South Coast Air Quality Management District

Amend Contracts to Substitute Marine Vessel Projects Under the Pre-Funded RECLAIM AQIP and RECLAIM Executive Order Emissions Mitigation Programs; and Execute Contracts to Re-power Diesel-Fueled Agricultural Pumps

SYNOPSIS:

On July 20, 2001, the Board approved marine vessel projects under the Pre-Funded RECLAIM AQIP and RECLAIM Executive Order Emissions Mitigation programs for $1,979,380 and $5,099,208, respectively. Due to business and operation changes, some of these projects cannot be realized. Staff recommends that such projects be substituted with existing projects so that emission reductions can be achieved in an expeditious manner. The substitute projects will be as cost effective in terms of NOx emission reduction as the original projects. Also on April 5, 2002, the Board approved marine vessel projects under the RECLAIM Executive Order Emissions Mitigation Program for $7,100,300. Some of these marine vessel projects will not be realized, and staff proposes to fund a reduced number of vessels and use the remaining funds for agricultural pump re-powering projects.

COMMITTEE:

Technology, July 26, 2002. Less than a quorum was present during the discussion of this item; the Chairman communicated his concurrence and recommendation that this item be forwarded for Board consideration with no approval or disapproval recommendation from the Committee.

RECOMMENDED ACTION:

1. Authorize the Chairman to amend contract with Seaboard Marine to substitute marine vessel Mello Boy with C. Adams under the Pre-Funded RECLAIM AQIP program with no change in the amount of funding approved by the Board on July 20, 2001. The funding and the NOx emission reductions are listed in Table 1.
   
   
2. Authorize the Chairman to amend contract with Seaboard Marine to substitute marine vessel projects under the RECLAIM Executive Order Emissions Mitigation Program with no change in the amount of funding approved by the Board on July 20, 2001. The marine vessels in the current contract, the substitute vessels, the funding, and the NOx emission reductions are listed in Table 2.
   
   
3. Authorize the Chairman to amend contract with OceanAir Environmental to substitute marine vessel projects and to increase funding to obtain a cleaner engine for marine vessel Pioneer by $50,000 under the RECLAIM Executive Order Emissions Mitigation Program resulting in an overall total saving of $24,300 from the amount approved by the Board on July 20, 2001. The marine vessels in the current contract, the substitute vessels, the funding, and the NOx emission reductions are listed in Table 2.
   
   
4. Authorize the Chairman to amend the marine vessel projects with OceanAir Environmental to fund six marine vessels instead of 10 vessels with $1,811,200 in reduced funding than originally approved by the Board on April 5, 2002. The marine vessels, the funding, and the NOx emission reductions are listed in Table 3.
   
   
5. Authorize the Chairman to execute a contract with Air Quality Management Services, LLC, to re-power 29 diesel-fueled agricultural pumps with electric motors in an amount not to exceed $1,762,446 from the RECLAIM Executive Order Mitigation Fund, utilizing the surplus funds generated by the proposed revision under Recommended Action #4.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On July 20, 2001, the Board approved the use of $1,979,380 under the Pre-Funded RECLAIM AQIP program and $5,099,208 under the RECLAIM Executive Order Emissions Mitigation program for marine vessel projects.

The marine vessel projects included in these two programs are needed to meet the requirements of Rule 1631, which was adopted on May 11, 2001. Rule 1631 requires that emission reductions eligible for Mobile Source Emission Reduction Credits (MSERC) must be achieved from marine vessels committed to stay in District waters 100% of the time. On June 7 and June 20, 2002, the AQMD was informed that due to business and operation changes, a number of marine vessels under these programs cannot meet this requirement.

On April 5, 2002, the Board approved ten marine vessel projects. Four of these ten vessels, Tioga, Leader, Admiral, and Master are owned by Crowley Marine Services. After source testing the engines, the NOx emission reduction is lower than that in the original application using default emission factors. Crowley has decided to withdraw from the RECLAIM Executive Order Emissions Mitigation Program and they may pursue other incentive programs to fund these vessels. Due to this, the four Crowley vessels are not included in this proposed set of projects. Staff proposes to make up the emission reduction shortfall by funding agricultural pump re-powering projects.

Emissions from diesel-fueled agricultural pump engines are not regulated and re-powering these engines with electric motors is very cost effective in achieving significant reductions of NOx, PM, SOx, hydrocarbon, CO, and greenhouse gas emissions. The area source credits (ARCs) that are generated from re-powering these engines can be used in the RECLAIM program.

Proposal

The marine vessel projects under the Pre-Funded RECLAIM AQIP and RECLAIM Executive Order Emissions Mitigation programs must be revised to meet the requirements of Rule 1631 and to generate ERCs. The revised projects, the funding amounts, and the NO_x reductions are listed in Tables 1 and 2. The MSERCs that can be generated from the above projects are needed immediately for the RECLAIM market. As is evident from Tables 1 and 2, the proposed projects are more cost effective as compared to the previously approved projects. Most of these projects can be completed in the 3^rd quarter of 2002.

Also on April 5, 2002, the Board approved marine vessel projects under the RECLAIM Executive Order Emissions Mitigation Program for $7,100,300. Some of these marine vessel projects will not be realized, and staff proposes to fund fewer vessels and use the remaining funds for agricultural pump re-powering projects. The revised projects and the proposed agricultural pump projects are listed in Table 3. The combined projects are more cost effective than the marine vessel projects that were approved in April 2002. The marine vessel projects will be completed in the 3^rd and 4^th quarter of 2002, and most of the agricultural pump projects can be completed in the 3^rd quarter of 2002.

The proposed agricultural pump re-powering project is located in Riverside County. On average, the pump engines in this proposed project are approximately 250 hp in size and operate for approximately 2,500 hours annually. The implementation of this program is contingent upon collaboration with the electrical power company, Imperial Irrigation Department, in terms of providing the power infrastructure for the electric pumps.

The total amount of NOx emissions generated by the proposed revision of the April 5, 2002 Board approved marine vessel projects and the agricultural pump projects will remain the same as originally approved.

Benefits to AQMD

The conversion of diesel marine vessels to low emissions technology is very cost effective, and can reduce significant amounts of NO_x emissions at a very competitive price as compared to other categories. The marine vessel projects under the Pre-Funded RECLAIM AQIP and RECLAIM Executive Order Emissions Mitigation, which were approved by the Board on July 21, 2001, will produce real and surplus NO_x emission reductions of at least 6,300 tons over 20 years. The revised marine vessel projects and proposed agricultural pump project will produce real and surplus NO_x emission reductions of at least 8,080 tons over 20 years.

Resource Impacts

The proposed funding for the revised marine vessel projects, which were approved by the Board on July 20, 2001, will be obtained from the funds that were authorized by the Board. There will be an actual savings of $24,300 in the RECLAIM Executive Order Emissions Mitigation for an increased amount of NOx reduction (Table 2).

The total funding of $6,685,246 for the revised marine vessel projects and the proposed agricultural pump project in Table 3 will be obtained from the $6,734,000, which was approved by the Board on April 5, 2002. This will result in a savings of $48,754 for a slightly increased amount of NOx reduction.

Table 1
Pre-Funded RECLAIM AQIP
July 20, 2001 Board Meeting
 

Table 2
RECLAIM Executive Order Emissions Mitigation Program
July 20, 2001 Board Meeting
 

Table 3
RECLAIM Executive Order Emissions Mitigation Program
April 5, 2002 Board Meeting
 

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