1 CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY 2 AIR RESOURCES BOARD 3 4 5 6 7 PUBLIC MEETING 8 9 10 11 12 13 TRANSCRIPT OF PROCEEDINGS 14 May 17, 2001 15 5:25 P.M. 16 The Oldtimers Family Center 3355 East Gage 17 Huntington Park, California 18 19 20 21 REPORTED BY: Jennifer S. Barron 22 CSR No. 10992 Our File No. 1-68860 23 24 25 1 APPEARANCES: 2 CALIFORNIA AIR RESOURCES BOARD: 3 Alan C. Lloyd, Ph.D., Chairman 4 William A. Burke, Ph.D. 5 Joseph C. Calhoun, P.E. 6 Dorene D'Adamo, Not present 7 Mark J. DeSaulnier, Supervisor 8 C. Hugh Friedman, J.D. 9 William F. Friedman, M.D. 10 Matthew R. McKinnon 11 Barbara Patrick, Supervisor 12 Barbara Riordan 13 Ron Roberts, Not present 14 AIR BOARD STAFF: 15 Michael P. Kenny, Executive Officer 16 Kathleen Walsh, General Counsel 17 Mike Scheible, Deputy Executive Officer 18 Lynn Terry, Deputy Executive Officer 19 Tom Cackette 20 Kathleen Tschogl, Ombudsman 21 22 23 24 25 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 I N D E X 2 PUBLIC HEARING: PAGE 3 01-4-1 Public Meeting to Consider an 7 Informational Update on Children's 4 Health and Exposure Research 5 01-4-2 Public Meeting to Consider an Continued Update on Enforcement Activities 6 01-4-3 Public Meeting on Community Health 26 7 and the Impacts of Phase 3 Reformulated 72 Gasoline 8 Open Session to Provide an Opportunity 70 9 for Members of the Public to Address the 88 Board on Subject Matters within the 10 Jurisdiction of the Board 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 CHAIRMAN LLOYD: Good evening. Is that 2 working? Yes. Good evening. The May 17th, 2001 public 3 meeting of the Air Resources Board may now come to 4 order. 5 Supervisor Patrick, will you please lead the 6 Board in pledge allegiance. 7 (Pause for pledge of allegiance.) 8 CHAIRMAN LLOYD: Thank you very much. 9 Will the Clerk of the Board please call the 10 roll? 11 CLERK OF THE BOARD: Dr. Burke? 12 DR. BURKE: Here. 13 CLERK OF THE BOARD: Mr. Calhoun? 14 Supervisor -- Miss D'Adamo? 15 Supervisor DeSaulnier? 16 SUPERVISOR DESAULNIER: Here. 17 CLERK OF THE BOARD: Professor Friedman? 18 PROFESSOR FRIEDMAN: Here. 19 CLERK OF THE BOARD: Dr. Friedman? 20 DR. FRIEDMAN: Here. 21 CLERK OF THE BOARD: Mr. McKinnon? 22 MR. MCKINNON: Here. 23 CLERK OF THE BOARD: Supervisor Patrick? 24 SUPERVISOR PATRICK: Here. 25 CLERK OF THE BOARD: Mrs. Riordan? 4 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Supervisor Roberts? 2 Chairman Lloyd? 3 CHAIRMAN LLOYD: Here. 4 Before we start this evening, I would like to 5 ask all of you, and I know that all my colleagues on the 6 Board and staff recognize that we lost one of our valued 7 employees this last weekend, Joyce Wesley who was the 8 secretary in the chairman's office for a number of 9 years. She passed away relatively suddenly after a 10 short illness and just before she was able to enjoy the 11 fruits of all her labor through retirement. So please 12 join me in a moment of silence for Joyce. 13 (Pause.) 14 CHAIRMAN LLOYD: Thank you very much indeed. 15 Good evening. My name is Alan Lloyd, and I'm 16 chairman of the State Air Resources Board. On behalf of 17 my fellow members, I would like to welcome everyone in 18 the audience tonight to this public meeting. We're 19 delighted to be in Huntington Park. Thank you for your 20 kind hospitality. 21 I remember very fondly being here probably over 22 a year ago at the invitation of Mayor Rosario. Marin at 23 that time. I enjoyed great hospitality and learned a 24 lot from the discussions we had that evening. So it is 25 indeed a pleasure to be back. 5 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 For those in the audience who would prefer to 2 listen to the meeting in Spanish, we have headsets at 3 the rear of the room. If you saw the notice for 4 tonight's meeting, you know that we're going to start 5 our special community hearing at 6:00 o'clock, so 6 although we're late starting this special session, we 7 will hopefully make up that time and get going. 8 Before that, we're going to have a short 9 meeting to hear one item on the Board's regular agenda, 10 and that's an update on the children's health research, 11 and then after the 6:00 o'clock meeting, we will have an 12 update on ARB's enforcement activities. 13 Even if you didn't come specifically to hear 14 certainly the item on health effects, you may find this 15 one of particular interest. So we wanted to give people 16 some extra time to get here after work and having just 17 again been reminded of the traffic congestion in L.A. 18 just from the freeways and I recognize time will be 19 necessary. 20 On that point, I intend to call upon my 21 colleague Dr. Bill Burke, Chairman of the South Coast 22 AQMD and whose area we're privileged to be and to make 23 some opening comments. 24 I will also introduce our special guest from 25 Assemblyman Marco Firebaugh's office, Juan Torrez who 6 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 will also have some remarks to share with us on behalf 2 of the assemblyman. 3 So with those opening remarks, let's turn it 4 over to the Executive Officer Mike Kenny to start the 5 item on health effects. 6 MR. KENNY: Thank you, Mr. Chairman and members 7 of the Board. As you know, ARB has a longstanding 8 commitment to investigate children's health issues. 9 There's compelling reason for that. Children are at the 10 center of our research projects because their bodies are 11 growing and developing which makes them much more 12 susceptible to air pollution. Children are also active, 13 spend more time outdoors and breathe faster than adults, 14 which means they tend to have higher exposures. 15 ARB started doing research on long-term 16 exposures more than ten years ago. We did that to see 17 if we could determine how air pollution affected people 18 over time. The flagship study of this research program 19 is the Southern California Children's Health Study. ARB 20 recently started a new research project in Fresno 21 focused on asthmatic children, a particularly vulnerable 22 population. 23 Staff is also investigating children's exposure 24 to air contaminants in their classrooms and school bus 25 commutes. This will yield invaluable information 7 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 regarding the impact of air pollutants on children's 2 health. 3 And with that, I'd like to introduce Dr. Diane 4 Mitchell who will make the staff presentation. 5 DR. MITCHELL: Good evening. Can everybody 6 hear me? 7 In this evening's presentation, I will 8 summarize what we know about the effects of air 9 pollution on children's health and describe the research 10 activities underway to learn more about these effects. 11 The Board has a long-term interest in this issue and has 12 placed high priority on protecting children and others 13 who are at special risk of illness from air pollution in 14 our communities. 15 I will be talking about the following topics: 16 Why we are concerned especially about children, what we 17 already know, what we are doing, and what we will try to 18 do next. 19 Our focus is on children. Air pollution is 20 known to have effects on developing children that may 21 make them more susceptible to disease, not just at the 22 time they're exposed to the pollution, but also much 23 later in life. If their lungs do not grow to their full 24 potential, they may well be susceptible to breathing 25 difficulties in old age. 8 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 An important difference between children and 2 adults is that children are growing and may absorb more 3 toxic material for their size. Children's behavior may 4 expose them to high levels of toxic material as they 5 have more contact with the ground and frequently put 6 materials in their mouths. 7 Also children are more active, breathe at a 8 faster rate and take in more air per body weight than 9 adults. A child at play can breathe over four times the 10 volume per body weight than an adult seated at a desk. 11 Children also spend over two hours a day on average 12 outside, and that's compared to less than 15 minutes per 13 adult. This all adds up to greater exposure to 14 potential harmful substances. 15 Children are growing and developing. There are 16 sensitive time periods around the birth of a child and 17 during childhood when different parts of the body 18 develop and can more easily be damaged by toxic 19 chemicals. For example, after a child is born, 20 85 percent of their lungs are yet to form, and the 21 volume they can breathe increases through adolescence. 22 The lungs are a complex structure of many cell 23 types with different functions. And air pollutants can 24 both damage cells and permanently alter the structure of 25 the lung. 9 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 The immune system by which our bodies fight off 2 disease develops in a complex series of carefully 3 coordinated events, which can also be disrupted by air 4 contaminants at many stages with permanent results. 5 Here is a list of common air pollutants that 6 affect children. I will highlight what is known about 7 several of the more important of these. Historically in 8 children, lead is a major cause of lowered intelligence 9 and related neurological defects that are listed here. 10 Children absorb lead from soil, dust and water and 11 breathe some small particles from leaded gasoline 12 exhaust. 13 Since regulations were implemented to remove 14 lead from gasoline and paint -- leaded gas was last sold 15 in 1994 -- the number of children with high blood lead 16 levels has decreased. Control programs have been 17 successful in reducing the number of children with very 18 high lead levels. However, we need to remain vigilant 19 as there are still occasions when children can be 20 exposed to lead, such as from deteriorating lead paint 21 in old houses and from lead recycling plants. 22 This graph demonstrates that blood levels of 23 lead dropped drastically in the United States after lead 24 was removed from gasoline and other substances, such as 25 paint. The red line indicates the drop in emissions of 10 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 lead from gasoline, and the yellow line is the 2 corresponding drop in the lead content of blood of 3 people of all ages throughout the United States. 4 Other pollutants have been proven more 5 difficult to remove and still pose health problems on 6 which we're working; for example, the health effects of 7 ozone and nitrogen dioxide. Nitrogen oxides are 8 produced when fuels are burned and gasoline or diesel 9 engines are run. When these gases mix with other 10 reactive organic gases from traffic and sunlight, ozone 11 is formed. 12 Both nitrogen dioxide and ozone are called 13 oxidants which burn lung tissue causing inflammation and 14 even slower lung growth in children. These gases also 15 make children more susceptible to illnesses. And, if 16 they're asthmatic, to more asthma attacks and 17 consequently more days missed out of school. 18 The health effects of particulate matter: 19 there is a complex mixture of particles in the air we 20 breathe, and particles smaller than about a seventh of 21 the diameter of a human hair can enter the lungs causing 22 irritation and inflammation. Particles may also carry 23 toxic materials with them. 24 High concentrations of small, breathable 25 particles have the ability to increase asthma attacks, 11 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 aggravate bronchitis and reduce lung growth in children. 2 And recent evidence suggests particles may also affect 3 the fetus through its mother resulting in decreased 4 birth weight and increased numbers of premature infants. 5 The child in the photograph is using an inhaler 6 to take her asthma medicine. 7 Childhood asthma: One reason we're really 8 concerned about children's health is a recent rise in 9 asthma in children. Asthma is a chronic lung disease. 10 The symptoms can come and go. The airways of asthmatics 11 are extra sensitive and narrow when irritated. 12 Difficulty in breathing can cause one or a combination 13 of symptoms such as shortness of breath, wheezing, 14 coughing or chest tightness. Asthma is a complex 15 disease, and many factors may influence whether a child 16 develops asthma from genetics to the environment and 17 social conditions. 18 The occurrence of new asthma cases is 19 increasing worldwide and especially so in children. In 20 California, about half a million children have asthma, 21 affecting up to 10 percent of the children in the state. 22 The graph on the slide shows that in Los Angeles County, 23 hospitalizations for asthma of children up to 14 years 24 old during a period between 1995 and 1997 were the 25 highest for African-Americans at the left. Caucasian 12 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 and Hispanic asthma hospitalizations were lower, closer 2 to the statewide average. 3 There is increasing concern that air pollution 4 may play a role in the development of asthma, and it is 5 well known that air pollution actually worsens existing 6 asthma. 7 The Air Resources Board has taken this 8 information seriously, and the role of air pollution and 9 asthma has been a focus of our research. Our research 10 program includes investigations of the levels of 11 pollutants that children are exposed to and studies to 12 determine the role air pollution plays in childhood 13 asthma, growth and development. 14 The Air Resources Board is sponsoring the 15 following studies to look at the environmental health of 16 children in relation to air pollution. These are all 17 studies including asthmatic children: The Southern 18 California Children's Health Study, the Fresno Asthmatic 19 Children's Environmental Study and a study of Childhood 20 Asthma in Huntington Park. 21 First, the Southern California Children's 22 Health Study: The Children's Health Study in 12 23 Southern Californian communities is a long-term project 24 which has studied over 5,000 children from the fourth 25 grade up. It will continue through 2003. 13 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Some of the findings of this study are 2 communities with high levels of particles, nitrogen 3 dioxide and acid vapors of children whose lungs grow 4 more slowly. Where ozone levels are higher, more 5 children are absent from school. Recent analyses 6 indicate that ozone makes asthma worse, and the 7 investigators are studying whether ozone may also be a 8 cause of new asthma in children. 9 The Fresno Asthmatic Children's Environment 10 Study has just begun in Fresno. About 400 -- around 450 11 children age between five and ten who already have 12 asthma will take part in this study, and they'll be 13 followed over five or more years. The researchers hope 14 to find out which air pollutants are the most important 15 in causing asthma to us; that is, more frequent attacks, 16 more severe asthma attacks or worse lung functioning 17 over the long term. 18 The girl in this photograph is blowing into an 19 instrument that measures how well her lungs are working. 20 Childhood Asthma and Air Pollution in 21 Huntington Park: Firstly, I wish to thank the South 22 Coast Air Quality Management District for contributing 23 funding and support to this study along with the State 24 Air Resources Board. The short-term study has already 25 taken place here in Huntington Park; although, the 14 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 results will not be available until the end of this 2 year. 3 Twenty-four asthmatic students aged between 10, 4 16 took part to see if their asthma attacks were related 5 to high community levels of air pollutants emitted by 6 nearby industries, such as paint shops, dry cleaners, 7 solvent users and also gasoline and diesel exhaust from 8 heavy traffic. 9 The children kept a diary of their asthma 10 symptoms over a period of about three months. They also 11 breathed into special canisters when they had an asthma 12 attack. These breath samples were analyzed to see what 13 contaminants they were breathing. From this 14 information, scientists hoped to be able to see if there 15 is a connection between any of the air pollutants and 16 asthma attacks in the children. 17 Children's exposure in schools: School 18 children -- schoolage children spend about a quarter of 19 their weekday time in schools, so schools are obviously 20 an important location to monitor for air pollution. The 21 following studies are being sponsored by the Air 22 Resources Board: Indoor Air Quality in Schools that are 23 part of the neighborhood assessment program, Portable 24 Classrooms Study and the School Bus Study. 25 The Indoor Air Quality in Schools: This is a 15 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 part of the Children's Environmental Health Program. 2 Indoor air pollution can come from outside the building, 3 for example, from nearby roadways, but also from indoor 4 sources, as the building materials, the construction, 5 heating and other appliances, cleaning and maintenance 6 and actual classroom activities. 7 Three schools will be studied extensively: 8 Hollenbeck Middle School in Boyle Heights, Wilmington 9 Park Elementary School in Wilmington and a third school 10 in Northern California. The study will monitor air 11 pollution in the schools from fall of 2001 through the 12 spring of 2002 13 In addition, health problems of the children 14 will be recorded to assess whether the air they are 15 breathing in the school is contributing to any 16 illnesses. This information will be discussed at public 17 meetings at a later date. 18 The Portable Classroom Study is a statewide 19 study of environmental health conditions in portable 20 classrooms, such as this one. It is being conducted in 21 conjunction with Department of Health Services. The 22 objectives of the study are to examine environmental 23 conditions in portables and identify any potential 24 threats to children's health. With community input, the 25 Air Resources Board will develop recommendations to 16 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 resolve any problems found. 2 The study has already mailed surveys to a 3 thousand schools, and about 800 of these will also be 4 monitored for formaldehyde. It is a compound found in 5 wood products and furnishings that go to make temporary 6 buildings. 7 Next, 240 classrooms in 60 schools will be 8 monitored more thoroughly for indoor pollutants of many 9 kinds. The information will be brought back to the 10 community for discussion for a completion study in 2002. 11 The children's school bus exposure study will 12 investigate levels of air pollutants inside buses, 13 outside buses at bus stops and compare levels with the 14 main community monitors that may be farther away. 15 Buses running on all types of fuel will be 16 monitored and the study will allow investigators to 17 determine what happens to the air in a bus over the 18 course of a journey. This will allow us to estimate 19 which and how much of different air pollutants the 20 children are exposed to. The main study will be complete 21 by the summer of 2003. This study is being cofounded by 22 the Board and the South Coast Air Quality Management 23 District. 24 The Children's Health Protection Act: The Act 25 recognizes that children are likely to be more 17 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 susceptible than adults to air pollution for many 2 reasons we've already discussed. It requires that the 3 current air quality standards are reviewed to make sure 4 that children are adequately protected and, if not, that 5 recommendations are made to make the standards more 6 strict. 7 Also, the Air Resources Board will be checking 8 that the current network for monitoring air pollution is 9 adequate. To do this, the Board has identified six 10 areas in the state where additional monitors will be set 11 up near schools, day care centers and outdoor 12 recreational facilities that are close to areas where 13 pollutants are emitted. Two of those sites are near 14 here: Boyle Heights and Wilmington. 15 If the current network is not performing 16 adequately, the Board will recommend changes to improve 17 the network. Similarly, regulations governing toxic air 18 contaminants, that is, substances such as solvents used 19 in many industries, and chemicals emitted from petroleum 20 refineries. These regulations will be reviewed and 21 chemicals added to the list or changes made to make 22 current standards more strict in order to protect 23 children's health. 24 What is next? The information gathered from 25 these studies on children will allow the Air Resources 18 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Board to have a clearer idea as to which chemicals and 2 how much of them children are exposed to as they move 3 from activity to activity during the day. In addition, 4 the Board will have a more complete account of the 5 effects of the chemicals on children's health. 6 With this information, the Air Resources Board 7 will be able to review air pollution standards, devise 8 strategies to reduce emissions in air pollutants and 9 better protect children and the effects of air 10 pollution. 11 As tonight, community meetings remain important 12 so that the Board can provide you with information and 13 so you are able to express your opinions and 14 suggestions. 15 Thank you. We encourage you for your 16 participation in this process, and again thank you all 17 for coming tonight. 18 CHAIRMAN LLOYD: Thank you very much. Thank 19 you for your presentation. I think you can see that the 20 Air Resources Board is deeply concerned about the health 21 effects of air pollution. And, in fact, Governor Davis 22 obviously agrees with this and has made the protection 23 for children from adverse environmental impacts a top 24 priority of his administration. 25 You can see the linkage here with learning 19 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 abilities. Education is obviously a direct tie. 2 Clearly all of us here have known about the health 3 effects for many years. The issue I think we want to 4 bring to attention here is that we're beginning to learn 5 some -- shed some light on some of the real causes here 6 which will help us to actually solve, identify some of 7 the causes and to move ahead as depicted in the last 8 slide. 9 So I'm optimistic -- while this is a fairly 10 critical subject, I'm optimistic that the research that 11 we're funding is actually going to pay off to some real 12 dividends. And the control measures that we're 13 implementing, both on some of the issues that we talked 14 about there on the diesel side and the gasoline, is 15 going to be really paying off. So I'm optimistic there. 16 I'm sure some of my colleagues have some 17 comments to make. Let's go to Dr. Friedman. 18 DR. FRIEDMAN: Can you hear me? 19 I mean, you know, intuitively, anyone would 20 reason that bad air is bad for children. The issue, 21 though, is not that simple. If we're going to really 22 make determinations that result in authentic progress, 23 regulations, policy changes, they must be data driven 24 because there are a number of constituencies that would 25 not want to buy in unless the conclusions are data 20 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 driven. 2 So I view the investment that the ARB is making 3 in these research projects as one of the best 4 investments that we make. These studies are actually 5 relatively unique to overuse the word, but they are 6 fashioned in a way that will provide information about 7 which very few arguments can be derived. 8 And when these studies are completed, they will 9 not only be useful to set regulation but also to point 10 to really a host of additional areas that deserve 11 studies so we can actually understand the precise 12 mechanisms, and you can't make progress in the absence 13 of this kind of research. So I think it's a really 14 wonderful investment, these studies which are the focus 15 on children. 16 CHAIRMAN LLOYD: Also, Dr. Burke, I was 17 delighted to see that we're actually working in 18 partnership on several of these studies. So that's -- I 19 think that's only going to help with that. 20 DR. BURKE: I was sensitive to that after the 21 criticism that the South Coast Air District received for 22 that. But it's okay that you think it's nice now. 23 CHAIRMAN LLOYD: It was on one item that I was 24 saying I was delighted. It didn't escape my notice. I 25 was informed by staff on this. But I think actually we 21 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 have a lot to gain by sharing resource on this issue. 2 DR. BURKE: If I may ask a question -- this 3 doesn't stop me from mumbling. If I could ask one 4 question, I noticed with some interest that in your 5 slide on effects in Los Angeles County that Hispanics 6 were affected to a diminished degree than some other 7 ethnic groups. Could that possibly be your study would 8 be skewed by the fact that Hispanics have less access on 9 a whole to adequate health care than the other groups 10 that you were measuring? 11 DR. MITCHELL: These were actually 12 hospitalizations. 13 DR. BURKE: Right. 14 DR. MITCHELL: So -- 15 DR. BURKE: So you see that -- I didn't mean to 16 interrupt you. 17 DR. MITCHELL: That's all right. 18 DR. BURKE: But let me explain to you what I 19 feel. 20 DR. MITCHELL: Um-hmm. 21 DR. BURKE: If you're going to do a real 22 effective study for us, you've got to find some system 23 by which you really measure what's going on in the 24 communities. And in various ethnic communities in this 25 city, hospitalization, health care treatment, is not 22 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 equitably distributed. And if you only measure by those 2 who have the quality of being able to get to the 3 emergency room, even at the county hospital, then you're 4 not really giving us the true picture of what's 5 happening to these communities. 6 DR. MITCHELL: I understand what you're saying. 7 This was part of a nationwide study, and this trend that 8 Hispanic people suffer asthma around about the same rate 9 or even less than white people could, as you said, be 10 attributed in some fashion to their access to health 11 care. But I do know that they have -- 12 DR. BURKE: But it's not only Hispanic. It's 13 Korean -- 14 DR. MITCHELL: Not just -- 15 DR. BURKE: Chinese. You know -- 16 DR. MITCHELL: Yes. 17 DR. BURKE: -- this city is a true melting pot. 18 I use Hispanics because that was what was on the slide. 19 DR. MITCHELL: Okay. I think the consensus 20 is -- the weight of evidence is that in general the 21 Hispanic communities around the country did not suffer 22 asthma in as high amount as the African-American 23 population and relatively similar rates to Caucasian 24 population. 25 DR. BURKE: See, I just can't intellectually 23 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 accept that. 2 DR. MITCHELL: Yeah. 3 DR. BURKE: Because children are children and 4 Hispanic children, black children, yellow children, 5 white children, are all -- 6 DR. MITCHELL: Well, if you -- 7 DR. BURKE: -- are all -- 8 DR. MITCHELL: Sorry. 9 DR. BURKE: If they're ingesting the same 10 contaminants, I don't understand. Unless you're saying 11 that something about the -- here we go with my doc. 12 DR. FRIEDMAN: You know, Bill? Let's call it 13 what it is. This was not a study designed to understand 14 the differences. It was rather a demographic survey of 15 a little horizontal slice of who got hospitalized. You 16 may be entirely correct. There are undoubtedly 17 differences that are genetic, environmental, 18 socioeconomic, access related, whether it be to medical 19 care or any other kind of situation, but the study was 20 never intended to disclose basic information about that. 21 It's an interesting observation, but that 22 question has never been highlighted, hypothesized, 23 specific methods have not been sought to analyze the 24 differences. 25 DR. BURKE: Got it. Thank you very much. 24 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 DR. FRIEDMAN: It's just an observation. 2 DR. BURKE: Then what I would suggest is that 3 we move at an expedited rate to try and figure out how 4 to do a study to give us the true indication of what are 5 happening to these children in these various 6 communities. And I can pledge to you that South Coast 7 will participate in funding those studies. 8 But you see, my interest is really as we are 9 here and I'll get to those remarks later, but we are 10 here to find out what's going on in the communities. We 11 need to have studies that tell us really what's 12 happening to the kids in this community. 13 And you're absolutely right, Doctor. It's -- 14 it was not meant to do that, but we need something that 15 tells us that I believe. 16 CHAIRMAN LLOYD: Thank you, Dr. Burke. 17 Any other comments from the Board members, from 18 my colleagues? Thank you. 19 Anybody signed up to make any comments on this? 20 So with that, this is not a regulatory item. 21 It's not necessary to officially close the record, so we 22 will bring this item to an end so we can commence the 23 community meeting. 24 So I'll give just a -- while we change staff -- 25 or do we need -- I guess we don't need any time to 25 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 change staff at this point. 2 So why don't we move on to Agenda Item 01-4-3. 3 That's the special community hearing. I'd like to 4 welcome everyone who has joined over the past half hour 5 or so and let you know that Spanish translations are 6 available over the headsets in the back of the room. 7 Again, just to reiterate, I'm Alan Lloyd, 8 Chairman of the State Air Resources Board. And to my 9 left over there is Dr. Burke, who some of you know quite 10 well, is the Chairman of the South Coast Air Quality 11 Management District. 12 We're in fact very happy to be here this 13 evening to hear directly from this community what your 14 concerns are about the air pollution and what we may do 15 to help. I want to emphasize again this is your 16 meeting, so we'll try to leave lots of time for 17 questions and discussions. 18 This is our second formal community meeting. 19 In fact, the first one we conducted up in Supervisor 20 DeSaulnier's district up in Richmond. We found it was 21 very productive, lots of good input. We learned a lot 22 from the community. 23 The residents in Richmond, particularly those 24 living close to oil refineries, had very specific 25 concerns about what was being emitted, how we might help 26 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 them monitor that better, and if there are problems, 2 what we could do to clean them up. 3 So tonight we want to hear about the air 4 quality issues in your community. We appreciate the 5 time that you're taking to come to attend the meeting 6 and encourage you to ask questions or in fact make 7 comments about what's on your mind so that we can make 8 this a fruitful exchange and we become much better 9 educated on the issues that are concerning you and stuff 10 that we may not be hearing when we're in Sacramento. 11 As I said a moment ago, this is the home 12 territory of Dr. Burke, and so I'd like to give him a 13 chance to welcome you himself and make a few 14 introductory comments. 15 Dr. Burke. 16 DR. BURKE: Thank you, Mr. Chairman and my 17 fellow board members for traveling all this way to South 18 Coast. We appreciate your efforts to get here. For 19 those of you from Sacramento, we don't want you to take 20 it personally about the Kings, but, you know, it's just 21 one of those things. Maybe next year. 22 We here at South Coast feel that community 23 outreach is extremely important because we in our 24 district represent 141 different nationalities here in 25 the South Coast. And in the San Bernardino, Riverside, 27 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Orange County and Los Angeles County, there are equal -- 2 there's an equal number of languages -- of those number 3 of languages spoken. 4 I noticed that some of the members of the Board 5 were a little concerned about the traffic to get to the 6 meeting. Well, we experience that traffic every day. 7 And we know that the California Air Resources Board has 8 a responsibility of managing the emissions of that 9 traffic, and we'd like to thank you for all the 10 erstwhile effort that you have put forth, and we would 11 like to encourage you to posthaste, do anything you can 12 to help us even more. 13 But I have to tell the people in the audience 14 that I sometimes feel like the teacher who lectures on 15 absenteeism to the kids who are always in school because 16 this board, our board, is probably the most community- 17 sensitive Board from my historical examination of the 18 past membership that has been in existence for probably 19 20 or 30 years. 20 So we all don't agree on everything, but we all 21 agree on what the mission should be. And I am proud to 22 serve on this Board, and I am proud to have the 23 colleagues that I have with me here every month. 24 I'd like to introduce some of our senior staff 25 from South Coast who are here tonight. Head of our 28 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 enforcement division, my favorite super cop, Peter 2 Mieras. Would you stand up? Our chief legal counsel 3 Mrs. Barbara Baird. The lady who when I think I'm a 4 scientists always straightens me out and says that I 5 really don't know anything about what I'm talking about, 6 Miss Carol Coy. 7 And the leader of the home team, a fellow who I 8 have to admonish every once in a while to take it easy 9 because the number of hours he puts in and the effort he 10 puts effort is just extraordinary and that's Dr. Barry 11 Wallerstein, our executive director. Barry, would you 12 stand up? 13 And, Barry, this is your fourth time here to 14 this building probably in recent times, so if you would 15 like to, with the Chairman's permission, if you would 16 like to -- 17 CHAIRMAN LLOYD: I'd be delighted to. 18 DR. BURKE: -- say a few words, we'd like you 19 to say it from the parking lot. See, I told you Mike 20 Kenny would get even one way or another. 21 MR. WALLERSTEIN: Good evening, members of the 22 Board, and welcome to the South Coast Air Quality 23 Management District, and we're very appreciative that 24 you're here this evening conducting a community meeting. 25 Under Dr. Burke's leadership on our board, we conduct 29 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 community meetings like this once a month. And as 2 Dr. Burke was noting, I've actually been in this 3 facility -- this is the fourth time in the last two 4 years. 5 I think it's very important that you're here 6 this evening in part because for the environmental 7 justice movement here in the South Coast, this is really 8 near ground zero. This community, this specific city 9 and the surrounding cities are heavily impacted by the 10 port, by our freeways, by the Alameda Corridor and by a 11 variety of land use patterns that have grown over of the 12 year to be in conflict. So I think you'll hear very 13 many important things from the community members this 14 evening. 15 We've made great progress in the last several 16 years as we move forward on our environmental justice 17 initiatives, but we know there's still more work to be 18 done. We've had a request that I would like to mention 19 to you this evening that when you schedule permits that 20 you conduct a similar forum in the western part of San 21 Bernardino and Riverside counties. And that is an area 22 that is adjacent to Ontario Airport where we're seeing a 23 tremendous growth in warehousing operations and very 24 significant community concerns over the diesel truck 25 traffic that is in the area and the increases that they 30 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 will see in the next few years. 2 They had appeared before our Governing Board 3 and requested that we request of you when you schedule 4 permits that you conduct a forum like that in that 5 community. We can certainly help arrange it. 6 I would also like to mention that we are very 7 appreciative of the great assistance that your staff has 8 given us in addressing issues related to the electricity 9 crisis. We've been doing a lot of good work together to 10 help facilitating the permitting of new power generation 11 in a manner that's sensitive to the environment and 12 provides good long-term air quality benefits. 13 Your staff has also given us great assistance 14 in the area of the school bus program where we're 15 helping to administer on the local level the governor's 16 funding for the clean up and conversion of school buses. 17 And, with that, I'll conclude and we'll get on 18 with the show which is really listening to the community 19 members. 20 CHAIRMAN LLOYD: Thank you very much, Dr. Burke 21 and thank you, Dr. Wallerstein. Again, it gives me an 22 honor and also a pleasure to see some of my 23 ex-colleagues down here I see the way we're working 24 together. I'd like to express from our side and from 25 the governor's side the way -- the fact that we're 31 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 working with the South Coast in particularly tough times 2 with regard to the power issue. So we'd like to express 3 that. 4 Also with Dr. Burke's indulgence, I would also 5 like to acknowledge Dr. Chung Liu. We worked with 6 Dr. Liu on many of these programs on the technology side 7 there. So, Chung, it's a pleasure to see you here also. 8 With that, I guess we will remind people who 9 want to speak to sign up with the clerk of the board or 10 if you -- by the way, also if you don't feel that you 11 want to speak but you want to ask a question or you want 12 to put it in writing, please see our staff, and we can 13 accommodate that as well so that we can read then the 14 question. 15 With that, I think I'd like to turn it over to 16 Mr. Kenny. 17 MR. KENNY: Thank you, Mr. Chairman and members 18 of the Board. What I'd like to do is second the Board's 19 welcome to the members of the community. It's also a 20 pleasure for the staff to be here and to have an 21 opportunity to hear from the community about these 22 issues. 23 One of the main reasons we're here is because 24 people in this community have expressed some concern 25 about reformulated gasoline and how upcoming changes to 32 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 that fuel might affect them. Because of these concerns, 2 Assemblyman Marco Firebaugh of East Los Angeles offered 3 a resolution, ACR 132, asking the Air Resources Board to 4 hold community meetings on our gasoline rules. 5 Excuse me. Mr. Juan Torrez of the 6 assemblyman's capital staff is here tonight, and I would 7 like to give him an opportunity to speak at this time. 8 Once Mr. Torrez has finished his remarks, staff plans to 9 make two short informational presentations on ARB's 10 overall community help program and then on our 11 reformulated gasoline regulation specifically. 12 With that, Mr. Torrez. 13 MR. TORREZ: Thank you. I was raised here in 14 Long Beach. I work in Sacramento, so I have to second 15 Dr. Burke's motion about sorry about the Kings. I can 16 say it here, not up there. 17 First of all, I want to thank you on behalf of 18 Assembly Member Firebaugh for holding this meeting. I 19 would like to read a couple of remarks that he prepared 20 and wanted to share with the Board. As you know, he's 21 the author of Assembly Concurrent Resolution 132. The 22 measure urged the Air Resources Board to hold the 23 statewide community meetings to discuss and hear public 24 comments on the reformulated gas. 25 It's my understanding that the Board has held 33 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 several community hearings, and the assemblyman is very 2 pleased to have it here in his district. I hope that 3 your visit here will provide you an opportunity to hear 4 from the community folks about the issues that are of 5 great concern. 6 As you know, the southeast basin is 7 unfortunately home to some of the worst air pollution in 8 the state. The city of Huntington Park has been 9 referred to as a "hot spot." Your efforts to hear 10 directly from the public in outgoing discussion is key. 11 There are many factors, as you know, that 12 contribute to air pollution. The ones that the assembly 13 member wanted me to stress tonight was the diesel 14 trucks. They've been identified as one of the major 15 sources of air contamination in the fifth assembly 16 district. As you know, the area lays between a series 17 of freeways that provide trucks easy access to the 18 ports, to the industrial parks and to other freeways 19 that will get them to their final destination. 20 As a result, our local communities receive the 21 unfortunate benefits, or lack of, of smog and air 22 pollution. With the growth of our economy and the role 23 California plays in the world of trade, the need for 24 more truck traffic to transport goods will only 25 increase. 34 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Industrial sources also contribute 2 significantly to this problem. Many speculate that the 3 sources of neighborhood ills, such as asthma, to the 4 industry which surrounds them, the truck depots, the 5 numerous truck depots in our district. 6 While many communities depend on the jobs 7 created by industry, and many industries abide by air 8 pollution standards, there are many of those who do not 9 do so and many of those who significantly contribute to 10 the problem. 11 The assembly member strongly believes that both 12 of these items can be addressed in a constructive, 13 effective manner by doing the following: First, 14 strengthening outreach and education. That can provide 15 local businesses with the resources and tools needed to 16 assure that they are actually implemented with local and 17 statewide air quality laws as well as giving outreach 18 and education to community folks to making sure they 19 know as to who to report any violations of any kind or 20 if they need additional information. 21 Also, technical assistance and knowhow provides 22 companies the tools to evaluate and understand not only 23 the economic benefits for upgrading their equipment but 24 also the benefits that it would provide to local 25 communities as far as air pollution. 35 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Also continue investment in natural incentives, 2 such as the Carl Moyer law, to allow them to upgrade 3 without necessarily having to take a huge hit to their 4 budget. Businesses, especially small businesses, need 5 to know that there is help available to them. 6 Finally, enforcement is perhaps the most 7 critical, important thing that the Air Resources Board 8 can do. The community deserves to have an agency that 9 is willing to go after the polluters and provide 10 leadership in maintaining our clean air. 11 Again, on behalf of the assembly member, thank 12 you for coming here. We are committed to working with 13 the Air Resources Board in Sacramento trying to find you 14 more budget funding. Although, it's critically 15 difficult these days with the energy crisis, but we are 16 committed to doing so. Thank you. 17 CHAIRMAN LLOYD: Thank you very much, Juan. 18 And we really appreciate your personal efforts and those 19 of the assemblyman. We've learned a lot since the 20 resolution has passed. I think we've come a long way. 21 As I mentioned earlier, we learned a lot from going to 22 Richmond. I'm sure we'll learn a lot from coming here. 23 And I hope we can accommodate Dr. Wallerstein's 24 request also to move farther east, but we really value 25 that relationship, and we hope to build very strongly. 36 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 And, obviously, I guess I've learned by now 2 after so many years, we support the governor's budget. 3 DR. BURKE: Unfortunately, Mr. Chairman -- 4 CHAIRMAN LLOYD: Yes, Dr. Burke. 5 DR. BURKE: The South Coast has been working 6 with Assemblyman Firebaugh in the design of the 7 community outreach -- an extended community outreach 8 program. As mentioned up in Monterey, we have just 9 approved a program for expanding in the Black and Asian 10 communities bifurcated. 11 And what I might like to do is suggest that our 12 staff at ARB look at maybe there could be some joint 13 things that we could do in the South Coast together so 14 that we could maximize the dollars that we spend in some 15 of this community outreach so we can pass along 16 information from ARB as well as AQMD, and not having two 17 people trying to pass the same message to the same 18 person, the same group. It's just a thought. 19 But we're in the process of going through the 20 selection of the various groups, and we're doing this. 21 I'm sure that our staff would love to work with your 22 staff, and I'd like to put a little something together. 23 CHAIRMAN LLOYD: Sounds like a good idea. 24 MR. KENNY: We'd be happy to follow up on that. 25 Returning to the presentation, at this point 37 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 what I'd like to do is turn the presentation over to Bob 2 Fletcher who will briefly describe our community and 3 children's health programs, and then following that Dean 4 Simeroth will make the presentation on the reformulated 5 gasoline standards and the phaseout of MTBE in this 6 state. 7 And with that, I think I'll turn it over to 8 Bob. Bob. 9 MR. FLETCHER: Thank you, Mr. Kenny. 10 On? The sound is on. 11 Over the last several years, the Air Resources 12 Board has advanced a new agenda to ensure that all 13 California communities have clean healthful air. This 14 new agenda poses many new challenges for us because it 15 now begins to consider the differential distribution of 16 pollutants and health risk among communities and 17 accumulative impacts of multiple facilities. In 18 addition, these issues must be considered in the context 19 of other community issues, such as jobs, schools and 20 housing. 21 In my brief presentation today, I would like to 22 highlight for the Board and the members of the community 23 a few of the important activities associated with this 24 program. By way of introduction, it is important to 25 recognize that existing programs have substantially 38 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 reduced the regional smog and air toxics that hang over 2 our cities. For example, cancer risk in communities 3 from the top ten air toxics in California has declined 4 about 40 percent over the last ten years. Ozone and 5 particulate matter exposures have also declined. These 6 benefits are due to the combined efforts of the Air 7 Resources Board and the Air Pollution Control Districts. 8 However, while these efforts are necessary and 9 will continue in the future, we need to do more on a 10 community level to understand and address cumulative 11 impacts as well as other local issues and concerns. 12 As a result, we have initiated a number of new 13 activities. These new activities are being developed 14 under the ARB's Community Health Program. The overall 15 goal of this program is to assess and reduce health risk 16 from air pollution as quickly as possible. All 17 Californians have a right to know what pollutants they 18 are exposed to and what is being done to reduce that 19 risk. 20 Environmental justice is included as an 21 important part of our community health effort, and I 22 will talk about that a little later in the presentation. 23 As we go about developing new clean air 24 strategies, we are focusing special attention on 25 children's health issues. And you just heard an 39 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 excellent presentation on that, so I won't go into that 2 in any detail. 3 We are also looking at both indoor as well as 4 outdoor exposures. Last May we held a symposium on 5 indoor air quality which highlighted opportunities to 6 reduce air pollution in homes and schools, and we are 7 proposing an air toxic control measure to reduce 8 formaldehyde from building materials to better protect 9 children at home and in school, especially in portable 10 classrooms. 11 Earlier I mentioned the need to look at 12 cumulative exposures to air pollution as well as the 13 need to provide people with access to information about 14 air pollution in their communities. To meet these goals 15 we are mapping cumulative health risks statewide based 16 on our current emissions inventories and health risk 17 information. 18 Cancer risk will be estimated at the community 19 level based on emissions from mobile sources, areawide 20 sources such as paints and coatings, and industrial 21 sources. This review is just the first step. As we 22 develop additional data, we will present other 23 indicators of air pollution and health effects, such as 24 non-cancer impacts and total emissions per area. 25 This is one of the reasons we initiated the 40 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Neighborhood Assessment Program in order to improve the 2 data at the community level. One of the goals of this 3 effort is to improve the technical tools available to 4 assess air pollution impacts on a small neighborhood 5 scale. This is technically challenging, but we have a 6 very good peer review process in place that includes the 7 air districts, academia and other experts. 8 Through this collaboration, we are developing 9 new modeling, monitoring and health assessment 10 techniques so we can better answer people's questions 11 about air pollution in their neighborhood. 12 Community outreach and participation are 13 certainly foundations for our community health efforts. 14 This means providing people with information as well as 15 opportunities for full participation during the decision 16 making processes. ARB has traditionally had extensive 17 public processes, but we have added additional outreach 18 efforts at the community level as part of our Community 19 Health Program. 20 In May alone, we will have participated in nine 21 different forum in community health and environmental 22 justice. As we are in communities and hear their 23 concerns, it is essential that we follow up in a timely 24 and meaningful way. Individuals throughout ARB are 25 involved in these follow-up activities, whether that be 41 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 enforcement, emissions or health related. 2 In terms of ARB programs, we will explicitly 3 identify and consider the impacts of ARB actions at the 4 community level. Considering environmental justice 5 issues is part of that process. 6 ARB is continuing to reduce health risk in 7 communities across the state, and most of the new 8 reductions will come from these programs. Reducing 9 emissions from mobile sources and fuels continue to be 10 essential to achieving health-based air quality 11 standards and reducing air toxics risk. 12 From an air toxics point -- standpoint, diesel 13 particulate is our highest priority with the Board's 14 adopted risk reduction plan targeting a 75 percent 15 reduction in diesel particulate emissions by 2010. This 16 plan includes the development of 14 new measurements. 17 In addition to implementing our diesel plan, we 18 are pursuing a number of additional strategies to reduce 19 health risk in communities right away. We are working 20 with the Department of Toxic Substance Control on 21 pollution prevention for refineries. We are developing 22 toxic control measures targeting to address 23 environmental justice. We're strengthening our 24 enforcement, and we're using incentive funds effectively 25 to reduce emissions. 42 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 I'd like to now discuss just a few of the 2 specific actions that we intend to take over the next 3 year or so. As mentioned, we have reduced -- we have 4 launched our risk reduction plan for diesel emissions 5 and have begun workshops on the first community-based 6 measures, which are refuse trucks and fuel tanker 7 trucks. 8 We are working more stringent control measures 9 for automotive finishing and chrome plating based in 10 part on findings from a recent special study conducted 11 in Barrio Logan in San Diego County. In addition, our 12 2001 clean air plan will identify new strategies needed 13 to reduce emissions statewide but will also describe the 14 impacts at a community level. 15 Relative to enforcement-related activities, we 16 are working on guidelines for uniform penalties for 17 refineries throughout the state so existing rules and 18 regulations are consistently applied, and the public is 19 equally protected. In addition, we are working to 20 improve the monitoring at refineries and to make this 21 data more accessible. As part of the next presentation, 22 you'll hear a little bit more about these topics. 23 To ensure that diesel trucks traveling through 24 communities are complying with existing rules, we've 25 deployed our Roadside Smoking Truck Inspection Team to 43 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 communities that are highly impacted by truck emissions, 2 and you'll hear a little bit more about that in the 3 enforcement presentation. But, in fact, this inspection 4 team has conducted Roadside Inspections Team yesterday 5 and today in Huntington Park, and since February we've 6 tested almost 3,000 trucks primarily in highly impacted 7 communities, and we expect this effort to continue at a 8 fairly high level. 9 Funding incentives will continue to be an 10 important part of the Community Health Environmental 11 Justice Program. We are working with the Bureau of 12 Automotive Repair to conduct special vehicle repairs in 13 low income communities. In effect, bringing state 14 repair and replacement subsidies to the people instead 15 of waiting for the biennial smog check cycle. And we 16 are expecting to launch a pilot program this summer. 17 Other incentive programs like the Cark Moyer 18 Program and the School Bus Program have been extremely 19 successful in introducing clean engines. 20 At the April board meeting, you heard about the 21 benefits of the Moyer Program in inner city communities 22 and our efforts to increase the number of projects 23 funded in low income areas. As funds are available, we 24 will continue to ensure that funds are allocated 25 consistent with these community needs. 44 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 On environmental justice, we are in the early 2 stages of developing proposed environmental justice 3 guidelines for Board consideration that we expect to 4 bring to this Board in December of this year. I'd like 5 to give you just a preview of these concepts that we've 6 developed so far. We've touched on all of them 7 essentially in the presentation. 8 The first is really integrating environmental 9 justice into ARB programs. Strengthening outreach and 10 education is a critical component. Reducing health 11 risk, strengthening enforcement and assessing and 12 considering cumulative impacts in the environmental 13 review process in district permitting programs. 14 We expect that these guidelines on cumulative 15 impacts will be particularly useful for land use 16 decision makers. And based on what we've heard from 17 community members and environmental justice advocate, 18 this last piece on community impacts is really a high 19 priority from their standpoint. 20 In summary, our existing programs have been 21 effective at reducing risk in communities and must 22 continue to ensure that continued progress is achieved. 23 However, we recognize that these regional and statewide 24 programs must be complemented with an aggressive program 25 that targets local communities. We have initiated an 45 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 action-based Community Health Program with an emphasis 2 on near-term reductions and including environmental 3 justice as an integral part. 4 Many activities are under way that focus on 5 these new measures to reduce risk, enhance enforcement 6 and improve guidance for land-use decision makers. And 7 we are increasing our outreach and education in many 8 communities to help ensure the success of the program. 9 Thank you. That concludes my presentation. 10 I'd be happy to answer questions, or we can move to the 11 gasoline part. 12 CHAIRMAN LLOYD: We have some questions. 13 Mr. McKinnon. 14 Thanks, Bob. 15 MR. MCKINNON: Bob, I think you're really good 16 about not using kind of shorthand, but you used the Carl 17 Moyer Program, and I'm sure community activists know 18 what that is, but in case there's somebody here that 19 just is an interested member of the community, could you 20 briefly tell folks what the Carl Moyer Program is? 21 MR. FLETCHER: Yes. Very, very briefly. 22 That's an element of the Community Health Program and 23 Outreach we're still working on is making sure that what 24 we're saying is understandable. 25 The Carl Moyer Program is an incentive-based 46 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 program that is a program that is designed to replace 2 dirtier engines with cleaner engines. These are diesel 3 trucks, agricultural engines, marine vessels. It's a 4 program that was authorized by Governor Davis in the 5 legislature, and there has been, approximately, about I 6 think $100 million allocated to that program at this 7 time. 8 CHAIRMAN LLOYD: Thank you. 9 Yes, Dr. Calhoun. 10 DR. CALHOUN: I guess I'd like to go beyond the 11 assessment program that you talked about, Bob, and move 12 to the next step, and that is cleaning up what we know 13 to be emissions from the diesel-powered vehicles. I'm 14 just wondering where are we relative to retrofitting 15 some of these particular vehicles? I know we're doing a 16 lot of work, but it isn't quite clear to me where we 17 are. And, in particular, I'm concerned about the 18 Alameda Corridor and what's taking place there. 19 MR. CACKETTE: Tom Cackette. 20 Mr. Calhoun, there's quite a bit of activity 21 going on on retrofitting diesel vehicles. The Board of 22 course passed regulation requiring all transit buses to 23 be retrofitted, and that will start in 2003. And we 24 have a number of transit buses operating with 25 particulate filters right now as a demonstration 47 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 program. We have money that's being expended on school 2 buses to install several thousand particulate filters on 3 some of those buses. And the South Coast has a 4 complimentary program also focusing on adopt-a-school- 5 bus and activities like that that will help clean up 6 diesel school buses. 7 The two regulations that were pointed out there 8 is to expand the particulate filter retrofits to trash 9 haulers which operate in all of these communities of all 10 types and also for gasoline cargo tankers, which often 11 take product from refinery or bulk terminal which is 12 often located in a low income or environmental justice 13 sensitive neighborhood. So those are why we picked 14 those two as sort of the first step. 15 The technology is not completely proven in all 16 applications yet. It's sort of an application-specific 17 technology with these filters, and so we have an 18 expanded number of demonstration programs under way to 19 show that the filtered work on these various 20 applications, and once those are done, we're going to 21 try to expand them into more public fleets and then 22 eventually into private fleets, both on-road vehicles 23 and ultimately off-road vehicles as well. 24 Our goal is to cover 90 percent of the diesel 25 engines in the state by the end of the decade with 48 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 particulate filters. Some of them would be from new 2 vehicles, but a lot of them would be in the retrofit 3 mode. 4 There's some challenges yet. We are not yet 5 sure that we can use this technology on the oldest 6 diesels, the ones that are the highest polluters of all 7 because it may not be capable on some of the worn out 8 engines that aren't working properly, and so we're doing 9 evaluations of those. 10 We have an international advisory committee 11 that meets about once a quarter. People from all over 12 the world because there's been a lot of activity of 13 using diesel clean up technology in Europe and Asia, so 14 we have people from those countries that are familiar 15 with that activity helping advise us on where we should 16 move first and how fast to move and what issues we have 17 to address. 18 And on top of that, then there are national 19 standards that we'd be cleaning up the fuel. Outside of 20 California, the state standard to further clean up the 21 fuel which lets these devices work better. And we have 22 standards that have been adopted at the national level, 23 and the Board will adopt a similar set in September. 24 We proposed at least that you adopt a similar 25 set of standards that will affect new diesel engines 49 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 that will knock out another 90 percent of the emissions. 2 So we'll have by 2007 to 10 time frame, which is 3 admittedly a ways off, we'll have new diesel engines 4 being produced for on-road vehicles that are about 5 97 percent cleaner than the uncontrolled engines for 6 both smog forming NOx and for particulate. The next 7 challenge after that will be to get construction and 8 farm equipment to use that same type of technology. 9 So I think the future is very rosy for taking 10 diesels out of the pollution equation and making them a 11 fairly minimal source but it's going to take them a 12 while. It's going to take a lot of hard work. It's 13 going to take time to turn the fleets over, which is 14 where programs like the Carl Moyer Program come in to 15 help provide incentives to make that fleet turn over to 16 the cleaner engines faster. 17 So it's kind of a long, complicated answer only 18 because there are a large number of different programs 19 focusing at the community level, at the entire fleets 20 that's in California and even the fleets outside of 21 California that comes -- you know, that is registered 22 outside that comes into our areas to deliver products. 23 DR. CALHOUN: Are you aware of any legal 24 barrier that will prohibit us from moving ahead with 25 this program? 50 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 MR. CACKETTE: Any what? 2 DR. CALHOUN: Legal barriers. 3 MR. CACKETTE: Well, there are legal barriers I 4 think on maybe a few areas. We're largely restricted 5 from what we do on quite a few of the locomotives. So 6 that has to be done by agreement or on only certain 7 subsets that we are not preempted on. But in most areas 8 in terms of retrofit, we pretty much have a freehand to 9 decide what's effective and cost effect. 10 On new vehicles, in equipping the new engines 11 with the best technology, there are. Construction and 12 farm equipment, we are preempted, and we have to depend 13 on EPA to regulate those. But once they're in the 14 fleet -- if that should not be adequate, once they're in 15 the fleet, we are able to effect retrofits at least 16 where the technology is available. 17 DR. CALHOUN: Thank you. 18 CHAIRMAN LLOYD: Dr. Burke. 19 DR. BURKE: My first -- it's a bifurcated 20 question. The first part is I'm a little confused. On 21 the traps, you say we have some demonstration projects. 22 Have we got anything by any company which will be 23 imminently available for installation? 24 MR. CACKETTE: Yes. For example, there is a 25 particulate filter retrofit program that goes on 51 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 specific Detroit diesel engines that has been -- is 2 being marketed by Detroit Diesel. So there's an engine 3 manufacturer that says, "I'm convinced that you could 4 put this stuff on my engines." 5 DR. BURKE: It's been certified by you? 6 MR. CACKETTE: It hasn't been certified yet, 7 but we've seen the data, and I expect it will be. 8 The more general generic traps are in the 9 retrofitting certification process right now. And -- 10 DR. BURKE: Is there anybody in the process 11 that will be finished imminently? What I'm trying 12 to get-- 13 MR. CACKETTE: Yes. 14 DR. BURKE: Can you fill us in on who that is? 15 MR. CACKETTE: Well, I think both Engelhard and 16 Johnson Mathy are doing the durability testing right 17 now, and when they've completed that, I will expect that 18 they will be certified. 19 DR. BURKE: But their technology only goes back 20 to vehicles that are how old? 21 MR. CACKETTE: Well, it's -- the technology is 22 being certified as certain efficiencies. It takes away 23 85 percent of the particulate -- particulate matter. 24 The question then becomes does that technology work on 25 your truck or your application. 52 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 And there are some, you know, vehicles that are 2 used a certain way in certain types of application that 3 will work fine, and there's another one where it won't. 4 And it's more challenging with the older -- older 5 vehicles than it is with the newer vehicles. 6 DR. BURKE: I'm sure that you're aware of this, 7 but I'm just saying this for some of my colleagues. In 8 the trucking business or in the school bus business, and 9 they are -- obviously, they are businesses. It's like a 10 funnel coming down to areas like this on the age of the 11 vehicle because in the more fluent routes, traffic 12 areas, the newer trucks, school buses reside. And then 13 they are either sold or moved to those areas which need 14 cheaper equipment to operate. 15 Therefore, there is a higher pressure of 16 emissions in areas where there are obviously older 17 trucks and school buses. And this area is under 18 tremendous -- this specific geographic area is under 19 tremendous duress from older freight and school bus 20 traffic. So, you know, it's -- we at South Coast are 21 trying to figure out a way to get some of that stress 22 relieved. 23 We'd appreciate in your deliberations if, in 24 fact, you keep that funnel situation -- because I know 25 the trucking association and all that comes up, and they 53 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 lobby and lobby, but it was very interesting when I made 2 them give me a list of their members who were most 3 opposed to retrofitting. It was a couple thousand 4 names, and they're all Hispanic. 5 What had happened was the guys who owned the 6 better trucks sold them to these guys because they could 7 pawn them off. That's why these guys are running the 8 low budget operation. They don't want to retrofit. So, 9 I mean, it's an interesting -- as you say, it's a very 10 complex situation. 11 MR. CACKETTE: Yeah. Fortunately, there's -- 12 particulate filters are not the only technology. They 13 happen to be one that looks very good right now to us, 14 but there's also some fuel reformulations using 15 emulsions that work, provide big particulate reductions. 16 There's also oxidization catalysts, kind of what you 17 have on cars, that are not as effective as filters, but 18 they do reduce particulate matter and at a lower cost. 19 So there may be a role for those technologies. 20 Where the trap may not work, we can fall back to one of 21 these other technologies that will be, you know, pretty 22 effective as well. So we'll try to make sure that we, 23 you know -- our strategy is to look for the best that we 24 can do for every possible engine. And where we fail on 25 one technology or find won't work, we're going to drop 54 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 down and look for the next one. 2 CHAIRMAN LLOYD: Yes, Professor Friedman. 3 SUPERVISOR DESAULNIER: I'll arm wrestle him 4 over it. 5 PROFESSOR FRIEDMAN: I'll defer to the 6 supervisor. 7 SUPERVISOR DESAULNIER: Thank you, Professor. 8 First of all, for all you people from 9 Sacramento representing the Bay Area, it could be worse. 10 You could have the Warriors as your hometown team. 11 I wanted to ask a question about the -- 12 PROFESSOR FRIEDMAN: You could have no home 13 team. 14 SUPERVISOR DESAULNIER: That's right. 15 PROFESSOR FRIEDMAN: San Diego. 16 SUPERVISOR DESAULNIER: How would you like one? 17 The cumulative risk assessments I think are 18 very encouraging that we're including those. Maybe you 19 can talk a little bit about -- define the geographical 20 area, and if we're looking at giving guidance for land 21 use decisions, how do we do that in terms of the 22 California Environmental Quality Act and how would you 23 define a geographic area in terms of assessing community 24 risk? 25 MR. FLETCHER: Well, I think that's the new -- 55 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 you know, that the new area that we're working on right 2 now. And what we have in process right now is basically 3 a mapping exercise that will allow us to take the 4 emissions inventory that we have, and we will be 5 essentially taking that emissions inventory, putting it 6 into an air quality model that will allow us to do some 7 really pretty rough predictions of what we think the 8 cancer risk is. And the grid level we're looking, there 9 is as low as a 2 kilometer by two kilometer grid. 10 The first set of data that we'll put out, 11 probably in the next couple of months, will be on a 12 census track level, and it's really designed to provide 13 an indication to a land use decision maker about what 14 else is in that vicinity. You know, what is the burden? 15 And cancer risk may not be the best indicator, but it's 16 the one that we have most readily available to us right 17 now. 18 As over the next year, we have a couple 19 exercises that we're looking at, one of them in Barrio 20 Logan. Another one will be in the Wilmington community 21 where we're actually doing a very detailed assessment of 22 our technical tools. What we will do is essentially 23 walk the neighborhoods, gather emissions inventory data 24 at a level that we've not collected data before. That's 25 simply not in the emissions inventory. 56 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 We will take that information. We will use a 2 different, more advanced set of air quality models that 3 will allow us really to go down to this narrow 4 neighborhood basis. And I think with the tools that 5 we're expecting to develop over the next year, we'll be 6 able to look at a siting situation and say, okay. You 7 have this, this and this facility and these source here, 8 and if you want to add a new one, this will be the 9 impact that you will have. 10 So in December, we expect to really provide to 11 this Board guidelines on how to do that assessment. And 12 that will involve, you know, kind of validating the air 13 quality modeling that we're doing to provide some level 14 of confidence that the information that's generated is 15 accurate. It will look at guidelines for land use 16 decision makers on how to use this information in an 17 environmental review process. So it's something that is 18 really relatively new. 19 Typically, these decisions are based on looking 20 at -- for example, you may put a new facility out there, 21 and the cumulative impact analysis will say, "Well, this 22 is only .1 percent of the emissions in the total area, 23 and, therefore, it's not significant." 24 What we hope to do is to take that really to a 25 new level that says, "Here is what is in this 57 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 neighborhood. This is what's affecting them already" 2 and provide them with enough information that they can 3 readily look at it in an easily, you know, digestible 4 formula, if you will, and make a decision that, "Well, 5 okay. If we add this, this is what happens explicitly 6 in this neighborhood." 7 And those will include mobile sources and 8 industrial sources and areawide sources, and I think 9 that's a new element as well. We really haven't had 10 good modeling tools that would allow us to go down to 11 that really detailed level. 12 SUPERVISOR DESAULNIER: Thank you. 13 CHAIRMAN LLOYD: Professor Friedman. 14 PROFESSOR FRIEDMAN: I'd like to come back 15 to -- Mr. Cackette, I'd like to come back to your 16 comments. Is there anything we can do to accelerate the 17 development -- 18 MR. CACKETTE: Turn your mike on. 19 PROFESSOR FRIEDMAN: Is that better? Is that 20 better? Is it working? 21 MR. CACKETTE: Yeah. It is. 22 PROFESSOR FRIEDMAN: Is there anything we can 23 do to accelerate the development of this new technology 24 to get rid of some of these emissions? I spent a good 25 part of today along the Alameda Corridor, and I visited 58 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 a number of the -- I gather, some of the worst areas, 2 particularly schools, elementary schools, middle 3 schools, high schools, and we were surrounded almost at 4 all times by trucks, many of which were belching volumes 5 of black, acrid smoke that you could smell. 6 And I'm wondering if there isn't something we 7 can do to support and help with our colleagues at South 8 Coast at the state level to foster and promote something 9 that's quicker and more remedial. 10 MR. CACKETTE: Well, in the -- in the -- 11 PROFESSOR FRIEDMAN: I'm talking about the 12 diesel. 13 MR. CACKETTE: Yeah. Right. The inspections 14 that we're doing at the roadside yesterday and today 15 here in this community are -- clearly we can do more of 16 those focused in areas that have some of the older 17 equipment, like the Alameda Corridor. 18 Initially, we did a lot of those inspections 19 out at the roadsides, and we are tending to decrease 20 that with our teams now at the Mexican border, for 21 example, and bringing those out of the roadside, which 22 are largely the newer trucks coming in from out of 23 state, and focusing more on the city communities is 24 something that we can do to get rid of some of the gross 25 emitters that -- where you can see those black puffs of 59 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 visible smoke. 2 In terms of getting those trucks cleaned up 3 beyond their initial capability because they were built 4 with quite a bit of pollution coming out of them, the 5 old ones were, and the things we can do there and we 6 have started is to try to have better outreach for these 7 programs, like the Carl Moyer Program, and have money. 8 Right now I think a lot of those programs, that money 9 went initially to people that are well funded, have 10 environmental staffs, can have large fleets of vehicles, 11 can become aware of the program. 12 And of course it was very effective, and it 13 reduces particulate for everyone in the basin, but we've 14 got some outreach activity, in fact, in this community 15 right now trying to locate smaller businesses that -- 16 and help them become aware of the program, see if their 17 vehicles might benefit. 18 Because clearly even the smaller businesses 19 have to upgrade their trucks at some point in time, buy 20 newer ones, and this program provides, you know, 21 essentially the incremental cost to let them buy a 22 better vehicle or a newer engine that will save them 23 fuel economy as well as reduce pollution. 24 So there's those kind of activities started. 25 What we've got going now is by no means adequate but we 60 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 can -- I think we can try to build on those types of 2 programs and do more. Especially in partnership with 3 the South Coast, we can do that. 4 CHAIRMAN LLOYD: Yeah. I -- oh. 5 Mr. McKinnon? 6 I was just going to follow on Professor 7 Friedman there. I think one of the valuable things I 8 think we learned from the meetings with Assemblyman 9 Firebaugh and Assemblyman Cardenas was the fact that a 10 lot of these programs are there, but unless people know 11 how to access the funds, and they need help to do that, 12 they're not being -- those dollars are going, as Tom 13 said, to people who can afford staff to prepare the 14 application and what not. So I think that was a good 15 learning exercise for us. 16 The other part, in terms of acceleration, I'm 17 all in favor of pushing that technology, but I think 18 many of us share, or at least some of us, or many 19 members of the staff will remember the NOx Retrofit 20 Program. That if, in fact, you try to push a 21 technology, retrofit technology, without going through 22 all the checks and balances, it could really backfire in 23 a major way. And we are concerned in this case that if 24 the technology that's out there on these trucks and they 25 get blocked or they actually -- of course, if it's 61 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 defective, they stop running. That's great maybe from 2 our viewpoint but terrible for business. 3 So I think that -- and I know that staff is 4 working full speed here, but it's on the surface you can 5 say, "Yeah. Why can't we do this?" But as Tom said, we 6 are in the process of manufacturers going through the 7 tests, and I think they've got the message then. 8 Clearly, I think all of us get frustrated we can't do 9 more. 10 MR. CACKETTE: And the demonstrations that we 11 have under way, including the one that South Coast is 12 sponsoring, have a lot of successes in them, but they 13 have had a few failures too. And we have to understand, 14 you know, what the reason for those failures are before 15 thousands of trucks of a given type or application use 16 the technology. 17 CHAIRMAN LLOYD: I would encourage any of my 18 colleagues of the Board to attend the next international 19 diesel program. This is right on the focus and takes 20 advantage. I know Mr. McKinnon and Mr. Calhoun has been 21 to some of them. 22 Mr. McKinnon, do you have a question? 23 MR. MCKINNON: First of all, I have kind of a 24 comment for the rest of the Board. Last week, there 25 were five Swedish mechanics, auto and truck mechanics, 62 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 here in California and in exchange with the Machinist 2 Union. That's a relationship developing internationally 3 between the unions. And we had the opportunity to steal 4 them away for a few hours over to the Air Board. 5 And, first of all, they marveled at our 6 progress in cleaning up the automobile, and they had a 7 lot of questions about how they might do that. 8 Second of all, we marveled at how they've 9 cleaned up the diesel, and they're to the point where 10 they're doing particle traps and clean fuel in trucking 11 fleets in a fairly large fashion. And clean fuel was 12 something they really, really emphasized. 13 The folks that came, none of them worked on off 14 road, but they know that within their union in Sweden, 15 there are mechanics that work on off-road construction 16 and agricultural equipment. So they're going to get 17 back to us about that. 18 So that's just kind of something that happened, 19 and it was an interesting conversation. We're going to 20 follow it up, and certainly the Board staff supported 21 that tremendously. We had a real good meeting. 22 When we met, the big issue was fuel. And I 23 know this Board has moved to get cleaner, lower sulphur 24 fuel, and I know that we have communicated with 20 or 30 25 other states to get cleaner fuel. And certainly the 63 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 last presidential administration was moving in that 2 direction. How is that all going? 3 Are we still moving towards a low -- and the 4 reason I ask this is that it seems to me if we're going 5 to do it for real that it's really important that we 6 have fuel that can be used anywhere in the United States 7 so that trucks can go back and forth, and there's clean 8 fuel available everywhere. How is that going is my 9 question? 10 MR. SCHEIBLE: Nationally, the rule that was 11 promulgated under the last administration was sustained 12 so that in 2006 nationwide there will be low sulphur 13 fuel that you can design after treatment systems around 14 for on road. We still have the issue of that same 15 quality fuel is going to be needed for off road to have 16 the interchangeability of equipment for construction or 17 farm that goes from one state to another. So that's an 18 area where we're different from the federal government. 19 We require the same quality fuel of the on- and off-road 20 used. 21 And we are moving along to match up for the 22 sulphur limits with the federal in terms of universal 23 availability in the same time frame. And refiners are 24 continuing to produce an added capacity to be able to 25 supply low sulphur fuel in advance of the regulatory 64 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 requirement to meet the demand to the extent that we 2 institute trap programs or other vehicle programs that 3 require that fuel to be used earlier than 2006. 4 CHAIRMAN LLOYD: Board Member McKinnon. 5 DR. BURKE: Can I ask you a question? In the 6 meeting with those fellows, did it seem -- was their 7 trap technology on equal footing with ours, or were they 8 ahead of us? 9 MR. MCKINNON: I can't be sure, but I suspect 10 they're way ahead of us. They're doing it on truck 11 fleets, not buses, and they're doing it in a much 12 broader fashion. They're also -- they have a fuel 13 supply that's 5 parts per million sulphur rather than -- 14 and some of what they said is even without traps, their 15 fuel is so clean there is an improvement. 16 DR. BURKE: But the trap -- Mr. Chairman, maybe 17 we ought to send some of our mechanics over. 18 CHAIRMAN LLOYD: Well, I think we should send 19 maybe a board member over there to get a better look at 20 that place. 21 SUPERVISOR DESAULNIER: Someone with expertise. 22 DR. BURKE: I'm a former mechanic. 23 CHAIRMAN LLOYD: Yes, Mr. Cackette. 24 MR. CACKETTE: If I could make one comment on 25 that, I don't think the technology is different. In 65 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 fact, the technology -- these companies that make the 2 traps and filters are largely international companies. 3 What's different is that certain countries in Europe 4 have proceeded to implement, apply the technology to 5 more vehicles than we have here in the U.S. They've got 6 more experience, more types of vehicles, and part of the 7 reason was because they did have really clean fuel 8 available. 9 CHAIRMAN LLOYD: Yes, Mr. McKinnon. 10 MR. MCKINNON: Yeah. The real opportunity here 11 is that if we work on this nationally, and the European 12 union is working on it throughout the union, which they 13 are, it seems to me the real opportunity, and, Tom, I 14 think you've talked about this before, is the economy of 15 scale in manufacturing the trap equipment. If you're 16 making 20,000, they're expensive. If you're making 17 hundreds of thousands, then you can mechanize an 18 automated factory to make lots of them quickly and 19 cheaply. 20 MR. CACKETTE: Yeah. I think the -- a couple 21 of observations: One is these manufacturers of these 22 filters have stated that they are putting more 23 development money into this product than they did into 24 the catalytic converter, which there's obviously a huge 25 market for them because they see this as a big growth -- 66 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 as a growth area. So we know they're working on it 2 really hard. The -- I guess that was the key point. 3 In terms of getting the experience, while I 4 certainly wouldn't say let's not send someone to Sweden 5 to see firsthand, but we have managed to coerce and to 6 get both, one gentleman from Sweden, who is a major 7 player in both the development and implementation of 8 traps on these vehicles they were talking about, to be 9 on our advisory committee. 10 We also have my counterpart from the German EPA 11 also on that committee because they're doing a lot in 12 Germany. So we are -- in fact, we've hired one of them 13 to provide a written assessment of what has happened in 14 Europe and hopefully use that as a guide to help us 15 catch up a little bit. 16 CHAIRMAN LLOYD: Maybe the Board could get the 17 benefit of that at one of the upcoming board meetings. 18 MR. CACKETTE: Yeah. We could certainly do 19 that. We have an upcoming -- another meeting of the 20 advisory committee on the 5th of June. 21 Yeah. And also that's true. MICA, the 22 association that represents manufacturers of catalysts 23 and filters, et cetera, are meeting with the Board next 24 month. 25 MRS. RIORDAN: In June? 67 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 MR. CACKETTE: In June. So again you can ask 2 the questions. This is always the number one -- filters 3 right now is the number one thing on their issue to 4 share with you the latest developments since that has 5 been going on in the last year. 6 CHAIRMAN LLOYD: Professor Friedman. And I 7 would like, my colleagues, that this will be the last 8 question because I emphasized at the beginning this is 9 your meeting, and so far we've done a pretty good job -- 10 this topic is so important we can go on for hours. 11 But, Professor Friedman. 12 PROFESSOR FRIEDMAN: I was just going to add 13 that I think the implementation is the key, quicker 14 implementation. That was my earlier point and question. 15 And anything we can learn from Sweden or anywhere would 16 facilitate our getting this done quickly because every 17 day, every week, every month that these polluters are 18 still on the road is poisoning all of us and 19 particularly the -- 20 MR. KENNY: If I might just simply add, that is 21 essentially, I think, really kind of the key element of 22 the diesel particulate reduction plan that this Board 23 adopted. I mean, it really did put this Board on a path 24 to essentially achieve huge and substantial emission 25 reductions by 2010. 68 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 And I think probably the key element of that is 2 going to be despite the fact that the Europeans may be 3 ahead of us right now, by 2010 we will be way ahead of 4 them. 5 CHAIRMAN LLOYD: Thank you. 6 Before we go ahead with the next presentation 7 from staff, I'd just like to remind the people in the 8 audience that if you want to speak, please sign up with 9 our Ombudsman, Kathleen Tschogl, over there on those 10 cards. 11 We do have one person signed up to speak on 12 this particular aspect, and I know his time is limited. 13 This is Gary Merritt, so I'd like to ask him to come at 14 this time and comment on what we discussed. 15 MS. REPORTER: Mr. Chairman. 16 CHAIRMAN LLOYD: Yes. 17 MS. REPORTER: I need a minute to change my 18 paper. 19 CHAIRMAN LLOYD: That's fine. So we'll just 20 hold off. If we can just hold one minute while the 21 court reporter changes her paper. 22 Just one minute. The court reporter is going 23 to change her paper. 24 We have a question for the sound engineer. The 25 board members are having great difficulty not only 69 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 hearing the people there but also hearing the 2 colleagues. I don't know whether you can -- okay. 3 Dr. Friedman or Professor Friedman say maybe more bass, 4 treble. 5 DR. FRIEDMAN: More treble, less bass. Can you 6 do that? 7 UNIDENTIFIED SPEAKER: Yes. 8 DR. FRIEDMAN: Okay. 9 CHAIRMAN LLOYD: Thank you. Now we're ready, 10 Mr. Merritt. 11 MR. MERRITT: I'd like to thank the chairman 12 and the members of the board for inviting me here. 13 My name is Gary Merritt. I'm the owner and 14 president of Record Transport. I operate a local 15 trucking company in Southern California. I have 16 approximately 60 employees working for me. The size of 17 my fleet is about 40 units. I average normally anywhere 18 from 4,800 to 5,000 miles a day with my equipment. 19 Basically, my equipment is probably anywhere 20 from 10 to 15 years old. So in order for me to buy new 21 equipment or, like you say, retrofit what I have, we're 22 going to -- you know, I'm going to need some help 23 financially because I'm more or less a small- or medium- 24 sized company. I have about 37 diesel trucks throughout 25 the L.A. area, and hopefully I'd be able to replace at 70 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 least 15 to 20 percent of these within the next year 2 with the help of -- like this Carl Moyer Program. 3 In order for me -- like I say, in order for me 4 to do this, I am going to need either some low interest 5 loans or possibly grants or some sort of tax credits. 6 Because of the increasing cost over the last year or so, 7 my costs have gone up quite a bit. My workmen's comp. 8 increased by 40 percent the last few months. 9 I'm sure you all know the cost of fuel -- I 10 think a little over a year ago I was paying a little 11 less than a dollar a gallon for diesel. Now I'm paying 12 about a dollar forty range for diesel fuel. I 13 understand the cost of labor and everything goes up, and 14 I'm sure that has a lot to do with increasing costs. 15 But in order for somebody in my size of 16 trucking company, there's no way that we're going to be 17 able to finance any big outlay of cash for either new 18 equipment or replacement engines that bring the quality 19 of air up and, you know, pollution down. 20 So in order -- like I say, in order for me to 21 do this, I would need some sort of help from any 22 programs that you might come up with here. So it would 23 really help me speed up the addition and the replacement 24 of my -- some of my older equipment. Like I say, most 25 of my equipment is probably 10 or 15 years old. 71 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 CHAIRMAN LLOYD: Thank you very much. 2 MR. MERRITT: All right. 3 CHAIRMAN LLOYD: I am sure staff here can work 4 with you and try to help you. Thank you. 5 With that, I'd like to resume the staff 6 presentation. I think Dean is going to speak on Phase 3 7 Gasoline. 8 MR. SIMEROTH: Chairman Lloyd, with your 9 permission, I'll have Steve Brisby make the actual 10 presentation, and I'll rejoin for the questions part of 11 it. 12 MR. BRISBY: Thank you, Mr. Simeroth. 13 Good evening, Mr. Chairman and members of the 14 Board. This evening I will be presenting information 15 regarding the California Cleaner Burning Gasoline 16 Program. 17 Assembly Concurrent Resolution 132 put forward 18 by Firebaugh requires the Air Resources Board to conduct 19 two public hearings to discuss impacts of California 20 Phase 3 reformulated gasoline on air quality, public 21 health and the price and supply of gasoline. This is 22 the second to these hearings. 23 The first was held earlier in the city of 24 Richmond in Northern California. I will discuss the 25 following topics: The history of California's gasoline 72 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 control program, including the governor's executive 2 order regarding MTBE, California's latest Cleaner 3 Burning Gasoline Regulations to implement the governor's 4 executive order. 5 As you can see from this slide, the Board has a 6 long history of regulating gasoline properties to reduce 7 motor vehicle emissions. Over the years, there has been 8 at least seven major California programs that set 9 increasingly sophisticated specifications for gasoline. 10 California's Cleaner Burning Gasoline Program 11 is one of the most significant emission reduction 12 measures ever undertaken in California. It has greatly 13 reduced both smog forming and toxic emissions. 14 The introduction of the Cleaner Burning 15 Gasoline Program resulted in a reduction of emissions 16 equivalent to removing 3.5 million vehicles from 17 California's roads. It has reduced smog-forming 18 emissions by about 300 tons per day, cut benzene 19 emissions in half, and reduced the potential cancer risk 20 from vehicle emissions by 21 40 percent. 22 The Cleaner Burning Gasoline Program provides 23 significant emission benefits from both older and newer 24 cars. The program provides air quality benefits by 25 reducing both the exhaust emissions and the emissions 73 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 resulting from the evaporation of gasoline. 2 Benzene is a toxic air contaminant. Lowering 3 the benzene content in the gasoline means that there 4 will be less benzene to evaporate and lower vehicle 5 emissions of benzene. It should be noted that the air 6 quality benefits of cleaner burning gasoline does not 7 depend on or require the use of MTBE. 8 The Federal Clean Air Act requires the use of 9 oxygenates, such as MTBE or ethanol, in federal 10 reformulated gasoline. Today, about 70 percent of the 11 gasoline sold in California is subject to this 12 requirement. Based on its economics and blending 13 characteristics, MTBE became the option of choice for 14 most refiners to meet the federal requirements. 15 California's rules are more flexible. 16 California regulations for cleaner burning gasoline do 17 not require the use of oxygenates as long as the 18 emission benefits of the program are preserved. Today, 19 in the San Francisco Bay Area, which is not subject to 20 the federal oxygenate requirement, a significant 21 quantity of non-oxygenated gasoline is being produced 22 and sold. 23 Based on an independent University of 24 California study on MTBE and on testimony at public 25 hearings, Governor Davis found that MTBE presents a 74 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 threat to groundwater, surface water and drinking water 2 supplies. Governor Davis also found that MTBE is not 3 needed to produce cleaner burning gasoline. As a 4 result, Governor Davis directed that the use of MTBE be 5 phased out from California no later than December 31st, 6 2002. 7 The California Energy Commission, in 8 consultation with the staff of the Air Resources Board, 9 found that to maintain the supply and availability of 10 gasoline in California, the earliest date that MTBE 11 could be phased out was December 31st, 2002. On 12 December 9th, 1999, the Air Resources Board amended 13 California's gasoline regulations to phase out the use 14 of MTBE by December 31st. 2002. 15 The amendments, as adopted by the Air Resources 16 Board, preserved the benefits of the current program, 17 provided additional flexibility in lowering or removing 18 MTBE from gasoline. The amendments also provide some 19 modest additional reductions of oxides of nitrogen and 20 potency weighted toxics. 21 The gasoline amendments were reviewed by the 22 California Environmental Policy Council. They found 23 that there would be no significant adverse impact on 24 public health or the environment, including any impact 25 on air, water or soil, that is likely to result from the 75 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 change of motor vehicle gasoline expected to be produced 2 in the future. 3 The staff estimates that the additional costs 4 of production for California Phase 3 reformulated 5 gasoline is about 2 to 6 cents per gallon. Most of this 6 is for the removal of MTBE. Had the California Phase 3 7 gasoline regulation not been adopted, the cost would 8 have been greater. 9 The staff estimates that should relief be 10 granted by the U.S. EPA from the federal oxygen 11 requirement, the additional cost to reduce gasoline -- 12 excuse me -- Phase 3 reformulated gasoline could be as 13 low as zero. 14 To meet the future demand and to compensate for 15 the removal of MTBE from gasoline in California, 16 refiners will need to debottleneck refinery processes, 17 add additional production capacity, and increase imports 18 of finished fuel and feedstocks, such as alkylates and 19 ethanol. With most of the volume probably coming from 20 imports. 21 Governor Davis requested from the administrator 22 of the United States Environmental Protection Agency a 23 waiver from the Federal Clean Air Act's oxygen 24 requirement. Without a waiver, MTBE cannot be removed 25 from California gasoline until at which time the 76 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 necessary infrastructure to distribute and blend ethanol 2 has been constructed, and sufficient ethanol supplies 3 have been built up. 4 Based on a recent analysis by the California 5 Energy Commission, the additional flexibility provided 6 to California refiners by a waiver of the federal oxygen 7 requirement could be worth 3 to 6 cents per gallon of 8 savings. This could save California's consumers upwards 9 of $450 million dollars per year or, conversely, without 10 a waiver, will cost the consumers. 11 Without a waiver, the state's susceptibility to 12 price fluctuations is increased. Should any disruption 13 in supply of ethanol occur or problems with deliveries, 14 refiners will have to curtail production until the 15 ethanol supplies have returned to adequate levels. Also 16 in addition to changes in crude supply price, gasoline 17 prices will now vary with ethanol prices. 18 The local districts permit conditions 19 associated with the expected refinery modifications 20 should not allow any increase in emissions from the 21 refineries. Most refiners have notified us that 22 relatively few refinery changes are expected to be 23 needed to produce gasoline without MTBE. This helps to 24 minimize the chance of any refinery emissions increase. 25 Whereas MTBE is blended at the refinery, 77 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 ethanol is different. It will need be to be blended at 2 the distribution terminal. Because most terminals do 3 not have a rail access or dedicated pipelines for 4 ethanol, most ethanol will be shipped to the 5 distribution terminals by tank truck. 6 Staff estimated that the delivery of ethanol to 7 the distribution terminals will result in about 290 8 extra truck trips per day statewide or about 130 per day 9 in Northern California and 160 per day in Southern 10 California. For perspective, there is an -- it's 11 estimated that there's over 21,000 truck trips per day 12 statewide. 13 This represents an increase in emissions of 14 about .07 percent. The increase in emissions associated 15 with the increase in truck traffic is in pounds per day 16 compared to the tons per day from the emissions of 17 trucks. 18 You can see that the estimated increase in 19 emissions for reactive organic gases is about 13 pounds 20 in the Bay Area and 17 pounds in the South Coast. The 21 increase in PM is about 7 pounds per day in the Bay Area 22 and 10 pounds per day in the South Coast. NOx has a 23 similar distribution. 24 Staff will propose several retrofit measures to 25 reduce emissions from heavy duty vehicles. The retrofit 78 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 measures include retrofit requirements for school buses, 2 refuse trucks, fuel tank trucks and transit buses. The 3 california refining industry is concerned with public 4 safety. Bay Area refineries have fence line monitoring, 5 and all refineries in the Contra Costa County are 6 members of the Contra Costa County Community Awareness 7 and Emergency Response Program. 8 The South Coast refiners are all members of the 9 Community Alert Network, an automated alert system. 10 South Coast refiners use various types of onsite 11 monitory systems to notify refinery staff if there are 12 any problems. 13 When the amendments take effect, future 14 gasoline will be similar to today's gasoline. The few 15 expected differences are: MTBE will no longer be used. 16 The use of ethanol will increase, and gasoline will have 17 less benzene and sulphur than found in today's gasoline. 18 The follow-up items are: As mentioned earlier, 19 a suggested control measure for refinery enforcement, a 20 review of refinery permitting and a review of the effect 21 of California's reformulated gasoline production on 22 emissions from refineries. 23 This concludes my presentation. 24 CHAIRMAN LLOYD: Thank you. 25 A question from Professor Friedman. 79 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Thanks, Steve. 2 PROFESSOR FRIEDMAN: I have a quick question. 3 Your next to last slide or point was that future 4 gasoline will look similar to today's except it won't 5 have MTBE, but it will have increased use of ethanol. I 6 assume that's on the assumption, the gloomy, pessimistic 7 assumption, that the feds do not grant the waiver. Or, 8 notwithstanding the waiver, should it be granted, are 9 you saying there will be increased use of ethanol. 10 MR. SIMEROTH: Professor Friedman, 11 notwithstanding the waiver there will be increased use 12 of ethanol. Of course, with the waiver, that amount 13 will be significantly greater. It's expected a number 14 of refiners will like to use ethanol as an octane 15 enhancer, if we have a waiver. 16 PROFESSOR FRIEDMAN: To make up the deficiency, 17 to fill out the recipe here? 18 MR. SIMEROTH: Yes. Right. The waiver 19 certainly increases the amount of ethanol that would be 20 used. Or without the waiver. I'm sorry. 21 CHAIRMAN LLOYD: You talk about the cost. What 22 is the current subsidy for ethanol? 23 MR. SIMEROTH: Chairman Lloyd, currently 24 there's actually two subsidies for ethanol. One is for 25 small producers of ethanol that's an income tax 80 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 adjustment. The subsidy that is more commonly used is 2 that for every gallon of ethanol that's used in gasoline 3 that receives 54 cents a gallon and federal excise tax 4 credit. Using it at 6 percent, ethanol, which is what 5 would be used in California, that's about 3.2 cents per 6 gallon of gasoline sold. Meaning that we receive 3.2 7 percent less of federal excise tax collected and 8 returned to the state for each gallon. 9 MR. SCHEIBLE: If ethanol is mandated at the 2 10 percent level, that mandate accounts for roughly 600 11 million gallons a year of ethanol, which is roughly $300 12 million in taxes that go -- that transfer to the ethanol 13 producer. 14 CHAIRMAN LLOYD: How much again? 15 MR. SIMEROTH: It's 600 million gallons of 16 ethanol, approximately, would be used times 54 cents. 17 That's a little over $324 million. 18 MR. SCHEIBLE: Once you get to the hundreds of 19 millions, we just kind of round. Keep it close to the 20 number. 21 CHAIRMAN LLOYD: Supervisor DeSaulnier. 22 SUPERVISOR DESAULNIER: I sort of wanted 23 Mr. Kenny to maybe help with this question. Being as 24 judicial as you like, what is the reason for not 25 allowing the waiver? The straight-faced answer. 81 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 MR. KENNY: The straight-faced answer to that 2 question is that we don't know the reason. Actually, we 3 think we have made a very compelling case that the 4 waiver should be granted. We have demonstrated that, in 5 fact, we can produce gasoline in California that is 6 cleaner without oxygen in it than with oxygen. 7 We have also been able to demonstrate on the 8 other front, which is not a matter that the 9 administrator would take into account in granting or 10 denying the waiver, but that we can actually make the 11 cleaner gasoline at a cheaper cost. We consequently 12 think that it is in the best interest of California and 13 also in the best interest of this country that, in fact, 14 that waiver be granted. 15 But we are very pessimistic about the granting 16 of the waiver. In fact, we anticipate that it's going 17 to be denied. 18 SUPERVISOR DESAULNIER: Why do you suppose? 19 MR. KENNY: I can give you a straight -- the 20 reason -- 21 SUPERVISOR DESAULNIER: That's enough. That's 22 enough. Perhaps it's political. It's not technical. 23 CHAIRMAN LLOYD: Professor Friedman. 24 PROFESSOR FRIEDMAN: You opened the curtain on 25 that one. 82 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 SUPERVISOR DESAULNIER: Yes, I did. Actually, 2 it was just an exercise of sadomasochism. 3 PROFESSOR FRIEDMAN: I just want to make sure I 4 have a correct understanding; okay? At least an 5 understanding that the staff can confirm. If the waiver 6 of the oxygenate requirement is not granted or if it's 7 denied, and ethanol has to be used as the only game in 8 town, since MTBE is being phased out since it is a 9 carcinogen, as we unhappily learned, then that's going 10 to be increased trucking, mostly diesel. It's going to 11 be increased emissions. 12 It's going to be increased cost of the fuel, 13 the regular fuel that our cars use, to pay for the 14 ethanol, and California doesn't have a self-sustaining, 15 adequate on-its-own supply of ethanol. So once again 16 California will be at the mercy of other states who 17 produce the ethanol and supply it; is that right? 18 MR. KENNY: That's correct. And, actually, we 19 can even make it a little bit more dire. We are talking 20 about roughly 600 million gallons of ethanol that would 21 be required to satisfy a 2 percent oxygenated 22 requirement. The entire production of ethanol in the 23 country today is roughly 1.4, 1.6 billion gallons, and 24 that's being utilized. 25 What is going to occur as a result is that 83 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 we're going to suddenly increase the demand on that 2 existing usage by a factor of, essentially, you know, 3 almost .3. 4 We also have the additional problem that -- 5 PROFESSOR FRIEDMAN: You mean there's going to 6 be a shortage. 7 MR. KENNY: Well, I would predict a shortage. 8 PROFESSOR FRIEDMAN: Or there will be a premium 9 price. 10 MR. KENNY: There will potentially be a premium 11 price. And part of the reason for that also as that, as 12 you mentioned, there is not sufficient production in the 13 State of California to supply that much ethanol, which 14 means it is going to have to be imported. 15 The difficulty there is, as Mr. Simeroth 16 mentioned, you can't get it here essentially by 17 pipeline, which means that the two alternative choices 18 would be either by rail or by truck. The difficulty 19 there is that there is not sufficient rail tankage or 20 truck tankage to supply and distribute that much ethanol 21 into the State of California within the time frames that 22 we're talking about. 23 So we are looking at, you know, substantial, 24 potential requirement to use a product that is going to 25 have substantial difficulty in being supplied to the 84 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 state. 2 PROFESSOR FRIEDMAN: It will be in very short 3 supply, and that's going to drive the price of the 4 gasoline that we all use to get to and from. 5 MR. KENNY: I think price volatility is the 6 pretty straightforward consequence of what we're looking 7 at. Substantial price volatility. 8 CHAIRMAN LLOYD: As I mentioned earlier, not 9 only is it going to drive prices up, but we're actually 10 paying -- we're all paying, again, the tax credit, so 11 we're getting a double whammy. 12 MR. KENNY: We're going to lose on multiple 13 fronts. We're probably going to have greater truck 14 traffic, which was just described, so we have greater 15 emissions as a result. There are the public health 16 impacts, essentially, as we're talking about tonight. 17 And we are going to see greater price volatility. We 18 are going to see greater costs as a result of that, and 19 we are going to see probably at least some supply 20 problems in the State of California. 21 SUPERVISOR DESAULNIER: All for a product that 22 has no health benefit. 23 MR. KENNY: All for a product that has no 24 health benefits. And, in fact, we can produce a 25 gasoline in the state of California, again, that is 85 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 cleaner and that is cheaper in terms of costs of what 2 this is going to require us to do. 3 SUPERVISOR DESAULNIER: At least no health 4 benefit other than those people who may produce them; 5 right? 6 MR. KENNY: I would agree with that. 7 CHAIRMAN LLOYD: Question, Mr. Scheible, maybe 8 my memory doesn't serve me very well, but I thought that 9 when we were here about 14 months or 16 months ago, that 10 the total truck trips were around closer to 60 than what 11 I see the 290. Have we revised our estimates upwards? 12 MR. SCHEIBLE: If that was a previous number, 13 apparently we have. 14 Dean, can you clarify that? He's the source of 15 the numbers. 16 MR. SIMEROTH: Well, actually my source staff 17 is the source of the numbers. 18 MR. SCHEIBLE: They're not here. 19 MR. SIMEROTH: They're not here, so. 20 CHAIRMAN LLOYD: I was just curious because I 21 remember a smaller number because I remember the 22 father -- what was his last name? Father -- 23 MR. SIMEROTH: Yes. 24 CHAIRMAN LLOYD: He was here and he talked 25 about that, and I thought we said it was only 60 trucks 86 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 statewide, but, as he said, in the basin, but if they're 2 all in my backyard, it's still a large number. And I 3 think that's where the .07 was a little bit misleading 4 because clearly if we smear things up, but that's not 5 the case in these corridors. They're going to be much 6 higher. 7 MR. SIMEROTH: Dr. Lloyd, part of the confusion 8 is that we've gone over to the number of truck trips a 9 day, not the number of trucks. 10 CHAIRMAN LLOYD: Oh. Okay. 11 MR. SIMEROTH: The actual number of trucks 12 would be much less. 13 CHAIRMAN LLOYD: Okay. Thank you for the 14 clarification. 15 MR. SIMEROTH: The reason we did that is now we 16 put it on the mileage basis and more accurately estimate 17 the emissions. 18 CHAIRMAN LLOYD: Yes. So Father Estrella, he 19 talked about -- we talked about trucks at that time. 20 You're right. Thank you. Thank you. 21 Anymore questions from the Board? We actually 22 have -- oh. Sorry. Mr. Scheible. 23 MR. SCHEIBLE: I don't know if we have 24 witnesses on this issue. We have one person who put in 25 a question, so when it's appropriate I'll state the 87 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 question. 2 CHAIRMAN LLOYD: Okay. After that we have two 3 witnesses. And I'd like to call them at this point. 4 Steven Stein of United Western Grocers and Bahram Fazeli 5 for Citizens for a Better Environment. So if you could 6 please pass them the mike and if you could read the 7 question after that. 8 MR. STEIN: Good evening. My name is Steve 9 Stein. I'm with Unified Western Grocers. We are a 10 corporate office located in Commerce. We are interested 11 in alternative fuel projects, and I appreciate the 12 effort that the subcontractors of the Air Resource Board 13 has provided to us so far. 14 We operate roughly 400 diesel trucks throughout 15 California and the western states. And we are presently 16 prepared to replace, oh, approximately, 15 different 17 yard spotters with some form of alternative fuel, and 18 we're prepared to do this by year end. If the project 19 is as successful as we hope, then we can expand this 20 project, and we wish to expand it into our over-the-road 21 vehicles outside the yards. 22 To do this, we need the subcontractors' 23 continued assistance and the ARB's assistance 24 financially through Carl Moyer or any other programs so 25 that we can get our local business neighbors involved. 88 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 We would like to propose a project with the city of 2 Commerce, with their fleet maintenance operation so that 3 we can move this project forward as quickly as possible. 4 And, with that, I'd again like to thank the 5 subcontractors that we have used. They've been very 6 helpful. Thank you very much. 7 CHAIRMAN LLOYD: Thank you for your comments. 8 Questions from the Board? 9 Thank you. 10 Mr. Bahram Fazeli. 11 Familiar faces this evening. 12 MR. FAZELI: Thank you, Mr. Chairman, ladies 13 and gentleman of the Board. My name is Bahram Fazeli 14 and I'm a staff scientist with Communities for a Better 15 Environment. I also want to thank Assemblyman Firebaugh 16 for recommending that the ARB conduct some meetings in 17 Huntington Park. 18 I didn't want to fill out any card, so I just 19 want to address one issue about asthma that was brought 20 up earlier in the children's study. And that I want to 21 agree with Dr. Burke that I think a careful study and 22 survey be conducted in the communities of colors, 23 especially Southeast L.A. or most of L.A. to find out 24 there are disproportionate number of children suffering 25 from asthma in these communities. 89 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 One only had to attend one of the community 2 meetings around the proposed Nueva Azalea power plant in 3 South Gate in which many community members, mothers, 4 fathers, came and testified about their children, their 5 neighbors' children and their friends' children having 6 asthma. 7 So I would strongly encourage South Coast and 8 the Air Resource Board to look more carefully into the 9 issue of asthma among children in communities of color, 10 especially in Southeast L.A. 11 As to the issue of reformulated gasoline, I 12 think it has been shown that intensification and the 13 process of refining has resulted in environmental 14 justice impacts and has impacted the communities next to 15 refineries disproportionately. So I would urge the 16 Board, the staff of ARB to take a closer look at the 17 environmental justice impacts of any reformulation 18 considering the past experience of this process. 19 The couple of things that I noticed in the 20 presentation, one was that on page 4 on the presentation 21 it says, "Amendments eliminate the use of MTBE and 22 provides the refiners flexibility in producing cleaner 23 burning gasoline." And I wasn't sure what they mean by 24 "flexibility," and if somebody could explain that on 25 staff, I would appreciate that. 90 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Also I think when it says that producing 2 gasoline -- next page, "Producing gasoline without MTBE 3 will result in no emission increases," I think the 4 presentation was not very clear in stating whether that 5 was a -- as a result of a study by ARB or was a 6 self-reporting by the refiners. It seems likes -- I was 7 not very clear whose study or whose result was that? 8 And if that's the result of the report of the refiners, 9 I would be very skeptical. 10 Also in the next page, page 6, there is the 11 refinery safety and the public under the category of 12 "South Coast Community Alert Network" is this -- I 13 think -- maybe somebody from South Coast can clarify. 14 Is this really happening? Because I'm not aware of a 15 real functional public serving, community serving 16 community alert network in the South Coast. So I think 17 we should be very careful in not just putting things on 18 paper that don't really exist in real life. 19 Also at the end, I want to commend, actually, 20 the efforts of ARB and the staff and the Board in 21 implementing air guidelines. They're very important for 22 the future of Southern California as a whole. Thank 23 you. 24 CHAIRMAN LLOYD: Thank you very much. And I'm 25 sure staff will provide you the answers to your 91 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 questions there. 2 Mr. Scheible. 3 MR. SCHEIBLE: Okay. We had a question that 4 was stated as, "The CEC," California Energy Commission, 5 "has predicted" that gasoline -- "a gasoline supply 6 shortfall with the phase out of MTBE. Ethanol may 7 contribute to a portion of this shortfall but, in fact, 8 waiver or not, there will still be a shortfall. How 9 does CARB view this situation?" 10 The CEC and we have worked together, and 11 clearly what we see happening in California is that we 12 have turned the corner now in the summer, and by 2003 13 for much of the year where California production of 14 gasoline will not equal California demand. So our 15 refineries will not be able to produce 100 percent of 16 the fuel that consumers consume in this state. 17 Now, that can be characterized as a production 18 shortfall, but in reality what it is, and all parties 19 recognize is, it's a need to import. Just like many 20 other markets in the United States do sufficient product 21 to level out supply and demand. So meeting demand will 22 be harder as that situation evolves. 23 That situation was probably increased somewhat 24 by the phase out of MTBE and the move to ethanol in 25 terms of when it actually occurs and how many months in 92 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 2003 it will occur, but it was happening anyway. 2 If we are to get out of that situation, we will 3 have to increase refinery capacity inside of the state 4 or make fantastic progress on decreasing demand for 5 gasoline and petroleum products. Neither one of which 6 looks like it's likely to occur. 7 So we are facing a new reality. I think we are 8 experiencing that new reality right now in terms of last 9 year's and the year before and this year's increase in 10 gasoline products. We have a tight market which means 11 it's readily available but expensive. 12 CHAIRMAN LLOYD: Indeed. 13 MR. SCHEIBLE: And in the future that market 14 may well get tighter, and we will have -- the Energy 15 Commission and the ARB will have to work with oil 16 companies to ensure that one of the goals that we had 17 when we did the Reformulated 3 regulation was to ensure 18 that external suppliers can produce the fuel that we 19 need in the quantities we need it continues to be 20 available. 21 CHAIRMAN LLOYD: Mike, I don't know. That 22 partially answered the question that I had here. The 23 question being given that we're suffering now from being 24 gouged by out-of-state energy producers on electricity 25 side, are we going to be gouged by the oil and gas 93 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 industry on gasoline? 2 MR. SCHEIBLE: Wow. The oil and gas industry 3 is in the state. And -- 4 CHAIRMAN LLOYD: But the customer -- is the 5 customer going to feel it? 6 MR. SCHEIBLE: Right. As we've seen the energy 7 markets, demand does not respond to price. And tight 8 markets lead to great opportunity to make profit, and 9 until the state fundamentally changes, either through 10 legislating inventory requirements or creating a reserve 11 or encouraging and getting additional capacity or doing 12 something to influence the public so that there is more 13 response to increases in supply, we're kind of faced on 14 all fronts with fuel prices rising quickly. 15 And I don't think gasoline is quite the same 16 situation as electricity, which you cannot store and 17 which is completely out of our control. But the future 18 may well be difficult. That's part of the fear about 19 with ethanol, that's just another complicating factor 20 that could make a difficult situation unmanageable. 21 CHAIRMAN LLOYD: Yes. What description that 22 you have that's really clear, I don't know -- I don't 23 think the general public is aware of the huge 24 significance of California being granted that waiver. 25 It could make a huge difference. 94 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Mike. 2 MR. KENNY: Mr. Chairman, Mr. Fazeli had asked 3 a couple of questions, and if you'd like, we can have 4 Mr. Simeroth respond to those. 5 CHAIRMAN LLOYD: Great. 6 MR. SIMEROTH: Thank you, Mr. Kenny. 7 Mr. Chairman, I think the first question was: 8 How do we provide flexibility to refiners in reducing 9 the Phase 3 reformulated gasoline or gasoline without 10 MTBE? We basically adjusted the standards. Sulphur is 11 going down, and benzene is going down to allow some of 12 the distillation temperatures to go up slightly. 13 If you look at the properties that ether brings 14 into producing gasoline, it -- ethers automatically 15 reduce distillation temperatures. And when you lose 16 that, you lose that automatic adjustment. So we're 17 actually getting the cleaner because of the lower 18 sulphur, lower benzene adjustments. And they get more 19 flexibility on the distillation distribution and the 20 temperatures that the gasoline evaporates at. 21 In terms of the prediction is there more 22 emission reductions? That was done by Air Resources 23 Board staff and was also reviewed -- peer reviewed by 24 the University of California professors to ensure that 25 we had done it correctly. 95 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 In terms of the Community Alert Network, that's 2 an automatic telephone guiding system. As soon as you 3 punch the button, it dials up automatically. They give 4 a prerecorded message to the people, and that's -- I 5 can't testify to the effectiveness of the system, but 6 that's the system we have in place. 7 In terms of emissions from refineries, what has 8 happened to that? Looking at emission inventory over 9 the last decade, emissions from refineries have gone 10 down. They've gone down for reactive organic acids. 11 They've gone down for oxides and nitrogen. They've gone 12 down for carbon monoxide. This decade is when we've 13 been introducing the various fuel reformulations that's 14 resulted in more processing at the refineries. 15 The reason is that refiners have closed down 16 the older, less efficient units and put in modern units. 17 The modern units are burning -- are using less energy. 18 They're better controlled, et cetera. The one 19 exception, so it's not all good news I'm giving you, is 20 sulphur dioxide. It looks like sulphur dioxide 21 emissions have gone up. Refineries have to pull more 22 sulphur out of the crude in order to make our sulphur- 23 free fuels. 24 If you look at how much it's gone up, it's in 25 the neighborhood of a couple of tons a day at the 96 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 refineries. It's scattered over 13 refineries. 2 Emissions from the use of the fuel have gone down by in 3 excess of 160 tons a day. So we traded 2 tons for 160 4 tons reduction. Usually, it's not too bad a trade. 5 If you look at more specifically at the local 6 communities and you estimate how much traffic is around 7 the refineries and how much sulphur has been reduced 8 from that traffic, by refinery, there's actually less 9 sulphur being out in the local communities when you add 10 the traffic in. 11 And there's also been at least one case where 12 initially benzene went up some and the same thing 13 happened. We cut benzene emissions in half in the 14 vehicles, and that more than offset what was happening 15 at the fixed facility. 16 So in response to the previous board meeting on 17 this topic that was held at Richmond, we are initiating 18 to look into this again and make sure that our 19 inventories are correct. It's been accounted for 20 correctly. Also make sure that the new units aren't 21 malfunctioning more frequently. We just received all 22 the data from the two affected districts, process of 23 reviewing and summarizing that. Thank you. 24 CHAIRMAN LLOYD: Thank you. 25 Are there comments or questions from the Board? 97 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 Dr. Calhoun. 2 DR. CALHOUN: Yes. I guess I'd like to go back 3 to the question that was asked earlier about the waiver. 4 Has California ever requested a waiver and had the 5 waiver denied? 6 MR. KENNY: We routinely request waivers on the 7 automotive program, and they are routinely granted. 8 Although, sometimes it does take some time. This kind 9 of a waiver has never been requested before where it's 10 under the Fields Program. However, we do again think 11 that we made a very compelling case, and we actually did 12 have every hope that it would be granted. And, again, 13 it has not yet been formally denied, so it is still 14 pending. 15 DR. CALHOUN: So the answer to my question is 16 no, it wasn't. 17 MR. KENNY: That's correct. This is the first 18 time we've done this in the Fields Program. 19 CHAIRMAN LLOYD: Yes, Mr. McKinnon. 20 MR. MCKINNON: Yes. This is a question for 21 Dean. I think what you said is at the refineries we may 22 be picking up a couple of tons of sulphur dioxide but 23 the trade off is 160 tons coming out of the -- coming 24 out of what -- the burning of the fuel, if you will. 25 I'm interested -- sort of as I understood kind of the 98 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 mechanics of what happened was when the refiners 2 received flexibility for pulling more sulphur out of the 3 fuel that became gasoline, it also kind of encouraged 4 them to begin bringing sulphur out of diesel. 5 When you talk about 160 ton gain, is that just 6 gasoline or does that include diesel? 7 MR. SIMEROTH: Board Member McKinnon, you're 8 correct. the 160 is a combination of the gasoline and 9 diesel. They are both about 80 tons a day equal by 10 happenstance. 11 CHAIRMAN LLOYD: Supervisor DeSaulnier. 12 SUPERVISOR DESAULNIER: One thing that would 13 help me in terms of why we had this meeting specifically 14 in terms of Reformulated 3 representing a county in 15 Northern California that will be affected and granted 16 that the numbers aren't large but the concern, as I 17 mentioned in Richmond, is the cumulative effect. 18 And I think on the long-term EJ Program, that's 19 going to be a fascinating process because the business 20 community is going to say to us, "Well, if we can't 21 build them here in the tradition industrial belts, where 22 will we build them?" And for those of us who represent 23 the industrial belts, we can success some very affluent 24 communities who might change some of their zoning laws. 25 But, specifically, I think for this community 99 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 and the community along the 80 corridor in the Bay Area, 2 I think it would be helpful at least for me, and I don't 3 know how Dr. Burke feels, are things like inspections. 4 We talked last time about particulate traps. If we 5 could identify the trucks that are carrying ethanol, 6 that would be really helpful to continue to work on 7 because I would assume that the people in this community 8 are like the people in Richmond and Oakland. 9 They want to know specifically what we're 10 doing, not just that we're trying to do these nice 11 things. And since there's a deserved healthy amount of 12 skepticism in those communities about what we in 13 government do for them, I think it would really be 14 helpful that we specifically identify the types of 15 things we're going to do in those communities. 16 And the inspections you're doing down here I 17 think are terrific, but it would certainly be helpful if 18 we knew specifically the kind of things we were going to 19 do in the communities affected. 20 MR. KENNY: It is our plan to actually do that, 21 and I think one of the things that we'll be bringing to 22 you in the near future or, essentially, within the next 23 six to nine months is probably a more accurate way of 24 putting it, is the cargo tank regulation. And the idea 25 there was that we potentially will see some greater 100 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 truck traffic as a result of the transport of ethanol, 2 and we thought that as a result -- that that will result 3 in some greater level of PM emissions, for example. 4 However, if we have a requirement that goes 5 into place that is specifically addressed to those 6 trucks, then we can then minimize the amount of PM 7 reductions associated with those trucks and potentially 8 even diminish it. 9 In addition, we are basically looking at 10 straightforward enforcement that is targeted on some of 11 these places, as Mr. Cackette said. Previously, we had 12 done this on the major highways and were getting kind of 13 the new trucks, but this is a way of looking at like the 14 more -- more likely areas for the older trucks to be in 15 existence and for us to basically look at those and try 16 to specifically bring them down. 17 SUPERVISOR DESAULNIER: One of the things -- 18 Mr. Chairman, just indulge me for a second. In terms of 19 follow up, which was a big thing at our last meeting, I 20 think it would be helpful for the affected communities 21 to know that when we get these specific types of things 22 we're going to do in the communities, that as we get 23 closer to the end of 2002, we actually do some outreach 24 perhaps through the districts, as Dr. Burke has 25 suggested, but at least in partnership with them. 101 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 CHAIRMAN LLOYD: Good suggestion. 2 I guess any other comments from my colleagues? 3 With that, again, I'd like to thank all the 4 participants, thank my colleagues for coming, thank the 5 community for the hospitality. I think, again, we've 6 learned -- although we didn't have a lot of questions, 7 we certainly learned things, and I think we appreciate 8 the staff's presentation here. 9 And, again, Dr. Burke, I'd like to reiterate 10 how much we need to work together with the South Coast. 11 It's clearly a huge problem down here, so we look 12 forward to that continuing relationship. 13 So if there's -- 14 MR. KENNY: Mr. Chairman. 15 CHAIRMAN LLOYD: Yes. 16 MR. KENNY: One thing I did want to request is 17 we did have the enforcement update that we were planning 18 to present to the Board today. But in the interest of 19 time, if the Board would like, we can push it until 20 June. 21 CHAIRMAN LLOYD: I'm sorry about that, but what 22 are the wishes my colleagues? Do you prefer to delay it 23 until June? That was the one item on enforcement. 24 PROFESSOR FRIEDMAN: We also have in June 25 the -- 102 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 MR. KENNY: The June meeting is going to be in 2 Sacramento. MICA dinner? Yes, we do. 3 PROFESSOR FRIEDMAN: Infrastructure. 4 MR. KENNY: That's correct. We have the 5 standardized charging that we're bringing to you. 6 CHAIRMAN LLOYD: We are delaying one issue from 7 July. Is there any problem if we delay this tonight? 8 MR. KENNY: There is no problem in delaying it, 9 and what we can do is we can look at the agendas for 10 June and July, and we can actually put it on the agenda 11 that's probably most convenient for the Board and fits 12 into the time schedule availability. 13 CHAIRMAN LLOYD: Mr. McKinnon. 14 MR. MCKINNON: There was an issue that was 15 raised earlier by one of the members of the public that 16 came about small trucking fleets and I -- something 17 occurred to me, and I just kind of want to lay this on 18 the table, and maybe we can think of a way to address 19 it. But there are -- in the port, there used to be 20 large trucking companies here that moved goods off the 21 port. 22 And what's happened on the port is all -- in 23 many cases, the work has been subcontracted out to 24 individuals who own, like, one truck, and they're paid 25 very, very little to haul each load. And sometimes they 103 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 wait hours in line to pick up a load, and it's abusive 2 in terms of kind of the labor component of it. But I'm 3 also concerned about safety of the trucks, air emissions 4 of the trucks because people are just not making it. 5 And I'm wondering if we can find out if the PUC 6 regulates the cost of those loads, or maybe there's some 7 other approach that we ought to think about. And, 8 anyway, it's a comment I've been kind of thinking about, 9 the little guy in the diesel repair. And there's some 10 little guys that own one truck. 11 MR. KENNY: We'd be happy to follow up on that. 12 CHAIRMAN LLOYD: Thank you, Mr. Kenny. I guess 13 without -- I guess I don't hear any great jump to hear 14 the last item, and if we can accommodate this I think 15 sufficiently in the next two board items, I think we can 16 certainly bring this meeting to a close. This is not a 17 regulatory item. I don't need to have a motion here. 18 Mr. Kenny. 19 MR. KENNY: Before the meeting closes, I did 20 want to mention one thing, and that is that the staff 21 has recently released our Clean Air Plan Proposals and 22 you heard a little bit about that in the presentations 23 tonight. But what the Clean Air Plan is, it's kind of 24 an amalgam of everything we're trying to essentially do 25 to reduce emissions throughout the State of California. 104 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 It also incorporates the environmental justice efforts 2 that you heard about tonight to some extent. 3 There is a workshop that is going to be held 4 next week on this, and it's a four-day workshop, and we 5 basically have put information out that covers the whole 6 host of potential measures that we can look toward for 7 emissions reductions over the next decade and beyond. 8 And so I wanted to mention that to the Board 9 because it is going to be a fairly comprehensive effort 10 on the part of the staff, so we are trying to look at 11 what we can do, not only to meet our SIP obligations but 12 also in the context of, essentially, toxic reductions, 13 the environmental justice protection and trying to 14 really kind of create the unified theory of air 15 pollution control. And that process is going to begin 16 next week. 17 CHAIRMAN LLOYD: And my understanding is it's 18 in Sacramento next week? 19 MR. KENNY: That's correct. 20 CHAIRMAN LLOYD: And the board members are 21 encouraged to attend. In this case, I will preempt 22 Dr. Burke. Are there any plans to have one of these 23 meetings, these workshops, down in the South Coast? 24 MS. TERRY: Absolutely. 25 MR. KENNY: The answer is yes. 105 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 MRS. RIORDAN: Yes? 2 MR. KENNY: Yes. 3 MRS. RIORDAN: When? 4 MR. KENNY: I'm not sure what the exact dates 5 are, but we'll provide those. 6 MRS. RIORDAN: Pardon me. 7 MR. KENNY: I don't know what the dates are, 8 but we'll get those to you. 9 CHAIRMAN LLOYD: Yeah. I'm delighted to hear 10 that you intend to do that because clearly it's a major 11 impact there. 12 MRS. RIORDAN: Yeah. 13 MR. KENNY: This is the kick off. And what 14 we're going to be doing is really working on this for 15 quite a number of months, and we will bring you sort of 16 the finished product hopefully at the end. It has gone 17 through probably a fairly substantial amount of public 18 comment from all over the state. 19 CHAIRMAN LLOYD: I think it would be helpful 20 like in the spirit of what we heard at our retreat that 21 maybe to make sure that Charlotte is aware of the time 22 and place of all the workshops so that the Board can 23 make a decision whether the board members want to attend 24 or not. 25 So a third time going. Thank you very much 106 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 indeed. 2 (Proceedings concluded at 7:55 p.m.) 3 * * * 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 107 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900 1 STATE OF CALIFORNIA 2 3 4 I, Jennifer S. Barron, CSR 10992, a Certified 5 Shorthand Reporter in and for the State of California, 6 do hereby certify: 7 That the foregoing proceedings were taken down 8 by me in shorthand at the time and place named therein 9 and were thereafter transcribed under my supervision; 10 that this transcript contains a full, true and correct 11 record of the proceedings which took place at the time 12 and place set forth in the caption hereto. 13 14 I further certify that I have no interest in 15 the event of this action. 16 17 18 EXECUTED this________day of_____________, 2001. 19 20 21 ________________________________ 22 Jennifer S. Barron, CSR #10992 23 24 25 108 BARNEY, UNGERMANN & ASSOCIATES, INC. (888) 326-5900