BOARD MEETING DATE: September 7, 2007
AGENDA NO. 32

REPORT:

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, July 27, 2007. Following is a summary of that meeting. The next meeting will be September 28, 2007 at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file.

Dennis Yates, Chair
Stationary Source Committee

Attendance

The meeting began at 10:30 a.m. Present were Committee Chair Dennis Yates, Committee Members Gary Ovitt, Joseph Lyou and Jane Carney (listened by phone but did not participate). Absent was Ron Loveridge.

INFORMATIONAL ITEMS

1. Approve Updates to the Advanced Air Pollution Research Plan

Philip Fine, Atmospheric Measurements Manager, Science & Technology Advancement, gave the presentation. The plan provides a framework for conducting and coordinating research to support the broad spectrum of activities conducted at AQMD. The presentation included updates from the previous Plan Update, examples of proposed projects in nine research areas and the projected costs.

Board Member Ovitt stressed the importance of making research results readily available to the public. Dr. Fine and Dr. Liu explained that many results are made public through community advisory and working groups specific to certain projects.

Board Member Yates inquired as to how collaborations with CARB affect rulemaking and compliance functions of the agencies. Dr. Fine explained this Plan only applies to research endeavors.

Board Member Lyou mentioned the importance of rapidly deployable monitoring platforms to address community concerns. He also suggested industry as a source of funding for this and other projects. Dr. Fine mentioned the pending air toxics proposal to U.S. EPA is intended to support the development of these platforms as well as monitoring near LAX and Long Beach Airports.

2. Gregg Industries Compliance Status Report

Carol Coy, DEO, Engineering & Compliance, presented an overview of the community compliant history and current compliance status at Gregg Industries, a sand mold and iron casting manufacturer in El Monte. The situation was referred to the Stationary Source Committee at the July Board meeting as a result of a complainant’s public comments regarding ongoing odors from the facility. Ms. Coy highlighted that the facility is currently operating under a Hearing Board issued Order for Abatement and overviewed the multiyear odor complaint history and compliance actions that resulted in AQMD partnering with CARB to find a technology development project to reduce VOC emissions, control odors, and increase system efficiency. The innovative Sonoperoxone System was fully operational by August 2004 yet odors continued. As a result of inspectors documenting public nuisance odors in October and November 2005, two notices of violation were issued, and the facility was placed under an Order for Abatement in February 2006. The Order has resulted in source testing and additional facility actions that further reduced odors in the community. Engineering staff is currently working to establish permit conditions to specify operational characteristics to limit odors. In addition, field enforcement staff continues to respond to odor complaints to try to identify remaining odor sources at Gregg Industries. The next hearing is scheduled for August 29, 2007 and the Order is schedule to expire September 15, 2007. This will be evaluated at the Hearing. Mr. Joe Blackburn, a community member, presented the Committee with letters from himself and two other residents regarding significant continuing odors in the area. He shared concerns about source testing at the facility and requested complaint findings on a specific incident. Ms. Coy committed to providing that information and stated the normal District practice is to contact the complainant with their findings. Dr. Lyou inquired about the possibility of community air monitoring and the use of grab samples in the area. Dr. Liu responded that monitoring is usually used when an odor source is unknown. Dr. Liu and Ms. Coy committed to evaluate further use of the canister samplers. Dr. Lyou inquired about detailed compliant statistics and expressed concern regarding community impacts, including further updates to the Committee. A further update will be agendized for the next Committee meeting.

3. NSR Equivalency

Mohsen Nazemi, Assistant DEO, Engineering & Compliance, presented this item. This item is a regular NSR status report, and presents final federal NSR determinations of equivalency for August 2004 through December 2005. The purpose of the report is to compare AQMD’s NSR program with federal NSR requirements by tracking debits from, and credits to, AQMD’s federal account balances for each subject pollutant. The report shows that while there were reductions in the account balances of VOC, NOx, and SOx, due substantially to the one-time removal of the remaining pre-1990 credits, AQMD’s federal NSR offset accounts remain, and are projected to remain positive thereby demonstrating equivalence with federal NSR requirements.

4. Status of Rule 1113 – Architectural Coatings – Flat Coating Technology Assessment

Lee Lockie, Director of Area Sources, summarized the findings of the technology assessments for flat coatings which she explained would be detailed in the seventh annual report on architectural coatings to the Board at its meeting in September 2007. The volatile organic compound (VOC) limit for flat coatings in Rule 1113 drops from 100 g/l to 50 g/l VOC on July 1, 2008. Ms. Lockie stated that extensive laboratory testing and field surveys have demonstrated that flat coatings are available on the market today that meet the future limit in the rule as well as the performance expectations of the industry. The laboratory testing was conducted under contract with the University of Missouri-Rolla Coatings Institute (UMR). The field surveys included meetings with manufacturers, on-shelf inspections, internet database searches, contractor interviews and in-situ coating performance evaluations.

There were no public comments received at the meeting.

5. Report on RECLAIM Compliance, Enforcement and Reporting of Credit Prices

Danny Luong, Engineering & Compliance Manager presented this item. RECLAIM’s backstop provisions require review of the program’s compliance and enforcement aspects if the average annual price of RTCs exceeds $15,000 per ton. Because the average price of compliance year 2010 RTCs traded in 2006 was $15,698 per ton, the Board directed staff to review compliance and enforcement of RECLAIM and the price reporting methodology used for infinite-year block (IYB) trades of RTCs (trades of RTCs from a specified start year and continuing into perpetuity). Therefore, staff has been carrying out such an evaluation with the help of a RECLAIM Working Group, which has held three meetings and has a fourth scheduled for early August.  This effort generated the following data and conclusions:

• There has been no increase in violations of facility allocations over the past three years;
• Five to six percent of all RECLAIM facilities exceed their allocations each year
• The total amount of allocation exceedances is less than one percent of overall allocations each year;
• There has been no increase in violations of monitoring, reporting, or recordkeeping requirements over the past three years; and
• Review of penalties actually collected indicates that the current statutory penalty structure is adequate to deter violations and the maximum available penalties have not limited penalty assessments sought by AQMD.

Four potential price reporting methodologies for IYB trades were evaluated and considered to determine which is the most representative of market behavior, has the least potential for price manipulation, is the most acceptable to market participants, and poses manageable administrative burden for AQMD. The reporting methodology recommended for implementation, which performs very well relative to these four evaluation criteria, calls for reporting and averaging prices for discrete-year and IYB trades separately. It also excludes the arbitrarily-reported prices of swap trades from the calculation of average annual RTC prices.

The program review also included an assessment of the impact of investors on the RTC market. Investors, which have no compliance obligations, provide needed capitol for control equipment. Most RTCs (e.g., 89 % of NOx IYB RTC sold during compliance years 2003 through 2005) sold by shut down facilities were purchased by investors. A significant share of IYB trades involve investors (e.g., 92% of IYB RTCs traded in 2006). Staff will continue to monitor investor participation in the RTC market.

There were no public comments regarding this item and there was no discussion by Committee members.

6. PAR 1112.1 – Emissions of particulate Matter and Carbon Monoxide from Cement Kilns

Larry Bowen, Planning and Rules Manager, presented this item. The amendments to Rule 1112.1 affect only one company. As a result of modifications made to their two cement kilns to comply with RECLAIM, NOx and CO mass emissions have been significantly reduced. However, this has resulted in occasional excursions of short duration above the CO concentration limit of Rule 407. The proposed amendment allows either the compliance with Rule 407 or the option of complying with the concentration limit of Rule 407 with an averaging time of three hours instead of 15 minutes. In addition, if the optional averaging time is selected, annual CO mass emissions must remain 50% below the 2003 baseline and a certified CEMS for CO must be installed and operated. The hearing will be September 7, 2007.

7. PAR 1175 – Control of Emissions from Manufacture of Polymeric Cellular (Foam) Products

Larry Bowen presented this item. Rule 1175 regulates emissions from polyurethane foam manufacturing. The proposal allows an alternative equivalent compliance option for foam block manufacturers. The hearing is set for September 7, 2007.

8. Report on Dry Cleaner Grant Program and CO₂ Machines

Dr. Pom Pom Ganguli, Assistant DEO/Public Advisor, gave a presentation on the Dry Cleaning Grant Program that clarified issues regarding greenhouse gas emissions from the non-perchloroethylene alternative dry cleaning technologies. CO2 machines utilize CO2 that is recycled from other industrial sources. Thus, CO2 emissions from such dry cleaning machines would have been emitted from the industrial source. There is also a greater electrical usage from the CO2 machine compared to the professional wet cleaning system. However, due to the significantly greater number of professional wet cleaning systems, the net effect is not significant.

Mr. Bill LaMarr expressed support for the grant program and added that there are many dry cleaners that still need to comply with Rule 1401 and 1402 requirements. He added that wet cleaning systems have performance issues which inhibit their acceptance by dry cleaning operators. Upon inquiry by Board Member Joe Lyou, he agreed that such drawbacks can be overcome with further research and developmental work. Staff further responded to an inquiry from Board Member Lyou that proposed funding for a future phase of the dry cleaner grant program for continued financial incentives may be from the Air Quality Assistance Fund, BP Settlement Funds or the General Fund, for the Board’s consideration.

WRITTEN REPORTS

All written reports were acknowledged by the Committee.

PUBLIC COMMENTS

There were no public comments.

The meeting was adjourned at 12:00 p.m.

Attachments (doc 66kb)
July 27, 2007 Committee Agenda (without its attachments)