BOARD MEETING DATE: February 3, 2006
AGENDA NO. 7

Execute Sole Source Contracts for Consulting Services to Assist in Preparation of Mobile Source Emissions Element of 2007 AQMP

SYNPOSIS:

There is a need to retain outside experts in the field of transportation fuel formulation and mobile source inventory development in preparation of the 2007 AQMP Revision. This action is to execute sole source contracts with A 2^nd Opinion, Inc. and Saint Malo Solutions, at a cost not to exceed $75,000 each. A 2nd Opinion has over 25 years experience in the area of fuel formulation and on the CARB fuel predictive model. Consultants from Saint Malo are ex-perts on the CARB EMFAC mobile source emissions factor model. Sufficient funds are available in the Clean Fuels Fund.

COMMITTEE:

Technology, January 27, 2006. Less than a quorum was present during the discussion of this item; the Chairman communicated his concurrence and recommendation that this item be forwarded for Board consideration.

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute a sole-source level-of-effort contract with A 2^nd Opinion, Inc. in an amount not to exceed $75,000, from the Clean Fuels Fund, to provide technical expertise on the CARB fuel predictive model in the devel-opment of the 2007 AQMP Revision.
2. Authorize the Chairman to execute a sole-source level-of-effort contract with Saint Malo Solutions in an amount not to exceed $75,000, from the Clean Fuels Fund, to provide technical expertise on the CARB EMFAC mobile emissions model and other related mobile source issues in the development of the 2007 AQMP Revision.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Key critical areas in the development of the 2007 AQMP Revision involve oxygenated fuels and the mobile source emissions inventory. The recent elimination of the federal oxygenated fuel mandate provides CARB and refiners with flexibility with regard to the use, or possible non-use, of ethanol as a blending component of gasoline. Similarly, up-dates to major components of the mobile source emissions inventory are underway, for both on-road and off-road vehicles. State-of-the-art knowledge, reflecting the latest data and trends, in these two areas are essential in the preparation of the AQMP baseline emissions inventory, the development of control measures, and the attainment demonstration for the federal PM 2.5 and 8-hour ozone ambient air quality standards.

CARB is in the process of updating the Phase 3 gasoline regulations, including the fuel Predictive Model, to reflect the elimination of the federal oxygenated fuel mandate in HR6 (Energy Act of 2005). With the implementation of this statute, the 15-year-old federal policy which mandated minimum levels of oxygenated fuels in California will come to an end. The structure of future summertime gasoline policy will be one of the central issues for the upcoming AQMP Revision. There are a number of complex factors which need to be fully accounted for in order to define and assess relevant AQMP scenarios related to fuel composition, including various options for ethanol-blended gasoline during the summer months.

With respect to the fuel Predictive Model used to qualify all formulations of gasoline sold within the state, the underlying data used to calibrate this model is quite extensive. The Predictive Model is used as the basis of adjusting gasoline components such as sulfur, aromatics, olefins, distillation temperatures and Reid Vapor Pressure. In light of the elimination of the oxygenated fuel mandate, refiners will have greater degrees of freedom in supplying California gasoline while also meeting the national Renewable Fuel Standard requirements for ethanol in gasoline. There is also considerable interest in the possible implementation of E-85 (i.e., 85 percent ethanol in gasoline) through a broader commercialization of flexible fuel vehicle technology.

Under current CARB guidelines, it is possible that the summertime gasoline pool, for example, could have a mix of oxygenated and non-oxygenated (i.e., zero ethanol con-tent) fuels, resulting in a commingling of these fuels with a possible commensurate increase in evaporative emission characteristics. Varying ethanol content is also expected to have some impact on hydrocarbon permeation emissions, as well as NOx exhaust emissions. It is important that the 2007 AQMP Revision reflect the most up-to-date assessment possible of the implications of alternative oxygenated fuel practices and policies. Expert knowledge is needed to help staff better assess the implications of gasoline fuel policies as they relate to near-term and longer-term compliance with state and federal ambient air quality standards.

The mobile source emissions inventory is also a critical component in the development of the 2007 AQMP Revision. Revisions to the mobile source emissions inventory have been made over the last several years, and continue to be made, to incorporate the best available knowledge. It is essential that the latest technical data on in-use emission factors be used in its formulation. For example, new data is becoming available with respect to On-Board Diagnostics II, in-use performance, vehicle demographics, vehicle inspection and maintenance, fuel solubility and evaporation effects, brand loyalty to various types of fuels, off-road emission factors, and other aspects of the mobile source emissions inventory. A full understanding of market trends, recent certification data, engineering and technology trends, as well as inventory uncertainties, is central to properly evaluating the impact of control strategies relative to the AQMD baseline inventory and emissions forecasts. It is important, for example, to understand the nuances in assumptions which influence emission inventory estimates, which in turn affect air quality modeling scenarios, and ultimately control measure design and analysis.

Staff does not have sufficient in-house technical resources to address the complexities of fuel reformulation and mobile source emissions inventory assessment in preparing the 2007 AQMP Revision. Therefore, staff is recommending retaining uniquely qualified external experts to assist staff with these critical areas during the preparation of the 2007 AQMP Revision.

Proposal

Staff is proposing that two technical consultants be retained to provide comments and technical input regarding fuel reformulation, the CARB fuel Predictive Model, and mobile source emissions inventory development. This action is to execute sole-source level-of-effort contracts to provide technical support services needed in the development of the 2007 AQMP Revision. Specifically, staff is requesting the Board’s approval to execute a sole-source level-of-effort contract with “A 2^nd Opinion, Inc.” and a sole-source level-of-effort contract with Saint Malo Solutions to conduct work related to the development of the 2007 AQMP Revision at a cost not to exceed $75,000 each. Both consultants will provide important analysis directly related to (1) mobile source emissions inventories, (2) modeling related to air quality and gasoline formulation certification (i.e., CARB’s Predictive Model), (3) scenario construction, and (4) AQMP control measure development and analysis, as needed. Sufficient funds are available from the Clean Fuels Fund to cover the total cost of $150,000.

Sole Source Justification

AQMD’s “Procurement Policy and Procedure” Section VIII.B.2 lists a number of conditions under which a contract may enter into on a sole-source basis. The recommendation to award a sole-source contract to A 2^nd Opinion falls under condition VIII.B.2.c.(1) – “The unique experience and capabilities of the proposed contractor or contractor team,” as the contractor has unique experience and capabilities in the area of fuel expertise. The firm’s principal, Mr. Cal Hodge, has extensive knowledge of oxygenated fuels, their underlying chemistry, the modeling protocols used by U.S. EPA and CARB to certify fuel formulations, the options available to refiners to achieve various levels of oxygenated blendstock and finished product, air quality models, emission data bases used to calibrate the CARB Predictive Model, refinery econometric optimization models as well as the regulatory foundation for past and current oxygenated fuels policy in California and nationally. He is currently providing expert advice on gasoline and biodiesel issues to the European Union and European refiners, and has had major management responsibilities for a major U.S. oil refiner (Valero) in the area of compliance with federal oxygenated fuel requirements. He has been intimately involved in development of oxygenated fuel policy at the federal and state level, including participation in the U.S. EPA’s Ozone Transport Assessment Group organized for the east coast.

Mr. Hodge was directly involved in U.S. EPA’s RFG Regulatory Negotiation process following the Clean Air Act amendments of 1990. He has also provided expert analytical support as a manager at Pace Consultants, an internationally recognized firm focusing on refinery processes. In addition, he has been responsible for engineering and technical services while employed at Amoco’s refineries in Missouri, Texas and Illinois. He combines a unique combination of knowledge and experience which will be of direct relevance to the 2007 AQMP Revision process.

Mr. Hodge provides a unique combination of skills, background and qualities which make him highly desirable to the AQMD as a temporary consultant. He has hands-on refinery experience directly related to the use of oxygenated fuels, he has interacted with CARB and U.S. EPA from the earliest days of the oxygenated fuel program on models which accurately reflect the impact of oxygenates on emissions and gasoline fuel properties, and he has detailed knowledge about the core data sets upon which the CARB’s Predictive Model is premised. Staff recommends that the District utilize this combination of qualities to obtain the best insight possible on current and potential future oxygenate fuel policies, to design the most appropriate scenarios to model as part of the up-coming AQMP revision, and to assess the implications of these scenarios on control measures and recommended policies to be reflected in the upcoming 2007 AQMP revision.

The recommendation to award a sole source contract to Saint Malo Solutions, Environ-mental Consultants also falls under Procurement condition VIII.B.2.c.(1). Mr. Mark Carlock, the principal of Saint Malo Solutions, is a nationally recognized expert on emissions inventory development and validation. He was formerly the Branch Chief for CARB’s Mobile Source Analysis Branch, with direct responsibility for developing and updating the EMFAC emissions inventory used in the development of the 2003 AQMP. Mr. Carlock has participated in numerous technical studies on behalf of CARB, including those on On-Board Diagnostics II systems, fuel permeation effects, in-use emissions, Inspection and Maintenance program, off-road sources, and numerous other aspects of the mobile emissions inventory. He has detailed knowledge of all of the assumptions underlying CARB’s current EMFAC emissions inventory. He also has detailed knowledge of emissions test data from the Coordinating Research Council as well as proprietary auto manufacturer data sets. He has participated directly in CARB control measure assessment and development.

St. Malo Solutions can provide several important and unique qualities of importance to the District. Its principal, Mr. Mark Carlock, had lead authority in developing the inventories of mobile source emissions which are the foundation of the most current AQMP, he has detailed knowledge of the key areas which need refinement and updating, and he already has the technical background and data needed to recommend specific changes and the basis for those changes in a timely manner as part of the upcoming AQMP revision.

Benefits to AQMD

The development of the 2007 AQMP Revision must be technically sound and withstand public scrutiny. Retaining outside technical expertise to assist staff in the development of the 2007 AQMP Revision is critical to an informed process. The experience and knowledge of A 2^nd Opinion will provide significant benefits to the District in the form of state-of-the-art understanding of oxygenated fuel issues and options, inventory uncertainties, air quality modeling analysis of specific fuel scenarios, and AQMD control measure design and analysis. Similarly, the unique experience of Saint Malo Solutions will be very valuable in helping provide state-of-the-art input on the 2007 AQMP Revision’s emissions inventory, underlying modeling, scenario construction and control measure development.

Resource Impacts

Sufficient funding for the described consultant services is available in the Clean Fuels Fund. Section 40448.5(e) provides for the consideration of “cost-effectiveness of emission reductions associated with clean fuels compared with other pollution control alternatives” when considering which clean fuels projects to promote. As such, Clean Fuels funds may be used to assist in the technical development of the mobile source emissions inventory and mobile source control measures for the 2007 AQMP Revision to help staff develop and prioritize future clean fuels projects.

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