South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: March 16, 2001 AGENDA NO. 32
Adopt Update of Technology Advancement Plan for Clean Fuels Program and Approve Technology Advancement Annual Report
SYNOPSIS:
SB 98 (Alarcon) amended and extended the Clean Fuels Program until January 1, 2005. Amendments under Health & Safety Code Section 40448.5.1 require the submittal of an Annual Report for the past year and a Technology Advancement Plan for the current year, regarding the AQMD Clean Fuels Program. These reports are due to the State Legislature by March 31, following Board approval. These documents have been accordingly prepared, reviewed and approved by the state-mandated Clean Fuels Advisory Group, and submitted for Board approval.
COMMITTEE:
Technology, February 23, 2001, 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 (Alarcon) was signed by Governor Davis into state law, which 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 objectives defined for the Clean Fuels Program in California Health & Safety Code 40448.5 are:
"(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 Board initially adopted such a plan 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.
SB 98 also requires the preparation of an annual report with specified contents. This annual report must be reviewed by an advisory group and the results of such consultation provided to the Board, prior to the Board's approval and the final submittal of the annual report 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 Board previously approved the membership of this advisory group on September 10, 1999. Changes to the composition will be reviewed by the Technology Committee and submitted to the Board for approval on an as needed basis.
Proposal
The attached Update to the Technology Advancement Plan for the Clean Fuels Program is the sixth submittal of the required plan. This update identifies potential project areas to be funded during 2001. The proposed projects reflect new promising low- and zero-emission technologies and applications that have emerged since the initial submittal. The 2001 update includes a number of proposed project areas, not all of which are expected to be funded in the current fiscal year given the available budget, staff resources, and suitability of potential projects. Projects not funded in 2001 may be considered for funding in subsequent years. There is no requirement to expend all of the allocated monies in any specific area within this year.
In addition to identifying proposed projects to be considered for funding, this Update establishes six key technical areas of highest priority to the AQMD. Those high priority areas include:
These technical priorities will necessarily be balanced by funding availability and the availability of qualified projects. Revenues from several sources support the AQMD's Technology Advancement program. The principal revenue source is the Clean Fuels Program, which, under H&SC Section 40448.5 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.
The ARB has established the Carl Moyer Memorial Air Quality Standards Attainment Program to provide incentives to replace or retrofit higher-polluting diesel vehicles, off-road vehicles and equipment, as well as infrastructure support. Matching funds are required from local air districts such as the AQMD in order to receive state funding and administer the program locally. In addition the Governor has also provided state funds to support the replacement of older, highly polluting school buses in California. Local funds are again required to receive the state funding and implement the school bus replacement program locally. The Plan includes a provision to provide such matching funds to implement these important incentives programs. Furthermore, due to some recent uncertainty with future state funding situations caused by the California energy crisis, the Plan allows for the Board to execute the option to transfer funds up to an additional $11,350,000 from other project areas into the Alternative Fuel Technologies - Incentive area, in the Clean Fuels Program.
Grants and cost-sharing revenue contracts from various government agencies, such as the ARB, CEC and DOE also support technology advancement efforts. 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 by the AQMD as a result of fines, penalties, and settlements from violations of applicable air pollution control rules or laws.
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 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 communications with the organizations specified in H&SC Section 40448.5.1 and review of their programs, the project areas proposed in this update do not appear to 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 avoid duplication and ensure optimal expenditure of clean fuels program funds.
Also attached is the Technology Advancement Office Annual Report, covering projects and progress of the program for calendar year 2000. This report addresses all of the requirements specified in H&SC 40448.5.1(d), as amended by SB 98. Specifically, the report includes:
As required, staff has consulted with the SB 98 Clean Fuels Advisory Group regarding approval of the annual report.
Due to the size of the Annual Report, the Appendix C Final Report portion will not be available electronically. It is available by hard copy only from the Technology Advancement Office.
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