BOARD MEETING DATE: March 17, 2000 AGENDA NO. 13
Adopt Update of Technology Advancement Plan for Clean Fuels Program and Approve Technology Advancement Annual Report
SYNOPSIS:
The passage of SB 98 (Alarcón) amended and extended the Clean Fuels Program until January 1, 2005. Amendments under Health and Safety Code Section 40448.5.1 now require submittal of the Technology Advancement Plan and Annual Report for the AQMD’s Clean Fuels Program to the State legislature by March 31 of each year, following Board approval. The Technology Advancement Plan outlines planned project expenditures for 2000. Based on communications with specified organizations, staff has determined that the proposed projects are not duplicative. The Annual Report summarizes accomplishments for 1998-99. The Plan and Annual Report will be updated and reviewed annually as required by legislation.
COMMITTEE:
Technology, February 25, 2000, Recommended for Approval
RECOMMENDED ACTION:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Achieving federal and state clean air standards in Southern California will require emission reductions from both mobile and stationary sources beyond those available from current technologies. The AQMP relies on the expedited, future implementation of cleaner-burning fuels and advanced technologies in Southern California to achieve these standards. To meet the needs of the AQMP for progressively lower-emitting fuels and technologies, the AQMD adopted a Clean Fuels Program in 1988 and established the Technology Advancement Office to administer the program. Concurrently, the State Legislature authorized funds for the AQMD’s Clean Fuels Program via SB 2297 and subsequently renewed this funding authorization via SB 316 in 1993. On June 8, 1999, SB 98 (Alarcón) was signed by Governor Davis that extended the Clean Fuels Program funding mechanism until January 1, 2005, added administrative requirements, and specified the creation of and expectations for the Clean Fuels Advisory Group.
The objective defined for the Clean Fuels Program in the enabling legislation is as follows:
California Health & Safety Code Section 40448.5.
"(a) The south coast district shall establish an Office of Technology Advancement to administer the clean-burning fuels program established pursuant to this section. The program shall encourage projects that increase the utilization of clean-burning fuels that reduce public health hazards from air pollution."
"(d) In developing its program, the south coast district shall consider promoting projects in the transportation and stationary source sectors utilizing methanol fuel, fuel cells, liquid petroleum gas, natural gas, including compressed natural gas, combination fuels, synthetic fuels, electricity, including electric vehicles, and other clean-burning fuels."
The AQMD Clean Fuels Program is implemented as a public-private partnership in conjunction with private industry, technology developers, academic institutions, research institutions, and government agencies. This public-private partnership has enabled the AQMD to leverage its public funds with outside investment in a ratio of more than $4 of outside funding to every $1 of AQMD funding.
Health and Safety Code (H&SC) Section 40448.5.1 requires that the AQMD adopt a plan that describes the expected cost and benefits of proposed projects prior to any Clean Fuels Program expenditure after January 1, 1996 and find that the proposed projects do not duplicate programs of specified organizations. The initial submittal of the required plan was adopted by the Board at its March 8, 1996 meeting. SB 98 amended this provision by requiring annual updates to this plan and 30-day public notice to specified interested parties and the public prior to the annual public hearing at which the Board takes action on the Clean Fuels Program. This notice was provided by both advertising in newspapers, as is normally done by the AQMD on issues requiring public notice, and by direct mailing of letters to specified interested parties including: groups involved in research, development and application of clean fuel technologies; public health and environmental organizations; and legislative members and members of the County Board of Supervisors, and members of any city council that represent territory within the AQMD.
SB 98 also requires the preparation of an annual report with specified contents. This annual report requires the review and approval by an advisory group and the Board, prior to submittal to specified offices of the Legislature by March 31 of each year. This legislation also specifies the make-up of this advisory group and its primary responsibilities to make recommendations regarding the most cost-effective projects that advance and implement clean fuels technology and improve public health. The membership of this advisory group was previously approved by the Board on September 10, 1999.
Proposal
The attached Update to the Technology Advancement Plan for the Clean Fuels Program is the fifth submittal of the required plan. This update identifies potential projects to be funded during 2000. The proposed projects reflect new promising low- and zero-emission technologies and applications that have emerged since the initial submittal. This update includes a number of proposed projects, not all of which are expected to be funded in the current fiscal year given the available budget. Projects not funded in 2000 may be considered for funding in subsequent years.
In addition to identifying proposed projects to be considered for funding, this Update establishes five key technical areas of highest priority to the AQMD. Those high priority areas include:
These technical priorities will necessarily be balanced by funding availability. The AQMD’s Technology Advancement program is supported by revenues from several sources. The principal revenue source is the Clean Fuels Program, which, under H&SC Sections 40448.5 and 40512, and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile and stationary sources to support the program’s objectives, albeit with constraints on the use of the funds. The Clean Fuels Program funding legislation is currently due to sunset on January 1, 2005.
Technology advancement efforts are also supported by grants and cost-sharing revenue contracts from various government agencies, such as the EPA and DOE, on a project specific basis. Another potential source to fund the development and demonstration of advanced clean air technologies is the Advanced Technology Fund. This fund was established primarily as a special revenue fund for revenues received as a result of fines, penalties, and settlements from air pollution violations.
Although not required by legislation, but in an attempt for completeness, the proposed Update to the Technology Advancement Plan includes some projects that may be funded by revenue sources other than the Clean Fuels Program. For example, there are several proposed projects that address the development of technologies that would reduce VOC and PM emissions from various stationary source applications. These projects are essentially efforts designed to specifically address the technology advancement needs related to Federal Clean Air Act Section 182(e)(5), as delineated in the 1997 AQMP Revision.
Not all projects identified in this plan are expected to be recommended for funding. Projects in the plan that are deemed ready will be presented individually to the Board for review and approval. At that time, additional details will be provided about the technology to be demonstrated, the intended application, the specific scope of work, the capabilities of the selected contractor and project team, and how the project will be cost-shared by various parties.
The proposed update is the result of a comprehensive planning and review process. This process has included consideration of AQMP control measures and coordination activities involving outside organizations. This update has also been reviewed by the Technology Advancement Advisory Group, a panel of key stakeholders, and the SB 98 Clean Fuels Advisory Group, an external panel of experts, listed in the Appendix to the Update. Based on staff communications with the organizations specified in H&SC Section 40448.5.1 and review of their programs, the projects proposed in this update do not further duplicate any past or present projects. As each individual project is recommended to the Board for funding, staff will continue to coordinate with these organizations to ensure that duplication is avoided.
Also attached is the Technology Advancement Office Annual Report, covering projects and progress of the program for the time period of July 1, 1998 through December 31, 1999. This report addresses all of the requirements specified in H&SC Section 40448.5.1(d), amendments resulting from SB 98. Specifically, the report includes the following required elements:
As required, this annual report has been reviewed and approved by the SB 98 Clean Fuels Advisory Group. The results of that review were presented to the Technology Committee and included in the minutes of the Technology Committee.
• Resolution
• Technology Advancement Plan Update for the Clean Fuels Program for 2000
• Technology Advancement Office Annual Report for 1998-99
(Due to the bulk of the reports, copies of these documents are not included as part of this package. The documents have been provided to the Governing Board Members and are available upon request from the AQMD Public Information Center at AQMD headquarters in Diamond Bar).
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