BOARD MEETING DATE: December 5, 2003
AGENDA NO. 21
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, October 24, 2003. Following is a summary of that meeting. The next meeting will be November 21, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Leonard Paulitz, Acting Chair
Stationary Source Committee
Attendance
The meeting began at 10:30a.m. Present were Leonard Paulitz, Acting Chair and Jane Carney. William Burke was appointed to the committee by Leonard Paulitz and viewed the meeting by videoteleconference. Absent were Ron Loveridge, William Craycraft and Fred Aguiar.
INFORMATIONAL ITEMS
- Rule 1121 – Water Heaters
Jill Whynot, Planning and Rules Manager, reported on recent information regarding Rule 1121. Rule 1121, which reduces NOx from water heaters was amended in December 10, 1999. NOx limits are reduced in two steps, with the first reduction due by July 1, 2002 and the second step by January 1, 2005. The rule includes an optional mitigation fee in lieu of meeting the first reduction. All manufacturers took this option. - Resolution Proposing Summit of Members of AQMD Governing Board and California Air Resources Board
Jill Whynot, Planning and Rules Manager, gave a briefing on a Resolution for the December Governing Board meeting. This is one of the early action measures in the Cumulative Impacts Reduction Strategy. The resolution would propose a summit between a subset of members of both the AQMD Governing Board and CARB Board. This effort would seek to continue cooperative efforts to achieve emission reductions from on- and off-road sources. At the Mobile Source committee meeting, members agreed with a suggestion made by Dr. Wallerstein that the summit include a discussion on the AB2766 program. Stationary Source members also concurred. - Rule 1421 – Dry Cleaning Equipment and Solvents Report
Jill Whynot, Planning and Rules Manager, gave an update on information related to dry cleaning. The Resolution for Amended Rule 1421 included a report to the Stationary Source Committee by December 2003 regarding future toxicity testing for alternatives to perchloroethylene, as well as information on the number of installations, equipment type and installation costs, and changes in energy use. - Report on CARB Comments Regarding RECLAIM
Dr. Elaine Chang, Deputy Executive Officer, Planning and Rules, discussed the rule amendments that will remove trading restrictions from power plants. This item was scheduled for the November 7th public hearing, but was delayed until the December 5th meeting to address comments raised by CARB. - Power plants should be kept out of RECLAIM permanently. Rule 2009
required command-and-control type retrofits, which resulted in much
greater reductions than anticipated when the program was initially
designed. Bringing them back into the trading market could either delay
reductions at other facilities or, in the event of another energy
situation, put a burden on the market.
- If power plants are allowed to participate in trading, the
allocations should be shaved now. CARB refers to BARCT requirements in
state law.
- CARB feels that it would be more difficult for staff to do the amendment next year to lower allocations for the entire program if power plants are brought in to the trading market earlier and without allocation reductions. The concern is that AQMD would not be able to get enough reductions.
The rule required manufacturers to report by July 1, 2003 on their progress in meeting the final emission limit. All four manufacturers are having difficulty in meeting the final rule limit. They cite several factors contributing to this, including other competing federal requirements. After the rule was amended, a national Flammable Vapor Ignition Resistance standard was issued to address safety concerns. Adoption of the standard and test methods took longer than anticipated. The Department of Energy also finalized requirements to improve fuel efficiency. The manufacturers have focused on meeting these requirements to meet the needs of the national market. They state that each of these issues affects NOx levels and they need more time to meet the standard.
The manufacturers specifically request a one year delay, exemption for water heaters less than 30 and greater than 50 gallons, as well as exemptions for power and direct vent water heaters. Their proposal also includes extending the mitigation fee program and increasing the fee from approximately $1.80 to $2.50 per unit.
Dr. Burke inquired about the percentage of sales in southern California. He suggested that staff look into whether these are publicly traded companies. If they are, their SEC filing would help answer this question. He and Mr. Paulitz expressed concern that the mitigation fee be structured so it would provide incentive to meeting the standard more quickly. Dr. Wallerstein explained that the mitigation fees were originally designed for the interim standard only.
Staff has requested additional information to further evaluate the proposal. Staff will report to the Board in January 2004 with recommendations
The 2003 AQMP which was recently approved by CARB also included a technical summit, which would be separate from this effort.
The Resolution recommends that the summit occur by March 31, 2004. Ms. Carney suggested that it would be better to meet earlier to discuss legislative proposals. The resolution will be modified to include this request.
Earlier this year, preliminary results from the 2-year bioassay of Green EarthTM indicated tumors in some of the animals. The grant funding for this solvent was discontinued and no applications have been filed since the preliminary results were disclosed. The number of non-perc alternatives has continued to increase since the rule was adopted.
Costs are consistent with estimates during rule development. No new information is available on energy consumption. An ongoing project between Occidental College, Edison, and the Gas Company is monitoring energy changes in facilities switching from perc to wet cleaning.
The grant program has helped over 115 dry cleaners so far, for a variety of non-perc alternatives. Approximately 30 percent of the funding has been in EJ areas.
In other efforts, staff is sampling perc sludge at 25 facilities once a quarter for a one-year period to increase the information available for perc emission factors. The first set of lab results are pending.
AB998 was adopted recently. This bill requires a $3 per gallon fee for manufacturers or distributors of perc for dry cleaning, beginning January 2005. The fee increases $1 per year until the year 2013. ARB will implement a grant and demonstration program. Grants would be available for CO2 and wet cleaning and could be in addition to AQMD grants. Ms. Carney requested that staff coordinate with ARB regarding grant applications.
CARB has expressed opinions on three main issues:
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Dr. Chang responded briefly to each issue. BARCT equivalency is required on a programmatic basis at the adoption of a market-based program and at Plan update. Power plant participation in trading is a separate policy issue that should be addressed in rule development for the AQMP control measure.
There is also an issue of market stability. Power plants were restricted from trading in the May 2001 amendments to RECLAIM. The amendments included the specific conditions under which the restrictions would be lifted, and findings have been made that the conditions were met. If allocations are reduced for this sector, or any industrial sector, it could have a detrimental effect on trading programs, which need certainty to function.
Dr. Wallerstein added that AQMD and CARB staff members agree that further reductions from the program are necessary, but disagree on how to meet that objective. If individual sectors are required to add specific controls and allocations are reduced, the flexibility of the program is diminished. There is no room for growth for new sources and structural buyers, facilities that came in to the program as buyers and that will remain buyers. AQMD staff wants to address the issues holistically to ensure the trading program will work well. Evaluating emission reductions on a program-wide basis is a better approach to maintaining a fluid, sustainable market than addressing the issue in a piece-meal approach. Mr. Paulitz asked for clarification regarding the emission reduction line for RECLAIM. Ms. Carney inquired how the emission reductions for the AQMP control measure would occur and whether, at worst case, the power plants could come in at the same time as the AQMP reductions. The prevailing proposal is to do an across-the-board shave on all current holdings, but the final proposal will be crafted as part of the rule development process. Staff will defer a recommendation on when to remove trading restrictions after a discussion with CARB staff this afternoon.
Dr. Burke expressed concern over possible impacts to operators in the program.
- Addendum to Air Toxic Control Plan Rule
Dr. Elaine Chang, Deputy Executive Officer gave an update on an Addendum to the March 2000 Air Toxic Control Plan (ATCP). This will be to the Governing Board in January or February, 2004. Most measures from the ATCP have been implemented. The Addendum will summarize progress in implementing the 2000 ATCP, update inventories, provide information on rules adopted by AQMD and CARB, revise emission reduction estimates for 2010 and 2020, and include measures from the Cumulative Impacts Reduction Strategy. - 1148.1 – Oil Field Production Wells
Rule 222 – Filing Requirements for Specific Emission Sources not Requiring a Written Permit Pursuant to Regulation II
Larry Bowen, Planning and Rules Manager presented this item. Proposed Rule 1148.1 is a new rule to control VOC emissions from oil and gas production operations and the amendment to Rule 222 extends the filing requirement to the production well equipment that will be regulated by Rule 1148.1 since that equipment is currently exempt from written permit. Rule 1148.1 requires periodic inspection of the oil pumping equipment for leaks and if leaks are found, prompt repair of those leaks. In addition, there are requirements for good operating practices to minimize emissions during maintenance. Gaseous emissions are to be controlled by at least 95% and intentional venting of gas is prohibited. The rule also proposes more stringent inspection and repair requirements for oil production operations located near sensitive receptor areas. - Rule 1113 – Architectural Coatings Status Report
Larry Bowen, Planning and Rules Manager presented this item. The Proposed amendments to Rule 1113 establish new future limits for several specialty coating categories and eliminate the small container exemption for clear wood finishes. It is set for hearing in December to fulfill a SIP commitment and to meet the conditions of the SIP settlement agreement. The proposed limits are based on coatings currently available in the marketplace that already have significant sales penetration as indicated by the year 2000 sales from the CARB 2001 Architectural Coatings Survey. That survey also reveals that a large percentage of the total sales of clear wood finishes are in small containers and that most of those coatings sold in small containers exceed the current VOC limits.
Ms. Carney asked if there would be more information on the individual strategies from the White Paper on Cumulative Impacts. The response was that staff would expand on the information, but the ATCP is primarily a planning document. Full rule development, including technical and feasibility analysis will occur for each rule. Ms. Carney emphasized the need for more detail on those strategies so that the Board could make an informed decision. Mr. Paulitz asked how state plans are incorporated. Ms. Chang responded that the ATCP incorporates state and federal programs.
Dr. Wallerstein stated that the ATCP sets out a vision for a comprehensive program. It helps staff to prioritize and schedule rule development and programs.
Rule 1148.1 is expected to achieve about a ton per day of VOC emission reduction that is SIP creditable from well heads and well cellars and another 0.86 from the control of produced gas. The cost effectiveness is $1250 to $1500 per ton.
Dr. Burke requested that staff provide an analysis or map of the location of the equipment in relation to environmental justice areas.
Staff has scheduled another public consultation meeting on December 4 and proposes to set in December for a January hearing.
Two versions of the rule will be offered to the Board for consideration at the December hearing. They are the same except for the sunset provision for the clear wood finish small container exemption. The staff proposal eliminates the exemption for small containers on July 1, 2006 when the limit for clear wood finishes changes to 275 g/l. An alternate proposal is offered reflecting an industry recommendation that would phase out the exemption by July 1, 2008, and in the interim, establish limits for varnishes and sanding sealers at 450g/l and lacquers at 550 g/l.
The expected emission reductions are based upon the CARB 2001 Survey that has just been finalized. That reduction is expected to be 3.73 tons per day.
Staff expects that there will be a number of comments at the public hearing on stringency of the limits and the effective dates. The staff proposal addresses these by basing the limits on currently available products in the marketplace and effective dates 2 ½ to 3 ½ years in the future to allow for additional coating reformulation. The phase out of the small container exemption is also expected to be an issue. Staff believes there are compliant substitutes available and that the amendment necessarily closes a loophole in the rule. There may also be comment regarding the impact of the photochemical reactivity of current and compliant solvents. This matter is receiving further scientific study, in which the AQMD is a participant, however, regardless of the relative reactivity of the solvents, staff believes there will be a net reduction in ozone concentration from the use of the low-VOC formulations.
There was a public comment in support of the phase out of the small container exemption in 2008 rather than 2006.
WRITTEN REPORTS
All written reports were acknowledged by the Committee.
The meeting was adjourned at 11:58 a.m.
November 21, 2003 Committee Agenda (without its attachments)
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