BOARD MEETING DATE: July 9, 2004
AGENDA NO. 30
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, June 25, 2004. Following is a summary of that meeting. The next meeting will be July 23, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Ronald Loveridge, Chairman
Stationary Source Committee
Attendance
The meeting began at 10:30 a.m. Present were Ronald Loveridge, Chairman (left at 11:20), William Craycraft, (Acting Chair upon Ronald Loveridge’s departure), Dennis Yates, and Bill Postmus (joined at 10:35) by Videoteleconference. William Burke was appointed as an ad hoc member of the committee for this meeting by Ronald Loveridge and participated by Videoteleconference. Absent was Jane Carney.
INFORMATIONAL ITEMS
- Status Report on RECLAIM Amendments
- Report on Firework Displays at Theme Parks and Other Locations
- Status Report on Proposed Rule 1127 – Emission Reductions from
Livestock Waste
Dr. Julia Lester reviewed the latest changes to Proposed Rule 1127 that had been made in response to comments by industry, environmentalists, and the public. She also described the technical and cost inputs used in the recently released staff report to assess the impacts of PR1127. Staff estimates that Proposed Rule 1127 will reduce 3.4 tpd of ammonia and 1.2 tpd of VOC in 2006 at a cost of $3.53 million dollars per year. PR1127 cost-effectiveness is $6,800/ton of VOC and $2,400/ton of ammonia. The removal of fresh manure to digesters can reduce a greater amount of emissions, but the costs are significantly higher than other controls. The incremental cost-effectiveness of digesters compared to fabric in-vessel composters is $25,000 to $58,000 per ton of VOC, depending upon the degree of energy cost recovery. The latest issue that has arisen is the emission credit generation potential for the use of digesters or other technologies that achieve greater reductions than called for in Proposed Rule 1127. Staff noted that there are significant technical and policy barriers to the creating emission credits for ammonia and VOC reductions from digesters, but would continue to study the issue. Proposed Rule 1127 is scheduled for Board consideration at its August 2004 public meeting. - Implementation Study for Rule 1146.2
Jill Whynot, Planning and Rules Manager, provided a briefing on the Implementation Study required by Rule 1146.2. This rule covers large water heaters and small boilers and requires implementation studies 18 months before rule deadlines. The report to the Board in July represents the 3rd and final such report.
Jill Whynot, Planning & Rules Manager, gave an update on RECLAIM rule amendments. The proposed amendments will reduce the total number of credits in the program to reflect Best Available Retrofit Control Technology (BARCT), as required by state law.
Staff is working with stakeholders through working groups and meetings with energy and refinery representatives. In addition, there is close coordination with ARB, EPA and CEC.
Key policy issues include the amount and timing of reductions, and whether it is appropriate for some facilities to be exempt from this phase of reductions. Staff is working to balance reductions for BARCT required by state law while ensuring a viable market.
BARCT reductions have been evaluated for all categories of equipment in RECLAIM. No adjustments are proposed in the SOx market. Many categories of NOx equipment in RECLAIM are already at BARCT. Feasible, cost-effective reductions can be achieved from refinery FCCUs, large refinery boilers and heaters, other boilers and heaters, heat treating and miscellaneous equipment. Staff has shared technical data with the working group and has asked for input on the BARCT evaluations.
The current NOx market has 34 tons/day of RTCs. BARCT reductions range from 5.4 to 7.4 tons/day, based on two different methodologies. The staff proposal is to reduce 5.4 tpd by 2008 and an additional 2 tpd by 2010. The 2nd step would occur only if the average price of credits is less than $15,000 per ton.
Staff is continuing to work with stakeholders and other agencies. Three market experts have also been hired, on contract, to assess market implications of reducing RTCs and to suggest ways to help minimize market impacts.
This item will be a September Governing Board public hearing. Mayor Loveridge asked that a more comprehensive briefing be put on the agenda for next month.
Carol Coy, Deputy Executive Officer, Engineering and Compliance, presented this item in response to a request by Stationary Source Committee members in a briefing at their January 2004 meeting to develop additional information and share the issue with the full Board. The report to the Committee in January was in response to a commitment to brief the Committee made at the December 5, 2003 Board meeting after Mr. William Fitzgerald, of Anaheim Homeowners Maintaining their Environment (HOME), shared his community’s ongoing concerns regarding Disneyland fireworks displays during the public comment period. Ms. Coy summarized the seasonal nature of the aerial fireworks displays, the AQMD complaint history (which has declined in recent years), an overview of the regular venues exhibiting firework displays and their material usage (Disney is by far the largest), and the regulations which currently exempt pyrotechnic equipment and displays from permitting and open burning statutes. She also reviewed the AB 2588 Health Risk Assessment values (1.8 in a million maximum cancer risk) which incorporated risk from the current firework displays and reiterated the results of AQMD particulate monitoring in 2002 which detected measurable firework components in the smoke traveling into the community, but no exceedance of state Reference Exposure Levels (RELs). The presentation concluded with an overview of the continuing progress Disney engineers are making in implementing full air launch technology for aerial shells this summer as well as development of reformulated low level, reduced smoke fireworks for implementation in 2005 and beyond. Ms. Coy discussed the staff recommendation that AQMD seek to have Disney enter into a letter of agreement that formalized their commitment to this proactive effort to reduce smoke impact on Anaheim residents and report back to the Board after each of the next two summer seasons regarding observed progress.
Committee members expressed concern regarding "singling out" Disneyland Resorts regarding a letter of agreement. Manuel Grace, Senior Vice President and Counsel for the Walt Disney Company stated that Disney was intending to share patent details with a non-profit organization so that any technological advances could indeed be shared industry-wide and that they did not object to participating in a letter of agreement. The Committee voted to suggest no letter of agreement be required and that progress simply be reported as proposed. Staff committed to share the Committee’s recommendation in the staff presentation to the full Board.
The basic rule requirements include a 30 ppm NOx limit for new or retrofit units, a phased compliance schedule depending on equipment size and manufacture date, and an exemption for equipment that uses less than 9,000 therms per year.
There are eight criteria evaluated in each implementation study. Key results were summarized. New units are readily available, cost-effective and two-thirds are certified below 20 ppm, substantially less than the 30 ppm limit. Retrofits have not developed to the extent projected when the rule was adopted. There are only a small number of equipment retrofits, which were done on a case-by-case basis. No manufacturer developed retrofit kits that could be applied to a large number of equipment. In addition, the costs to retrofit are approaching the cost to replace the equipment. The rule deadlines of January 1, 2005 and January 1, 2006 would require replacement of equipment that is less than 10 years old in some cases.
This rule also has compliance challenges due to the types of sources with equipment in this size range (hotels, apartments, condominiums, office buildings and a variety of industries) and the numbers of equipment (>20,000) involved.
Staff recommends initiating rule development to shift to more of a manufacturer, point-of-sale approach. Initial concepts are to reduce the 30 ppm standard to 20 ppm for new equipment in this size range and to explore the possibility of a 10 year replacement schedule. If the Board agrees with the recommendation for evaluating a rule amendment, the proposed amendments to the rule would come back to the Board later this year.
WRITTEN REPORTS
All written reports were acknowledged by the Committee.
The meeting was adjourned at 11:35 a.m.
June 25, 2004 Committee Agenda (without its attachments)
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