BOARD MEETING DATE: May 2, 2003
AGENDA NO. 27

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, April 25, 2003. Following is a summary of that meeting. The next meeting will be May 23, 2003, at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file.

Ronald O. Loveridge, Chairman
Stationary Source Committee

Attendance

The meeting began at 10:40 a.m. Present were Ron Loveridge, Chairman, (left at 11:20 a.m.), Leonard Paultiz, (arrived at 10:47 and chaired after 11:20 a.m.), William Craycraft, Jane Carney and Fred Aguiar.

INFORMATIONAL ITEMS

1. Proposed Amended Rule 1131 – Food Product Manufacturing and Processing Operations
   Larry Bowen, Planning and Rules Manager presented this item. Rule 1131 was adopted in September of 2002 to control the emissions of VOC from food processing operations. The rule required control by use of low-VOC materials, installation of add-on control equipment or an alternative compliance option that would achieve equivalent emission reductions. The compliance date was October 1, 2002. In February of 2002, USEPA published a limited approval/disapproval of the rule for inclusion into the SIP. The disapproval was for the alternative compliance provision that allows delegation of authority to the Executive Officer. The AQMD is required to correct the disapproved sections within 18 months to avoid SIP sanctions.
   
   Staff is proposing to delete the alternative compliance provision since no sources have used this provision to comply with the rule. In addition, staff is also clarifying a matter that has been the subject of a rule interpretation by District Counsel: specifically, that vitamins or herbal food supplements in tablet or capsule form are subject to the requirements of Rule 1103 and not Rule 1131.
    
2. Proposed Rule 1105.1 – Reductions of PM10 and Ammonia Emissions from Fluid Catalytic Cracking Units
   Dr. Laki Tisopulos, Assistant Deputy Executive Officer, Planning, Rules, and Area Sources, presented this item. This new rule will control particulate an ammonia emissions from refinery fluid catalytic cracking units (FCCUs). There are six such units at the major refineries in the AQMD and five will require major modification or replacement of control equipment. The sixth refinery is already in compliance with the standard. The rule targets control of both primary and secondary particulate to achieve estimated emission reductions of 0.5 and 1.5 tons per day, respectively.
   
   There has been significant effort between staff and the refineries to come to agreement on the proposal but there is still not resolution on the proposed standards and the long-term continuous compliance with those standards, as well as the cost and cost effectiveness of the staff proposal. The refineries have proposed an alternative that would establish facility-specific emission reduction targets in lieu of Rule 1105.1 and although not fully developed, it would allow each refinery to achieve its share of emission reductions through whatever means they deem appropriate either within or outside of the refinery. Staff has serious concerns about such an approach.
   
   Staff has proposed an alternative that would allow some flexibility to exceed the standards up to a higher emission cap. The refinery would mitigate the exceedance by providing equivalent emission reductions from other sources or pay a mitigation fee to the AQMD to achieve the mitigating emission reductions.
   
   Regarding the cost and cost effectiveness, the AQMD did its own estimates based on vendor quotes, and compared those to independent estimates by USEPA, Bechtel (industry consultant), and the actual cost reported by the refinery that has installed compliant equipment. The AQMD estimated costs are comparable to the other sources and even conservative in some cases. In addition, there will be a substantial savings to each refinery in the cost of ammonia.
   
   Whether based upon filterable and condensable particulate, filterable particulate and ammonia, or simply filterable particulate alone the proposal is assessed by staff to be cost effective.
   
   There were questions from Board members that related primarily to the presentation charts presented on the latest test results and the capital cost comparisons. One of the questions asked was that, since the latest test results indicate that three of the six refineries are at or near compliance with the proposed standard, did it mean that three were supportive and three were against? Staff responded that none of the refineries support the staff proposal. The chart reflects the latest test results and it is the position of the refineries that this one data point may not be necessarily representative of their ongoing operations for the five years between FCCU turnarounds and they may not be able to comply on a continuous basis. To address the issue of continuous compliance, staff is proposing to allow the averaging of source test results and the use of alternative compliance options consisting of paying a mitigation fee or implementing alternative emission reductions programs. Another question was whether the capital cost comparison chart that relates to the latest test results reflect that those refineries that are close to the standard will be able to "fine tune" their operations, whereas those that significantly exceed the standard will have to do major modifications. Dr. Tisopulos responded that to conservatively estimate the control costs, staff’s cost analysis assumed that all of the refineries, except Refinery A (currently in compliance with the standard), will have to replace their electrostatic precipitator. The actual costs were expected to be lower, since some refineries may be able to meet the proposed limits with equipment upgrades as opposed to equipment replacements. Further, staff estimates were based on meeting an earlier proposed standard of 0.002 instead of the current staff proposal of 0.0042. Staff cost estimate was not changed to provide a conservative margin that was expected to lessen the debate regarding costs. Staff was asked about why one refinery was so far above the standard compared to the others and why staff’s estimated control cost was lower for that refinery than some of the others? Staff responded that the high concentrations could be due to the size, age, and/or maintenance of the unit. The control cost is based upon the throughput as well as the emission concentration the units are designed for.
   
   Also regarding the condensable particulate and ammonia, the question was asked whether the issue was that these emissions do not exist or that they are emitted but have not yet formed air contaminants when they leave the refinery. Staff responded that the contaminants were definitely emitted from the refinery but the issue was whether the particulate formation was mostly in the vicinity of the refinery or somewhere further downwind.
    
3. Proposed Amended Reg. III - Fees
   Dr. Laki Tisopulos, Assistant Deputy Executive Officer, Planning, Rules, and Area Sources, presented this item on proposed amended Reg. III – Fees. This regulation sets fee rates and funds about two thirds of the annual budget. A hearing has been set and staff has had workshops on a proposed amendment to increase fees by the California CPI of 3 percent, recover delinquent fees prior to acceptance of any new applications from a facility and institute a new fee, implemented over two years, to recover the costs associated with the required tracking and reporting of ammonia emissions from permitted stationary sources. In addition, there are also a number of other proposed rule improvements that have little or no fiscal impact.
   
   Staff has also identified additional cost recovery measures that will help mitigate the impact of the increase in retirement contribution. Staff was only recently advised of the need for increased contributon. These measures will be discussed in further detail later at the Board Budget Workshop.
    
4. 2003 AQMP Stationary Source Measures
   Dr. Laki Tisopulos, Assistant Deputy Executive Officer, Planning, Rules, and Area Sources, presented a status report on the proposed stationary source control measures in the draft 2003 AQMP. The draft 2003 AQMP stationary source control strategy consists of 21 short-term measures estimated to achieve emissions reductions of 21.5 tons per day (tpd) VOC and 5 tpd NOx, 2-6 tpd PM10, 2 tpd SOx, and 10 tpd ammonia by 2010. Long-term measures, divided into Tiers I and II, are estimated to achieve 11 and 20 tpd VOC reductions by 2010, respectively. Dr. Tisopulos’ presentation included a brief summary of the short-term control measures and the written comments received to date. While the comments were specific to each measure, the comments generally questioned the specifics of certain control strategies, the reduction potential and/or specificity of some measures, and whether sources are being unfairly targeted relative to other source categories. Dr. Tisopulos also briefly summarized additional control strategies suggested by a technical subcommittee of the AQMP Advisory Group which was formed to address the "black box" issue. The suggestions did not provide specific measures with defined emission reductions, but rather general concepts for further exploration.
    
5. Rule 1102 – Dry Cleaners Using Solvent Other than Perchoroethylene Report
   Jill Whynot, Planning and Rules Manager, discussed the status report for R1102 – Dry Cleaners Using Solvent Other than Perchloroethylene. R1102 was amended in November 2002 at the request of ARB to upgrade equipment design to meet all feasible measures. Transfer equipment was phased out by January 1, 2003 for all but one facility. The rule includes a compliance date of January 1, 2005 for one unique, large industrial facility.
   
   M.L. Winters, located in Pico Rivera, is a very large cleaner and waste recycler that deals with soiled textiles such as gloves contaminated with oils and metal fragments. They use 2 machines now which are ten times larger than typical dry cleaning equipment. In addition, they have 10 dryers. They use Stoddard solvent and are permitted to emit 27 tpy VOC.
   
   The company has been working diligently to meet the rule requirements. There are two manufacturers that are making prototypes for trial---one using Stoddard solvent, one DF2000. This equipment may be technically feasible but expensive. The facility may need to add a shift and change part of their roof to accommodate new compliant technology.
   
   Staff recommends that AQMD staff continue to work with the facility to monitor progress, evaluate options, and evaluate cost-effectiveness. Staff recommends another follow-up report January 1, 2004, 12 months prior to the compliance date.
    
6. Status Report on Cumulative Impacts
   Jill Whynot, Planning and Rules Manager, provided a briefing on efforts to address cumulative impacts. This is an update to the directive from the Governing Board to investigate the feasibility of rulemaking to address cumulative impacts of air toxics above current AQMD requirements. Staff needs additional time to develop recommendations due to the complexity of the issues and the divergent interests.
   
   In addition to working groups, there will be 5 community forums on Saturdays and evenings to get public input on approaches and priorities.
   
   The handout provided includes a list of concepts staff proposed for consideration. Environmental/Community groups, as well as industry representatives, have submitted additional suggestions (included in the package).
   
   Staff will continue the working group process, get input from the community meetings, and formulate recommendations for the Board’s consideration in or around July
    
7. Best Available Control Technology (BACT) Guidelines Report
   Marty Kay, Program Supervisor, Science and Technology Advancement presented this semi-annual BACT Guidelines report. This report contains a new BACT listing for Part B of the BACT Guidelines for major sources and includes fourteen new listings and four updated listings.
    
8. Update Minor Source BACT for Emergency Diesel Engines
   Marty Kay, Program Supervisor, Science and Technology Advancement presented this item Staff recommended that the Board adopt amended minor-source BACT guidelines for emergency engines. The new guidelines would require new emergency diesel engines to meet USEPA Tier 2 emission standards, limit use of new emergency engines in interruptible electric service programs to cleaner spark-ignited emergency engines and reference the upcoming reductions in sulfur content of diesel fuels required by Rule 431.2.

WRITTEN REPORTS

All written reports were acknowledged by the Committee.

The meeting was adjourned at 12:00 p.m.

Attachments

April 25, 2003 Committee Agenda (without its attachments)

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