The Stationary Source Committee met Friday, July 27, 2001. Following is a summary of that meeting. The next meeting will be August 24, 2001, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Norma J. Glover, Acting Chairman
Stationary Source Committee
Attendance
The meeting began at 10:45 a.m. Present were, Jon Mikels, acting Committee Chair until Vice Chair Norma Glover arrived at 11:15 a.m., Leonard Paulitz, Jane Carney and Cynthia Verdugo-Peralta (arrived at 11:10 a.m.). Absent was Ron Loveridge, Committee Chair.
ACTION ITEMS
Monthly Report on Home Rule Advisory Group
- Approval of Two Alternate Members
Henry Hogo, Assistant Deputy Executive Officer of Planning and Rules,
presented this item for action. Two alternate members were approved by the
Committee.
INFORMATIONAL ITEMS
Rule 1124 Aerospace Assembly and Component Manufacturing Operations
Laki Tisopulos, Manager, Planning, Rule Development and Area Sources,
presented this item. Rule 1124 regulates the emissions from aerospace and
aircraft operations. There are two major aircraft builders and approximately
230 subcontractors in the basin. The emissions inventory is currently 2.6 tons
of VOC per day. The proposed amendment would adjust VOC limits to reflect the
current state of technology. Specifically, the proposed amendment would retain
a 250 g/l VOC limit for adhesive primers used in new commercial aircraft
applications and would adjust the VOC limit to 805 g/l for military,
remanufactured spare part, acoustic and sonic aircraft fuselage lamination;
adhesion promoters would be redefined and an 850 g/l VOC limit would be
reinstated for a period of approximately three years; effective January 1,
2005, the VOC limit would drop to 250 g/l; a reduced VOC limit would be
established as of March 1, 2002 for viscous sealants, antichafe coatings,
military fire-resistant coatings and Type II chemical maskants; and an
industry specific alternative compliance option to the risk reduction plan of
Rule 1402 would be established. Staff also recommends to continue the
exemption for small helicopter fuel-tank coatings. There are no adverse
environmental or socioeconomic impacts anticipated.
A public consultation meeting is scheduled for early August. This item will go
to the Board for consideration in September.
Report on RECLAIM Implementation Guidance Document
Pang Mueller, Engineering and Compliance Manager, presented this item.
When the RECLAIM rules were amended in May, 2001, the Board chose to also
adopt Rule 2009 and Rule 2009.1. Rule 2009 requires utilities to submit a
compliance plan to demonstrate that they have installed BARCT. Rule 2009.1
requires a facility that emits 50 tons or more, to submit a compliance plan
and facilities from 25 to 50 tons to submit a forecast report. Staff was
directed by the Board to meet with the working group to develop an
implementation guidance document for the compliance plan. Five working group
meetings have been conducted. A final draft guidance document has been
completed and given to industry for comment.
To comply with Rule 2009.1, non-power producing facilities have two options.
First, based on the production rate for the year 2000, they would need to
demonstrate that future RTC holdings are sufficient to compensate for
emissions at that production level. Such demonstration can be done through
purchasing RTC or proposed control technology installation to adequately
reduce emissions to the RTC holding level. The reduction must come from actual
installation of control equipment and not production curtailment. Once the
plan is approved, a facility can choose to sell credits. The second option is
to demonstrate that all permitted equipment is equipped with BARCT.
The Board also asked staff to produce a streamlined trade document. This trade
procedures guidance has been developed. This includes the new requirement in
the rule for each RTC trade party to submit trade information within five
working days.
One remaining issue is RTC swapping, which has become increasingly more
popular. One of the reasons cited for this popularity is to minimize capital
gain taxes. Swapping can be done in many different variations, which makes it
difficult to put a dollar amount on the RTCs swapped for reporting
requirements. Committee member Mikels expressed concern over the determination
of the market price on the credits being swapped. He asked what the percentage
is of credits being swapped. Ms. Mueller responded by saying that overall, if
you compare the swapped credits to the overall trade, its a small
percentage. If one looks at the last month, however, a large amount of trades
were swapped which could mean the beginning of a new trend. A big issue is
whether the swap should be reported as a swap or if a dollar amount should be
placed on the swap. Over the next two weeks, staff will continue to confer on
this issue to develop proposed reporting procedures.
Representatives from WSPA expressed concerns over the compliance plan
emissions averaging period. Norma Glover asked if a meeting had been set up
between the Board and WSPA that she had requested. Both Frances Keeler and
Carol Coy agreed to make certain the meeting is arranged.
WSPA representatives raised the issue of not making control equipment
installation deadlines, which would place them in a non-compliance situation.
They feel that the way the plan is currently written, they are put in the
position of guessing how long it will take their permits to be approved by the
District. Barry Wallerstein, Executive Officer, suggested that if for some
reason staff was not able to process the permits to allow compliance with the
plan, a brief letter would be sent which would be an amendment to the plan,
granting more time until the permits are issued. Dr. Wallerstein expressed
concern that there is still a problem with inadequate controls being proposed,
especially for the refineries. Norma Glover brought up the issue to Dr.
Wallerstein about the meeting being arranged between the Board and WSPA. Dr.
Wallerstein gave a status report stating he recently met with representatives
of WSPA and Doug Henderson to discuss what would be presented to the Board,
and it was agreed to schedule that meeting for September.
Cynthia Verdugo-Peralta returned to the concern of the refiners and the issue
of not meeting a deadline due to permits not being issued and whether there
should be a formal extension. Dr. Wallerstein explained that a simple letter
stating that the date for their plan has been extended for a certain length of
time would be sent out to the company. He also said that due to the complexity
and the size of the facilities, he often sits down with the refinery managers
along with Carol Coy and Pang Mueller meeting with the individual refineries
to ensure ongoing communication regarding projects.
RECLAIM Implementation Report
Pang Mueller, Engineering and Compliance Manager, provided this monthly
report to the Board on the number of permit applications submitted for NOx
control equipment and also to report on RECLAIM trading prices. In the
previous month, two applications for two installations at two facilities were
submitted. Both facilities are subject to the compliance plan requirement
under Rule 2009.1. Between January and June 2001, 42 installations at 13
facilities were submitted. Six of these facilities are subject to compliance
plan requirements, which included 11 applications. As far as NOx RTC prices
are concerned, there continues to be a decline from the previous month. The
maximum price last month was $35 - $36 per pound, which is now down to $32 -
$33 per pound. The price of SOx has been increasing. Supervisor Jon Mikels
asked what has contributed to the drop in price over a period of time. Ms.
Mueller suggested a variety of reasons including a slow trading month, the
beginning of the reconciliation period, and the recent rule changes.
Dr. Wallerstein commented on a newspaper article in which the Bush
administration is proposing to take the RECLAIM type concept and apply it to
power plants nationwide. This would include not only NOx and SOx, but also CO
and Mercury.
Update on Proposed Amended Rule 1122 Degreasing Operations
Lee Lockie, Director of Area Sources, presented this item. The current VOC
limit is being lowered from 50 to 25 grams per liter by the year 2003. With
respect to NESHAP solvent cleaning and open top vapor degreasers and batch
loaded cleaning, facilities that are currently using perchlorethylene (perc)
and want to continue to use it, will have to use airless and airtight
degreasers by 2003 or an alternative control method. The major issue in this
proposal is that VOC vapor degreasing being lowered to 25 grams per liter.
Staff believes that the technology is available to achieve this. Emission
reductions for perc with respect to NESHAP are 0.8 tons per day. Overall
emission reduction for this proposal is 3.12 tons per day.
The technical working group consists of environmentalists and representatives
of the business community. Staff continues to work on several remaining issues
of concern.
Representatives from Caddock Electronics expressed concern over the economic
impact their company is facing. They feel the rule making process has been
rushed and that the implementation date of January 1, 2003 should be moved to
2006 to give them time to make changes to their systems. Lee Lockie stated
that there are cost effective alternatives available to the company to comply
with the rule. Vice Chair Glover expressed willingness to work with this
company. Dr. Wallerstein is scheduled to meet with Ms. Lockie to see what can
be resolved.
Rule 102 Definition of Terms
Lee Lockie, Director of Area Sources, presented this item. Proposed
changes to this rule are to amend the clean air solvent definition to add a
future effective date for 25 grams of VOC per liter by the 2003 deadline and
to consolidate clean air solvent certificate definitions from Rule 1171 and
Rule 1122 into Rule 102.
Status Report on Reg. XIII New Source Review
This item has been delayed until September 2001.
Rule 1137 Emission Reductions from Woodworking Operations
This item has been delayed until August 2001.
WRITTEN REPORTS
Status Report of Mobile and Area Source Credits for RECLAIM
The committee acknowledged the report.
Notice of Violation Penalty Summary
The committee acknowledged the report attached to the agenda.
Rule Forecast Report & Advance Calendar
The Committee acknowledged the report attached to the agenda.
South Coast Air Quality Management District