled will notice a decrease in fuel economy 23 which will come to a shift. 24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And I suspect 25 we will have to have better answers for you when we come PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 with a low carbon fuel standard proposal in a year and a 2 half or so, assuming we do that. 3 CHAIRPERSON SAWYER: Thank you. 4 Ms. Berg. 5 BOARD MEMBER BERG: Just piggy-backing on some of 6 your comments. It would seem that we would also need to 7 start educating consumers that with this formula change 8 and not getting as efficient fuel mileage, that doesn't 9 equate that they're polluting more. What we're saying is 10 they are polluting less because of the formula change even 11 though their gas mileage is poor; isn't that correct? 12 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Polluting the 13 same or less I think would be true. And quite frankly, at 14 one percentage change, it's pretty difficult for a 15 consumer to actually determine that change in fuel 16 economy. 17 We had the same issue when we switched to 18 reformulated gasoline in 1996 and oxygenates were 19 introduced. That was approximately a two to 20 two-and-a-half cent change in fuel economy. It could not 21 be measured at the consumer level. We could see it in the 22 total gross sales of gasoline. 23 BOARD MEMBER BERG: Not the individual? 24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: No. It 25 changes so much from habits and season to season. And on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 a hot day like today when your air conditioning is 2 running, it's a much bigger hit than a one or two percent 3 change in fuel economy. 4 BOARD MEMBER BERG: But just to clarify, we are 5 going to pollute less with this change in reformulation? 6 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Yes, because 7 of the exhaust will go down. And we're eliminating the 8 permeation increase. That's the reduction. 9 CHAIRPERSON SAWYER: Are there any more 10 questions? 11 The first three witnesses are Gordon Schremp, 12 David Hirshfeld, and Sara Brady. 13 Mr. Schremp. 14 (Thereupon an overhead presentation was 15 presented as follows.) 16 MR. SCHREMP: Still afternoon. Okay. Good 17 afternoon, Dr. Sawyer, fellow Board members. My name is 18 Gordon Schremp. I'm the Senior Fuel Specialist at the 19 California Energy Commission. 20 I'll make my comments brief. They'll focus on 21 the cost, refinery modifications, and the project time 22 line associated with this proposed regulation. 23 --o0o-- 24 MR. SCHREMP: Just want to emphasize that these 25 are staff comments approved by senior management and our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 Executive Director. Full approval by the Energy 2 Commission would have to go before a business meeting of 3 the Commissioners, and that has not occurred for these 4 comments. 5 --o0o-- 6 MR. SCHREMP: Our main findings are we agree with 7 the Air Resources Board that we believe the ethanol 8 content in gasoline as a result of these proposed 9 modifications will increase from E60 to 10. 10 We believe there will be sufficient ethanol 11 capacity in the United States and in California to meet 12 this incremental demand for ethanol in this state. And 13 we're looking at an additional 750 million gallons of 14 ethanol on top of the 950 million gallons we currently 15 use. 16 The cost to consumers is in that range consistent 17 with the Air Board staff proposal you just heard today. 18 --o0o-- 19 MR. SCHREMP: And to illustrate that graphically, 20 we're pointing out the lower two pieces are the lowest 21 pieces, the amount of the increased refinery production 22 cost estimate consistent with what the Board staff has 23 concluded, and the very small component of modifications 24 in the distribution infrastructure to be able to receive 25 additional amounts of ethanol at more than 50 distribution PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 terminals. 2 And the final component of which you've asked 3 several questions is the change in the energy density of 4 the resulted fuel and the increased amount of gallons that 5 consumers will purchase to travel the same distance. 6 We've just represented that in terms of cents per gallon, 7 even though that wouldn't change the price of fuel, to 8 illustrate it is a larger component of the total cost to 9 the end user, the consumers and businesses. 10 --o0o-- 11 MR. SCHREMP: Now I'll talk about those refinery 12 modifications. We believe that because the ethanol 13 content will increase, there will be additional NOx 14 emissions that would have to be offset by decreasing 15 sulfur. 16 We believe refiners will have to target certain 17 streams in their refineries. As this graphic illustrates, 18 on the bottom scale you see sulfur content of the typical 19 gasoline used to make gasoline. And most of them are 20 under six parts per million sulfur already. So they are 21 very low in sulfur. What they are going to be targeting 22 are these last three columns that are associated with one 23 of the major gas producing processing units of fluidized 24 catalytic cracking. We believe that's where the refiners 25 will be spending upwards of a billion dollars to make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 modifications to achieve lower sulfur levels. 2 --o0o-- 3 MR. SCHREMP: Now the project time lines 4 associated with this work we've broken up into four major 5 components. Based on meetings we attended with ARB 6 technical staff and a survey that was conducted of the 7 industry in early June, we've obtained information and 8 ranges for these various aspects of a typical project to 9 make refinery modifications. 10 --o0o-- 11 MR. SCHREMP: And taken this information, we put 12 it into a graphic. And it shows on the upper the green 13 bars the lower end of the range or the shorter time period 14 to fully comply. And that does coincide with staff's 15 proposal of December 31st, 2011. And looking at the upper 16 range of the various aspects of a project, you see that 17 the full compliance date is beyond that of December 11, 18 2011. It's actually 13 months beyond. 19 So I think what the Energy staff recommendation 20 is your consideration is to amend the full compliance date 21 of December 31, 2011, to January 31, 2013, a 13-month 22 extension to minimize the risk that some of the refineries 23 will not be fully complying by the December 31, 2011, 24 date. 25 And that concludes my comments. And I will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 happy to take any questions you may have at this time. 2 CHAIRPERSON SAWYER: I guess I need to understand 3 a little bit your recommendation for the extension to 4 allow compliance of old refineries. Am I correct that the 5 refineries have the option to do nothing? Or is that not 6 an option? 7 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, some 8 refiners are -- one or two refiners can produce the fuel 9 with their current configuration without much loss in 10 production or in fact some gain. Others could produce it 11 but would lose productive capability. We don't believe 12 they'll choose that option. We believe they'll invest in 13 the refinery rather than lose the product sales in 14 California. 15 And let me point out that there's one significant 16 difference in the Energy Commission's analysis and what we 17 think the industry will do. The Energy Commission when 18 their time line starts at the time they assume the Office 19 of Administrative Law approves final regulation. And they 20 anticipate that may not occur until early in 2008. 21 Many of the steps refineries have to take, 22 planning and preliminary design of an EIR, that type of 23 thing, they are perfectly capable of doing as soon as they 24 recognize the decision the Board is going to make and the 25 regulations that are going to go through. Our track PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 record with OAL is very good, so they can pretty surely 2 anticipate if the Board decides today what the final 3 regulations will look like in terms of the performance 4 standards. We think they'll start earlier and therefore 5 gain time. 6 The other aspect is that we have a one-year 7 one-time extension that an individual refiner can justify 8 upon a showing that some set of factors beyond their 9 reasonable control requires a delay. We hope the industry 10 doesn't have to use that option. But it's there as a 11 safety valve. 12 So we think that they have chosen to be more 13 conservative. Their interest is ensuring that we have 14 adequate energy supplies that meet environmental quality. 15 Our interest is in ensuring we get the environmental 16 benefits as early as possible. We think our schedule is 17 adequate for the refining industry to meet. 18 CHAIRPERSON SAWYER: I understand the issue of 19 the fungibility of the gasoline. We're assuming that all 20 the refiners will go to 10 percent. Is that essential or 21 is that just likely to happen? 22 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think we 23 think it's likely to happen. It's not essential under the 24 regulation. 25 CHAIRPERSON SAWYER: If a refiner choose to leave PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 their ethanol content where it is now, would they have to 2 o nothing or still be required to make some improvements? 3 DEPUTY EXECUTIVE OFFICER SCHEIBLE: They would 4 have a difficult time meeting the new predictive model 5 with acceptable blends. 6 CHAIRPERSON SAWYER: And there are no refiners 7 that have no oxygenate now in California? 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: They all use 9 oxygenates in almost all of their gasoline. 10 CRITERIA POLLUTANTS BRANCH CHIEF SIMEROTH: 11 There's a very small amount of non-oxygenated gasoline 12 being produced in the Bay Area. But that refiner also 13 produces the vast majority of their gasoline with 14 oxygenates. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And because 16 of the pipeline system, they have to basically get 17 together and decide on what level of oxygenate they are 18 going to use and anything that goes into their 19 non-priority pipelines. Since the majority of the 20 gasoline in California is shipped through those pipelines, 21 they have to decide that for most of their production. 22 CHAIRPERSON SAWYER: Thank you. 23 Mr. Hirshfeld. 24 (Thereupon an overhead presentation was 25 presented as follows.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 MR. HIRSHFELD: Good afternoon, Chairman Sawyer, 2 members of the Board. My name is Dave Hirshfeld. I'm 3 with Mapco, Incorporated. We're a consulting firm in 4 Maryland, and we do work in refining economics. And I'm 5 here today to describe the work that we've been doing for 6 the California Energy Commission to -- 7 --o0o-- 8 MR. HIRSHFELD: -- assess the refining 9 economics -- the effects of refining economics in 10 California refineries of complying with the amended Phase 11 III CARB program and the amended predictive model. 12 --o0o-- 13 MR. HIRSHFELD: So our job for CEC is to estimate 14 economic effects both with the current refining capacity 15 that's available in the state and the capacity that would 16 be available after investment in new capacity, considering 17 the full range of ethanol blending possibilities. 18 --o0o-- 19 MR. HIRSHFELD: Now, my presentation, technically 20 speaking, involves those subjects. But after hearing the 21 presentations immediately proceeding mine, I'll end the 22 suspense and tell you right away that our results to date 23 are generally consistent in terms of refining costs, 24 investment requirements, so on with what you've heard from 25 the CARB staff and Gordon Schremp from CEC. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 In that regard, I feel somewhat I have to say 2 like a stand-up comedian who's been asked to go on after 3 Jerry Seinfeld and Bill Cosby. But anyway, here I am. So 4 I'm going to try to concentrate my remarks today not so 5 much on what our -- 6 --o0o-- 7 MR. HIRSHFELD: -- results and findings are, 8 because I've already told you that, but some aspects of 9 the analysis that we are conducting in hopes that you 10 might find that interesting and useful and understanding 11 of what's going on. 12 --o0o-- 13 MR. HIRSHFELD: At any rate, reducing gasoline 14 under the amended predictive model introduces, as you have 15 heard, the increases in CO2 emissions due to ethanol 16 permeation, which in turn requires that there be 17 improvements in CARBOB quality to offset the emissions 18 resulting from this permeation. 19 In order to bring about that quality improvement, 20 the refiners producing California gasoline are going to 21 use some combination of investing in new process capacity, 22 changing their operations in various ways, and as you've 23 heard, increasing their use of ethanol. In order to put 24 some numbers to all that, what we have done as we were 25 asked is to conduct a fairly standard analysis using a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 refinery linear programing model of the aggregate 2 California refining system. 3 --o0o-- 4 MR. HIRSHFELD: And we have incorporated in that 5 the amended predictive model and given the latest 6 information on the refining operations through the summer 7 of 2006. And we've used that to analyze a family of what 8 we call cases representing different possible refinery 9 operations, both with and without capital investment in 10 due process capacity. 11 So the technical approach, as I said, involves 12 using this model to look at the various study cases that I 13 mentioned at different time periods and degrees of ethanol 14 blending. 15 We also looked a two additional side cases which 16 I think are important to talk about and understand. And I 17 will get to them in a minute or so. But if I can move on, 18 I think if I can find it -- 19 --o0o-- 20 MR. HIRSHFELD: In doing this work, we've looked 21 first at the case of the California refiners undertaking 22 to comply with the amended PM 3 without making any capital 23 investment. This is not to say we necessarily think this 24 is realistic or even feasible. But it represents a good 25 milestone in a logical progression of the analysis. What PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 we found was that if one tries to produce CARB gasoline 2 under the new standard, with no ethanol, the operation is 3 infeasible. Essentially, nobody could do that, which is 4 again consistent with what you've heard. 5 At the current levels of ethanol blending, 6 refiners would sustain in aggregate what we estimate to be 7 a 10 percent loss in their production capability for 8 making CARB gasoline, or what we call for short 9 producability. 10 Somewhere between 7.7 percent ethanol or 2.7 11 percent oxygen and 10 percent ethanol, three-and-a-half 12 percent oxygen is the region of ethanol blending where the 13 refining sector could essentially sustain their production 14 of CARB gasoline in the aggregate. 15 What you are looking at there on that slide 16 number 11 for the results that were returned by this 17 aggregate model that I talked about that considers all the 18 refineries taken together so they were one super colossal, 19 big refinery. 20 --o0o-- 21 MR. HIRSHFELD: However, in fact, these represent 22 a likely overstatement of what would actually happen 23 absent investment. The emissions reductions that are 24 returned by the amended PM 3 are actually highly sensitive 25 to small changes in gasoline properties. More so I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 believe than the mass versions. 2 Working in the same arena is the inherent nature 3 of the kind of refinery remodeling one does where all the 4 models are lumped together to sort of over-optimize the 5 combination of the refineries inside the little box. All 6 working in unison, leads to results being returned that 7 are better than they can really do in practice. 8 And this is heightened by the fact that there are 9 actually significant differences from refinery to 10 refinery. And their capital stock, their technical 11 capabilities, and the properties of the gasoline that are 12 now producing. 13 --o0o-- 14 MR. HIRSHFELD: This shows the dispersion in the 15 average properties, two of the eight predictive model 16 properties of the gasoline produced by the individual 17 refineries in California in 2006. The red circle 18 represents the industry average. This is the volume 19 weighted average of all the refineries in 2006. That 20 represented a compliant gasoline in 2006 under the old 21 model. 22 That read dot -- 23 CHAIRPERSON SAWYER: Excuse me, Mr. Hirshfeld. 24 We appreciate the tutorial nature of what you're 25 presenting. And I find it very interesting. But I'm a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 little bit concerned some of my Board members might -- I'm 2 sure they'd appreciate it if you speed it up a little bit. 3 Cut to the -- 4 MR. HIRSHFELD: Let me get down to it. 5 The point of all this is that the refiners who 6 find themselves in the northeast corner of that diagram 7 are the ones that are going to be disadvantaged initially 8 and find it most difficult to produce under the new 9 amended model without making capital investments. The 10 refiners who are operating more in the southwestern corner 11 will be able to respond more quickly. 12 --o0o-- 13 MR. HIRSHFELD: And so we conducted some side 14 analyses -- 15 --o0o-- 16 MR. HIRSHFELD: -- to estimate what investment 17 will be required of those refineries that would be unable 18 to comply early. 19 --o0o-- 20 MR. HIRSHFELD: And -- 21 --o0o-- 22 MR. HIRSHFELD: -- the results that we found were 23 generally consistent with what you've already heard. 24 Additional refining investment probably in excess of 500 25 to 700 million. Increasing refining costs ranging from a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 penny to a penny and a half. And a loss in fuel economy 2 consistent again with what you've heard on the order of 3 one to one-and-a-half percent as a result of ethanol's 4 fuel. 5 --o0o-- 6 MR. HIRSHFELD: In the longer term, what we find 7 is that given sufficient time to invest, all the 8 refineries will have relatively little difficulty in 9 meeting the CARB standard. They will put in new capital 10 equipment primarily. In additional, desulfurization. 11 Ethanol use will indeed approach 10 percent in most cases. 12 And the standard looks attainable under the new sustaining 13 core production under the new standard looks like a quite 14 reasonable expectation. 15 CHAIRPERSON SAWYER: Thank you very much. 16 Questions? 17 BOARD MEMBER BERG: Just a question of staff. 18 I just want to make sure that in these changes 19 that we're not looking at any material effect to either 20 supply, because now we'll be using that incremental 21 additional gas, or that we're not seeing any supply 22 disruptions or shortages or this really isn't a material 23 issue. 24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We do not see 25 supply disruptions with the mechanisms we've included in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 the time lines. There will be additional consumption 2 associated with less fuel economy, but we're changing the 3 ethanol content by three times the amount of the fuel 4 economy change. So we are adding a new component that 5 doesn't have to come out of the refinery. 6 BOARD MEMBER BERG: Thank you. 7 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We still will 8 be net importers of gasoline. We're not changing that 9 situation. 10 BOARD MEMBER D'ADAMO: In follow up to that, I 11 was going to ask as we come to a close on this that we get 12 a report back from staff on the issue of supply, markets, 13 and technology, just how the regulation is going and the 14 impact that it may have. 15 CHAIRPERSON SAWYER: Thank you. 16 Ms. Brady. And then we'll have Pamela Van Camp, 17 Paul Wuebben, and Cathy Reheis-Boyd. 18 Okay. Mr. Wuebben. 19 MR. WUEBBEN: Good afternoon, Chairman Sawyer, 20 members of the Board. I'm Paul Wuebben, Clean Fuels 21 Officer for the South Coast Air Quality Management 22 District. And we certainly appreciate the opportunity to 23 comment on this very important rulemaking. 24 First and foremost, we want to compliment your 25 staff and commend them for an excellent process. They PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 performed a lot of careful analysis and developed very 2 detailed staff reports. So sincerely we want to give them 3 our strong commodation there. 4 Several short comments. Regarding the sulfur 5 cap, we do strongly support the staff's recommendation as 6 far as it goes. We certainly would not propose any 7 relaxation of the 20 PPM. But we recommend that you take 8 the next additional opportunity for emission reductions, 9 mainly to tighten that 20 PPM sulfur cap down to 10 parts 10 per million. That reduction is an essential enabler of 11 higher fuel efficiency vehicles. The average level of 12 sulfur today is 9 to 11 PPM, so there is already a large 13 compliance margin in the marketplace. 14 Japan and the European Union have both already 15 acted in that regard. California should not concede any 16 leadership in that area. 17 We know that 10 PPM sulfur fuel can be produced 18 at a very reasonable cost with no meaningful impact on 19 gasoline production volumes. And perhaps most importantly 20 there are NOx benefits. I think I had a slide that I had 21 asked to be available so you can see. 22 But essentially, the NOx reductions that we would 23 accrue from that reduction of sulfur would be 5.2 tons a 24 day of sulfur. Very significant for our air basin. An 25 additional 1.4 tons of direct reduction of the SOX PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 emissions. Both vitally important for PM 2.5 attainment 2 as well as ozone. 3 And lastly on the sulfur point, that there's no 4 reason gasoline sulfur should be any different in 5 stringency -- or any less stringent than the diesel 6 specification. Very seriously we want you to consider 7 today to adopt a stricter 10 PPM sulfur spec. 8 Two concerns quickly on the predictive model. We 9 would strongly recommend that you use a 2010 inventory and 10 not 2015. There are several reasons for that. The last 11 five years, we have seen unmitigated -- fully unmitigated 12 hydrocarbon permeation emissions. So we've already 13 accrued that disbenefit. 14 The AERP we've heard reference to. That goes 15 into effect in 2010. The full compliance with gasoline we 16 understood was going to be in 2012, and we're concerned 17 that is closer to 2010 inventory year. 18 The start date of the low carbon fuel standard as 19 you know is in 2010, not 2015. The 2010 inventory is much 20 more closely approximate to the current inventory. So 21 given the public health emergency status of the South 22 Coast air basin -- and I use that phrase very carefully, 23 because our Board just several weeks ago adopted formally 24 an emergency petition to the Governor and to the President 25 to declare the South Coast air basin an air pollution PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 emergency. 2 For that reason, we think a strict inventory year 3 is a very important opportunity to expedite emission 4 controls. When SB 989 was adopted, there was not any 5 expectation at that time there be in effect a 13-year lag 6 implied by this 2015 inventory portion of this question. 7 Specifically now, just turning quickly to the 8 permeation emissions. I just want to say quickly we know 9 very clearly that permeation is an exponential function 10 relative to temperature, not linear; that the staff have 11 proposed a maximum temperature of 87 degrees for the L.A. 12 County portion. If we applied the temperatures they 13 assumed for Fresno, for example, today, there would be a 14 significant shortfall in the inventory. Similarly, in Los 15 Angeles, last year, we had the highest number of 16 consecutive days above 100 degrees. 87 degrees is not a 17 realistic appropriate temperature. 18 We appreciate the hard work the staff have done 19 and understand some of the complexities of the modeling 20 inventory. But we do seriously recommend that you 21 consider -- in fact, we recommend that you adjust the 22 temperature exogenously for L.A. County to at least 95 23 degrees to address that fundamental under-count of 24 permeation emissions. 25 Lastly, just want to turn to the question of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 certification fuel harmonization to underscore its very 2 important relevance. As you I'm sure know, gasoline 3 vehicles today are allowed to certify on cleaner Phase II 4 gasoline, even though MTB has been fully phased out and is 5 no longer available. That represents in fact a de factor 6 relaxation of the standards. And we consider that a major 7 weakness of the current predictive model. 8 So we recommend that the staff be directed by 9 your Board, as I think they reflected in their request, 10 that they be directed as soon as possible to bring a 11 harmonization recommendation. 12 So in conclusion, we certainly appreciate the 13 scope and complexity of the issues today. Today is a 14 tipping point. We are putting in motion a fundamental 15 decision for long-term use of low-level ethanol blend, 16 essentially up to E10. Do not mischaracterize or 17 underestimate the long-term ramifications of that sentence 18 throughout the fuels market. 19 So that I think is a sobering reality that needs 20 to be checked against another important reality. This is 21 a second slide I asked to be brought up. Mainly that the 22 cleanest gasoline -- this goes to a question that Board 23 Member Burg asked a couple minutes ago. Just that in 24 conclusion, the cleanest gasoline in terms of 25 ozone-forming potential, the cleanest gasoline in terms of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 NOx emissions, that cleanest gasoline is zero ethanol 2 gasoline. So we should be under no misunderstanding on 3 that as California moves to low carbon fuel standard. We 4 fully appreciate the potential catastrophes that we face 5 globally with respect to carbon management. 6 CHAIRPERSON SAWYER: Could I ask you to conclude? 7 MR. WUEBBEN: In conclusion, that we certainly 8 fully appreciate the imperative to extend the maximum 9 precautionary principle. For that reason, we hope that 10 you'll seriously consider the recommendations we're making 11 today and appreciate this opportunity. 12 CHAIRPERSON SAWYER: Thank you very much. 13 There are several issues which I think we should 14 have an answer to. That is the 10 PMM sulfur cap, what 15 the down side of that is, I guess. Why that wasn't in 16 there. 17 The use of the 2010 inventory, the 87 degree F 18 point. 19 And the cert fuel we've already heard about, and 20 the staff does have instructions to switch to cert fuel as 21 soon as possible, something which is representative of 22 California fuels. 23 DEPUTY EXECUTIVE OFFICER SCHEIBLE: They are 24 pretty straight forward responses to all of that. 25 The way we govern gasoline specification of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 performance under the predictive model, the cap does not 2 determine the emission reductions. It's the 3 specifications in the predictive model. So we think the 4 gasoline will be averaging around five parts per million 5 sulfur. There are no tons to be gained by lowering the 6 cap from 20 to 10 unless we re-juggle the whole formula. 7 And if we were to remove the mechanism that 8 allows crediting for sulfur reductions between 20 and 10, 9 I think we would be in a very different situation being 10 able to tell the Board produceability could be preserved. 11 Because we're taking away the emission reductions that are 12 essential to offset the impact of oxygen. 13 So our recommendation on the 20 cap was what 14 level do we think it shouldn't be any higher than 15 necessary in terms of the sulfur cap. It's not going to 16 get us more emission reductions. We recommend 20, because 17 we think it's doable. And we don't recommend going to 18 ten, because unlike Europe or Japan that have nationwide 19 or multi-nation markets where those gasoline are out 20 there, we do have to rely on other gasoline sources in the 21 U.S., and the U.S. cap is 80. And the average standard is 22 30. So we would put ourselves in a dangerous situation 23 for no emission gain were we to drive the sulfur cap too 24 low. I can't argue against lower sulfur being good, but I 25 can say it's risky for us to pursue that strategy with no PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 good benefit. 2 Relative to the temperature profile, the 87 3 degrees I believe is called the max is actually a vehicle 4 travel weighted average temperature across the Los Angeles 5 air basin. So you've got vehicles on the coast operating 6 on the hottest hour of the day under the high ozone days 7 in the 70s. You have mid-basin vehicles operating in the 8 mid 80s. You have vehicles operating in the eastern 9 portions of the basin in the 90s and then by 100 degrees. 10 So we do take into account the full range of temperatures. 11 But when you average that out across of the basin where 12 much of the BMT occurs in coastal areas that don't get 13 hot, you get a lower average. 14 The days we selected to pick the averages are the 15 ones that lead to the highest eight-hour ozone, those we 16 must solve in the SIP. We did that around the state. So 17 we thought the emissions produced under circumstances that 18 are the toughest for us to achieve the standard are the 19 ones that we should base the model on. 20 The 2015 year was chosen because we thought it 21 was more important to represent the impacts in advanced 22 vehicles where we want to make sure we have the fuels 23 reflecting the fleet of LEVs and LEV IIs and partial ZEVs 24 that we anticipate. 25 And this actually is taken care of though, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 because when you look at 2010 and the mitigation 2 responsibility, the mitigation responsibility is to 3 mitigate the 18 tons that have come from permeation in 4 that year. It's the percent changes as the vehicle goes. 5 So it self corrects. There is a slight loss of emission 6 effectiveness, but it's very small. It's nothing close to 7 the trends. 8 So we weighed all these factors, and the 9 recommendations we're making we think are fully protective 10 of the environment and meet our obligation. And we have 11 not left any emission reductions out there that we could 12 otherwise get. 13 CHAIRPERSON SAWYER: Thank you. 14 MR. WUEBBEN: Might I just quickly respond? 15 CHAIRPERSON SAWYER: Certainly, Paul. 16 MR. WUEBBEN: On the sulfur issue, as the agency 17 that, of course, permits the refineries in the South Coast 18 air basin, I think we would observe that de-sulfurization 19 does not severely limit a throughput of gasoline 20 production. 21 We agree with the staff that a 20 PPM will in 22 effect achieve a 10 PPM in use. And a 10 PMM standard 23 will achieve a 5 PPM. So this notion of no incremental 24 benefit I would respectfully have to strongly disagree 25 with. There are some incremental benefits. Maybe not as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 large as five tons. I think that could be more -- perhaps 2 more carefully looked at. But there are incremental 3 benefits. 4 On the temperature data, I think we focused on 5 the L.A. County portion. But I think we'll agree to 6 disagree. We do have a strongly held opinion in that 7 regard. 8 And on the 2010, I think that we probably fully 9 described the value of a more stringent inventory. 10 CHAIRPERSON SAWYER: Thank you. 11 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We really 12 don't agree that a 20 cap results in 10. The 20 cap will 13 just cap the maximum sulfur in the system. The changes in 14 the predictive model will produce an average of around 15 five we belive of sulfur. That will get the benefits 16 there. The cap does not drive the system to low sulfur. 17 It's the other aspects of the regulations. 18 MR. WUEBBEN: We're looking for the certainty 19 rather than the expectation. 20 CHAIRPERSON SAWYER: Okay. Ms. Reheis-Boyd. 21 MS. REHEIS-BOYD: Good afternoon, Chairman 22 Sawyer, members of the Board. 23 Again, for the record, my name is Cathy 24 Reheis-Boyd, Chief Operating Officer of the Western States 25 Petroleum Association. And again, we appreciate the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 opportunity to comment. 2 Our industry certainly has gone through a number 3 of significant reformulations with this Board over the 4 years. I think Ms. Witherspoon noted Phases I, II, and 5 III. We've been together dealing with oxygenates, phasing 6 out MTBE, and now of course we have before us finding the 7 solution to the ethanol permeation problem. 8 But we do believe that this latter problem should 9 not be viewed such just as an issue for the oil industry, 10 and that there are others who should share in addressing 11 the ethanol permeation problem. Part of the past year of 12 work certainly has been similar to prior predictive model 13 updates where new vehicle technologies have been 14 incorporated into the model. But as you know, staff was 15 directed to complete two new kinds of tasks, one being to 16 incorporate into the predictive model the permeation 17 effect related to ethanol addition after phase out of 18 MTBE; and secondly was the State's policy directive to 19 increase the amount of ethanol to have more renewable fuel 20 in our transportation fuel. Because of these, we really 21 do view this as significant. This is a significant event. 22 This is not a minor tweak of formulation. And as you've 23 heard, there are large capital investments that will be 24 involved. 25 So I'd like to just summarize our three main PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 recommendations. The first being that we recommend the 2 Board revise the implementation date. Because as you 3 know, the staff has proposed a two-year year-end 2009 time 4 frame without this AERP. We believe you need the full 5 four-year plus time frame. And I think as you heard from 6 the Energy Commission possibly five from the time the 7 regulation's deemed final. 8 Second, we recommend the AERP which is designed 9 in our opinion as really a penalty for companies that 10 can't comply with the two-year implementation date. That 11 it's not really a fair mechanism and that it be replaced 12 with language that would allow for the development of an 13 alternative mechanism for achieving these emission 14 reductions. And we recommend that because we are all 15 involved in what we think are very productive discussions 16 in the Legislature on this topic. And we're hopeful that 17 will be a better mechanism for us to utilize offsetting 18 the ethanol permeation. 19 And then lastly, as we've just seen some of the 20 preliminary findings from what we think is very important 21 work the CEC has done on refining, modeling, and industry 22 impact studies that we know that you will be considering 23 this as an important part of the rulemaking when we get 24 the full report. Because as you know, we've just seen 25 these preliminary results. But this CEC work has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 traditionally with this Board has played a critical role 2 in making sure that you analyze the real impacts to 3 supply, fungibility, and cost from these types of 4 reformulations, and certainly this regulatory proposal. 5 So again, we think you should continue to carefully 6 consider that in this package. 7 And then I would just like to say that, you know, 8 consistent with the carrot-stick theme, AERP is a pretty 9 big stick. And we're hoping that some alternatives can be 10 pursued here that are a little better mechanism to address 11 ethanol permeation as a result of the State's desire to 12 increase more ethanol in the fuel. 13 So what I'd like to do now is Albi Hochhauser, 14 who is the next speaker, I believe, Mr. Chairman, he will 15 also speak to some of the technical issues behind these 16 general comments. 17 CHAIRPERSON SAWYER: Fine. And then Dave Smith, 18 James Uihlein, and Gary Herwick. 19 MR. HOCHHAUSER: Chairman Sawyer, members of the 20 Board, my name is Albi Hochhauser. And I recently retired 21 after 30 years with the oil industry. I've been working 22 with WSPA developing comments on the regulatory package. 23 As you know, we've provided thorough comments. 24 And I'd like to take my time today to describe some of our 25 comments. We support some of the actions that the Board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 is recommending, and we strongly recommend a few aspects 2 be altered. 3 We support the proposed approach to dealing with 4 permeation from off-road engines and equipment. There's 5 just not enough data to write regulations to deal with 6 ethanol's impact. 7 We support the allowance for emissions averaging 8 when sulfur specifications are inadvertently exceeded. 9 Since the program allows no backsliding, there can be no 10 possibility of a negative air quality impact. 11 We also support adding ethanol to the 12 certification fuel. And we urge the Board to do it as 13 soon as possible. Certification fuels should represent 14 real-world conditions. And all the fuels out there 15 contain ethanol. 16 On the other hand, WSPA requests the Board direct 17 staff to revise the currently proposed two-year 18 implementation date to an allowance of at least four 19 years, preferably five, from the time the regulations are 20 finalized. Staff has agreed that we'll need four years. 21 CEC recommended five years to the end of January 2013. 22 This rulemaking is not a minor tweak of 23 regulations. And complying with them will be a major 24 undertaking for the industry with significant investments. 25 We need the historical time period after rule PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 finalization in order to ensure we can comply with the 2 regulations. We've got planning, design, permitting, and 3 construction in refineries and the infrastructure we need 4 to carry out. Don't choose implementation dates that are 5 based on unrealistic expectations. 6 WSPA also requests that the Board direct staff to 7 delete the alternative emission reductions plan and 8 instead include the potential for identifying alternative 9 funding mechanisms. 10 The AERP is really linked to staff's two-year 11 implementation date, and it's a penalty approach. It's a 12 stick approach. We need some more carrot approaches. 13 WSPA doesn't agree with this principle. Set a realistic 14 implementation date. The alternative funding mechanism 15 that Cathy mentioned will be able to offset emissions 16 including those from off-road sources well in advance of 17 the implementation date. 18 Finally, we request that the Board take into 19 consideration CEC's modeling of refinery costs and supply. 20 The Commission and Mapco have provided some initial 21 results this week, and they have not yet received peer 22 review. However, we do see the results support WSPA's 23 position for additional implementation time. 24 CHAIRPERSON SAWYER: Can I ask you to include, 25 please? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 MR. HOCHHAUSER: Yes. 2 We believe that we can achieve the dual 3 objectives of good air quality, along with increased 4 renewable content if we're given a reasonable time to 5 comply, not what's contained in the staff report. Thank 6 you very much. 7 CHAIRPERSON SAWYER: Thank you. 8 Mr. Smith. 9 BOARD MEMBER SPERLING: Could we hear about the 10 year from staff? There was a question about the -- 11 CHAIRPERSON SAWYER: Two years. 12 SUPERVISOR HILL: And any alternatives that may 13 have been used other than the AERP. 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We were 15 trying to meld several things. One is we believe at least 16 some of the industry for a fair bit of the fuel will be 17 able to comply without taking up the entire four-year 18 period. 19 Second, the environmental impact of permeation is 20 occurring today. We believe that there is a compelling 21 case, as you just heard, with the San Joaquin Valley with 22 the South Coast to do everything we can to reduce 23 emissions as early as possible. And we think some can 24 reduce in 2010. Others can reduce through the AERP in 25 2010. And that that obligation is a cost effective way of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 mitigating until we get to the place we want to be, which 2 is where all the refiners have had the necessary 3 investment. So we did it in order to achieve the benefits 4 and mitigate the impact of permeation sooner. 5 If we have an early implementation date with the 6 AERP, we also think the refiners can move earlier to use 7 greater mounts of ethanol. Otherwise, the system will 8 likely move to higher ethanol levels only at the last 9 possible date, because they will have to wait until 10 everybody is ready to blend higher ethanol levels. So the 11 AERP is an essential part of the early compliance. 12 It's really a choice on is it fair to expect the 13 industry to use one of two routes. Either make the fuel 14 complying or an alternative emission reduction plan. I 15 think it's also good that it gives them an incentive to 16 comply as early as possible rather than to plan their 17 projects to the advantage of the full compliance period. 18 CHAIRPERSON SAWYER: Mr. Smith. 19 MR. SMITH: Thank you, Mr. Chairman and Board 20 members. I'm Dave Smith. I work for BP as their Director 21 of Fuel Regulations. 22 You've heard today that due to the model changes 23 that the rule includes some new flexibility, a new 90-day 24 averaging period for unexpected programs that come up in 25 the refineries. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 BP differs from the rest of the industry in that 2 we don't think this flexibility is really needed. And 3 more importantly, it diverges from policies that past 4 Boards have taken when giving refiners additional 5 flexibility by requiring them to pay some additional cost. 6 And I'll get into that later. I might add that to our 7 best knowledge the oil industry didn't originally request 8 this flexibility, but it came from staff. 9 Currently, the rule does have a 90-day averaging 10 period in it that refiners can take advantage of. It also 11 has a variance provision in it that we can take advantage 12 of for such situations. And they are both designed to 13 deal with unexpected problems. 14 The important difference is that the current 15 flexibility comes with a cost. In the case of a variance, 16 you have to pay 15 cents a gallon. In the case of an 17 averaging provision, the current one, you have to actually 18 meet a lower set of specifications. It's a tighter 19 specification for the fuels. This new flexibility that's 20 being proposed doesn't contain any of that. There is no 21 fee. There is no public reporting, no public hearing. 22 And for the averaging, it doesn't require the refiner to 23 meet a lower set of limits. 24 Now, admittedly this flexibility in the rule 25 hasn't been used widely because of those costs. It's been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 a big cost. And refineries have looked at those costs and 2 said actually it would be cheaper just to design the 3 refinery and operate it so we don't have to use this 4 flexibility. And personally, I think that's a good thing, 5 because it drives to really ensure that we get the 6 emission reductions we're talking about. 7 In the past, earlier Boards decided that before 8 they gave refineries this flexibility they needed to have, 9 charge them a cost. And especially for averaging, with 10 averaging, it's harder to enforce an averaging standard. 11 So you're less certain you're going to actually get the 12 emission reductions that you would otherwise get if you 13 didn't use that averaging. And so because of their 14 emphasis on making sure they get those environmental 15 qualities they require and the current averaging standard 16 requires you to meet a lower emission limit. For sulfur, 17 it's actually 25 percent lower. So previous Boards said 18 we really want to make sure if we're going to give these 19 people flexibility, we want to make sure to get the 20 emission reductions. 21 So in summary, our solution would be that you 22 delete this new flexibility. But if you think it's 23 necessary, we think you should follow the practice of 24 previous Boards and assign some cost to this new 25 flexibility so that we'll ensure that the environmental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 benefits will be achieved. Thank you very much. 2 BOARD MEMBER BERG: Mr. Smith, are you concerned 3 about the implementation timetable? 4 MR. SMITH: Yes, I am very much. 5 There's really two things going on here. It will 6 take us three to four years in general. I can speak to my 7 refinery to come into compliance with using the new model. 8 I think the point can be made that this 9 alternative emission reduction plan is an attempt to 10 achieve early permeation emission reductions. And it's 11 all being directed towards our industry. And I think 12 Cathy made the point that there are more than just one 13 party involved in this. There's the ethanol suppliers, 14 the autos, and the oil people. And they all should be 15 playing a part in this. 16 And I really think that it's premature and may I 17 say unfair to require us to make the necessary investments 18 in our refinery to change the fuel and then unilaterally 19 impose this AERP requirement on us by saying we have to 20 comply with this standard in two years. So I am very 21 concerned. 22 BOARD MEMBER BERG: Thank you. 23 SUPERVISOR HILL: Mr. Chair, Mr. Smith makes a 24 good point. Why aren't we looking at the auto industry 25 and others that have some role in this permeation issue? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think we 2 have extensively looked at the auto industry, and they are 3 subject to the strictest standards in the world. 4 SUPERVISOR HILL: On this issue? 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: In terms of 6 their ongoing production, we are. 7 MR. SMITH: May I? I mean, as has been pointed 8 out, they are currently not using an ethanol containing 9 fuel to certify their vehicle. 10 You know, one idea would say, hey, autos, you 11 should start certifying your cars with ethanol-containing 12 fuels in two years. And if you can't, then you should pay 13 something or you should, you know, offset it by scrap. I 14 mean, those are the kind of fairness issues that I think 15 that have been kind of ignored here. 16 BOARD MEMBER D'ADAMO: Could we have staff 17 respond to that on ethanol certification? 18 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Tom 19 Cackette. 20 We have work underway already to look at the 21 issues involved in adopting certification fuel that's 10 22 percent ethanol for everything. It's going to differ as 23 Dean Simeroth indicated for a lawnmower perhaps 24 certification and for car certification. 25 There are a number of issues we have to look at. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 The fuel can make the existing standards more stringent. 2 Is it still feasible we gain some emission reductions? If 3 it's not feasible, we might have to relax the standard 4 numerically to make it go along with the feasibility. But 5 once the State appears to have moved to an E10 fuel for 6 commercialize use, we plan on making the certification 7 fuel E10. 8 Now, whether or not it's appropriate to do it 9 even quicker and make people do an AERP as a result, if 10 that should be an implication, I don't know. We certainly 11 aren't far enough downstream to consider that yet. 12 BOARD MEMBER D'ADAMO: Would you have to come 13 before us in the requirement of -- 14 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes. 15 It's in the regulation now what the test fuel is. And the 16 test fuel is a non-ethanol -- it's MTBE fuel, basically. 17 It's not the fuel that's commercially being sold today. 18 It's what the fuel used to be when it was commercially 19 sold five years ago or so. 20 BOARD MEMBER D'ADAMO: So assuming that you 21 determine that a rule needs to come to us, what's the 22 quickest time frame that you would come to us? 23 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Our 24 first decision is whether we know enough to do this in a 25 global way for all of the different gasoline powered PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 vehicles that we certify, jet skis, lawnmowers, forklifts, 2 things like that, as well as cars, or whether we will come 3 at a piecemeal. We are looking at the cars first. 4 And I think it probably will have to come in 5 pieces, because we don't have enough information yet on 6 the non-road gasoline vehicles to understand the 7 interaction of the evaporative emissions with the tailpipe 8 emissions. We understand that well with the on-road 9 gasoline cars. So it's going to be -- the real issue is 10 going to be whether or not they can meet the zero evap 11 standard I think for which about half the cars ultimately 12 have to be with this test fuel or whether we have to 13 change the procedure some way to accommodate more 14 emissions from this fuel. It won't be an increase in 15 emissions, because this is the real emissions are 16 occurring in the fuel today. But whether we can actually 17 reduce them and using this test fuel or not is the issue. 18 BOARD MEMBER D'ADAMO: What's the time frame 19 though, the soonest it would come before us? 20 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: We 21 started working on this the last three or four months once 22 the E10 issue seemed to be solidified with the change in 23 the national law and the interest in low carbon fuel 24 standard and the progress on the predictive model. So, 25 you know, it's typically -- the range for regulations is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 one to two years. So we're partly into the first year. 2 It depends how many issues come up. 3 We haven't gotten to the point of having the 4 chart that gives the date that we think we'll come to the 5 Board yet. Real shortly, we know that. 6 MR. SMITH: Thank you. My comments are around 7 the sulfur flexibility and the idea that you'd add a cost 8 to it so that it would ensure that we gain the 9 environmental benefits that you truly are looking for. 10 Thank you very much. 11 CHAIRPERSON SAWYER: Thank you. 12 Mr. Uihlein. 13 MR. UIHLEIN: Good afternoon. I'm Jim Uihlein 14 representing Chevron. 15 I just want to start off saying that Chevron 16 supports the objectives of the proposed changes. And our 17 company is working very hard currently to ensure that we 18 comply with these changes as soon as we possibly can. 19 At the same time, we do see that the 20 implementation of the objectives of these changes is less 21 than perfect. In particulate, we support WSPA's position 22 on the timing in the AERP. And it's important to note 23 that the real compliance date for these regulations is 24 12-31-09. After that, we're forced to pay a penalty 25 simply for our inability to perform the impossible. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 After that, not only is that two-and-a-half years 2 that we roughly have to comply with the regulations 3 fundamentally unworkable, we've also already seen resource 4 constraints both in terms of people, availability in 5 engineering contractors and materials and fabrication 6 ability that have resulted already in six-month delays in 7 executing projects just in our normal operations. And 8 being forced to operate in an accelerated compliance 9 deadline is just going to increase the competition for the 10 available resources and make the problem worse. 11 While we do have a problem with the AERP as 12 basically being a penalty in nature, we do support ARB 13 doing everything that it can to enable increased ethanol 14 blending sooner rather than later and we're pleased to see 15 language in the proposed Resolution that allows for such 16 measures to be added to the regulation. 17 Enabling additional ethanol blending as soon as 18 possible, while making sure that we fully offset any 19 emission impacts of that ethanol blending, is the best way 20 to see the benefits as quickly as we can. 21 We also support emissions averaging, the topic of 22 our last speaker. We see that as providing useful 23 flexibility, while by its very design it ensures emissions 24 are preserved. 25 We also encourage the Board to include T-50 as a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 trigger for that emissions averaging similar to the 2 treatment that's currently being given for sulfur due to 3 sensitivity for T-50 in an E10 type of environment. 4 Finally, we also support the previous statements 5 about the need for fixing the certification fuel. Eight 6 years ago, this Board approved the regulations that phased 7 out MTBE from the fuel, and yet today we still see the 8 bulk of the cars that are being sold in California are 9 certified using an MTBE containing fuel. Thank you. 10 CHAIRPERSON SAWYER: Thank you. 11 Professor Sperling. 12 BOARD MEMBER SPERLING: It is getting late, I 13 know. One short question. I guess I don't understand 14 this compliance date controversy so much. You know, you 15 say and the others seem to say you want to accelerate the 16 use of higher ethanol blends. And if the low carbon fuel 17 standard comes into the plan, that will be taking effect 18 the same time that this rule takes effect. You know, it's 19 January 1st, 2010. 20 I guess I'm thinking -- and given that you are 21 going to have the same CARBOB to be able to go into 22 pipelines and the common carrier pipelines, is there 23 anyone that's not going to meet -- I mean, let me ask it 24 again. It seems look almost everyone is expecting to meet 25 that date anyway from all the expressions that I hear of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 plans. 2 MR. UIHLEIN: Which date? 3 BOARD MEMBER SPERLING: The 12-31-09. 4 MR. UIHLEIN: The 12-31-09 is when we're mandated 5 to use the new model. That means that we have to offset 6 permeation. And because of the way the model is 7 constructed as was alluded to before, it kind of steers us 8 towards E10 even though it stops well short of a mandate 9 of E10. 10 The thing is that we can't do -- as CEC presented 11 and WSPA has been telling you, we can't do a refinery 12 project that quickly in order to be able to comply in that 13 time frame. And so that's why that stick approach of 14 penalizing us because we just simply can't do a project 15 that quickly comes into play that takes us to the second 16 compliance date where even that option runs out. 17 So realistically, I think maybe the way to think 18 about it is while we're getting steered towards E10 by the 19 new model, that's not the real purpose of the new model. 20 But there's other mechanisms that can be implemented that 21 could help enable E10 because of the problems that you 22 have in trying to offset emissions within the current 23 model and even exist to a certain extent in the new model. 24 It's just if you spend enough money on your refinery, 25 eventually the new model will enable you to offset it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 fully within the model. Whereas, the current model, 2 there's no way for a refiner practically to do it within 3 the model just through fuel reformulations. 4 EXECUTIVE OFFICER WITHERSPOON: Do you get it? 5 BOARD MEMBER SPERLING: I think so, but it's not 6 the same thing as Jim is saying. 7 CHAIRPERSON SAWYER: Mr. Herwick. And then 8 Darren Stroud, Bill Jones, and Tom Koehler. 9 MR. HERWICK: Good afternoon, Dr. Sawyer, members 10 of the Board. My name is Gary Herwick. I'm with 11 Transportation Fuels Consulting. And I'm here today 12 speaking on behalf of the Renewable Fuels Association, 13 national representative for the U.S. ethanol industry. 14 I appreciate the opportunity to add some comments 15 here to what we've already provided to you in written 16 form. And first I'd like to compliment the staff on 17 handling the complex and time-consuming task of updating 18 the predictive model with all of the available new 19 emissions data that also comprehensive permeation evap 20 emissions and also accommodates 10 percent ethanol blends. 21 The dual model proposed by RFA models Tech 4 22 vehicles -- that is, 1986 to 1995 higher emitters 23 differently than normal vehicles that are complying with 24 the applicable standards. 25 It isn't a surprise that higher emitters respond PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 differently to fuel properties such as ethanol and 2 aromatic hydrocarbons. The auto oil program demonstrated 3 that several years ago. 4 Modeling these emitter groups separately as the 5 dual model proposes just improves the accuracy of the 6 predictive model so it more closely matches in-use 7 vehicles emissions performance. 8 The dual model approach is not new. It was 9 proposed about a year-and-a-half ago by the RFA within the 10 predictive model workshop process. But unfortunately, 11 the response focused too much on the NOx response to 12 ethanol and, you know, not enough on the improved accuracy 13 of all the model criteria pollutant emissions and also the 14 fuel properties. 15 And as a result of that, RFA contracted the Air 16 Improvement Resource and also ICF International to 17 re-write the predictive model using the dual model 18 approach and to conduct a complete side-by-side analysis 19 of the two model outputs. 20 What we learned from the analysis that is the 21 dual model is not only a more accurate model that 22 preserves the emission benefits of the California 23 reformulated gasoline program, but it also would provide 24 increased refining flexibility and help enable 10 percent 25 ethanol. We believe the increased in refining flexibility PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 provided by the dual model would result in increased fuel 2 supply by facilitating the blending of 10 percent ethanol 3 sooner. The staff proposal would make it more difficult 4 to blend 10 percent ethanol and might even keep it at 5 either 5.7 percent or at 7.7 percent. 6 Earlier implementation of 10 percent blends via 7 the dual model approach would provide increased dilution 8 of gasoline properties such as sulfur and aromatic 9 hydrocarbons. And also according to our preliminary 10 calculations, that would improve off-road emissions as 11 well. 12 I don't believe the gasoline sulfur levels would 13 change significantly with the dual model. There's not a 14 lot of room to reduce sulfur from the current level of ten 15 parts per million, which just about matches the worldwide 16 fuel charter specification of ten parts per million. I 17 wouldn't expect sulfur levels to be increased beyond 18 current levels, but even a small increase could be 19 partially offset by the dilution with 10 percent ethanol. 20 The right way to keep sulfur levels low is by reducing the 21 sulfur gap to the lowest feasible level. 22 Several important changes have been proposed such 23 as a lower sulfur cap, revising the sulfur NOx curb, and 24 the dual model. All of these deserve further 25 consideration. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 We would recommend allowing additional time to 2 properly consider these changes, perhaps an extra couple 3 or three months, another workshop, before the Board gets 4 the opportunity to approve. Making the model as accurate 5 as possible is in everyone's best interest to preserve the 6 benefits of the RFG program. 7 Thank you very much. 8 CHAIRPERSON SAWYER: Thank you. 9 Mr. Stroud. 10 MR. STROUD: I think it's almost good evening. 11 So I'll say good evening, Mr. Chairman and honorable Board 12 members. My name is Darren Stroud. I'm Corporate 13 Environmental Council for Valero Energy Corp. 14 Valero owns and operates two refineries in 15 California, the Valero Wilmington refinery and the Valero 16 Benicia refinery. The Benicia refinery produces about 25 17 percent of the clean burning transportation fuels in the 18 Bay Area market. And the Wilmington refiner produces 19 about 14 percent of the clean burning transportation fuels 20 in the southern California market. I make those 21 statements because it's going to be important in a minute 22 when I address a specific point. 23 We appreciate the opportunity to testify before 24 you this evening regarding the amendments to the 25 California reformulation gasoline regulations. And Valero PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 incorporates and supports with its testimony the testimony 2 of WSPA as far as written correspondence, meetings, and so 3 forth. 4 We have reviewed the proposed amendments, and we 5 think it's going to require significant changes to our 6 refineries in order to meet the requirements of the 7 regulation. 8 We've met with staff on two separate occasions to 9 address our concerns regarding the concerns we have with 10 the regulations concerning length of time needed to comply 11 with the regulation, cost, potential loss of production, 12 fungibilty of the system, changes needed to the common 13 carrier and so forth. 14 And we appreciate staff's willingness to sit down 15 and listen to us and hear our concerns. Unfortunately, we 16 don't think all of our concerns have been adequately 17 addressed in the particulate regulation. And I will just 18 briefly address three main points, because I will not 19 reiterate some of the points that WSPA and some of the 20 others have made, particularly regarding the length of 21 time the refineries need in order to comply with these 22 regulations. 23 You heard CEC saying that based on their analysis 24 they see us needing about five years. We see that we need 25 between four and six years. The reason for that is right PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 now trying to permit major refinery modifications in 2 California it takes two-and-a-half to three years to get 3 through that process. You've got CEQA to deal with. You 4 have the local permitting as far as air districts. You've 5 got your local cities. You have your counties. You have 6 your Coastal Commissions and so forth. So even if we 7 could do the construction and install the equipment we 8 need in order to comply with these regulations within 9 two years, the permitting would put us outside that window 10 in the first place. So that's a major consideration that 11 needs to be taken into consideration here. 12 Also what we're seeing is that right now it's 13 taking almost three years for project design, funding, 14 procurement and construction even on an aggressive basis. 15 And the reason for that is due to high work backlogs and 16 engineering and construction firms, a very tight labor 17 market, and land availability issues particularly in 18 southern California. So we see that each refinery is 19 going to need at least until 2013 in order to make the 20 modifications necessary to comply with these regulations. 21 Secondly, regarding the AERP. The AERP in our 22 opinion is very punitive, and it's a penalty. And when 23 you look at the numbers associated with that, it's quite 24 striking. 25 I did a rough back-of-the-envelope calculation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 based on the testimony of one of the CARB staff members 2 where he mentioned that if you consider 10 percent of 3 refinery production in California, that would amount to 4 under a car scrapping scheme of 29,000 cars and a cost of 5 $22 million. For our refineries, if we were to go that 6 route, which Benicia is 25 percent of the market, that 7 would amount to 72,500 cars that would need to be scrapped 8 at a cost of $55 million. And for our Wilmington 9 refinery, 14 percent of the market, that would amount to 10 about 40,600 cars at a cost of about $31 million. 11 So first of all, we have to find about 110- to 12 120,000 cars that would be scrapped. And then we would 13 have to pay on top of the cost we already got to do in 14 order to comply with the regulations another about $85 15 million. So there's a huge cost associated with the AERP. 16 And also I would direct your attention to CARB's 17 staff report about what you have to do in order to take 18 advantage of the AERP. The onus is on the refinery to put 19 in place this program. If you look at page 28, it's quite 20 an onerous effort for a refinery to identity the program 21 that we need to use in order to take advantage of the 22 AERP. And I mean, there's like almost a page and a half 23 of bullet points of everything that needs to go into an 24 AERP plan that needs to be submitted to CARB that CARB 25 approves and goes out for its 30-day public review and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 comment. So not only is the cost associated with the AERP 2 what we believe to be punitive -- 3 CHAIRPERSON SAWYER: I need to ask you to 4 conclude. 5 MR. STROUD: In conclusion, I would just request 6 respectfully that the Board not approve the proposal 7 before you today, that you would send it back to staff to 8 review the issues associated with length needed in order 9 to comply, and to eliminate the AERP and to work with a 10 more flexible approach as mentioned by WSPA and other 11 commentors. 12 With that, I conclude my remarks. I appreciate 13 your time and the fact you're still here. And I'll be 14 glad to answer any questions that you may have. 15 CHAIRPERSON SAWYER: Thank you. 16 Bill Jones, then Ellen Sharpiro, David Patterson, 17 and Bill Davis. 18 MR. JONES: Mr. Chairman, members, appreciate 19 your time also and the late hour. My comments will be 20 brief. 21 I appreciate the staff working exhaustive hours 22 with many of the people in the industry. Notwithstanding 23 some of the comments pro and con, I think there has been a 24 very collaborative process. 25 We are supportive of staff recommendations. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 want to just say that ethanol as renewable fuel is 2 important to America. It is a national security issue. 3 It is a problem not being able to be a net exporter of 4 refined fuels out of California like we once were. Now we 5 are net importer. No solution is perfect. 6 I would argue that refineries -- we are building 7 the first refineries, new refineries built in California 8 in a generation, I would argue not because the oil 9 companies do not have an interest, but it is easier to 10 build some of the ones that we build than some of the ones 11 they have to build. I will not debate their time frames. 12 But I will say this. That signals sent today are 13 important in order to keep the flow of renewable fuels 14 coming. This is not going to change. Oil went to 15 67-plus-dollars a barrel today. Gasoline is up again. We 16 have the opportunity to add five percent by volume to the 17 fuels in California. 18 And we have gone through summer after summer 19 where the refinery capacity has been eliminated or reduced 20 by one occurrence or another. Many out of the total 21 control of refineries. So it is incumbent on us, and 22 having been a former policy maker, having sat where you 23 sit, it's incumbent of us to not let, you know, the 24 perfect become the enemy of the good. 25 I would argue that in this case, we have an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 alternative that will provide some choices, some options, 2 and some guidance, along with, of course, the guidance 3 that the Governor has given us which was not really an 4 issue actually years ago which is the low carbon fuel 5 standard and the greenhouse gas reduction. It has become 6 an urgency. It has set the agenda beyond what normally 7 historically CARB has had to look at. I understand that 8 adds complexity. 9 I would argue this adds a solution. I realize 10 maybe not all the time frames may line up exactly. But as 11 I say, it's been my experience in public life they usually 12 don't line up totally exactly all the time. 13 But we are supportive, our company. We want to 14 work with the Air Board to try to resolve what other 15 outstanding issues there are. And we want to move 16 forward, because the signals sent today will be important 17 and the volume will increase. 18 I do not believe there will be either 19 distribution issues. Those arguments were made a few 20 years ago that did not materialize as far as delivery. 21 And we are currently investing large quantities of dollars 22 to build refineries in California, because this is where 23 the business is. And this is where we believe the future 24 is for renewable fuels in this country. 25 So we're pleased to be here. Thank you, Mr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 1 Chairman and members, for your time. And I'd be happy to 2 answer any questions if you have them. 3 CHAIRPERSON SAWYER: Thank you. 4 MR. JONES: If not, thank you very much. 5 CHAIRPERSON SAWYER: Ms. Sharpiro. 6 MS. SHAPIRO: I had a few slides. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 MS. SHAPIRO: Thank you, again, also for staying 10 so late and having the time to finish this up today. 11 My name is Ellen Sharpiro. I am Director of 12 Automotive Fuels for the Alliance of Automobile 13 Manufacturers. I think you know our members. 14 --o0o-- 15 MS. SHAPIRO: You're familiar with those. 16 --o0o-- 17 MS. SHAPIRO: I want to also add my voice to 18 everyone who complimented the ARB staff. They did do a 19 very thorough, fair, balanced and open process that 20 enabled all the stakeholders to try to input information. 21 I want to thank Paul Wuebben for stealing my 22 remarks. 23 My do support a 10 PPM cap on gasoline in 24 California. This is a bit of a de ja vu experience for me 25 having been at the 1999 hearing where we also recommended PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 1 an ultra-low sulfur gasoline at that time for emission 2 benefits. 3 And recognizing the debate later today about the 4 average, the cap, about is there going to be emission 5 benefits or not emission benefits, we support the 6 predictive model. And we believe Dean when he says the 7 model will drive sulfur downward in the field. But if you 8 notice, he said it would drive the average down. We don't 9 know what's really going to happen at the upper end. Fuel 10 is always a bit of a distribution curve. And we don't 11 know how much of the fuel will be above 10 PPM. 12 --o0o-- 13 MS. SHAPIRO: And just to illustrate using North 14 American fuel survey that the Alliance conducts every 15 year, you can see how the sulfur is going down pretty 16 steadily. The minimum is quiet low already, and the 17 average is going down. It probably will continue to go 18 down. We don't know the size of the tail and how much 19 will be above it. 20 --o0o-- 21 MS. SHAPIRO: So there is this emissions question 22 out there to some extent. 23 I want to address the issue of enabling fuel 24 efficiency which is one of our key reasons for 25 recommending 10 PPM. I think it was a misunderstanding by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 1 the staff in some comments we made. We need sulfur in the 2 single digits. But we do not say that lean burn is 3 enabled by up to 20 PPM sulfur. It's very similar to 4 diesel technology. We need the ultra low sulfur levels. 5 I'd like to propose an alternative program to the 6 extent that a regulatory cap cannot be put in. We think 7 incentives will help reward the progressive refiners 8 instead of penalizing them under a regulatory system. We 9 want to suggest that they could -- ARB could authorize a 10 label for ultra clean gasoline in exchange for certifying 11 under 10 PPM consistently that they would have to forgo 12 some of that flexibility above 10 PPM But we think they 13 can do it. The data show that they're pretty much there. 14 And I know you want me to move on. Thank you very much 15 for your time. 16 CHAIRPERSON SAWYER: Thank you. 17 Mr. Patterson. 18 MR. PATTERSON: Good evening, Chairman Sawyer, 19 members of the Board. My name is Dave Patterson. I'm 20 with Mitsubishi Motors. 21 I'm going to follow along with what Ellen 22 Sharpiro was talking about with lean burn gasoline 23 injected engines. We are one of the industry leaders in 24 this technology. And that is what we slightly disagree 25 with staff a little bit. Lower sulfur will gain us new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 1 technology. It won't gain us tons in the model. It will 2 gain us new technology. 3 I can understand staff's concern looking at the 4 predictive model. I've spent years with them now learning 5 about this predictive model, and I understand that it 6 takes a whole focus to really fully understand all of the 7 interworkings of this model. And I go along with what 8 Ellen was just discussing about the proposing an ultra-low 9 sulfur gasoline similar to what the auto makers now do 10 with the top tier gasoline, to be able to propose that 11 this is a voluntary program for superior fuel. 12 This can be an example where ARB can lead the 13 country into the future with a clean high technology 14 fleets. This isn't something that we're going to be able 15 to -- even if California does have this lower sulfur 16 gasoline, until it is adopted across the country, we will 17 not enable to use these low lean burn engines to be able 18 to get those NOx benefits. That will only be allowed in 19 captive fleets for the time being. But we need to take a 20 step forward into the future. And I hope this Board can 21 look at this as a first step towards that future. 22 I'd also like to look to regarding E10 and cert 23 fuel, I'd like to agree with Mr. Cackette. You know, as 24 you know, ARB standards are the most stringent in the 25 world on vehicles. And we do it by mandating E10 as cert PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 1 fuel, it will effectively tighten the current emission 2 standards. And again, I agree that we need to carefully 3 evaluate the procedures. 4 And I go along with everyone else. I thoroughly 5 thank staff. Staff has been open and equitable through 6 the entire process. And it has been a joy to work with 7 them. Thank you. 8 CHAIRPERSON SAWYER: Thank you. 9 Mr. Davis. 10 MR. DAVIS: Thanks, Dr. Sawyer, members of the 11 Board. 12 I have to stick my oar into this because CIAQC, 13 Construction Industry Air Quality Coalition, and the 14 mobile crane operators group here in California are both 15 actually quite concerned about our ability to meet the 16 demands for refinery construction. Cranes are integral to 17 the refining construction process. 18 And you have two rules now that affect us. One 19 is the portable engine rule which will be prohibiting Tier 20 0 engine operation effective January 1st, I believe, 2010. 21 And the second, of course, is the off-road diesel 22 regulation that is your consideration. 23 We've had conversations with Mr. Cross and his 24 staff regarding the crane industry, and we, I think, are 25 having some more this week; is that correct? Well, that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 1 what I was told. So hopefully we'll be able to move 2 forward and help the crane industry, because they're 3 absolutely critical to being able to do the work at the 4 refinery. Every single refinery project requires mass 5 amount of cranes. 6 We are doing additional research on the topic of 7 environmental construction. The construction industry is 8 part of the solution to many of the problems that you all 9 are weighing. And we just want to make you aware this is 10 going to be a problem for our industry if we can't get 11 some relief in this area. 12 And then, secondly, we want to thank you for 13 giving us some more business from the refiners. And we'll 14 do our very best to make them happy. 15 You guys need to know about these other rules, 16 because they are really seriously going to impact the 17 construction industry. 18 CHAIRPERSON SAWYER: Thank you. 19 Madam Ombudsman, do you have anything to report 20 on this one? 21 OMBUDSMAN QUETIN: No. I did in the beginning. 22 CHAIRPERSON SAWYER: Yeah. 23 OMBUDSMAN QUETIN: Nothing more. I'm not 24 concentrating. I'm sorry. 25 CHAIRPERSON SAWYER: Ms. Witherspoon, do you have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 1 any further questions or comments? 2 EXECUTIVE OFFICER WITHERSPOON: No. We'll just 3 stand by for your questions. 4 CHAIRPERSON SAWYER: Okay. I will close the 5 record on this agenda item. However, the record will be 6 reopened when the 15-day Notice of Public Availability is 7 issued. 8 Written or oral comments received after this 9 hearing date but before the 15-day notice is issued will 10 not be accepted as part of the official record on this 11 agenda item. 12 When the record is reopened for a 15 day-comment 13 period, the public may submit written comments on the 14 proposed changes which will be considered and responded to 15 in the Final Statement of Reasons for the regulation. 16 Are there any ex parte on this item? No. I 17 don't think there is. Oh, okay. Ms. Riordan. 18 BOARD MEMBER RIORDAN: I'll start. 19 On June 11th, I had a phone conversation with 20 Dave Smith representing BP. And his conversation with me 21 represented what was said today. 22 On the same date, June 11th, had a conference 23 call with Western States Petroleum Conversation, Cathy 24 Reheis-Boyd, Gina Grey, and Jim Uihlein. And essentially 25 what was testified to today represented very much our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 1 conversation on the June 11th date. 2 CHAIRPERSON SAWYER: Do you? 3 BOARD MEMBER SPERLING: June 5th, I had a 4 telephone call with Casey Bishop from Chevron. 5 And on June 12th, conference call with WSPA with 6 Cathy Reheis-Boyd, David Lie, Jim Uilein, David from 7 ExxonMobile, Jim Uihlein, Elroy Garcia from KP Advocates, 8 and Scott Folwarkow from Valero reflecting the full range 9 of issues that we talked about this afternoon. 10 CHAIRPERSON SAWYER: On June 3rd, I met with John 11 Dunlap, Rob Lapsley, and Tom Curler. The subject matter 12 was similar to what we heard today. 13 On the 5th of June, I met with John Dunlap, Rob 14 Lapsley, Tom Curler, Casey Bishop, Elroy Garcia, and Dick 15 Newtson representing Pacific Ethanol and the Western 16 States Petroleum Association. And what we discussed was 17 similar to what we heard today. 18 On the 7th of June, I participated in a 19 conference call with Cathy Reheis-Boyd of the Western 20 States Petroleum Association, Gina Grey of WSPA, and David 21 Lie of ExxonMobile, again reflecting what we heard today. 22 SUPERVISOR HILL: On June 12th, telephone 23 conversation with Dave Smith from BP. 24 And June 13th, conference call with Cathy 25 Reheis-Body and the Gina Grey, Western States Petroleum PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 312 1 Association. And the conversations were related to their 2 testimony today. 3 BOARD MEMBER D'ADAMO: On June 5th, had a call 4 with Dave Smith representing BP. 5 And also on June 5th, a conference call with Dick 6 Newtson, Elroy Garcia, Jim Uihlein from Chevron, David Lie 7 from Exxon, and Cathy Reheis-Boyd from WSPA. And what we 8 discussed was similar to their testimony they presented 9 today. 10 CHAIRPERSON SAWYER: Do Board members have any 11 further comments on this? 12 We've heard a lot today and a lot of different 13 viewpoints. But although I know some people would like to 14 have a geometric average, I think we can average the 15 viewpoints we got here. 16 On balance, I think what staff has put together 17 is a reasonable way to go. I know not everybody is happy 18 about all of the details in it. There is flexibility in 19 the staff proposal. There's flexibility in what we will 20 be adopting today. And I think on balance it's a 21 reasonable thing to be doing. It's time to move ahead and 22 get this regulation started. It's going to be 2010 before 23 we begin to see the reductions that will be associated 24 with it. I think now is the time to do it. 25 BOARD MEMBER D'ADAMO: Mr. Chairman, I agree. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 313 1 would just ask that staff report back on the progress of 2 the two-year time frame and how many are going to go with 3 that alternative path. And then also to report back on 4 any changes that they see in the market that might be 5 related to this. Just as an update for us. 6 CHAIRPERSON SAWYER: And does staff have any 7 further comments? 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We plan to do 9 that. And clearly, as we design the low carbon fuel 10 standard rulemaking, how this is working out will be a 11 thing to review. As we get more advice and knowledge of 12 however that might work, we will look at this and make 13 sure the two work together. 14 CHAIRPERSON SAWYER: I might say that I think 15 that we are willing to commit ourselves to work with U.S. 16 EPA for a national low sulfur gasoline fuel. 17 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Yes. I think 18 we have direction from the Governor to pursue that 19 wherever possible. 20 BOARD MEMBER CASE: Mr. Chairman, I might ask for 21 more comment on that. I'm certainly interested in the 22 comment about the lower sulfur standard might actually 23 gain new technology. Is that wrapped up in the new fuel 24 formulation in the carbon reducing rules that are going to 25 be coming forward? Can you kind of frame that for me? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 314 1 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, the low 2 carbon fuel standard would likely lead to either 3 alternative fuels such as electricity coming into greater 4 play or advances in biofuels where there may be new types 5 of biofuels or maybe ethanol made in a much more efficient 6 manner. And all of those things I think will fit in the 7 current regulation. 8 EXECUTIVE OFFICER WITHERSPOON: I think 9 Supervisor Case was talking about the lean burn gas 10 technology which the auto industry is working on very 11 sophisticated engine designs which are sulfur intolerant. 12 So they have to be guaranteed that the sulfur content will 13 be very low and be consistent. There won't be batch to 14 batch variations. And that we have a narrower range of 15 max and min for them to design to have the systems to 16 operate properly. And until California, until the U.S. 17 has that, they will only deploy those technologies in 18 captive fleets in Japan and in Europe. And that there are 19 NOx benefits from those technologies we will forgo if the 20 U.S. is not willing nationwide to go to ultra low sulfur. 21 BOARD MEMBER CASE: So we don't have that as an 22 option right now, and it's narrow in scope for this Board 23 to be taking into consideration. 24 EXECUTIVE OFFICER WITHERSPOON: Well, for years 25 we've tried to move EPA along with us to lower sulfur, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 315 1 lower aromatics, cleaner fuels in general. And the auto 2 industry is active in Congress and in talking to the 3 Federal Administration about their needs. It's just a 4 major investment for the United States to make, the 5 refining industry to make. So that hasn't happened yet. 6 I think when they actually have the technologies and 7 people can drive them and see what they are not able to 8 have, then maybe those investments will come together. 9 CHAIRPERSON SAWYER: Ms. Berg. 10 BOARD MEMBER BERG: I would also like to 11 encourage that we fix the certification fuel, because it 12 seems to be certifying on a fuel that has a formulation of 13 eight years ago using a chemical that we're not using is 14 lagging. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: That is 16 mentioned in the Resolution before you. 17 BOARD MEMBER BERG: Okay. And I do want to 18 acknowledge that I do feel that the implementation time 19 frame of 18 months is tight, given the fact that you had a 20 hard time getting a permit in this state to do anything of 21 any magnitude in that time frame. So really what we have 22 set up is a very aggressive -- and by if way, we want you 23 to pay for compliance. And I think that that is -- 24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It's 30 25 months from today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 316 1 BOARD MEMBER BERG: Thirty months. 2 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Is the -- 3 yes. 4 And we choose that, because we believe that this 5 would mitigate the -- it's not a penalty. It's a way of 6 mitigating the impact of the increased permeation 7 emissions as soon as possible so we get the smog reduction 8 benefits. And it turned out to be even though it's a fair 9 amount of money on a cost effectiveness basis, it's very 10 cost effective to do. 11 BOARD MEMBER BERG: I would suggest the industry 12 would prefer to be in compliance and have their 13 construction completed and that they probably will run 14 into things that are beyond their ability to control. So 15 maybe within the updates we could keep the lines of 16 communication open so that we understand what's happening. 17 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And that 18 would probably occur first at the end towards the end of 19 2008 when we anticipate bringing the first version of the 20 low carbon fuel standard forward. 21 EXECUTIVE OFFICER WITHERSPOON: And the one extra 22 year extension. 23 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Right. 24 EXECUTIVE OFFICER WITHERSPOON: Is the AERP 25 waived during the one-year extension? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 317 1 DEPUTY EXECUTIVE OFFICER SCHEIBLE: No. If they 2 get the one-year extension, they would have to mitigate 3 the emissions during that time. The basic principle is 4 mitigate the emissions as early as possible, comply as 5 quickly as you can. Comply completely, no later than the 6 end of 2013. 7 BOARD MEMBER SPERLING: I think it was kind of 8 said. But I think the one thing we'd like to hear is as 9 soon as possible some report on what the real plans of the 10 refiners are in terms of complying with it. 11 You know, the impression we've gotten from staff 12 is that many of them or some portion of them will be able 13 the meet it without too much trouble within the time 14 frame. Some will not. And then, you know, we are going 15 towards ethanol blends as you're saying anyway for other 16 reasons. So I think we'd like to get reassured as soon as 17 possible that the story that we're hearing is accurate. 18 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We can do 19 that. They have three compliance routes. One is to 20 produce fully compliant fuel and produce somewhat less of 21 it depending on the refining capability. They can augment 22 that with imports, or they can choose the alternative 23 emission reduction plan. We have to work with the 24 industry to say given the reality of the rulemaking and 25 everything else that's happened, what path do you intend PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 318 1 to take. 2 CHAIRPERSON SAWYER: Okay. The Board has before 3 it Resolution 7-2-1. Do I have a motion to adopt? 4 BOARD MEMBER SPERLING: So moved. 5 BOARD MEMBER D'ADAMO: Second. 6 CHAIRPERSON SAWYER: Would the Clerk please call 7 the role? 8 SECRETARY ANDREONI: Ms. Berg? 9 BOARD MEMBER BERG: Aye. 10 SECRETARY ANDREONI: Ms. D'Adamo? 11 BOARD MEMBER D'ADAMO: Aye. 12 SECRETARY ANDREONI: Supervisor Case? 13 BOARD MEMBER CASE: Aye. 14 SECRETARY ANDREONI: Supervisor Hill? 15 SUPERVISOR HILL: Aye. 16 Sorry. 17 STATIONARY SOURCE DIVISION CHIEF FLETCHER: We 18 have one additional change to the Resolution in Attachment 19 B if we could introduce for you to complete the vote. 20 Sorry. And that is there is on Attachment B in the last 21 page it talks about the sulfur cap that we are extending 22 the deadline for compliance with that to 12-31-12. And 23 we'd like to also apply that to the CARBOB formulation. A 24 minor technical change to the Attachment. Sorry. 25 EXECUTIVE OFFICER WITHERSPOON: Where it says PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 319 1 12-11, Bob, for the sulfur, you would change that to 2012? 2 STATIONARY SOURCE DIVISION CHIEF FLETCHER: I 3 don't have it in front of me here. We were trying to add 4 CARBOB has a higher limit than the 20 PPM. We wanted to 5 say 21 PPM for CARBOB. All the other dates are fine. 6 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Changing 20 7 to 21. 8 STATIONARY SOURCE DIVISION CHIEF FLETCHER: No. 9 We're not changing. We're adding 21 for CARBOB. And 10 CARBOB is the fuel that goes into the distribution system, 11 the pipeline, from the refiners. Just makes it consistent 12 with what the regulation is. 13 EXECUTIVE OFFICER WITHERSPOON: Bob, on 14 Attachment B under the sulfur cap, read out loud what 15 you're saying that revision will be. 16 STATIONARY SOURCE DIVISION CHIEF FLETCHER: It 17 says, "Amend provisions to change the date for lowering 18 the sulfur content cap from 30 parts per million by weight 19 to 20 parts per million by weight and from -- and to 21 20 parts per million by weight for CARBOB formulations from 21 December 31st, 2009, to December 31, 2011." 22 Sorry for the confusion. 23 CHAIRPERSON SAWYER: For the people who voted 24 already, is this all right? 25 BOARD MEMBER D'ADAMO: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 320 1 CHAIRPERSON SAWYER: Continue the roll call. 2 SECRETARY ANDREONI: Ms. Kennard? 3 BOARD MEMBER KENNARD: Yes. 4 SECRETARY ANDREONI: Ms. Riordan? 5 BOARD MEMBER RIORDAN: Aye. 6 SECRETARY ANDREONI: Professor Sperling? 7 BOARD MEMBER SPERLING: Aye. 8 SECRETARY ANDREONI: Chairman Sawyer? 9 CHAIRPERSON SAWYER: Aye. 10 SECRETARY ANDREONI: Motion passes. 11 CHAIRPERSON SAWYER: Thank you very much. 12 This is the time when we have the opportunity for 13 Board members to comment on any matter of interest. Does 14 any Board members want to make comments at this time? 15 No. 16 Then we also have a period for public comment at 17 the end of our long day. And we have two requests, Mr. 18 Billings and Mr. Montalbano. 19 Mr. Billings. No. 20 Mr. Montalbano. 21 I'm afraid we wore them out. They'll be back at 22 our next meeting. 23 Do I have a motion for adjournment? 24 BOARD MEMBER BERG: So moved. 25 BOARD MEMBER RIORDAN: Second. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 321 1 CHAIRPERSON SAWYER: All those in favor? 2 Do we have to call the roll on this? No. 3 All those in favor please say aye. 4 (Ayes) 5 CHAIRPERSON SAWYER: Opposed? 6 Meeting is adjourned. 7 Thank you, staff. 8 (Thereupon the California Air Resources Board 9 adjourned at 6:24 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 322 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 28th day of June, 2007. 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