BOARD MEETING DATE: November 9, 2001 AGENDA NO. 25
REPORT:
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, October 26, 2001. Following is a summary of that meeting. The next meeting will be December 7, 2001, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Jon D. Mikels, Acting Chairman
Stationary Source Committee
Attendance
The meeting began at 10:55 a.m. Present were Jon Mikels, acting Committee Chair, Jane Carney and Leonard Paulitz. Absent were Ron Loveridge, Committee Chair, Norma Glover and Cynthia Verdugo-Peralta.
INFORMATIONAL ITEMS
Rule 1137 – Emission Reductions from Woodworking
This item has been delayed until December 2001.
Rule 444 – Open Fires
Rule 208 – Permit and Burn Authorization for Open Burns
Larry Bowen, Manager, Planning, Rule Development & Area Sources, presented this item. EPA has reviewed and identified deficiencies with these rules. Specifically, lack of "carrying capacity" when burning is allowed and burn allocation based on incentives. The proposal addresses these deficiencies. Staff is also incorporating 1999 ozone SIP control measure and modifying rule language for consistency.
A key modification to Rule 444 is to define "burn day". Another modification would includes a burn window, which is the length of time allowed during the day in which to do the burn. Also, the smoke management plan, which is a requirement of all prescribed burns would have additional requirements. Modifications to Rule 208 would make this rule consistent with Rule 444.
Concerns of the agricultural burners are that the burn window may be too short and that the conversion from agricultural usage is not well defined. Prescribed burners are concerned about the maximum daily limits. Staff amended the proposal after the public workshop to address these concerns. This item will go to the Board for consideration in December.
Rule 1178 – Further Reduction of VOC Emissions from Storage Tanks at Petroleum
Facilities
Laki Tisopulos, Assistant Deputy Executive Officer, Planning, Rule Development & Area Sources, presented this item. The purpose of Rule 1178 is to further reduce the VOC emissions from storage tanks at petroleum facilities. Requirements of the 1999 SIP Settlement Agreement and the AQMP are to conduct a tank study and explore the feasibility for further reductions, as well as review the Bay Area AQMD rule. The AQMP lists three control measures: FUG-03, which seeks to reduce emissions from external floating roof tanks operated by the refineries, FUG-04, which seeks to reduce emissions from fugitive sources as well, and FUG-05, which seeks to reduce emissions from large fugitive sources.
This amendment focuses on the large petroleum facilities, with more than 20 tons per year of VOC emissions. Staff is proposing that effective January 1, 2007, all deck fittings on internal floating roof tanks be upgraded (approximately 35 tanks) and inspection and monitoring procedures be improved. Fixed roof tanks would be required to vent to a vapor recovery unit or convert to a floating roof tank and also better maintain vacuum pressure valves. The tank category with the largest inventory would be the external floating roof tanks. This category is split into two groups. Those that store organic liquids with a vapor pressure of less than three psi would be required to upgrade their rim seals and deck fittings, and would also be subject to semi-annual inspection requirements. The external floating roof tanks, that store liquids with greater than three psi vapor pressure, will be required to install domes over a four-year period.
Staff anticipates an emission reduction of 534 tons per year with a cost effectiveness of $11,473 per ton. Committee Member, Leonard Paulitz, inquired as to whether a material savings had been taken into consideration. Dr. Tisopulos responded that it had been factored in. Staff continues to meet with the working group to resolve remaining issues that include the compliance schedule for installing domes, applicability criteria and test methods and cost-effectiveness evaluation. This item is scheduled to go to the Board for consideration in December.
Update on Proposed Amendments to Rule 1309.1 – Priority Reserve
Laki Tisopulos, Assistant Deputy Executive Officer, Planning, Rule Development & Area Sources, presented this item. The purpose of this amendment is to facilitate permitting of new Electric Generating Facilities (EGFs) by allowing temporary access to AQMD's Priority Reserve account for SO2 and CO credits. This status update is to address issues brought to staff’s attention by Committee Members.
Dr. Tisopulos explained that any emission credits that are not used by December 31, 2003, would be returned to AQMD’s NSR account. Regarding the provision to sell power to the state, in the event the Executive Officer determines, during permitting, that the state in entering into long-term contracts, facilities will be required to enter into a long-term contract (at least one-year) and to sell a minimum of 50% of their power production to the state.
Dr. Tisopulos informed the committee that staff is working with several municipalities requesting an extension for the mitigation fee submittal until they can get financing. Dr. Wallerstein explained that this could require a change in our policy to allow issuance of the permit while noting the offsets will be coming from Priority Reserve and conditioning the permit to require mitigation fee payments prior to start of any construction. Rule development staff will work with legal staff to develop appropriate language.
Report on Rule 2009 and 2009.1 – RECLAIM Compliance Plan Submittal
Pang Mueller, Senior Manager of Engineering and Compliance presented this item. The Reg. XX amendment was adopted in May 2001. The purpose of the amendment was to stabilize NOx RTC prices by increasing supply, reducing demand and increasing the exchange of RTC trade information. Rule 2009 focussed on the power producing facilities and required them to install Best Available Retrofit Control Technologies (BARCT), while 2009.1 aimed at other RECLAIM facilities that were emitting more that 25 tons per year. Those emitting more than 50 tons were required to submit compliance plans. Under the two rules, there were 14 power producing facilities that were subject to Rule 2009 and 42 facilities that had emitted more than 50 tons per year in either 1999 or 2000. Based on information from the power producing facilities, projected NOx emissions for the years 2001, 2002 and 2003 would exceed the allocation they currently have in their account. Such exceedance triggers the mitigation fee provision in RECLAIM and revenues are used to completely offset emissions exceedances. At this time, staff will have to wait and see if the actual emissions will reach the projected level or be significantly lower due to reasons such as the lower than expected electricity demands. Based on partial data received from RECLAIM facilities subject to Rule 2009.1, projected emissions with planned controls are expected to be reasonably close to the corresponding RECLAIM target.
Report on RECLAIM Backstop Measures
Jill Whynot, Manager, Planning, Rule Development & Area Sources, presented this item. Part of the RECLAIM Board resolution adopted in May was to evaluate whether or not command and control rules that were subsumed in RECLAIM should be reinstated. All RECLAIM facilities required to submit compliance plans have done so. The plans are being evaluated. The reductions planned by facilities (other than power plants) appear to be sufficient to meet the allocation for non-utility RECLAIM facilities for 2001, 2002, 2004 and 2005.
There is a possible difference of 0 to 370 tons in 2003 from all non-utility RECLAIM facilities (<3% of total allocations). This potential difference could be smaller if additional reductions are implemented by other RECLAIM facilities, if controls in the compliance plans are operated more efficiently or if mobile or area source credits are used.
Staff evaluated rules and control measures that could be reinstated if needed in the future. At this time, staff is proposing to continue to monitor the emission reduction project in RECLAIM and place the rule level effort on hold for now.
If forecast reports or other information indicates that the projected emissions will exceed the RTC allocations and this cannot be mitigated or there would be insufficient credits for future growth, staff will report back to the Board and propose amendments to RECLAIM.
RECLAIM Implementation Report
Pang Mueller, Senior Manager of Engineering and Compliance, presented this monthly report to the Committee on the progress of NOx control applications and RTC prices. Since last month, there has been one additional application submitted. As far as RTCs are concerned, prices have continued to drop, averaging $17.00 - $18,00 per pound for NOx. The price for SOx averages at about $3.50 per pound.
Status Report on Rule 1634 – Pilot Credit Generation Program for Truck Stop
Electrification
Jill Whynot, Manager, Planning, Rule Development & Area Sources, presented this item. Staff continues to work with EPA and progress is being made in resolving remaining issues. This rule would be the sixth credit generation rule since March 2001. This rule would provide NOx credits for use in RECLAIM through electrification of truck stops in lieu of idling diesel engines. This rule was continued last month in order to work with EPA to resolve questions.
Report on RECLAIM Centralized Market
Jill Whynot, Manager, Planning, Rule Development & Area Sources, presented this item. Two working group meetings were held, with limited input provided. Another effort is underway to further streamline trading posting and processing. Staff recommends continued monitoring of the trading program and will evaluate models for a centralized market if submitted. Staff will update the committee on a periodic basis.
Rule 518.2 – Federal Alternative Operating Conditions
Jill Whynot, Manager, Planning, Rule Development & Area Sources, presented this item. This rule provides a mechanism for variances at Title V facilities to be recognized by the federal government. The proposed changes address EPA comments that did not allow previous versions of the rule to be SIP-approved. Excess emissions from variances can be offset by use of a bank of EPA approved credits, ERCs, or reductions at the same facility. EPA has indicated support for these proposed changes.
WRITTEN REPORTS
Status Report on Mobile and Area Source Credits for RECLAIM
The Committee acknowledged the report.
Monthly Report on Home Rule Advisory Group
The Committee acknowledged the report.
Notice of Violation Penalty Summary
The Committee acknowledged the report.
Rule Forecast Report & Advance Calendar
The Committee acknowledged the report.
OTHER BUSINESS
Jane Carney asked when the Committee can expect to review the substance of the upcoming AQMP revision. Elaine Chang, Deputy Executive Officer, Planning, Rule Development & Area Sources responded that it would probably be the beginning of 2002. Dr. Wallerstein asked staff to brief the Committee at the next meeting on the current status of the CARB proposed measures that affect stationary sources.
Mohsen Nazemi, Assistant Deputy Executive Officer of Engineering & Compliance brought up the subject of remaining committee dates for the year. It was agreed that the Committee would like to go forward with combining the November and December meetings to Friday, December 7, at the normally scheduled time.
South Coast Air Quality Management District