BOARD MEETING DATE: June 12, 1998 AGENDA NO. 32
REPORT:
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, May 22, 1998. Following is a summary of that meeting. The next meeting will be June 19, 1998, at 11:00 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Mee Hae Lee
Chair, Stationary Source Committee
Attendance
The meeting began at 11:15 a.m. Present were Committee Chair Mee Hae Lee and Board Members Jon Mikels, Leonard Paulitz, and Wayne Nastri (who was appointed to the Committee for this meeting only). Absent were Committee Members Richard Alarcòn, Ron Loveridge, and James Silva.
Summary
The Committee reviewed the items on their agenda (attached). Comments were noted on the following items:
Stationary Source Compliance Senior Manager Pom Pom Ganguli presented this item. Regulation XIII requires that BACT or LAER be applied to new, modified, or relocated spray booths having an emission increase greater than 1 lb/day. About 9,000 spray booths are operating within the AQMD jurisdiction, and last year approximately 650 permits to operate were processed for BACT determination.
BACT/LAER Guidelines list requirements for commonly permitted equipment. Spray booths currently require add-on controls for emissions over 140 lbs/day per spray booth. Add-on controls are also assessed on a case-by-case basis for technological feasibility and cost-effectiveness. Staff has found over 30 examples of spray booths in different industries, using add-on controls. Dr. Ganguli said that for spray booths having VOC emissions of 39 lbs/day or greater, it appears that BACT/LAER should be add-on controls with 90% destruction efficiency.
Two alternatives to BACT or LAER are proposed on the principle that it is best to prevent pollution rather than trying to control it. The first involves the use of super-clean materials that have very low VOCs. Examples of such technology are UV-cured products, electron beam coatings, powder coatings, etc.
Dr. Ganguli said that the second alternative is equivalent emission reductions through the use of low-VOC products. Finally, if there are examples of a specific application where add-on controls have achieved lower levels, then staff will be required to apply add-on controls for a new source at that level.
Mr. Paulitz asked if equipment with 39 lbs/day or greater VOC emissions could use credits instead of controls. Dr. Ganguli responded that they could not, because BACT or LAER has no exemptions from controls.
Gene Beck of the Small Business Coalition asked Dr. Ganguli if EPA has bought into the concept. Dr. Ganguli said that they are tentatively in agreement with us; however, they will provide their final opinion next week.
John Billheimer said that the EnviroCure system is a clever concept and is workable in a very narrow group. It is designed for and economically tailored to automotive refinishing, and has not been used in other applications. Mr. Billheimer objected to EPA’s policy of not considering cost and economic feasibility in BACT/LAER determination and said that case-by-case BACT determination is unworkable.
Dr. Ganguli continued with a presentation on BACT/LAER determination for Large Turbines, over 32 MW. He mentioned that there are two basic NOx control technologies: SCONOX catalyst, that has been demonstrated for 32 MW units, and the old SCRs (selective catalytic reduction) that use ammonia. Dr. Ganguli reported on the staff analysis regarding the following issues raised at the April 10 Board meeting regarding SCONOX: (1) SCONOX Unproven for more than 32 MW turbines; (2) Potential to Exceed 2.5 ppm; (3) Six-Month Data Insufficient; (4) Effect of SCOSOX Technology; (5) NOx Reduction during Variable Loads; (6) Safety Issues Concerning Hydrogen ; (7) NOx Reduction at 600 degrees F; and (8) Backpressure Problem.
Dr. Ganguli said that the Board had asked staff to investigate SCR data for gas turbines. The association for SCR vendors has written a letter stating that they will guarantee 3 ppm or 2.5 ppm NOx emissions with a properly designed and operated system. Three units have been found (one in Sacramento--Campbell Soup; one in Brooklyn, New York; and one in Bakersfield) running at 3, 3.5, and 3.6 ppm of NOx, respectively. These are large units that have been source tested and have been in operation over 6 months. Staff would like to propose a 2.5 ppm NOx emission standard. Staff is also proposing a 1-hour averaging period, and an efficiency credit. EPA considers all megawatt sizes to be subject to a 2 ppm limit and they are working with the High Desert Power Plant regarding the 2 ppm, 3-hour rolling average NOx LAER limit.
Wayne Nastri said that at the last Board meeting he had asked staff to go back to look at the differentiation in size. He asked about the definition of BACT/LAER, and about two key criteria, demonstration in practice and commercial availability. Dr. Ganguli responded that BACT/LAER is defined in Regulation XIII as achieved in practice or contained in a State Implementation Plan, or technologically feasible and cost effective. The State Health and Safety Code also has identical language for all permitted sources. The technologically feasible and cost effective requirement only applies to the AQMD’s Regulation XIII. LAER, under the Clean Air Act, is applied on a permit-by-permit basis. The question, therefore, may boil down to what is the appropriate source category in this case. Dr. Ganguli said that EPA has looked at the exhaust gas stream properties to make their LAER determination, for a boiler, engine, furnace, oven, or gas turbine, not by size of equipment.
Mr. Nastri asked if a 2.5 ppm NOx limit is in any other SIP. Dr. Ganguli replied in the negative.
Mr. Nastri asked if it has been demonstrated in practice and if there was hard data that shows that it has been demonstrated in practice. Dr. Ganguli said that SCRs have achieved emissions of 3 ppm and SCONOX has achieved emissions of 2 ppm for gas turbine exhaust.
Mr. Nastri asked if SCONOX has been demonstrated on a 100 MW facility. Dr. Ganguli said no. Mr. Nastri expressed concern at the lack of data at 2.5 ppm for large size turbines. Dr. Ganguli confirmed that the staff proposal is based on technical assessment that it would be applicable to larger sizes, but there is no SCONOX plant at 100 MW and above. Mr. Nastri said he appreciated the engineering analysis yet maintained that BACT cannot be based on an engineering analysis of what can and cannot be accomplished, but actual evidence in practice.
Mr. Paulitz said that his understanding is that BACT is not dependent on any particular technology. The 2.5 ppm limit can be met with any technology, not necessarily SCONOX. Mr. Nastri said he agreed and asked if it has been demonstrated at 2.5 ppm, with SCR technology or any other technology. Dr. Ganguli said that there are no permit limits, SCONOX is the only example at 2 or 2.5 ppm. Mr. Nastri said that he was very concerned about meeting the statutory definition for BACT due to the lack of data for large size turbines.
Rita Loof asked about the spray booth proposal for unlimited throughput for super-clean products. Dr. Ganguli affirmed the staff intent.
Ron Wilkniss/Western States Petroleum Association said that NOx emissions from uncontrolled gas turbines are in the range of 70-100 ppm, and that NOx emission targets were 42 ppm a few years ago. Now that the limits are 2 ppm or 2.5 ppm, emissions are approaching zero. There are tremendous problems in measuring emissions that low with proof of compliance. He said he is happy to hear that the District is considering averaging periods greater than 15 minutes.
Mr. Mikels said that if you look at the overall history, tremendous progress has been made in NOx control compared with uncontrolled equipment.
Chung Liu said that for clarification, he didn’t think that there was a major debate between EPA and staff at 2 ppm/3-hour, or 2.5 ppm/1-hour average.
Stationary Source Compliance Senior Manager Jill Whynot reported on the status of Rule 1401. The hearing date for this rule amendment was set at the May 8, 1998 Board meeting; following the 60-day public review period, the rule will be on the agenda for the July 10, 1998 Board meeting. She told the Committee there was a Working Group meeting on May 19 and there will be two Public Consultation meetings, May 26 in Carson in the evening, and May 27 in Diamond Bar. Another Working Group meeting will be held on June 25. She said those meetings will provide more opportunities to explain the proposal to interested parties and to get additional input. The last Working Group meeting was used to scope out key issues for the next effort of work under Rule 1402. There are about a half dozen issues which include the contribution of sources, which is related directly to the monitoring efforts in MATES II. Ms. Whynot said staff wants to start looking at that information at the August Working Group meetings which will help look at how best to address cumulative impacts at either a facility level or a community level. Other key considerations for Rule 1402 are the in-progress changes in the risk assessment methodology through the state.
At the Environmental Justice Task Force Meeting on May 21, Ms. Lee asked staff to come back to the Board with information about the geographical location and the population density where some of the industries requesting special consideration under Rule 1401 are located. She said there will also be a joint, overlapping meeting scheduled in June with the Environmental Justice Task Force to coordinate the work of the two groups.
Mr. Nastri asked what exemptions are proposed in the rule right now. Ms. Whynot said they are wood furniture stripping and emergency internal combustion engines, as well as a couple of administrative exemptions. For example, if Rule 219 is changed so a type of existing equipment now requires a permit, then there is an exemption that if they apply for their permit within a year of the Rule 219 change, 1401 requirements do not apply. Requests for special consideration include the motion picture film processing industry, metal-plating, and chemical film maskants.
Ms. Lee said staff has been asked to come back with cost estimates that will be associated with whether or not these additional exemptions will be granted. She also requested an estimate of cost savings due to health benefits.
John Billheimer said the socioeconomic analysis is sufficient in detail to get an idea what is going on. The specific item he wanted to call attention to is the table that showed the estimated effect of the rule on different SIC Codes. He suggested that the impact on various industries be examined and possibly exempt those industry groups that have lower economic impacts.
Ms. Whynot said that the groups with the higher economic impacts are the ones we have identified that will have to put on control equipment in order to meet the rule limits. The groups that don’t have a high socioeconomic cost are types of equipment or industries that will come in, and through the BACT process or by the nature of their operations, are not predicted to have additional cost. This analysis was based on past permitting activity and emissions reporting data. Staff recommends keeping all industries in the rule to ensure there is a mechanism for new source review for future changes.
Mr. Billheimer said another issue is the socioeconomic analysis of Rule 1401. He said he believes it states that there is no reason for delaying this portion of 1401 from an economic standpoint.
Stationary Source Compliance Senior Manager Mohsen Nazemi reported to the Committee on this item. He said that this is an existing rule that has been in effect since the inception of the District in 1977. This came from an older version of a rule in the Los Angeles County Air Pollution Control District. This sets the limit for olefin content for unsaturated hydrocarbons in gasoline because olefins have high ozone reactivity potential, cause higher NOx formation in the process of burning gasoline in engines, and generate toxics emissions (1,3-Butadiene) in vehicle exhaust. This rule was intended to lower the level of olefins in the gasoline. Since that time, the state has adopted new requirements for California reformulated gasoline, which limits the olefin content to levels lower than Rule 432. As a result, there is no air quality impact due to evaporated losses associated with the requirement that is established in Rule 432. Therefore, staff is recommending that this rule be rescinded to avoid having dual standards, since the California reformulated gasoline standards are more effective and have been implemented since April 1996 in production of gasoline in California.
Stationary Source Compliance Senior Manager Dave Schwien gave a status report on this item. He said that in terms of background, this item was a result of past Board interest, since 1995, in working with the businesses in our area of jurisdiction. A priority permitting program became a specific item in the 1996 Regulatory Reform Initiative that the Board approved and asked staff to implement. A 12-month pilot program for Green Carpet Priority Permitting was initially adopted in April 1996 and renewed in June 1997. In terms of eligibility, he said the program is primarily looking at large projects, or projects that can result in an environmental improvement, as well as projects that cost in excess of $10 million each. To date there have been 30 inquiries about the program and 106 applications submitted from 12 companies. Eight companies received permits to construct and there is a potential of 261 new jobs. Accumulated project costs were $587,000. Mr. Schwien said that there is a negative impact from this in that AQMD costs exceed fees collected; however, there has been a favorable response from impacted industries. Since there has been only a moderate level of program participation, inadequate cost comparison data has been generated and no submittals have yet been received from Certified Permitting Professionals. Taking all things into consideration along with the fact that the area economy is improving, staff recommends a continuation of the pilot program for another 12 months.
Ms. Lee asked if we had made an adjustment when we talked about next year’s budget about collecting enough fees to cover the District’s cost of processing these permit applications.
Stationary Source Compliance Assistant Deputy Executive Officer Carol Coy said Green Carpet fees were not specifically assessed, although the Board did adopt a number of time-and-materials-type charges for Title V. She said they also tried to adjust the discounts so they would be more representative of the time used to process applications. In this particular program there was no adjustment made, standard fees are paid. From the feedback received from those attending the additional meeting and planning sessions conducted under the Green Carpet Program, it appears the assistance has helped them through the process on these major projects. The area does have an economic benefit for this type of program.
Ms. Lee asked staff to look into the possibility of quantifying and recovering costs the District incurs for expediting applications for companies using the Green Carpet service. Ms. Coy said she would look into this and report back to the Committee.
Ms. Coy said a discussion on this item was previously held in the Administrative Committee Meeting. That discussion walked through the current small business definition in the context of the 15% surcharge for equipment constructed without permits being raised to 50%. The Administrative Committee had looked at the Bay Area which offers a small business discount for companies that employee 25 employees, rather than just 10 employees. Their annual gross receipts were $1 million rather than a half million dollars. At the same time they allow manufacturing companies to be considered a small business up to 50 persons. She said they reviewed a number of other agency definitions for small businesses that basically vary on the type of industry. The Administrative Committee reviewed this information and evaluated a number of options. Staff focused on whether to leave it at 10 employees or less, or raise it to 25 employees. Another question was whether to leave the gross annual receipts at the long-standing number of $500,000 or raise it to $1 million. The recommendation of the Administrative Committee was to go ahead and for this portion of the fee rule, have a small business defined as one that had 25 employees or less, and up to $1 million in receipts, plus use the same manufacturing language as the Bay Area. In addition, to be eligible for exemption from the surcharge, there must be no facility history of having ever applied for a permit or holding any permits to construct or permits to operate. The Administrative Committee proceeded to recommend expansion of the small business definition for the purpose of this particular portion of the fee rule.
Mr. Paulitz asked if this means that if AQMD changes the definition and one of these businesses starts to operate without a permit to construct, they won’t have any penalty at all. Ms. Coy said it would reduce the current 15% penalty to a zero surcharge. Companies that do not fall within this definition, those that are not "first-time customers," will pay a 50% surcharge. There were over 900 first time customers last year that came in with applications for permits to operate, and did not first apply for a permit to construct. Of those, 300 applications met the current small business definition.
Mr. Mikels asked Ms. Coy to explain the state definition of small business. She said that for fee purposes under AB 2588 – Fees, a business must have less than 10 employees and annual receipts under $1 million at the facility, but the facility can be part of a conglomerate operation, so all California operations under that business must be under $5 million.
This item was postponed until next month.
Initiative #2 - Ambient Monitoring of Air Toxics: Director of Applied Science and Technology Mel Zeldin gave a summary of the Environmental Justice Initiative No. 2, MATES-II and Microscale Study. He reported to the Committee that for MATES-II, six sites have been operating for about a month. These are Burbank, Los Angeles, Long Beach, Fontana, Pico Rivera, and Anaheim. The seventh site, Rubidoux, should begin monitoring May 23. Three new sites will begin operating soon: Huntington Park by May 29; Compton by June 5; and Wilmington by June 10. On the Microscale Study, one of the three platforms alternates between Hawthorne and Pacoima, and Hawthorne has been monitoring since May 10. The Pacoima platform will begin in early June. Staff has received approval recently from the City of Montclair to locate Platform #2, and Platform #1 in Torrance is awaiting final city approval.
Staff has completed three draft documents, "Monitoring and Laboratory Protocol Document," "Workplan on Air Toxics Modeling Protocol," and "Workplan on Diesel Component Study." These were presented to the Scientific Review Group and they will review and present comments back to staff.
Initiative #8 - Field Inspection Technology: Stationary Source Compliance Senior Manager Dave Schwien gave a status report on Field Inspection Technology. The report covered the current field emission measuring capability and the lab sample analytical ability. He said staff is continuing with the Board-approved workplan. With regard to the contract activity, the request for proposals was released in mid-April and May 22 is the deadline for submittal of bids. Mr. Schwien said they expect a good response. The next week would be devoted to the evaluation of the bids by a five-member bid review panel. He told the Committee they will be finalizing recommendations on the successful contractor and expect to bring those forward with a presentation to the Technology, Stationary Source, and Administrative Committees in June. Recommendations will be brought to the Board in July. A peer review group is in place and will begin having meetings in July, once the recommendations are prepared.
Initiative #10 - Rules 1401 and 1402:
This item was discussed under Agenda Item #2.
Ms. Lee asked Ms. Coy to begin including the Rule Forecast Report as part of the Stationary Source Committee package each month.
The meeting was adjourned at 12:25 p.m.
May 22, 1998 Committee Agenda (without its attachments)
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