BOARD MEETING DATE: September 3, 2004
AGENDA NO. 9

Recognize and Appropriate U.S. EPA Pollution Prevention Grant Funds for Lubricant and Rust Inhibitor Study

SYNOPSIS:

The U.S. EPA has awarded the AQMD $79,986 in Pollution Prevention Grant funds to characterize the emissions inventory of lubricants and rust inhibitors and to identify, test, and demonstrate alternative low, or non-emitting products. As part of conditions awarding the contract, AQMD will provide an additional $25,000 in contract dollars and $54,986 of in-kind funding of personnel services to develop the emission inventory, review, print, and distribute the final report. This action is to recognize and appropriate $79,986 in grant funds to the FY 2004-05 Planning, Rule Development and Area Sources Budget.

COMMITTEE:

Administrative, August 13, 2004. Less than a quorum was present for the discussion of this item; those Committee members who were present communicated their concurrence.

RECOMMENDED ACTIONS:

1. Recognize $79,986 in revenue from the U.S. EPA in Pollution Prevention Grant Funding to characterize the emission inventory for VOC-emitting lubricants and rust inhibitors and identify and test environmentally friendly alternative products.
    
2. Upon receipt of the grant, appropriate $79,986 from the Undesignated Fund Balance to the FY 2004-05 Planning, Rule Development and Area Sources Budget, Services and Supplies Major Object, Professional and Special Services account.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

U.S. EPA created the Pollution Prevention Grant program under the authority of the Pollution Prevention Act of 1990. The grant program provides matching funds to develop state and local cross-media environmental programs. The majority of these grants fund projects for technical assistance, training, education, data collection, research and demonstration projects.

Lubricants are metal working fluids used by thousands of companies in Southern California. Lubricants function as coolants, stamping fluids, vanishing oils, rust inhibitors, and cutting, forming, and honing oils. Most lubricant-based oils can be classified as mineral (petroleum) based, synthetic, or vegetable based. Mineral-based oils are diluted as necessary with mineral spirits or kerosene to achieve specific performance characteristics. VOC emissions from lubricants are significant because of their high VOC content which ranges from 50 to 100%.

The 2003 AQMP includes Control Measure #CTS-10 which covers miscellaneous industrial coatings and solvent operations. The objective of this control measure is to further assess emissions and reduction potential from several categories including lubricants. The funding identified herein would assist in carrying out the SIP commitment.

U.S. EPA Region IX recently sponsored a project to identify, test, and implement alternative lubricants, specifically those that do not rely on chlorinated paraffin additives. The project was not specifically designed to convert companies to low-VOC alternatives. However, non-emitting lubricants were identified that have proved successful, including (1) synthetics and semi-synthetics which are diluted with water and (2) vegetable oils which are diluted with water or are not diluted at all. After learning of these promising results, AQMD prepared a successful joint proposal to U.S. EPA with U.S. EPA’s contractor Institute for Research and Technical Assistance (IRTA) to conduct further work in this area. The proposed project will analyze lubricating operations at eight facilities and identify and test non-VOC alternatives. Additional work will analyze cross-media impacts and develop the lubricant VOC emissions inventory. Demonstrating the actual performance of alternatives is required so that AQMD staff can develop a rule, if necessary, to reduce lubricant VOC emissions. The proposal contains an AQMD commitment to match U.S. EPA funding.

The total cost of the project is expected to be $172,452 including:

1. $79,986 from U.S. EPA
    
2. $25,000 in contract funds from AQMD
    
3. $54,986 in AQMD staff work
    
4. $12,480 in in-kind contributions from CAL EPA’s Department of Toxic Substance Control (DTSC), California Department of Health Services Evaluation System & Information Service (HESIS) and the lubricant suppliers.

Objectives

The purpose of this joint project is to quantify the VOC emissions from lubricants and rust inhibitors and to demonstrate the use of safer non-emitting products in eight specific applications. AQMD staff will develop the emissions inventory with the assistance of the contractor. Three machine shops that use high-emitting VOC lubricants and five companies that use rust inhibitors will participate in the demonstration project. At the conclusion of the study, case studies of the conversions will be documented and a final report will be prepared for use in rule development.

Implementation

The project will be implemented in four phases:

1. Lubricants will be characterized by types, designed use, quantities used and VOC content.
    
2. The emissions inventory will be characterized by analyzing AQMD annual emissions data and by surveying companies or manufacturers who do not report emissions data to AQMD. Field visits will be conducted to verify the accuracy of reported emissions.
    
3. Three machine shops and five other companies using rust inhibitors will be selected to demonstrate conversion to low or non-emitting VOC products. Case studies will analyze and compare costs and performance of alternative lubricant and rust inhibitors with those traditional materials currently in use.
    
4. Cross media and toxicity consequences will be analyzed with the assistance of Cal/EPA Department of Toxic Substances Control (DTSC) and Cal-Department of Health Services Hazard Evaluation System and Information Service (HESIS).

A project report will be prepared by the contractor describing the results of the inventory and environmental analysis and the field testing. AQMD will distribute the case studies to companies in the Basin with similar operations and incorporate suggestions and comments from the affected industry in any future regulatory development. The proposed project is anticipated to lead to a rule that would reduce VOC emissions in the South Coast Air Basin by a significant amount.

The project will be implemented beginning October 1, 2004. Staff has already begun the work (met with eight associations, gathered preliminary data on manufacturers and suppliers, and collected available data from AQMD databases).

Fiscal Impact

The grant funds are a supplement to the FY 2004-05 Budget and have no negative impact on the budget. Contractor and AQMD staffing resources are available to implement the project as presented.

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