BOARD MEETING DATE: November 7, 2008
AGENDA NO. 30

REPORT:

Stationary Source Committee

SYNOPSIS:

The Stationary Source Committee met Friday, October 17, 2008. Following is a summary of that meeting. The next meeting will be November 21, at 10:30 a.m., in Conference Room CC8.

RECOMMENDED ACTIONS:

Receive and file.
 

Dennis Yates, Chair
Stationary Source Committee

Attendance

The meeting began at 10:30 a.m. Present were Dennis Yates, Joseph Lyou and Jane Carney (arrived at 10:35 a.m.). Absent were Ronald Loveridge, Gary Ovitt and Michael Cacciotti. Also, Ms. Carney left the meeting before item No. 2 and did not return for the remainder of the meeting.
 

INFORMATIONAL ITEMS

1. Rule 222 – Filing Requirements for Specific Emission Sources Not Requiring a Written Permit Pursuant to Regulation II

Laki Tisopulos, Assistant Deputy Executive Officer, Planning & Rules, gave a brief overview of the proposed amendments, explaining the goals and requirements. There were no major issues presented and no public testimony on this item.
 

2. Rule 1144 – VOC Emission Reductions for Lubricants

Committee Member Jane Carney left the meeting for agenda item 2 citing possible conflict of interest, as Fleetwood Aluminum Products and Modular Metal Fabricators are sources of income for her.

Naveen Berry, Planning & Rules Manager, gave the presentation explaining the proposed rule’s goals, requirements, and major issues. In response to the issues raised, staff has revised the initial proposal and plans to continue efforts with industry in analyzing the need and feasibility of additional exemptions and time for implementation. Several members from the audience commented on the fast pace of the rule development process, the need for additional extension to the implementation dates, need to address recycling, other specialty applications, and the need to finalize the test method. Based on recommendations from the Committee, staff plans to include a resolution to continue to work with industry on finalizing the test method, as well as continue the dialogue with respect to implementation dates and further analysis of exemptions for specialty uses, including additives currently used for recycling and those that fall under Military Specification.
 

3. Rule 317 – Clean Air Act Emissions Fees for Major Stationary Sources of VOC and NOx

Kurt Wiese announced that Committee Member Jane Carney has excused herself from agenda item 3 citing possible conflict of interest, as Loma Linda University is a source of income for her.

Larry Bowen, Planning & Rules Manager, presented this item. This proposed rule implements a federal Clean Air Act (CAA) requirement for air basins designated severe or extreme that do not attain the federal 1-hour ozone standard by the statutory deadline. This will apply to the portions of the South Coast Air Basin (SOCAB) and the Salton Sea Air Basin (SSAB) within the jurisdiction of the AQMD. Major stationary sources in air basins that do not achieve the standard by the deadline are required to reduce their actual emissions of VOC and NOx to a level of at least 80% of their actual emissions in the attainment year, each year after the attainment year until the standard has been determined to have been achieved or pay annual fees for that portion of their VOC and NOx emissions that exceed the 80% baseline.

The emission fee rate is designated in the CAA and is $5000 per ton in 1990 dollars adjusted by CPI each year. The attainment year is based on the air basin designation and is 2007 for the SSAB and 2010 for the SOCAB. The size of a major source is also based on air basin designation and potential to emit of the source. For sources in the SSAB it is 25 tons per year of VOC or NOx and for sources in the SOCAB it is 10 tons per year for VOC or NOx. It is estimated the rule would apply to one source in the SSAB and 584 sources in the SOCAB based on the current emission inventory and revenues, depending on the future inventory, are expected to be $24,000,000 to $36,000,000 in 2012, the first year fees would be due for the SOCAB.

There have been a number of comments received including to delay adoption until further pending guidance from U.S. EPA is released and to allow industry some flexibility in the proposal. Staff is continuing to work with stakeholders but believes we must meet our mandate to adopt a rule in 2008. Staff is recommending adoption at the December 4 Board Meeting.

Greg Adams, L.A. County Sanitation District, commented that this rule is punitive for stationary sources even though stationary sources in the AQMD have installed the Best Available Control Technology (BACT) to allow this region to move toward attainment. Mobile and other source controls that have not been adequately implemented, are the main cause for the difficulty in attaining the standards in this region, and are not affected by this proposal. Although it may have been thought by Congress in 1990 when the Clean Air Act was amended that stationary sources would be the major contributor to non-attainment, circumstances have changed and this is simply not the case today. The AQMD should hold off on adopting this proposal and join with other stakeholders to convince U.S. EPA to take action to correct this inequity. Notwithstanding that situation, including an option in this proposal for a source to direct its fees to air quality improvement projects within its own facility would make a completely objectionable proposal a little more palatable.

Curtis Coleman, representing California Manufacturer’s Association, commented that on behalf of his clients, he agrees with Mr. Adams’ comments. However, the point he would like to make is on a more global perspective. It may be that Congress in the near future will need to reopen the Clean Air Act to address global warming and other issues. If so, the AQMD should be ready and prepared to join together with industry to jointly approach Congress to change this Clean Air Act provision and persuade them to direct the focus on the mobile and other sources that are currently the major cause of non-attainment in this region.
 

4. Rule 1147 – NOx Reductions from Miscellaneous Sources

Kurt Wiese announced that Committee Member Jane Carney excused herself from agenda item 4 due to possible conflict of interest, as Maruhachi Ceramics of America, Inc. and Creel Printing are sources of income for her.

Joe Cassmassi, Planning & Rules Manager, presented this item.  Proposed Rule 1147 will reduce nitrogen oxide emissions from a variety of industrial combustion sources including ovens, dryers, furnaces and kilns.  Affecting about 3,700 process equipment and as many as 1,300 afterburners, vapor incinerators and remediation units, the proposed emission limits range from 20 ppm to 60 ppm and will be achieved though replacement with low NOx burners.  Compliance with the proposed emission limits will be phased in based on equipment age and emissions starting in 2010.  The proposed rule will also require equipment to be source tested or certified to meet limit.  Facilities will also be required to install fuel/time meters and maintain records.  The cost effectiveness for the proposed rule is in the range of $5,000 to $8,000 per ton of NOx reduced.
 

5. Rule 314 – Fees for Architectural Coatings

This item was not discussed.
 

6. Offsets Availability and Potential for Generation of Emission Reduction Credits Through the Application of BACT

This item was not discussed.
 

7. Rule 1469 – Hexavalent Chromium Emissions from Chrome Plating and Chromic Acid Anodizing Operations

This item was under “Written Reports” and staff did not provide any presentation. However, there was a public comment which was provided on this agenda item. Ms. Rita Loof commented that she was surprised that staff had characterized PAR 1469 as having no key issues.  Ms. Loof commented that at the Public Workshop for PAR 1469 she recalled a facility operator stating that implementation costs associated with implementing PAR 1469 were too high and would require that facility to shut down.  Ms. Nakamura, Planning and Rules Manager, commented that the Metal Finishing Association met with this facility operator and told the AQMD staff that they believed that this facility could possibly use trivalent chromium instead of hexavalent chromium which would significantly reduce their compliance costs.  In addition, staff commented that the requirements to install HEPA are an effect of the state ATCM and that Rule 1469 incorporates the ATCM requirements to ensure equivalency. This requirement applies in any case with or without amending Rule 1469. However, AQMD would like Rule 1469 to be equivalent to the ATCM so that industry needs to comply with only one rule, instead of two.
 

PUBLIC COMMENTS

During the public comment period, Joe Blackburn, Francisco Magdalena, Bob Welemin, John Nguyen, Kelly Andrews, and Ruben Castellanos expressed concerns about the limited downwind community involvement in the pending settlement negotiations between AQMD and Gregg Industries.   Chairman Yates acknowledged their concern and reiterated AQMD’s commitment to work together to help resolve the long-standing foundry odor problems affecting the El Monte neighborhood.  Dr. Lyou asked staff if AQMD could meet with the public members who provided comments at this meeting to discuss their concerns. Dr. Wallerstein agreed to meet with the public members who were present at this meeting immediately after the Stationary Source Committee meeting.
 

WRITTEN REPORTS

All written reports were acknowledged by the Committee.
 

The meeting was adjourned at 12:05 p.m.
 

Attachments (DOC, 72k)

October 17, 2008 Committee Agenda (without its attachments)