BOARD MEETING DATE: March 3, 2006
AGENDA NO. 25

Stationary Source Committee

SYNPOSIS:

The Stationary Source Committee met Friday, February 24, 2006. Following is a summary of that meeting. The next meeting will be March 24, at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTIONS:

Receive and file.

Ronald O. Loveridge, Chair
Stationary Source Committee

Attendance

The meeting began at 10:35 a.m.  Present were Ronald Loveridge, Jane Carney, Gary Ovitt and Dennis Yates. 

INFORMATIONAL ITEMS

1.      Annual RECLAIM Audit Report for 2004 Compliance Year

Pang Mueller, Engineering and Compliance Manager, presented this item.  For compliance year 2004, aggregate NOx and SOx emissions from RECLAIM facilities continue to be below allocations.  NOx emissions were below allocations by 2,524 tons (20%) and SOx emissions were below allocations by 712 tons (17%).  However, the Governing Board amended RECLAIM rules in January 2005 to reduce the RTCs supply for Compliance Year 2007 and all years after.  The amendment will achieve a total of 7.7 tons per day reduction in NOx emissions within the RECLAIM program when fully implemented in 2011.  NOx allocations at that time will be below the current NOx emission levels.  With anticipated NOx emissions from new and expanded facilities operating between now and 2011, staff anticipates a corresponding reduction of NOx emissions through installation of control equipment at existing RECLAIM facilities.

Annual average NOx and SOx RTCs prices for all compliance years were below $15,000 per ton.  Prices for future year NOx RTCs, especially those traded in multi-year streams, increased during Calendar Year 2005.  Annual average prices for RTCs valid for Compliance Year 2008 and after were at the highest level since the start of the program.  Compliance Year 2008 NOx RTCs were traded at an annual average price of $9,730 per ton and NOx RTCs for Compliance Year 2010 were traded at an average price of $10,193 per ton.  RTCs were also traded as a block of RTCs valid for all years after a start year at a single price per pound for the whole block.  Average prices for these Infinite-year RTCs blocks were $10,678 and $6,084 per ton of NOx and SOx infinite-year RTCs, respectively.  In Calendar year 2005, mutual funds started to participate in the market and option to sell RTCs appeared for the first time. 

Compliance year 2004 concluded with high compliance with allocation limits.  Ninety-six percent of the NOx RECLAIM facilities complied with their Allocations during Compliance Year 2004.  Failure to obtain sufficient RTCs to reconcile with emissions was the leading cause of exceedance.  A list of facilities that exceeded allocations is maintained and updated by staff, and is available to the public.  All SOx RECLAIM facilities complied with allocation limits.  Board Member Dennis Yates indicated that some of the smaller size RECLAIM facilities that are structural buyers are not able to afford to purchase RTCs if the cost keeps approaching $15,000/ton.

2.      Proposed Amended Rule 1178 – Further Reductions of VOC Emissions from Storage Tanks at Refineries

Larry Bowen, Planning and Rules Manager, presented this item.  Rule 1178 is the rule that requires the doming of petroleum storage tanks at large petroleum facilities.  AQMD is in the process of implementing the rule and some clarification in the rule is necessary.  The proposal makes clear that equivalent control technologies can be used for floating roof drain covers and that mechanical shoe seals in internal floating roof tanks need to extend a minimum of 12 inches above the tank instead of the 24 required of external floaters.  Mandating the larger shoes for the internal floaters may affect the structural integrity of some internal floating roofs.  These amendments do not affect air quality or emission limitations.  Board Member Jane Carney wanted to make sure that this proposal is shared with the industry early enough to allow industry to provide any comments they may have.

 WRITTEN REPORTS (This item was taken out of order while Board Member Jane Carney was still present)

Jane Carney had a question regarding the Penalty Report in relation to penalties assessed to TWA.  Peter Mieras was not present at the meeting, but will be contacting her in the near future regarding her concerns. 

All written reports were acknowledged by the Committee.

 PUBLIC COMMENTS (This item was taken out of order while Board Member Jane Carney was still present)

 There were no public comments at this meeting.

 “Committee Member Jane Carney left the meeting for agenda #3 due to a possible conflict of interest.  Ms. Carney announced that Inland Concrete Enterprises, Inc., Delilah Properties and Maruhachi Ceramics of American, Inc. are sources of income for her.”

3.      Update of Rule 1157 – PM10 Emission Reductions from Aggregate and Related Operations

Lee Lockie, Director of Area Sources, presented this update.  A Settlement Agreement in the Rule 1157 litigation was reached in early September 2005.  In that agreement, staff committed to meet with industry representatives on a number of issues, including the emissions inventory, high wind exemption, opacity measurement, use of chemical dust suppressants, and 100 foot plume restriction.  Efforts thus far have been focused on the emissions inventory, opacity monitoring, and high wind exemption.

Staff has met with industry representatives on a number of occasions (~10) thus far regarding the emissions inventory.  These meetings have been very productive and valuable information was exchanged between the parties.  However, staff and industry are still not in agreement on several key issues, those being throughput, hours of operation, and control efficiencies; however, discussions are continuing.  Staff has been working to refine the emissions inventory.  Additional data recently submitted by industry may be very helpful in defining the material throughput. 

Staff has conducted several meetings regarding opacity monitoring and the validity of making observations, including the use of the new, EPA approved, AQMD Method 9B in determining plume opacities.  These meetings have been beneficial relative to understanding how the method is employed for compliance purposes.  Field visits to evaluate the effectiveness of the method, and its application to aggregate and mining processes are being planned for next month.

The proposed rule amendments regarding the high wind exemption provisions of the rule are on track for a June 2006 public hearing. 

Mr. Malcom Weiss, representing the industry, expressed agreement with Ms. Lockie’s statement, but did express concern over the amount of time that has been necessary to attempt to resolve the technical issues related to the emissions inventory and the use of exemption provided in the rule.  He presented a handout with a chronology of events and emissions inventory data.

 The meeting was adjourned at 11:00 a.m.

Attachment(s) (DOC 51 KB)
February 24, 2006 Committee Agenda (without its attachments)

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