BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY CENTRAL VALLEY AUDITORIUM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, NOVEMBER 20, 2003 9:00 A.M. JAMES F. PETERS, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 10063 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES Mr. Terry Tamminen, CalEPA Secretary BOARD MEMBERS Dr. Alan Lloyd, Chairperson Mr. Joseph Calhoun Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Professor Hugh Friedman Mr. Matthew McKinnon Mrs. Barbara Riordan BOARD MEMBERS EXCUSED Dr. William Burke Dr. William Friedman Supervisor Barbara Patrick Supervisor Ron Roberts STAFF Ms. Catherine Witherspoon, Executive Officer Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Diane Johnston, General Counsel Ms. Kathleen Tschogl, Ombudsman Mr. Steve Albu, Chief, Engineering Studies Branch PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. Robert Barham, Assistant Chief, Stationary Source Division Mr. Richard D. Bode, Chief, Health And Exposure Assessment Branch Mr. Richard Corey, Chief, Research and Economics Studies Branch Mr. Bart Croes, Chief, Research Division Mr. Dan Donohoue, Chief, Emissions Assessment Branch Mr. Scott Fruin, Population Studies Section, Research Division Mr. Paul Hughes, Mobile Source Control Division Mr. Aron Livingston, Staff Counsel Mr. Nic Lutsey, Graduate Student Ms. Annmarie Mora, Air Pollution Specialist Mr. Alex Santos, Air Pollution Specialist Mr. Chuck Shulock, Executive Office Ms. Peggy Taricco, Manager, Technical Analysis Section Ms. Eileen Tutt, Mobile Source Control Division Mr. Floyd Vergara, Staff Counsel Mr. Peter Venturini, Chief, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED RESEARCH SCREENING COMMITTEE MEMBERS Dr. Harold Cota, Chairperson Dr. John Balmes Dr. Robert Devlin Dr. Michael Lipsett Mr. Chung S. Liu, D. Env Dr. Tracy Thatcher Dr. Amy Walton ALSO PRESENT Mr. Bruce Bertelsen, Manufacturers of Emissions Control Association Ms. Elaine Chang, South Coast Air Quality Management District Dr. Henry Clark, West County Toxics Coalition Mr. Mike Dillon, California Ski Industry Association Ms. Mary Jane Foley, Southern California Alliance POTW Mr. Tim French, Engine Manufacturers Association Ms. Carolyn Green, City of Thousand Oaks Ms. Bonnie Holmes-Gen, American Lung Association Ms. Carol Kaufman, Metropolitan Water District of Southern California Ms. Kate Larsen, Environmental Defense Ms. Barbara Lee, CAPCOA Mr. Russel Long, Bluewater Network PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. Daniel McGivney, Western Municipal Water District Mr. Roger McRae, WZI, Inc. Mr. John Mundy, Las Virgenes Municipal Water Ms. Jane Williams, California Communities Against Toxics PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX PAGE Pledge of Allegiance 1 Roll Call 1 Item 03-9-1 2 Chairperson Lloyd 2 Executive Officer Witherspoon 3 Staff Presentation 3 Q&A 13 Item 03-9-3 20 Chairperson Lloyd 20 Executive Officer Witherspoon 21 Research Screening Committee 22 Executive Officer Witherspoon 28 Staff Presentation 28 Q&A 37 Motion 42 Vote 42 Item 03-9-2 42 Chairperson Lloyd 42 Executive Officer Witherspoon 44 Staff Presentation 45 Ombudsman Tschogl 67 Q&A 68 Barbara Lee 80 Elaine Chang 85 Bruce Bertelsen 86 Tim French 89 Daniel McGivney 93 Kate Larsen 97 Bonnie Holmes-Gen 110 John Mundy 125 Mike Dillon 127 Carolyn Green 128 Afternoon Session 132 Carol Kaufman 133 Mary Jane Foley 137 Dan Smith 139 Discussion 139 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX PAGE Item 03-9-4 142 Chairperson Lloyd 142 Executive Officer Witherspoon 144 Staff Presentation 145 Q&A 171 Russell Long 182 Dr. Henry Clark 192 Jane Williams 193 Discussion 196 Public Comment 197 Adjournment 197 Reporter's Certificate 199 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON LLOYD: Good morning. The November 3 20th meeting of the California Air Resources Board will 4 now come to order. 5 Will you please join me in the Pledge of 6 Allegiance. 7 (Thereupon the Pledge of Allegiance was 8 Recited in unison.) 9 CHAIRPERSON LLOYD: Thank you very much. 10 Would the clerk of the Board please call the 11 roll. 12 BOARD CLERK DORAIS: Dr. Burke? 13 Mr. Calhoun? 14 BOARD MEMBER CALHOUN: Here. 15 BOARD CLERK DORAIS: Ms. D'Adamo? 16 BOARD MEMBER D'ADAMO: Here. 17 BOARD CLERK DORAIS: Supervisor DeSaulnier? 18 BOARD MEMBER DeSAULNIER: Here. 19 BOARD CLERK DORAIS: Professor Friedman? 20 BOARD MEMBER HUGH FRIEDMAN: Here. 21 BOARD CLERK DORAIS: Dr. Friedman? 22 Mr. McKinnon? 23 BOARD MEMBER McKINNON: Here. 24 BOARD CLERK DORAIS: Supervisor Patrick? 25 Ms. Riordan? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER RIORDAN: Here. 2 BOARD CLERK DORAIS: Supervisor Roberts? 3 Chairman Lloyd? 4 CHAIRPERSON LLOYD: Here. 5 Thank you very much. Sorry we're a little bit 6 late starting. But we're continuing to fight the bond 7 amendment, fight that on behalf of California. 8 So first of all I want to say that shortly I will 9 have the pleasure of introducing our new Secretary of Cal 10 EPA, Terry Tamminen. So I'll reserve some comments when 11 he comes down. 12 Secondly, I would like to announce a change in 13 the agenda from what you see there. That we're going to 14 do the proposed research plan immediately after the public 15 health update and then proceed to the stationary diesel 16 engine ACTM. 17 So with that, I'd like to turn it over to 18 introduce the first item on the public health update. 19 That's agenda item 03-9-1. And a reminder for anybody in 20 the audience who wish to testify on today's agenda items, 21 to please sign up with the clerk of the Board. And if you 22 do so, if you have written comments, please provide 30 23 copies of those to the Board. 24 Again, our monthly health update is on the 25 recently completed ARB-sponsored study on school bus PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 exposures. That has important findings related to 2 children's health. 3 And with that I'd like to turn it over to Ms. 4 Witherspoon to begin the staff presentation. 5 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 6 Lloyd and -- am I on? 7 CHAIRPERSON LLOYD: No. 8 EXECUTIVE OFFICER WITHERSPOON: The green light 9 is on, but no volume. 10 Is that better? 11 CHAIRPERSON LLOYD: No. 12 EXECUTIVE OFFICER WITHERSPOON: Can you hear me? 13 CHAIRPERSON LLOYD: Yes. 14 EXECUTIVE OFFICER WITHERSPOON: All right. 15 Good morning, Dr. Lloyd and members of the Board. 16 Today's health update is about a recently 17 completed school bus exposure study conducted by UCLA and 18 UC Riverside investigators. In this study school buses 19 were driven over urban and rural routes in Los Angeles, 20 while real-time pollutant concentrations were measured in 21 the buses' passenger area. The findings show pollutant 22 concentrations inside the buses are affected both by 23 roadway traffic and by the buses themselves. 24 Older school buses with poorly controlled diesel 25 engines and leaky passenger cabins have even higher PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 on-board exposures. 2 Dr. Scott Fruin, a member of our research 3 division, and project manager for this study, will now 4 present a summary of these findings. 5 DR. FRUIN: It's not on. 6 CHAIRPERSON LLOYD: No. 7 DR. FRUIN: Thank you, Ms. Witherspoon. 8 CHAIRPERSON LLOYD: Hopefully Scott's will be 9 working better. 10 DR. FRUIN: Is this on? 11 CHAIRPERSON LLOYD: No. 12 Well, given this is a very appropriate time 13 actually -- I couldn't have timed it better, because our 14 new Secretary of Cal EPA has arrived. 15 And it gives me great pleasure to introduce Terry 16 Tamminen. 17 Terry, as you know, was the architect of the 18 Governor's aggressive environmental agenda. Previous to 19 this he was heading up environment now. Prior to that 20 he's got varied experience. You probably read in the 21 press. 22 And I will say, of the first few days of 23 interaction with Terry, he brings I think tremendous 24 vision, energy to the Agency and the commitment to the 25 environment, and assure us the commitment of the -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 Governor's commitment to the environment is really 2 inspiring. 3 For my colleagues on the Board, you will have in 4 your package a copy of the Governor's environmental 5 agenda. And I think again, as Terry told the BDO's 6 yesterday, this is a road map that we're expected to 7 follow. So we have a challenge before us. 8 Again, I'm delighted that Terry's heading this 9 up. And I think he'll hold us to high standards. But I 10 think, again, we're willing and able to follow his 11 leadership. And I think it's tremendously exciting as we 12 enter this new era. 13 So with that, Terry, I'd like to introduce you. 14 My new boss, the Secretary of Cal EPA, Terry 15 Tamminen. 16 (Applause.) 17 CALIFORNIA EPA SECRETARY TAMMINEN: Thank you 18 very much. What a great auditorium. I mean I feel like I 19 have to launch into "Friends, Romans, countrymen, lend me 20 your ears." 21 I don't come to bury anyone. But I do come to 22 praise you all. We all know that we work for Alan. 23 (Laughter.) 24 CALIFORNIA EPA SECRETARY TAMMINEN: And all I can 25 say, first of all, is it's a great honor to hold this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 position, especially to step into the shoes of such 2 distinguished predecessors and to be able to work with 3 such talented people and boards and commissions and 4 offices, departments. My job I think is really just to 5 help everyone do their job, to be a voice to the Governor 6 and from the Governor. 7 The action plan that you may have that Alan 8 referred to is probably still the document that was on the 9 campaign website. So forgive any political rhetoric. 10 That's all being taken out. And that document is actually 11 being updated and expanded slightly. It'll go on the 12 Governor's website, if it's not already up there, in a 13 cleaner, better version. I encourage you all to take a 14 look at that. But it is a very optimistic and aggressive 15 road map to cleaner air and water and protected 16 landscapes. A governor who, I can tell you, very 17 personally was involved in drafting that plan. And we 18 spent many hours talking about his values. He truly sees 19 the environment through his kids, especially with respect 20 to air quality. I would say, without showing favorites, 21 that that's his most important agenda item. 22 And obviously we live in budget constrained 23 times. But he's challenging all of us to use all of our 24 energy, heart, humor, and ingenuity to find ways to get 25 these things done, much as you've been doing for a long PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 time. And I think all we can do is build on the good work 2 that you've done. And, again, I just see my task as being 3 here to make your job easier and more effective. 4 So I really hope that you'll come talk to me at 5 any time about your ideas, about ways that we can do that. 6 We've discovered in the last 24 hours how we can put aside 7 anything we have to to go attack a problem that's in front 8 of us. I think some of you know what I'm talking about. 9 And we have a Governor, because he does care 10 about these issues so much, he's been very engaged -- I 11 mean I think you all know I'm talking about the bond 12 amendment with respect to small engine regulation. And he 13 has been very engaged, and his call for nonpartisanship 14 has been demonstrated in this. He's been on the phone to 15 Republicans, Democrats. He and Senator Feinstein are 16 working very closely together. We just got out of a call 17 with her. This is completely nonpartisan. It's about 18 protecting California and California's kids. It's very 19 appropriate that that's up there. 20 So all I can do is say thank you, and help us 21 fight the good fight. And I will be here to help you and 22 support you in any way that I can. 23 Thank you. 24 (Applause.) 25 CHAIRPERSON LLOYD: Thank you very much, Terry, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 for taking time out of what I know is a hectic schedule. 2 So we really appreciate it very much. 3 So with that, hopefully we've got our mics in 4 order to proceed. 5 DR. FRUIN: Good morning, Dr. Lloyd and members 6 of the Board. 7 CHAIRPERSON LLOYD: That's better. Thank you. 8 (Thereupon an overhead presentation was 9 Presented as follows.) 10 DR. FRUIN: Today I will be summarizing the 11 results from the recent ARB-sponsored study of children's 12 school bus exposures. The study was conducted by 13 researchers at UCLA and UC Riverside, with co-funding by 14 the South Coast AQMD and EPA. 15 The goal of the study was to characterize 16 children's exposures due to their school bus commutes, 17 with a special emphasis placed on characterizing the 18 conditions expected to produce high exposures. 19 --o0o-- 20 DR. FRUIN: Seven buses were studied in total. 21 These included five uncontrolled diesel buses, that is, 22 buses with no after treatment, ranging in age from 1975 to 23 1998. Also included were a 1998 bus outfitted with a 24 particulate trap and a 2002 uncontrolled natural gas 25 powered bus. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 Actual school bus routes from Madison School in 2 West L.A. were followed at normal route times. No 3 children were on board, but all route stops were made in 4 order to simulate the picking up or the dropping off of 5 children. 6 The primary urban route was about 60 minutes long 7 each way, serving residential areas of south central L.A., 8 with significant time spent in the slow traffic conditions 9 of the 10 Freeway. A suburban rural route was also 10 included from UC Riverside to Diamond Bar, east of urban 11 L.A., and was chosen for its low traffic. The study was 12 conducted mornings and afternoons in the late spring and 13 early summer of 2002. 14 While many pollutants were measured, a key aspect 15 of the study was adding an inert tracer gas to the bus's 16 exhaust to allow distinguishing the bus's own emissions 17 from that of other vehicles. 18 --o0o-- 19 DR. FRUIN: The most important result of this 20 study was demonstrating the extent of school bus 21 self-pollution. School buses appear to be especially 22 vulnerable to the reintrusion of their own exhaust into 23 the bus cabin after it leaves the tailpipe. 24 This bar chart shows the fraction of the exhaust 25 making it back into the bus cabin as determined by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 tracer gas measurements. 2 The two bar colors are for open and closed 3 windows, with light blue being the closed window results. 4 On the X axis are listed the buses in order of their age, 5 the oldest on the left. 6 Intrusion rates can be seen to generally be 7 higher for the older buses and higher when windows were 8 closed, when cabin ventilation was reduced. 9 --o0o-- 10 DR. FRUIN: Self-pollution contributed 11 significantly to on-board pollutant concentrations. For 12 example, when windows were closed, concentrations of 13 diesel vehicle-related pollutants were about two times 14 higher on uncontrolled buses compared to when the windows 15 were open. 16 Self-pollution was also more pronounced for 17 dirtier buses than for cleaner buses. For the two 18 uncontrolled diesel buses that showed rates of intrusion 19 as low as the cleaner CNG or trap-equipped buses, 20 diesel-related pollutant concentrations were two to five 21 times higher under closed windows conditions. 22 --o0o-- 23 DR. FRUIN: The other primary contributor to 24 on-board pollutant concentrations was other traffic. The 25 congested urban routes caused concentrations of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 diesel-related pollutants two to seven times higher than 2 on the lightly congested suburban rural route for the same 3 bus with open windows. 4 --o0o-- 5 DR. FRUIN: To help determine the importance of 6 these elevated concentrations on board buses, several 7 commuting scenarios were compared in terms of diesel 8 particulate matter exposure, considered to be the major 9 risk among the urban air toxics. For a worst-case 10 scenario, assuming the relatively long commute measured in 11 this bus study was ridden by children twice a day, 200 12 days per year, for grades K through 12, with diesel 13 particulate concentrations equal to the uncontrolled bus 14 average, a lifetime diesel particulate matter exposure 15 increase of 4 percent was calculated. Using the ARB OEHHA 16 unit risk factor, this increase translates to an increased 17 lifetime risk of lung cancer of 30 in a million. 18 However, because school buses are significantly 19 safer than other vehicles, these results mean that school 20 bus fleets need to become cleaner, not that children be 21 taken off buses and transported by less safe means. For 22 example, the increased risk of crash fatality for children 23 driven to school over the same commute in passenger cars 24 rather than school buses was 200 in a million, much higher 25 than the increased risk of lung cancer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 --o0o-- 2 DR. FRUIN: Our recommendation then, first and 3 foremost, is to clean up the school bus fleet through 4 replacing or retiring the older buses as quickly as 5 possible. Replacing diesel buses with natural gas or 6 retrofitting them with particulate traps also appears to 7 be effective in reducing exposures. 8 In the meantime other bus activity-related 9 recommendations includes using the newest buses on the 10 longer routes; and for older buses, where comfort allows, 11 keeping windows open. 12 It's also important to discourage buses from 13 following each other, such as occurs during caravaning to 14 after-school events. 15 Finally, as a follow-up to this work, staff were 16 planning an additional study into the self-pollution 17 phenomena. This follow-up study will determine how and 18 when self-pollution occurs, and with either special 19 inspection or maintenance measures might prove effective 20 in reducing this problem and in reducing bus commute 21 exposures. 22 Thank you. I'll be happy to answer any questions 23 at this time. 24 CHAIRPERSON LLOYD: Thank you very much. 25 Any questions from Board members? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 Joe. Mr. Calhoun. 2 BOARD MEMBER CALHOUN: In looking at the 3 recommendations that you just described -- and I guess my 4 question is, what are we doing, we, the Air Resources 5 Board, doing to help implement these recommendations? 6 What are we doing about it? 7 DR. FRUIN: Well, there's a couple things -- we 8 recently of course passed the rule against idling. So 9 that will go a long way. 10 And of course publicizing the results. There's a 11 lot of these activities that are easy to implement if 12 drivers and fleet managers are aware of the differences 13 that -- assigning cleaner buses to the longest routes or 14 trying to maintain buses so that visible emissions are 15 never present. 16 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: 17 The other programs we've got at ARB go to the 18 acquisition and providing funds to school districts to -- 19 acquisition of cleaner school buses. And so that's 20 something that the Air Resources Board has been working -- 21 not the Research Division of course -- but has been 22 working very strongly. 23 DEPUTY EXECUTIVE OFFICER SCHEIBLE: After we 24 adopted and the school bus no idling rule took effect, we 25 did an extensive outreach effort where we mailed basically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 guidance and advisories to school. I think the same type 2 of thing as here. Because in the medium to long term we 3 want to clean up the exhaust from the buses so that 4 there's not much exhaust to go back in. But things like 5 not caravaning or keeping the windows open so there's more 6 air flow, the shorter term measures that can be taken are 7 probably more of a public education campaign. So staff 8 will be investigating how do we package these results and 9 get them out to the people we've already dealt with on the 10 no-idling measure in terms of -- as you're operating your 11 fleet and taking measures, these are things you should be 12 doing that will help reduce children's exposures to diesel 13 exhaust in the interim. 14 BOARD MEMBER RIORDAN: Mr. Chairman? 15 Oh, excuse me. 16 CHAIRPERSON LLOYD: Yes, Mrs. Riordan, and then 17 Professor Friedman. 18 BOARD MEMBER RIORDAN: Just to follow along on 19 that. We do need to do an outreach. And I'm trying to 20 think about what might be the best to recommend obviously 21 to the superintendent of each school district. But we 22 might want to in some way inform school board members 23 personally somehow. I'm not sure exactly how. But it 24 would I think be very interesting to school board members, 25 who ultimately make some of the decisions, that this type PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 of thing is, you know, studied and we now have the 2 information that we have, and that they can do certain 3 things to mitigate some of the diesel exhaust from 4 influencing the individual school buses. But I'm thinking 5 the school boards need to be aware of this. 6 CHAIRPERSON LLOYD: Thank you. 7 Professor Friedman, Ms. D'Adamo. 8 BOARD MEMBER HUGH FRIEDMAN: It occurs to me that 9 the recommendations are going to be the most difficult to 10 follow in rural areas particularly, but anywhere in the 11 winter, but where the climate gets pretty cold. And it's 12 difficult to leave windows open in a bus. And yet those 13 may be some of the areas where the older equipment is 14 being used and maybe the areas where there's a longer 15 driving time involved. So I think it's especially 16 important to somehow communicate this to those 17 districts -- those school districts and those areas and 18 maybe, you know, put some special emphasis on the need to 19 upgrade the equipment to the newer -- if at all possible, 20 to the newer buses because -- and that's -- I don't know 21 that they do caravaning. It's probably just a single bus 22 in some of those areas. But they can't open the windows 23 all the time in really cold areas. 24 CHAIRPERSON LLOYD: Ms. D'Adamo. 25 BOARD MEMBER D'ADAMO: Is there a difference PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 between open and closed windows while a bus is idling? 2 DR. FRUIN: Yeah -- 3 BOARD MEMBER D'ADAMO: I mean my gut feeling is 4 that even though you're saying it's best to have the 5 windows open, that while the bus is idling it's probably 6 not a good idea? 7 DR. FRUIN: Yes. There's not a clear cut 8 difference because when the bus is not moving and the 9 windows are open, it could be more vulnerable to the 10 exhaust being blown into the bus or drifting into the bus 11 through the open windows. So it is a complicated 12 phenomenon that's happening. 13 BOARD MEMBER D'ADAMO: So we'd have to somehow 14 communicate that as well in a way for the school districts 15 to understand. 16 I suspect staff didn't come prepared to answer my 17 next question. So give it a stab if you could. 18 On the older buses versus newer buses, the chart 19 that you have on self-pollution, could you give a rough 20 breakdown on the percentage of 1975 and, you know, these 21 various years that you've provided? 22 DR. FRUIN: Yeah. Very roughly, there's about an 23 equal split for the California bus fleet between buses in 24 the 19 -- manufactured in the 1980's and the 1990's. And 25 1970's buses are fairly rare. I would guess something on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 the order of five or ten percent. 2 EXECUTIVE OFFICER WITHERSPOON: We have actual 3 accounts of different age buses from our work on the 4 school bus upgrading and retrofit program, and we can 5 provide those later today. 6 BOARD MEMBER D'ADAMO: Okay. 7 CHAIRPERSON LLOYD: Thank you. 8 Mr. McKinnon. 9 BOARD MEMBER McKINNON: Yeah, I was sort of going 10 there, the same place. Thank you. 11 I'm looking at the '98 trap and the 2002 CNG. 12 And it seems that they're very close. And maybe when we 13 talk about that later -- I think we're always sort of 14 faced with the real-world decision: Where do you put the 15 money? And how much can you do to improve conditions for 16 children riding the buses, retrofitting, cleaning up, 17 putting traps on diesel, or doing CNG? 18 And, you know, we've often thought we got more 19 bang for our buck -- or at least I've often thought we get 20 more bang for our buck dealing with cleaning up diesel and 21 traps. And as I look at sort of the replacing 1975 and 22 1985 buses rapidly with limited resources, this graph just 23 sort of reemphasizes that for me. 24 But I guess the -- I have a question; and, that 25 is, do we have a way of sort of defining for school PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 districts what caravaning is and what isn't? What a safe 2 distance is or -- I mean I imagine weather conditions 3 influence that. But I'm guessing school districts are 4 going to want to know that. 5 DR. FRUIN: Well, I would define caravaning as 6 buses directly following each other. And in urban 7 conditions that means they're pretty close together. 8 Of course distance is important. So if you're in 9 a rural district, if you can be, say, 50 or 100 feet away 10 from another bus, that reduces the effect a lot. But in 11 general in city traffic, it's whether you have other 12 vehicles in between you or not. And it's very common in 13 afternoon departures for the buses to all leave together. 14 And the ones that are heading the same way will be right 15 on each other's tail. And that's the situation where we 16 measured a lot of high exposures and high concentrations. 17 DEPUTY EXECUTIVE OFFICER SCHEIBLE: That's 18 another area where we'll have to do more work to try to 19 calculate in some terms, that we can give bus drivers that 20 they understand, "You need to be four bus lengths behind 21 and you're okay," or what the actual distance is to cut 22 the risk down to a very low level. But it's pretty clear 23 that you don't want to tailgate any diesel vehicle right 24 in front of you for any significant amount of time. 25 CHAIRPERSON LLOYD: Correct. Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 BOARD MEMBER McKINNON: Are you limiting that to 2 diesel vehicles or diesel and CNG? I mean I think we 3 ought to -- 4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, the CNG 5 numbers suggest that the exhaust levels are far lower. I 6 mean I think it's just advisable. It's an avoidable risk. 7 So that you would want to not go right in the plume of any 8 vehicle. But if you did it following a CNG vehicle, you'd 9 have a lot less exposure than an older diesel vehicle. 10 CHAIRPERSON LLOYD: Thanks very much. 11 And we -- as a drive we've got about what, five 12 million this year Carl Moyer type funds for school buses, 13 is that right or not? 14 EXECUTIVE OFFICER WITHERSPOON: Actually I was 15 just reading that yesterday. I think it's a lot less than 16 that. There's 25 million total, of which a certain 17 percentage was set aside for school bus replacement only. 18 No traps were authorized under Proposition 40, only 19 replacements. And I believe the number of buses that that 20 purchases statewide is around 50. 21 CHAIRPERSON LLOYD: No. But how many dollars 22 though? I thought it was $5 million, or not? 23 EXECUTIVE OFFICER WITHERSPOON: I don't remember 24 if it was 20 percent of the total or something less than 25 that. But 20 percent sounds about right. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 CHAIRPERSON LLOYD: Okay. Thanks. 2 Thank you very much. If there's -- this is not a 3 regulatory item. No need to officially close the record. 4 So we'll move on to the next item. 5 Thank you very much. 6 CHAIRPERSON LLOYD: The next agenda item today is 7 03-9-3, planned air pollution research for Fiscal Year 8 2003-2004. 9 First of all I want to take the opportunity to 10 welcome members of the Research Screening Committee to our 11 annual joint meeting. Again, we'll have the opportunity 12 of being introduced individually later. But, again, I'd 13 like to express my personal appreciation for all the time 14 and effort that you guys put in. Having served there, I 15 know how much work you get through. I also want to assure 16 you how much the Board relies on you being the fine sieve 17 for whatever comes forward. So personally and on behalf 18 of my colleagues really want to express our appreciation 19 for the excellent work you continue to do. So a great 20 job. 21 I'd also like to acknowledge I guess that Dr. Amy 22 Walton will be leaving us, I guess, the Research Screening 23 Committee. And she's going from JPL, going back from 24 Pasadena, going back to Washington DC. So, Amy, many 25 congratulations. But also I'd like to thank you. You've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 been on the Committee for four years, and you've provided 2 strong technical and scientific support there. My 3 colleagues, her expertise in economic theory, 4 econometrics, environmental economics, energy public 5 policy, research management, and technical innovation. 6 I understand her new appointment is NASA's Deputy 7 Manager of Earth Science Technology Office in Washington 8 DC. And will no doubt clearly make good use of those 9 talents. 10 I would again personally like to express our 11 gratitude to you for your long and dedicated commitment to 12 California's air pollution research programs. I had the 13 pleasure of working with you when I was down at South 14 Coast and continuing here. So, Amy, we wish you the very 15 best going back to DC, and we certainly will miss you. 16 But it's nice to see the promotion. Congratulations. 17 (Applause.) 18 CHAIRPERSON LLOYD: As you know, the Research 19 Screening Committee was established by law to advise the 20 Board as we develop and implement our research program. 21 So with that I will turn it over to Ms. 22 Witherspoon to introduce the item to the full Board. 23 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 24 Lloyd. 25 As a staff, we are very appreciative of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 assistance provided by the RSC. Their insights and 2 expertise are enormously valuable to us. It's my 3 privilege to introduce Professor Hal Cota, Chairman of the 4 RSC, who will present the rest of the Committee to you. 5 Professor Cota will also provide some comments on this 6 year's research highlights. 7 RESEARCH SCREENING COMMITTEE CHAIRPERSON COTA: 8 Thank you, Ms. Witherspoon. It's a pleasure to 9 meet with the Board again. And before I make some brief 10 comments, I'd like the Committee members to introduce 11 themselves. I'll start. 12 I'm a Professor of Environmental Engineering at 13 Cal Poly San Luis Obispo. And in addition I serve as 14 Director of Cal Poly's EPA area-wide training center, 15 whose primary mission is to offer professional development 16 to people that work in air pollution control agencies and 17 industry. 18 RESEARCH SCREENING COMMITTEE MEMBER BALMES: John 19 Balmes. I'm a physician. I'm a Professor of Medicine at 20 UCSF and a Professor of Environmental Health Sciences at 21 UC Berkeley. At UC Berkeley I direct the Center for 22 Occupational and Environmental Health and the Center for 23 Environmental Public Health Tracking, and am actively 24 engaged in MIR pollution research both in the laboratory, 25 exposing people to pollutants and looking at respiratory PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 health effects, and then collaborating in epidemiologic 2 studies such as the Fresno Asthmatic Children's 3 Environment Study which you fund. 4 RESEARCH SCREENING COMMITTEE MEMBER THATCHER: 5 I am Tracy Thatcher, and I am a scientist at the 6 Lawrence Berkeley National Lab in Berkeley, California. 7 And the Indoor Environment Department looks at exposures 8 to both indoor and outdoor pollutants while people are 9 indoors. And my specialty is looking at the transport of 10 pollutants from the outdoor environment into the indoor 11 environment. 12 RESEARCH SCREENING COMMITTEE MEMBER DEVLIN: I'm 13 Bob Devlin, Chief of the Clinical Research Branch, Office 14 of Research and Development, U.S. Environmental Protection 15 Agency. Our group performs epidemiology and controlled 16 human exposure studies, trying to determine the health 17 effects of exposure to air pollution, particularly 18 focusing on vulnerable populations. 19 RESEARCH SCREENING COMMITTEE MEMBER LIU: My name 20 is Chung Liu. I'm the Chief Scientist and Deputy 21 Executive Officer for the South Coast Air Quality 22 Management District. And Dr. Lloyd's program I'm taking 23 over six years ago. And our programs is doing research 24 and demonstration projects to promote clean air 25 technology. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 RESEARCH SCREENING COMMITTEE MEMBER LIPSETT: I'm 2 Michael Lipsett. I'm a physician -- can you hear this? 3 CHAIRPERSON LLOYD: No power there. 4 RESEARCH SCREENING COMMITTEE MEMBER LIPSETT: It 5 looks like it's on. 6 All right. Michael Lipsett. I'm a physician 7 epidemiologist, formerly with the Office of Environmental 8 Health Hazard Assessment. I'm now Chief of the Exposure 9 Assessment Section in the Division of Occupational and 10 Environmental Disease Control of the State Health 11 Department. I've done a number of air pollution 12 epidemiologic studies. And while I was with OEHHA was 13 responsible for developing the health-based 14 recommendations to you guys for the ambient air quality 15 standards. 16 RESEARCH SCREENING COMMITTEE MEMBER WALTON: And 17 Amy Walton. And Dr. Lloyd did a much nicer job of 18 introducing what I do than I ever possibly could myself. 19 So let me take a moment and say, not only thank you for 20 your kind words, but how much I have enjoyed working with 21 your magnificent research staff, that they're energetic, 22 bright, and they care. And it has truly been a pleasure 23 to work with all of them and with the Board. 24 Thank you. 25 CHAIRPERSON LLOYD: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 RESEARCH SCREENING COMMITTEE CHAIRPERSON COTA: 2 Thank you. 3 There's five other committee members who aren't 4 joining us today. I'd like to just tell you who they are 5 and a little bit about their expertise. 6 Barbara Finlayson-Pitts is a professor of 7 chemistry at UC Irvine. And her research interests 8 include photo-chemistry, kinetics, and mechanisms of 9 atmospheric reactions, especially heterogeneous reactions. 10 Steven Japar is a retired supervisor of 11 Environmental Impacts Group in the research laboratory at 12 Ford Motor Company. Dr. Jaspar's area of expertise are 13 atmospheric chemistry and motor vehicle emission testing. 14 Rachel Morello-Frosch is an assistant professor 15 at the Center of Environmental Studies and Department of 16 Community Health, School of Medicine at Brown University. 17 Her research examines race and class determinants of the 18 distribution of health risks associated with pollution 19 among diverse communities in the United States. 20 Michael Prather is an ex officio member of the 21 Committee and is a chaired professor in the Earth Systems 22 Science Department at UC Irvine. His research interests 23 include assimilation of physical, chemical, and biological 24 processes that determine atmospheric composition and the 25 development of detailed numerical models of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 photo-chemistry and atmospheric radiation, and global 2 chemistry transport models that describe ozone and other 3 trace gases. 4 And then, finally, Forman Williams is a professor 5 of engineering physics and combustion at UC San Diego. 6 And he's conducted extensive research in the areas of 7 combustion and flame theory, and is an internationally 8 recognized expert in these fields. 9 Quite a broad group of expertise. 10 It's really a privilege for us to work with the 11 Board and Bart Cross and the entire staff of the 12 California Air Quality Research Programs. 13 The division has done -- the Research Division as 14 done an outstanding job I believe in identifying key 15 knowledge gaps and encouraged the best researchers to 16 participate in the work. Ideas on research come from 17 in-house, from leading scientists and engineers and the 18 general public through the open policy that the Research 19 Division has set up. 20 I believe the research program is a very 21 important part -- is very important to the State of 22 California. Finding answers to key questions the Board 23 needs to make decisions on is key. 24 Questions such as: What levels of air pollution 25 will protect the most sensitive in our population based on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 total exposure? Or zero emission technologies. Or how 2 should California respond to global environmental 3 challenges and strengthen California's economy? 4 All require research. Some of your leading-edge 5 research this year involved looking at how particulate 6 matter affected vulnerable populations, like children with 7 asthma and elderly with cardiovascular disease? With the 8 encouragement of Chairman Lloyd, the final reports from 9 California's research program are now available to 10 researchers around the world via the Internet. I think 11 this is a real cost effective way to leverage what's been 12 done. 13 I'd like to thank each of the Committee members 14 for their great amount of time that they've spent to 15 critically review the research plan, the research 16 proposals and final reports in making suggestions for 17 future research. 18 Finally, I want to thank you, Dr. Lloyd, and each 19 of you Board members, for your continued support of the 20 research program. 21 CHAIRPERSON LLOYD: Thank you very much, Hal. 22 EXECUTIVE OFFICER WITHERSPOON: Thank you, 23 Professor Cota. 24 Now we'll go on to the proposed research plan for 25 the current fiscal year. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 Seventeen projects are recommended for funding 2 this year, with two additional projects in the queue 3 should additional funding become available. 4 The extramural research budget is a total of $5.3 5 million, with 3 million of that coming from the Air 6 Resources Board, and then the balance, 2.3 million, from 7 the California Energy Commission. 8 The plan shows how this budget would be allocated 9 to recommended projects in various research categories. 10 I would now like to introduce Ms. Ann Marie Mora 11 of the Research Division, who will take us through this 12 year's planned research. 13 (Thereupon an overhead presentation was 14 Presented as follows.) 15 AIR POLLUTION SPECIALIST MORA: Good morning, 16 Chairman Lloyd and members of the Board. 17 Today we are presenting to you the annual 18 research plan, which is a compilation of the research 19 ideas we believe should be funded in Fiscal Year 20 2003-2004. 21 We have developed the plan around some main 22 priorities where we believe our research dollars are most 23 beneficial, such as: Traffic and its effects on sensitive 24 population; the health effects of wood smoke; 25 understanding diesel emissions, their sources, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 potential controls; and global air pollution. 2 CHAIRPERSON LLOYD: Can you get a little bit 3 closer to the mike. 4 AIR POLLUTION SPECIALIST MORA: I'm sorry. 5 CHAIRPERSON LLOYD: Thanks. 6 AIR POLLUTION SPECIALIST MORA: Additionally, 7 this plan contains several projects that will leverage the 8 state's research dollars by either including co-sponsors 9 or building on studies funded by other research entities. 10 This year we are anticipating a research budget 11 of approximately $3 million, plus $2.3 million from the 12 California Energy Commission. 13 We are recommending 17 projects for funding and 2 14 if any funding becomes available. 15 --o0o-- 16 AIR POLLUTION SPECIALIST MORA: The Health and 17 Safety Code states that an effective research program is 18 an integral part of the statewide effort to combat air 19 pollution. Furthermore, it charges the Board with 20 administering and coordinating all air pollution research 21 funded with state funds. It is imperative that the 22 Board's research program is scientifically sound and 23 responsive to issues which affect the health, safety and 24 well being of California's residents. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 AIR POLLUTION SPECIALIST MORA: These projects 2 presented here on the plan will be developed into either 3 requests for proposals or interagency agreements in 4 consultation with the Research Screening Committee. 5 The resulting proposals or agreements will be 6 evaluated by staff and presented to the Research Screening 7 Committee for review before they come to you for 8 consideration. 9 --o0o-- 10 AIR POLLUTION SPECIALIST MORA: We have organized 11 this plan under the same categories as our long-term 12 strategic plan for air pollution research, which are: 13 Health and welfare effects, exposure assessment, 14 technology advancement and pollution prevention, and 15 global air pollution. 16 --o0o-- 17 AIR POLLUTION SPECIALIST MORA: I'll now go 18 through the 17 recommended projects from each section and 19 highlight one to two projects from each area. 20 --o0o-- 21 AIR POLLUTION SPECIALIST MORA: There are six 22 recommended projects in the health and welfare effects 23 section. The projects in this section will investigate 24 the health and ecological effects of exposure to air 25 pollution. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 Three of the projects in this section will focus 2 on disentangling the effects of long-term exposure to 3 traffic. 4 --o0o-- 5 AIR POLLUTION SPECIALIST MORA: One study will 6 investigate the health effects of wood smoke and another 7 is a human exposure study that will investigate ozone 8 effects on asthmatics. The last recommended project in 9 this section will quantify the sources of nitrate in Lake 10 Tahoe. 11 The health studies provide critical information 12 for future air quality standard reviews for PM and ozone, 13 while the Lake Tahoe project helps determine the role 14 deposited air pollutants play in algae growth and declines 15 in water clarity. 16 --o0o-- 17 AIR POLLUTION SPECIALIST MORA: One project of 18 particular interest in this section is entitled "Traffic 19 Pollution and Children's Health," refining estimates of 20 exposure for the East Bay children's health study. It 21 will refine estimates of exposure to traffic-related 22 pollutants from a previous study through the integration 23 of traffic, air pollution, and time activity data through 24 GIS methods. 25 In the previous study investigators related PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 traffic-based air pollution monitored at schools to 2 bronchitis and asthma episodes in children. 3 School pollutant concentrations were used as 4 surrogates for children's overall exposure to traffic 5 emissions. Measures will be refined to better reflect 6 exposures at both residences and schools. 7 Additionally, the study population is 85 percent 8 non-white and generally of lower socioeconomic status, 9 making this study a good opportunity to examine the 10 effects of traffic on a low-income and primarily non-white 11 population. 12 For this project there is good coverage from 13 CalTrans traffic data and only a few major highways, 14 making it easier to model traffic exposures. Ultimately 15 these factors make it easier to isolate the effect of 16 traffic on respiratory health, particularly among a 17 sub-population where the issue of environmental justice is 18 relevant. 19 --o0o-- 20 AIR POLLUTION SPECIALIST MORA: Another study I'd 21 like to highlight will take advantage of work that was 22 done in Christchurch, New Zealand. Investigators there 23 looked at wood smoke exposure and data for daily morbidity 24 and mortality over a 12-year period. The high levels of 25 wood smoke there make up about 90 percent of the ambient PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 PM during the winter. 2 Investigators will acquire data on meteorology, 3 emission inventories, levels of indoor and outdoor air 4 pollution, mortality, and hospital emissions in order to 5 assess all aspects of human exposure from wood smoke. 6 The relationships between outdoor levels and 7 indoor levels will be analyzed and compared to those in 8 California. The established data sets offer a unique 9 opportunity to evaluate the effect of primarily wood smoke 10 within a culturally and economically similar population 11 sufficiently large and with a high quality medical and 12 pollution monitoring needed to produce statistically valid 13 results. 14 --o0o-- 15 AIR POLLUTION SPECIALIST MORA: The next section 16 is exposures assessment. 17 In this section projects are focused on 18 understanding the atmosphere processes that impact the 19 behavior of pollutants and characterizing personal 20 exposure to pollutants from indoor and outdoor sources. 21 There are seven recommended projects, three of which will 22 be funded entirely by the California Energy Commission. 23 The first project will look at organic compounds' 24 contribution to total PM 2.5. Two projects will quantify 25 and characterize exposure to air pollutants. And the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 final project will improve our modeling capabilities. 2 Ultimately each of the projects will support 3 state implementation plans and more effective control 4 strategies. 5 --o0o-- 6 AIR POLLUTION SPECIALIST MORA: The three CEC 7 projects will focus on indoor air quality and 8 environmental conditions with respect to California 9 classrooms, new homes, and emissions from office machines. 10 --o0o-- 11 AIR POLLUTION SPECIALIST MORA: The one project 12 from this section that I'd like to highlight is entitled 13 "Hourly In Situ quantitation of Organic Aerosol 14 Compounds." This project will help us address some of the 15 critical questions regarding quantitative attribution of 16 the sources of organic particles in California and their 17 contribution to PM 2.5. The investigators will develop 18 automated time result measurements of organic compounds 19 and they will deploy the instrument in summer and winter 20 of 2005 in the Central Valley. 21 The new data will be used for air quality 22 attainment strategies and the development of the state 23 implementation plan. 24 --o0o-- 25 AIR POLLUTION SPECIALIST MORA: The next section PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 is technology advancement and pollution prevention. This 2 section supports projects that advance the development and 3 commercialization of technologies associated with reducing 4 emissions. Projects will look at the past, present, and 5 future of diesel emissions. 6 There are three recommended projects in this 7 category. 8 --o0o-- 9 AIR POLLUTION SPECIALIST MORA: The project I'd 10 like to highlight is factors affecting school bus 11 airtightness and self-pollution. As discussed in the 12 health update, the ARB study found that buses contribute 13 significantly to their own on-board pollution 14 concentrations. Infiltration rates appeared to increase 15 with age and mileage. 16 This follow-on project will locate the points of 17 intrusion. The investigator will also test closed window 18 air exchange rates and leaks. 19 Since the replacement of buses is often too 20 costly for schools, the project will focus on how to 21 repair or maintain buses in order to avoid the 22 self-pollution and reduce air pollution exposure to 23 children who are riding them. 24 --o0o-- 25 AIR POLLUTION SPECIALIST MORA: Our last section, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 global air pollution, has one recommended project entitled 2 "Climate Change - Characterization of Black Carbon and 3 Organic Carbon Air Pollution Emissions, an 4 evaluation-of-measurement method." 5 Our global warming project deals with the role of 6 aerosols in climate change, specifically black carbon. 7 --o0o-- 8 AIR POLLUTION SPECIALIST MORA: Absorption of 9 light by black carbon is expected to lead to the heating 10 of the atmosphere since the light energy is converted to 11 thermal energy. 12 Result of the limited study suggest that black 13 carbon may be the most important component of global 14 warming next to carbon dioxide. 15 The investigators will compare and contrast 16 results from laboratory tests and an ambient air study of 17 particulate carbon sampling, using optical and 18 filter-based sampling techniques. This project would also 19 clarify the role of different combustion processes in 20 determining emission rates of black carbon to the 21 atmosphere, including the uncertainty inherent in these 22 factors. Better characterization and control of black 23 carbon can have immediate and potentially profound impact 24 on addressing global warming. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 AIR POLLUTION SPECIALIST MORA: As you know, the 2 research that is sponsored by the Board is crucial to the 3 Board's mission to provide California with cleaner air. 4 We believe that these projects outlined in the plan 5 strongly support ARB mission and, therefore, recommend 6 that you approve the planned air pollution research for 7 2003-2004. 8 I'd be happy to answer any questions. 9 CHAIRPERSON LLOYD: Thank you very much. 10 Questions from the Board? 11 I had a few questions. 12 On the last one, what's the status of the 13 modeling program with Dr. Seinfeld -- Professor Seinfeld 14 involving black carbon? 15 RESEARCH DIVISION CHIEF CROES: The project was 16 put in place last year. So we should get results I 17 believe by next spring. 18 CHAIRPERSON LLOYD: Next spring? 19 RESEARCH DIVISION CHIEF CROES: Yes. 20 CHAIRPERSON LLOYD: Also, do we have a unique 21 tracer for diesel exhaust? 22 RESEARCH DIVISION CHIEF CROES: There are some 23 unique tracers for diesel exhaust. But they require very 24 specialized measurements. There's actually been a lot of 25 work in the scientific community to come up with a routine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 method, and so far we haven't been able to come up with 2 one. 3 CHAIRPERSON LLOYD: So are we proposing to -- 4 will the programs this year help us in that goal? 5 RESEARCH DIVISION CHIEF CROES: We actually have 6 three ongoing projects that will help us find a tracer. 7 The new project this year looks like it will be able to 8 separate combustion from biomass sources, but not 9 necessarily separate gasoline from diesel. But we have 10 programs at UC San Diego, UC Davis -- two actually at UC 11 Davis to find unique markers for diesel exhaust. 12 CHAIRPERSON LLOYD: Yeah, given the fact that I 13 guess the diesel particulate is not on the Endangered 14 Species Act give, yet it would give us time to actually 15 develop some methodology to come up with that, I think is 16 pretty important. 17 EXECUTIVE OFFICER WITHERSPOON: Dr. Lloyd, if I 18 might make just one closing comment for the Board. 19 It wouldn't be honest or fair not to tell you 20 that the research budget itself is affected by the state's 21 budgetary problems. And for the time being this is our 22 plan with the funds that we have. But the new 23 administration has begun talking about the possibility of 24 a 2 billion cut in the balance of this fiscal year. And 25 without much specificity of how that cut might be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 administered, we don't know if it will happen, we don't 2 know if it will affect the Air Resources Board. But this 3 pot of funds is among our discretionary expenditures and 4 could be affected by a cut in the next six months. So I 5 just wanted you to be aware of that as you act on this 6 research plan. 7 CHAIRPERSON LLOYD: That's a good point. 8 The other point I'd like to link back -- you 9 know, you heard Secretary Tamminen say early on -- well, 10 earlier the Governor's concern for the health of the 11 inner-cities. And given the fact now that we see not only 12 the effect of toxics on cancer and other things, but also 13 as triggers for asthma. 14 I think it would be important if we could clearly 15 help to elucidate maybe some of the mechanism that's 16 unduly affecting inner-city children. And maybe a 17 challenge to the RSC Committee and to the Research staff 18 to try to design a program which would help us identify 19 some of the active -- the more active ingredients there, 20 the key actors, but also potential mitigation measures. 21 Because this is clearly an ongoing issue which has been 22 identified over a number of years by previous 23 administration and now with Governor Schwarzenegger coming 24 ahead and again giving additional highlight on that. And 25 I know it's not easy and I know that we've identified some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 of those in the previous program coming up, there's 2 cross-reference. But I think it would be -- give that 3 some thought as we move ahead and see if we could target 4 and come up with a pretty good program. 5 Professor Friedman. 6 By the way, we are -- 7 BOARD MEMBER HUGH FRIEDMAN: I'm not clear. Are 8 you suggesting -- because I think if you're suggesting 9 that we should consider prioritizing in case we have to 10 cut -- and which programs are easily capable of being 11 deferred, which projects, as opposed to those that may 12 lose something because of extended delays? 13 EXECUTIVE OFFICER WITHERSPOON: I did understand 14 that comment to be about prioritization and also building 15 into the future other elements. 16 We have some projects that are continuations of 17 ongoing studies, and we would want those to continue. And 18 we would probably hold back on initiating brand new ones. 19 But also emphasize the children's health analyses, the 20 asthmatic studies more than any others. The 21 traffic-related one, which affects low income and 22 non-white communities, and try and get that one done too. 23 I'm hopeful that none of this will be necessary. 24 But I just needed to raise that as a possibility with you. 25 CHAIRPERSON LLOYD: But also I think this also to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 me shows the value of having Dr. Devlin and Dr. Liu on the 2 Research Screening Committee, because I know we partner up 3 with EPA and with South Coast in some of these studies to 4 actually help spread the burden. So, again, I'd like to 5 express my appreciation for both of you coming -- 6 particularly Bob coming from the East Coast. But I think 7 that's very good linkage there. So -- but I hear that. 8 Obviously important. 9 BOARD MEMBER HUGH FRIEDMAN: At some point shall 10 we move -- 11 CHAIRPERSON LLOYD: Yes, I would just like to 12 say, while -- as you know, our M.D. representative, Dr. 13 Friedman, is not here today. 14 Maybe you could indicate your briefing of him and 15 any comments me might have had. 16 RESEARCH DIVISION CHIEF CROES: Dr. Friedman was 17 very supportive of the research plan. He had comments on 18 three of the projects that we're incorporating into the 19 final version of the plan. 20 CHAIRPERSON LLOYD: Great. Thank you very much. 21 Yes. So with that -- if there's no more 22 questions, then we can move it -- 23 BOARD MEMBER HUGH FRIEDMAN: Is a motion in 24 order? 25 CHAIRPERSON LLOYD: Yes, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 BOARD MEMBER HUGH FRIEDMAN: Move approval of 2 Resolution 03-29. 3 BOARD MEMBER D'ADAMO: Second. 4 CHAIRPERSON LLOYD: All in favor say aye. 5 (Ayes.) 6 CHAIRPERSON LLOYD: Anybody against? 7 Thank you. 8 Thank you staff, and thank you Committee. 9 I guess we look forward to seeing you personally 10 at lunch time. Thank you again. 11 My colleagues on the Board, you're probably 12 wondering why has that letter appeared before you from the 13 paper. And the reason for that, it's a letter for the 14 Wall Street Journal, published today, which was in 15 response to a quote that came from Jerry Martin, which was 16 an incomplete quote which gave the impression that we were 17 only potentially going after some of the HFCs or CFC's and 18 not looking at CO2, methane, and nitrous oxide. So that 19 was the reason for that. And it just so happened it was 20 timely today because we are going to be hearing that item 21 this afternoon. 22 CHAIRPERSON LLOYD: The next item on the agenda 23 is 03-9-2, public hearing to consider adoption of a 24 proposed airborne toxic control measure for stationary 25 diesel engines, also referred to as compression ignition PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 engines. 2 The proposed regulation would reduce public 3 exposure to diesel particulate matter and further the 4 goals of the Diesel Risk Reduction Plan adopted by the 5 Board in 1999. 6 Ahead of the presentation I would like to 7 indicate that we will hear this item today. We will not 8 close the period -- we will not close the record, but we 9 will not vote on this item. I think those of you are 10 familiar with the Executive Order this week. And in 11 deference to that, we are in fact hearing it, as I said, 12 because a lot of people have come to testify on this. But 13 as I indicated, we will not -- neither close the record 14 nor vote on this item. 15 So with that, I turn it over to Ms. Witherspoon 16 to see if she wants any more clarification on that before 17 she begins the staff presentation. 18 EXECUTIVE OFFICER WITHERSPOON: Maybe just a 19 brief comment. Executive Order S-203 directs all State 20 agencies to pause in their processing of regulatory items 21 so that a supplemental review can be performed on the 22 regulations and the analysis about their necessity, 23 clarity, consistency, sort of the normal administrative 24 procedural processes and, in particular, their impacts on 25 businesses of all kind and small business. And so it is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 procedural step. And we have done those analyses in the 2 preparation of the regs themselves, and so we're quite 3 confident we'll be cleared quickly to get back to work. 4 But it is a bit of a pause. And because this is 5 the first week of the new administration, there was not 6 time to obtain approval for this proposed regulation in 7 particular, so we will be carrying it over to a future 8 Board meeting for your vote. 9 We would hope to complete the lion's share of our 10 presentation, discussion, deliberations today. So that 11 will be, you know, just a simple act over the next -- when 12 we're ready for a Board vote on the item. 13 When the Board adopted the Diesel Risk Reduction 14 Plan of 2000, you defined a comprehensive and far-reaching 15 strategy to reduce public exposure to diesel PM. To date, 16 the Board has adopted control measures for heavy-duty 17 diesel vehicles, the Transit Bus Rule, a verification 18 procedure for technologies that reduce diesel PM, lower 19 sulfur limits for diesel fuel, school bus idling limits, 20 and, most recently, control requirements for solid waste 21 collection vehicles. The measure before you today is 22 another piece of the Diesel Risk Reduction Plan. 23 Stationary diesel engines operate throughout 24 California. They are used for backup emergency power, to 25 pump irrigation water, and to power cranes, rock crushers, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 and a variety of other machinery. Many of the engines are 2 located in urban centers, increasing the potential to 3 affect nearby residents and workers. 4 The proposed Air Toxic Control Measure for 5 stationary diesel engines will significantly reduce public 6 exposure by establishing emission standards and 7 operational requirements for these engines. 8 I will now introduce Mr. Alex Santos of our 9 Stationary Source Division to present the proposed ATCM. 10 (Thereupon an overhead presentation was 11 Presented as follows.) 12 AIR POLLUTION SPECIALIST SANTOS: Thank you. 13 Good morning, Mr. Chairman and members of the 14 Board. I will be presenting for your consideration 15 staff's proposed Air Toxic Control Measure to reduce 16 diesel particulate matter emissions from stationary diesel 17 engines. 18 --o0o-- 19 AIR POLLUTION SPECIALIST SANTOS: In my 20 presentation I will summarize the requirements of the 21 proposed Air Toxic Control Measure, or ATCM, discuss the 22 impacts of implementing it. 23 I will also be presenting staff's changes to the 24 ATCM that will be made available for public comment and 25 review as part of a proposed 15-day change package. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 Finally, I'll outline several activities we 2 intend to undertake in the near future. 3 --o0o-- 4 AIR POLLUTION SPECIALIST SANTOS: Shown on this 5 slide, and as you've heard before, diesel PM is a toxic 6 air contaminant, and the emissions of diesel PM present a 7 serious public health concern. 8 --o0o-- 9 AIR POLLUTION SPECIALIST SANTOS: The ATCM that 10 you will consider today is one of several measures that 11 are being developed to reduce public exposures to diesel 12 PM and to fulfill the goals of the Diesel Risk Reduction 13 Plan, which was approved by the Board in 2000. 14 --o0o-- 15 AIR POLLUTION SPECIALIST SANTOS: Stationary 16 diesel engines are used in a wide variety of applications 17 and are categorized as either prime engines or emergency 18 standby engines. 19 As shown on this slide, emergency standby engines 20 are those installed for the purpose of providing emergency 21 power or the pumping of water for flood or for fire 22 protection. Because they are installed to help during 23 emergency situations, they are operated only a few hours 24 each month, on average about 30 hours a year. 25 About 80 percent of the hours used are for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 maintenance and testing purposes to ensure that the engine 2 will operate when it's called upon during an emergency. 3 --o0o-- 4 AIR POLLUTION SPECIALIST SANTOS: Prime engines 5 are those engines used to provide electrical power or 6 mechanical work in non-emergency situations. Prime 7 engines are used in applications such as prime power 8 generation. Many prime engines are also used in 9 agricultural applications, primarily for irrigation. 10 The annual hours of operation for a prime engine 11 application is much higher than those for emergency 12 standby engines. On average, prime engines operate about 13 1,000 hours a year, but can range from less than 50 hours 14 per year for a turbine starter engine to over 5,000 hours 15 per year for a prime power generator. 16 --o0o-- 17 AIR POLLUTION SPECIALIST SANTOS: Combined, there 18 are about 26,000 stationary prime and emergency standby 19 engines operating in California. These engines emit about 20 three tons per day of diesel PM and about 41 tons per day 21 of NOx. As shown here, the bulk of the emissions come 22 from prime applications. 23 Considering all sources of diesel PM, stationary 24 diesel engines are responsible for about 4 percent of the 25 total diesel PM emitted in California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 Stationary diesel engines are distributed 2 throughout California. Many are located in urban centers. 3 And because they are stationary and remain in one location 4 over a long period of time, they can result in significant 5 near-source cancer risk. For example, the near-source 6 cancer risk from a typical uncontrolled stationary diesel 7 engine operating as little as 200 hours per year can be 8 over 50 in a million. 9 --o0o-- 10 AIR POLLUTION SPECIALIST SANTOS: Fortunately 11 there are ways to reduce the emissions of diesel PM 12 emitted from stationary engines. These include: Clean 13 fuel technologies, reducing operation time, replacing an 14 older dirtier engine with a cleaner engine, and the use of 15 after-treatment controls. 16 --o0o-- 17 AIR POLLUTION SPECIALIST SANTOS: Many stationary 18 engines in California have been successfully equipped with 19 after-treatment controls such as diesel particulate 20 filters and diesel oxidation catalysts. The effectiveness 21 of these controls was further verified through a joint 22 California Energy Commission/Air Resources Board 23 demonstration project, where diesel particulate filters 24 and diesel oxidation catalysts were installed on 25 stationary diesel engines. The results of this project PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 showed that for stationary diesel engines a diesel 2 particulate filter can achieve over 85 percent reduction 3 in diesel PM emissions and a diesel oxidation catalyst can 4 achieve over 25 percent reduction in diesel PM. 5 --o0o-- 6 AIR POLLUTION SPECIALIST SANTOS: Next I will 7 discuss the proposed air toxic control measure. 8 --o0o-- 9 AIR POLLUTION SPECIALIST SANTOS: The proposal 10 before you today was developed over a two and a half year 11 period. We held eight public workshops and numerous 12 meetings with interested stakeholders. We also met 13 bimonthly with CAPCOA. 14 To help in our technology evaluation, as I 15 mentioned earlier we undertook a control technology 16 evaluation demonstration program for after-treatment 17 devices used on stationary engines. 18 We also formed a test method workgroup to help us 19 identify the most appropriate test method to use when 20 measuring PM emissions from stationary diesel engines. 21 --o0o-- 22 AIR POLLUTION SPECIALIST SANTOS: Our goal in 23 developing the requirements of the proposed ATCM was to 24 establish best available control technology requirements 25 for stationary diesel engines. In doing this, ARB staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 considered a number of factors, including ambient PM 2 levels, near-source risk, the cost of controls, and the 3 potential for reducing criteria pollutants such as NOx and 4 hydrocarbons. 5 --o0o-- 6 AIR POLLUTION SPECIALIST SANTOS: The proposed 7 ATCM addresses both stationary engines that are less or 8 equal to 50 horsepower and those that are greater than 50 9 horsepower. For engines greater than 50 horsepower there 10 are two sets of requirements, one for new engines and one 11 for in-use engines. 12 New engines are those installed at a facility 13 after January 1st, 2005. An in-use engine is one 14 installed at a facility prior to or on January 1st, 2005. 15 Portable engines and in-use stationary 16 agricultural engines are not addressed in this ATCM. But 17 they will be addressed in separate measures. 18 The next slide provides more information on how 19 we plan addressing in-use agricultural engines. 20 --o0o-- 21 AIR POLLUTION SPECIALIST SANTOS: For in-use 22 stationary agricultural engines, the proposed ATCM does 23 not include emission limits or hour-of-operation 24 restrictions. There are control equipment installation 25 and availability issues as well as control measure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 enforceability issues that need to be worked out. 2 ARB staff will address these issues and others as 3 we continue to work with the agricultural working group. 4 We will evaluate the feasibility and cost effectiveness of 5 electrification. 6 --o0o-- 7 AIR POLLUTION SPECIALIST SANTOS: We will work 8 with the districts on implementing the requirements of SB 9 700 regarding the permitting of agricultural engines. And 10 we will report back to the Board in June of 2004 on 11 staff's work to reduce emissions from stationary 12 agricultural engines. 13 --o0o-- 14 AIR POLLUTION SPECIALIST SANTOS: The 15 requirements of the proposed ATCM can be grouped into 16 three main areas. These include: Emission standards and 17 operating requirements, fuel use requirements, and 18 reporting requirements. 19 Over the next few slides I'm going to discuss the 20 requirements of the proposed ATCM, starting with the 21 emission standards and operating requirements. 22 --o0o-- 23 AIR POLLUTION SPECIALIST SANTOS: The proposed 24 ATCM establishes different emission standards and 25 operating requirements depending on the size, use, and age PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 of the engine. The following slides will discuss the 2 requirements for engines less than or equal to 50 3 horsepower, prime engines greater than 50 horsepower, and 4 emergency standby engines greater than 50 horsepower. 5 --o0o-- 6 AIR POLLUTION SPECIALIST SANTOS: For new engines 7 less than 50 horsepower, they will be required to meet 8 current off-road engine certification standards. This 9 requirement becomes effective on January 1st, 2005. 10 --o0o-- 11 AIR POLLUTION SPECIALIST SANTOS: Now I'm going 12 to present the requirements for prime engines greater than 13 50 horsepower. 14 For prime engines greater than 50 horsepower the 15 ATCM establishes different requirements depending if the 16 engine is a new engine or an in-use engine. 17 --o0o-- 18 AIR POLLUTION SPECIALIST SANTOS: New prime 19 engines must meet a 0.01 gram per brake-horsepower 20 standard. This is equivalent to purchasing the cleanest 21 available Tier 3 engine and installing a diesel 22 particulate filter. 23 For other pollutants like NOx, hydrocarbons, and 24 CO, new prime diesel engines must meet the appropriate 25 off-road standards. These requirements become effective PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 January 1st, 2005. 2 --o0o-- 3 AIR POLLUTION SPECIALIST SANTOS: New stationary 4 agricultural engines must meet a 0.15 gram per 5 brake-horsepower standard. This is equivalent to 6 purchasing the cleanest available engine. For other 7 pollutants new agricultural diesel engines must meet the 8 appropriate off-road standards. And, again, these 9 requirements become effective January 1st, 2005. 10 --o0o-- 11 AIR POLLUTION SPECIALIST SANTOS: For in-use 12 prime diesel engines there are three options for 13 compliance. 14 Option 1 and 2 apply to all in-use prime engines 15 and can be achieved through the application of a diesel 16 particulate filter. 17 Option 3 applies only to engines that are not 18 certified to off-road standards. These engines are 19 generally older and with higher emission rates than 20 certified engines. Option 3 allows owners of these 21 engines to reduce emissions by 30 percent now, which could 22 be accomplished by retrofitting the engine with a diesel 23 oxidation catalyst, and then replacing the engine in 2011 24 with a Tier 4 engine. 25 The compliance schedules are discussed on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 next slide. 2 --o0o-- 3 AIR POLLUTION SPECIALIST SANTOS: As shown on 4 this slide, owners and operators of three or fewer engines 5 must be in compliance by the dates listed. The earlier 6 compliance dates are for the older, dirtier engines. 7 Owners of four or more engines must phase in 8 compliance at 25 percent per year, with complete 9 compliance by 2009. 10 --o0o-- 11 AIR POLLUTION SPECIALIST SANTOS: Now I will go 12 over the requirements for emergency standby engines. 13 --o0o-- 14 AIR POLLUTION SPECIALIST SANTOS: The diesel PM 15 emission limit for new emergency standby engines is 0.15 16 gram per brake-horsepower hour. This is equivalent to the 17 emission rate of a currently available off-the-shelf 18 off-road certified engine. In addition, for emergency 19 standby engines, the number of scheduled hours the engine 20 is allowed to operate for maintenance and testing is 21 limited to 50 hours per year. 22 No limit is placed on the number of hours an 23 emergency standby engine can operate for emergency 24 purposes. In light of public safety concerns, it makes 25 sense to us not to limit the number of emergency hours an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 engine is run during a true emergency. 2 These requirements would go into effect on 3 January 1st, 2005. 4 --o0o-- 5 AIR POLLUTION SPECIALIST SANTOS: For in-use 6 emergency standby engines, the diesel PM emission limits 7 are also linked to the number of hours the engine operates 8 for maintenance and testing purposes. Engines with a PM 9 emission rate of greater than 0.40 grams per 10 brake-horsepower per hour are limited to 20 hours a year 11 or less for maintenance and testing purposes. 12 Engines with a PM emission rate of less than or 13 equal to 0.40 grams per brake-horsepower per hour are 14 limited to 30 hours per year or less for maintenance and 15 testing. 16 These limits are based on the results of a 17 conservative risk analysis and are designed to ensure the 18 cancer risk from a compliant engine is less than 10 in a 19 million. 20 The next slide discusses the compliance schedule 21 for in-use emergency standby engines. 22 --o0o-- 23 AIR POLLUTION SPECIALIST SANTOS: For those 24 owners of in-use emergency standby engines that will 25 comply by either maintaining or reducing the number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 annual hours of operation for maintenance and testing, 2 they must begin compliance by January 1st, 2005. For 3 those owners that retrofit compliance will be phased in as 4 shown under bullet 2. 5 Owners of four or more engines must phase in 6 compliance at 25 percent per year, with complete 7 compliance by 2009. 8 --o0o-- 9 AIR POLLUTION SPECIALIST SANTOS: Now I'll 10 discuss the fuel use requirements. 11 --o0o-- 12 AIR POLLUTION SPECIALIST SANTOS: The proposed 13 ATCM requires that by January 1st, 2005, all stationary 14 diesel engines will be required to use either CARB diesel 15 or a verified alternative fuel. The proposed ATCM also 16 allows the use of dual fuel technologies. These 17 technologies burn CARB diesel and an alternative fuel like 18 CNG simultaneously. 19 --o0o-- 20 AIR POLLUTION SPECIALIST SANTOS: Now I'll 21 discuss the reporting requirements of the proposed ATCM. 22 --o0o-- 23 AIR POLLUTION SPECIALIST SANTOS: The initial 24 reporting requirements require each owner of a stationary 25 diesel engine operating in California to provide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 information to the districts on their engines and how 2 they're used. This information will be used to create a 3 detailed stationary engine inventory and will help fulfill 4 the emission inventory requirements of the AB 2588 5 program. 6 The initial reporting information is required 7 prior to installation of a new engine and no later than 8 July 1st, 2005, for an in-use engine. 9 The control strategy reporting requirements 10 require owners subject to the proposed ATCM to provide the 11 district with information indicating what control 12 strategies they plan on using to bring their engines in 13 compliance. This report is due to the district no later 14 than 180 days prior to the earliest compliance date. 15 The demonstration of compliance requirements 16 require the owners and operators of stationary engines to 17 provide emissions data to the district showing compliance 18 with the standards. 19 Examples of the types of data that can be used to 20 show compliance include emission test data, off-road 21 certification test data, engine manufacturer data, 22 emission data from a similar engine, and verification test 23 data. 24 Owners and operators of stationary engines that 25 will limit their hours of operation for purposes of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 showing compliance will be required to keep monthly logs 2 indicating the number of hours the engine was operated and 3 the nature of its use. 4 --o0o-- 5 AIR POLLUTION SPECIALIST SANTOS: Listed on this 6 slide are some of the exemptions staff is proposing for 7 specific applications where it is not practical to comply 8 with the requirements of the proposed ATCM due to high 9 costs or technical issues associated with controlling PM 10 emissions. 11 --o0o-- 12 AIR POLLUTION SPECIALIST SANTOS: One of the 13 issues we faced early on in the development of the ATCM 14 was what test method should be specified for measuring PM 15 emissions from stationary engines. To help us address 16 this question, we formed an industry Air Resources Board 17 district workgroup that evaluated two of the methods 18 typically used for measuring diesel PM from stationary 19 engines: ARB's method 5, which is used for measuring PM 20 from stationary sources; and the ISO 8178 method, that is 21 used for the certification of off-road diesel engines. 22 The workgroup recommended that either the 23 off-road engine certification test method or the front 24 half or filter catch of ARB method 5 be used. This 25 recommendation is consistent with the test methodology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 used in engine certification, control equipment 2 verification, and the sources of emissions data used to 3 create the emissions inventory. 4 --o0o-- 5 AIR POLLUTION SPECIALIST SANTOS: Now I'll 6 discuss the economic and environmental impacts of the 7 proposed ATCM. 8 For businesses with prime engines there will be 9 costs associated with installing after-treatment controls 10 on their engines. Based on actual in-use costs associated 11 with the installation of controls on engines in 12 California, we estimated that the cost to install a diesel 13 particulate filter is about $38 per horsepower; and for a 14 diesel oxidation catalyst, $10 per horsepower. A new 15 engine costs considerably more. 16 For emergency standby engines we believe the 17 majority of engine operators will comply with the ATCM by 18 reducing the hours of operation for maintenance and 19 testing and, thereby, realizing a cost savings. 20 --o0o-- 21 AIR POLLUTION SPECIALIST SANTOS: We estimate the 22 cost of the ATCM to affected businesses and government 23 agencies to be approximately $47 million for the total 24 capital costs. This corresponds to $8.4 million annually 25 over the useful life of the control equipment. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 majority of the costs will be borne by prime engine 2 owners. 3 In many cases, owners of emergency standby 4 engines will have no cost or a net savings due to the 5 reduced operating hours. Based on an analysis of the 6 estimated change in return on owner's equity, we believe 7 overall most businesses will be able to absorb the costs. 8 The cost effectiveness of the proposed ATCM when 9 attributing all the costs to reduction in diesel PM is 10 about $15 per pound of diesel PM reduced. This compares 11 favorably to the refuse hauler regulation, which was 12 approved by the Board in September of 2003 and had a cost 13 effectiveness of about $67 per pound. 14 Because the ATCM will also reduce hydrocarbon and 15 NOx emissions we also allocated half of the cost of 16 compliance against these benefits, resulting in a cost 17 effectiveness value of $8 per pound for PM reduced and a 18 dollar per pound of hydrocarbon plus NOx reduced. 19 --o0o-- 20 AIR POLLUTION SPECIALIST SANTOS: We estimate 21 that with the implementation of the ATCM there will be an 22 80 percent reduction in PM emissions from those engines 23 covered by the regulation in 2020 relative to the 2002 24 base line. The average reduction per year of diesel PM, 25 NOx, hydrocarbon and CO are shown on this slide. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 A majority of the PM reductions occur between the 2 years 2005 and 2009. 3 --o0o-- 4 AIR POLLUTION SPECIALIST SANTOS: With the 5 reductions in diesel PM we anticipate health cost savings 6 due to reduced mortality, incidences of cancer, PM related 7 cardiovascular effects, and chronic respiratory symptoms. 8 The cancer risk from each stationary emergency 9 standby engine subject to the proposed ATCM is expected to 10 be reduced to 10 in a million or less. 11 The cancer risk from each prime engine subject to 12 the proposed ATCM is expected to be reduced by at least 85 13 percent. 14 --o0o-- 15 AIR POLLUTION SPECIALIST SANTOS: During the 16 45-day public comment period, we worked with the affected 17 businesses and interested stakeholders on refining the 18 ATCM. In particular, as indicated in the public notice, 19 we continued the evaluation of the use of emergency 20 standby engines in demand response programs. 21 --o0o-- 22 AIR POLLUTION SPECIALIST SANTOS: Based on those 23 discussions and further review of the language, we are 24 proposing additional language for demand response programs 25 that would allow the use of emergency standby engines in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 limited cases. We are also proposing clarifications to 2 definitions exemption language and will be making 3 non-substantive corrections to the original text of the 4 Air Toxic Control Measure. 5 --o0o-- 6 AIR POLLUTION SPECIALIST SANTOS: Demand response 7 programs are programs offered by ultilities to their 8 customers. These programs are contractual agreements 9 where the customer agrees to reduce their demand or shed 10 load from the grid during periods of peak demand. 11 In some cases, but not all, customers reduce 12 demand by operating emergency standby engines. The 13 proposed ATCM released during the 45-day public comment 14 period did not allow for the operation of emergency 15 standby engines in demand response programs. However, we 16 did indicate at the August workshop and in the staff 17 report that we would be proposing demand response program 18 language. 19 --o0o-- 20 AIR POLLUTION SPECIALIST SANTOS: ARB staff is 21 proposing to allow emergency standby engines to be used in 22 two types of demand response programs, Interruptible 23 Service Contracts and San Diego Gas and Electric Company's 24 Rolling Blackout Reduction Program. Both of these 25 programs are emergency programs. And engines are only PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 dispatched when blackouts are imminent or already 2 occurring. 3 Under Interruptible Service Contracts, or ISCs, 4 are operators of emergency standby engines into a 5 contractual agreement with the utility provider to reduce 6 demand or shed load during Stage 2 or Stage 3 events. 7 Under an ISC the owner typically receives discounted 8 electrical rates. 9 During the development of the ATCM, we found that 10 there were many public municipalities, notably water 11 treatment facilities, that had Interruptible Service 12 Contract agreements. 13 The San Diego Gas and Electric Company's Rolling 14 Blackout Reduction Program, or RBRP, exists only in the 15 San Diego Air Pollution Control District. 16 Under the RBRP engines are called upon to reduce 17 loads during Stage 3 events, and the engine owners are 18 paid only for the hours they operate during that event. 19 According to the San Diego Gas and Electric Company, they 20 view the RBRP as insurance against having uncontrolled 21 rolling blackouts. The program has been in place for 22 three years and has not yet been called upon. 23 Stationary engines enrolled in these programs 24 will be required to meet stringent emission limits, be 25 limited in their hours of operation. And RBRP engines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 will be dispatched into service taking into account public 2 health impacts. 3 --o0o-- 4 AIR POLLUTION SPECIALIST SANTOS: For emergency 5 standby engines in Interruptible Service Contracts the 6 proposed language requires all in-use engines to meet a 7 0.15 gram per brake-horsepower power limit by 2005 and 8 then meet a more stringent 0.01 gram per brake-horsepower 9 limit in 2008. 10 And new engines enrolled after January 1st, 2005, 11 will need to meet a diesel PM emission rate of 0.01 grams 12 per brake-horsepower hour. 13 The engines will be limited to no more than 150 14 hours a year for ISC operation. However, based on 15 historical data, we believe the actual usage will be much 16 less. Based on the survey we conducted, the average 17 number of hours operated under an ISC was 25 hours per 18 year during the period 1999 to 2001. 19 --o0o-- 20 AIR POLLUTION SPECIALIST SANTOS: In our proposal 21 we limit the hours that an engine can operate annually 22 under the RBRP to 75. And we also limit the total 23 megawatts of diesel power that can be dispatched at any 24 one time to 80 megawatts. Engines currently in the 25 program must meet all other requirements in the ATCM, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 any new engine to the program after 2005 must meet more 2 stringent PM limits. 3 In addition, the San Diego Gas and Electric 4 Company must develop an environmental dispatch protocol 5 that is approved by the district, and identifies how the 6 engines will be dispatched to minimize public health 7 impacts. 8 --o0o-- 9 AIR POLLUTION SPECIALIST SANTOS: There is a 10 benefit to allowing emergency standby engines to 11 participate in ISCs and the RBRP. In most cases, these 12 engines will be required to meet emission limits at an 13 earlier date. 14 The benefits of a lower emission rate would be 15 realized any time that engine operated for non-demand 16 response program reasons, which include maintenance and 17 testing operation and emergency operation. On balance, 18 staff believe there is a net diesel PM benefit. 19 And, again, both of these programs are emergency 20 programs, and engines are only dispatched when Stage 2 or 21 3 events are imminent. 22 --o0o-- 23 AIR POLLUTION SPECIALIST SANTOS: Once the Board 24 acts on the proposed ATCM we intend to work on a number of 25 projects related to the implementation of the ATCM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 --o0o-- 2 AIR POLLUTION SPECIALIST SANTOS: We plan to 3 continue our discussions with the agricultural community 4 to determine how best to reduce emissions from in-use 5 stationary engines used in agricultural operations. We 6 will give a status report to the Board on this issue by 7 mid-2004. 8 We intend to work with the districts to develop 9 implementation guidelines in the system in their efforts 10 to implement the ATCM. 11 We are going to continue to investigate diesel PM 12 measurement methods for diesel engines. 13 --o0o-- 14 AIR POLLUTION SPECIALIST SANTOS: Next year you 15 will consider amendments to the AB 2588 program to 16 integrate diesel engines into the program. It is our 17 intention to work closely with the AB 2588 staff and 18 stakeholders to ensure the ATCM and the AB 2588 program 19 are integrated and complement each other. 20 We will also be using the data submitted to help 21 improve our emissions inventory for stationary engines. 22 And, finally, we will monitor the use of engines 23 in demand response programs and determine if adjustments 24 need to be made. 25 That concludes my presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 Thank you for this opportunity to discuss our 2 proposal. And at this time we'd be happy to answer any 3 questions. 4 CHAIRPERSON LLOYD: Thank you very much. 5 Before we get to the question, I'd like to ask, 6 Madam Ombudsman, if you would please describe the public 7 participation process that occurred while this item was 8 being developed. And share any concerns or comments you 9 may have with the Board at this time. 10 OMBUDSMAN TSCHOGL: Mr. Chairman and members of 11 the Board, to develop this proposal staff worked with many 12 stakeholders for more than two years. The stakeholders 13 include engine associations, several branches of the 14 United States military, labor groups, utility companies, 15 sanitation districts, a university, private companies, and 16 other interested parties. 17 Also, environmental groups and public agencies 18 participated in the development of this regulation. 19 In early 2001 staff began its effort to develop 20 this. The first of eight workshops was held in Sacramento 21 on February 14th, 2001. On average 70 to 80 people 22 attended each workshop. Staff held two evening community 23 meetings in southern California, made 15 presentations to 24 industry groups, and had numerous teleconferences and 25 individual meetings during the course of developing this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 ATCM. 2 In addition, the outreach activities included 3 hundreds of personal contacts via telephone, E-mail, 4 regular mail, surveys, and facility visits. 5 On September 26th, 2003, staff posted the public 6 hearing notice and staff report to our website. More than 7 1,500 notices were also mailed to individuals and 8 organizations on that day. Additionally, the notification 9 was E-mailed to the list serve which has more than 750 10 subscribers. 11 Thank you. That concludes my comments. 12 CHAIRPERSON LLOYD: Thank you very much. 13 Questions from my colleagues on the Board? 14 Supervisor DeSaulnier. 15 BOARD MEMBER DeSAULNIER: Just briefly, given the 16 previous items we've talked up. You've talked about -- 17 could you talk a little bit about the use of backup 18 generators where kids are prevalent, particularly schools. 19 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Yes. 20 This is Dan Donohoue. I'm Chief of the Emissions 21 Assessment Branch. 22 Currently in the proposal we have a provision 23 that in those cases where there is a backup generator on a 24 school site, the school must -- the school officials must 25 operate that when kids -- when children are not present. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 That's the main requirement that we have in there 2 with respect to that. 3 BOARD MEMBER DeSAULNIER: And I don't know -- 4 when we were going through the rolling blackouts during 5 the energy crisis, I remember some discussion about 6 exemptions for schools. For instance, we had the 7 exemptions for public safety facilities like firehouses 8 and police stations. Was there any -- I assume they use 9 these backup generators or many of them might have been 10 purchased in reaction to that. 11 EXECUTIVE OFFICER WITHERSPOON: None of the 12 operational limitations we're proposing would apply in an 13 emergency situation. What we've done is reduce the number 14 of routine maintenance hours where they fire it up. They 15 don't need to run it as often as they do to keep it in 16 good working order. 17 BOARD MEMBER DeSAULNIER: Then did you look at 18 other locations other than schools where children may 19 be -- 20 EXECUTIVE OFFICER WITHERSPOON: We were asked to 21 look at day-care centers and other sensitive receptors. 22 It gets to be very difficult to identify where they all 23 are. 24 BOARD MEMBER DeSAULNIER: Okay. Thank you, Mr. 25 Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 EXECUTIVE OFFICER WITHERSPOON: If I might. Air 2 districts are required within six months of the adoption 3 of this ATCM to adopt it themselves. And if they are 4 able, you know, through their own files of locations and 5 whatever else to expand upon the school bus restriction, 6 then they can -- I mean the school site restriction. 7 BOARD MEMBER DeSAULNIER: Well, child care sites 8 have to be licensed with the State. That information 9 shouldn't be that difficult to come up with, 10 particularly -- I would think we could set some kind of 11 threshold, look at some kind of threshold in terms of the 12 size of the facility. 13 DEPUTY EXECUTIVE OFFICER SCHEIBLE: In general, 14 we took the approach that these engines could be almost 15 anywhere for backup and in fairly dense areas. And we 16 tried to design the measure so that by limiting the hours 17 of testing and operation the risk would be reduced to a 18 tolerable level. 19 In the case of schools, since they know when the 20 school children are there, it's just a -- it was an added, 21 well, we can eliminate some additional exposure that, even 22 though it's a small exposure, it's worthwhile doing. 23 But we didn't view it as practical to try to 24 figure out how to limit every situation from nearby 25 receptors. So we took the opposite approach: Be pretty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 conservative with our assessment of what the risks might 2 be, and then keep that risk to a very low level for the 3 generators. 4 And then we will need the AB 2588 process to look 5 at those cases where individual engines somehow produce a 6 significant risk nearby and if additional mitigation needs 7 to be done. But we think that will be a very, very small 8 percentage of the engines. 9 BOARD MEMBER DeSAULNIER: Okay. Thank you. 10 CHAIRPERSON LLOYD: Mr. Calhoun. 11 BOARD MEMBER CALHOUN: One of the difficulties 12 that I see is enforcing these regs. How do you propose to 13 enforce some of the requirements? For example, it says 14 stationary engines are subject to diesel -- subject to 15 fuel requirements. Now, how do you know if they're using 16 CARB diesel or some other type of unregulated fuel? 17 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: The 18 vast majority of the stationary engines, the actual -- the 19 supply of diesel fuel for those engines is out of the 20 normal CARB diesel. We've not found, you know, engines 21 that basically are using things other than CARB diesel. 22 But that has not been a specific requirement. We wanted 23 to ensure that that occurred. 24 As the entire diesel fuel structure changes with 25 the -- in the 2006 timeframe as we bring in the other, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 basically that's going to be the only fuel available. 2 The districts also have permits that restrict 3 these. The districts would also be inspecting these 4 engines from time to time. So we felt that certainly with 5 respect to that provision it is enforceable. 6 STATIONARY SOURCE DIVISION CHIEF VENTURINI: Mr. 7 Calhoun, I'd just like to add as well that with respect to 8 hours of operation and so forth, the operators of the 9 engines are required to keep records already to make sure 10 they're testing them and keeping the maintenance, so if 11 they are called upon for emergency use that they will be 12 ready to go on line. 13 So with a combination of the requirements they 14 have to keep plus the inspections by the districts -- and 15 I think we also intend to come with -- all regulations to 16 follow the implementation to make sure that they're 17 working as we've intended. 18 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: And 19 we do have a requirement in the regulation for monitoring 20 devices, install hour meters on all of these engines so 21 that the hour meters can be -- so the actual hours of 22 operation could be tracked and the districts can 23 periodically go out and look at that and look at the 24 records that have been kept on that usage also. 25 BOARD MEMBER CALHOUN: So you anticipate that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 local districts will follow up on enforcing these 2 requirements? 3 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Yes. 4 Since this air toxic control measure affects stationary 5 sources as compared to a number that you've seen so far 6 and will see in the future that affect mobile sources, in 7 this case the districts have the primary authority to 8 implement and enforce under the Health and Safety Code. 9 This regulation can be implemented and enforced 10 immediately upon adoption -- or clearing the OAL Secretary 11 of State process -- can be implemented and enforced 12 directly by the districts. If they wanted to do something 13 different than this, they'd have to propose alternatives 14 within 120 days and adopt a regulation within 180. 15 So basically this regulation -- the primary 16 responsibility for implementing and enforcing it does fall 17 with the districts. And we've been in contact and 18 consultation with the districts in this process. And many 19 of them are moving forward right now with permitting 20 programs for these engines, and we fully anticipate that 21 they will be implementing and enforcing the regulation. 22 CHAIRPERSON LLOYD: Thank you very much. 23 On slide 28, what currently are verified 24 alternate diesel fuels? 25 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 Verification through the retrofit verification 2 process of alternative fuels. There are not any currently 3 that have completed the verification process. The 4 emulsified diesel fuel is in that process right now. But 5 that would be -- you know, that's the only one that is 6 moving through that entire process that's very far along 7 the line. 8 CHAIRPERSON LLOYD: And when do we expect that to 9 fulfill that process? 10 STATIONARY SOURCE DIVISION CHIEF VENTURINI: That 11 one's having to go through the Environmental Policy 12 Council. And we're hoping that it can be considered by 13 the Council I believe January of '04. 14 CHAIRPERSON LLOYD: Okay. 15 BOARD MEMBER HUGH FRIEDMAN: I have a question. 16 CHAIRPERSON LLOYD: Yes. Professor Friedman. 17 BOARD MEMBER HUGH FRIEDMAN: You've estimated, if 18 I understand it, the cost effectiveness of this to be 19 about $15 a pound just for the emission reduction and PM. 20 But there's substantial NOx and ROG reductions as well 21 that are indicated. 22 And I'm wondering -- I didn't hear the 23 calculation. What would be the net benefit cost per tons 24 reduced of combined emissions? 25 STATIONARY SOURCE DIVISION CHIEF VENTURINI: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 Professor Friedman, we did look at that, because 2 you're correct, there's substantial benefits to NOx 3 particularly. When you look at it in the combination of 4 benefits, it reduced the PM cost effectiveness to about $8 5 a pound. And the benefits for NOx and hydrocarbons was -- 6 I believe was a dollar per pound. 7 BOARD MEMBER HUGH FRIEDMAN: Well, Alex's memo 8 set out -- the summary that I saw set out 790 tons of NOx 9 reductions estimated a year and 110 tons of reactive 10 organic gas reductions. So I just -- I wanted to relate 11 that to the $15 per pound of diesel PM reduces. 12 STATIONARY SOURCE DIVISION CHIEF VENTURINI: When 13 you relate -- 14 BOARD MEMBER HUGH FRIEDMAN: That's per pound 15 versus annual tonnages in a -- 16 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 17 Right. It works out to about a dollar per pound 18 for the NOx and VOC combined. And then the particulate 19 becomes $8 per pound. That's a very cost effective 20 measure. 21 BOARD MEMBER HUGH FRIEDMAN: All right. And that 22 is in the record? 23 STATIONARY SOURCE DIVISION CHIEF VENTURINI: Yes. 24 BOARD MEMBER HUGH FRIEDMAN: And I know we're not 25 voting today, but I -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 EXECUTIVE OFFICER WITHERSPOON: It's in slide 35, 2 Professor Friedman, that -- that information is on slide 3 35 of your in depth -- 4 BOARD MEMBER HUGH FRIEDMAN: Oh, I guess I missed 5 that. 6 Page 35? 7 EXECUTIVE OFFICER WITHERSPOON: Yes. 8 CHAIRPERSON LLOYD: Slide 35. 9 EXECUTIVE OFFICER WITHERSPOON: Right ahead of -- 10 CHAIRPERSON LLOYD: Slide 35. 11 BOARD MEMBER HUGH FRIEDMAN: Oh, slide 35. 12 It might have been when I walked out. 13 Ah, there. Thanks. I did miss that then. 14 Thank you for your patience. 15 CHAIRPERSON LLOYD: Mr. Calhoun. 16 BOARD MEMBER CALHOUN: One other comment. 17 In reviewing some of the comments that were 18 received concerning this particular issue, I note that 19 there was some, I wouldn't say discrepancy, but some 20 differences or some -- in regard to the test methods. And 21 have those been resolved? Or should we -- do we expect or 22 anticipate comments from the audience regarding the test 23 methods? 24 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 25 Basically, with respect to the test method, you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 know, what we are proposing based on the work that we've 2 done with CE-CERT and through the test method workgroup 3 that involved the district, the control system 4 manufacturers and the engine manufacturers, we're 5 recommending, at this point in time, to either allow the 6 use of the ISO 8178, which is the filter-only test, or the 7 Method 5 front half. 8 There's still arson issues and particularly with 9 respect to what percent of semi-volatiles we may be 10 missing in that front half filter. What we've proposed to 11 do and what we would bring forward to you in a resolution 12 would be to continue the work of the test method workgroup 13 to continue to gather additional information. 14 The data we have so far is based on six engine 15 tests and a lot of other information with respect to the 16 experts there. But we think that this -- the approach 17 would allow for consistency between how engines are 18 certified, how their control systems are verified, and 19 then how they're tested in the field. Because basically 20 these diesel engines are really coming out of the off-road 21 fleet. We're dealing with something different than the 22 normal stationary source. 23 But we do believe that we need to continue to 24 follow this. We've committed to continuing that process 25 and continue to work with all the interested parties, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 come back and see whether there is anything additional 2 that we need to do with respect to testing for stationary 3 engines or whether there's anything additional we need to 4 do on the overall process with respect to, you know, how 5 engines are certified and verified. 6 EXECUTIVE OFFICER WITHERSPOON: Mr. Calhoun, I 7 want to restate what Dan just said in a simpler way. 8 We're now in agreement that the rule should be enforced 9 and implemented using the test method that's the front 10 half. 11 And what we're going to -- 12 BOARD MEMBER CALHOUN: Using the test method 13 where? 14 EXECUTIVE OFFICER WITHERSPOON: On the front 15 half. That's how we're able to certify it. That's how 16 we'll enforce in the field. And what the continuing work 17 is on is: Shall we be calculating emissions more 18 expansively by looking at the back half? And as Dan 19 indicated, are we missing some of the semi-volatile 20 organics such that we're under accounting emissions? But 21 in terms of implementing this particular rule, there is 22 not a disagreement anymore of how we should test it in the 23 field. 24 BOARD MEMBER CALHOUN: Okay. Thank you. 25 CHAIRPERSON LLOYD: Come back to Peter again. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 Why has it taken an additional two months or two 2 and a half months to get the emulsified diesel out there? 3 Because I've heard from a number of people who would like 4 to use this and put it into this system as soon as 5 possible. 6 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 7 Well, it's been going through the verification process. 8 And, quite frankly, we had some delays in getting the peer 9 reviews going and some contractual issues. I think those 10 are resolved now. And the peer reviews are under way. 11 And there was just a meeting with my staff and the other 12 boards and departments and the peer reviewers to explain 13 the process and provide technical information. 14 So with that behind us, we're expecting now that 15 the work should be done and be able to -- the 16 Environmental Policy Council can hold their hearing in 17 January, which mean announcing it next month. 18 CHAIRPERSON LLOYD: Do we have a date in January? 19 STATIONARY SOURCE DIVISION CHIEF VENTURINI: I 20 don't recall. 21 EXECUTIVE OFFICER WITHERSPOON: Not yet. 22 We have almost daily E-mails back and forth with 23 Cal EPA. Tam Doduc is following this closely and trying 24 to keep it on track. We were unable to get a hearing 25 scheduled before the last administration changed over. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 And now it's the new administration's job, and the 2 earliest date that will happen is -- looks like it will be 3 January. 4 CHAIRPERSON LLOYD: Okay. Thank you. 5 I guess if we have no other questions from my 6 colleagues on the Board, I'd like to call the first three 7 witnesses signed up on this item. Barbara Lee, Elaine 8 Chang, Bruce Bertelsen. 9 Looks as though staff has done a very good job, 10 given the fact we don't have anybody opposing this. 11 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: We 12 just moved some of those to the other column. 13 (Laughter.) 14 MS. LEE: Good morning, Mr. Chairman, members of 15 the Board. My name is Barbara Lee. I'm the Air Pollution 16 Control Officer in northern Sonoma County. I'm also here 17 as an official for the California Air Pollution Control 18 Officers Association. I am currently their vice president 19 and have been working as the liaison between the CAPCOA 20 Board of Directors and the ARB on all toxics issues for 21 the last eight years. 22 I want to start off by expressing our gratitude 23 and our respect for your staff and their work on this 24 program. Controlling the emissions of diesel particulate 25 is one of the biggest challenges we're facing. It is one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 that will bear tremendous fruit in terms of protecting 2 public health and, in particular, the health of people 3 living in low-income communities and communities of color. 4 So we are very supportive of your efforts. 5 And we also believe you have made tremendous 6 efforts to work with us to achieve our common goals of 7 advancing public health, of seamlessly integrating a 8 variety of complicated programs, and minimizing, to the 9 extent we reasonably can, the regulatory burden on the 10 affected industry. There's still some work to do. But I 11 want to make sure you understand we are strongly in 12 support of this effort. 13 That said, we have a couple of issues we have not 14 yet been able to resolve, although everybody has been 15 working real hard on doing that. And I want to just touch 16 on those four issues for you. 17 I also need to caveat my comments by saying that 18 we have not had time to adequately review the supplemental 19 proposals that were released after the 14th of November, 20 including the demand reduction program proposals. And we 21 will, therefore, not be making any comments on those. And 22 we certainly hope that no decisions will be made about 23 those proposals until the public has had adequate time to 24 review them and comment on them. 25 The four issues that we have remaining include PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 some lingering concerns about the test method that Mr. 2 Calhoun mentioned. We believe that there needs to be 3 further work looking at the fractions of particulate that 4 are not currently counted in the certification method. 5 Not only for the purposes of quantifying emissions and 6 estimating health effects for AB 2588, but also perhaps to 7 revise the test method for certification. We have 8 provided a schedule in our written comments, and we hope 9 that you will incorporate that into your adopting 10 resolution with commitments to proceed with us on the 11 work. 12 The second issue that we want to raise is the use 13 of alternative fuels. We would like to see this proposal 14 strengthened a bit in that regard. We would like it to 15 require the owner-operator of an affected prime engine 16 that is new to prepare a feasibility analysis of using 17 alternative fuels and submit that to the air district with 18 the application for the permit, and have there be a 19 requirement to use the alternative fuel if a review of 20 that feasibility analysis by the air pollution control 21 officer shows the alternative fuel is feasible in that 22 application. 23 Our third issue deals with sensitive receptors. 24 As Supervisor DeSaulnier pointed out, there are remaining 25 questions about exposure to children at school sites. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 would like to see a widening of the limitations on the 2 non-emergency use of engines to include engines that are 3 located within a hundred meters of a school. 4 We understand that staff believe the current 5 proposal is sufficiently protective. We are responding to 6 considerable concerns we have heard from community groups 7 about facilities that are operating close to school 8 boundaries. And we think that this would strengthen your 9 proposal. 10 And then our final issue regards engines located 11 in remote locations. We would like to see a very limited 12 exemption provided for engines that are at least one mile 13 from the nearest receptor and have a risk that is below 14 one in a million or a hazard index of -- and a hazard 15 index of .1 or a priority score of 1. And the engine 16 would either need to be in central public service or 17 compliance with the ATCM would need to create undue 18 economic hardship. 19 We have provided specific language to you in our 20 written comments and we would like you to respectfully 21 consider those. 22 But I do want to close by saying this is a 23 tremendous effort. We are very supportive of it. You're 24 doing very good work here. And we hope that this program 25 moves forward and ultimately the ATCM is adopted. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 Thank you. 2 CHAIRPERSON LLOYD: Thank you very much. 3 Any questions? 4 One thing, Barbara, it would be useful, we -- 5 you're jumping back and forth between meters and miles. 6 So I guess we'll translate your miles into meters. 7 MS. LEE: If that will make it easier for you in 8 your regulation, you may translate it into other units, 9 yes. 10 CHAIRPERSON LLOYD: Another example of alt fuels, 11 because clearly some places don't have natural gas. And I 12 think you make a very good point, that -- I think that 13 should be looked at. Presumably also if you don't have 14 natural gas, LPG or something like that, which might be on 15 site, would be -- should be looked at as well. 16 MS. LEE: We would expect that a feasibility 17 analysis would look at a variety of alternative fuels 18 including, if LPG or natural gas is not feasible in that 19 circumstance, perhaps an emulsified or alternative diesel 20 fuel would be feasible. But feasibility needs to look at 21 availability and also other constraints on the use of the 22 fuel in the application. 23 CHAIRPERSON LLOYD: So we would be requiring the 24 local districts to do that? 25 MS. LEE: Yes. We would review a feasibility PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 analysis. But we would give the latitude to the affected 2 industry to prepare that analysis using their data. 3 CHAIRPERSON LLOYD: Thank you. 4 MS. LEE: Thank you. 5 CHAIRPERSON LLOYD: Elaine Chang, Bruce 6 Bertelsen, Tim French. 7 MS. CHANG: Good morning, Mr. Chairman and 8 members of the Board. My name is Elaine Chang, Deputy 9 Executive Officer with the South Coast AQMD. The District 10 staff is here to support the staff proposal and the CAPCOA 11 comments. 12 But I would like to highlight two specific issues 13 that are very important to us. One is the continued 14 commitment to study the test method. The second is the 15 expansion of engine testing limitations to beyond just the 16 engines located on school site to be within 100 meters of 17 school boundaries. We believe that's more health 18 protective. And we took the liberty to prepare some 19 proposal language for your consideration. 20 This completes my remarks. And I'm happy to 21 answer any questions you may have. 22 CHAIRPERSON LLOYD: Thank you, Elaine. 23 Professor Friedman. 24 BOARD MEMBER HUGH FRIEDMAN: Just a quick 25 question. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 Your proposed language seems to track CAPCOA's -- 2 MS. CHANG: Yes. 3 BOARD MEMBER HUGH FRIEDMAN: -- recommendations. 4 MS. CHANG: Yes. 5 BOARD MEMBER HUGH FRIEDMAN: There's no 6 difference between them? 7 MS. CHANG: No. 8 BOARD MEMBER HUGH FRIEDMAN: I would hope that 9 others who are commenting on this item would comment on 10 these proposed additions or clarifications as well. 11 Thank you. 12 CHAIRPERSON LLOYD: Good point. 13 Thanks, Elaine. 14 Bruce Bertelsen, Tim French, Daniel McGivney. 15 MR. BERTELSEN: Good morning. 16 CHAIRMAN LLOYD: Good morning, Bruce. 17 MR. BERTELSEN: For the record, my name is Bruce 18 Bertelsen, and I am here representing the Manufacturers of 19 Emission Controls Association. MECA is pleased to provide 20 testimony in support of the proposed rule. We believe 21 it's an important step forward in further reducing 22 emissions from stationary IC engines. 23 We concur with the staff's analysis that emission 24 control technologies exist to significantly reduce PM 25 emissions from stationary diesel engines. As was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 discussed by the staff, diesel particulate filters which 2 can reduce total PM by 85 percent or more and reduce the 3 carbon based ultrafine particles by 99 percent or more as 4 well as reducing toxic hydrocarbons by 80 percent or more 5 is commercially available today. In fact, worldwide there 6 are over 1,000 stationary IC engines equipped with diesel 7 particulate filters. 8 Similarly, diesel oxidation catalysts is a 9 technology that's commercially available. The performance 10 characteristics of that technology were well discussed in 11 the staff report. There are in the U.S. alone over 500 12 engines equipped with diesel oxidation catalysts. 13 We concur with the sentiment of others that low 14 sulfur diesel fuel will be a key component in achieving 15 the desired reductions. 16 With regard to the issue of test methods, and in 17 particular where a diesel particulate filter or diesel 18 oxidation catalyst is used, we believe the best approach 19 for demonstrating compliance for engines using these 20 technologies is through the ARB verification procedure, 21 where testing is performed under properly controlled 22 conditions and using very accurate test measurement 23 techniques. 24 We believe that if verified emission control 25 technologies are used, the need for additional field PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 testing may not always be required. 2 We are concerned about the ability of the 3 available source testing methods to accurately determine 4 compliance with the very, very stringent control 5 requirements established by this rule. And we appreciate 6 the willingness of the staff to work with our members, 7 other stakeholders, the local air quality districts to 8 continue to work on these issues. The discussions have 9 been I think very positive and very fruitful. We think 10 there are still some issues that we'd like to pursue with 11 the staff. But in general we're very supportive of this 12 rule. 13 And appreciate the opportunity to testify today. 14 CHAIRPERSON LLOYD: Thank you, Bruce. 15 Couple of questions. 16 In your experience with diesel particulate 17 filters, are there any safety concerns with those? Fire 18 concerns? 19 MR. BERTELSEN: I'm not aware of any instances 20 where that has been a concern. Typically, the failure 21 mode with a filter would be some type of cracking, which 22 would become pretty evident. And most filters today that 23 are used commercially have some type of monitoring device, 24 whether it's a back-pressure monitoring or something else, 25 that will very early on alert the operator to an issue if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 one exists. 2 CHAIRPERSON LLOYD: Same question for diesel 3 oxidation catalysts. 4 MR. BERTELSEN: Diesel oxidation catalyst is, I 5 think, a product we'd call a simply elegant technology. 6 It's a flow-through technology. And in a diesel operating 7 environment fire and safety issues just have not occurred. 8 CHAIRPERSON LLOYD: Thank you. 9 Any other questions? 10 Thanks, Bruce. 11 MR. BERTELSEN: Thank you. 12 CHAIRPERSON LLOYD: Tim French, Daniel McGivney, 13 Kate Larsen. 14 MR. FRENCH: Mr. Chairman, members of the Board. 15 My name's Tim French. I'm with the Engine Manufacturers 16 Association. 17 And I just want to echo some of the earlier 18 comments that have been made about the great work that 19 your staff has done in this rulemaking. Peter, Dan, Alex, 20 Peggy spent a great deal of time looking at this issue. 21 When we first started we came to a situation where because 22 of the unit risk factor that's ascribed to some of these 23 technologies, it seemed like an insurmountable problem to 24 get a workable regulations to put together. But through 25 concerted effort, cooperative efforts, dedicated research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 on these issues, including especially this test method 2 issue that we've worked through, they did a fabulous job, 3 and they really should be highly, highly commended for the 4 great work that they've done. We don't always see eye to 5 eye on these issues. But they're a pleasure to work with, 6 very professional group. And the rulemaking that is 7 before you today reflects that. 8 If you read through the initial statement of 9 reasons, look at all the appendices that they've put 10 together, you see some fabulous work that's been done. 11 And we, the regulated industry, very much appreciate it. 12 All you could ask for is the best effort from the people 13 that are regulating your industry. And we have it with 14 your staff. 15 I'm happy to answer any questions about it. 16 We've submitted detailed comments. We had three principal 17 concerns going into this: 18 Try to avoid retrofitting with traps emergency 19 standby engines because they need to get up to load in ten 20 seconds. That's what they need to do. And it would be 21 very complicated to retrofit those. In addition, because 22 of their very low hours of operation in non-emergency 23 situations, it just didn't seem entirely cost effective. 24 And staff responded very well to that. 25 We also wanted as much alignment as possible PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 between the federal ARB non-road engine standards and 2 these standards because very often stationary engines are 3 non-road engines that don't move. And staff responded 4 very well there. 5 And, finally, the test method that was being 6 employed, ARB Method 5, there was a huge disconnect 7 between how we certify engines, how after-treatment 8 technologies are tested and verified, and how the field 9 method would work. And we've resolved that, through great 10 work with Riverside and the folks here who've done -- 11 they've developed the data to show and prove that out. 12 And that was wonderfully done. 13 So our comments are submitted. We have some very 14 specific issues about risk modeling that we commend you, 15 if you have the time to read through our comments. I 16 think we do have some improvements to make there as we go 17 forward on these further measures. Caterpillar submitted 18 comments. 19 We also had Professor Kittelson submit some 20 detailed comments. He's a leading expert in particulate 21 measurement and characterization. And to the extent you 22 have any questions about whether the test method that 23 we're talking about accurately describes what is 24 experienced by a receptor in air, please look at Professor 25 Kittelson's comments. He is, in essence, the world's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 leading expert on those issues. 2 So I have nothing further to add other than it 3 was a really bang up job. 4 BOARD MEMBER HUGH FRIEDMAN: Thank you very much, 5 Tim. 6 Any comments, questions? 7 BOARD MEMBER CALHOUN: Yes, I guess I'd like to 8 ask a question. 9 I note, Tim, that EMA took a neutral position as 10 opposed to one of the other two possibilities. And is 11 there any particular reason why you chose to go neutral? 12 MR. FRENCH: Well, it's sort of like going to the 13 dentist. I mean you have to do it. 14 (Laughter.) 15 MR. FRENCH: You come home. You know, you're 16 cleaner, you're better off for it. But it's not like 17 you're in favor of going through it. So, you know, I 18 just -- I feel bad speaking on behalf of the industry 19 saying, yeah, you know, continue to cram down on us. So 20 we say neutral. But I think the tenor of our comments 21 speak for itself. 22 BOARD MEMBER CALHOUN: I know the feeling, Tim. 23 Thank you. 24 MR. FRENCH: Thank you. 25 BOARD MEMBER HUGH FRIEDMAN: Any others? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 Thank you. 2 Mr. McGivney. Daniel McGivney. 3 MR. McGIVNEY: Good morning, Chairman Lloyd and 4 members of the Board. My name's Dan McGiveny and I 5 represent Western Municipal Water District in western 6 Riverside County. 7 My agency provides water and sewage collection 8 and treatment services to over half a million people in a 9 550 square mile service area. We use emergency generators 10 to support a lot of those essential public service 11 facilities, sewage treatment facilities, pump plants, well 12 heads in order to keep drinking water flowing, fight fire 13 fee flow, and protect against sewage overflows. 14 I'm also here today representing the Southern 15 California Alliance of Publicly Owned Treatment Works, or 16 SCAP. It's an association of over 60 public water and 17 sanitation districts in southern California that provide 18 services to over 18 million people. 19 I'd like to again, as previous speakers before 20 me, to thank the Board for the great efforts of their 21 staff. Again, it was a good two and a half year effort. 22 And as the previous speaker noted, Peter and Peggy and 23 Alex all the staff did a great job. We've come to some 24 great resolutions on this. 25 Eastern and SCAP are here in support of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 regulation as it's being proposed to you today. And we 2 are especially supportive of the late amended language for 3 the demand response programs. 4 And we'd like to note that on those types of 5 programs, a lot -- it's been noted that energy providers 6 come out and provide those programs to industrial and 7 commercial users. And that's true. But it's also true 8 that those programs are actually programs that are 9 implemented or devised to help mitigate energy crises 10 events like we had back in 2000. And they're done under 11 the requirements of the CPUC, who requires energy 12 providers to have curtailment programs available in order 13 to help prevent different types of energy crises. 14 So while they do provide some benefit to the 15 agencies and people using them, they are part of the 16 overall strategy of the State to help mitigate energy 17 crises. 18 We'd particularly like to talk about the 19 interruptible service contract agreements. Those are 20 typically done to implement or to help prevent rolling 21 blackouts. Rolling blackouts can impact the elderly 22 during the height of the summer who are seeking refuge and 23 use of their air conditioning. They can impact the home 24 health impaired who might need electrical medical devices 25 and other types of health impacts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 They also create financial loss to business when 2 you have a rolling blackout. So ISCs help mitigate these 3 impacts. And while a number of participants utilize 4 diesel emergency engine generators, it should be noted 5 that these events are historically low and of short 6 duration. 7 These facts have been supported by research done 8 by staff. And, again, they only operate during stage 2 or 9 3 electrical emergencies as declared by the State of 10 California's ISO. 11 What's weighing against these programs are the 12 emissions and associated health risks that diesel engines 13 may have during these extra events, that we could them. 14 I think before you today is a proposal that 15 mitigates both of the emissions and the health risks in 16 what we believe is a win-win solution. Staff's proposed 17 language addressing demand response programs would allow 18 continued use of the diesel engines to support ISC 19 programs as long as these engines are retrofitted or 20 installed to meet the most stringent emission rate 21 standard, that being the same as the prime engine. 22 This is above and beyond the standards proposed 23 for the non-ISC participating engines and obtains greater 24 health risk reduction. This means any time an engine's 25 operated for an ISC or interruptible event, the emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 and health risk is reduced to the maximum extent possible. 2 In addition -- and this is where the win-win 3 comes in -- every other time the engines are operated 4 throughout the year, these same emissions and health risk 5 reductions will occur. This means every time the engine's 6 exercised for maintenance, reliability testing, or any 7 kind of a local emergency or a more widespread emergency, 8 that you will have the emissions and health risk reduction 9 benefits to the maximum extent possible. These events 10 occur year in and year out and at a much higher frequency 11 than ISC events, which can have years spanning between 12 events. 13 EMWD and SCAP member agencies believe that this 14 proposal goes beyond what is being required in engines not 15 participating in ISC contracts and benefits all concerned 16 parties. This is truly a win-win solution benefiting air 17 quality, reducing health risk, and providing options to 18 mitigate energy crises and the health and financial 19 impacts associated with them. 20 EMWD strongly urges the Board to adopt the ATCM 21 as proposed by staff, including the language for the 22 demand response program. 23 Thank you. And I'd be happy to answer any 24 questions. 25 BOARD MEMBER HUGH FRIEDMAN: Any questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 Thank you, sir. 2 Ms. Larsen. 3 MS. LARSEN: Mr. Chairman, members of the Board. 4 Kate Larsen from Environmental Defense, representing over 5 80,000 members in California. 6 Environmental Defense would like to express its 7 strong support for the proposed ATCM and to thank you and 8 your staff for the work you've done on this important 9 issue. 10 Though we would like to see more protections for 11 sensitive receptors, especially children, we believe that 12 the proposed emission standards and operating hour limits 13 for both prime and emergency standby engines will be an 14 important step in protecting the public from the severe 15 and acute chronic health impacts from diesel exhaust 16 emitted from over 26,000 stationary engines located 17 throughout California. 18 However, we do not support the supplemental 19 provision released a few days ago allowing engines to 20 run -- engine owners to run their diesel emergency backup 21 generators to comply with demand response programs such as 22 SDG&E's ruling blackout reduction program and other 23 interruptible service contracts. 24 We are concerned that allowing engine owners to 25 receive payment for running their diesel backup generators PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 under such programs will undermine efforts to maintain 2 these as purely emergency resources, as they were intended 3 to be, and allow them to avoid the strict operating hour 4 restrictions upon which the ATCM is based. 5 Allowing backup generators to run as mini-peaker 6 plants sets a dangerous precedent. These engines were 7 never intended to be used as good resources. Even during 8 the most acute electricity shortages of 2000 and 2001 9 CARB's own policy was the backup generator should only be 10 used in the event of a true emergency. 11 Permitting engine owners to operate these engines 12 during compensated service interruptions is tantamount to 13 dispatching them as grid resources. This is not 14 appropriate, as diesel backup generators are the most 15 polluting form of stationary electric power generation. 16 Even a retrofitted engine running at .15 grams 17 per brake-horsepower hour is more than 15 times dirtier 18 than a simple sample peaker. The fact that a majority of 19 engines are located close to where people live and work 20 makes them even less suited to provide good backup. In 21 fact, our dispersion analysis shows that engines emitting 22 at this rate or up to 150 hours per year to fulfill an 23 ISC, in addition to 50 hours of maintenance and testing, 24 would create a cancer risk of greater than 10 per million 25 within a 60-meter radius of an engine -- a modeled engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 in both Fresno and San Diego. 2 CHAIRPERSON LLOYD: Kate, don't feel compelled to 3 read all your letter. We've got it here. But if you want 4 to highlight -- 5 MS. LARSEN: Actually, this is a shortened 6 version of our comments. 7 CHAIRPERSON LLOYD: Okay. Thank you. 8 MS. LARSEN: Just a few more. 9 Most state and local agencies agree the diesel 10 backup generators should be only used in the event of an 11 emergency. 12 In June of this year the PUC, CEC, and CPA issued 13 a joint statement called California Demand Response - A 14 Vision for the Future, in which they state the agency's 15 definition of demand response does not include or 16 encourage switching to use of fossil fueled emergency 17 backup generation. 18 Waste water treatment agencies and other entities 19 providing essential services should not currently be 20 enrolled in ISCs, as they lack the appropriate flexibility 21 to curtail service in the event of rolling blackouts. 22 The ISC programs have been revamped since the 23 shortages of 2000 and 2001, in which a poor compliance 24 rate, especially in Southern California Edison's service 25 territory, led to a PUC investigation that revealed that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 many essential service customers lacked the necessary 2 operating flexibility. 3 Subsequently, the Commission has directed the 4 utilities to redesign their programs to assure that 5 participants actually can reduce load when called upon; 6 and reiterated its commitment to exclude from demand 7 response program any customers who would switch to diesel 8 dogs. 9 CARB has traditionally been a national leader in 10 developing forward-thinking policies to protect air 11 quality. As other states develop their own demand 12 response programs, CARB should set the standard. 13 We urge CARB to join the PUC, CEC, and CPA in 14 reaffirming the position that diesel backup generators 15 should not be treated as great resources. While we 16 endorse the emission standards and operating hours 17 restrictions in the ATCM, we strongly urge the Board to 18 remove the exemptions for engines paid to participate in 19 demand response programs. 20 Thank you. 21 CHAIRPERSON LLOYD: Thank you. 22 Ms. D'Adamo. 23 BOARD MEMBER D'ADAMO: I'm trying to come to a 24 better understanding of what occurred here. Perhaps if 25 staff let us know what happened in the last couple of days PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 that led staff to arrive at the language. First question. 2 Second question. Is it possible that these 3 changes would actually attract new customers to engage in 4 interruptible service contracts? I'm a little concerned 5 about perhaps unintended consequences. So that perhaps 6 additional businesses may want to take advantage of the 7 opportunity to have these contracts if they can run backup 8 generators. 9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: During the 10 reg development process we recognized we had the issue to 11 deal with with what should backup generators be 12 categorized if they're going to be used outside of just 13 emergency service, that is replacing power that was lost 14 from the grid and not through some sort of interruptible 15 contract? 16 We dealt with the owners of these engines. And 17 they always seem to have the possibility to become prime 18 engines, because that was the definition of prime. But 19 should they get some emergency status classification? 20 And what we did through this process, we were 21 unable to reach the design of a program in time to make it 22 in the original proposal. So we made clear to all the 23 stakeholders we'd continue to work on it. 24 In the end, the operators for the most part said 25 that they would install the type of controls needed for a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 prime engine; and convinced us through the process that if 2 they did that, we'd actually see a reduction in the PM 3 emissions that would occur over the next 30 years from the 4 engine operations because the expectation and historical 5 practice is that they were run very, very few hours on an 6 average year. Excepting the energy crisis, it's only a 7 few hours a year that the interruptible service contract 8 has been invoked and they've been curtailed. 9 So we saw a net -- through the proposal they 10 made, a net decrease. I don't think this will attract new 11 business because the people that, you know, find this 12 advantage are already there. And this doesn't make it 13 cheaper for them to participate. It actually makes it 14 more expensive for people to participate over what 15 historical participation has been. They will have to 16 control their engines. 17 Secondly, I'd like to address an issue. Our 18 policy with respect to signing up diesel engines as 19 mini-peakers hasn't changed. During the energy crisis 20 there were many proposals out there to say, let's go out 21 and find the diesel engines that are out there. Let's 22 sign them up for compensation so that they will agree to 23 turn on and shed grid power as resources get low. And we 24 haven't changed that. These are people that are in a 25 different program. The interruptible power contracts, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 they get an ongoing rate. They get no advantage for 2 running the deal any particular hour. They just have to 3 do it to honor their contract. These contracts exist. 4 They haven't been changed. 5 I think as PUC considers them, we'll probably be 6 there saying do things that lower the use of diesel 7 engines as part of these contracts. But so long as 8 they're there and the engines can participate and the 9 industry came up with an approach that actually helped us 10 reduce PM as opposed to making it more difficult to reduce 11 PM, we thought it was fair to go ahead and propose it as 12 part of our proposal. It's not a good policy to have 13 diesel engines being run to produce power, and we don't 14 think we're doing this here. We continue to have concerns 15 about the NOx emissions. And districts can continue to 16 regulate these more stringently for other pollutants if 17 they decide that they're not appropriate to run even under 18 these conditions. 19 So it's a complicated matter. It's a close call. 20 We were skeptical that we could do something with the 21 industry that would make sense in the end. We've proposed 22 it. And unfortunately, you know, because of the late hour 23 we haven't been able to explain it to everyone or deal 24 with all the concerns. 25 CHAIRPERSON LLOYD: Mr. McKinnon. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 BOARD MEMBER McKINNON: Yeah. This is a 2 really -- it's a really tough argument. And I heard the 3 argument very clearly. I'm somewhat torn. And I'm 4 thinking back to the energy crisis. And I don't want to 5 sort of represent this as, you know, the State or 6 something. But I got a phone call, and I believe it was 7 in either Santa Cruz County or Monterey County. There was 8 a glass plant. And the glass plant needed heat to do the 9 process of making the glass. And they had gone to the 10 most environmentally sound heat source for heating the 11 glass. They'd done it electrically. 12 And they had thought they had done it the best 13 way for the community they lived in. And suddenly they 14 got hit with power outages right and left in that January, 15 February timeframe. And they had to do something because 16 if they lost heat in the glass plant, it ruined the whole 17 product and it took several days to get back going. 18 And it's a really compelling argument you make. 19 But I'm also torn that for emergency backup and, yes, even 20 when people are being paid, if you're surviving the 21 business environment in California, you're doing it the 22 most environmentally sound way in glass production, and 23 then you get hit with an emergency, I have a real hard 24 time saying that we shouldn't like figure out an approach 25 to that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 MS. LARSEN: We're not arguing that engines 2 shouldn't be able to run in emergencies. The glass 3 factory could have their own engines and run them to 4 provide power during the blackout. What we're saying is 5 that companies that sign up for these rate reductions 6 should say, "We actually are flexible in our operating 7 abilities and can curtail our electricity to be able to 8 supply electricity to other people who need it, who don't 9 have that flexibility." 10 And we're saying that you shouldn't be able to 11 run your diesel generators just to provide that sort of 12 artificial flexibility. We're not at all arguing that 13 people shouldn't be able to use their engines in emergency 14 situations to provide themselves with power. 15 BOARD MEMBER McKINNON: Yeah, I guess I really 16 didn't say it right. And, that is, that the glass factory 17 uses a lot of electricity as an alternative to natural 18 gas. And so part of that is they do sign up for the rate 19 reduction, right? I mean that's part of trying to operate 20 that kind of business in that environment. 21 But I get your argument. It's really compelling. 22 And I'm sort of torn. And we'll see as the day goes on. 23 Thank you. 24 MS. LARSEN: Thank you. 25 BOARD MEMBER RIORDAN: Mr. Chairman? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 CHAIRPERSON LLOYD: Mrs. Riordan. 2 BOARD MEMBER RIORDAN: I just want to ask the 3 staff. My general impression without having any actual 4 knowledge is that California has really, through the last 5 few years, stepped forward to try to have a number of new 6 generators out there so that we don't go through the 7 crisis that we did some years back. 8 Therefore, if we have new generators, if we have 9 maybe an ample supply of electricity, we aren't going to 10 experience the problems that we did before. And, 11 therefore, I think your comments, Mr. Scheible, to the 12 fact that, yes, you may have a contract, but you're not 13 necessarily operating those generators, you're not feeding 14 into the grid system. Or am I wrong? Are we still 15 feeding into this grid system? 16 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, I think 17 some people are willing to sign up for an interruptible 18 service contract because they know that if they have to 19 honor that contract, they can at least meet some of their 20 power needs by operating their own power generator. They 21 don't get to do it for economic dispatch. They get to do 22 because the system has reached a crisis situation. 23 And our view is the way to manage that in terms 24 of the electricity crisis is clearly to avoid a repeat of 25 the situation we had where the system was in crisis day PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 after day because of inadequate production and supply for 2 various reasons. 3 I think we're hopeful, and we're working very 4 closely with the CEC and others to prevent that from 5 happening, so these things are not routinely turned on. 6 So then you get into the situation of, you don't have a 7 chronic shortage or a crisis; what you have is you have 8 fires that take out a big power line or you have other 9 things that may require some substantial amount of period, 10 but occur very infrequently. And then under those 11 circumstances it seems to be a reasonable resource; and 12 the operation is not 100 hours a year, it's zero hours for 13 most years and then a few hours other years. 14 If we get into another power crisis, then, yes, 15 the operation of these things -- large amounts of time 16 will be -- could be a problem. 17 BOARD MEMBER RIORDAN: But generally speaking, 18 don't we have more sources of power, significant sources 19 of power than we did a few years back? 20 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We do. And 21 the Energy Commission believes that we're in pretty good 22 shape until 2006. The ISO is a little worried about the 23 more near term. And I mean our policy needs to be -- we 24 need to build new capacity that is much cleaner than the 25 existing plants we have out there, to replace them and in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 an adequate capacity so we don't get out of this. 2 If we get to that situation, then I think the PUC 3 and the utilities are going to have to reassess the need 4 for these contracts and how much they pay. And that's a 5 whole other debate over the -- what the, you know, value 6 to the public is of giving a significant rate reduction to 7 these other users. 8 But they are in place now. The users do the 9 economic analysis. It makes sense for them. And we think 10 we've proposed something that actually has some 11 environmental benefits in terms of diesel PM over just 12 saying, "No, you can't do that unless you become a prime 13 engine." 14 EXECUTIVE OFFICER WITHERSPOON: Mrs. Riordan, in 15 addition to more powerplants having come on line, peaker 16 and normal capacity, since the crisis there were also 17 solutions to transmission congestion on path 15, and the 18 availability of natural gas in San Diego where the 19 pipeline was too small to bring in as much as was needed, 20 and the market manipulation that was causing outages that 21 had nothing to do with power availability but everything 22 to do with price has also been eased. So we're in a lot 23 better shape now than we once were. 24 BOARD MEMBER RIORDAN: That's what I thought. 25 Therefore, you probably would use even less these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 contracts. 2 EXECUTIVE OFFICER WITHERSPOON: That's our -- 3 BOARD MEMBER RIORDAN: In a simplified way. 4 EXECUTIVE OFFICER WITHERSPOON: Yes. 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And I'd also 6 like to add. I think we're in complete agreement with the 7 letter that we got from the several organizations about, 8 this is a component of an emergency program. The Board is 9 not establishing a policy of where we think diesel 10 generation should be used as a routine resource where you 11 pay people to turn on the diesel generator. I know this 12 is a form of it. But it happens under conditions where 13 the system has reached an emergency level, reserves are 14 too low. So we should do everything we can to avoid 15 getting there. And when we get there, then we need to 16 avoid -- we need to mitigate the impacts that occur with 17 that. 18 MS. LARSEN: And we have actually provided 19 language in some of our supplemental comments that says 20 that, you know, if you do go ahead with this, we'd like to 21 make it clear to other states who may not have such 22 ambitious standards that this is an emergency program and 23 not an economic demand response. 24 CHAIRPERSON LLOYD: Thanks for stimulating that 25 discussion. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 Bonnie Holmes-Gen, Roger McRae, Mike Dillon. 2 MS. HOLMES-GEN: Good morning, Mr. Chairman, 3 Board members. 4 We of course are strongly supportive of every 5 measure that comes before you to control diesel pollution. 6 That's one of our top priorities, and we appreciate it's 7 one of your top priorities. And so we are here to support 8 the regulation, but to ask you to strengthen it. 9 And you've discussed many of the issues that we 10 have to raise. So I'll just run through them very 11 quickly. We'd like to, number 1, improve children's 12 health protection; number 2, improve enforcement; 3, 13 oppose use of backup generators in the interruptible 14 programs. You just had a long discussion about this. 15 And, 4, include in-use agricultural engines. 16 On the issue of sensitive receptors and 17 children's health, we are suggesting that you specifically 18 expand the operational limits to BUGs within 1,000 feet of 19 schools. So basically -- you already have said that BUGs 20 shouldn't be operating on school grounds. And we want to 21 see you include that BUGs operating within 1,000 feet of 22 schools should also not be operating during school hours 23 or during school-sponsored activities. 24 And I just wanted to note that you've already 25 included in your regulation some recognition for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 children's health, and I appreciate that. You 2 specifically prohibited BUGs on school -- you've excluded 3 engines within 1,000 feet of school grounds from your 4 low-use exemption that you've included in the regs. So 5 you already have some recognition of the 1,000 feet as a 6 buffer zone, so to speak. 7 So, you know, we are suggesting -- I know you've 8 heard testimony on 100 meters, and now here's 100 feet. 9 But the gist I think of what we're all saying is that, you 10 know, we need to have some protection for kids, not just 11 on school grounds, but in nearby neighborhoods. And I 12 think we can settle on a number that makes sense. But we 13 need to expand those operational limits. 14 We would certainly also be very happy to include 15 day-care centers, you know, as another sensitive receptor 16 that should be included. 17 You know, throughout the course of the years of 18 commenting in workshops on this reg, we've been very 19 focused on this issue of sensitive receptors. And we've 20 suggested various mechanisms to deal with it. And, you 21 know, we've come down to these final recommendations. But 22 we certainly could expand the coverage for sensitive 23 receptors. And day-care centers would certainly be the 24 next step, the next place to go. 25 So that was the first point, that we do want to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 protect kids within 1,000 feet of schools. 2 A second key point is that -- you know, we're 3 extremely concerned about the enforcement of this 4 regulation. And you've talked about this a little bit. 5 And the staff has made clear that, you know, because of 6 the way the regulation is structured for current 7 operators' in-use engines, there's of course an incentive 8 for 80 percent of the folks to not have to retrofit by 9 cutting their maintenance and operation hours down to 20 10 hours -- down to the 20-hour level, which would be very 11 helpful. 12 And we think that's a good restriction. But of 13 course the question arises: How do we continue to enforce 14 that restriction? We have the run time hour meters on 15 the engines. But there's obviously going to need to be 16 district personnel out there looking at these engines and 17 talking to folks in the field to make sure that the 18 engines are not run more than they're supposed to be run 19 to maintain the reduced cancer risk. 20 And, you know, we have to ensure that there's no 21 incentive for operators to misstate the number of hours 22 they're running these engines and to take advantage of the 23 exemption from the operating limits without truly cutting 24 those run time hours. 25 So we're recommending that you, number 1, you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 know, follow this extremely closely. But we'd like to see 2 you include something in your resolution on this item 3 recommending that districts adopt some new mechanisms to 4 fund enforcement activities for this regulation. 5 Obviously, you know, new fees can be complicated to enact 6 at the local level. But you could propose new fees for 7 oversight of stationary engines specifically -- new fees 8 for the air districts to collect specifically to, you 9 know, to oversee the engines under their jurisdiction. 10 There could be new or elevated penalties for 11 violation of the operating hour requirements in the 12 regulation. And I'm sure there's other types of funding 13 mechanisms we could think of. But we would like to see 14 the district -- see the Board give some strong direction 15 to the districts on the need to raise some funds and make 16 sure there's sufficient enforcement personnel to 17 adequately enforce this regulation. 18 On the third issue, I think you've had a good 19 discussion of the interruptible service contracts. And I 20 just wanted to underscore that we agree with the testimony 21 of Kate Larsen and Environmental Defense. You know, we 22 don't think that the BUGs should be considered a grid 23 resource. And, unfortunately, we think these late 24 arriving provisions do go in that direction. And we think 25 they change the policy that the CARB Board has previously PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 established, that BUGs should not be used for any purpose 2 other than genuine emergency operation. And we think it's 3 a bad precedent and a bad signal to be sending, not just 4 in California but in other states. 5 So we are very concerned about that. And, you 6 know, we would like to ask you to take that out of the 7 regulation at this point. 8 As a state we're trying to move toward relying as 9 little as possible on the dirty engines. And so -- I know 10 that you've written these provisions very narrowly. And I 11 appreciate that there's some incentive in the way you've 12 structured the new provisions to incentivize some 13 retrofitting of engines. And I understand what you're 14 saying about the possibility for that to lower emissions. 15 But, overall, what it's basically doing is saying that 16 we're going to rely on the dirtiest power sources 17 available for some part of our electrical power. And we 18 think that's a bad direction to be going. 19 And the last issue is on in-use agricultural 20 engines. And you have covered this also in your staff 21 presentation. And my basic comment is, as I think you're 22 aware, that this rule is not complete until you have the 23 in-use ag engines included in the rule. They're a huge 24 component of the emissions. And it's a huge gap in the 25 rule. And I know that you're moving forward and trying to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 look at how to include them and what are the best ways to 2 reduce those emissions. 3 And I just would ask you to move forward very 4 expeditiously on this and to really not consider this 5 complete until that piece of it is done. And I can't 6 recall if you asked for a specific date certain, but I 7 think there should be maybe a six month date certain when 8 the Board is going to come back and include the in-use ag 9 engine component in the regulation. 10 We really do support the reg. But we do think 11 there's still some work that needs to be done to 12 strengthen it. And so we have submitted those comments. 13 And, again, we thank you, and we thank the staff 14 for the hard work on this. It has been a long process and 15 we've been pleased to be participating in it. 16 CHAIRPERSON LLOYD: Thank you. 17 Mr. McKinnon. 18 BOARD MEMBER McKINNON: First, I'm sort of 19 hearing over and over and sort of warming to the idea that 20 we need to do more around schools. And I don't know if we 21 want to take that up with staff right now or at the end. 22 But it's sort of come up several times. 23 Before I do that, Bonnie, I have a question for 24 you. I sort of miss seeing you every day. And we 25 probably would have had this debate somewhere along the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 way in the last couple of weeks, but I've moved to a 2 different work location. 3 MS. HOLMES-GEN: I know, yeah. 4 BOARD MEMBER McKINNON: But it's on the issue of 5 child-care centers. And it's sort of at first glance, 6 "Who could be against that?" But I'm sort of like trying 7 to figure out the practicality of it. You know, for 8 instance, for example, the top of this building probably 9 has a backup generator on it. I'm sure it does. 10 EXECUTIVE OFFICER WITHERSPOON: The bottom does. 11 BOARD MEMBER McKINNON: Oh, the bottom. In the 12 basement of the building. All right. 13 EXECUTIVE OFFICER WITHERSPOON: Back by the 14 loading dock. 15 BOARD MEMBER McKINNON: Oh, then there is a 16 day-care center here. 17 (Laughter.) 18 BOARD MEMBER DeSAULNIER: It's hard to miss, Mac. 19 BOARD MEMBER McKINNON: Yeah. But how would -- 20 let's say we sort of didn't have a day-care center and 21 someone in the neighborhood put one in. How would we know 22 that? How would that work? What would be the mechanism 23 sort of for dealing with that? Would we have day-care 24 centers not permitted because there was already a 25 generator here? Would we have people take out generators PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 because somebody wanted to open the day-care center? 2 MS. HOLMES-GEN: Yeah, I mean I think those were 3 issues that need to be figured out. But it seems like 4 there could be, you know, notification going out to 5 day-care centers that, you know, we're trying to protect 6 kids and we're trying to make sure that BUGs that are 7 nearby day-care centers are not operating during day-care 8 centers. So it seems like there could be some noticing 9 going out to day-care centers to, you know, register or, 10 you know, make sure that they're on record with the State 11 Board and the local districts so that we can enforce these 12 provisions. I mean it seems like there's things that 13 could be done to at least do some due diligence to get as 14 many as possible protected. 15 BOARD MEMBER McKINNON: I'm not against it. I'm 16 just trying to figure out how to do it. 17 MS. HOLMES-GEN: Because we're not saying they 18 can't run. We're just saying we can shift the operational 19 hours so that they're not running when the kids are at the 20 center. 21 BOARD MEMBER McKINNON: We should probably start 22 with this building. Do we have like a rule against 23 running whatever is in the basement while the kids are 24 here? 25 EXECUTIVE OFFICER WITHERSPOON: They will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 affected by this regulation. 2 BOARD MEMBER McKINNON: What? 3 EXECUTIVE OFFICER WITHERSPOON: They would be 4 affected by this regulation. 5 But I did want to follow up on Bonnie's point 6 about the hours that you're running the engine. Because 7 it really turns out to be a residential versus urban 8 setting problem. And, you know, there's probably a way to 9 bring day-care centers into this and have an affirmative 10 burden on the engine owners to know where the day-care 11 center is. But what we're talking about is if you're at a 12 school -- what the rule says now, if you're at a school, 13 run it when the kids go home or before they come to 14 school. 15 And if you're near a day-care center, if we were 16 to expand it, the rule would be the same. Well, what if 17 that engine is sitting in a residential neighborhood? So 18 the day-care center closes and everybody gets home from 19 work and then the engine's running because we've moved it 20 to after-school hours and we've moved it to at-home hours 21 for the adult population and the kids. 22 So it gets to be tricky figuring out what is 23 truly in an urban setting with a school that happens to be 24 plopped there -- this day-care center fits that 25 definition -- and other ones where it's all integrated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 with residential, mixed use, you know, people coming and 2 going at different hours of the day. 3 So we sort of started with a clear case, on 4 school grounds, don't run it when the kids are there. 5 Unless you expand off from there, you pick up 6 complexities. But, you know, we're happy to talk about 7 expanding the meters in which that occurs for the schools 8 and trying to figure out the day-care thing properly. But 9 I want you to be aware of the residential side, which is 10 the flip: Who comes home and breathes it at night or 11 first thing in the morning? 12 BOARD MEMBER McKINNON: It's clearly much more 13 difficult than it sort of appears on a glance. I'm sort 14 of for it. I'm like more than sort of for it. It's 15 just -- I just sort of want to know how it would work. 16 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: I 17 think from a technical standpoint the other issue that you 18 need to look at as we've designed the regulation, you 19 know, what we've looked at was we -- the meteorology we 20 looked at, taking the most conservative meteorology, we 21 looked at west-case met conditions, we looked at 75 22 percent load, we looked at those emissions being at 3 23 o'clock in the afternoon. And that's how we came up -- 24 and we looked at a residential exposure of ten in a 25 million. And we said, "Okay. We're going to design PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 controls and hours to ensure that any engine would be able 2 to meet a situation that it was in West L.A. and those 3 hours are at 3 o'clock in the day." And so that's how we 4 set the things. 5 When you come back now and you start looking at 6 different locations, that risk number changes a whole 7 bunch because you're not dealing with the most serious -- 8 the most restrictive West L.A. met conditions. Sacramento 9 met conditions will change it by a factor of 4. 10 The other thing is is that when you look at ten 11 in a million risk using West L.A., that would convert to a 12 less than one in a million risk for children at school in 13 West L.A., which is the most conservative. 14 So we think overall we've designed technically 15 that these engines will be, even if they were operated on 16 the school site, less than one in a million risk for 17 children. And so that's the baseline where we designed 18 the whole regulation. To go beyond that, to require 19 additional control seems to me to be more of a 20 site-specific situation, which the district clearly has 21 the authority to do. Which as we bring in 2588 into this 22 process, we'll have health risk assessments done. And 23 they can make decisions, the districts can, on a 24 site-specific basis, "Do we need additional controls for 25 this engine because it's here or there?" rather than a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 generic one-size-fits-all design at the State level. 2 CHAIRPERSON LLOYD: Ms. D'Adamo and then 3 Supervisor DeSaulnier. 4 BOARD MEMBER D'ADAMO: Clearly, we need more 5 dialogue on this issue. And it also reminds me of the 6 Lung Association's concern about enforcement in light of 7 the fact that the districts have the authority perhaps to 8 go further. I think that this regulation clearly needs 9 some good teeth in it, you know, for enforcement. 10 So could staff respond to the Lung Association's 11 suggestion regarding enforcement? 12 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 13 Well, I think one of the things we can do is -- 14 or my perspective is the concern seems to be expressed 15 about expectations that the districts are aggressively 16 enforcing is, one of the things I might suggest is we have 17 a discussion with the districts about that and get their 18 perspective on it and how they feel about this. Because 19 they have a lot of these facilities under permit now and 20 have to enforce those conditions. And I'd suggest we work 21 with them. 22 BOARD MEMBER D'ADAMO: And then just one other 23 point, to let Bonnie know that I know Peter's group, the 24 working group on the agricultural issue, I know that they 25 continue to work on that. And as Chairman of the Ag PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 Advisory Committee, I'm committed to moving this along, 2 obviously with the great input from your association and 3 the industry. 4 CHAIRPERSON LLOYD: Yeah, I'm glad you mentioned 5 that because I was going to say, Bonnie, I think we made a 6 commitment with the ag industry that as we develop this, 7 it would be brought before the other committee that D.D. 8 chairs, that we get the benefit of all the stakeholders in 9 that arena. 10 Supervisor DeSaulnier. 11 BOARD MEMBER DeSAULNIER: Just on the child-care 12 issue, since I've been very involved in the First Five 13 Commission in our county and the statewide initiative, it 14 just strikes me that knowing you already have done a lot 15 of work and how difficult this would be, in addition to 16 what Catherine pointed out, that we know -- and actually 17 it's not supposed to be day-care child-care anymore. They 18 constantly remind me I'm not -- it's not politically 19 correct. It's early education. So in the early education 20 field we know that, as opposed to this facility, the trend 21 is to put your kids into early education close to home, 22 which goes to your argument it's probably in a -- most of 23 them, over 50 percent are in residential areas. 24 So although it's problematic, it seems like there 25 would be an opportunity because of the possible health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 benefits, particularly to 0-5 kids, and the schools are a 2 good place to start. But it would almost strike me that 3 the public health benefit from the beginning would be more 4 in the young kids because that's where they're most 5 susceptible. And since more and more of them are in early 6 education, to at least maybe work with you, Bonnie, and 7 maybe even the State First Five Commission and find out if 8 there are resources that we can work with districts to do 9 it. 10 And in that regard I could see myself in the Bay 11 Area District of me urging my colleagues not only to do 12 more enforcement and trying to do more revenue and fees 13 and fines, but maybe some revenue to identify early 14 education facilities. 15 So maybe it's -- you give the districts the 16 discretion and maybe, as you work on a language, 17 incentivize them to be aggressive in urban areas to go out 18 and sort of get those revenues, and in this instance put 19 them -- apply them perhaps to those most sensitive 20 receptors in early education and work with other -- like 21 First Five and the child care councils, would be my 22 suggestion. 23 I don't think it's something we can do right 24 away. But I think it's something that we could encourage 25 in the reg to sort of push. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 Thank you, Mr. Chairman. 2 CHAIRPERSON LLOYD: Thank you very much. 3 MS. HOLMES-GEN: Two quick comments. 4 CHAIRPERSON LLOYD: Quick. 5 MS. HOLMES-GEN: Which is just to remind you that 6 while the reg is based on the cancer risk, of course 7 there's -- you know, diesel particulate contributes to 8 asthma attacks, it contributes to reduced lung capacity 9 and, you know, the premature death mortality issue. So 10 there's other issues going on besides just the cancer 11 risk, and there's a justification for what we've been 12 talking about here. 13 And, second of all, I forgot to mention one other 14 thing, which is the BUGs especially shouldn't be 15 operating -- the BUGs on or near schools shouldn't be 16 operating on unhealthy air days also. It's just another 17 issue to bring up for your staff's consideration. 18 Thank you, 19 CHAIRPERSON LLOYD: Thanks very much, Bonnie. 20 We are going to break at 12 o'clock for lunch. 21 And when are we getting back? Was it 1:30 or 2? 22 EXECUTIVE OFFICER WITHERSPOON: After lunch we go 23 to closed session. So it depends how long closed session 24 lasts. But approximately 2 o'clock. 25 CHAIRPERSON LLOYD: Approximately 2 o'clock. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 So we have just over five minutes. I've got I 2 think 1, 2, 3, 4, 5, 6 -- 7 more people on this item. 3 Is there anybody who has a plane to catch who 4 wants to step forward? Not everybody please. Or if you 5 want to come forward and use one minute to say something, 6 please step up. 7 But we are going to stop for lunch at 12. Not 8 only for that, but also the court reporter's been going 9 all morning. 10 MR. MUNDY: Good morning, Mr. Chairman and 11 members of the Board. My name is John Mundy. I'm 12 Director of Facilities and Operations for the Las Virgenes 13 Municipal Water District located in Calabasas, California, 14 in the West Los Angeles Region. 15 On behalf of our water district and joint venture 16 partner, Triumphal Sanitation District, we'd like to 17 mention that we do express and support your proposed 18 regulations and the continuance of the Interruptible 19 Service Contract Program that is being proposed under the 20 Regulations. 21 Las Virgenes provides municipal potable water 22 services, recycled water, and waste water treatment for an 23 ecologically sensitive area that is prone to emergency 24 interruptions and emergency operating conditions. 25 Supplemental emergency power facilities are essential to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 our operations to provide reliable service to our 2 customers. 3 Las Virgenes operates the Tapia Water Reclamation 4 Facility, which is located in the heart of the Santa 5 Monica Mountains National Recreation Area, adjacent to the 6 Malibu Creek that is tributary to Surf Rider Beach. The 7 facility relies upon standby diesel generators to continue 8 the operation of the facility during times of emergency 9 power events. 10 In order to meet our obligations, the maintenance 11 of our standby generation equipment is highly -- is a high 12 priority. The Interruptible Service Contract Program 13 provides financial incentives that can be in turn put back 14 into the facility for these maintenance needs. Any 15 proposal that will reduce or eliminate the Interruptible 16 Service Program causes us great concerns. Unlike private 17 utilities, cost savings under this program do not go to 18 investors. They're used to ensure the ability for us to 19 perform our core mission. 20 Las Virgenes supports your improvements and the 21 technology that reduce diesel emissions, improves advances 22 in diesel fuels and practices retrofitting accessories 23 that are effective with existing engines. 24 Considering the history that we've had with our 25 IC programs since 1988, we don't feel that loss of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 interruptible program will benefit any improvements in air 2 technology. This being the case we feel that improvements 3 of air quality would be better served by continuing the 4 interruptible service program. 5 In conclusion, I ask for your continued support 6 of the program. Thank you for your opportunity to speak 7 today. 8 CHAIRPERSON LLOYD: Thank you very much. 9 Appreciate it. 10 MR. DILLON: Thank you, Mr. Chairman and members. 11 Mike Dillon representing the California Ski Industry, and 12 today filling in for Bob Roberts, our Executive Director, 13 who could not change a medical point. Will take less than 14 one moment. 15 We are in support of the proposed rule. Several 16 of our members have worked closely with the staff and, 17 whenever possible, to reduce emissions from stationary 18 diesel engines. 19 A few of our ski areas, as you might imagine, are 20 located in remote areas, with some having no access to 21 alternative means of power such as electricity from the 22 grid or natural gas from pipelines. They rely solely on 23 the electric -- on the diesel generators. And without 24 them, simply put, they would be out of business. And some 25 of the control technology is just not feasible. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 Like the others before me, I would also like to 2 thank and acknowledge your staff on behalf of the ski 3 industry for working with us and recognizing, one, the 4 diesel particulate controls cannot be installed on 5 existing diesel engines equipped with selective catalytic 6 reduction controls; that even new diesel engines operating 7 at high altitudes where our ski lifts cannot achieve a 8 diesel particulate emission level of 0.01 per 9 brake-horsepower hour. And also that emergency diesel 10 power must be provided on occasion when the electricity 11 supplied by the grid cannot be relied upon. 12 Thank you very much for your time. 13 CHAIRPERSON LLOYD: Thank you. 14 Just a question. Is the ski season starting 15 early this year or -- 16 MR. DILLON: Yes, it is, Mr. Chair. I haven't 17 been up yet, but anxious to get up there and give it a 18 try. 19 CHAIRPERSON LLOYD: It's good for job creation. 20 Thank you. 21 Last speaker before lunch. 22 MS. GREEN: Thank you very much. 23 Good morning, Chairman -- still morning. Good 24 morning, Chairman Lloyd and members of the Board. My name 25 is Carolyn Green. I'm a senior analyst for the City of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 Thousand Oaks, and I'm speaking today in support of the 2 proposed ATCM, and in particular for the continuation of 3 the Interruptible Service Contract Program. 4 Our most valuable city asset in Thousand Oaks is 5 actually our Hill Canyon Waste Water Treatment Plant, 6 which processes up to 14 million gallons of waste water 7 each day. Waste water treatment must continue on an 8 interrupted basis and, as such, it is essential that we 9 have backup and supplemental emergency power generation 10 capability. The city has spent millions of dollars 11 developing this reliable emergency power generation 12 system. 13 Thousand Oaks has experienced a 20 percent 14 overall reduction in energy costs since participating in 15 the ISC program, resulting in significant cost savings 16 which are passed directly and entirely back to our 17 residential and commercial rate payers. We've had only 18 one interruption since the statewide power shortages of 19 2000 and 2001. And we have never even approached our 20 permitted limit of 200 hours per year of operation. And 21 our generators already meet the 2008 emission standards. 22 And, furthermore, we do support the ATCMs additional 23 hourly limitations an record-keeping requirements. 24 A critical issue for us is the willingness of our 25 city and many other large generators to participate in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 ISC program, agreeing to function on their own power 2 during times of energy shortages. We believe this has 3 helped alleviate power shortages and reduced the impact on 4 residences and businesses statewide. It's not unlike the 5 public safety mutual aid program where public agencies 6 back up each other in an emergency. 7 Our generators already meet the 2008 emissions 8 standards, but we do support the ATCM because it will 9 require backup generators to meet strict new emission 10 standards, which should be the ultimate goal of your 11 board's action. Without the ATCM being approved, 12 operators will not be required and will have no incentive 13 to retrofit engines with cleaner emission technologies. 14 So on behalf of the City of Thousand Oaks, thank 15 you for letting me speak early. And I urge your approval 16 of the ATCM with the continuation of the ISC program. 17 Thank you. 18 CHAIRPERSON LLOYD: Thank you very much for 19 coming. Appreciate it. 20 Well, with that I'd like now to adjourn for 21 lunch. 22 Following our lunch the Board will convene in 23 closed session as noticed in the public agenda for today's 24 meeting. The purpose of the closed session is to confer 25 with and receive advice from legal counsel regarding the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 following pending litigation: State of California versus 2 U.S. Environmental Protection Agency, U.S. Court of Appeal 3 for the District of Columbia, Circuit No. 03-1362; State 4 of California versus United States Environmental 5 Protection Agency, U.S. Court of Appeal for the District 6 of Columbia, Circuit No. 03-1366. 7 Then after the conclusion of closed session we 8 will reconvene in open session at approximately 2 o'clock. 9 We will finish this item. Hopefully, that will be fairly 10 quick since we've only got about four people to testify. 11 And as I indicated, we're not going to take a vote on the 12 current agenda item. And then we will get an update from 13 the staff on the climate change regulations. 14 So we'll see you around 2 o'clock. And thank 15 you. 16 (Thereupon a lunch break was taken.) 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 AFTERNOON SESSION 2 CHAIRPERSON LLOYD: The meeting of the Air 3 Resources Board is now in session. So we'll please come 4 to order. And I'd like to turn it over to our legal 5 counsel, to Diane Johnston, to summarize what we heard in 6 closed session. 7 GENERAL COUNSEL JOHNSTON: I just wanted to 8 remind the audience that our Board met in closed session 9 to confer with legal counsel. No action was taken by the 10 Board. But we did advise them regarding the following 11 pending litigation: State of California versus United 12 States Environmental Protection Agency, U.S. Court of 13 Appeal for the District of Columbia, Circuit No. 03-1362; 14 and State of California versus United States Environmental 15 Protection Agency, U.S. Court of Appeal for the District 16 of Columbia, No. 03-1366. 17 And that's all. Thank you. 18 CHAIRPERSON LLOYD: Thank you very much. 19 We will continue testimony on the item, 20 stationary compression ignition engines, ATCMs. 21 And my record shows we have four witnesses: 22 Roger McRae, Dan Smith, Mary Jane Foley, and Carol 23 Kaufman. 24 So I'd like to call up Roger McRae. 25 He's not here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 Dan Smith and Mary Jane Foley and Carol Kaufman. 2 MR. SMITH: Mr. Chairman, Ms. Foley and Ms. 3 Kaufman have airplanes coming up on them. Can I let them 4 go ahead of me? 5 CHAIRPERSON LLOYD: Oh, very nice. 6 By all means. 7 MS. KAUFMAN: Good afternoon, Chairman Lloyd and 8 members of the Board. My name is Carol Kaufman, and I'm 9 here today representing Metropolitan Water District of 10 Southern California. We appreciate this opportunity to be 11 able to provide testimony regarding the proposed ATCM. 12 Metropolitan is a consortium of 26 cities and 13 water districts that provide drinking water obtained from 14 the Colorado River in northern California to nearly 18 15 million people in 6 counties. 16 Metropolitan currently delivers an average of 1.7 17 billion gallons of water per day to a 5,200 square mile 18 service area. To provide this service, Metropolitan 19 operates an extensive system of water conveyances, 20 reservoirs, and water treatment plants which maintain 21 stationary diesel engines for critical emergency backup 22 power. As such, our operations will be significantly 23 impacted by the proposed control measure. 24 We support the ATCMs goal to reduce diesel 25 particulate matter emissions from stationary compression PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 ignition engines. During our participation in this 2 two-year plus rulemaking effort, we have been very 3 appreciative of the ARB staff responsive efforts to 4 address the issues and concerns of affected entities. The 5 result of these joint efforts is the proposed ATCM that we 6 believe will achieve the much needed PM emission 7 reductions while providing industry the flexibility to 8 operate, upgrade and/or replace their engines in a 9 practical and timely manner. 10 A key provision that Metropolitan supports is the 11 use of the emergency engines in Interruptible Service 12 Contracts, or ISCs, which would occur during a State Stage 13 2 or Stage 3 alert, both of which denote an electrical 14 emergency. 15 According to the language of the proposed ATCM, 16 such emergency diesel engines would be required to meet 17 more stringent emission standards at an accelerated 18 schedule: 0.15 grams per brake-horsepower by July 1st, 19 2005, and 0.01 grams per brake-horsepower by January 1st, 20 2008. 21 In comparison, non-ISC engines that are operated 22 20 hours or less per year during non-emergencies would not 23 have to be retrofitted at all. Although the engines 24 operated greater than 20 hours would need to be 25 retrofitted per a phase schedule that would not begin PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 until 2006 and extending through 2009. 2 Therefore, to emphasize, the engines that 3 participate in the ISCs would be required to meet the most 4 stringent PM emission standards of the ATCM much sooner 5 than the non-ISC engines. 6 Historically, the engines that participate in the 7 ISCs are existing engines and, as in the case of a central 8 public service agency, such as hospitals, water and 9 sanitation agencies, these backup generators are required 10 by other California regulatory agencies but are used 11 infrequently. By having the provision in the ATCM that 12 allows these cleaner engines to participate in the ISCs, 13 the overall result is beneficial for the ARB, the 14 regulated community, and the public. 15 The crucial benefits of using these existing 16 engines to support the ISCs include the following: 17 1) Operation of the retrofitted engines under an 18 ISC can help contribute to the prevention of rolling 19 blackouts during an energy crisis. This contribution was 20 highlighted during the 2000-2001 energy crisis during 21 which we understand multiple blackout situations were 22 averted due to the ISC program. 23 Also, it should be noted that with the exception 24 of the 2000-2001 energy crisis, historically the utilities 25 have not had a frequent need to call upon the companies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 enrolled in the ISC program. 2 Benefit 2) In preventing the rolling blackouts, 3 the use of the cleaner engines by the ISC customers to 4 shed load during emergency events can also help prevent 5 the widespread use of uncontrolled diesel fueled engines. 6 This will result in less PM emissions. 7 And the third benefit would be the operation of 8 the retrofitted engines enrolled in the ISCs during engine 9 maintenance, reliability testing, or emergencies will 10 result in enhanced health benefits as compared to the 11 unabated health risk of a non-retrofitted engine operated 12 during these same events. And it should be noted that 13 these types of operations occur more routinely throughout 14 the year than the infrequent ISC events. 15 So given the above, Metropolitan urges the Board 16 to approve the proposed ATCM with the inclusion of the 17 provision to participate in the ISCs. This would be a 18 significant step towards reducing particulate matter 19 emissions throughout the state during both routine and 20 emergency operations. And, again, this ATCM with the 21 interruptible service contract provision strikes an 22 important balance between the needs of industry and the 23 needs of the community. 24 Thank you. 25 CHAIRPERSON LLOYD: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 Any questions, comments from the Board? 2 Thank you very much. 3 MS. FOLEY: Good afternoon, Mr. Chairman and 4 members of the Air Board. The last time I got to see the 5 Chairman was one of my last days on the State Water Board. 6 And we were in rolling blackouts and we were working on 7 how to prevent sewage in the streets and have people not 8 violate their air permits and get -- and we worked it out 9 very well. We had a lot of success. And that's what I 10 think this ISC program is about. 11 So since leaving the Board, I've become a 12 regulatory consultant to the folks that I used to 13 regulate. And it's been a very rewarding experience. 14 And this morning several of our members spoke on 15 the value of ISC. And I think that Carol just did a very 16 eloquent job trying to give the specifics of why this 17 program is a very valuable program. And we've worked with 18 your staff. They've been wonderful. All the staff 19 sitting here has been wonderful and understanding the 20 win-win of this ISC program. 21 And the win-win is you are going to have public 22 agencies with very clean retrofitted engines, only in 23 imminent blackouts, ready to get off the grid, to run 24 those cleaner engines, to prevent every mom and pop in the 25 neighborhood from putting on their engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 So we prevented a lot of blackouts in southern 2 California in our last situation. And the engines were 3 not cleaned up this way. 4 I just think that the staff -- it was a great 5 exercise. Thoroughly evaluated the pros and cons. And it 6 is a win-win. It's only emergency. It's only to prevent 7 everybody else turning on their engines. And I think that 8 you will find that having these cleaner engines is going 9 to be a tremendous benefit. 10 And so I really don't have much else to say 11 except that I understand the -- I understand the issues 12 brought up this morning by the environmental community. 13 Being a former regulator for 18 years, I know what it is 14 to balance. I know what it is to try to find common 15 ground. And a lot of it -- a lot of it seemed to me to be 16 focused on a precedent, what this would mean in other 17 states. And, you know, we're the ones that had the energy 18 crisis. We're the ones in our state that are pulling 19 together in the strangest way history will ever record. 20 And I think that this is a very valuable program. And it 21 will be a good -- it will be a good model. 22 And I thank you for your attention. 23 CHAIRPERSON LLOYD: Thank you very much. Good to 24 see you again. 25 Then Dan Smith. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 MR. SMITH: Chairman Lloyd and members of the 2 Board. I'm Dan Smith, and I represent the Association of 3 California Water Agencies, which is comprised of about 440 4 public agency water suppliers. 5 At the risk of being an echo, I too want to 6 comment about the great job your staff has done in 7 getting, considering, and dealing with the concerns of a 8 whole lot of interests. And we think the result is a 9 proposed ATCM that is both reasonable and workable. 10 Our association is focused primarily on the 11 demand response programs. And we believe the language 12 that we all got to see in the last couple days is 13 essential to this proposal. 14 In our written comments we have made a few minor 15 suggestions that I'll characterize as clarifying. And I'm 16 trying to be refreshingly brief here. I'll leave it at 17 that and just say that this is a very supportable rule and 18 we urge you -- would get a chance to go forward with it. 19 Thank you. 20 CHAIRPERSON LLOYD: Thank you very much. Thank 21 you for your written statement. 22 So I guess -- did Roger McRae come back? 23 I guess not. 24 So with that, as I indicated, I will not close 25 the record on this item. We will continue it to a time PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 uncertain as we move ahead on that. 2 So any final words, Ms. Witherspoon or Ms. 3 Johnston? 4 GENERAL COUNSEL JOHNSTON: Just one final 5 thought. 6 I think it might be helpful, if there have been 7 any ex parte communications to the Board members, to put 8 those on the record now. And then they'll be on the 9 record for when you reconvene. 10 CHAIRPERSON LLOYD: Okay. Good suggestion. 11 Any, starting with Mr. Calhoun. 12 Anyone -- any ex parte, Joe? 13 BOARD MEMBER CALHOUN: No. 14 CHAIRPERSON LLOYD: Anybody? 15 Nothing. 16 Professor Friedman. 17 BOARD MEMBER HUGH FRIEDMAN: I don't have any ex 18 parte communications to report. 19 But I don't know when we'll get this matter back. 20 CHAIRPERSON LLOYD: I don't think we know at this 21 time. 22 BOARD MEMBER HUGH FRIEDMAN: At this time, we're 23 not sure. 24 I, too, would like to join in commending staff. 25 Obviously, once again, you've walked the tightrope. But I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 trust the staff will be prepared when this does come back 2 to us to have analyzed and respond to CAPCOA, to South 3 Coast, to the environmental community who have made 4 specific language change recommendations, and let us know 5 what you think of those, whether you've already considered 6 them or whether these are matters yet being digested. 7 EXECUTIVE OFFICER WITHERSPOON: Yes, we will, 8 Professor Friedman. We'll also be prepared to talk more 9 about day-care centers and the hundred meter boundary 10 issue that we talked about at length this morning. 11 BOARD MEMBER HUGH FRIEDMAN: Thank you. 12 CHAIRPERSON LLOYD: So the message is stay on 13 that tightrope. And if you slip, you'll do yourself 14 serious damage. So keep on there. 15 (Laughter.) 16 BOARD MEMBER DeSAULNIER: I do want to correct 17 you. It's early education centers. 18 EXECUTIVE OFFICER WITHERSPOON: Yes. 19 (Laughter.) 20 BOARD MEMBER McKINNON: Excuse me. For working 21 people they're still day-care centers. 22 (Laughter.) 23 BOARD MEMBER DeSAULNIER: For working people, 24 they're day-nighttime centers. 25 CHAIRPERSON LLOYD: And I presume as soon as we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 bring that, we'll duly notice when this is coming back on 2 the agenda. 3 EXECUTIVE OFFICER WITHERSPOON: Yes. There'll be 4 an update to the agenda for the meeting that it's on. 5 CHAIRPERSON LLOYD: Great. 6 BOARD MEMBER RIORDAN: And, Mr. Chairman, it was 7 a very good staff report. I knew it when I saw the 8 breadth and depth of it as it was sent to my home. 9 CHAIRPERSON LLOYD: I certainly echo that. 10 That's a great job. 11 Thank you very much indeed. 12 So with that we will take a break and move on to 13 greenhouse gases. 14 (Thereupon a break was taken.) 15 CHAIRPERSON LLOYD: The next item on our agenda 16 is Item 03-9-4, an update to the Board on the status of 17 the greenhouse gas regulations for motor vehicles. 18 This work is an outgrowth of Assembly Bill 1493, 19 authorized by Assembly Member Fran Pavley, and signed into 20 law in the summer of 2002. 21 The effects of climate change are well documented 22 and of particular concern to California. As always, our 23 first concern is public health. Climate change could 24 adversely affect public health in California through 25 changes in air quality, in the number of weather-related PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 deaths, and a possible increase in infectious diseases. 2 Another area of considerable concern is the 3 effect of climate change on California's water supply. 4 Altered temperatures and rainfall patterns, and new pest 5 problems that could result from climate changes could 6 wreak havoc on our agriculture industry. 7 Finally, this state's spectacular coastal and 8 forest areas are vulnerable to adverse effects as the sea 9 level rises and fire hazards increase. And I think we 10 just have to remind ourselves of the recent fires where 11 we've got part of areas affected by the forest beetle 12 because of drought, susceptible things to see so we can 13 reduce fire dangers. 14 Much of the industrialized world has recognized 15 the real and present danger associated with climate 16 change. In California, the transportation sector 17 contributes to over 50 percent of these emissions. As 18 stated in AB 143, "California has a long history of being 19 the first in the nation to take action to protect public 20 health and the environment, and the federal government has 21 permitted the state to take those actions." 22 I am pleased that we are again stepping up to the 23 plate, and although no decision will be made today, I look 24 forward to hearing about the progress this Agency is 25 making to thoughtfully develop regulations to reduce PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 climate change emissions from vehicles. 2 With that I'd like to turn it over to Ms. 3 Witherspoon to introduce the item and begin the staff's 4 presentation. 5 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr. 6 Lloyd. 7 Since the Pavley Bill was signed in July 2002, 8 staff has been working to develop regulations that will 9 achieve the maximum feasible and cost-effective reduction 10 in greenhouse gas emissions from motor vehicles. 11 As you might imagine, determining what is 12 feasible and cost-effective is a difficult task. Staff is 13 hard at work on the technical basis for our 14 recommendations which we'll bring to you at your September 15 2004 meeting. Today's update is to give you an overview 16 of the work that is under way and how we will proceed from 17 here. 18 As Chairman Lloyd indicated, the effects of 19 climate change on California are broad and worrisome. 20 Climate change threatens our health, our economy, our 21 agriculture, and our coastlines. That is why AB 1493 was 22 enacted and why we're doing a thorough job in carrying out 23 its provisions. 24 On that, I'll ask Ms. Eileen Tutt to proceed with 25 the staff presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 (Thereupon an overhead presentation was 2 Presented as follows.) 3 MS. TUTT: Thank you, Ms. Witherspoon. 4 Good afternoon, Chairman Lloyd and members of the 5 Board. 6 --o0o-- 7 MS. TUTT: I will begin today with a summary of 8 the impacts of global warming and some background 9 information on Assembly Bill 1493. I will then turn the 10 presentation over to Mr. Steve Albu to begin the overview 11 of the staff assessment with a discussion of the available 12 and emerging technologies that reduce climate change 13 emissions from vehicles. 14 After Steve's presentation, I will give a brief 15 overview of staff's assessment in several other key areas: 16 The form of the standard alternative compliance 17 provisions, the economic analysis we are conducting in 18 support of this work, and our efforts thus far to work 19 with the environmental justice community. 20 I will end with next steps and brief concluding 21 remarks. 22 --o0o-- 23 MS. TUTT: To begin, it is important to 24 understand what is at stake here. Climate change 25 pollutants pose a danger to public health and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 environment on a broad scale. This slide from the U.S. 2 EPA highlights the dangers to public health and the 3 environment from climate change in general. 4 In September of last year noted scientists at the 5 University of California Santa Barbara found that climate 6 change will have important implications for California. 7 Our state is one of the most diverse regions, 8 ecologically, geographically, and culturally, of any in 9 the world. 10 Human health in California is likely to be 11 impacted through changes in air quality, the number of 12 weather-related deaths, and possible increase in 13 infectious diseases. 14 Water systems are critically important to human 15 welfare, the environment and the economy of our state. In 16 California each winter at the high elevations of the 17 Sierra Nevada snow accumulates in deep packs, preserving 18 much of California's water supply in cold storage. 19 Throughout the 20th Century annual April-to-July 20 spring runoff in the Sierra Nevada has been decreasing. 21 This decreased runoff was especially evident after 22 mid-century. Since then the water runoff has declined by 23 about 10 percent. 24 Agriculture is especially vulnerable to regional 25 climate changes, such as altered temperature and rainfall PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 patterns, as well as new pest problems that could result 2 from climate change. 3 All forest ecosystems in California, whether 4 natural or managed, will likely be affected by climate 5 change. Temperature changes, shifting precipitation 6 patterns, and susceptibility to pests and diseases 7 increase fire hazard. 8 The increasing population in California's coastal 9 areas means that climate change impacts such as sea level 10 rise and increased storm surges would impact a larger 11 number of people. 12 Finally, according to the scientists at UC Santa 13 Barbara, California may be subject to more frequent and 14 more intense extreme events, such as floods, drought, and 15 wild fires. 16 --o0o-- 17 MS. TUTT: For this Agency, protection of public 18 health is our number one priority. Changes in weather 19 patterns can influence the frequency of meteorological 20 conditions conducive to the development of high pollutant 21 concentrations. Higher temperatures cause an increase in 22 emissions. More fuel evaporates, engines work harder, and 23 the demands on powerplants increase. 24 There is a positive correlation between air 25 temperature and ozone. Higher temperatures, strong PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 sunlight, and the stable air mass create the ideal 2 conditions for ozone formation. As the temperature rises 3 And air quality diminishes, heat-related health problems 4 also increase. And overall warming trends have been 5 recorded since the late 19th century, with the most rapid 6 warming occurring over the past two decades. The ten 7 warmest years on record all occurred within the last 15 8 years. 9 --o0o-- 10 MS. TUTT: Transportation is the largest source 11 of climate change pollutants in California, accounting for 12 58 percent of all sources of emissions. Therefore, it is 13 essential to reduce climate change pollution from 14 transportation sources, and Assembly Bill 1493 recognized 15 this. 16 Assembly Member Fran Pavley authored Assembly 17 Bill 1493, and it was signed by the Governor in July 2002. 18 The bill specifically recognizes California's leadership 19 role and states that California has a long history of 20 being first in the nation to take action to protect public 21 health and the environment. And the federal government 22 has permitted the state to take those actions. 23 --o0o-- 24 MS. TUTT: The general requirements of AB 1493 25 include a requirement that the Board adopt regulations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 that provide the maximum feasible and cost-effective 2 emission reductions from vehicles by January 1, 2005. The 3 Board is then required to report to the Legislature. 4 The Legislature has one year to review the 5 regulations, during which time they must hold at least one 6 public hearing. Following the year-long review and a 7 public hearing by the Legislature, but no sooner than 8 January 1, 2006, the regulations may take effect. These 9 regulations may apply only to model year 2009 and later 10 vehicles. 11 As you might imagine, developing these 12 groundbreaking regulations will require staff to carefully 13 consider a variety of complex issues. And we have 14 comprehensive staff analysis under way. 15 The remainder of this presentation will provide a 16 brief overview of our efforts. 17 --o0o-- 18 MS. TUTT: To begin I'd like to turn the 19 presentation over to Mr. Steve Albu, who will brief you on 20 the technology assessment which is at the heart of this 21 entire effort. 22 ENGINEERING STUDIES BRANCH CHIEF ALBU: Thank 23 you, Eileen. 24 Goof afternoon, Chairman Lloyd, members of the 25 Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 I will now discuss technologies that are 2 currently available or that will be available in the near 3 future that can reduce mobile source climate change 4 emissions. 5 --o0o-- 6 ENGINEERING STUDIES BRANCH CHIEF ALBU: In March 7 2003 the Air Resources Board hosted a three-day 8 international vehicle technology symposium that brought 9 together numerous experts on climate change emission 10 reduction technologies. 11 Leading researchers from the auto industry, 12 vehicle component suppliers, academia, and vehicle 13 simulation firms were invited to speak about various 14 technologies and their potential to reduce climate change 15 emissions in the 2009 to 2015 timeframe. 16 --o0o-- 17 ENGINEERING STUDIES BRANCH CHIEF ALBU: Unlike 18 criteria pollutants, vehicle climate change emissions 19 cannot be controlled primarily by after treatment. 20 Modifications to the vehicle engine and drivetrain are 21 required. Recognizing this, specific technologies 22 presented at the symposium included engine and drivetrain 23 modifications to reduce carbon dioxide, or CO2; exhaust 24 cleanup alternative to reduce conditions of methane and 25 nitrous oxide; modifications to mobile source -- to air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 conditions systems to reduce CO2 emissions; and 2 hydrofluorocarbon, or HFC, emissions associated with their 3 use in vehicles; and the use of alternative fuels. All of 4 these technologies are under consideration by the Air 5 Resources Board staff developing the proposed standards. 6 I will briefly cover each of these areas. 7 --o0o-- 8 ENGINEERING STUDIES BRANCH CHIEF ALBU: Engine 9 technologies that can reduce climate change emissions fall 10 into two categories: Those that are currently available 11 or off the self; and those technologies that are currently 12 under development or are just now penetrating the market, 13 so-called emerging technologies. This list, while 14 significant, is not fully comprehensive though. 15 Manufacturers are increasingly using variable 16 valve timing in their engines to take advantage of the 17 improvements in engine operation this technology provides. 18 By 2009 we anticipate the majority of the engines used in 19 92 light-duty vehicles will incorporate variable valve 20 timing. 21 When combined with variable valve lift, the 22 benefits can be even greater. And a substantial 23 percentage of light-duty vehicles are also projected to 24 have variable valve lift by 2009. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 ENGINEERING STUDIES BRANCH CHIEF ALBU: Shown 2 here are two current models using both variable valve 3 timing and lift. 4 --o0o-- 5 ENGINEERING STUDIES BRANCH CHIEF ALBU: 6 Decreasing the number of operating cylinders when 7 the vehicle power demand is low, such as during idle or 8 cruise mode, can result in reduced vehicle CO2 emissions. 9 This is commonly called displacement on demand or 10 cylinder de-activation. Although not expected to be used 11 by a majority manufacturers, it is likely to be used in 12 vehicles with relatively large displacement engines 13 relative to the vehicle size, such as large passenger cars 14 and trucks. 15 --o0o-- 16 ENGINEERING STUDIES BRANCH CHIEF ALBU: Unlike 17 conventional gasoline engines, gasoline direct injection, 18 or GDI, engines directly inject fuel into the combustion 19 chamber. This can occur under stoichiometric conditions 20 using only enough air to burn the fuel or under lean burn 21 conditions with excess air in the combustion chamber. 22 Due to thermodynamic improvements, a lean burn 23 GDI system can offer substantial CO2 reductions. However, 24 due to the presence of excess air in the exhaust, control 25 of oxides of nitrogen emissions is problematic. Advances PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 in lean burn after-treatment devices similar to systems 2 being developed with diesel engines may offer a solution 3 though. 4 Stoichiometric GDI systems may offer about half 5 the CO2 benefit of lean burn operation, but would not have 6 NOx after-treatment concerns. 7 The BMW vehicle pictured here uses a 8 stoichiometric gasoline direct injection. 9 This BMW 760 also incorporates two other climate 10 change emission reduction technologies that reduce engine 11 CO2 emissions, namely continuously variable valve timing 12 and lift. This allows the BMW to operate without a 13 conventional throttle. In fact, this vehicle represents 14 probably the state of the art relative to climate change 15 emissions. 16 Engine compression ratio is a key determining 17 factor for optimal engine operation and lower CO2 18 emissions. Current gasoline engines generally use a 19 compression ratio of about 10 to 1 and are limited in 20 using higher ratios by a pre-ignition, or knocking, at 21 high loads. 22 --o0o-- 23 ENGINEERING STUDIES BRANCH CHIEF ALBU: Because 24 knocking increases with engine load, overall CO2 emissions 25 can be improved by adjusting to higher compression ratios PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 at lower loads and lower compression ratios under higher 2 loads using variable compression capability. 3 While some promising developments in technology 4 have been achieved by manufacturers, additional 5 development work in cost reduction remains before this 6 technology can be commercially viable. 7 When combined with engine downsizing and 8 turbocharing, however, this can provide substantial CO2 9 benefits. 10 --o0o-- 11 ENGINEERING STUDIES BRANCH CHIEF ALBU: For a 12 variety of reasons manufacturers are exploring the use of 13 42 volt electrical systems on their vehicles to handle 14 increasingly sophisticated electronic systems on vehicles. 15 The use of an integrated starter/generator is possible 16 with these systems and allows engine shutoff when the 17 vehicle is stopped as well as recovery of braking energy 18 and some motor assist. Under urban driving conditions CO2 19 reduction is about 13 percent are possible. 20 --o0o-- 21 ENGINEERING STUDIES BRANCH CHIEF ALBU: The 22 climate change benefits from hybrid electric systems vary 23 significantly depending on the degree of hybridization. 24 Hybrid electric systems can range from moderate 25 hybrids such as the Honda Civic, with motor assist, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 fully integrated hybrids that can provide up to a 2 29-percent reduction in CO2 emissions. The Toyota Prius 3 is an example of a fully integrated hybrid that uses a 4 small gasoline engine with a large battery pack and 5 electric motor capable of slowly providing motor power at 6 low speeds plus providing additional power for the vehicle 7 during acceleration or hill climbing. 8 At this time, it appears that the major domestic 9 manufacturers are now focusing their hybrid efforts on the 10 larger sport utility vehicles and trucks, vehicles that 11 can more readily absorb the other component costs while 12 providing significant reductions in vehicle CO2 emissions. 13 --o0o-- 14 ENGINEERING STUDIES BRANCH CHIEF ALBU: Diesel 15 compression ignition engines that utilize high compression 16 ratios, turbocharging, and operate under lean burn 17 conditions also offer substantial CO2 reductions, about 26 18 percent better than gasoline engines. However, diesel 19 engines face a substantial challenge meeting California's 20 more stringent NOx requirements. 21 --o0o-- 22 ENGINEERING STUDIES BRANCH CHIEF ALBU: The 23 vehicle transmission transfers the energy out from the 24 engine to the vehicle's drive wheels, reducing the losses 25 associated with this transfer of energy and also PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 significantly improve vehicle CO2 emissions. 2 Shown here is a list of transmission technologies 3 that can reduce climate change emissions. 4 --o0o-- 5 ENGINEERING STUDIES BRANCH CHIEF ALBU: Automatic 6 transmissions on today's vehicles generally have four 7 speeds of gear ranges. Increasing the number of gear 8 ranges to five or six allows the engine to operate more of 9 the time in an optimal range during the drive cycle, 10 thereby reducing vehicle CO2 emissions. 11 We project a substantial number of vehicles will 12 incorporate six-speed automatic transmissions by 2009 even 13 in the absence of climate change requirements. More 14 advanced transmissions such as the automated manual 15 transmission, or AMT, and the continuously variable 16 transmission, or CVT, may offer even more improvement. 17 The automated manual transmission is most 18 efficient when the torque converter is replaced with 19 either one or two electronically controlled clutch 20 mechanisms, thereby limiting the losses associated with 21 the torque converter. These transmissions are currently 22 being used on some models in Europe, and can be expected 23 to be introduced into the United States in the near 24 future. These are basically fully automatic manual 25 transmissions. The Audi TT and the Volkswagen Passat are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 two models which have these transmissions in Europe. 2 Just as increasing the number of gear ranges also 3 allows the engine to operate closer to its ideal operating 4 point at any given time, the continuously variable 5 transmission provides engines with even greater 6 capabilities to operate precisely at the optimal speed for 7 the required load. 8 The CVT effectively acts as an automatic 9 transmission with an infinite number of gear ranges 10 neither using a belt or chain or a system of two pulleys. 11 The more advanced disk and roller design that 12 affords higher torque capability is also under 13 development. 14 Several manufacturers are planning to use this 15 technology in their vehicles by 2009. 16 --o0o-- 17 ENGINEERING STUDIES BRANCH CHIEF ALBU: Shown 18 here are a number of other technologies that can provide 19 further reductions in vehicle CO2 emissions, and also 20 methane, nitrous oxide, and HFCs. 21 --o0o-- 22 ENGINEERING STUDIES BRANCH CHIEF ALBU: Better 23 aerodynamics, electric power steering, electric water 24 pumps, electric oil pumps, reduced engine friction, 25 improved lubricating oils, reduced vehicle mass, and lower PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 rolling resistance tires can also contribute to lower 2 exhaust CO2 emissions. Better catalysts and more 3 efficient air conditioning systems with reduced global 4 warming potential refrigerants also contribute to lower 5 vehicle climate change emissions. 6 --o0o-- 7 ENGINEERING STUDIES BRANCH CHIEF ALBU: 8 Alternative fuel vehicles operating on fuels such 9 as natural gas, hydrogen, electricity and others can 10 provide another means of reducing vehicle climate change 11 emissions. Such fuels inherently produce less carbon 12 emissions than conventional fuels. 13 While currently occupying primarily -- vehicle 14 markets due to either cost or fuel availability, they 15 still represent another avenue to represent -- to reduce 16 vehicle climate change emissions. 17 --o0o-- 18 ENGINEERING STUDIES BRANCH CHIEF ALBU: Methane 19 is the component of the unburned hydrocarbons emitted by 20 motor vehicles. Methane emissions from natural gas -- I'm 21 sorry. Methane emissions from gasoline vehicles are 22 generally proportional to emissions of non-meth organic 23 gas and they're approaching near zero levels. 24 Natural gas vehicles have relatively high methane 25 emissions since its typically about 90 percent methane. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 But recent studies have shown that they can be 2 significantly reduced through improved catalysts. Since 3 these vehicles have inherently lower CO2 emissions than 4 gasoline vehicles, manufacturers would be wise to 5 incorporate improved catalyst technology on their natural 6 gas vehicles to ensure that overall advantage. 7 Nitrous oxide emissions are a byproduct of 8 catalyst activity, and they're primarily formed during 9 catalyst warm up. 10 Similar to methane emissions, nitrous oxide 11 levels are generally proportionate to vehicle oxides of 12 nitrogen emissions and they're approaching near-zero 13 levels. 14 Since it is not currently a regulated pollutant, 15 catalyst manufacturers are not currently pursuing 16 strategies to reduce vehicle nitrous oxide emissions. 17 However, inclusion of nitrous oxide emissions in the 18 proposed vehicle climate change regulations would likely 19 encourage more development work. 20 It may be worth pointing out that ARB's likely to 21 give programs that are already reducing climate change 22 emissions from motor vehicles. 23 --o0o-- 24 ENGINEERING STUDIES BRANCH CHIEF ALBU: Shown 25 here are some of the partial zero-emission vehicles, or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 PZEVs, the advanced technology PZEVs, or AT PZEVs, 2 certified for 2003 in response to the ARB's low emission 3 or zero emission vehicle programs. 4 The extremely low emissions of non-methane 5 organic gas and oxide of nitrogen on these vehicles also 6 result in reduced emissions of methane and nitrous oxides. 7 This is just because they weren't up very quickly. 8 Vehicles certified to the AT PZEV standards such 9 as the Toyota Prius also provide significant CO2 10 reductions. As the number of our PZEVs and AT PZEVs 11 increase in the future, the climate change benefits of our 12 vehicle program will also increase. 13 --o0o-- 14 ENGINEERING STUDIES BRANCH CHIEF ALBU: Mobile 15 air conditioning systems contribute to vehicle climate 16 change emissions in two ways: 17 First, direct emissions of the hydrofluorocarbon 18 R134a refrigerant for the use of these systems are highly 19 reactive in terms of global warming potential. R134a has 20 a global warming potential 1,200 times greater than an 21 equivalent mass of CO2 emissions. 22 And, second, the indirect exhaust of CO2 23 emissions resulting from air conditioning use to cool the 24 vehicle cab or to defrost the windshield also contributes 25 to climate change. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 Therefore, HFC emission reductions can be 2 achieved either by reducing system leakage through better 3 materials and fittings or by developing a system that 4 utilizes alternative refrigerants that have no global 5 warming potential values. 6 --o0o-- 7 ENGINEERING STUDIES BRANCH CHIEF ALBU: More 8 promising examples of -- to assist that they use 9 dichloroethane, known as R152a, that can be used with 10 minor modifications to current mobile air conditioning 11 systems or CO2. 12 Use of R152a and CO2 as refrigerants presents 13 some technical challenges due to the slight accountability 14 of 152a and the very high pressures required by systems 15 using CO2 as the refrigerant. 16 The air conditioning compressor used by current 17 systems operate either fully on or off depending on cabin 18 temperature demand. Using compressors that can vary in 19 their operations depending on cabin filling requirements 20 can significantly reduce the indirect exhaust of CO2 21 emissions. 22 --o0o-- 23 ENGINEERING STUDIES BRANCH CHIEF ALBU: There are 24 a number of technologies that are available today that can 25 substantially reduce the vehicle climate change emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 Many manufacturers are already planning to incorporate 2 these technologies on their vehicles to some degree. 3 Other more advanced technologies are under development, 4 and we expect it to be available by -- for use by the 5 2009-2015 timeframe. 6 Furthermore, these technologies can be 7 incorporated on vehicles without diminishing vehicle 8 performance or function. 9 --o0o-- 10 ENGINEERING STUDIES BRANCH CHIEF ALBU: In 11 summary, the cost-effective reductions in the mobile 12 source climate change emissions are achievable in the 13 timeframe envisioned by AB 1493. 14 --o0o-- 15 ENGINEERING STUDIES BRANCH CHIEF ALBU: Staff is 16 currently involved in a comprehensive vehicle technology 17 modeling study to estimate what various combinations of 18 technologies will yield in reducing climate change 19 emissions. It is also analyzing the cost of these 20 technologies. 21 Staff intends to use this information to develop 22 its climate change requirements that will be proposed to 23 the Board in September of next year. 24 --o0o-- 25 ENGINEERING STUDIES BRANCH CHIEF ALBU: Eileen PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 will now continue the presentation with a discussion of 2 the staff's assessment in several other key areas, an 3 overview of the next steps for the broader regulatory 4 development process and concluding remarks. 5 Thank you. 6 MS. TUTT: Thank you, Steve. 7 The technology assessment is at the heart of our 8 regulatory development effort. However, as Steve 9 indicated, there are several other key areas that are 10 being assessed. These areas are both defined and directed 11 by the requirements in AB 1493. 12 Our work to determine the form of the climate 13 change emission standard is impacted by the statements in 14 the legislation that direct ARB to provide the maximum 15 feasible and cost-effective emission reductions without 16 banning any vehicle type and without requiring weight 17 reduction. 18 The bill specifically states that we must allow 19 for alternative compliance strategies. We must also 20 evaluate the economic impacts of our regulations upon the 21 economy of the state. 22 Finally, the bill requires us to study the 23 economic impacts specifically on communities with minority 24 populations or low income populations, often referred to 25 as environmental justice community, and hold at least PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 three workshops in environmental justice communities. 2 --o0o-- 3 MS. TUTT: As I stated in the slide previously, 4 we are keeping in mind the requirements of AB 1493 as we 5 determine the best form for the standard. In addition to 6 those requirements, staff has developed some additional 7 guidelines we believe are compatible with the goals of the 8 legislation. These guidelines include a form that yields 9 real and significant emission reductions, that does not 10 seek to restrict manufacturers' product offerings, does 11 not penalize manufacturers that are already using 12 innovative technology, and minimizes opportunities for 13 gaming. 14 --o0o-- 15 MS. TUTT: Keeping in mind all these 16 considerations and after investigating a variety of 17 standard-setting approaches and discussing them with 18 industry, environmentalists and other interested parties, 19 we're considering two general approaches to conform with 20 the standard. These are not in order of preference, as we 21 have not completed our analysis and we need to do the 22 results of the technology assessment before we could make 23 a final recommendation. 24 The form of the standard could be a single fleet 25 average for the entire vehicle fleet. That is, regardless PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 of fleet make up, each manufacturer would be subject to 2 the same emission standards. Or we could have a form that 3 allows for separate emission standards for different 4 vehicle categories, depending upon particular attributes. 5 Attributes on which standards could be set include vehicle 6 type, car versus truck, or size or weight. 7 --o0o-- 8 MS. TUTT: In addition to staff considerations 9 regarding how we establish climate change emission 10 standards, we are also looking at ways to provide auto 11 manufacturers the flexibility in meeting these standards. 12 AB 1493 specifically requires us to allow for alternative 13 methods of compliance in our regulations. Although the 14 regulations will allow for alternative methods of 15 compliance, this allowance must not dilute the emission 16 benefits, technology-forcing nature, or any of the other 17 requirements of the regulations. 18 The overriding goals are to reduce emissions and 19 to improve the vehicles themselves. 20 --o0o-- 21 MS. TUTT: Rather than to try to come up with a 22 list of acceptable alternative compliance strategies, 23 staff is considering criteria that would be used to 24 evaluate strategies on their merits. The criteria being 25 considered are those that are applied to all current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 emission credit trading programs. These include 2 requirements that the emission benefits be real, 3 quantifiable, surplus, enforceable, and permanent. 4 We will not allow alternative compliance 5 strategies to interfere with any of the other important 6 environmental goals of this state. Therefore, alternative 7 compliance strategies must provide equivalent or better 8 climate change emission reductions and must also ensure 9 against any negative environmental impacts such as 10 increases in criteria prudence or toxic emissions. 11 --o0o-- 12 MS. TUTT: I would now like to turn to the 13 economic analysis staff is working on in support of the 14 regulations. In addition to our traditional evaluation of 15 the emission benefits and macro-economic effects of our 16 regulations on the California economy, shown here in the 17 outer ripple, staff is considering other affects that are 18 specific to these regulations. 19 As a result of the climate change regulations, we 20 anticipate that vehicle attributes such as operating costs 21 and vehicle price may change. Changes in these attributes 22 could result in changes in consumer behavior or consumer 23 response. 24 In the past, some ARB regulations have resulted 25 in an increase in operating costs, primarily due to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 fact that vehicles use slightly more fuel per mile than 2 they would without after treatment. However, climate 3 change emission control technology is likely to reduce 4 operating costs, as it is likely that the regulated 5 vehicles would be more efficient. 6 Various studies in economics literature have 7 argued that in response to a reduction in operating costs, 8 consumers will drive more. This effect is called the 9 rebound effect. ARB staff in cooperation with UC Irvine 10 and other experts is evaluating the magnitude of a 11 possible rebound effect associated with our climate change 12 regulations. 13 Another attribute change resulting from our 14 regulations will be an increase in vehicle price. In 15 other ARB rulemaking industry analysts have argued that if 16 vehicle prices go up, consumers will respond by purchasing 17 fewer new vehicles. ARB staff, in cooperation with UC 18 Davis and other experts, is evaluating the magnitude of a 19 possible fleet turnover effect associated with our climate 20 change regulations. 21 --o0o-- 22 MS. TUTT: Another very important part of our 23 economic analysis has to do with taking a look at the 24 impacts of climate change and of our regulations on 25 environmental justice for EJ communities. AB 1493 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 requires us to consider the ability of these communities 2 to maintain and attract businesses. And we have been 3 working with environmental justice advocates and other 4 experts to do so. 5 --o0o-- 6 MS. TUTT: EJ communities are often the 1st and 7 hardest hit when it comes to health effects of pollution 8 and economic hardship. 9 ARB staff is committed to developing a 10 partnership with the EJ community as we develop the 11 climate change regulations. ARB staff has had numerous 12 meetings with EJ organizations and will continue with 13 these efforts. 14 AB 1493 specifies that ARB must hold at least 15 three workshops in EJ communities. We are pleased that 16 representatives from the EJ stakeholder groups have 17 attended most of our workshops thus far and intend to 18 attend all our remaining workshops, not just those held in 19 EJ communities. 20 --o0o-- 21 MS. TUTT: Over the last year we had a number of 22 workshops on various aspects related to development of our 23 climate change regulations. The first was an inventory 24 workshop in December of last year. 25 And Steve mentioned earlier, in March of this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 year we held an international symposium on vehicle 2 technology to gather information about various existing 3 and emerging technologies that reduce climate change 4 emissions. 5 --o0o-- 6 MS. TUTT: In October we held a two-part 7 workshop. The first part was on the form of the standard 8 and the second on our economic analysis. Finally, in 9 mid-October we held a workshop on alternative compliance 10 strategies. These workshops are all part of staff's 11 ongoing efforts to ensure that the proposal we bring 12 before you next year has been fully vetted by all 13 interested parties. 14 --o0o-- 15 MS. TUTT: In terms of next steps we are planning 16 at least five more workshops in the first and second 17 quarter of next year. We will be holding a technology 18 workshop upon the completion of our technology assessment 19 and an inventory workshop upon the completion of our 20 climate change remission inventory. 21 We plan to release a draft staff proposal in May 22 of next year. Our current plan is to hold at least one EJ 23 workshop early next year, prior to the release of the 24 draft staff proposal, and additional EJ workshops 25 following the release of the draft staff proposal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 In addition to the EJ workshops related to the 2 release of our staff proposal, staff will hold a general 3 workshop to take public comment on the proposal in the 4 second quarter of 2004. 5 Staff will consider public comment and release 6 the final staff proposal in July of next year. Finally, 7 this Board will hear the staff proposal in September of 8 next year and determine whether or not to adopt the 9 proposed regulations. Upon adoption, staff will report to 10 the Legislature, and the Legislature will have one year to 11 review our regulations. 12 --o0o-- 13 MS. TUTT: In conclusion, I'd like to reemphasize 14 that climate change is a serious threat to public health 15 and the environment, and that we in California are 16 particularly vulnerable to its effects. Our state will 17 have a difficult time achieving the existing air quality 18 standards required to protect public health. Local 19 warming exacerbates our efforts. Our valuable agriculture 20 industry is dependent upon reliable water supplies that 21 could be compromised. Our expansive coastlines and 22 beautiful forests are particularly susceptible to the 23 adverse impacts of global warming. 24 Transportation is the largest source of climate 25 change pollutants and there is no question that technology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 exists to reduce climate change emissions from motor 2 vehicles. 3 We are directed by AB 1493 to do as we have 4 always done and take a leadership role to protect public 5 health for the maximum extent feasible and cost effective. 6 We have a top flight team of ARB staff and outside experts 7 contributing to this effort, and look forward to bringing 8 our recommendations to you in the fall of next year. 9 Thank you for your consideration. 10 Staff will now respond to any questions you might 11 have. 12 CHAIRPERSON LLOYD: Thank you very much. 13 I'd like to compliment the staff. I must say 14 that 513 ripples from a regulatory stone in an economic 15 pond. You've excelled yourselves there with that. And I 16 guess, looking at the arrow pointing outwards, we must 17 make sure they continue that way rather than pointing 18 inwards. 19 So with that, any comments or questions from my 20 colleagues? 21 I have one question for Steve. And it might be 22 naive, Steve. I was told as a variable geometry 23 turbocharging was an up and coming technology. 24 ENGINEERING STUDIES BRANCH CHIEF ALBU: That's an 25 option. And also electric turbochargers as well. We are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 looking at both. 2 CHAIRPERSON LLOYD: Okay. 3 Okay. With that, then we have -- sorry, Mr. 4 Calhoun. 5 BOARD MEMBER CALHOUN: I think what you said, 6 that there's no question but that there is technology 7 available at this time to help reduce some of these 8 greenhouse gases. 9 Don't we have a lot of these things automatically 10 evolving now as part of manufacturers' efforts to be a 11 little more competitive, or whatever they take into 12 consideration, in deciding changes that ought to be made 13 to a vehicle? 14 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yes, 15 that's true. In fact I point out that, for example, six 16 speed automatic transmissions are going to be pretty much 17 uniformly across the Board in 2009. 18 This is coming because in Europe and Japan, for 19 example, there already are some requirements in place for 20 improved climate change emissions, so that this is tending 21 to produce changes in technology already. Actually, we'll 22 benefit in the U.S. from the Mercedes Benz 2005 model 23 they'll bring out in the E class and the M class with a 24 seven-speed automatic. So these are kind of funneling 25 down from efforts also around the world. And there are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 other technologies as well that will come into play. 2 Also because there's a perception by the public 3 that those manufacturers which are out in front with 4 leading technology, such as the Prius, are those that are 5 the ones they're going to buy from. They have the best 6 technology. So that other manufacturers noting this, they 7 themselves are going to becoming on line to some extent 8 with technologies to match those as part of a marketplace 9 incentive. 10 But, nonetheless, there's still a lot of things 11 that can be done beyond what they would probably do on 12 their own. And that's why we're trying to do a more 13 thorough assessment, which would show the potential to 14 even greater changes and improvements that could be done 15 cost effectively. So while there's some on their own, 16 there's still a lot more that could be done, and what 17 they're planning to do in 2009, for example. And our 18 study is actually projecting what each manufacturer will 19 have in place as advanced technology in 2009, so we know 20 what their product lines are going to offer already. 21 BOARD MEMBER CALHOUN: This is a status report 22 being presented today. 23 Will your next report to us include alternative 24 ways of accomplishing some of these same reductions in 25 greenhouse gases as you proposed today just based on using PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 gasoline? 2 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yes. We 3 will actually have another workshop after we've put 4 together our staff report. But what we're doing as part 5 of this external technology assessment is we're looking at 6 various combinations of technologies on individual vehicle 7 classes to see which technologies and which combinations 8 provide the best benefit at the lowest cost. So we're 9 doing a -- this modeling study we'll look at the 10 synergistic effects of combining these technologies so it 11 will be just -- you just can't add up each technology 12 individually. You have to actually -- interactions of 13 putting them together and that's why we have to do 14 modeling to do the simulation runs. 15 But we will come up with the packages in our 16 staff report and are aware of packages that manufacturers 17 can use as a guideline they choose themselves. But we're 18 basically using packages to establish what percent 19 reductions can be achieved and at what cost. 20 BOARD MEMBER CALHOUN: Will that include 21 consideration of alternative fuels? 22 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yes. 23 BOARD MEMBER CALHOUN: Next and last question. 24 An economic analysis. I was kind of -- Dr. Lloyd 25 mentioned a few moments ago about the pie chart -- not pie PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 chart, but the diagram you have there concerning the 2 economic analysis. Will the report you come back to the 3 Board with include that particular type of analysis? 4 ENGINEERING STUDIES BRANCH CHIEF ALBU: Well, 5 there's several economical analyses going on. And from 6 the standpoint of the technology, if that's what you're 7 referring to, at least in that aspect we are also working 8 with a consultant that is used by the auto industry 9 themselves, I mean the major domestic manufacturers and 10 their suppliers. We learn the -- the company that we're 11 using to project costs. And so we will know very clearly 12 what the costs of this new technology will be when used in 13 large volume and in learned out situations. So we will 14 have a very clear cost for the combinations on each of the 15 vehicle types. 16 EXECUTIVE OFFICER WITHERSPOON: Mr. Calhoun, all 17 the economic analyses will be in our final recommendation 18 to the Board. And we're going through the process of 19 sharing them with the public so that people have an 20 opportunity to comment on the work of our own staff and 21 our contractors in doing those analyses, because they are 22 fundamental to the conclusions staff will reach about what 23 is feasible and cost effective. 24 BOARD MEMBER CALHOUN: Thank you. 25 CHAIRPERSON LLOYD: I know Mr. McKinnon and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 Supervisor DeSaulnier had a question. But I'd just like 2 to comment on one thing following up. 3 My understanding is that we're also trying to get 4 some augmentation of the work we're doing in alt fuels so 5 it will actually help staff analysis. 6 Mr. McKinnon, Supervisor DeSaulnier. 7 BOARD MEMBER McKINNON: Yes. Just a comment. 8 When I got my briefing on this the other day, I 9 had to ask staff if they were having fun because the 10 briefing was fun for me. 11 And I think that what's different here is that as 12 we sort of look at all this technology, even if we're, you 13 know, like not prescriptive about what ought to be used or 14 not used in terms of the technology, the one thing that's 15 clear and sort of different than where we were with, say, 16 the ZEV is that a lot of this is mass produced, it is sort 17 of changes that can be put into production at large scale, 18 bringing prices down. 19 And, you know, there's a long ways to go to 20 figure that out. But it's already appearing to me at 21 least that -- not to minimize the design problems and the 22 work that's going to go into it. But it's already 23 appearing that this is sort of available in the future as 24 a mass produced solution, and that it has, you know, real 25 viability without breaking the bank. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 And so I hope you're having fun. And I sure am 2 enjoying the development of it. 3 And I guess I do have a question for staff and, 4 that is, sort of -- I'm constantly sort of interested in 5 how the EJ policy is implemented of the Board. And in 6 this case the bill requires it. 7 Where were the meetings conducted, sort of who 8 was engaged in them? I mean with just sort of briefly 9 broad strokes. 10 MS. TUTT: Well, we've attended three different 11 meetings with groups of EJ -- EJ of stakeholders, two of 12 them in L.A. And one of them in northern California. 13 We've also -- out of those meetings we developed 14 an E-mail list. And we send -- every time we have a 15 workshop, or like for today's hearing we send that list -- 16 all the announcements, the presentations, every document 17 that has to do with climate change, that list gets it. In 18 addition, we've had numerous phone conversations. We've 19 had -- you know, we've gone to coffee, we've had lunch 20 with EJ stakeholders. We really are making an effort to 21 determine what's important for the EJ community and how we 22 can meet their needs. 23 CHAIRPERSON LLOYD: I think staff will get a 24 grading on how they're doing when we go to our witnesses. 25 Supervisor DeSaulnier. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 BOARD MEMBER DeSAULNIER: See, that was going to 2 be my question since Dr. Clark's here in terms of the 3 outreach meetings. I assume you're going to have those in 4 different parts of the state, prospectively. And we have 5 a former Ford plant in Richmond, Dr. Clark's area. If you 6 want to use that, we can see if that's available. 7 So where will you have them? 8 MS. TUTT: Well, we were thinking of having one 9 in like Oakland, northern California, one in the San 10 Joaquin Valley, and one in L.A. 11 BOARD MEMBER DeSAULNIER: Okay. And just to 12 comment along with Matt, it's nice to see a 13 non-controversial issue come in front of the Board. It's 14 like a Peggy Lee moment, is this all there is after all 15 that effort? 16 Thank you, Mr. Chairman. 17 CHAIRPERSON LLOYD: I want to go to one of the 18 things that Matt said. I think that one of the things 19 that you're struck by is, again, the number of 20 technologies that the auto industry is working on. I 21 mean, it's just a tremendous -- a lot of work going on in 22 all these areas. And I think it's really nice to see that 23 as we think maybe things are static, then they're really 24 not static. 25 You highlighted, Steve, the fact -- if you look PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 at our ZEV regulation, that is also on a path to reduce 2 this. Have we quantified, say, by the time we introduce 3 this regulation what reduction from the base stand we'll 4 get as a result of greenhouse gases as a result of the ZEV 5 regulation, briefly? 6 ENGINEERING STUDIES BRANCH CHIEF ALBU: Well, we 7 haven't done it yet, but it's something we could do. I 8 mean we could provide that for you later. 9 CHAIRPERSON LLOYD: It would be interesting. You 10 know, the nearest percent is fine, just to see what -- 11 BOARD MEMBER RIORDAN: Mr. Chairman, I'd like to 12 encourage the staff to do that. I think it -- you know, 13 it would be a very interesting analysis. 14 CHAIRPERSON LLOYD: And I think the other thing 15 we'll probably -- we are engaged in with some 16 stakeholders. And, that is, the -- not only the role of 17 alt fuels. And they can be addressed. And I realize 18 obviously we could quantify that in terms of reduction in 19 greenhouse gases from these various examples that you 20 gave. But of course that's meaningless until you look at 21 the penetration. 22 But the other part of it, I know we are 23 discussing the role of maybe alt fuels themselves and how 24 you go to, you know, lower greenhouse gas type fuels there 25 and how that may play into that. So, again, there's some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 other dimensions that we'll be looking at, too, in that 2 period of time. 3 I also -- how confident are you on the September 4 date? 5 EXECUTIVE OFFICER WITHERSPOON: Absolutely 6 confident. 7 CHAIRPERSON LLOYD: Ms. D'Adamo. 8 BOARD MEMBER D'ADAMO: Just a question and a 9 couple of comments. 10 First of all, I share my other colleagues' 11 here -- the enthusiasm for what we're about to accomplish 12 here. And I just want to encourage staff to be as 13 creative as possible. It appears that that's where you're 14 headed, but just wanted to underscore that. 15 I'm looking at Slide No. 29, goals for the form 16 of the standard, and note that you have here real and 17 significant emission reductions. And I think that that 18 kind of ties in with the last point that you have here, 19 minimize opportunities for gaming. 20 I for one am still smarting from the ZEV reg. 21 And I'd like for us to actually eliminate all 22 opportunities for gaming. And I know that it's virtually 23 impossible to assure that. But I think that ought to be 24 our goal. Mr. McKinnon points out, you know, a number of 25 technologies that seem to be achievable now. So I think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 that once we get into the various approaches that are on 2 the next slide -- I just don't want to lose that 3 opportunity since those technologies seem to be before us 4 now. And I'm sure that staff shares that concern, but 5 just wanted to state that for the record. 6 My question has to do with -- on Slide 30, 7 possible approaches, separate fleet average emission 8 standards. Weight based. 9 In light of the fact that we are precluded by the 10 statute to require weight reduction, I don't read this as 11 possibly requiring weight reduction. But if staff could 12 just comment on what is meant by weight-based standard. 13 EXECUTIVE OFFICER WITHERSPOON: The idea is to 14 segregate vehicles by their weights and impose standards 15 for those segments, as opposed to pushing vehicles from 16 one weight or another. 17 And the concept is that heavier weight vehicles 18 can respond differently than lighter weights and have 19 different technologies employed on them and give you a 20 different answer about maximum feasible emission 21 reductions in that weight class than you might get if you 22 lumped everything together. 23 BOARD MEMBER D'ADAMO: Okay. And in light of 24 what I said earlier about getting gamed, it just reminds 25 me of what happened with, you know, the SUV -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 EXECUTIVE OFFICER WITHERSPOON: Right, there's 2 gaming issues -- 3 BOARD MEMBER D'ADAMO: -- allowances that we got 4 with the ZEV Regulation. 5 EXECUTIVE OFFICER WITHERSPOON: True. And the -- 6 the segmented standards, and especially weight-based 7 segmentation has provoked questions and concerns about 8 gaming and whether or not if the standards were perceived 9 to be less stringent in higher weight categories, would 10 you create an incentive to move up, you know, like a 11 gaming or just an incentive to add more weight to the 12 vehicle to escape a more stringent standard. And we're 13 looking at that. It's one of the pros and cons we have to 14 weight in all of the different options up there. 15 CHAIRPERSON LLOYD: I see Mr. Cackette has joined 16 us. Do you want to say anything at all on this item, Tom? 17 I know you've been heavily busy, occupied on another 18 critical issue. 19 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: No 20 thanks. 21 CHAIRPERSON LLOYD: We have three witnesses 22 signed up, Russell Long, Dr. Henry, and Jane Williams. 23 MR. LONG: I'm Russell Long, Executive Director 24 of Bluewater Network, the organization which originally 25 sponsored AB 1493. And I'd like to address three issues PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 related to the implementing regulations. We're deeply 2 concerned about several of them, and that's why we're here 3 today. But before I do, I'd like to compliment ARB staff, 4 who've been receptive to and available to discuss all of 5 our concerns. We appreciate that. 6 Three years ago this month, when I conceived and 7 wrote what ultimately became known as the Pavley bill, I 8 envisioned a regulation that would potentially reduce 9 greenhouse gas emissions from motor vehicles on an 10 absolute basis. That is to say, we would have no net 11 increases, zero increases from the new vehicle fleet. And 12 instead total emissions would actually shrink. 13 I like to think about greenhouse gas emissions 14 from motor vehicles as a pie. Each auto manufacturer is 15 responsible for a piece of the of the pie or a certain 16 percentage of greenhouse gas emissions. If we're really 17 going to control or address the escalating global warming 18 problem, the size of the whole pie must decrease. 19 But staff at this point appears to be proceeding 20 in a slightly different direction. And I'm concerned that 21 this regulation will not actually reduce the pie, but it 22 may allow it to grow. That certainly wasn't my original 23 intent or the intent of the environmental community or the 24 many organizations, businesses, and individuals who worked 25 so diligently to pass this legislation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 Now, why would the pie grow? Because so far 2 staff has chosen only to analyze on-vehicle technologies. 3 But there's several other very important factors forcing 4 the state's emissions to increase. There's the trend 5 towards bigger cars and trucks. There's a growing number 6 of new vehicles sold. And there's the trend towards 7 increased mileage driven per year. 8 In the way the regulation is proceeding now, 9 those variables are going to become the state's problem. 10 So if the state underestimates, for example, a shift 11 towards bigger cars, we will have higher greenhouse gas 12 emissions than we had anticipated. And that's precisely 13 what we believe is flawed about this approach that staff 14 is currently taking. 15 Our view is that we should require that the auto 16 industry take responsibility for managing the greenhouse 17 gas consequences of some or all of those variables. The 18 manufacturers have far more control over some of those 19 variables than the state. So it only makes sense that 20 they rather than the citizens of California should own 21 those variables. They are the ones creating the problems, 22 not us. 23 Exacerbating the problem of a growing pie staff's 24 proposal is for an attribute-based standard, at least one 25 of them is, because -- it's unfortunate because if we set PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 different standards for different vehicle classes without 2 an absolute cap on emissions, we're just setting up a 3 system that encourages manufacturers to sell more of the 4 large vehicles in the big emissions category. And I think 5 that's what Catherine was alluding to. 6 Nor does this achieve the maximum emissions 7 reductions mandated by the law. Yet another issue. 8 Instead I would urge you to direct staff to 9 establish an absolute cap on each manufacturer's total 10 greenhouse gas emissions, a cap that would rachet down, 11 shrinking the pie over the short and the long term. An 12 absolute cap on each manufacturer's slice of greenhouse 13 gases would guarantee that the state's vehicle 14 contribution to global warming would decrease. And it 15 would encourage innovation that would also help to set an 16 excellent model for the federal government to follow 17 whenever they do get around to controlling greenhouse gas 18 emissions from this sector. And one day they must. 19 The Governor's indicated strong support for 20 advanced vehicles. And we, therefore, believe that the 21 more assertive approach to controlling this problem is not 22 only justified legally, but politically. At the very 23 least we urge you to do a full analysis supporting an 24 absolute emissions cap on new vehicles so that you and the 25 Governor's office can consider the implications of both PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 approaches prior to making a final determination. We 2 think that's very important. And we'd ask your support 3 for that approach. 4 Now, I'd like to mention a potential problem with 5 the regulatory process in regard to alternative fuel 6 vehicles, which have been mentioned so far. And I 7 appreciate Dr. Lloyd and Mr. Calhoun bringing that up. 8 As you know, CO2 emissions from vehicles are 9 dependent not only on the amount of fuel that's burned, 10 but also on the type of fuel burned. Alternative fuel 11 vehicles have the potential to dramatically reduce 12 greenhouse gas emissions. So obviously we're concerned 13 that ARB staff has not conducted an in-depth and thorough 14 analysis of the potential emissions reductions benefits 15 there or the ownership costs of those options. We believe 16 an in-depth analysis of alt fuel vehicle compliance 17 options is really essential in order for such vehicles to 18 be included as part of the main regulatory pathway; in 19 other words, not as an alternative compliance option. And 20 I think that's a very important distinction. 21 Now, why do we believe this? 22 Well, first, because our expert attorneys in DC 23 have conducted a comprehensive legal analysis of the 24 legislation, and they believe that the Air Board has a 25 legal responsibility to fully analyze all options that may PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 allow the State to reduce greenhouse gas emissions to the 2 maximum cost-effective extent. The Board cannot and must 3 not overlook the fact that some alt fuel vehicles may cost 4 effectively create significant reductions in greenhouse 5 emissions on a full life-cycle basis, fuels such as 6 natural gas and others. 7 Bluewater strongly urges you to direct ARB staff 8 to conduct an in-depth analysis of alt fuel vehicle 9 compliance options as soon as possible to ensure that the 10 results can be included in your draft regulatory proposal 11 this spring. 12 As Dr. Lloyd and I discussed recently, my 13 organization is trying to help raise funds to help the 14 Board with an independent analysis of alt fuel vehicles. 15 But regardless of whether we actually succeed in raising 16 funding, it's still incumbent upon the Board to direct 17 staff to fully explore this issue in order to meet its 18 legal mandates. 19 Moreover, a number of automotive companies are 20 doing really excellent work in this area. And we've 21 talked to General Motors and Ford about using this 22 regulation to help increase their sales in the alt fuels 23 markets while also helping to protect the environment. 24 And I think there's some great opportunities for them 25 here. And we hope that they will really consider PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 embracing at least that aspect of the regulation. 2 The final issue that I'd like to address is 3 related to staff's proposal to not account for greenhouse 4 gas emissions from fuels production or distribution until 5 a trigger point of vehicle sales is reached. They have 6 proposed a trigger point of 20,000 of any one type of alt 7 fuel vehicle sold. And we actually disagree with this 8 approach. To us, this would be very short sighted because 9 it ignores up to 100 percent of the life-cycle greenhouse 10 gas emissions from some alternative fuel vehicles and 11 their fuel production processes. And it may create 12 incentives for some alternative fuel vehicles which may 13 not have a substantial climate benefit. 14 We think it's very important to measure the 15 actual benefits of alternative fuels. And we urge you to 16 eliminate the 20,000 vehicle trigger before considering 17 upstream greenhouse gas emissions. Staff has commented 18 that for ARB to do the additional analysis would take 19 valuable time. But instead we would urge staff to use 20 excellent studies by Argon National Laboratory and others 21 who have already done really extensive work in this area 22 and to incorporate their data into the analyses. And that 23 will save the time they're concerned about. 24 If they're concerned about the need to redo these 25 existing studies themselves, the Argon data should serve PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 just fine until some trigger point such as 20,000 vehicles 2 is actually arrived at, at which point they can conduct 3 their own analyses. And I don't think they have a problem 4 with that. 5 In the meantime it simply doesn't make sense to 6 completely ignore existing data about upstream greenhouse 7 gas emissions with the net effect that we could perversely 8 incentivize the wrong alternative fuel vehicles from a 9 greenhouse gas standpoint and disincentivize the right 10 ones. 11 Just a few final words. It's not often that an 12 agency is granted the legal authority or responsibility to 13 achieve the maximum feasible reductions in anything. The 14 fact is you now have that authority. And you also have 15 the ability to draft a regulation that considers both the 16 short term and the long term, a mandate that permits you 17 to closely look at the potential for incredible changes to 18 our car technologies and even to the fuels that we use in 19 our vehicles. 20 I strongly encourage you to take full advantage 21 of that legal and moral imperative, because it's so 22 terribly important for California to lead the way on this 23 problem so that others can follow on our path. 24 I've always hoped and believe that this 25 regulation has the potential to be the definitive model PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 for both the United States and, who knows, maybe even the 2 world. And I'm hopeful that the Board will take all the 3 necessary steps to fully achieve the vision that so many 4 of us have held when we fought so vigorously to pass this 5 legislation. Our children are counting on us to make the 6 maximum of it. 7 Thank you. 8 CHAIRPERSON LLOYD: Thank you. 9 Are there any questions or comments? 10 BOARD MEMBER RIORDAN: Well, just a follow-along 11 comment. You know, it's not often that we hear somebody 12 offer us opportunities of studies or monies towards 13 independent studies. And I recognize that. And I think 14 that's something we ought to follow up on, to see if there 15 is some cooperation that can be very helpful to our staff 16 analysis. And so I'm encouraging you, Mr. Chairman, maybe 17 to follow up on that with a further meeting with Mr. Long 18 and his group to see what opportunities there are to make 19 this analysis happen. 20 CHAIRPERSON LLOYD: I think we've made that 21 commitment. And I have sent the E-mail, as promised. 22 MR. LONG: Thank you very much. We'd be happy to 23 do whatever we can on that basis. 24 CHAIRPERSON LLOYD: Ms. Witherspoon. 25 EXECUTIVE OFFICER WITHERSPOON: Dr. Lloyd, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 something I'd like to clarify for the Board's sake in 2 response to his testimony, is to say emphatically that 3 staff does not have a proposed standard at this time. 4 Some of Russell's remarks were aimed at "Your staff is 5 planning" and "there's a problem with that." We have no 6 recommendation. We have alternatives presented to the 7 public, which we are weighing and soliciting comment on. 8 But there is absolutely no proposal at this time. 9 CHAIRPERSON LLOYD: And I didn't -- I know that, 10 and I didn't read into his comments. I thought he said, 11 "While there's time to get some input into that." 12 MR. LONG: And I certainly didn't mean to imply 13 there was any proposed standards here. That was not my 14 intention. 15 EXECUTIVE OFFICER WITHERSPOON: Or even form of 16 the standard. We have made no decision about the form of 17 the standard either. 18 CHAIRPERSON LLOYD: And then, again, that will 19 come out. There will be workshops. All this stuff will 20 come out. And obviously you'll be meeting staff, as not 21 only meeting with the NGO's, but also the auto industry as 22 appropriate. 23 Mr. McKinnon. 24 BOARD MEMBER McKINNON: I just wanted to comment. 25 Many of us value the legislation and many of us PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 participating in its passage. So many of us think a great 2 deal of it. And thank you for working on it. And we're 3 not taking it lightly. 4 MR. LONG: No, I'm absolutely sure you're not. 5 Thank you for all the great work that is being 6 done. 7 CHAIRPERSON LLOYD: Thank you. 8 Dr. Clark and Jane Williams. 9 DR. CLARK: Good afternoon, Chairman Lloyd and 10 members of the Board. I'm Dr. Henry Clark, the Executive 11 Director of the West County Toxics Coalition, an 12 environmental justice organization based in Richmond, 13 California. Probably one of the oldest environmental 14 justice organizations in the country now, going into our 15 21st year. 16 I'm glad to be a stakeholder in this process here 17 to reduce greenhouse gases in the state of California. 18 The West County Toxics Coalition has been involved in this 19 effort with other environmental justice groups throughout 20 the country. And it's good to see our state taking the 21 lead here in this effort here. And I look forward to 22 working with the Board and the staff. 23 The staff have been diligent in contacting me 24 about the meetings and keeping me informed and providing 25 information. And in the final end, I hope we come out of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 this process with a product that will certainly protect 2 all residents in the State of California as well as the 3 environmental justice communities that my organization 4 represent. And we certainly will be keeping you informed 5 in that effort if there's any complications or problems in 6 that area. 7 So thank you very much for inviting us to be part 8 of this process. And we look forward to continuing to 9 work with you and staff. 10 Thank you. 11 CHAIRPERSON LLOYD: Thank you for those comments. 12 And, again, clearly staff is doing a good job in working 13 with the community. So thank you Dr. Clark. 14 And Jane Williams. 15 MS. WILLIAMS: I am Jane Williams. I'm the 16 Director of California Communities Against Toxics, a 17 statewide coalition of environmental justice groups. 18 And Dr. Clark is right. He is the senior among 19 us. He is one of the elders of the environmental justice 20 movement, not only in California, but in the country. 21 So thank you for the invitation to come and speak 22 to you today, Dr. Lloyd, members of the board. 23 There are many issues involved in this 24 regulation: Issues of technology; issues of what is the 25 nexus with the other regulations that the Board has in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 play on mobile sources; as well as the very intensive 2 effort on environmental justice that this Board has 3 engaged in, ably led by Mr. McKinnon. 4 And while industry may be concerned about the 5 rebound effect, you can imagine that the environmental 6 justice communities are concerned with other effects. 7 We're very, very pleased to see that part of the 8 criteria for the alternative compliance strategies is no 9 increase in criteria or toxic air contaminant emissions. 10 That is something that's very important to the communities 11 that I represent. 12 When it comes to a tradeoff between community 13 health and dollars, I think it's going to be clear to 14 everybody where we're going to stand on that. Our 15 communities are heavily impacted by emissions from mobile 16 sources, and believe that their communities' health and 17 economic well beings are both affected by proximity to 18 refineries, proximity to ports, proximity to freeways. 19 So it's going to be very interesting to me, not 20 only to sit on the sidelines as we watch the process on 21 the technology choices unfold, but to also be part of the 22 process of trying to look 10 years in the future about 23 what it's going to be like to be Pacoima, where you've 24 got, you know, many older cars, a very poor community. 25 Very concerned about the health of the air that they're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 breathing and their children. And what kinds of choices 2 are we going to place before the consumers in that 3 community? Are they going to be able to make choices that 4 are in concert with their economic stature and in concert 5 with their values of protecting their kids health? 6 So I second the recommendation by you, Dr. Lloyd, 7 to have the agency look at sort of the synergy of the 8 regulations on mobile sources, including this regulation, 9 and what is that going to look like in a community-based 10 setting 10 years from now or 15 years from now? And, 11 indeed, that is something I had mentioned to the staff 12 before. So I would love to see the Agency do that. 13 And I also, you know -- one of the other hats I 14 wear, I chair the Sierra Club's National Air Toxics 15 Committee and spend a lot of time suing the federal EPA on 16 this air toxics standards. And very, very concerned about 17 the gaming that goes on there as well. 18 So I just want to reiterate the importance of 19 establishing baselines and timelines and perhaps a goal of 20 no-net increase. You know, I am not personally acquainted 21 with my colleague here at the Bluewater Network, but 22 working on air toxics and air pollution issues now for 23 longer than I'd like to say -- it would give away my 24 age -- I think caps are a very good idea. I think that 25 the state and the citizens of the state would benefit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 immensely from capping greenhouse gas emissions from 2 mobile sources, and then having the technology work out 3 underneath that. So I do challenge staff to look at that 4 as a possible option in the form of the standard. 5 And thank you very much for including the 6 environmental justice movement in this. We're working 7 diligently with staff to try to figure out, you know, ways 8 of engaging people who are already, as you know, 9 overworked and underpaid and have lots of other issues in 10 front of them right now. But we will certainly be very 11 interested to work with the staff and the Board as this 12 comes down. 13 So thank you. 14 CHAIRPERSON LLOYD: Thank you very much, Jane. 15 Again, clearly we share your concern about 16 communities such as Pacoima. But that's where we're 17 hoping that the penetration of the super-clean cars, PZEVs 18 and the AT PZEVs that staff talked about earlier is going 19 to really help in that direction and that sort of 20 timeframe. 21 Are there comments or questions from my 22 colleagues? 23 Again, I think to reiterate what was said earlier 24 and what you heard Secretary Tamminen said, that Governor 25 Schwarzenegger is not only committed to supporting this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 bill, but to defending this legislation and regulations. 2 So I think that gives us strong faith in moving forward. 3 But clearly we've got to try and move forward 4 with all the stakeholders. And I think we've got -- staff 5 has done a wonderful job so far. Clearly our job is not 6 finished. We've got other dimensions we have to look at. 7 But I have complete faith that staff will be talking to 8 the stakeholders, as it usually does, and that we look 9 forward to engaging all the stakeholders and communities. 10 And we have some specific action items to work on as 11 discussed in the presentations and the testimony. 12 Ms. Witherspoon, do you want to say anything? 13 EXECUTIVE OFFICER WITHERSPOON: Not at this time. 14 CHAIRPERSON LLOYD: Thank you. 15 Well, thank you very much. And seeing that 16 there's -- I don't have to close this. It's not a 17 regulatory item. But we will move ahead. 18 We don't have anybody signed up for the open 19 comment period. 20 So with that I'd like to officially bring the 21 November 20th meeting of the Air Resources Board to a 22 close. 23 Again, thank you all very much. I guess Happy 24 Thanksgiving. 25 /////// PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 (Thereupon the California Air Resources 2 Board meeting adjourned at 3:40 p.m.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 CERTIFICATE OF REPORTER 2 I, JAMES F. PETERS, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing California Air Resources Board meeting was 7 reported in shorthand by me, James F. Peters, a Certified 8 Shorthand Reporter of the State of California, and 9 thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said meeting nor in any 12 way interested in the outcome of said meeting. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 3rd day of December, 2003. 15 16 17 18 19 20 21 22 JAMES F. PETERS, CSR, RPR 23 Certified Shorthand Reporter 24 License No. 10063 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345