BOARD MEETING DATE: December 3, 2004
AGENDA NO. 33
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, November 19, 2004. Following is a summary of that meeting. The next meeting will be December 17, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
William Craycraft, Acting Chair
Stationary Source Committee
Attendance
The meeting began at 10:35a.m. Present were William Craycraft, Acting Chair, Jane Carney (left for agenda items #2 and #3 due to conflict of interest), Bill Postmus (left at 11:30) and Dennis Yates. Absent was Ronald Loveridge.
ACTION ITEM
- December Stationary Source Committee Meeting Schedule
Carol Coy, Deputy Executive Officer, asked the Committee Members whether or not they would like to have a meeting scheduled for December. After discussion, the Members agreed to have a meeting on December 17th. Staff will contact the Members to confirm availability and a time preference.
INFORMATIONAL ITEMS
Committee Member Jane Carney left the meeting for the next two items due to a conflict of interest. TMI Products, Inc., Inland Concrete Enterprises, Inc., Delilah Properties, Maruhachi Ceramics of American, Inc., and J.R. Pipeline are sources of income for Ms. Carney.
- Update on Proposed Rule 1157 – PM10 Emission Reductions from Aggregate and Related Operations
- Update on Rule 1145 – Plastic, Rubber, and Glass Coatings
- Update on Rules 102, 201, 201.1, 202, 203, 219 and Proposed Rule 312
- The Annual Status Report on Rule 1113 – Architectural Coatings
- RECLAIM Rule Development Update
- Proposed Amended Rule 1146.2 – Emissions of NOx from Large Water Heaters and Small Boilers
- Rule 1168 – Adhesive and Sealant Applications
- Revised Risk Assessment Procedures for Rule 1401 and 212
Lee Lockie, Director for Area Sources, presented a summary status report on the Proposed Rule 1157 - PM 10 Emission Reductions from Aggregate and Related Operations. This proposed rule is scheduled for public hearing on December 3, 2004. The structure of the rule includes a set of performance standards, options for controlling process emissions to meet these standards, provisions for compliance plans to be submitted by repeat violators and a set of exemptions where controls are infeasible. The compliance dates in the rule are July and December of 2005 for implementation of housekeeping requirements and equipment installation, respectively.
Ms. Lockie outlined the remaining issues and stated that staff was close to full agreement with the industry on these issues. A new opacity standard of no more than five consecutive, individual readings exceeding 50% opacity has caused some concern as the industry is not familiar with the standard and its test method. Ms. Lockie explained that staff proposes to extend the compliance date for this standard to December 2005 from July 2005 to allow additional time for the industry to understand and train their staff in this new standard and test method. Also, the rule proposal has been modified so that exceedences of this standard do not trigger the repeat violator provision in the rule. Clarifications have been made to the test method to explain more fully its application to certain activities. Ms. Lockie explained that the U.S. EPA has asked AQMD staff to include a new requirement that facilities ensure that aggregate trucks exiting the facilities tarp or stabilize their loads to prevent track out onto public roads. Ms. Lockie explained that U.S. EPA has asked staff to include language from a similar rule adopted by the San Joaquin Valley APCD. The last issue surrounds an exemption for high winds. Staff has provided flexibility to the industry to allow them, during high winds, to continue to operate those processes supplying jobsites where concrete or asphalt is being continuously poured during a high wind situation. The proposal would require that the facilities demonstrate that interruption of these jobs would cause irreparable harm to the project.
Larry Bowen, Planning and Rules Manager, presented this item. The committee was briefed last month on this amendment that is scheduled for hearing in December. Staff is recommending a change that was included in the proposal after the briefing last month but before the hearing was set. That change was to the VOC content limit and compliance dates for two-component general coatings. The compliance date for the final limit of 120 grams of VOC per liter of coating was changed to January 1, 2008. In the interim, effective January 1, 2006, the limit will be reduced to 300 grams of VOC per liter of coating.
Larry Bowen, Planning and Rules Manager, presented this item. Staff has been meeting with the agricultural industry and is proposing two changes to the proposal since the Committee was last briefed. First, implementation of emission fees for agricultural sources will be postponed until the 2005 – 2006 reporting period. Second, those agricultural sources constructed or modified after January 1, 2004 but before January 1, 2005 will receive the lower permit processing fee of $380.60 provided applications are submitted by March 5, 2005 (90 days from date of adoption). However, those sources will still be subject to all applicable AQMD rules, including Regulation XIII.
Lee Lockie, Director for Area Sources, summarized information presented in the 5th Annual Status Report on Architectural Coatings that provides an update of staff’s work on available coatings, evaluations and implementation activities associated with the rule. Ms. Lockie discussed surveys in progress, re-evaluation of previous site visits and continuous coating evaluations that indicate the availability and continuing use of architectural coatings that meet current and future VOC limits stipulated in the rule. Ms. Lockie also discussed manufacturers utilizing the Averaging Compliance Option in the rule and audits that have been completed that indicate compliance with the approved plans. Also discussed was the continued participation by the Technical Advisory Committee (TAC) relative to the most recent contract awarded to study architectural coatings subject to the 2006 limits in the rule. Ms. Lockie explained some of the concerns the TAC had relative to the number of coatings being tested and the test protocols being used. Ms. Lockie also stated that the AQMD would consider testing additional coatings in the early part of next year. Ms. Lockie explained that a detailed report of all studies in progress will be made to the Board in July 2005.
Jill Whynot, Planning and Rules Manager, gave the staff briefing on recent efforts regarding the RECLAIM rule amendments. Follow-up items from last month’s meeting were discussed, including information relating to SCR equipment life and manufacturer’s guarantees for emission levels. An explanation of the components and method used to account for various costs was provided.
Significant work has been done regarding reductions from different equipment categories and several technical adjustments have been made. Staff has revised the proposal to include a market protection mechanism for the last three years of the reduction schedule, rather than the last year only. 7.7 tons per day (tpd) would be reduced by 2010. 4 tpd would be reduced in 2007 and submitted to the SIP and the subsequent reductions in each of the next three years would be submitted only after they have occurred. If, in any of the last three years, the 12-month rolling average price for credit trades exceeds $15,000 per ton, the reduction for that year would be reinstated.
Several industry associations propose that two tons be reduced in 2007, two tons in 2008, zero tons in 2009 and amounts to be determined in 2007 for reductions in 2010 and 2011. They also request that individual power plants be allowed to voluntarily take early reductions in order to be able to sell credits after rule adoption. Industry representatives also requested that staff consider allowing a break in the reduction schedule or more time for the reductions to occur.
Discussions are on-going regarding structural buyers and potential options to address the concerns that some facilities have reduced emissions to BARCT and will need to buy credits. This highlights a very significant policy issue relative to the future direction of the RECLAIM program. If facilities are no longer in the program once they have added controls, the program would essentially transition out of existence. Staff will continue to work on ways to address this situation while preserving the market aspects of the program. Many meetings have occurred over the month and several are scheduled for the next few weeks. December 3rd will be the set hearing for a January public hearing on the proposed rule revision.
Board Member Craycraft asked if there was a way to provide assurance that staff would react quickly if there is a problem in the future. Dr. Wallerstein indicated that this could be done through the Board resolution and continued reports to the Stationary Source Committee.
A representative from Sempra Energy commented that this rule amendment covers diverse equipment categories and is quite complex. Due to uncertainty with future growth, he recommends a cautious approach with respect to the emission reduction. New peaking units need to obtain streams of credits which will place a demand on the market. He also commented that facilities with less than 10 tpy account for less than 10% of the credit holdings. With respect to structural buyers, he stated that some industry groups are favoring an AQIP approach.
Staff pointed out that RECLAIM’s annual approach and the 10% buffer in reductions proposed allowed in the reductions, should help with concerns about whether there are enough credits for peak days of electricity generation and for the market overall.
Dr. Wallerstein commented that one suggestion he offered yesterday was to consider allowing power plants that took early reductions to sell credits to new and existing power plants. The Sempra Energy representative mentioned that they asked staff to evaluate using stream prices and including other factors for the price trigger. Staff indicated they are open to discussing this.
Zorik Pirveysian, Planning and Rules Manager, provided a report on the proposed amendments to Rule 1146.2 - Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers. Rule 1146.2 establishes emission limits for new and existing water heaters and boilers in the size range of 75,000 to 2,000,000 Btu/hr units. The primary reason for the proposed amendment is the technical infeasibility of the upcoming compliance dates for existing units: January 1, 2005 for units greater than 1 MM Btu/hr but less than or equal to 2 MM Btu/hr (manufactured between 1992 and 1999) and January 1, 2006 for units greater than 0.4 MM Btu/hr but less than or equal to 1 MM Btu/hr. For these units, development of certified retrofit kits, which were anticipated to provide a lower cost compliance means, did not materialize for most units, and alternatively, most of these units would have to be retrofitted or replaced with new units considerably before reaching the end of their useful life.
The proposed amendment would extend the above compliance dates and allow 15 years of average useful life before these units would have to be retrofitted or replaced to meet the rule limits (effective January 1, 2007). The proposed amendments would result in emission reductions foregone (e.g., 1.2 tons/day in 2006 and 0.5 ton/day in 2010 of NOx). However, these reductions will be realized by 2014 when existing units are eventually retrofitted or replaced with new units. The attainment demonstration will also not be affected because of the set aside budget allocated in the 2003 AQMP for delays in implementation of technology forcing rules.
The proposed amendments, for the most part, are supported by equipment owners, trade associations, distributors/manufacturers, and Gas Company. Other comments have included a request for a 20-year useful life allowance and different effective dates (start dates). The public workshop for the proposed amendments was held on November 3, 2004. Two working group meetings were also held on October 21 and November 3, 2004. Comments on the draft Environmental Assessment document are due November 23, 2004. The Set and Public Hearings are scheduled for December 3, 2004 and January 7, 2005 respectively.
Board Members Carney and Craycraft expressed concerns over the reductions foregone and the proposed January 2007 effective date for the 15-year useful life and recommended that staff consider earlier effective dates (i.e., for the 15-year useful life) for the existing units to minimize the extent of the emissions reductions foregone.
Larry Bowen, Planning and Rules Manager, presented this item. Staff will be asking the Board to amend Rule 1168- Adhesive and Sealant Applications in January 2005. The proposal is to continue the current limit for top and trim coatings until January 1, 2007 and at that time lower it to 250 grams of VOC per liter as well as to maintain the current VOC limits for PVC/CPVC cements and reduce the limits slightly for the PVC/CPVC primers and ABS cements. Finally, for solvent welding of acrylic and polycarbonate sheets set the concentration limit of methylene chloride at 60 % by weight and an annual facility maximum usage of 20 pounds.
Susan Nakamura, Planning and Rules Manager, presented proposed changes to the Risk Assessment Procedures (RAP) for Rules 1401 and 212. The RAP changes reflect 2003 health risk assessment guidelines adopted by OEHHA. Major changes to the RAP include a different calculation methodology for cancer risk, a different unit of measure for cancer potency, revised exposure assumptions for workers and residents, pollutant concentration values indexed to body weight, and different breathing rates for residents and workers. It is expected that the new RAP will result in greater stringency for some toxic air contaminants. In response to a comment received at the meeting, AQMD staff will conduct additional analysis to assess impacts of the new RAP and will report back to the Stationary Source Committee. Another commenter requested consideration of higher AQMD risk thresholds in light of the new RAP.
WRITTEN REPORTS
All written reports were acknowledged by the Committee.
The meeting was adjourned at 12:02 p.m.
November 19, 2004 Committee Agenda (without its attachments)
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