BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD AIR RESOURCES BOARD AUDITORIUM 9530 TELSTAR AVENUE EL MONTE, CALIFORNIA THURSDAY, JUNE 24, 2004 9:00 A.M. JAMES F. PETERS, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 10063 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Alan Lloyd, Chairperson Mr. Joseph Calhoun Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Professor Hugh Friedman Dr. William Friedman Mr. Matthew McKinnon Mrs. Barbara Riordan Ms. Barbara Patrick STAFF Ms. Catherine Witherspoon, Executive Officer Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Diane Johnston, General Counsel Ms. Kathleen Tschogl, Ombudsman Mr. Gerhard Achtelik, SEV Implementation Section Mr. Richard Bode, Chief, Health & Exposure Assessment Branch Ms. Janette Brooks, Chief, Air Quality Measures Branch, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. Bart Croes, Chief, Research Division Mr. Robert Cross, Chief, Mobile Source Control Division Mr. Steve Giorgi, Manager, Consumer Products Enforcement Section, Enforcement Division Ms. Annette Hebert, Chief, Heavy-Duty Diesel In-Use Strategies Branch, Mobile Source Control Division Mr. Robert Jenne, Senior Staff Counsel Mr. Jack Kitowski, Chief, On-Road Control Regulation Branch Ms. Leslie Krinsk, Senior Staff Counsel Mr. David Mallory, Manager, Measures Development Section Ms. Kathleen Mead, Air Pollution Specialist, Retrofit Implementation Section, Mobile Source Control Division Mr. Jim Ryden, Chief, Enforcement Division Ms. Nancy Steele, Manager, Retrofit Implementation Section Ms. Carla Takemoto, Manager, Technical Evaluation Section, Stationary Source Division Dr. Clint Taylor, Air Pollution Research Specialist, Research Division Mr. Peter Venturini, Chief, Stationary Source Division Dr. Barbara Weller, Manager, Population Studies Section ALSO PRESENT Mr. Robert Babik, GM Mr. Byron Butterworth, Butterworth Consulting, Chlorobenzene Producers Association PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED ALSO Ms. Nidia Bautista, Coalition for Clean Air Mr. Jose Cisneros, San Francisco Muni Mr. R. Bruce Dickson, Chlorobenzene Producers Association Mr. Thomas Donegan, Cosmetic, Toiletry and Fragrance Association(CTFA) Mr. Michael Eaves, CA Natural Gas Vehicle Coalition Ms. Dawn Friest, EMA Ms. Ann Heil, Tri-TAC Mr. Warren Huang, Department of Public Works Mr. Chung Liu, South Coast AQMD Ms. Julie Masters, NRDC Mr. Jim Mattesich, Reckitt Benckiser Mr. Marty Mellera, San Francisco Muni Mr. David Olmeda, SAMTRANS Mr. Richard Pearl, Magic American Mr. Doug Raymond, Sherwin Williams Ms. Melissa Lin Perrella, NRDC Mr. Douglas Quetin, CAPCOA Mr. Joshua Shaw, CTA Mr. Michael Simon, ISE Corporation Mr. Gene Walker, Golden Gate Bridge - CA Transit Association Mr. Barry Wallerstein, South Coast AQMD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. Thomas Webb, BAE Systems Mr. Bill Willert, Willert Home Products Ms. Katy Wolf, Institute Research and Technical Assistance(IRTA) Mr. Joseph Yost, Consumer Specialty Products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX PAGE Opening Remarks 1 Roll Call 1 Item 04-6-1 16 Chairperson Lloyd 16 Executive Officer Witherspoon 16 Staff Presentation 17 Item 04-6-4 27 Chairperson Lloyd 27 Executive Officer Witherspoon 31 Staff Presentation 33 Ombudsman Tschogl 48 Q&A and Discussion 50 Joshua Shaw 56 Jose Cisneros 64 Gene Walker 68 David Olmeda 71 Robert Babik 73 Thomas Webb 80 Douglas Quetin 83 Barry Wallerstein 88 Michael Eaves 94 Julie Masters 101 Michale Simon 104 Dawn Friest 110 Nidia Bautista 116 Marty Mellera 122 Ex Partes 124 Discussion 127 Vote 134 Afternoon Session 135 Item 04-6-5 135 Chairperson Lloyd 135 Executive Officer Witherspoon 136 Staff Presentation 137 Ombudsman Tschogl 153 Warren Huang 155 R. Bruce Dickinson 156 Byron Butterworth 188 Melissa Lin Perrella 199 Joseph Yost 202 Ann Heil 205 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX CONTINUED PAGE Nidia Bautista 211 Thomas Donegan 211 Richard Pearl 215 Jim Mattesich 215 Katy Wolf 216 Doug Raymond 217 Discussion 220 Vote 222 Adjournment 223 Reporter's Certificate 224 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON LLOYD: Good morning. 3 The June 24th meeting of the Air Resources Board 4 will now come to order. 5 Supervisor DeSaulnier, would you please lead us 6 in the Pledge of Allegiance. 7 (Thereupon the Pledge of Allegiance was 8 Recited in unison.) 9 CHAIRPERSON LLOYD: Will the Board please call 10 the roll. 11 BOARD CLERK ANDREONI: Dr. Burke? 12 Mr. Calhoun? 13 BOARD MEMBER CALHOUN: Here. 14 BOARD CLERK ANDREONI: Ms. D'Adamo? 15 BOARD MEMBER D'ADAMO: Here. 16 BOARD CLERK ANDREONI: Supervisor DeSaulnier? 17 BOARD MEMBER DeSAULNIER: Here. 18 BOARD CLERK ANDREONI: Professor Friedman? 19 BOARD MEMBER HUGH FRIEDMAN: Here. 20 BOARD CLERK ANDREONI: Dr. Friedman? 21 BOARD MEMBER WILLIAM FRIEDMAN: Here. 22 BOARD CLERK ANDREONI: Mr. McKinnon? 23 BOARD MEMBER McKINNON: Here. 24 BOARD CLERK ANDREONI: Supervisor Patrick? 25 BOARD MEMBER PATRICK: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD CLERK ANDREONI: Ms. Riordan? 2 BOARD MEMBER RIORDAN: Here. 3 BOARD CLERK ANDREONI: Supervisor Roberts? 4 CHAIRMAN LLOYD: Chairman Lloyd? 5 CHAIRPERSON LLOYD: Here. 6 Well, thank you very much. And welcome to you 7 all. 8 Hopefully we've got -- we've got a reasonably 9 full agenda today with two important items. My colleagues 10 on the Board, if you notice the change in order, I'm now 11 pincered between two Friedmans. And so if I don't keep 12 this on track, then I've got -- I'm going to be pushed 13 from both sides. So pincer movement here. 14 In all seriousness, by the way, it's wonderful to 15 be back in El Monte. Welcome to all the staff. And, as 16 usual, you've done a great job here making us feel 17 welcome. We don't spend enough time. So thank you all 18 and Bob and the staff and Bill and John. Thank you very 19 much indeed. 20 Before we get going -- like I say, I'm going to 21 keep my remarks short. But I think that one of my 22 colleagues would like to say a few words. 23 BOARD MEMBER McKINNON: Good morning. 24 CHAIRPERSON LLOYD: Mr. McKinnon. 25 BOARD MEMBER McKINNON: Thank you, Mr. Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 In the last few days my old area of employment, 2 the Machinists Union, came to me and has asked me to 3 return, doing some work throughout the western U.S. And 4 it's very, very sad for me. I'm going to here in the next 5 several days be resigning from the Board, and at some 6 point next month resigned from the labor agency, to start 7 work for Machinists Union. And this in my mind is going 8 to be my last meeting and my last opportunity to just very 9 publicly thank everybody for everything, everything that 10 you've done. 11 And I want to start with this Board. I've been 12 around since June '99. And many of you have many, many, 13 many more years of experience. But I'm so proud of what 14 this Board can do together in all the different expertise, 15 public service, at the local level, in the legal field, in 16 the medical field, in automotive engineering. It's a bit 17 humbling to serve with this Board and everything this 18 Board brings to any question that's before it. And I 19 really, really appreciate every -- each and every one of 20 you. And it's been a lot of fun, I've learned a lot from 21 you, and I'm going to miss you a lot. 22 The staff, you're awesome, you're awesome. And 23 time and time again the staff of this Board has taken 24 difficult, difficult issues and worked years through a 25 process to make sure that the public had opportunities in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 the interests involved had opportunities to help shape the 2 regulatory climate carefully, that considered all the 3 interests. And it's just stunning the work you do. I've 4 never worked in the public sector before. And, you know, 5 I think about the talents that, you know, every one of you 6 have brought in. And I think about the what we've 7 accomplished since '99 in terms of huge, huge, huge 8 changes around dealing with diesel. Before, you know, we 9 went to work on environmental justice, it was sort of a 10 term you heard out there maybe in transportation, maybe in 11 brown fields. But it's not -- you know, had never really, 12 really been part of sort of day-to-day life in an 13 environmental regulatory agency. 14 And certainly we have a ways to go, but it's 15 stunning what progress we've made. And not a bit of it 16 could have been done without the staff of this Board. Not 17 a bit of it. I can't -- I can't say enough to tell you 18 what a pleasure it is to go to a briefing, get all sides 19 of the issue, to know that you've spent, you know, a year 20 or more working an issue, you know what all the interests 21 need and you know how to sort it out. And you leave us 22 often times with, you know, fairly easy decisions to make 23 because you've made it through all the loops to get us 24 there. 25 And, you know, certainly it's been a pleasure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 working with, you know, many of the interests involved, 2 auto and oil and the environmental community. And 3 CAPCOA -- you know, CAPCOA's stood up time and time again 4 to do some of the difficult work with us. 5 And so thank you all. It's been a pleasure. I'm 6 really glad that I sort of had in advance in a meeting to 7 be able to say this publicly. It's been great and I'm 8 going to miss you all. 9 CHAIRPERSON LLOYD: Thank you very much, Matt. 10 And I'm going to allow my colleagues all to say a few 11 words. I would like to add, to me a tremendous loss. I 12 didn't know Matt when he came on the Board. But during 13 the time we've worked together he's made just unique 14 contributions. And, again, I think -- I've got the utmost 15 respect for him both in what he represents but also his 16 person. We've had some heated discussions at times, but 17 most of the time it's not. But I've always respected 18 where he's come from. He's provided a unique perspective 19 to the Board in acknowledging the labor side. But also 20 his work on EJ I think has been tremendous. And I really 21 appreciate, Matt, all that you've done on that and 22 continued on that part of it. 23 I learned a tremendous lot from you and what you 24 represent and giving a different perspective on things, 25 your technical side as well, as I say, your skills as a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 negotiator. 2 So a big loss. And I look back at that and some 3 of the humorous side we talked about last night. I won't 4 go into all of those. 5 (Laughter.) 6 BOARD MEMBER DeSAULNIER: That'll be a two-day 7 hearing if you do. 8 CHAIRPERSON LLOYD: But the one I vividly 9 remember and -- when we had a meeting in San Francisco. 10 And when Supervisor DeSaulnier gave me very great words of 11 advice, "Don't engage Ethel." 12 That was at the same meeting where it was tough 13 going. And I remember Matt talking. And we had these 14 signs pop up because we had people there -- security 15 people so if they got unruly, we'd have them escorted out. 16 So we got around that. And they had these signs. And so 17 that when Matt was speaking at one time, he had this signs 18 popping up, "Liar, Liar." 19 (Laughter.) 20 CHAIRPERSON LLOYD: And after a while Matt 21 couldn't take it any longer and began to engage the 22 public. Of course that was also a mistake. 23 (Laughter.) 24 CHAIRPERSON LLOYD: But, again, Matt, a 25 tremendous loss. I say I've got the utmost respect. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 wish you extremely well in what you do. I think you've 2 exhibited the very best in public service. I can only say 3 that the job you go to and the people you represent have 4 the finest person. 5 And so good luck. Thank you. 6 BOARD MEMBER WILLIAM FRIEDMAN: Well Matt, it 7 really has been a privilege and a true pleasure to have 8 served on this Board with you. I'm really going to miss 9 you. You bring a unique perspective to our dealings. You 10 taught me an immense amount. And for that I'm really 11 grateful. And you're going to be a great success in 12 whatever you do, because you cut through the BS all the 13 time and you get right to the heart of the matter. And as 14 a cardiologist, I really appreciate that. 15 (Laughter.) 16 BOARD MEMBER WILLIAM FRIEDMAN: But thanks very 17 much, Matt and good luck to you. 18 BOARD MEMBER RIORDAN: Mr. Chairman? 19 CHAIRPERSON. LLOYD: If my colleagues could go 20 down -- 21 BOARD MEMBER RIORDAN: Yes. I'd also like to 22 echo our appreciation to Matt, particularly in the 23 environmental justice area. He was just terrific. And 24 that is not an easy area to work out the different 25 interests and -- but I also want to say, Matt, that I've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 always had great respect for your organized labor 2 movement. And are they ever wise in bringing you back for 3 the western United States. Congratulations. And we look 4 forward to working with you, maybe not here on the Board, 5 but with your movement. 6 Thank you. 7 BOARD MEMBER CALHOUN: Matt, I was trying to 8 think of what I would say to characterize the perspective 9 that you brought to the Board. And I haven't really 10 decided how best to say that. 11 But I would like to echo Dr. Friedman's and all 12 the other Board members' comments. 13 And Dr. Burke isn't here, and I know he's your 14 favorite Board member. 15 (Laughter.) 16 BOARD MEMBER McKINNON: I feel bad about that. 17 (Laughter.) 18 BOARD MEMBER McKINNON: I was going to say to 19 him, "How about that Detroit." But -- 20 (Laughter.) 21 BOARD MEMBER CALHOUN: I knew that was coming. 22 That's why I said that. 23 But, anyway, I want to wish you well. And I'm 24 sure our paths will cross again. 25 BOARD MEMBER McKINNON: Thanks, Joe. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 BOARD MEMBER PATRICK: Matt, I wish you well. 2 You have really taught us all a lot because you 3 just totally cut through the BS on this thing, and I think 4 that -- some of us, especially those of us in elected 5 office, we would like to do that, but we don't because we 6 want to get reelected. And so Matt just kind of gets in 7 there. 8 But for all of you who will be giving testimony 9 in the future, it's safe to come to the microphone now. 10 And I think our meetings are going to be much shorter now. 11 (Laughter.) 12 BOARD MEMBER PATRICK: So we will definitely miss 13 you, and hope that when you're in Sacramento -- that's I 14 think going to still be your home base? 15 BOARD MEMBER McKINNON: Yes. 16 BOARD MEMBER PATRICK: -- hope that you'll come 17 and visit us because we've all learned a lot from you, 18 have a tremendous amount of respect for you. And your 19 sincerity and the focus that you have given to your job is 20 something that we all respect a great deal. 21 So we wish you well. Be sure and come back and 22 see us. 23 BOARD MEMBER McKINNON: Thanks, 24 BOARD MEMBER HUGH FRIEDMAN: Yeah. Well, I guess 25 what I want to say about this is -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 (Laughter.) 2 BOARD MEMBER McKINNON: Jimmy Stewart -- 3 BOARD MEMBER HUGH FRIEDMAN: -- well, well, well, 4 well, just a white rabbit. 5 (Laughter.) 6 BOARD MEMBER HUGH FRIEDMAN: I'm going to miss 7 that most of all. 8 Matt, what can I say. You've brought to your 9 role as a public member all the things that have been 10 described. And just to underscore that, I think 11 practical -- practical common sense, that's one way of 12 putting cutting through the whatever. 13 And I think you brought a good grasp on the 14 science. I mean your machinist background enabled you to 15 have a head start. And what you didn't know, you showed 16 you were a very quick study at. I'm still struggling with 17 a lot of that, because my training is very different. 18 And I think that you brought a very deep and, for 19 us, useful understanding of human nature, the human 20 condition, and the ordinary average citizen. 21 You obviously took on leadership in the EJ area, 22 which we continue to struggle with, because I think you 23 just sensed that that was an area you could make a unique 24 contribution in, and you have. And I don't know how we'll 25 fill that gap. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 You're not only forthright and direct, but you 2 are clear, you're very principled in the stands you've 3 taken. I could almost predict where you'd come out. I 4 can't say that's true of all of our colleagues, but -- or 5 myself. I never know what I'm going to do until I've 6 thought it through. But you do have I think a consistency 7 that stands you in good stead. And I'm very proud to have 8 served with you, my good friend. And we'll miss you. 9 You leave this Board much better off than you 10 found it because of your being here. And I think you have 11 deeply enriched our work and the work of the entire Air 12 Resources Board, as a generic term, for everybody 13 involved. And so Thank you. 14 BOARD MEMBER McKINNON: Thank you. 15 BOARD MEMBER DeSAULNIER: Careful. 16 Leave something for me. 17 BOARD MEMBER D'ADAMO: Boy, am I really going to 18 miss you. It has been just a true pleasure to sit by you 19 and to work with you. And I almost feel like we're coming 20 full circle here, because I remember when we first came on 21 the Board, we came down to El Monte. I know not together. 22 But we came down here to take a tour, meet the staff. And 23 I felt like, "Wow, I'm really in over my head because this 24 is far beyond my expertise." 25 And I got lucky enough to be positioned at these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 hearings right next to probably one of the strongest, most 2 skilled members on this Board. I'd come to a hearing and 3 we'd talk about chrome plating. And I'd think, Chrome 4 plating, chrome plating? I think I remember my brother 5 had an old car and they used chrome plating on it." Matt 6 right away knew about chrome plating. 7 And we had a hearing on rebuilds, and I'm trying 8 to figure out, "Okay, what's this all about?" Matt, you 9 understood that issue immediately. 10 Your wealth of experience not just with labor 11 unions but with all workers in the State of California I 12 think enabled you to truly understand the EJ issues in a 13 way that none of us could. And we will really sense a 14 loss. I know that, as some of the other members said, 15 that you will be do very well in your employment. And we 16 hope that you'll be coming back. I will miss sitting next 17 to you. But I am very confident I won't be missing the 18 friendship I expect that we will continue to be in touch. 19 So good luck. 20 BOARD MEMBER McKINNON: Thank you. 21 Oh, you get the last word. 22 (Laughter.) 23 BOARD MEMBER DeSAULNIER: Well, as long as you're 24 here I won't get the last word. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 BOARD MEMBER DeSAULNIER: Last night when we were 2 talking about this I started to tease Matt. He reminded 3 that I might be running for election again some time, so I 4 should be careful today. 5 Oh, what the heck. 6 I stayed up late last night thinking of Matt's 7 magical moments. And we've already had a few mentioned: 8 The famous Board meeting in San Francisco with the late 9 night pizza study session with Mr. Kenny and Mr. McKinnon, 10 which I'll refer to as a toga party dinner. 11 And of course I always had a wonderful position 12 physically to watch the -- our version of point-counter 13 point when Matt would engage Bill Burke, because I could 14 see their body language. I see Bill responding facially 15 and I could see Matt's large hunkering. And I go, "Oh, 16 we're going to be entertained here for a moment or two. I 17 wonder if there will be any innocent victims in this" . 18 But it really was a wonderful, a wonderful 19 experience serving with you. Speaking as one of the gang 20 of three at this end, we've done our fair share of side 21 bars; and from some people's perspective, trouble making. 22 But I think that's what -- that's what in the best 23 possible sense you brought to the Board, Matt. And I mean 24 that really not as a pejorative. But your obvious empathy 25 for those members of our society who need a voice, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 that's your calling and that's what you're going back to. 2 Your care for, as people have mentioned, environmental 3 justice, those folks who are a part of this state who need 4 a strong voice to defend them and speak for them, and you 5 have done that for working people. And your vacancy is 6 going to be a huge liability for the Board. And hopefully 7 the Governor will replace you with somebody who has those 8 same kind of passions. 9 And when I think of Matt I always think of, 10 besides his humor and his passion -- when we were going to 11 try to add some urgency items, I was trying to figure a 12 way to get Stephanie here today. So could we have an 13 urgency item around the California Trucking Association to 14 get her to fly in before we go? 15 But the serious part is your care for and your 16 passion for people who need a voice. And I'm reminded of 17 Martin Luther King's quote that injustice anywhere is a 18 threat to justice everywhere. And I will always think of 19 you in that regard and your participation in this role and 20 your participation in your public role. 21 So goodbye, my friend, and best of luck. 22 BOARD MEMBER McKINNON: Thank you. 23 (Applause.) 24 CHAIRPERSON LLOYD: I would like to afford 25 Catherine a chance to say something on behalf of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 staff. 2 EXECUTIVE OFFICER WITHERSPOON: Just a very brief 3 statement. 4 The respect and admiration that you have for the 5 staff is returned tenfold by the staff for you. And if I 6 say anything more than that, I'll cry. 7 BOARD MEMBER DeSAULNIER: Go ahead. 8 (Laughter.) 9 EXECUTIVE OFFICER WITHERSPOON: Maybe the 10 transcript will make me cry. We'll see. 11 We'll miss you. 12 CHAIRPERSON LLOYD: And, again, with all those 13 wonderful words -- and one thing, I think some realism I 14 should point out, that with all the skills of the staff 15 and all the combined skills of the Board, and they're 16 substantial, we have failed in one area: Matt joined the 17 Board as a smoker, he leaves the Board as a smoker. 18 BOARD MEMBER McKINNON: I got rid of the 19 Suburban. 20 (Laughter.) 21 CHAIRPERSON LLOYD: But, again, thank you all. 22 And I say, I'm sure we'll be seeing you, Matt. Look 23 forward to it. 24 BOARD MEMBER McKINNON: Thank you. 25 CHAIRPERSON LLOYD: I realize also today, with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Matt leaving and he is more of a free agent, and then I'd 2 say between the two Friedmans I'm under a short leash, oh 3 I'd better be very careful here and move ahead to the 4 first item. And remind anyone who is going to testify 5 today to sign up with the Clerk of the Board. And if they 6 have written statements to provide, 30 copies of the 7 statements to the Board. 8 And the first item is a public health update 9 04-6-1. And today we'll be talking about the findings 10 from the Air Resources Board widely known respected 11 Children's Health Study. The Children's Health Study, the 12 largest and longest-term epidemiological study ever funded 13 by the Board provides the Board with crucial information 14 on the long-term health effects of air pollution on 15 children. 16 The investigators from Health Services have 17 recently submitted final synthesizing findings from over a 18 decade of follow-up on a cohort of children residing in 19 Los Angeles. 20 Ms. Witherspoon, would you please introduce the 21 item and begin staff presentation. 22 EXECUTIVE OFFICER WITHERSPOON: Thank you, 23 Chairman Lloyd and members of the Board. 24 Staff is going to highlight for you today the 25 major findings of the Children's Health Study, including PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 the association between ambient air pollution and declines 2 in lung function growth, asthma exacerbation and 3 incidence, and increases in bronchitic symptoms among 4 asthmatics. 5 Dr. Clint Taylor will be making the staff 6 presentation. 7 (Thereupon an overhead presentation was 8 Presented as follows.) 9 AIR POLLUTION RESEARCH SPECIALIST TAILOR: Thank 10 you, Ms. Witherspoon. 11 Good morning, Dr. Lloyd. 12 Thank you, Ms. Witherspoon -- 13 CHAIRPERSON LLOYD: No. Still can't hear you. 14 AIR POLLUTION RESEARCH SPECIALIST TAILOR: Okay. 15 Thank you, Ms. Witherspoon. 16 Good morning, Dr. Lloyd and members of the Board. 17 Today I will be discussing the Children's Health 18 Study, ARB sponsored investigation of the long-term health 19 effects of air pollution on children. 20 The investigators at the University of Southern 21 California have submitted a final report that summarizes 22 the results of over a decade and $18 million worth of 23 research. I will summarize major results from the 72 24 peer-reviewed publications for the study, along with a 25 summary of the future of the study and ARB's continued PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 involvement with it. 2 The Children's Health Study is a prospective 3 study of nearly 6,000 children living in 12 southern 4 California communities of varying ambient air pollution 5 levels. 6 The primary purpose of the study was to determine 7 whether air pollution causes chronic adverse respiratory 8 health effects. Ozone, nitrogen dioxide, acid vapor, and 9 several measures of particulate matter were monitored 10 continuously in each community. 11 --o0o-- 12 AIR POLLUTION RESEARCH SPECIALIST TAILOR: In 13 2001 the investigators reported that children in the 14 communities with the highest level of PM, NO2, and 15 atmospheric acidity as compared to those in the 16 communities with the lowest levels had reduced lung 17 function growth about 1 percent per year. 18 Recently USC reported results for a second cohort 19 of children which replicate the results found in the first 20 study. This analysis found that higher exposures to 21 elemental carbon in PM2.5 in addition to most of the 22 pollutants from the first study were significantly 23 associated with slower lung function growth. In addition, 24 ozone was a associated with reduced growth in peak flow 25 rate. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 Confirmation of reduced lung function growth in 2 the second group significantly strengthens the evidence 3 supporting the adverse effects of air pollution on lung 4 function growth. 5 More importantly, the second cohort indicates 6 that these adverse effects are still occurring at lower 7 pollution levels. The slower lung function growth 8 associated with higher exposures to elemental carbon may 9 indicate a specific respiratory effect of diesel PM or 10 other combustion exhaust. 11 The investigators also found that lung function 12 growth changed if the children in the study relocated to 13 areas with different PM levels. If children moved from a 14 community with high PM to an area of low PM, their lung 15 function growth increased. Although this increase may not 16 make up for the adverse effects of their previous 17 exposures. 18 Conversely, their lung function growth decreased 19 if they moved to areas with higher particle levels. There 20 was also a trend toward an increase in PM effect with 21 increasing length of exposure. 22 --o0o-- 23 AIR POLLUTION RESEARCH SPECIALIST TAILOR: Among 24 asthmatics, PM10 was associated with bronchitic symptoms. 25 The nature of this analysis was cross-sectional; that is, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 exposure to air pollution and reports of bronchitis were 2 assessed at the same time. 3 However, the strength of the Children's Health 4 Study is that the children were followed over time, thus 5 making it possible to evaluate relationships between 6 current symptoms and past air pollution exposures. 7 The investigators took advantage of this aspect 8 of the study to delve further into the pollutants 9 associated with bronchitis in asthmatics. The 10 associations were strongest for PM2.5, organic carbon, 11 nitrogen dioxide, and ozone. 12 --o0o-- 13 AIR POLLUTION RESEARCH SPECIALIST TAILOR: While 14 we have known for some time that air pollution can 15 exacerbate existing cases of asthma, the Children's Health 16 Study is a first to indicate a possible causal role of air 17 pollution and asthma development. 18 Active children playing multiple team sports in 19 high ozone communities were at three times greater risk of 20 developing asthma. No other pollutant showed this 21 relationship with the development of asthma. 22 These results emphasize the importance of ozone 23 advisories to reduce exposures in children, but need 24 further confirmation. 25 Ozone exposure was also associated with a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 substantial increase in school absenteeism from both upper 2 and lower respiratory illnesses. 3 Reducing current ozone levels to meet the state 4 one-our standard could prevent 1.3 million school absences 5 annually. 6 Also of great interest is the relationship 7 between exposure to traffic-related pollutants and asthma. 8 In analyses where local traffic exposure was modeled, the 9 investigators observed marginally significant associations 10 between asthma and traffic-related pollutants at the home, 11 but only when the analysis was restricted to children 12 living at the same address since age two. 13 In these analyses large increases in physician 14 diagnosed asthma reported by the parent were associated 15 with a top 10 percent of exposure. 16 --o0o-- 17 AIR POLLUTION RESEARCH SPECIALIST TAILOR: The 18 investigators at USC have received $17 million for 19 Children's Health Study II from the National Institute of 20 Environmental Health Sciences. 21 This research builds on the years of data 22 collected by the ARB-funded study and will test the 23 following hypotheses: 1) That dietary intake of fruits, 24 vegetables and anti-oxidants affect children's 25 susceptibility for slow lung function growth, and an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 increased occurrence of those respiratory illnesses from 2 chronic exposure to air pollution; and 2) that 3 polymorphisms in genes involved in lung defenses affect 4 the same outcomes. 5 The study has found preliminary evidence that low 6 intake of anti-oxidant vitamins such as Vitamin C can 7 result in lung function deficits. 8 Also one of the questions to be answered is if 9 the lung function deficits seen in the children continue 10 into adulthood. Therefore, the investigators will attempt 11 to determine if air pollution is associated with maximum 12 lung function attained. 13 --o0o-- 14 AIR POLLUTION RESEARCH SPECIALIST TAILOR: ARB 15 will continue to be very involved in the Children's Health 16 Study for two critical components of the study. The first 17 of these is the air monitoring for the study. ARB will 18 enter into an agreement with the investigators to loan 19 them monitoring equipment to continue measuring air 20 pollution in the 12 communities. 21 We have a data exchange agreement with the 22 investigators to remain informed of the latest findings 23 from the ongoing research for the Children's Health Study 24 II. 25 The second important role for ARB is a formal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 agreement with USC for a process by which health and 2 exposure data from the Children's Health Study can be 3 released to qualified investigators in order to expand 4 upon our understanding on the relationship between air 5 pollution and children's's health. 6 We look forward to many years of continued useful 7 results and interaction with the investigative team at 8 USC. 9 Thank you for your attention. And we'd be glad 10 to answer any questions. 11 CHAIRPERSON LLOYD: Thank you very much. 12 Dr. Friedman. 13 BOARD MEMBER WILLIAM FRIEDMAN: Yeah, this is a 14 landmark study in so many different ways. Before this 15 longitudinal study all possible associations between 16 children's health and air pollutants were always done in a 17 sort of a horizontal ice pick way across a population. 18 And although there were associations, there were always 19 quibbling arguments, no proof, no nothing. And it really 20 impeded progress with respect to creating regulations and 21 really understanding what was going on. 22 And this study is remarkable in taking care of 23 business and now making it quite clear that those 24 arguments have to be trashed; that there really are 25 terribly important associations; some cause and effect; PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 lots and lots of questions that have arisen out of the 2 study, which is the proper purpose of the study. It's not 3 to answer everything but, also to point to directions for 4 the future. 5 So I'm particularly pleased that the NIH has 6 picked up and it's going to be continuing on with the 7 questions raised in this study. 8 I think that it's important to recognize not only 9 that the study's success is based on the talents of the 10 people at USC -- and there are many and they have worked 11 very hard and many people are involved -- but also because 12 of the ability of staff and the Research Division to do a 13 great job in monitoring and keeping things in line and in 14 order throughout this entire decade. Without that 15 interplay I'm not really sure what we would have come up 16 with. 17 And in addition, others outside the study, 18 outside the ARB, the creation of a scientific board, was 19 vital; people from other countries as well as the United 20 States participated in the advice given to investigators. 21 So we really have something to be proud of. We knew going 22 in it was going to cost a fortunate. It did. It was well 23 worth it. That's what health -- that is really what this 24 kind of research does cost in this day and age. And the 25 results are well worth it. And it will be really PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 profoundly appreciated in the next decade. 2 CHAIRPERSON LLOYD: Thank you very much. 3 Again, I'd like to reiterate that having worked 4 with the staff in the design of the study and seeing how 5 it worked out, it was just a great job and I think staff 6 has done a great job. The advisors -- the investigators 7 also did a great job, together with the external advisory 8 committee. 9 And when we look at the billions of dollars, 10 multi-billion of dollars which are caused by health 11 impacts, as you say, Dr. Friedman, this is really a very 12 wise investment. And no question of the linkage between 13 health effects and air quality. I mean it's happening in 14 this basin. 15 I should also say I think South Coast contributed 16 also to various parts of this study too, for which we much 17 appreciate it. 18 So with that, hearing no -- Mr. Calhoun. 19 BOARD MEMBER CALHOUN: Mr. Chairman, I sat and 20 listened very carefully at the comments as they were being 21 made. And it seems to me that the bottom line of this 22 whole thing is it sort of justifies the work that is 23 currently being done to clean up the area. 24 And if I had a child that had an asthma problem, 25 there are certain areas I would not want to live in. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 And I kept thinking what kind of additional 2 publicity are we going to take on in order to further 3 inform the public of this? 4 EXECUTIVE OFFICER WITHERSPOON: Well, your packet 5 has in it a summary of all the publications that have been 6 issued with respect to the Children's Health Study 7 findings and different aspects of it. And so certainly in 8 the medical community, there is wide distribution. And 9 then we also frequently remind legislators, and the 10 various environmental groups and public health groups that 11 work with us disseminate the same information in every 12 venue where pollution control is being discussed and 13 debated. 14 But if there's particular aspects of it that you 15 feel aren't getting enough air play and the people still 16 don't understand, perhaps we could talk outside this 17 meeting about where to expand our efforts to get the word 18 out. 19 BOARD MEMBER CALHOUN: Thank you. 20 CHAIRPERSON LLOYD: Well, I think again, I think 21 it is sobering to look at the data, and again 22 pier-reviewed data. And that's one of the concerns that 23 we've expressed and I think South Coast and CAPCOA have 24 expressed, concern that we're abandoning the one-hour 25 ozone -- potentially abandoning the one-hour ozone PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 standard, looking at the eight hour and sort of dragging 2 out some of the deadlines. 3 It's clear with the Governor's commitment to 50 4 percent reduction and because of public health, no matter 5 what there is, we need to do this as soon as possible. So 6 I think it's a very important reminder of that. 7 So with that I'd like to thank staff and move 8 ahead to the next item. 9 Thank you. 10 While we're changing staff, I'd just like to 11 introduce this item. And next item is 04-6-4, proposed 12 modifications to the exhaust standards and test procedures 13 for urban bus engines and vehicles, the transit fleet 14 rule, and the zero-emission bus demonstration 15 requirements. 16 As a reminder, in February of 2000 the Board 17 confirmed its commitment to reducing emissions from public 18 transportation by establishing a series of rules related 19 to urban transit buses. The Board set stringent emission 20 standards for new buses, required transit agencies to 21 accelerate the retirement of older buses or retrofit them 22 with aftertreatment technologies, and included an advanced 23 technology demonstration element for zero-emitting 24 technologies. 25 And of course in reducing diesel particulate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 emissions we were delighted to see the Governor advance 2 additional monies for Carl Moyer this year. So it was 3 really good for all of us. 4 Recognizing the progressive nature of the 5 regulations, the Board required staff to report back 6 regularly on progress by transit agencies in implementing 7 the rules. In response to those reports we have adjusted 8 the rule several times. I won't repeat all the details of 9 those rule changes in my opening remarks, but did want to 10 highlight one action that bears on today's hearing. 11 In March 2002, after hearing significant public 12 testimony on the this issue, the Board asked staff to 13 develop certification test procedures for heavy-duty 14 electric hybrid buses that would help commercialize this 15 promising new technology. In October of that same year, 16 the Board adopted interim certification procedures for 17 hybrid-electric vehicles in urban bus and heavy-duty 18 vehicle classes. 19 Again, a little bit of history. Earlier I think 20 when we were on the board, I vividly remember Norm Mineta, 21 now Secretary of Transportation, make a lengthy 22 presentation on behalf of Lockheed-Martin of why we should 23 get hybrid buses into the system. And here we are back 24 today. And you might say, "Well, why did it take so 25 long?" Again, I'd like to compliment staff on trying to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 work our way through -- very carefully through 2 accommodating and understanding how this technology fits 3 in there. 4 Also, I think it's very important to get hybrids 5 into the meeting of the heavy-duty sector, as we've seen a 6 significant impact already on the burgeoning hybrids in 7 the light-duty sector. 8 And, again, Governor Schwarzenegger's comments 9 applauding the hybridization of medium-duty when he was 10 attending the unveiling of the Federal Express diesel 11 hybrid vehicles in Sacramento on the steps of the Capitol. 12 And he at that time was delighted to see the hybrids 13 getting their in giving some substantial reduction in both 14 emissions and in increasing fuel economy. 15 So I think it's very appropriate that today staff 16 is proposing that we add specific emissions standards for 17 diesel electric hybrids to the transit bus rule, and that 18 we allow certain transit agencies on the diesel path to 19 purchase those buses between now and 2007. 20 To ensure that there are is no emissions 21 backsliding, staff is also proposing an emissions offset 22 requirement for transit districts that elect to purchase 23 diesel electric hybrids. And that's an important piece. 24 We're trying to encourage this technology, but at the same 25 time we also don't want to have any backsliding. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 In addition, staff is proposing to modify the 2 zero-emission bus demonstration program to better match 3 the pace of technology development of hydrogen fuel cell 4 buses, the only technology that complies with a 5 zero-emission requirement at this time. Hopefully there 6 will be others soon. 7 Before I turn it over to Ms. Witherspoon to 8 introduce the item, I would also like to observe that this 9 is a very focused item today. I think if people -- I 10 don't want to get drawn into the debate in terms of the 11 natural gas, the diesel debate. That is not the focus of 12 today's item. And unless my colleagues think differently, 13 then I will not be expecting extensive discussion on that. 14 I've seen in the last few months very exciting 15 developments in the natural gas, maybe of it being able to 16 meet some of our rules. They're exciting promises. 17 They're not there yet. I've seen some exciting work more 18 in the research side on some of the diesel technology 19 including this week. And all of which is great, because 20 it's driving stuff down. So I'm excited to see the 21 progress there. And I think staff wisely delayed that 22 decision until next year so we get closer to the dead 23 lines. 24 And, clearly, our job is to serve the public 25 health. But I don't want to get this debate dragged into PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 that arena. So I'm excited. I've got my own opinions 2 there. But I very much respect the Board and respect the 3 Governor as he moves ahead and maybe making changes on the 4 Board. 5 So I think it's inappropriate -- that we don't 6 know. There are statements on both sides and many 7 exciting developments. 8 So with that I'd like just to put that caveat and 9 to notify people that are testifying that please keep it 10 specific here. And if there are extensive discussions on 11 that, I will be -- I will be discouraged. 12 I'd like to turn over to Ms. Witherspoon and 13 begin staff presentation. 14 EXECUTIVE OFFICER WITHERSPOON: Thank you, 15 Chairman Lloyd and members of the Board, 16 To echo your remarks, the proposed rule changes 17 that we've brought before you today are quite narrow. 18 Staff considered sweeping changes to the Transit Rule that 19 would have extended through the 2007 model year and 20 beyond, and would have aligned our urban bus standards 21 with the National Heavy-Duty Diesel On-road Standards 22 recently adopted by the U.S. Environmental Protection 23 Agency. However, we got a lot of negative responses to 24 our initial draft proposal, and some people felt we were 25 drawing technical conclusions too soon. So we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 postponed that broader discussion and that broader debate 2 to spring-summer of next year. And I'm referring of 3 course to the diesel versus natural gas debate that's been 4 part of the Transit Rule since its inception. 5 We believe we'll have a better sense of where 6 diesel and natural gas engine manufacturers stand with 7 respect to meeting the 0.2 gram per brake-horsepower hour 8 standard for NOx. It's currently on the books for 2007 9 for transit buses next year. We're not ready to call it 10 yet. 11 But there is still a pressing issue for the 2004 12 through 2006 model years, and that is why we are here 13 today. Some of the transit agencies on the diesel path 14 have told us they would like to purchase diesel electric 15 hybrids to replace older dirtier diesel buses as they are 16 currently on the diesel path. They expect to continue 17 procuring dramatically cleaner diesel buses in the future. 18 And so these transit districts do not want to take a side 19 step and to make an investment in natural gas 20 infrastructure and training for a temporary period. 21 However, our regulation does not currently allow 22 for diesel electric hybrid bus purchase. It has no 23 standards for that technology. 24 So in response, staff has crafted a proposal to 25 allow for the certification and purchase of diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 electric buses with a corresponding emissions offset 2 requirement. We view this as an alternative compliance 3 option that is emissions neutral. 4 We believe the rule change would insure no 5 backsliding in emissions and actually result in slight 6 emission reductions as older diesel buses are replaced. 7 As Chairman Lloyd indicated, we are also 8 proposing minor adjustments to the zero-emission bus 9 demonstration project requirements to reflect the 10 availability and cost of hydrogen fuel cell buses. And 11 next year we'll delve more deeply into the ZEV 12 requirements and where we are on that timetable as well. 13 The staff presentation this morning will be made 14 by Ms. Kathleen Mead. 15 (Thereupon an overhead presentation was 16 Presented as follows.) 17 AIR POLLUTION SPECIALIST MEAD: Thank you, Ms. 18 Witherspoon. 19 Chairman Lloyd and members of the Board. It's my 20 pleasure to present the staff proposal for the 21 modifications of the fleet rule for transit agencies. 22 --o0o-- 23 AIR POLLUTION SPECIALIST MEAD: Today's 24 presentation will include a brief background and status of 25 the fleet rule for transit agencies and associated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 regulations; a description of the proposed modifications 2 to allow diesel path transit agencies to purchase diesel 3 hybrid electric buses; a description of the proposed 4 modifications to the zero-emission bus demonstration 5 project; and staff's conclusions and recommendations. 6 --o0o-- 7 AIR POLLUTION SPECIALIST MEAD: First I would 8 like to provide you with some background on the fleet rule 9 for transit agencies and associated regulations. 10 --o0o-- 11 AIR POLLUTION SPECIALIST MEAD: In February 2000 12 this Board adopted exhaust emission standards for new 13 urban buses, the fleet rule for transit agencies, and the 14 zero-emission bus rule, all designed to reduce emissions 15 from urban buses used by public transit agencies. 16 The goal of these regulations is to reduce 17 nitrogen oxide, NOx, and particulate matter, or PM, 18 emissions from new engines through more stringent new 19 engine standards and the establishment of a dual path for 20 purchases; and by requiring emission reductions from 21 existing buses through retirement, engine replacement, and 22 retrofits. 23 Transit agencies were also to lead the way to 24 zero emissions through demonstrations carried out by the 25 large agencies on the diesel path and through PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 zero-emission bus purchasing requirements for all large 2 transit agencies. 3 --o0o-- 4 AIR POLLUTION SPECIALIST MEAD: The Board 5 established a dual path system to provide flexibility to 6 transit agencies as they make independent decisions for 7 their regions, while ensuring maximum emission benefits 8 are achieved. Because most engine manufacturers certify 9 their alternative fuel engines to lower optional NOx 10 standard, the alternative fuel path provided for lower NOx 11 emissions from the outset. 12 Diesel engines were supposed to be cleaner 13 beginning in 2004 to offset their higher initial NOx 14 emissions, meeting a 0.5 gram per brake/horse power/hour 15 standard. 16 By 2007, the Board set equivalent NOx emissions 17 standards for both diesel and alternative fuel engines to 18 match what we believe the U.S. EPA would adopt nationally. 19 --o0o-- 20 AIR POLLUTION SPECIALIST MEAD: The alternative 21 fuel path provides greater PM benefits because of the 22 inherently lower PM emissions of the engines. To get PM 23 reductions across all fleets, the Board established lower 24 PM emissions for new diesel engines beginning October 1, 25 2002, and required all transit agencies to reduce PM on a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 fleet-wide basis starting this year. 2 As of January 1, 2004, transit agencies have 3 retrofitted 602 buses to meet the diesel PM reduction 4 requirements, reducing their diesel PM emissions by 40 5 percent if they were on a diesel path or by 20 percent if 6 they were on the alternative fuel path. 7 --o0o-- 8 AIR POLLUTION SPECIALIST MEAD: Because of the 9 lead time in phasing of the regulations when the Board 10 adopted the rule in 2000, you asked staff to report back 11 regularly on implementation progress. 12 The Board also asked staff to develop a test 13 procedure to certify hybrid electric buses, or HEVs, and 14 emerging technology at the time. 15 Staff has worked closely with transit agencies to 16 encourage compliance and provide separate status reports 17 to the Board on September 20, 2001 and on March 21st, 18 2002. As instructed by the Board, at the March 2002 19 meeting, staff developed amendments to the fleet rule for 20 transit agencies and a test procedure for certification of 21 HEVs, which the Board then adopted at its October 24th, 22 2002, public meeting. 23 --o0o-- 24 AIR POLLUTION SPECIALIST MEAD: For model years 25 2004 through 2006, five alternative fuel urban bus engines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 are certified: Four CNG; one gasoline hybrid-electric. 2 No diesel urban bus engine meets the current diesel fuel 3 NOx standard of 0.5 gram per brake/horsepower/hour. 4 The regulations provided transit agencies with 5 the opportunity to buy dirtier diesel buses if they 6 cleaned up their fleets overall beyond the requirements 7 through the alternative NOx strategy exemption. 8 The seven transit agencies approved for the 9 alternative NOx strategy exemption are able to purchase 10 higher emitting diesel urban buses in 2004 true 2006. The 11 other diesel path transit agencies presumably can operate 12 successfully through 2006 without purchasing new diesel 13 buses, as they did not seek approval for the alternative 14 NOx strategy exemption. 15 --o0o-- 16 AIR POLLUTION SPECIALIST MEAD: Now, I will 17 provide staff's proposal for the hybrid-electric bus 18 amendments. 19 --o0o-- 20 AIR POLLUTION SPECIALIST MEAD: Staff has been 21 asked by many transit agencies to consider a special NOx 22 standard for diesel hybrid-electric buses or HEVs. HEVs 23 use advanced technology to achieve lower emissions and 24 better fuel economy than equivalently sized diesel buses. 25 Emission testing studies at the Air Resources PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 Board and other facilities indicate a fuel consumption 2 reduction of 25 percent and NOx emission reduction of 3 about 50 percent for diesel fuel HEVs compared to 4 conventional diesel transit buses. 5 Today New York City and Seattle, Washington have 6 the largest HEV procurement, totaling 650 on order, with 7 about 60 in revenue service. 8 --o0o-- 9 AIR POLLUTION SPECIALIST MEAD: In October 2002, 10 recognizing the potential for this technology, the Board 11 adopted a unique certification procedure for HEVs that 12 allows manufacturers flexibility in meeting certification 13 requirements for hybrid-electric drive systems. Thus far 14 one manufacturer, IEC Corporation, has certified its 15 hybrid-electric drive system, which incorporates a 16 gasoline engine to a NOx plus methane hydrocarbon standard 17 of 0.6 grams per brake/horsepower/hour. 18 Long Beach Transit has ordered 27 of these 19 gasoline hybrid-electric buses, which will be the first 20 commercial order for this technology. 21 No diesel HEV is currently certified for sale in 22 California. None has met the California 2004 urban bus 23 engine NOx emissions standard of 0.5 grams per 24 brake/horsepower/hour because the base engines are not 25 clean enough. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 However, staff believes that diesel HEVs could 2 meet a NOx standard of 1.8 grams per brake/horsepower/hour 3 and a PM standard of 0.01 grams per brake/horsepower/hour. 4 --o0o-- 5 AIR POLLUTION SPECIALIST MEAD: To encourage 6 turnover of the oldest, dirtiest diesel engines, staff 7 proposes to add a new subsection for a 2004 to 2006 model 8 year diesel hybrid-electric bus standard at 1.8 gram per 9 brake/horsepower/hour NOx and 0.1 gram per 10 brake/horsepower/hour PM exhaust emissions. 11 Only diesel path transit agencies approved by the 12 executive officer would allow to purchase a diesel HEV 13 certified to this standard. 14 --o0o-- 15 AIR POLLUTION SPECIALIST MEAD: To ensure there 16 is no disbenefits from the higher NOx emission of the 17 diesel HEVs, staff proposes to require transit agencies to 18 offset the excess NOx emissions relative to the 0.5 gram 19 per brake/horsepower/hour NOx standard. 20 The new provision requires the diesel HEV to be 21 certified to the proposed NOx emission standard of 1.8 22 grams per brake/horsepower/hour or lower, provide the 23 specific calculation to be used to quantify emission 24 reductions, and provides a mechanism whereby ARB's 25 executive officer approves the actions to offset the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 increased emissions that would result from operating a 2 diesel HEV. 3 These emission reductions must be surplus. 4 --o0o-- 5 AIR POLLUTION SPECIALIST MEAD: Staff proposes to 6 also add new reporting requirements to provide a mechanism 7 to review applications and decide on the merits of the 8 exhaust emission offset actions proposed by a transit 9 agency that chooses to purchase diesel HEVs. 10 Transit agencies would require to submit an 11 application by January 1st, 2005, to purchase diesel fuel 12 HEVs. The application would need to include the number of 13 diesel HEVs to be purchased and specific actions, such as 14 addition of NOx aftertreatment technology or number and 15 types of engines to be repowered to reduce NOx emissions. 16 The executive officer would have up to 90 days to 17 consider the transit agency's request and render a 18 decision. Prior to receipt of the last HEV, the transit 19 agency must provide a report documenting implementation of 20 the plan. A transit agency would be responsible for 21 providing any plan changes or updated information to the 22 executive officer. 23 --o0o-- 24 AIR POLLUTION SPECIALIST MEAD: Staff expects a 25 small positive emission benefit from the proposed diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 HEV purchase amendments through increased turnover of old 2 dirty diesel engines that are replaced by the diesel HEVs. 3 For the purposes of this amendment staff assumed, 4 because of the lead time for certification and 5 manufacturer, that 150 diesel HEVs would be placed in 6 service in 2006, with their NOx emissions offset to the 7 0.5 gram per brake/horsepower/hour level. 8 These 150 diesel HEVs would replace 150 old 9 diesel buses. We would expect emission benefits to 10 continue into the future until the buses are replaced. 11 --o0o-- 12 AIR POLLUTION SPECIALIST MEAD: Now, I will 13 provide staff's proposed amendments to the zero-emission 14 bus rule. 15 --o0o-- 16 AIR POLLUTION SPECIALIST MEAD: In 2000, the 17 Board also adopted the zero-emission bus or ZEV rule along 18 with the fleet rule for transit agencies. A ZEV was 19 defined as a hydrogen fuel cell, electric trolley, or 20 battery electric bus. 21 Large diesel path transit agencies are required 22 to demonstrate three zero-emission buses starting July 23 1st, 2003, and to submit a final project report to the ARB 24 by January 31st, 2005. 25 Four transit agencies are required to participate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 in a zero-emission bus demonstration. These are 2 Alameda/Contra Costa Transit, Golden Gate transit, Santa 3 Clara Valley Transit Agency, and San Mateo County Transit, 4 for a total of 12 buses to be placed into revenue service. 5 The rule requires staff to present a ZEV status 6 report to the Board by January 31st, 2006. 7 All transit agencies with more than 200 buses 8 will be required to purchase ZEVs at a rate of 15 percent 9 of their total purchases through 2015, starting in 2008 10 for a diesel path agencies and 2010 for alternative fuel 11 path agencies. 12 --o0o-- 13 AIR POLLUTION SPECIALIST MEAD: At the time of 14 adoption, information available to staff indicated that 15 bus applications would lead to the development of fuel 16 cells before their application in light-duty vehicles. 17 The advantage for bus applications include: The 18 ability to handle the extra weight of early fuel cells and 19 fuel cell storage systems; centralized fueling; and 20 operation and servicing by trained professional staff. 21 In addition, initial demonstration projects 22 showed fuel cell powered buses could meet performance 23 requirements regarding power, range and flexibility in 24 application. 25 Also, fuel cell manufacturers estimated that by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 2003 or 2004 the cost of this fuel cell bus would be 2 comparable to its overhead wire electric trolley, and cost 3 was expected to drop as further production increased. 4 --o0o-- 5 AIR POLLUTION SPECIALIST MEAD: There has been 6 progress in developing fuel cell buses. Some line transit 7 tested a 30 foot hydrogen fuel hybrid fuel cell bus for 8 over six month in revenue and non-revenue applications in 9 desert conditions from late 2002 through early 2003. 10 The Alameda/Contra Costa Transit District 11 operated the same bus on hilly terrain from December 2003 12 through mid 2004. 13 Both tests the fuel cell bus was able to meet the 14 challenges successfully and allowed hands-on experience to 15 be gathered. 16 In addition, 30 fuel cell demonstration project 17 is under way in 10 European cities. All of these buses 18 are on the road now and are being tested in a variety 19 terrain, climate and traffic conditions. The fuel cell 20 manufacturer for the European project is the same as the 21 Santa Clara Valley Transit Authority demonstration. 22 The large European program that was just 23 described, although a very positive program, was pulling 24 research and development interests in funding out of 25 California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 --o0o- -- 2 AIR POLLUTION SPECIALIST MEAD: Despite these 3 successes and the best efforts of transit agencies in 4 California, there have been significant hurdles to 5 overcome for fuel cell buses. 6 The four transit agencies required to participate 7 in the zero-emission bus demonstration formed a 8 partnership to reduce administrative costs. In January 9 2001, they issued a request for proposals for up to 20 10 fuel cell buses, 12 of which were required by our rule. 11 Sunland Transit voluntarily joined the 12 partnership to purchase an additional two buses. 13 Only one bus manufacturer submitted a proposal in 14 response. That manufacturer subsequently withdrew the 15 proposal. The bus manufacturers were reluctant to develop 16 a special platform specifically for a limited number of 17 demonstration applications. 18 Also, Ballard, the potential fuel cell provider, 19 in his initial proposal stated that their participation 20 was now contingent on all transit agencies using the same 21 bus manufacturer. 22 In addition, as it turns out, fuel cell 23 manufacturers have focused their efforts on light-duty 24 applications instead of the urban bus market. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 AIR POLLUTION SPECIALIST MEAD: After failing to 2 receive a response to the initial request for proposals 3 the transit agencies changed their tactics to obtain fuel 4 cell buses. The four transit agencies formed two 5 partnerships and were able to solicit responses for three 6 buses each. The funding available for the participating 7 transit agencies to purchase at least 12 buses now was 8 only sufficient to purchase 6 buses. 9 The results of all this is California's required 10 demonstration projects are now up to 32 months behind 11 schedule. In addition, the buses currently cost three to 12 four times more than originally anticipated. 13 The good news is the first bus has been delivered 14 to Santa Clara Valley Transit Authority and an additional 15 two buses are expected to be delivered at the end of this 16 fall. 17 --o0o-- 18 AIR POLLUTION SPECIALIST MEAD: After considering 19 various options, staff was convinced to follow the 20 proactive efforts of the two lead transit agencies to 21 promote the future commercialization of fuel cell buses. 22 Therefore, we are proposing to revise the rule to match 23 the plans and commitments of those agencies. 24 Specifically staff is proposing to revise the 25 implementation date of operation of the final PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 demonstration bus to February 28th, 2006. Initial buses, 2 however, will have been deployed significantly before this 3 date. 4 Next, staff is proposing to require an additional 5 interim project status report from the transit agencies to 6 be submitted by July 31st, 2005, and a final report on 7 July 31st, of 2007. 8 Lastly, staff proposes to change the number of 9 buses required from three buses per participating agency 10 to three buses per demonstration, for a total of six fuel 11 cell buses required to be demonstrated. Sunland Transit 12 will demonstrate one additional bus voluntarily. 13 Staff believes enough information will be 14 collected from the demonstrations in California and in 15 Europe for staff to assess the status of the technology in 16 a report to the Board by January 2006. 17 --o0o-- 18 AIR POLLUTION SPECIALIST MEAD: Now I will 19 discuss the remaining major issue, which is not being 20 addressed by staff's proposal today: 21 The availability of urban bus engines to meet the 22 California 2007 urban bus NOx emission standard. 23 When the Board adopted its urban bus engine 24 standard for 2007 and beyond, the U.S. EPA had not adopted 25 the federal urban bus standard. Thus California's urban PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 bus standard differs from U.S. EPA for engine model years 2 2007 through 2009. 3 U.S. EPA allows for averaging between the 2004 4 and 2010 model year engine emissions standards. As a 5 result, EPA expects manufacturers to certify heavy-duty 6 engines to a NOx standard of 1.2 grams per 7 brake/horsepower/hour or produce a variety of engines that 8 will average at 1.2. 9 Manufacturers have told staff that no diesel 10 urban bus engines will be produced that will meet the 0.2 11 grams per brake/horsepower/hour NOx standard until 2010. 12 In addition, staff is uncertain if any natural gas engine 13 will be certified by 2007 to meet the 0.2 gram NOx urban 14 bus engine standard. This raises the possibility that no 15 urban buses will be available in California from 2007 to 16 2009. 17 Staff expects more information by the spring of 18 2005, as we get closer to the natural gas engine 19 development deadlines. Staff will bring a recommendation 20 to the Board in the summer of 2005 on whether the 2007 21 through 2009 California diesel urban bus NOx standard 22 should be revised. 23 --o0o-- 24 AIR POLLUTION SPECIALIST MEAD: The amendments 25 presented today will support ARB's efforts to promote PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 advanced technology for urban buses by allowing for the 2 certification and sale of diesel hybrid-electric buses to 3 diesel path transit agencies, resulting in turnover of 4 additional older dirty diesels. This will achieve the 5 must needed NOx emission reductions from the diesel path 6 agencies as originally anticipated in the 2000 rule 7 making. 8 In addition, the changes proposed to the ZEV 9 demonstration project more accurately reflect the cost and 10 expected availability of fuel cell buses, while allowing 11 transit agencies that operated in good faith to implement 12 this new technology to meet the requirements. 13 Staff recommends the Board approve the proposed 14 amendments to the current rule. In addition, staff will 15 continue to assess technology for the 2007 urban bus 16 engine standard and will bring our recommendation to the 17 Board by mid 2005. 18 This concludes my presentation. 19 CHAIRPERSON LLOYD: Thank you very much. 20 Madam Ombudsman, will you please describe the 21 process by which this rule was brought before the Board 22 and express any concerns or observation you have at this 23 time. 24 OMBUDSMAN TSCHOGL: Mr. Chairman and members of 25 the Board. Staff developed the proposed amendments with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 input from the Engine Manufacturers Association, 2 California Transit Association, California Association for 3 Coordinated Transportation, Regional Council of Rural 4 Counties, Manufacturers of Emission Control Association, 5 California Department of Transportation, California 6 Natural Gas Vehicle Coalition, California Energy 7 Commission. In addition, staff worked with air districts, 8 environmental organizations and public transit agencies. 9 In December 2003 staff began their effort to 10 develop the amendments to the fleet rule for transit 11 agencies. Four public workshops were held to gather 12 input. The first two were held in December 2nd and 3rd, 13 2003, El Monte and Sacramento respectively. The other two 14 were held March 29th and 30th in Sacramento and El Monte 15 respectively. Approximately 50 people participated in 16 each workshop. 17 The individuals represented the transit agencies, 18 the cities and counties, the -- count all of the people 19 listed above. And in addition to that the Natural 20 Resource Defense Council, the American Lung Association, 21 the California Department of transportation, and many, 22 many others. 23 Staff also held individual meetings and phone 24 conferences with several interested parties and 25 stakeholders. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 On May 7th, 2004, the staff report was mailed, 2 E-mailed and posted on ARB's website. Using the various 3 modes of communication, more than 1300 individuals and 4 companies received information regarding the proposed 5 amendments. 6 This concludes my comments, except that I would 7 also like to add that I too will miss having Matt on the 8 Board. 9 BOARD MEMBER DeSAULNIER: That's not this agenda 10 item. 11 OMBUDSMAN TSCHOGL: I know, I know. 12 But in addition to all the other kind comments 13 that you've made, he's always been willing to bear with me 14 as I tried to enlighten him to the wisdom of my opinion on 15 the needs of industry. And while we didn't always agree, 16 the discussions were lively, fun and respectful. And I 17 will truly miss having you on the Board. 18 BOARD MEMBER McKINNON: Thank you. 19 CHAIRPERSON LLOYD: Did he help you to look to 20 Monterey for the truth. 21 OMBUDSMAN TSCHOGL: No comment. 22 (Laughter.) 23 CHAIRPERSON LLOYD: Any questions from the Board. 24 Professor Friedman: 25 BOARD MEMBER HUGH FRIEDMAN: A quick question. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 want to make sure I understand the staff's proposal on the 2 changes in the ZEB demonstration project. 3 It looks -- am I correct, that we're proposing to 4 extend about a year and a half the time lines, the 5 deadlines? And do you think -- are you pretty comfortable 6 that these new time lines are capable of attaining them? 7 MR. ACHTELIK: Yes, we are. We talked with the 8 transit agencies. And the way the contracts are written, 9 by the end of February the last bus should be delivered. 10 It would be most -- the way it is right now all but one of 11 the buses will have been delivered in that. And that's 12 the last one. 13 CHAIRPERSON LLOYD: On that it wasn't clear to me 14 when the new date is for the 15 percent purchase. 15 EXECUTIVE OFFICER WITHERSPOON: That's not 16 amended in the -- 17 MR. ACHTELIK: At this time we're not proposing 18 to make any changes to the purchase requirements. We're 19 only changing the demonstration requirements. And we'll 20 discuss any changes to the purchase requirements when we 21 give our recommendations for the technology review in 22 2006. 23 CHAIRPERSON LLOYD: Thank you. 24 Supervisor DeSaulnier. 25 BOARD MEMBER DeSAULNIER: I wanted to ask staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 in reference to the June 17th letter from the Bay Area 2 Management District that Mr. Broadbent signed. There are 3 three issues. It seems as if two of them are okay right 4 now. The three being -- the first issue's the first 5 bullet on the bottom of that page. Just in a sidebar I 6 just had with Catherine, it seems like that was 7 incorporated in the discussion in order to strengthen the 8 staff's recommendations. 9 The second bullet, which is adopting a lower 10 fleet-wide NOx average for all transit fleets to 11 accelerate fleet turnover, the installation of 12 aftertreatment technology, and/or repowering with 13 certified cleaner engines on the existing diesel transit 14 buses in a local fleet. Did you consider that? And what 15 would be the implications if we added that? 16 EXECUTIVE OFFICER WITHERSPOON: The second bullet 17 in the Bay Area letter represents a more stringent 18 requirement than is currently in the transit rule or that 19 we've proposed before you today. So the staff can 20 certainly look at that as a possible future amendment to 21 the rule and, if you like, roll it into the 2005 22 rulemaking. But it's outside the scope of our notice 23 because no one got any indication from the staff that we 24 were going to make the NOx retrofits or PM retrofit 25 requirement any more stringent than it already is. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 that's what's being suggested here, that if it's possible 2 to offset emissions from diesel electric-hybrids to have 3 no net increase in emissions, then it's also possible to 4 drive them down further. 5 And so we would need to look at how much further 6 down they could be pressed, what the costs of that would 7 be, any other implications there would be, and do that in 8 a future rulemaking. And we'd be happy to do that. 9 BOARD MEMBER DeSAULNIER: It strikes me from a 10 public health perspective it would be a good thing. I 11 just don't know what the practical consequences in terms 12 of costs in fleet purchasing might be. But what you're 13 suggesting is the staff could look at that? 14 EXECUTIVE OFFICER WITHERSPOON: It's a retrofit 15 requirement. And so it's the difference between a simple 16 particulate filter and one which reduces NOx at the same 17 time. And, for example, price quotes we've had on the 18 long-view device manufactured by Cummins Westport on the 19 order of 12 to 14,000 is what I'm -- 20 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 21 HEBERT: Eighteen to twenty. 22 EXECUTIVE OFFICER WITHERSPOON: Oh, I'm sorry. 23 Eighteen to twenty thousand inclusive of the particulate 24 filter, which is itself a 6,000 -- I said inclusive of. 25 BOARD MEMBER DeSAULNIER: And those are available PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 in the market in the kind of scale they would need to 2 be -- 3 EXECUTIVE OFFICER WITHERSPOON: Yes, they are. 4 And the MTC is paying for the installation of many of them 5 in the San Francisco fleet. 6 BOARD MEMBER DeSAULNIER: I know. Therein lies 7 my concern as an MTC Commissioner. 8 And the last point is just the biodiesel issue, 9 which I'd assume we can deal with at future agendas if we 10 continue with that fuel neutral. It's in the last 11 paragraph. It's consistent with some of our comments in 12 the past. 13 EXECUTIVE OFFICER WITHERSPOON: Right, it's 14 permissive right now. 15 BOARD MEMBER DeSAULNIER: Right. 16 Okay. Thank you, Mr. Chairman. 17 CHAIRPERSON LLOYD: And I guess it's still the 18 issue in terms of whether you get B10, B20 and all that 19 whole issue there. I guess that's still -- we're working 20 through that, because some -- 21 EXECUTIVE OFFICER WITHERSPOON: That's correct. 22 So biodiesel will have to be twinned up at the moment with 23 an oxy-catalyst to not have the NOx -- 24 CHAIRPERSON LLOYD: Yeah, and some of the 25 manufacturers don't want a warranty if it gets too high. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 That's an issue that's obviously ongoing, and I know your 2 staff is monitoring that -- 3 BOARD MEMBER DeSAULNIER: I've just been asked by 4 some of my colleagues from the north bay counties to 5 continue to go to the mantra of biodiesel, so I'm doing 6 it. They're from Marin, Mr. Chairman. 7 CHAIRPERSON LLOYD: No, I think it's a good issue 8 and I think we're all interested in that. The workshop I 9 went to and attended on that, it's more complicated than 10 you think on the surface, because the engine manufacturers 11 have real concerns if you go to higher percentage of 12 biodiesel and what that does to warranties, et cetera, and 13 how it affects NOx. 14 Any other questions from my colleagues? 15 Mr. Calhoun. 16 BOARD MEMBER CALHOUN: I thought I heard you say 17 that seven transit agencies had retrofitted 602. 18 Can you clarify that for me? 19 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 20 HEBERT: The 600 -- Yes, Annette Hebert. 21 The 602 is all of the transit agencies to comply 22 with the 40 percent reduction of PM as of last January, 23 the first government reductions -- 24 BOARD MEMBER CALHOUN: And what was the nature of 25 the retrofit? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 2 HEBERT: Diesel particulate filter. 3 BOARD MEMBER CALHOUN: Would you repeat that? 4 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 5 HEBERT: Diesel particulate filters. 6 BOARD MEMBER CALHOUN: And you feel comfortable 7 that they're working well? 8 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 9 HEBERT: The retrofits seem to be working very well, yes, 10 sir. We haven't had -- in the transit industry we haven't 11 had a lot of failures reported. They seem to be working 12 pretty well. 13 BOARD MEMBER CALHOUN: Thank you. 14 CHAIRPERSON LLOYD: Seeing no other comments from 15 my colleagues, I'd like to call up the first three 16 witnesses. 17 Just a reminder, what I'd like to do is try to 18 keep testimony to within five minutes. 19 First is Joshua Shaw, Jose Cisneros, and Gene 20 Walker. 21 MR. SHAW: Thank you, Mr. Chairman, members of 22 the Board and staff. Joshua Shaw, Executive Director of 23 the California Transit Association, on behalf of our more 24 than 80 public transit system members around the state, 25 who are the direct subject of this rule, and our nearly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 100 supplier members who provide the vehicles and the 2 parts for a lot of these vehicles. We'd like to thank you 3 for letting us be here today. 4 I also want to compliment the staff, everybody 5 here who has worked so hard to make this rule happen over 6 the years, thank you; the Board members for working with, 7 us. You know, a little -- almost four and a half years 8 ago we were here to support the rule when it was 9 originally implemented. We're proud to do so today. We 10 continue to support the rule. 11 Appreciate the Chairman's comments about the 12 debate or not getting into the debate about the fuel. We 13 appreciate the fuel neutral approach that you have taken. 14 We want you to keep setting standards, let the technology 15 meet those standards. 16 In that regard, we have made progress on either 17 path of the rule since you implemented it in terms of our 18 mutual goal of lowering air quality emissions. For 19 instance, you've got gas-powered fleets entering into the 20 marketplace -- the transit marketplace around California, 21 even outside of the South Coast Basin. You've got gas 22 vehicles in San Diego, Riverside, 100 percent gas-powered 23 fleet in Sacramento. 24 On the other path, the San Mateo County Transit 25 District, for instance, recently completed contracting for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 installation of emission reduction filters for over 200 of 2 its buses, far exceeding the requirements of your fleet 3 average PM requirement. They have also just performed a 4 repower on 137 of their engines. So they're making a lot 5 of progress. 6 The Santa Clara Valley Transportation Authority, 7 for instance, has also contracted with the same provider 8 for installation of emission reduction filters for up to 9 130 of its buses. Those filters are certified by your 10 staff to provide NOx emission reductions of 25 percent, PM 11 emission reductions of 85 percent. 12 And Golden Gate Transit, just for a final for 13 instance, has recently reduced its PM fleet averages 14 nearly 75 percent. 15 So a lot of progress has been made. Your rule is 16 working. 17 Having said that, we are asking you today to 18 support these amendments. We thank staff for bringing 19 those two you. The amendments do recognize some things 20 that are going on in the marketplace, recognizing things 21 that are going on with regard to transit funding. It's 22 not a good picture. So we specifically ask you to support 23 the amendments that make the changes on the diesel 24 hybrid-electric bus program for the '04-'06 years. We do 25 think that technology is a bridge to your ultimate goal of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 a zero-emission technology. 2 And on the zero-emission bus program you may 3 think it's asking a little bit to reduce from three 4 vehicles down to one. But when the cost has gone from our 5 estimate of a million dollars to three million or more, 6 there just aren't six to nine million dollars of extra 7 change lying around at these transit agencies, especially 8 when you look back and just about the time you implemented 9 this rule, the state transit funding picture, as with 10 every state funding picture, as you know, has virtually 11 cratered. This year alone the Governor's proposed budget, 12 unfortunately, would take $1.2 billion out of various 13 transportation pots. That includes your cities, counties, 14 and transit districts. So we're struggling, although 15 we're continuing to do what we can to put these rules into 16 place. 17 Your staff has been firm in keeping us on track. 18 I continue to get calls every once in a while from our 19 agencies that says, "Hey, these folks, they're continuing 20 to beat up on us. We can't do this, we can't do that." 21 Well, to you, you should thank your staff, because that 22 tells you that they have done what you've asked them to do 23 and keep us in line. On the other hand, we do think these 24 amendments recognize there's some additional flexibility 25 necessary to meet those goals and, in fact, improve on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 them as was mentioned. And we thank you for considering 2 these amendments, urge you to adopt them. 3 Finally, Chairman Lloyd, you mentioned you didn't 4 want to get into the debate about the fuel path, but 5 Catherine's first comments were about what's not in front 6 of you today. I don't think it necessarily has to be a 7 debate about the fuel path. But the question of alignment 8 with the 2007 U.S. EPA standards for us in many ways it's 9 simply a question of decision making of purchasing. We're 10 looking right now at our fleet composition, our fleet 11 turnover ratios. Where is the money coming from? We're 12 making procurement decisions today for one, two, three 13 years down the road, including 2007. So the question is 14 really certainty. And our view is the sooner you can 15 provide us certainty with regard to what will be those 16 2007 standards, the better, so we can continue making the 17 right decisions. And we'd urge you to direct your staff 18 to bring a proposal back to you on alignment with the U.S. 19 standards this year basically as soon as possible. 20 So with that I'd like to thank you. 21 Oh, Dr. Lloyd, one more thing. You might want to 22 hear this, but with regard to Board Mr. McKinnon's smoking 23 or not, I can tell you that at least in one aspect of his 24 life there's no evidence of that. I've had to play 25 basketball against him several times, and he gets up and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 down the court really well. So he's doing well at least 2 in that regard, and I continue to wish him well. 3 Thank you very much. 4 BOARD MEMBER DeSAULNIER: Tell us about his 5 elbows. 6 CHAIRPERSON LLOYD: I thought you were going to 7 suggest he also tries a retrofit as well. But I -- 8 (Laughter.) 9 CHAIRPERSON LLOYD: Thank you very much. 10 I think a couple of comments there. One, it's 11 painful for me to look at the zero emissions and seeing 12 what's happened to the cost of that. But I'm clearly 13 fully supportive of staff. I've become educated that -- 14 forcing people to have, you know, a number of 15 demonstrations when you have limited resources and what 16 you're going to gain from that. So I'm perfectly 17 comfortable with that. 18 You're the one on the alignment. That's also a 19 very painful issue. And when we set the regs, we assumed 20 that we'd get the .2 NOx with the diesel at that time. So 21 this is going to be a tough -- very tough decision. So I 22 can argue it strongly both ways. And I think that we're 23 not ready to do that yet. But it's a tough one, very, 24 very tough. 25 Any questions or comments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 BOARD MEMBER HUGH FRIEDMAN: I have a question. 2 CHAIRPERSON LLOYD: Yes, Professor Friedman. 3 BOARD MEMBER HUGH FRIEDMAN: On that point, 4 what -- I'm not -- can you tell me again, when will we -- 5 in response to the last point raised by the speaker, when 6 will we have before us the alignment? 7 EXECUTIVE OFFICER WITHERSPOON: We were planning 8 on May or June of next year to bring that regulation 9 before you. 10 BOARD MEMBER HUGH FRIEDMAN: Okay. 11 CHAIRPERSON LLOYD: I think we're trying to 12 create enough time. Then I say we've got two very 13 promising and exciting presentations to the staff on the 14 potential of natural gas meeting the .2. And so there may 15 be other technologies out there. So then it comes down to 16 the debate of how do you weigh up all those issues. So 17 it's going to be a complicated one. 18 EXECUTIVE OFFICER WITHERSPOON: The way we 19 arrived at that date was we looked at the procurement 20 cycles for the transit agencies and what was the last 21 possible time that we could decide for '07 and make a 22 prediction about technological readiness in '07. 23 CHAIRPERSON LLOYD: Ms. D'Adamo. 24 BOARD MEMBER D'ADAMO: Well, just to clarify -- 25 just to clarify that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 The previous speaker said that he was suggesting 2 that we direct staff to align with the 2007 federal 3 standards. But it's my understanding that this would just 4 be coming up for review. In other words the last word is 5 the standard that was originally set for fuel neutrality 6 and for our higher standard. 7 CHAIRPERSON LLOYD: Yeah, I think the question 8 from the last speaker, we're saying we're not going to -- 9 we're going to visit that next year. 10 EXECUTIVE OFFICER WITHERSPOON: It's a little bit 11 of a mixed bag. Staff did propose alignment earlier this 12 year. And were we to make the decision today, we would 13 have to say no one could meet the .2 standard, not natural 14 gas, not diesel. And the kind of reactions we got was 15 "It's too early to make the call. Please let it play out 16 as long as you can before you decide." Because we thought 17 we had a rule that became a no-purchase rule in 2007. And 18 we've been told that might not be the case. No purchase 19 for anyone. So wait and see. And that's why we would 20 resist the proposal to come in in the end of this year, 21 because it would force a decision you might not want to 22 make at that time. 23 But it's open what the recommendation will be in 24 '05, whether to align or whether to keep the standard that 25 you have or whether to do something altogether different. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 CHAIRPERSON LLOYD: But I think in fairness 2 though -- we've had two presentations from two companies 3 to say that they hoped to meet the .2. They're not there. 4 But we've looked at their research plan and it looks very 5 promising, natural gas. We've heard no presentation from 6 the diesel path that they will be able to meet the .2. 7 BOARD MEMBER D'ADAMO: I just think, Mr. 8 Chairman, that -- well, obviously this is going to be 9 discussed at another hearing. But I, for one, feel 10 strongly about the standard that we originally set out. 11 I'm optimistic that it can be met. And I'm just a little 12 concerned about maybe sending the wrong message that we're 13 wavering. I hope to keep the pressure on and to reserve 14 this for a later date. That's why I just wanted to 15 clarify in light of the previous witness's testimony. 16 CHAIRPERSON LLOYD: That's why we're trying to 17 keep the pressure on. That's exactly right. That's 18 exactly right. 19 Jose Cisneros, and then Gene Walker, David 20 Olmeda. 21 MR. CISNEROS: Good morning, Chairman Lloyd and 22 members of the Board. My name's Jose Cisneros. I'm 23 Deputy General Manager of MUNI in San Francisco. And I'm 24 here today to speak in support of the staff recommendation 25 to allow diesel hybrid-electric buses in California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 And basically we're taking that support position 2 because diesel electric-hybrid buses are the only viable 3 option for us at MUNI in San Francisco. 4 But before I get to that, let me give you just a 5 little bit of background on MUNI itself. We have the 6 seventh largest transit agency in the country, and we 7 operate a variety of different types of vehicles. We have 8 rail cars, both new and historic; we have cable cars, 9 which many people are aware of; we have also a large -- 10 very large fleet of electric trolley buses; in addition to 11 a fleet of about 500 conventional diesel buses. So as you 12 can see, the majority of our fleet today is zero emission. 13 MUNI has been working very hard to clean up our 14 diesel fleet. And today we've reduced our PM emissions by 15 88 percent. In order to continue in that effort, MUNI 16 conducted an all-fuels pilot program in conjunction with 17 UC Berkeley and UC Davis. And what that study showed was 18 that diesel electric-hybrids are really the only viable 19 option in San Francisco due to a number of unique 20 characteristics we face there. 21 One of those is our high ridership. We have very 22 high passenger loads, often times crush loads on numbers 23 of our vehicles. So they're put under a very intense 24 strain. At the same time we have very steep hills. And 25 so those very heavily loaded vehicles are trying to climb PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 up very, very steep hills. And it become a matter 2 performance. 3 So our next step in cleaning up our emissions is 4 to replace our 80 or 90 or so of our remaining older 5 conventional diesel buses, which are highly polluting 6 buses. We are lined up and ready to execute that 7 procurement. We have our funding ready to go. We have 8 both our local and our federal funding planned and lined 9 up and ready to go to execute that. 10 When we complete this procurement of our hybrid 11 buses, we'll have cleaned up 98 percent of our PM 12 emissions. We're very much looking forward to that. 13 In addition to giving this emissions benefit 14 today, the hybrids will prepare us for our future clean 15 air goals that we have at MUNI. We've actually developed 16 and implemented a clean air plan which establishes an 17 aggressive goal of our entire fleet being zero emissions 18 by 2020. As far as we know we're the only operator of our 19 type that's actually set up our own goal like that. 20 However, electric drive technology and the hybrid 21 technology are both key critical pieces of achieving that 22 zero emission goal. To that end we have seen, and I 23 believe you received, letters of support for the staff 24 recommendation from a number of parties who understand 25 where we're coming from. That includes a number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 elected officials, as well as the mayor of San Francisco. 2 The San Francisco Department of the Environment has also 3 weighed in, as well as the Bay Area Air Quality Management 4 District. MTC, our funding and planning agency, has also 5 expressed support for the recommendation, as well as, as 6 you already heard from our previous speaker, the 7 California Transit Association, as well as a variety of 8 other transportation stakeholders that work with us in San 9 Francisco. 10 So in summary, I just want to state again we're 11 here to support the staff recommendation. Diesel 12 electric-hybrids our really our only viable option with 13 this. If we're not able to procure those in the next few 14 years, we face continuing emissions at our current levels, 15 which we don't want to do. We also face risking our 16 actual ability to get service out on the streets, which is 17 the last thing we want to do. We don't want to impact our 18 service at all. 19 I also want to mention that I'm joined here today 20 by one of my colleagues, Marty Mellera, our Out-fuels 21 Engineer. He'll be giving testimony later this morning. 22 He'd be happy to follow up with any technical information 23 or questions you might have. 24 CHAIRPERSON LLOYD: So he might be able to 25 address why you don't think natural gas would work or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 whatever? Or whether -- have you considered that and what 2 not? 3 MR. CISNEROS: Natural gas -- the all-fuels pilot 4 program looked at two technologies for San Francisco: CNG 5 and Diesel electric-hybrids. And, yes, we can address 6 that. 7 CHAIRPERSON LLOYD: Thank you. 8 Mr. McKinnon. 9 BOARD MEMBER McKINNON: Yeah, I -- Jose, I want 10 to thank MUNI. When we turned back the Bay Area SIP a few 11 years ago and there were six environmental justice 12 hearings, one of those hearings was in Hunters Point. And 13 within days of that hearing you removed the diesel buses 14 from Hunters Point. And I appreciate sort of the 15 responsiveness to what came out in the hearing. 16 Thanks. 17 MR. CISNEROS: Thank you. 18 CHAIRPERSON LLOYD: Thank you very much. 19 Gene Walker, David Olmeda, Robert Babik. 20 MR. WALKER: Good morning, Chairman Lloyd, Board 21 members and staff. My name is Gene Walker. I'm the 22 Chairman of the California Transit Association Maintenance 23 Committee and the Maintenance Manager of Golden Gate 24 Transit. 25 (Thereupon an overhead presentation was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 Presented as follows.) 2 MR. WALKER: The California Transit Association 3 and its public and private members, along with Golden Gate 4 Transit, would like to restate our continued support of 5 the fuel-neutral approach taken by the ARB in developing 6 and administering the fleet rule for public transit. Our 7 focus continues to address what comes out of the tailpipe, 8 not what goes in the fuel filler neck. 9 We also strongly support ARB staff's proposed 10 mechanism to allow for the purchase of diesel hybrid urban 11 buses, or HEBs, by transit agencies in California. The 12 caveats in the rule making that allow for such purchases 13 are reasonable and will make up any deficit in the NOx 14 reduction applicable to these purchases. 15 California's Transit Association members have 16 always embraced HEBs as a bridge for new technologies and 17 as a first step in moving to a true zero-emission bus or a 18 ZEV. It is past time for California to have the 19 opportunity to test and evaluate diesel HEBs and determine 20 their best bet in our transit operations. 21 The Association and Golden Gate Transit are also 22 very supportive of ARB staff modifications applicable to 23 the ZEB bus program. We agree that ARB staff developed 24 the current ZEB demonstration program using the most 25 information available at the time. Because of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 redirection of the fuel cell's manufacturers research and 2 development resources, this program has suffered from 3 unexpected and unforeseen delays. However, California 4 transit agencies are still moving forward with our 5 demonstrations in spite of these obstacles. 6 I do not want to beat to death the harmonization 7 issue with the 2007 amendments. All I will ask is that we 8 move forward with all expediency on whatever direction we 9 go here. Transit agencies procurement is very involved. 10 It takes years of planning in advance of purchases. So 11 for us to make our decision and certainly to acquire the 12 needed funding, we do need a time line in order to work 13 this out. 14 California Transit Association members and 15 agencies have continued their proactive approach to 16 emission reductions. Transit agencies have been 17 repowering coaches due for mid-life engine rebuild, 18 replaced older coaches with new coaches, both approaches 19 utilizing the latest clean diesel engine technology. We 20 are retrofitting using combination emission reduction 21 devices that achieve an 85 percent PM reduction and a 25 22 percent NOx reduction. 23 Several transit agencies, including Golden Gate 24 Transit, are actively participating in a demonstration of 25 advanced NOx reduction technology at Valley Transportation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 Authority, the host property. 2 With these proactive measures transit agencies 3 have dramatically lowered California transit fleet 4 emissions beyond what has been required simply to be 5 compliant to ARB regulations. 6 Transit agencies are continuing to actively test 7 and evaluate other means of lowering emissions from our 8 fleets, such as diesel fuel blends, gas-to-liquids fuels, 9 and various gasoline and diesel HEVs. As always, the 10 California Transit Association members and Golden Gate 11 Transit offer their continued assistance to the ARB staff 12 in achieving our joint goal of reducing emissions from 13 California public transit fleets. 14 Thank you. 15 CHAIRPERSON LLOYD: Thank you. Thank you very 16 much. 17 David Olmeda, Robert Babik, and then Thomas Webb. 18 MR. OLMEDA: Good morning, members of the Board. 19 My name is David Olmeda. I am the Director of Maintenance 20 for San Mateo County Transit District, known as SAMTRANS. 21 SAMTRANS is in support of the fuel-neutral 22 approach to reduce harmful emissions. We encourage the 23 Board to continue its support for new technology, research 24 and development. 25 Diesel technology continues to achieve success PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 that benefit many transit agencies. We've heard this 2 morning about repowers, we've heard about aftertreatment 3 devices, and technology of that nature. 4 Collaboration from the OEMs, transit agencies, 5 and the ARB are indispensable for the continued success of 6 testing and developing of hybrids and zero-emission buses. 7 We encourage the Board to pursue alignment with 8 the EPA standards, to leverage a development of 9 technology, to reduce -- and continue to reduce emissions. 10 Between 2000 and 2003 SAMTRANS invested over $11 11 million in grant money to repower 137 vehicles that Josh 12 alluded to. These were two-cycle engines that were 13 replaced with four-cycle cleaner diesel engines. This 14 achievement allowed SAMTRANS to meet ARB's NOx goals 11 15 months in advance of its due date. 16 SAMTRANS continues its support of the urban bus 17 by volunteering partnership with northern California 18 transit agencies to demonstrate advance NOx reductions 19 technology and cooperation with BTA, the host agency. 20 Additionally SAMTRANS continues to support 21 installations of the clear air NOx device, PM traps. And 22 we are partners with ETA in the zero-emission 23 demonstration project. 24 So SAMTRANS encourages the Board to continue 25 collaboration for a mutual benefit, seeking sensible PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 cost-effective technology that reduces emissions. And we 2 fully support the proposed amendments proposed to you 3 today. 4 One last note. On behalf of Bobby Kuhn from San 5 Joaquin Regional Transit -- he was not able to attend 6 today. He had a court appearance. But he wanted me to 7 express his support for diesel hybrid technology. If 8 allowed, San Joaquin would be replacing diesel hybrid 9 buses at the tune of 52 to 54 vehicles that were 10 manufactured in 1994 that are currently scheduled for 11 2007. 12 Thank you. 13 CHAIRPERSON LLOYD: Thank you very much. 14 Robert Babik, Thomas Webb, Douglas Quetin. 15 MR. BABIK: Chairman Lloyd, members of the Board. 16 Good morning. My name is Robert Babik. I'm the Director 17 of Vehicle Emissions for General Motors Corporation. I'm 18 here today to give you a little brief status on hybrid 19 technology as it's applied to heavy-duty vehicles. 20 As you may be aware, Allison Transmission -- it's 21 a division of General Motors -- has developed the Allison 22 electric drive EP system for use in commercial buses. 23 The EP system is a strong parallel hybrid system. 24 It's a system that, combined with an engine generator 25 combination that works in parallel with the battery, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 provides in influently variable power ratio to the wheels. 2 And what this does is it allows the engine in the hybrid 3 system to run more efficiently, quietly, smoothly, and 4 cleanly. And it provides the rider with an enhanced 5 riding experience. 6 Our system coupled to a clean diesel engine that 7 uses low sulfur fuel and is fitted with a PM trap has 8 shown that the transit bus can obtain emissions equivalent 9 or on par with compressed natural gas vehicles. So no 10 longer can you refer to it as a higher emitting bus than 11 CNG. It is equal to. 12 This advance clean diesel hybrid-electric bus 13 with the EP system does have the capability, and we've 14 shown, that it can reduce emissions of nitrogen oxides, 15 particulate matter, carbon monoxide, and hydrocarbons. 16 And, in addition, the system benefits provide the customer 17 with improved vehicle performance and improved fuel 18 efficiency. 19 Now, the question I've been asked a lot of times 20 is: Is hybrid technology ready for prime time in 21 heavy-duty vehicles? And I'm here to give you some 22 examples of why at least General Motors is moving forward 23 and are going commercial as I speak. 24 In 2000 the company began its electric hybrid 25 preview program, bringing hybrid-electric buses to transit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 systems across north America. And actually in 2 California's Orange County Transit Authority was one of 3 the first to place an Allison-powered hybrid-electric bus 4 into actual service. And it continues to evaluate the 5 technology today. And other transit agencies in 6 California, as you just heard, are interested also. 7 GM has placed 38 buses between 2001 and 2003 in 8 various areas across the country. I mean we placed them 9 in Connecticut, Philadelphia, New Jersey, Houston, in a 10 lot of the major urban areas, which has led to GM/Allison 11 producing and beginning to -- going into production in 12 late 2003 with a commercially viable product. 13 As with any new technology, it takes time for the 14 transit agencies to get comfortable. I think we've gotten 15 there. And people may ask why there was a little delay 16 between the 2002 approval of the certification process and 17 coming to the market now. But, as I said, it took a 18 little bit of time to get the transit agencies 19 comfortable. 20 GM plans to roll out more than 270 of its hybrid 21 system buses in ten cities this year alone. Starting on 22 June 5th of this year the largest order of hybrid buses in 23 history are beginning to be placed into service in the 24 Seattle area. Metro trains that ordered 213 of our new 25 hybrid-electric buses. And the order also included an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 additional 22 hybrid buses for sound transit regional 2 express. 3 To date we've delivered 35. And if you ask me 4 next year how many we delivered, it will probably be 42, 5 and the following week it will be -- because we're 6 delivering every week now. 7 The two transit agencies were in dire need to 8 replace more than 200 aging dual-mode buses that now 9 operate in the downtown Seattle area as well as the 10 Seattle bus tunnel and throughout the surface streets of 11 King County. 12 So the question is: Are the buses ready for 13 prime time: And in my view it's a resounding yes. We've 14 accumulated over 1.4 million miles of testing. Reports 15 from the previous cities of high in-use availability 16 rates, that those buses tested in Seattle were run 20 17 hours a day for greater than 40,000 miles at 130 percent 18 load, which is what actually convinced Seattle that these 19 were the real deal. 20 After 53,000 thousand miles Seattle operators 21 asked for the pieces to be torn down so that they can 22 inspect them for wear, and found none. 23 CARB's own emission testing showed great results, 24 which we're on par with CNG, and we believe the technology 25 has only improved. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 Allison's EP system offers a range of additional 2 benefits, that I'd like to share with you today, for the 3 bus operator and the rider. Buses equipped with this 4 system provide 50 percent better acceleration than the bus 5 powered by a regular diesel power train. This allows for, 6 in the instance of Orange County, more stops; or in other 7 trains that agencies have used that have longer layover 8 times at the bus stops for their riders. 9 In addition, the new feature of the variable 10 transmission creates no shift points, so the ride is a lot 11 smoother for the riders. And it is much quieter since the 12 engine doesn't have to work as hard as normal. 13 We also have a unique feature called the whisper 14 mode, which is an all-electric mode that a transit agency 15 can select to operate the bus for short distances, such as 16 a tunnel where maybe a ZEB operating mode would be 17 desirable. For instance, Seattle's taking advantage of 18 this in their 1.3 mile tunnel. 19 Transit agencies that select this hybrid diesel 20 buses, while incurring some initial capital cost for the 21 purchase of the bus, will see a tremendous cost savings on 22 fuel and maintenance. For example, the Seattle delivery, 23 they're expecting an annual savings of 750,000 gallons of 24 diesel fuel a year. 25 And brake wear is significantly reduced, with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 change intervals that go from 30,000 miles and are raised 2 up to 50 and 80,000 miles, depending on the front and back 3 brake. 4 The regeneration of the regenerative braking 5 system is so effective at absorbing the storage energy, 6 we've actually found that the bus drivers don't even have 7 to hit the brakes until they're below five mile an hour. 8 CHAIRPERSON LLOYD: Bob, are you coming to a 9 close here? 10 MR. BABIK: Yes. 11 In 2000 we worked hard with your staff to come up 12 with a certification program. And the CARB staff proposal 13 that's before you today has allowed for offsets and other 14 things that make this rule for those on the diesel path 15 equivalent to what they're facing today. 16 So in conclusion then GM would just like to 17 express its support of the changes that the staff has 18 made. And I make myself available about questions you may 19 have on advanced diesel hybrid technology. 20 CHAIRPERSON LLOYD: Yeah, that's very exciting to 21 hear that you have an all-electric range. And though it 22 might be small -- 23 MR. BABIK: It is limited in Seattle since it's a 24 1.3 mile tunnel. 25 CHAIRPERSON LLOYD: What about, can you -- at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 stops can you turn it off and just -- 2 MR. BABIK: The diesel engine for this particular 3 application does continue to run. But it's never -- as 4 you're accelerating away it doesn't gear up as quickly as 5 a regular, so that you get reduction. 6 CHAIRPERSON LLOYD: Yeah, okay. 7 Questions, comments? 8 Mr. Calhoun. 9 BOARD MEMBER CALHOUN: Mr. Babik, it's my 10 impression that the vehicles that you have in Orange 11 County have been there since 2000, 2002? 12 MR. BABIK: Yes, we've actually had two sets. 13 First we had a series hybrid. And that was the first 14 vehicle that they had. Through that program, we decided 15 that the parallel hybrid system had more advantages, for 16 many reasons. And, therefore, we took their buses back 17 and retrofitted them with the parallel system, and that's 18 what they're running today. 19 BOARD MEMBER CALHOUN: Are the vehicles that are 20 being planned for Seattle a parallel hybrid also? 21 MR. BABIK: Yes, sir. 22 BOARD MEMBER CALHOUN: Have you found any major 23 problems with the ones in Orange County? 24 MR. BABIK: We have found no major problems. 25 And, in fact, just recently -- I don't expect you to know PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 what the Altuna test is. But under the Federal Transit 2 Authority, there's a test that simulates 12 miles of use. 3 And we just sort of -- got both of our 60 foot and 40 foot 4 buses through that process with no problem. 5 BOARD MEMBER CALHOUN: Thank you. 6 MR. BABIK: Twelve years. What did I say. 7 Oh, sorry. Twelve years. I've been traveling a 8 lot, so I'm a little tired. 9 CHAIRPERSON LLOYD: Maybe as a resident of Orange 10 County, Mr. Calhoun, you got a chance to go and take a 11 look. 12 BOARD MEMBER RIORDAN: Go down and tell us what 13 it's like. 14 CHAIRPERSON LLOYD: Thank you very much. 15 MR. BABIK: Thank you. 16 Thomas Webb, Douglas Quetin, Barry Wallerstein. 17 MR. WEBB: Good morning Chairman Lloyd, members 18 of the Board and the ARB staff. On behalf of BAE Systems, 19 I am here to testify in support of the proposed interim 20 diesel hybrid-electric bus rule. 21 Chairman Lloyd, you mentioned at the beginning of 22 this topic Norm Manetta's visit to your Board. At that 23 time we were Lockheed-Martin; he was the Lockheed-Martin 24 employee, and helped to kind of kick off I think a lot of 25 hard work on the part of the staff as well as the transit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 industry and suppliers to come up with both an acceptable 2 procedure for testing and validating the emissions and 3 fuel economy and other benefits of electric technology. 4 And now the key piece is to put in place a 5 standard that the manufacturers tend to in fact meet. 6 We've worked with the Board and the staff during 7 those two steps and are pleased to see the results to 8 date. 9 In '96 BAE Systems teamed up with Orion Bus 10 Industries, which is now part of the Daimler-Chrysler 11 Commercial Bus Organization, the world's largest 12 manufacturer of heavy-duty buses, to develop an efficient, 13 clean, durable heavy-duty hybrid-electric bus that could 14 satisfy North America Transit Bus requirements, but in 15 particular the demanding requirements found in New York 16 City, the largest operator of transit buses in the United 17 States. And if you can make it in New York, you can make 18 it anywhere. It's sort of funny. It's not an easy place 19 to go into with any technology. New York is extremely 20 demanding. The duty cycle is brutal. Probably arguably 21 transit buses are perhaps more difficult than a lot of the 22 other vehicles that we have our technology on, which 23 includes aircraft that fly in the sky, where road calls 24 are unacceptable, and other applications as well. 25 But since then, working with New York and with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 Daimler-Crysler, we have improved the product to the point 2 where we've now introduced a commercial product. New York 3 City has placed two orders totaling 325 units. It will be 4 the largest fleet in North America operating diesel 5 electric-hybrid buses. Deliveries have begun after some 6 delays. Bus-frame-issue-related delays; not high 7 proportion system delays. But we're proud to announce 8 that there are about 20 units now operating in revenue 9 service with very good results, very, very encouraging 10 results in terms of few economy, which is very important 11 to New York City Transit. 12 The product, as ARB knows from some firsthand 13 testing, as the previous speaker mentioned, really offers 14 CNG-like emissions for oxides of nitrogen particulates. 15 We too use a diesel particulate filter in ultra-low sulfur 16 diesel. But it also offers significant greenhouse gas 17 reductions, which obviously, while today they're not 18 regulated, they may be in the future. And as the previous 19 speaker mentioned, it offers other benefits as well to 20 maintenance and operators. 21 While we're not Lockheed anymore, we're BAE 22 Systems; we're still a global leader in transportation 23 systems and products, with about a hundred thousand 24 employees worldwide, about 2500 here in California. We've 25 looked forward to the opportunity not only to offer our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 product around other parts of North America, but here in 2 California. And we think the adoption of this interim 3 standard is an important first step. 4 Thank you for your attention. And be happy to 5 answer any questions. 6 CHAIRPERSON LLOYD: Thank you very much. 7 Any questions? 8 And thank you for clarifying the relationship 9 with Lockheed. 10 Doug Quetin, Dr. Wallerstein, Michael Eaves. 11 MR. QUETIN: Morning, Chairman Lloyd, members of 12 the Board and staff. I'm here representing the California 13 Air Pollution Control Officers Association. We've 14 submitted written comments dated June 22nd. I won't go 15 into detail. I know you're anxious to move along. 16 We do recognize and respect the technical and 17 financial complexity of this issue, and the staff work on 18 this has been admirable. 19 Basically, however, we do differ with staff in 20 that we believe that greater use and emphasis should be 21 made on the gas hybrid option, for two reasons: These are 22 available; and there's no diesel PM, which of course is a 23 toxic air contaminant. 24 We also believe that the proposal should be more 25 aggressive in the second part of the path, in that 1.2 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 grams per brake/horsepower/hour should be required and 2 technology should be pushed instead of just accepted. 3 And I'm going to take a bit of liberty, sir, if 4 you don't mind. I'm well within my five minutes. And I'd 5 like to say from the California Air Pollution Control 6 Officers Association that, Matt, we will miss you as well. 7 I was very sorry to see you leaving the Board. You've 8 done a great job in particularly environmental justice. 9 And especially in the meetings that I attended, I have 10 great admiration for the way you handled the blend of the 11 community interests, which were extreme, and the technical 12 staff, which we all represent. And you would let the two 13 groups go, but would provide guidance and direction when 14 needed right on time every time. And I personally admire 15 that. And, well, we're sorry to see you leave the Board. 16 Thank you, Mr. Chairman. 17 CHAIRPERSON LLOYD: Thank you for that nice 18 comment also. 19 Any questions? 20 Ms. Witherspoon. 21 EXECUTIVE OFFICER WITHERSPOON: Just a comment. 22 Staff did look at a 1.2 gram standard for diesel 23 electric-hybrids and ultimately concluded it was not 24 feasible in this time interval. So to set the standard at 25 that level would be to deny the option, and that's why we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 didn't recommend it to you. 2 And then on the gas electric-hybrid -- 3 CHAIRPERSON LLOYD: You mean gasoline? 4 EXECUTIVE OFFICER WITHERSPOON: No, the diesel 5 electric-hybrid we looked at a 1.2 gram per 6 brake/horsepower/hour standard. 7 CHAIRPERSON LLOYD: But you talking about gas or 8 gasoline hybrid? 9 EXECUTIVE OFFICER WITHERSPOON: I was just 10 transitioning to gas hybrid. What did I say? 11 CHAIRPERSON LLOYD: That's fine. 12 EXECUTIVE OFFICER WITHERSPOON: Is everybody with 13 me now? 14 Okay. That was on diesel we looked at 1.2. 15 On gas electric-hybrids this Board in 2002 16 designated gas electric-hybrid as an alt fuel, so that any 17 transit district is currently permitted to purchase that 18 technology. 19 CHAIRPERSON LLOYD: That's what I was trying to 20 clarify. Natural gas or gasoline when you talk about gas? 21 EXECUTIVE OFFICER WITHERSPOON: Gasoline 22 electric. 23 CHAIRPERSON LLOYD: Okay. Well, we got to be 24 clear because some people talk about gas as natural gas -- 25 sorry. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 EXECUTIVE OFFICER WITHERSPOON: Sorry. 2 CHAIRPERSON LLOYD: Yes, Ms. D'Adamo. 3 BOARD MEMBER D'ADAMO: Did staff consider 1.2 in 4 the out years? 5 EXECUTIVE OFFICER WITHERSPOON: No, because we 6 postponed all consideration of the out years until our 7 next rule making. 8 BOARD MEMBER D'ADAMO: Okay. And then on the 9 gasoline electric-hybrids -- 10 EXECUTIVE OFFICER WITHERSPOON: Dede, just to 11 follow up on that point. The hybridization of a diesel 12 engine accomplishes a reduction over base emissions. So 13 as diesel technology advances, then hybrid standards can 14 become more stringent as well. And right now in our 15 certification procedure, we grant a flat 25 percent credit 16 reduction. And engine manufacturers can qualify for 17 greater reductions than that by putting the vehicles on 18 dynamometers and testing actual emissions. We think our 19 credit adjustment is conservative and protective. But 20 that in fact hybridization gets you possibly even greater 21 remission reductions from the base engine. 22 BOARD MEMBER D'ADAMO: Okay. Shifting over to 23 gasoline electric-hybrids. 24 Mr. Quetin or staff, could you respond to whether 25 or not it was considered to provide for further incentives PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 to encourage greater use of gasoline hybrids as opposed to 2 diesel? 3 EXECUTIVE OFFICER WITHERSPOON: Well, the Board 4 provided an incentive to the manufacture of gasoline 5 hybrids in the very beginning, an ICAT grant for the 6 development of that technology. It perhaps would not even 7 exist but for this Board's investment in the technology. 8 And then, as I indicated, in 2002 you put -- although it's 9 gasoline and petroleum, you gave it a designation of an 10 alternative fuel for the purposes of this rule making, 11 which made it any transit agency able to purchase it. 12 There are no other incentives at the moment, 13 financial or otherwise, that would lead people in that 14 direction. But we think we've done a lot to foster that 15 technology along. 16 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 17 HEBERT: May I add just one comment to that, is that the 18 diesel hybrid is actually only allowed for diesel path 19 agencies. So the agencies that are on the alt fuel path 20 would either buy the alt fuel or the gasoline hybrids. 21 So, in effect, that's kind of one hype of incentive to 22 help promote gasoline hybrids. 23 CHAIRPERSON LLOYD: And I think the other thing 24 that will play in next year is evaluating, for example, 25 all the fuels not only in the light of emission, which is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 our primary objective, but also on the AB 2076 reduction 2 in petroleum dependency. So it's a -- we're looking at a 3 complex mix, and that's why we can't, you know, rush into 4 this. And we're waiting for some more guidance on that 5 piece of it. 6 Thank you very much. 7 Dr. Wallerstein, Michael Eaves, Julie Masters. 8 DR. WALLERSTEIN: Good morning, Chairman Lloyd 9 and members of the Board. 10 I'm also standing here unfortunately in 11 opposition to the staff proposal. Dr. Lloyd, I thought it 12 was important that you mentioned at the outset of the 13 meeting today the Governor's new bold initiative providing 14 permanent funding for the Moyer program to accelerate the 15 retirement of dirty diesels and to incentivize clean 16 technologies. And it strikes us at South Coast that the 17 proposal that's before you today doesn't take full 18 advantage of the options that are before you in the way of 19 gasoline hybrids, as was just being discussed. 20 We view it more as a step sideways because the 21 engines that are going to be used in these diesel hybrids 22 are 2.1 to 2.5 grams per brake/horsepower engines. There 23 are no improvements in the engine. The emission 24 reductions come from two things: The hybrid technology, 25 and the offsetting of the emissions through retrofit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 control devices on other vehicles. So there are some 2 important policy questions before you today. It is not a 3 choice between diesel and natural gas. It is really a 4 choice between diesel and gasoline hybrids. 5 The gasoline hybrid engine is actually -- it's 6 actual cert level is 0.4 grams, not 2.5, not 2.1, not 1.8 7 married to the hybrid technology. In the staff 8 presentation they indicated 0.6 because your procedures 9 take an engine at 0.4, 0.5, and 0.6 and lump them together 10 in a certification then at 0.6. If you look at the 1.8 11 versus the 0.4, the gasoline hybrid engine is 78 percent 12 less polluting -- 78 percent. 13 So we would ask that you really take that into 14 consideration and the need for offsetting through retrofit 15 control devices with the complications that go through 16 that. 17 We also ask you to take a very serious look at 18 the signal that you will send today. What are you going 19 to tell manufacturers of advanced technologies, whether 20 it's gasoline hybrids, alt fuels, or any other technology? 21 Should they invest? Will you hold firm if they produce 22 vehicles that will meet your emission reduction target? 23 In addition, you've heard I think a little bit 24 about, well, is the gasoline hybrid ready for prime time? 25 You're going to hear from the vendor of the equipment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 They'll go into, I'm sure, some detail. But my staff's 2 looked at this, and we think it is ready for prime time. 3 We're not the only ones that think it's ready. There are 4 a number of transit agencies that have put these vehicles 5 on order. I understand there's 150 on order to date. 6 Agencies in South Coast because they don't have a diesel 7 path option have selected these vehicles, including our 8 Long Beach Transit, Omni Trans, Gardena, OCTA, Montebello, 9 and Norwalk. 10 In South Coast we have a substantial number of 11 these vehicles on order. The engines in these vehicles 12 are 10 liter, 310 horsepower. They have the ability to go 13 up steep hills. I'm told that Omni Trans's bus went to a 14 conference in Colorado and went up over the Rockies. So 15 if you can go over the Rockies, although it wasn't loaded 16 down with passengers, you can hopefully do a hill in San 17 Francisco. 18 I'm not hear to knock diesel hybrids. But we do 19 think there are still some uncertainties about the diesel 20 hybrids. We think that's reflected actually in New York 21 City's purchase plan. If you look at their 40 to 45 foot 22 buses, they're planning on buying non-hybrids compared to 23 hybrids at a ratio of 7 to 1. As you heard, they only 24 have 15 to 20 of the latest generation in use. And 25 there's no published data available on how those are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 performing. And as you would expect, in the early 2 introduction there were some problems. 3 We would also ask you to consider that when we're 4 talking about advancing technology, if you have a group of 5 folks that are regulated where the federal government 6 picks up 80 to 83 percent of the capital cost of the 7 vehicles, if you can't require the cleanest technology in 8 that circumstance, which is the circumstance that's before 9 you today, how can you ask small businesses and large 10 businesses alike to take the full burden of costs of 11 advanced technologies that are less polluting when 12 they're -- instead of a higher emitting technology. 13 For stationary sources, as I know this Board 14 knows, people don't have the choice of end user 15 preference. They're required to use the cleanest 16 technologies. So we're here in large part today to ask 17 for a continued leveling of the playing field. When your 18 staff comes to us and says for stationary source rule, go 19 with the cleanest technology, when we do that, we do that 20 willingly. We would hope that today you would go with the 21 cleanest option that's available to you. 22 Lastly, I'd like to note on a positive note that 23 I arrived here today in a fuel-celled powered car, a Honda 24 car. It's the first to come to our fleet in our facility. 25 And I was really proud riding over here with Dr. Liu today PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 in that vehicle. And it would not have been possible 2 without the foresight of this Board and for you taking a 3 stride forward where you have an opportunity to do so. 4 And we would like you to continue that in the 5 context of the item before you today, require that if they 6 want to go hybrids, let them go hybrids, but let's go with 7 the low emission cleaner air choice. 8 Lastly -- two other things if I could quickly, 9 Dr. Lloyd. 10 In terms of the -- I'm going to get to -- let me 11 do Mr. McKinnon first. Okay? 12 (Laughter.) 13 BOARD MEMBER DeSAULNIER: We've been waiting. 14 DR. WALLERSTEIN: In the Legislature when 15 everything's been said and you're a supporter, you get up 16 and you simply say, "Me too." And South Coast would like 17 to register as a "Me too." And so we thank you, 18 especially for all your work on EJ. 19 There was an additional suggestion earlier in 20 your meeting about moving forward with the retrofit rule. 21 We fully support that. If the technology's good enough 22 for what is being proposed by the staff, it ought to be 23 good enough for a full retrofit rule, and we'd ask that 24 the staff prepare that on an expedited basis, because we 25 sure need the additional emission reductions of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 gasoline hybrid plus the retrofit rule, which will get us 2 the maximum emission reductions and cleaner air. 3 CHAIRPERSON LLOYD: Do you have any plans for 4 natural gas hybrids in South Coast? 5 DR. WALLERSTEIN: Actually, Dr. Lloyd, our 6 Technology Advancement Office, which you started, has a 7 project underway to develop a natural gas hybrid -- 8 several projects. 9 CHAIRPERSON LLOYD: What are sort of the 10 emissions numbers you're looking at there? 11 DR. WALLERSTEIN: Maybe Dr. Liu can come up here 12 quickly. 13 In addition to that, we're also, as I think 14 you're aware, working with DOE on some advanced natural 15 gas engines that would meet the 2007 standards without the 16 sorts of add-on controls that would be required for the 17 diesel counterpart. 18 DR. LIU: Just quickly some information. With 19 all the hybrid we're looking for .2, .5. We have three 20 projects ongoing in hybrid. Definitely we're looking at 21 .2 at this time. And MTA actually at this time for -- 22 station are thinking about including the hybrid natural 23 gas as this other station. 24 CHAIRPERSON LLOYD: Well, yeah, the other thing 25 that came up earlier when we talked about the particulates PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 from diesel and that -- clearly gasoline doesn't have 2 diesel particulates, but it does have particulates. I 3 mean your studies have shown the same thing. So to 4 characterize that is really not accurate. 5 The other part I think, Dr. Wallerstein, I take 6 exception to the fact that we're not pushing technology 7 here. I think we've seen a number of times when you've 8 come before us challenging us to do that. And I think 9 that -- I'll say no more than to say to that challenging 10 us on some of those issues with our staff is getting a 11 little bit tiresome. 12 DR. WALLERSTEIN: Well, Dr. Lloyd, I was not 13 saying today that this agency doesn't move forward and 14 challenge technology to the limits. What I am saying to 15 you is that the item before you today doesn't take 16 commercially available technology that is lower 17 emitting -- 18 CHAIRPERSON LLOYD: I'm fully aware of what's 19 before us today. I'm fully aware of what's behind it. 20 Thank you. 21 Michael Eaves, Julie Masters. 22 MR. EAVES: Good morning, Dr. Lloyd and Board 23 members. Dr. Lloyd, I take your admonishment about not 24 drifting into the other subjects. 25 And I do appreciate this opportunity to speak. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 And I also -- I appreciate the opportunity to visit 2 several of the Board members one on one and talk about 3 some of these issues. 4 The natural gas vehicle industry would like to go 5 on record as opposing this particular amendment, as we've 6 opposed most of the recommendations over the last six and 7 a half months that would have rolled back the emission 8 standards. 9 We do feel that this -- we do feel that this 10 particular rule is a rollback of the standards. Not 11 mentioned in the staff report -- the staff report covered 12 the fact that engine manufacturers in the 2007 timeframe 13 are not going to deliver .2 gram engines, but they have 14 also indicated they're not going to -- 15 CHAIRPERSON LLOYD: We are protecting air quality 16 because we're requiring those emissions offset. What you 17 said is partially correct. But on the other hand we do 18 want to look at the impact on air quality and make sure 19 that we don't have additional emissions coming into the 20 air. 21 MR. EAVES: I recognize that. But I mean part of 22 the problem -- part of the problem in the urgency to look 23 at a diesel hybrid alternative is the fact that no engine 24 manufacturer will manufacture the .5 gram engine needed 25 for conventional buses in California for the next three PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 years. 2 So that leaves -- so that leaves, as Dr. 3 Wallerstein said, the engines that are going to go into 4 those vehicles are going to be 2.4 gram engines. 5 Certainly they can be offset by NOx control technology. 6 But if you take a look at some of the circumstances of the 7 fleet designs and how much you have to offset emissions 8 for the life of those new vehicles, you find out in some 9 circumstances there are not sufficient emissions to offset 10 to allow purchase of three years or six years of engines, 11 you know, that don't meet the standard. 12 And I -- again, I think it's difficult to look at 13 the CARB's action to allow the diesel engines to be sold 14 as conventional diesels at the EPA standard of 2.4 or 2.5 15 gram when the engine manufacturers declared that they 16 won't supply the conventional engines, you know, for a 17 conventional transit bus. 18 Again, I've already mentioned about the offsets. 19 I think that -- I think it is appropriate that the offsets 20 are there. But I believe that if you'd take a look at the 21 modeling, that it takes more than one-to-one offset to 22 make the system whole. 23 I've looked at some modeling that shows that you 24 get immediate reduction when you do the -- when you 25 retrofit the NOx control emissions to older buses. But PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 you run across over a point about 2007 to 2010, and then 2 your fleet average after that is higher than what would 3 have been achieved had the CARB-compliant engines been in 4 effect, you know, for the whole time. 5 So again I -- we feel that this action is 6 inappropriate at this time. We feel that natural gas and 7 the gasoline hybrid are the two options that are on the 8 board that are available through the transit -- diesel 9 transit bath properties and that those are a lower 10 emission technology. 11 Thank you. 12 CHAIRPERSON LLOYD: Thank you. 13 And, again, I want to also say, Mike -- and while 14 I say it's not the debate today, we really do appreciate 15 the fact that you're keeping the pressure on, that you've 16 brought to our attention some of the people who are 17 working on that technology of the natural gas to meet the 18 point too. So I really appreciate that. And I know we'll 19 hear as we -- as we advance next year, we'll hear a lot 20 from you, and I look forward to that because that pressure 21 is very important all around. 22 MR. EAVES: Thank you. 23 Mr. Calhoun. 24 BOARD MEMBER CALHOUN: I don't have a question 25 for Mr. Eaves. I have question I want to ask of staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 about a comment that Barry made -- Wallerstein. 2 CHAIRPERSON LLOYD: Okay. Can you use the mike. 3 BOARD MEMBER CALHOUN: Yes. Excuse me. 4 As I understand Dr. Wallerstein, he said that New 5 York was not purchasing any hybrid diesels. 6 EXECUTIVE OFFICER WITHERSPOON: He said that in 7 there 40 to 50 foot bus length, that they were only 8 purchasing diesel electric-hybrids at a 7 to 1 margin, 9 implying that they weren't confident dent in the 10 technology. And I don't know a lot of the details about 11 that, but I think the volume of diesel electric-hybrids 12 that they and other transit agencies in the country are 13 purchasing sort of speaks for itself. It is a truly 14 commercial technology now, and we're in the hundreds of 15 purchases around the country. 16 BOARD MEMBER CALHOUN: We really don't know then 17 why they chose to go the route that they're following? 18 EXECUTIVE OFFICER WITHERSPOON: No, we don't know 19 exactly the cause. In Seattle their articulated buses are 20 I think in excess of 40 feet. I think it's 60. And 21 they're going with these electric-hybrids for those very 22 long buses. And so there doesn't seem to be anything 23 unique about the New York choice other than maybe what the 24 price point is from the supplier they were using. 25 BOARD MEMBER CALHOUN: Okay. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 CHAIRPERSON LLOYD: Thank you. 2 Professor Friedman. 3 BOARD MEMBER HUGH FRIEDMAN: A quick question. 4 There was I think a comment Dr. Wallerstein made about -- 5 as I understood it, that a natural gas bus, a fairly large 6 bus could go up over Pikes Peak. 7 And the inference was that "Why can't it go up 8 the San Francisco Hills?" 9 I learned to drive in a stick shift going up Nob 10 Hill in San Francisco. And I didn't have a long run at 11 it. 12 (Laughter.) 13 BOARD MEMBER HUGH FRIEDMAN: And it seemed like 14 it was almost straight up to me. 15 And so I'm wondering, can the staff -- does it 16 have any empirical data to support or contradict what we 17 heard from the San Francisco MUNI people? 18 EXECUTIVE OFFICER WITHERSPOON: Well, I'll start 19 then and let Tom chime in here. 20 There is a dispute in the industry and among 21 transit districts about load factors for natural gas 22 engines. And some who have them say it's no more 23 troubling than any other factor about a natural gas bus 24 and there are hills in Los Angeles too and they're able to 25 mount them. I think in the Bay Area's case it's a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 combination of crush loads plus steeper elevations that 2 leads that transit district to reach a contrary conclusion 3 that for them the loss in performance would not be 4 tolerable. But then there are other people who will say, 5 you know, "Well, how do you know till you've done it? And 6 we see no defect and you should have to buy them anyway." 7 I'll let Tom chime in. 8 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I 9 think, first of all, I mean you do have to look to the 10 transit agencies and their demonstrations to figure out 11 what really works for them. It's going to be different 12 from a flat area obviously to a San Francisco hilly area. 13 The natural gas engines on a -- if you take the 14 same size engine and put natural gas in them, you do lose 15 power compared to the diesel engine. And I think that's 16 what one of the issues is. 17 On the flip side, for the hybrid-electric vehicle 18 you get more torque off the line than you get from a 19 regular diesel engine. And so that's probably -- shows up 20 as a positive attribute. One of the reasons we wanted to 21 wait until next spring to look at this whole issue of the 22 .2 is that the new gas -- natural gas technologies that 23 are being developed don't have that power loss. And so, 24 you know, that's going to remove -- potentially remove 25 move one of the down sides for some of these applications. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 And I think that's probably the future of the natural gas 2 engines. And so we'll be able to give you a more balanced 3 picture then. 4 But for right now, I mean, I don't think we can 5 really second guess whether or not one bus versus another 6 climbed up Nob Hill well or not. The transit agencies are 7 really the best ones to assess that. 8 CHAIRPERSON LLOYD: Thank you. 9 Julie Masters, Michael Simon, and Dawn Friest. 10 MS. MASTERS: Good morning. I'm Julie Masters. 11 I'm here on behalf of the Natural Resources Defense 12 Council, NRDC. And I'd like to thank you for the 13 opportunity to address you today. 14 I'd like to begin by commending staff on taking 15 off the table for this hearing in any event the discussion 16 of rolling back the 2007 standards. 17 But we'd like to make clear at this time that we 18 are adamantly opposed to any change in those standards in 19 the future. And it's important to mention this just 20 really briefly right now, because manufacturers and 21 agencies need to consider what their next steps will be 22 for complying with the 2007 standards. 23 First, we don't believe that it's necessary to 24 change them because we are -- 25 CHAIRPERSON LLOYD: I indicated this was not the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 focus of this meeting. 2 MS. MASTERS: Then I won't mention it. 3 Well, I just wanted to point it out there because 4 we wanted to make sure you create the proper incentives. 5 CHAIRPERSON LLOYD: You couldn't resist. 6 (Laughter.) 7 MS. MASTERS: I won't mention it. 8 (Laughter.) 9 As far as the amendments today, I just want to 10 speak about one, and that's the diesel electric-hybrid 11 standard. We did not, NRDC did not take a position in our 12 written comments on the proposed weakening of the 13 standard. And our position was as long as transit 14 agencies made up the difference in emission reductions, 15 that we were okay with that. 16 But we have -- now have serious concerns about 17 the proposed amendment. Since we submitted our letter 18 we've learned more about the gasoline hybrid-electric 19 option that meets the .5 gram standard, and they seem 20 extremely promising to us. We can't understand why ARB 21 would choose to raise the standard and allow as a general 22 rule the purchase of diesel hybrid-electric buses that 23 meet a much higher 1.8 grams standard when a cleaner 24 option already exists. 25 We want to make clear that we strongly support PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 the advancement of hybrid technology as an important 2 bridge towards zero-emission technology. And since ARB 3 has made clear that it is unwilling to change to an 4 alternative-fuel-only bus rule, we do support the hybrid 5 approach. But we urge you to require the purchase of the 6 cleanest hybrid rather than to raise the standard to allow 7 dirtier diesel hybrids into the rule as a general rule. 8 If individual agencies cannot use the gasoline 9 hybrid for a particular application or if the cleaner 10 buses are not available for a particular order, then staff 11 should consider an individual variance at that time. But 12 the answer is not to allow the purchase of dirtier buses 13 across the board when a cleaner option exists. 14 Thank you. 15 CHAIRPERSON LLOYD: Thank you. 16 Again, I think -- reiterate that the gasoline 17 hybrids are available. They're selling -- well, they're 18 selling now, so we're not trying to prevent that at all. 19 MS. MASTERS: You know, maybe it is that you 20 might be able to get a commitment -- I don't know if 21 you're going to hear later on from the manufacturer of the 22 gasoline hybrids -- to make sure to meet the demand. But 23 if you could do that, that would be a good step forward 24 rather than changing the standard. 25 CHAIRPERSON LLOYD: Yeah, well, recognize, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 staff said, you know, we supported ISE. We've got a 2 tremendous regard. They're a company based in California. 3 We want to do everything we can. We think they're doing 4 well in the marketplace. So we're not -- that's not -- 5 you know, not an issue for us on that. So I think we're 6 very happy with that. 7 MS. MASTERS: Thank you. 8 CHAIRPERSON LLOYD: But thank you. And I know 9 we'll hear from you. I can tell already. 10 Michael Simon, Dawn Priest, and Nidia Bautista. 11 MR. SIMON: Hi. I'm Michael Simon, Chairman and 12 Co-CEO of ISE Corporation. 13 Thank you, Mr. Chairman and the members of the 14 Board and staff for the opportunity to talk with you today 15 about the status of hybrid-electric technology in 16 California and, in particular, gasoline hybrid. And I 17 would also, if I have time, like to throw in a few words 18 about hydrogen hybrids, that haven't been brought up yet. 19 Your staff report, which I believe is excellent, 20 correctly identifies ISE's gasoline hybrid system as 21 the -- which is certified at 0.4 grams per 22 brake/horsepower of NOx as the only hybrid system 23 currently certified for use in transit buses in 24 California. And so I thought it was important that I come 25 up here and clarify the status of that product, because PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 it's been discussed quite a bit. 2 There are presently nine transit buses, all 3 demonstration vehicles and early adopter vehicles, using 4 ISE hybrid systems that are fundamentally technically 5 similar to the gasoline hybrid system which we are 6 entering in the commercial production later this year. 7 Five of these buses use fuels other than 8 gasoline. But they rely on the same basic hybrid 9 architecture as the gasoline versions. 10 The nine buses have accumulated a total of 11 approximately a hundred thousand miles of testing over the 12 past two years, about 60 percent of this in actual revenue 13 service. One of the four gasoline hybrids has survived as 14 of yesterday 8,000 miles of testing on that durability 15 track in Altuna, which essentially puts us more than 16 halfway through that 12-year test. And there been haven't 17 been any significant problems with the hybrid drive system 18 there either. 19 Two of the other ISE hybrids, the non-gasoline 20 hybrids, have been in service in New Jersey since last 21 year and have had an availability record of over 90 22 percent on a demanding high speed suburban route. 23 And a third hybrid, a diesel hybrid that ISE 24 used -- again, the same system as a gasoline hybrid, just 25 a diesel engine -- recently made a cross-country trip last PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 month from San Diego to New Jersey without a single 2 breakdown and made it over the Rocky Mountains, and also 3 averaged over eight miles per gallon, which is about two 4 and a half times typical fuel economy for a bus. 5 Through all of this testing service, we have seen 6 our basic hybrid system perform very well without any kind 7 of unusual or major problem that would be -- to be other 8 than what we expected in a typical new bus. Demonstrating 9 a significant vote of confidence in the ISE gasoline 10 hybrid system, North America's two largest transit bus 11 manufacturers, New Flyer and North American Bus 12 Industries, are both offering ISE's gasoline hybrid system 13 to their transit customers from coast to coast, and our 14 diesel hybrid system for that matter. And so is the 15 largest manufacturer of commuter buses, Motor Coach 16 Industries. 17 As these bus manufacturers have a very large 18 vested interest in the reliability of the buses that they 19 deliver, we believe that these actions speak for 20 themselves in terms of demonstrating the viability of ISE 21 hybrid technology. 22 ISE offers a warranty of up to six years on its 23 hybrid system. We're presently negotiating for a capital 24 investment from a major venture capital firm that will 25 ensure our ability to manufacturer as many hybrid systems PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 right here in California as required to meet California's 2 need for the most environmentally friendly buses that we 3 can possibly put on the roads here. 4 We've been -- as has been mentioned earlier, 5 we've received orders for or have been selected to supply 6 a total of more than 150 gasoline hybrid systems, and we 7 believe this is just the tip of the iceberg. 8 We acknowledge that our hybrid system is still, 9 despite these facts and figures, in its early stages of 10 commercialization. But we don't believe that should be an 11 issue if you're debating gasoline versus diesel hybrid 12 because we're all in a early stage. Raising the current 13 NOx emission standard to the higher levels proposed would 14 certainly -- would indeed open up California's market to 15 diesel hybrid systems that are produced outside of the 16 state. But none of these diesel systems is really that 17 much more proven than the gasoline hybrid system. 18 In fact, the Siemens components that we use in 19 our gasoline hybrid system that are at the core of our 20 system have been used in Europe in more transit buses than 21 all of our diesel hybrid competitors have produced 22 combined. 23 In addition, we offer our own diesel hybrid 24 system, as I mentioned, which we believe can be upgraded 25 to meet the 1.2 standard at least, if not the current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 standard. 2 Your staff report accurately points out that 3 ISE has a business interest in the debate, so we are 4 abstaining from taking a formal position on the proposed 5 rule change. We don't want to be accused of placing our 6 corporate interest above that of our customers or 7 potential customers, the public at large. And we believe 8 in our diesel hybrid system as well as our gasoline. But 9 we do believe that the Board should note that the gasoline 10 hybrid system is entering true commercial production with 11 a lot of backing and that we are certified at a NOx level 12 of about a quarter -- or less than a quarter of the 13 proposed new standard. 14 We also believe that diesel hybrids can be 15 improved beyond the 1.8 and that there should be some 16 impetus to improve diesel; that California should continue 17 to be a leader enforcing, you know, clean new 18 transportation technologies, as we have been. 19 In closing, I'd like to clarify a few points that 20 were made earlier. We did have a gasoline hybrid that 21 also made it over the Rockies and that has been tested on 22 the hills in San Francisco, and as far as I know it did 23 quite well. 24 We also incidentally produced a CNG hybrid system 25 a few years ago that was tested in a 54,000 pound refuse PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 truck and made it up 20 percent grades in San Francisco. 2 Also, I'd like to acknowledge the ICAT grant that 3 the Board granted us in 1996, which was used initially for 4 the development of our CNG hybrid system, which we 5 actually demonstrated in three different trucks, and which 6 led directly to the gasoline hybrid innovation. So I want 7 to thank the ARB, the Board, your staff, and all of your 8 people for all their wonderful support over the past eight 9 years. 10 And I was pleased to see the culmination or 11 latest example of that support, along with support from 12 the AQMD and others, the hydrogen hybrid system we're 13 developing. As of earlier this week we successfully 14 installed our hydrogen burning engine into a hybrid bus -- 15 a hybrid New Flyer bus. That bus will be operating later 16 this year. And when we talk about the .2 standard and 17 even the zero emission standard, I think that hydrogen 18 hybrid gives us an opportunity we shouldn't lose sight of, 19 to actually have a commercially viable bus operating 20 within the next year that meets the .2, possibly, and 21 possibly even the zero-emission standard at a fraction of 22 the cost of a fuel cell bus. So I want to thank you for 23 your support for that program and for your time here 24 today. 25 CHAIRPERSON LLOYD: Thank you very much, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 congratulations on successful bringing this technology to 2 the market. 3 MR. SIMON: Thank you. 4 CHAIRPERSON LLOYD: Dawn Friest and Nidia 5 Bautista. 6 MS. FRIEST: Good morning. My name is Dawn 7 Friest and I'm here today on behalf of the Engine 8 Manufacturers Association. 9 EMA's members include the principal manufacturers 10 of diesel fueled and alternative fueled urban bus engines. 11 And with all due respect to the Board and 12 Chairman Lloyd, sorry to say EMA's comments do focus on 13 the alignment issue and the delay in alignment. And we 14 believe it's important to address the issue today because 15 it's having an impact today. 16 CHAIRPERSON LLOYD: Why do you say that? Because 17 you've heard me cut off other people, why should I allow 18 you that liberty? 19 MS. FRIEST: I think I heard you earlier allow 20 some other people a couple minutes to address the issue. 21 And I've come a very long way. And my members would 22 really -- 23 CHAIRPERSON LLOYD: I'll give you two minutes. 24 MS. FRIEST: Thank you. 25 My comments will be brief. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 EMA and its members have been active participants 2 throughout the development of ARB's urban bus program. As 3 you know, the program has been reviewed by this Board on a 4 number of occasions. 5 Throughout the process there have been several 6 constants. This Board consistently has recognized the 7 role and importance of maintaining a diesel option, the 8 so-called diesel path. Engine manufacturers have 9 consistently called for alignment of the 2007 emission 10 standards for both diesel and CNG engines. And the staff 11 has consistently indicated its intent to make the decision 12 on alignment in a timely fashion. 13 Now we run the risk of losing one of those 14 constants, a prompt decision on alignment, the result of 15 which as a practical matter is that we run the risk of 16 losing the option of a diesel path. And certainly we 17 cause confusion in the marketplace. 18 The Board should make a decision on alignment as 19 soon as possible and at a minimum must make that decision 20 by the end of this year. 21 Delaying in aligning of the 2007 standards will 22 cause confusion and uncertainty for engine suppliers, bus 23 manufacturers, and transit agencies. Unless The ARB acts 24 soon, transit agencies will need to make plans for 25 managing their fleets, assuming they will not have new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 engines available in 2007. 2 Deferring action in maintaining a .2 gram NOx 3 standard will not cause engine manufacturers to divert 4 resources to try to meet that standard in 2007. Resources 5 already are fully allocated to meeting the federal 6 requirements for trucks and buses in 2007. 7 As we have said with consistency and as we 8 believe the staff recognizes, alignment is not just an 9 option. It is the only option which provides a certainty 10 that new diesel and natural gas engines will be available 11 in the 2007 to 2009 time period. 12 Alignment ensures that California will realize 13 the emissions benefits from new low emission diesel and 14 natural gas engines that otherwise will not be available 15 and/or purchased. Alignment makes sense for all engines 16 for many reasons, including cost efficiency, product 17 availability, transit fleet decision making, lead time 18 concerns, and certainty of flexibility for the market as 19 well as certainty for achieving emission benefits 20 associated with the rule. 21 CHAIRPERSON LLOYD: That's two minutes. 22 And I don't understand your logic when you say 23 alignment will help natural gas, because what we've been 24 hearing is that keeping the standard helps natural gas. 25 MS. FRIEST: Well, I also -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 So you're saying your members feel that they will 2 be able to -- a better chance with natural gas with 3 alignment? 4 MS. FRIEST: Our members are also the members who 5 you're talking to about the .2 gram diesel -- or the 6 natural gas engines. Deere International. Cummins of 7 course is a member. You know, Detroit Diesel I don't 8 think has talked to you about the .2 gram engine, but 9 nonetheless they do manufacture natural gas engines. And 10 the members support my comments today on alignment because 11 it is not the California market that's driving the 12 investment in that technology. It's the larger market. 13 It's the federal incentives. 14 CHAIRPERSON LLOYD: For natural gas? 15 MS. FRIEST: Correct. I'm sorry, did I say -- 16 CHAIRPERSON LLOYD: No. Anyway, I don't 17 understand the logic there, but -- 18 MS. FRIEST: It's because this market is too tiny 19 to drive that investment alone. It's the incentives in 20 the federal program and the possibility and the incentives 21 that are built in to develop those engines and sell them 22 in the larger market that develop -- that incentivizes -- 23 CHAIRPERSON LLOYD: Well, we'll hear more about 24 that as we move ahead. 25 MS. FRIEST: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 CHAIRPERSON LLOYD: So in conclusion? 2 MS. FRIEST: In conclusion, I would just like to 3 say that engine manufacturers, including those that are 4 planning to produce the .2 NOx product CNG engine, support 5 alignment. The fact remains that alignment with the 2007 6 heavy duty on highway requirements provides a certainty of 7 low emission product availability and the appropriate 8 incentives for early introduction of .2 gram NOx product. 9 And we urge the Board to consider this at the earliest 10 opportunity, and hopefully before the end of this year. 11 Thank you. 12 CHAIRPERSON LLOYD: Thank you. 13 Professor Friedman. 14 BOARD MEMBER HUGH FRIEDMAN: I just wondered if 15 the staff had any response to any of that. I had asked 16 earlier about the time line, which in part she was 17 addressing. I'm not -- I don't think any of us is 18 prepared to deal with alignment, as such, today. 19 Obviously that was stated at the outset. But part of this 20 proposal is when we would -- when we would address that. 21 And she's urging by the end of the year, as I heard. 22 EXECUTIVE OFFICER WITHERSPOON: Yeah. Staff had 23 initially proposed alignment because we believed in, on 24 the basis of all the evidence we've seen to date, that no 25 engine manufacturer, neither natural gas or diesel, was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 going to meet the .2 standard, and the transit rule would 2 become a no-purchase rule, which did not seem like good 3 public policy. 4 What happened at that point was natural gas 5 engine manufacturers came forward and said, "You're 6 judging too soon. We're on a path. We think we might be 7 able to get there. Can you postpone your decision long 8 enough to let us prove it out?" And we looked at transit 9 procurement schedules to see when they absolutely needed 10 to know in order to buy a bus for '07 when we would have 11 to call it. But were you to call it today and were you to 12 call it in December, staff believes you would have had no 13 choice but to drop the .2 standard because by then the 14 natural gas manufacturers will not be able to prove to you 15 that they can meet it. 16 By the spring-summer of next year, they'll be 17 closer and we'll know if they're truly in shooting 18 distance or not of that standard. 19 Then you have a separate policy question to 20 consider: If only natural gas can meet it, do you wish to 21 retain that standard and require everybody to purchase 22 natural gas only? They're separate questions. But we had 23 proposed alignment based on feasibility -- or 24 infeasibility alone. 25 And now, there'll be two questions before you, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 feasibility and the policy implications. 2 BOARD MEMBER HUGH FRIEDMAN: Thank you for 3 clarifying that. 4 CHAIRPERSON LLOYD: Thank you. 5 Nidia Bautista. 6 And I don't know if Marty Mellera wants to 7 testify. 8 MS. BAUTISTA: Thank you. Good morning. Good 9 morning, Chairman, Board, staff, public. I'm here today 10 on behalf of the Coalition for Clean Air. 11 I am here because we -- although we are -- we 12 commend the staff's recommendations to improving the 13 proposed amendments, we would like to see a preservation 14 of the existing Bus Transit Rule. We do not -- we hope -- 15 we look forward to next year when you do look at the 16 alignment issue, that you will preserve the existing 2007 17 standard. We are aware that there are manufacturers that 18 are committed to meeting that. And we want to make sure 19 that we reward these early adopters, both in the fact that 20 they have already invested in a lot of research and 21 development, and we certainly think that it's only fitting 22 that they get rewarded and we -- more where we shouldn't 23 be rewarding those who are seeking to weaken the rule. 24 Coalition for Clean Air has always been 25 disappointed with the diesel pathway rule. We've always PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 believed it should be an alternative fuel rule, because 2 alternative fuels have been shown to be superior. 3 Seems no willingness on behalf of staff to 4 require diesel transit agencies to purchase alternative 5 fuels. We do believe that the purchase of hybrid diesel 6 electric buses is the correct strategy. However, we do 7 favor gasoline hybrid-electric buses. Gasoline 8 hybrid-electric buses are 500 percent cleaner than diesel 9 buses, which are -- diesel hybrid-electric buses, which 10 are 33 percent cleaner. A significant difference, one 11 that will benefit breathers in California throughout the 12 state. 13 If ISE has the ability to supply the entire 14 market, we hope that the Board does take that into 15 consideration. 16 Unfortunately, transit providers have already 17 expressed today they're in a holding pattern. And they're 18 waiting for the ARB to finalize the adoption of this rule. 19 And so we do look forward to an expeditious adoption 20 without the amendments, and so that transit agencies can 21 remove their dirty diesel buses and replace them with 22 cleaner buses so that everyone can breathe in clean air in 23 California -- cleaner air. Excuse me. 24 Thank you. 25 CHAIRPERSON LLOYD: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 And Marty Mellera. 2 MR. MELLERA: I was going to say good morning. 3 It's almost good afternoon. Batting clean-up for MUNI. 4 Thanks to staff for all the hard work, first of 5 all. And I'm going to -- I know there's some questions 6 that I should answer that have come up. I want to go 7 through a brief presentation about how the hybrid-specific 8 changes influence one agency in California, MUNI. And if 9 you don't mind, I'll save the questions that came up for 10 the last part. 11 CHAIRPERSON LLOYD: Keep it within five minutes 12 please. 13 MR. MELLERA: Together with the San Francisco 14 Department of Environment, San Francisco MUNI has put 15 together the plan that Jose mentioned earlier. It calls 16 for complete elimination of emissions by 2020. 17 It's based on a two-year in-service study we did 18 of hybrids, CNG, LNG -- the high pressure direct injection 19 LNG, which by the way was a dynamite product; it's too bad 20 it's not available -- battery electric buses, 21 aftertreatment devices. We really looked at everything in 22 service in San Francisco for two years. 23 We came up with a three-part strategy after that: 24 The first was to maximize the use of 25 zero-emission buses. We've done that better than anyone PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 else in the country. 2 The second is to emphasize electric drives for 3 vehicle replacements. In other words replace conventional 4 diesel vehicles with electric drive vehicles. 5 And then, third, obviously, is to clean up what's 6 left. And that means everything. Nothing's left on the 7 table. 8 With this MUNI's poised to lead all the transit 9 agencies, at least that I'm aware of. We're the seventh 10 largest in the country. Jose mentioned that. We're the 11 second largest in California. And I'll also add that we'e 12 the second largest alternative fuel fleet in California. 13 We have 400,000 riders everyday that ride on 14 zero-emission vehicles. And obviously the ultimate goal 15 is to have all 725,000 riders ride zero-emission vehicles 16 in 2020. 17 Without hybrids, the 2020 plan is delayed, it's 18 setback, because the plan emphasizes electric drive. 19 Electric drive technology is what's used in fuel cell 20 buses, which is obviously the ultimate goal, as well as 21 hybrids of course. 22 There are two bridges to get to fuel cells. And 23 we considered both bridges -- bridge technologies, I 24 should say. Obviously we want to go after hybrids because 25 it's the best bit for MUNI. It emphasizes electric drive PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 technologies. I just mentioned we have more electric 2 buses than anyone else in the country, in fact as much as 3 the rest of the country combined. 4 We've had electric buses for 70 years. Why? 5 Seventy years ago it wasn't about clean air. It was about 6 making it up the hills efficiently. For anybody who was 7 in San Francisco, in the last few decades you've been on 8 diesel buses that couldn't make it up the hills. The 9 passengers literally had to get out of bus, go to the top 10 of the hill and get back in the bus. 11 Electric drive solves this problem. And 12 obviously hybrids are electric drive, again. 13 What we learned from the two years of in-service 14 with CNG buses was what our facility modifications had to 15 be, what the citywide infrastructure issues are. We have 16 low 600-volt overhead trolley contact wires throughout the 17 city. We have long, poorly ventilated tunnels or very low 18 tunnels in some cases. Obviously there's the trans-bay 19 terminal which will be addressed at some point. 20 The bottom line is we chose the electric drive 21 path for obvious reasons. It's just logical at MUNI. 22 The key to reducing fleet emissions is vehicle 23 turnover, not necessarily which specific technology. It's 24 getting the oldest buses off the road. And we're trying 25 to solve that last part of our puzzle. It's a very small PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 part of our fleet fortunately. But it is our last 2 problem, and we're trying to replace those vehicles with 3 hybrids. 4 It's all about choices. I'm not going to choose 5 one technology over another. I'm San Francisco MUNI. I'm 6 not going to recommend anything to Sacramento or L.A. or 7 any other property. This is MUNI and we need choices, a 8 pallet of clean air options in order to address the 9 problem in many areas. We have five modes. 10 I want to tell you a little about -- 11 CHAIRPERSON LLOYD: You've got two minutes. 12 MR. MELLERA: -- about what MUNI is right now. 13 Five out of six of our buses are either low emission or 14 zero emission. Jose mentioned 88 percent PM reduction. 15 That was with growing the fleet by 45 buses during that 16 time period. We currently have the lowest per passenger 17 emissions in the state. 18 In 2007, with a hybrid procurement, Jose also 19 mentioned a 98 percent PM reduction. We'll also have a 20 NOx average for 900 buses of 1.8 grams. I don't know 21 anybody who can compare to those numbers. 22 As far as the questions that came up during the 23 other presentations: Will CNG buses climb the hills? 24 Yes, every single time. The problem is they do it an 25 average system-wide at five percent slower line to line -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 terminal to terminal. Five percent doesn't sound like a 2 lot. But the hybrids did it five percent faster. So now 3 you have a ten percent differential, and that's one trip. 4 Now consider as many as 15 to 20 trips throughout the 5 course of the day; now your hours behind schedule as a 6 total. You either have of add buses or reduce stops or 7 address the operational efficiencies or deficiencies 8 appropriately. 9 CHAIRPERSON LLOYD: What about the gasoline 10 hybrids? 11 MR. MELLERA: The gasoline hybrids -- again, I'm 12 not going to -- I don't want to pick and choose 13 technologies. It's -- recommending a single technology to 14 a specific agency is I believe not a good policy. For 15 example, we have the -- we just finished a zero-emission 16 bus purchase of over 300 buses. Would I recommend those 17 for Palm Springs? They're the cleanest available 18 technology. Not necessarily appropriate for that 19 environment. 20 I would say that the only thing more reliable 21 than a diesel engine is an electric motor. And I think 22 that's why you see them in hospital backup generators and 23 ocean liners and tanks and armored trucks and anything 24 where you have to absolutely get down the road. 25 The other kind of X factor is, again with the San PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 Francisco Department of Environment, they're aggressively 2 going after a biodiesel study that seeks to essentially 3 make San Francisco self sufficient and use their recycling 4 program to create the fuel that moves the transit system. 5 Obviously we have hydroelectric power for our electric 6 vehicles. The goal would be -- and that's city-owned. 7 The goal would be to power the actual fuel vehicles with 8 fuel that's made in San Francisco from restaurant waste, 9 sewage grease, that kind of thing. There's actually a 10 resolution from our board urging us to go forward with 11 that project. 12 CHAIRPERSON LLOYD: Thank you. 13 Any questions from the Board? 14 Thank you very much for clarification. 15 Any other comments from staff? 16 EXECUTIVE OFFICER WITHERSPOON: We were just 17 chatting about the gas electric -- gasoline 18 electric-hybrid versus diesel electric-hybrid. And one of 19 the things staff does consider, though it's not 20 determinative, is how many vendors there are of 21 technologies we recommend standards to you. There is only 22 one vendor in the country of gasoline electric-hybrids, so 23 there will be no price competition is just one factor. 24 There are two major vendors of the diesel electric-hybrid. 25 You heard from both of them today. And so there is an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 opportunity for competitive bidding and other sorts of 2 vying for transit district purchases. And although 3 they're heavily subsidized, even government tries to save 4 money when they're adding to their transit fleets. 5 CHAIRPERSON LLOYD: Okay. I understand that. I 6 think we've had that discussion before. Although it's 7 painful to look at that when we have a company in 8 California creating jobs. And it's tough. 9 If there are no other comments from staff, I will 10 now close the record in this agenda item. However, the 11 record will be reopened when the 15-day notice of public 12 availability is issued. Written or oral comments received 13 after this hearing date, but before the 15-day notice is 14 issued, will not be accepted as part of the official 15 record on this agenda item. 16 When the record is reopened for a 15-day comment 17 period, the public may submit written comments on the 18 proposed changes, which will be considered and responded 19 to in the final statement of reasons for the regulation. 20 Do we have any ex parte communications to be 21 divulged? 22 Professor Friedman. 23 BOARD MEMBER HUGH FRIEDMAN: I had a brief 24 telephone conversation yesterday with Jose Cisneros on the 25 San Francisco MUNI. And he related to me, as briefly or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 more briefly than he did here to all of us, the same 2 information. 3 CHAIRPERSON LLOYD: And I had the same 4 conversation the day before, I think again all reflecting 5 the discussion today. 6 Ms. D'Adamo. 7 BOARD MEMBER D'ADAMO: Yes, Mr. Chairman, I had a 8 conference call with Jose Cisneros regarding the same 9 issues on June 21st. 10 BOARD MEMBER RIORDAN: Mr. Chairman, I had a 11 conference call on Monday, the 21st, with Andrew 12 Littlefair and Jim O'Neil from Clean Energy. That 13 conversation followed very closely the written submittal 14 by Mr. Littlefair in our written comments. And I would 15 just say that that was the general conversation that we 16 had, and it's contained in his letter. 17 CHAIRPERSON LLOYD: Mr. Calhoun. 18 BOARD MEMBER CALHOUN: On the 11th of May I met 19 with Mike Eaves of the Natural Gas Vehicle Coalition. And 20 the nature of that discussion was essentially the same as 21 his testimony here today. 22 CHAIRPERSON LLOYD: Supervisor Patrick. 23 BOARD MEMBER PATRICK: Mr. Chairman, I also met 24 with Mike Eaves, but I think it was -- it was not within 25 the 45-day period. It was several months ago. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 But I met -- or I had a phone conversation with 2 Jose Cisneros that very closely mirrored his testimony 3 today. 4 CHAIRPERSON LLOYD: Jose was busy. 5 (Laughter.) 6 CHAIRPERSON LLOYD: As well as Mike. 7 Any other -- Supervisor DeSaulnier. 8 BOARD MEMBER DeSAULNIER: I've had conversations 9 with all of those people. But as near as my calendar can 10 tell, it was all outside the 45 days. But it's keen in my 11 memory. 12 CHAIRPERSON LLOYD: So with that I'm open for 13 discussion. Oh, sorry. 14 SENIOR STAFF COUNSEL KRINSK: I just have a 15 comment. 16 I just want to clarify that if the Board does not 17 make any changes to the staff proposal as it is today, 18 there are no 15-day changes and you would be adopting it 19 and there would be no further action necessary to the 20 proposal. 21 CHAIRPERSON LLOYD: Okay. Thank you. 22 Did you want to say something? 23 With that -- I know what all the discussion -- 24 anyway, let's move ahead here. 25 And I think we have a resolution before us. Most PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 people would have looked at this. If the Board would like 2 to discuss this, and I'm open to suggestions from the 3 Board. 4 Supervisor DeSaulnier. 5 BOARD MEMBER DeSAULNIER: Thank you, Mr. 6 Chairman. And at the risk of being cut off -- and, you 7 know, I will adhere to your every guideline. But I made 8 no -- for a period of time. And I appreciate the staff's 9 separating the really controversial issue, having spent a 10 lot of time prior to staff coming out, talking with people 11 on both sides of the issues, and also having -- along with 12 the staff and some of my Board members, having had 13 heartburn over this when we originally passed the 14 alternative path. And given as much as I represent the 15 Bay Area, it was problematic for me. But I do think the 16 transit agencies, particularly in the Bay Area, have seen 17 a light, they're reporting properly due to our 18 persistence, and I look forward to the discussion, if I'm 19 here, in the future about those alternatives. 20 I do want to say though in terms of NRDC's 21 comments, I don't think this -- this should definitely -- 22 and when I heard from the Chairman, it wasn't a question 23 about not talking about it, or by not talking about it we 24 were rolling back anything, that we -- at least for me 25 personally, I'm not interested in rolling back when we get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 to that point. So hopefully that's a clear message. 2 But I would like to thank everyone who's worked 3 so hard on this, and particularly Jose and MUNI. It does 4 strike me that -- and insomuch as this is so focused on 5 MUNI, the fact that they are one of the most -- granted, 6 they've been controversial over a period of time. But in 7 terms of their transit ridership and their commitment to 8 successful ridership and clean air, they're probably at 9 the forefront compared to large fleets in the state of 10 California. 11 But we're trying to deal with this specific part 12 of their inventory. And I think everyone's gone about 13 that with the best intentions. 14 So for purposes of discussion I would move 15 Resolution 04-19, with a couple of comments, and ask staff 16 to give me some help with this. I would like to direct 17 staff -- and if it's more appropriate that I do it 18 separate from a resolution, I'd like to direct staff to 19 include a bullet number 2 in the letter from the Bay Area 20 Air Quality Management District to adopt a lower fleetwide 21 NOx average and all the language that's in that. And, 22 again, I'll give some time to staff to respond to how the 23 best vehicle to do that is. And if it's best to keep it 24 outside the resolution, I understand. 25 And the other thing, Catherine, is in terms of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 the conversation now allowing this vehicle in the diesel 2 path so that MUNI in particular can do diesel hybrids. 3 But I've been influenced by the comments today, and I 4 think I hear some of the tenor from some of my colleagues, 5 that we also want to keep the gas electric-hybrids as 6 something that people -- purchasers would consider -- 7 CHAIRPERSON LLOYD: Gasoline. 8 BOARD MEMBER DeSAULNIER: -- in the diesel. 9 Did I say -- what did I say? 10 Gasoline. Oh, I'm sorry. Should have been an 11 English major. 12 (Laughter.) 13 BOARD MEMBER DeSAULNIER: Get corrected by the 14 guy from Wales. 15 (Laughter.) 16 BOARD MEMBER DeSAULNIER: Do you understand what 17 I'm saying, Catherine? Because I understood what you were 18 saying earlier when Allen didn't. 19 EXECUTIVE OFFICER WITHERSPOON: Yes. 20 BOARD MEMBER DeSAULNIER: So could you just 21 comment on, you know, if we have somebody who's looking at 22 purchasing, say, MUNI, we don't want them to not look at 23 gas -- petroleum hybrids. 24 EXECUTIVE OFFICER WITHERSPOON: If they selected 25 the gasoline electric-hybrid, they would not have the same PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 offset mitigation requirement that goes along with a 2 diesel electric hybrid. So that might be added incentive 3 in making the choice. We do understand that there is at 4 least six transit districts in California on the diesel 5 path that would like to purchase hybrids. And I'm sure 6 they'll be weighing the price points, fuel savings, the 7 kind of fuel, the availability of refueling, and all these 8 other considerations when they choose between the two. 9 Dollar for dollar they're about the same in purchase 10 price. And the rest of it will be driven by other 11 considerations within the transit agencies. 12 BOARD MEMBER DeSAULNIER: So you're comfortable 13 as it's currently constructed that it's fuel neutral as 14 is? Without getting into the semantics of making the 15 statement. 16 EXECUTIVE OFFICER WITHERSPOON: Yes. Yes, I am. 17 BOARD MEMBER DeSAULNIER: Okay. 18 EXECUTIVE OFFICER WITHERSPOON: I think -- 19 actually I think it's advantageous to gasoline electric 20 without, you know, forcing that result. 21 BOARD MEMBER DeSAULNIER: Okay. And could you 22 respond to the second part of the -- what's the best 23 process -- 24 EXECUTIVE OFFICER WITHERSPOON: Yeah, on the 25 second part I think if you -- I understand your direction PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 to include the NOx retrofit requirement within the next 2 rulemaking that the staff would be preparing. We don't 3 need to say so in the resolution, and we'd have to stop 4 and add that clause. Either way, we understand that's 5 your intent and we will include that analysis and a 6 recommendation for you on a cost-effective NOx. 7 BOARD MEMBER DeSAULNIER: Okay. So -- 8 CHAIRPERSON LLOYD: I think his question was: 9 Should that be included in a resolution or should that be 10 taken separately? 11 EXECUTIVE OFFICER WITHERSPOON: It doesn't 12 matter. We'll do it in either event. 13 CHAIRPERSON LLOYD: Okay. I see. 14 I would like to reiterate I think Supervisor 15 DeSaulnier's comment, that I think it's been helpful to me 16 to have some of the debate on the gasoline 17 electric-hybrids as well and to see that staff is there. 18 So I think it's good to have that in the mix. That's very 19 positive. 20 Ms. D'Adamo. 21 BOARD MEMBER D'ADAMO: Yes, I support Supervisor 22 DeSaulnier's motion and would just like to indicate my 23 reasons why. 24 I was concerned going into today's hearing about 25 any possible signal that we may send to the engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 manufacturers and to the industry that if we were 2 considering making changes, that we may decide to go 3 further when the full-blown issue of alignment comes 4 before us. I'm in support of the changes regarding the 5 diesel electric-hybrids because I feel strongly about the 6 technology and advancing those technological changes. 7 Of course it remains to be seen if I'll be on the 8 Board when it comes up. But if I am, I do feel strongly 9 about the original standard that we've adopted. So I just 10 felt that it was important to inform the industry -- 11 officials that are here today so they can deliver the 12 message back to their headquarters. 13 CHAIRPERSON LLOYD: Well, I'm also -- again, I'm 14 a big proponent of the hybridization. I was also very 15 encouraged to hear now that we'll have natural gas hybrids 16 coming down the line. So we'll have natural gas, we'll 17 have diesel, and gasoline. So I think that that's also 18 very, very encouraging. 19 Mr. McKinnon. 20 BOARD MEMBER McKINNON: I also support. And I 21 won't be around when it comes up. That's certain. But I 22 also support. I mean we have struggled a bit with this 23 rule over the last few years because of lack of 24 availability. And I think it's really important to stay 25 the course for fuel neutral and technology neutral PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 progress. And I think we're getting something for it. 2 And, frankly, that last presentation from MUNI 3 couldn't have been said better about why we stay the 4 course. 5 Thank you. 6 CHAIRPERSON LLOYD: Thank you. 7 BOARD MEMBER RIORDAN: Mr. Chairman, if I might. 8 It would seem to me that -- California is a very 9 large state, very diverse. And when my colleague 10 mentioned learning to drive on Nob Hill, I do remember 11 some experiences of my own. But it points out that there 12 are some differences in our great and wonderful state. 13 And I think our position of allowing for the development 14 of a technology which is best for those differences in our 15 state is a very key one. And so I'm supporting the motion 16 because I recognize there are those differences and they 17 need to be taken into consideration. 18 CHAIRPERSON LLOYD: Thank you. 19 So I've got a motion and a seconder. 20 Any other comments? 21 Seeing no other comments. 22 GENERAL COUNSEL JOHNSTON: May I just clarify, 23 given that there are no modifications to the proposal, we 24 need to make sure the public understands that the record 25 is now closed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 CHAIRPERSON LLOYD: Okay. Thank you. 2 So all in favor say aye. 3 (Ayes.) 4 CHAIRPERSON LLOYD: Anybody against or 5 abstaining? 6 So unanimous. 7 Move ahead. 8 And I can't wait for the debate coming up on the 9 natural gas-diesel. 10 BOARD MEMBER DeSAULNIER: That's if you're still 11 here. 12 CHAIRPERSON LLOYD: If I'm still here. 13 Thank you very much. What we'll do, I'd like to 14 take a half hour break. That's all for lunch. So come 15 back here at 25 of, and we'll take the next agenda item 16 vis-a-vis consumer products. 17 (Thereupon a lunch break was taken.) 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 AFTERNOON SESSION 2 CHAIRPERSON LLOYD: Next item, Agenda Item 04-6-5 3 is a combination of proposed amendments to an existing 4 consumer product regulation and a new airborne toxic 5 control measure, or ATCM, for para-dichlorobenzene. 6 The proposed rule changes in the proposed ATCM 7 are designed to meet the Air Resources Board's statutory 8 mandates. State law requires this Board to achieve the 9 maximum feasible emission reductions from consumer 10 products and to reduce exposure to toxic air contaminants 11 to the maximum extent possible. 12 This hearing on consumer product regulations is 13 also responsive to a legal settlement on the 1994 State 14 Implementation Plan for southern California, wherein the 15 Board committed to consider additional consumer product 16 regulations by certain dates. Under the settlement 17 agreement, this Board is legally bound to hold today's 18 hearing and has met that obligation by scheduling this 19 item for consideration. 20 But let emphasize to my colleagues, particularly 21 our newest members, that the Board retained its full 22 discretion to decide what content of each emissions 23 control regulation should be, and we will make that 24 decision following our customary deliberative process. 25 The presentation and spoken testimony here today PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 are very important. You will note there that I didn't 2 read this "critically" here and this was prepared some 3 time ago. 4 (Laughter.) 5 CHAIRPERSON LLOYD: At this time I'd like to turn 6 it over to our Executive Officer to introduce the item and 7 begin the staff presentation. 8 EXECUTIVE OFFICER WITHERSPOON: Thank you, 9 Chairman Lloyd and members of the Board. 10 Staff is proposing rule amendments that affect 18 11 consumer product categories. In addition, we're proposing 12 an airborne toxic control measure to prohibit the use of 13 para-dichlorobenzene in certain products. Staff is also 14 proposing to prohibit three other toxic air contaminants 15 in seven product categories. And, finally, minor updates 16 to test Method 310. 17 As Chairman Lloyd indicated, this rulemaking is 18 responsive to a legal settlement reached on the 1994 SIP. 19 It also implements new control measure commitments for 20 consumer products contained in the 2003 South Coast Plan 21 adopted by this Board last October. 22 In that plan there was a commitment to develop a 23 consumer products measure for Board consideration between 24 2003 and 2004, to be fully implemented by 2006, that would 25 achieve emission reductions from consumer products of at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 least 2.3 tons per day in the South Coast Air Basin by 2 2010. 3 So we've met that commitment with this proposed 4 regulation. 5 I'll now call upon Mr. David Mallory of our 6 Stationary Source Division to present the proposed 7 regulation. 8 (Thereupon an overhead presentation was 9 Presented as follows.) 10 MEASURES DEVELOPMENT MANAGER MALLORY: Thank you, 11 Ms. Witherspoon. Chairman Lloyd and members of the Board. 12 As Ms. Witherspoon mentioned today, we are 13 proposing for your consideration amendments to the 14 California Consumer Products Regulations, test Method 310, 15 and an airborne toxic control measure for 16 para-dichlorobenzene. 17 --o0o-- 18 MEASURES DEVELOPMENT MANAGER MALLORY: I'll begin 19 with a background and overview of the consumer products 20 program. I will then discuss the State Implementation 21 Plan, or SIP, and the SIP lawsuit agreement as it relates 22 to consumer products. This will be followed by a 23 description of staff's proposed amendments. 24 I will then go through the overall impacts of our 25 proposal. And, finally, I will discuss future activities PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 of the Consumer Products Program and provide a summary. 2 --o0o-- 3 MEASURES DEVELOPMENT MANAGER MALLORY: First, the 4 background on the consumer products. Consumer products 5 are defined in state law as chemically formulated products 6 that are used by household and institutional consumers, 7 and include personal care, automotive care and household 8 care products. 9 --o0o-- 10 MEASURES DEVELOPMENT MANAGER MALLORY: State law 11 requires the ARB to achieve the maximum feasible 12 reductions in VOCs from consumer products. The 13 regulations must be technologically and commercially 14 feasible and preserve product forms. 15 --o0o-- 16 MEASURES DEVELOPMENT MANAGER MALLORY: We've been 17 developing VOC regulations for consumer products since 18 1989. VOC limits for 83 categories of consumer products 19 have been established. These VOC limits apply to 20 antiperspirants and deodorants, aerosol coatings and other 21 categories such as hair, household and automotive care 22 products. 23 Since 1989 these limits have achieved a VOC 24 emission reduction of 130 tons per day or 50 percent 25 reduction from regulated categories. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 The Board has also previously adopted the use of 2 toxic air contaminants such as perchloroethylene, 3 methylene chloride and trichloroethylene in several 4 consumer products categories. 5 --o0o-- 6 MEASURES DEVELOPMENT MANAGER MALLORY: This slide 7 shows the statewide VOC emissions by major source 8 category. As shown, despite reducing emissions from 9 regulated categories by 50 percent, the emissions from 10 consumer products are predicted to make up a larger 11 percentage of the inventory by 2010. 12 This larger contribution is due to more controls 13 taking effect for other source categories as well as 14 population growth. 15 --o0o-- 16 MEASURES DEVELOPMENT MANAGER MALLORY: This slide 17 shows the emissions from consumer products in 1990, 2000, 18 and 2010 by general category. Without additional measures 19 emissions would begin to increase after the last of the 20 existing VOC limits takes effect in 2005 due to population 21 growth. 22 --o0o-- 23 MEASURES DEVELOPMENT MANAGER MALLORY: I will now 24 discuss the SIP and SIP lawsuit settlement agreement as 25 pertains to consumer products. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 --o0o-- 2 MEASURES DEVELOPMENT MANAGER MALLORY: On October 3 23rd, 2003, the Board adopted the proposed 2003 state and 4 federal strategy for the California State Implementation 5 Plan or SIP. 6 Consumer product element of the SIP is broken 7 down into two specific measures, Cons 1 and Cons 2, as you 8 can see on the slide. 9 The amendments that we are proposing today need 10 the Cons 1 commitment. 11 --o0o-- 12 MEASURES DEVELOPMENT MANAGER MALLORY: In 1997 13 three environmental groups filed a lawsuit regarding the 14 1994 SIP. They ARB reached a settlement agreement, which 15 includes the consumer products related elements shown on 16 this slide. The staff proposal before you today meets 17 this commitment. 18 --o0o-- 19 MEASURES DEVELOPMENT MANAGER MALLORY: I will now 20 discuss staff's proposed amendments to the Consumer 21 Products Regulations and Test Method 310. 22 --o0o-- 23 MEASURES DEVELOPMENT MANAGER MALLORY: The 24 proposed amendments were developed using an open public 25 process. In 2002 a stakeholder work group was formed to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 serve as a forum for communication during development of 2 the 2001 survey and the staff proposal on consideration. 3 Four public stakeholder meetings and a formal public 4 workshop were held. 5 Staff also conducted and participated in numerous 6 individual meetings, teleconferences, and videoconferences 7 within industry representatives. 8 Staff initially proposed VOC limits and 9 regulatory language changes at a public meeting in 10 December 2003. Also discussed at that meeting and in 11 subsequent public meetings was our intent to effectively 12 ban pair para-dichlorobenzene in toilet and urinal care 13 products. We stated we would be using our consumer 14 product and our toxic air contaminant authority to do 15 this. 16 --o0o-- 17 MEASURES DEVELOPMENT MANAGER MALLORY: The 18 proposed amendments include new VOC limits for 15 19 categories, 14 of which are new categories that have not 20 been regulated before. We are also proposing a 21 para-dichlorobenzene airborne toxic control measure, 22 para-dichlorobenzene ATCM that would prohibit the use of 23 para-dichlorobenzene in solid air fresheners and 24 toilet/urinal care products. The para-dichlorobenzene 25 ATCM will be discussed in further detail later in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 presentation. 2 We are also proposing to eliminate the use 3 methylene chloride, perchloroethylene, and 4 trichloroethylene in seven product categories. 5 In addition we are proposing minor amendments to 6 Test Method 310, which is the analytical method used to 7 determine compliance with a consumer product limits, 8 modifications to several existing definitions, labeling 9 and reporting requirements and other clarifications in the 10 consumer products regulation, the antiperspirant and 11 deodorants regulation, and the aerosol coatings 12 regulation. 13 Together the proposed amendments achieve an 14 overall 65 percent reduction in the VOC emissions from 15 affected categories. 16 --o0o-- 17 MEASURES DEVELOPMENT MANAGER MALLORY: This slide 18 those the 15 categories subject to today's proposal. 19 --o0o-- 20 MEASURES DEVELOPMENT MANAGER MALLORY: All of the 21 proposed VOC limits will be effected on December 31st, 22 2006, except for aerosol antistatic product and 23 second-tier limit for shaving gel. In order to monitor 24 industry's progress in complying with the proposed limits, 25 we will conduct technology reviews for the VOC limits PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 prior to the effective dates. To comply with challenging 2 VOC limits the aerosol antistatic product category will be 3 given until December 31st, 2008, and the shaving gel 4 products will be given until December 31st, 2009, to meet 5 the second-tier limits. 6 At least one year prior to the effective date of 7 the second-tier shave gel limit staff will perform a 8 detailed technical and cost assessment of manufacturers' 9 progress in meeting the four percent limit. 10 --o0o-- 11 MEASURES DEVELOPMENT MANAGER MALLORY: We are 12 also proposing several other amendments. Many of these 13 changes are being proposed to improve enforcement of the 14 regulations. The most restricted limit provision states 15 that when a product meets more than one regulated 16 category's definition, it must meet the lowest or most 17 restrictive VOC limit. 18 Currently we determine which VOC limit applies 19 only by using claims or representation on a product's 20 principal display panel, typically the front label. Staff 21 proposes to amend the provisions so that the VOC limit 22 applicability can be made based upon representations made 23 anywhere on the label, packaging, and all the fixed labels 24 or stickers. This change would affect products 25 manufactured after January 1st, 2007. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 The proposed changes to the reporting 2 requirements would clarify that when information's not 3 submitted by a primary responsible party, any person who 4 holds that information is required to submit it to the ARB 5 upon request. This provision ensures that complete data 6 is obtained to estimate emissions or set new VOC limits. 7 MEASURES DEVELOPMENT MANAGER MALLORY: To enhance 8 enforcement into a system of retailers and distributors we 9 are proposing new sell-through notification provisions 10 that would require that any person who sells or supplies 11 regulated products during the sell-through period must 12 notify the purchaser or distributor in writing of the date 13 on which the sell-through period for that product will 14 end. However, this notification is only required if the 15 product is noncompliant and sold or supplied to a retailer 16 or distributor within the last six months of the 17 sell-through period. 18 We are proposing changes to the current product 19 code dating language of the Consumer Products Regulation 20 that will make it easier for ARB inspectors and retailers 21 to determine when a regulated product was manufactured. 22 This proposed amendment will hope ensure that sell-through 23 products are clearly identified when removed from shelves 24 on time. 25 In addition, modification to several existing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 definitions are proposed to improve clarity. We are also 2 proposing minor amendments to Test Method 310. In 3 addition to these changes several other minor changes are 4 being proposed that will simplify, clarify or better 5 organize the regulation. 6 --o0o-- 7 MEASURES DEVELOPMENT MANAGER MALLORY: We are 8 also proposing to prohibit the use of methylene chloride, 9 perchloroethylene, and trichloroethylene, TCE, from the 10 seven categories listed here. In the staff report we 11 propose that the prohibition be effective on December 12 31st, 2006. This proposal is consistent with the Board's 13 prior actions for aerosol coatings and aerosol adhesives. 14 For safety reasons the prohibition will not apply 15 to electrical cleaners, electrical cleaner products used 16 exclusively for cleaning equipment when electrical current 17 exists. However, these products must report annually on 18 the use of perc and methylene chloride. 19 --o0o-- 20 MEASURES DEVELOPMENT MANAGER MALLORY: Next I'll 21 describe the changes we are proposing to the amendments as 22 described in the original document. 23 To provide adequate lead time we are proposing 24 that the changes to the sell-through notification 25 provision take effect on products manufactured on or after PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 December 31st, 2004. 2 We are also proposing changes to the date coding 3 requirement to clarify how they will apply to multi-unit 4 packaging. These modifications should provide 5 manufacturers with flexibility for multi-unit packages. 6 In addition, we want to clarify how the most 7 restrictive limit applies to insecticides. We are 8 proposing to exclude insecticide foggers from the most 9 restrictive limit provision. In addition, we are 10 proposing to allow Federal Insecticide, Fungicide and 11 Rodenticide Act for registered products -- registered 12 insecticide products an extra year to comply with the 13 change to the most restrictive limit provision. 14 In the 15-day changes we also intend to propose 15 language to the most restrictive limit provision that 16 would clarify what when a product falls into two or more 17 category definitions, the most restrictive limit applies 18 even if the definitions may exclude one another. 19 In response to comments we propose to move the 20 effective date of the phaseout on the use of the three 21 chlorinated toxic air contaminants for the seven affected 22 product categories from December 31st, 2006, to December 23 31st, 2005. We ask, however, that the Board allow staff 24 to continue to work with interested parties to determine 25 if this earlier effective date is appropriate for some or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 all of the categories prior to releasing the 15-day 2 changes. 3 Also in response to comments, we propose to move 4 the effective date on the prohibition of the use of 5 para-dichlorobenzene in solid air fresheners and 6 toilet/urinal care products from December 31st, '06 to 7 December 31st, '05. The sell-through period would be 8 changed to 12/31/06. 9 We are also proposing several minor modifications 10 such as renumbering subsections and correcting dates. 11 --o0o-- 12 MEASURES DEVELOPMENT MANAGER MALLORY: I will now 13 present the proposed airborne toxic control measure, ATCM, 14 for para-dichlorobenzene. 15 --o0o-- 16 MEASURES DEVELOPMENT MANAGER MALLORY: In 17 developing an ATCM state law requires, among other things, 18 that the ARB evaluate the availability and suitability 19 of a whole -- of products when proposing an ATCM. State 20 law also requires that ATCM's be designed to reduce 21 emissions to the lowest level achievable to application of 22 best available control technology or a more effective 23 control method, taking into consideration cost and risk. 24 --o0o- -- 25 MEASURES DEVELOPMENT MANAGER MALLORY: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 Para-dichlorobenzene is a widely used -- is 2 widely used as an air freshener in toilet and urinal 3 deodorant blocks and also as a solid air freshener. 4 Para-dichlorobenzene is listed as a California toxic 5 airborne contaminant, as a federal hazardous air 6 pollutant, and has been on the Proposition 65 list since 7 1989. 8 The International Agency for Research on Cancer 9 has classified para-dichlorobenzene as a possible human 10 carcinogen, with sufficient evidence of causing cancer in 11 animals. 12 The proposed ATCM will prohibit the use of 13 para-dichlorobenzene in toilet/urinal blocks and solid air 14 fresheners. 15 As mentioned earlier, staff is proposing today to 16 revise the effective date of the proposal from 2006 to 17 2005. Therefore, effective December 31st, 2005, no person 18 would be allowed to tell, supply, offer for sale, or 19 manufacturer for use in California any solid air 20 fresheners or toilet/urinal care products that contained 21 para-dichlorobenzene. 22 --o0o-- 23 MEASURES DEVELOPMENT MANAGER MALLORY: Currently 24 there exists on the market numerous 25 non-para-dichlorobenzene toilet/urinal care products and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 solid air fresheners. These alternatives are comparable 2 in product usage claims, function, and longevity and are 3 widely accepted by consumers. 4 --o0o-- 5 MEASURES DEVELOPMENT MANAGER MALLORY: Several 6 municipalities now have policies regarding the purchase or 7 use of para-dichlorobenzene products in their facilities. 8 Examples are the City of Seattle, Washington; City of 9 Gothenburg, Sweden; Erie County, New York; New York 10 Department of Corrections; the Fire Department of New York 11 City. 12 In addition, the New York State Legislature 13 recently approved a statewide ban of para-dichlorobenzene 14 products in schools; and, finally, the State of Vermont 15 has banned state agencies from purchasing 16 para-dichlorobenzene products. 17 --o0o-- 18 MEASURES DEVELOPMENT MANAGER MALLORY: This slide 19 shows the benefits of the proposed ATCM. 20 Para-dichlorobenzene is also a VOC, so the 21 proposed ATCM will also contribute to the overall VOC 22 reductions of our proposed amendments. 23 --o0o-- 24 MEASURES DEVELOPMENT MANAGER MALLORY: Here we 25 show the costs of the ATCM. This is comparable to other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 ATCM's adopted by the Board. 2 --o0o-- 3 MEASURES DEVELOPMENT MANAGER MALLORY: I'll move 4 on now to a discussion of the overall impacts of our 5 proposal. 6 --o0o-- 7 MEASURES DEVELOPMENT MANAGER MALLORY: There will 8 be significant environmental benefits from the proposal. 9 Overall the proposed amendments will achieve six tons per 10 day VOC reduction statewide and 2.8 tons per day in the 11 South Coast Air Basin by December 31st, 2006. This 12 reduction will fulfill ARB's SIP commitment for consumer 13 products and ARB's lawsuit settlement agreement. 14 In addition, the proposed amendments will achieve 15 a 4.9 ton per day statewide reduction in toxic air 16 contaminants by December 31st, 2005; and as a result, 17 there will be reductions in public exposure to toxic air 18 contaminants. 19 We do not expect any significant adverse 20 environmental impacts as a result of the proposal. 21 --o0o-- 22 MEASURES DEVELOPMENT MANAGER MALLORY: The 23 overall cost of the proposal are shown here. This 24 compares favorably with other consumer products 25 regulations adopted previously by the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 --o0o-- 2 MEASURES DEVELOPMENT MANAGER MALLORY: I will now 3 discuss what lies ahead for the Consumer Products Program. 4 We will conduct a comprehensive consumer products 5 survey later this year that will encompass products sold 6 in 2003. Data from this 2003 consumer products survey 7 will be used to develop the Cons 2 SIP measure. We will 8 also perform a detailed reassessment of various solvent 9 categories including multi-function cleaning products to 10 determine the most effective regulatory strategy for these 11 products. 12 For shaving gels staff will perform a detailed 13 technical and cost assessment of manufacturers' progress 14 in meeting the four percent limit in the 2008 timeframe. 15 --o0o-- 16 MEASURES DEVELOPMENT MANAGER MALLORY: In 17 summary, these amendments were developed through an open 18 public process. The proposed amendments and the proposed 19 para-dichlorobenzene ATCM are technologically and 20 commercially feasible and will not eliminate any product 21 forms. 22 Also, we believe the amendments are cost 23 effective. The proposed amendments will fulfill the Cons 24 1 SIP commitment and the consumer products element of the 25 SIP lawsuit settlement agreement. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 Finally, the proposed amendments reduce exposure 2 to several toxic air contaminants. We recommend that you 3 adopt the proposed amendments and para-dichlorobenzene 4 ATCM with staff's proposed changes. 5 CHAIRPERSON LLOYD: Thank you very much indeed. 6 I realize this is a tough regulation, bringing it 7 before the Board. And I know you're still going and 8 talking to stakeholders. And you've done an excellent job 9 in the past of -- as new information becomes available -- 10 and I'm personally aware when you come back to us and say 11 it can't be done or change the timeframe. I just wanted 12 to make sure in this case that also if new information 13 comes up, that in fact you'll bring this back to the 14 Board. 15 And I heard the question earlier on too that the 16 flexibility to work with a stakeholder during the 15-day 17 notice, if you need some flexibility on time, I'd be happy 18 to -- 19 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 20 Absolutely, Mr. Chairman. 21 Thank you. 22 CHAIRPERSON LLOYD: Thank you. 23 Madam Ombudsman, would you please let us know the 24 process by which the development of this regulation was 25 followed, and express any concerns or share any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 observations that you have with the Board at this time. 2 OMBUDSMAN TSCHOGL: I'd be glad to. 3 Mr. Chairman and members of the Board. The 4 amendments were developed with assistance from more than 5 70 consumer product manufacturers and trade associations. 6 My first version of this listed them individually. So I'm 7 just telling you that there are more than 70 individual 8 consumer product manufacturers and trade associations. 9 Representatives from local air districts and 10 agencies, U.S. EPA, and environmental organizations also 11 participated in the process. 12 ARB staff began the process to develop the 13 amendments with a comprehensive survey known as the 2001 14 consumer and commercial products survey, which comprises 15 selected categories of consumer products. Staff mailed 16 the survey to companies in September 2002. The survey was 17 posted to the web on September 24th, 2002. The data that 18 were gathered from the survey provided ARB staff with 19 technical information that was used to develop the 20 amendments -- the proposed amendments. 21 In 2002 a subcommittee of the Consumer Products 22 Working Group, called the Consumer Products Regulation 23 Work Group, was formed to provide -- to serve as a forum 24 for communication during the survey and rule development 25 process. Participation in this subcommittee was open to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 anyone. Numerous meetings were held, with the first one 2 being held on April 4th, 2002. 3 Four additional public meetings were held during 4 March 2003 through March 2004. The first was held via 5 teleconference on March 11th, with about 86 participants. 6 The second was on October 21st, 2003, with 16 attending in 7 person and a number of participants on the phone. The 8 third meeting was on December 16th, 2003, with 31 people 9 in attendance and others on the phone. The fourth was 10 held on March 10th, 2004. 11 On March 11th staff held a public workshop. They 12 also had individual meetings and conference calls with 13 industry representatives and various trade associations. 14 Between December 15th, 2003, and March 2004, staff held 15 several meetings and many conference calls with a number 16 of companies. 17 The staff report was noticed via mail and E-mail 18 in early May, and on May 7th, 2004, it was posted on the 19 web. Staff maintains a mailing list of over 3,000 20 companies and interested parties, including environmental 21 organizations. In addition, staff established an 22 electronic list serve, which has over 650 subscribers. 23 That concludes my comments. 24 CHAIRPERSON LLOYD: Thank you very much. 25 Questions of the staff at this time? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 Seeing none, I'd like to call up the first three 2 witnesses on this item: Warren Huang, Bruce Dickson, 3 Byron Butterworth. 4 MR. HUANG: Good afternoon, Mr. Chairman and 5 members of the Board and ARB staff. My name is Warren 6 Huang and I work for the City of Los Angeles Bureau of 7 Sanitation. 8 This afternoon I'll be speaking on behalf of the 9 City of Los Angeles. 10 The City of Los Angeles thanks the Board for the 11 opportunity to review and comment on the proposed 12 amendments to the Consumer Products Regulations that ban 13 toxic chlorine solvents in certain consumer products and 14 the draft ATCM that bans para-dichlorobenzene in urinal 15 care products. 16 The proposed Board actions will help reduce the 17 cancer risk in the communities served by our waste water 18 treatment facilities. The city supports these measures 19 and looks forward to their expeditious us implementation. 20 Thank you. 21 CHAIRPERSON LLOYD: Thank you very much. 22 Questions? 23 Thank you very much. 24 Bruce Dickson, Byron Butterworth, Bill Willert. 25 BOARD MEMBER WILLIAM FRIEDMAN: I would have one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 of those if I could stand. 2 MR. DICKSON: It's fabulous, believe me. I 3 substituted a wheelchair for this a couple years ago. 4 Chairman Lloyd and members of the Board. First I 5 want to thank you personally for giving us the opportunity 6 to address these issues. 7 Mr. Willert has asked that Dr. Butterworth and 8 myself use whatever time he has just to -- rather than 9 have a continual recitation of people up here, if that's 10 all right with the Chair. 11 CHAIRPERSON LLOYD: So you will displace them? 12 You will displace them? 13 MR. DICKSON: No, I'm only talking about Mr. 14 Willert, who is not going to be speaking. 15 CHAIRPERSON LLOYD: Oh, okay, Mr. Willert. Okay. 16 Not Mr. Butterworth. 17 MR. DICKSON: No, Mr. Butterworth will still -- 18 he has some slides all ready working with the computer. 19 CHAIRPERSON LLOYD: I guess it was wishful 20 thinking on my part there. 21 MR. DICKSON: Thank you. 22 But the first point I want to make is that it's 23 particularly important that we do have an adequate chance 24 to explain the issues that this arises. Primarily -- 25 CHAIRPERSON LLOYD: One of the things we don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 want to do -- as you know, the para-dichlorobenzene was 2 classified as a toxic air contaminant. It doesn't help at 3 all to try to discuss that issue before the Board. That's 4 not the purpose of this hearing. 5 If new information comes available, that has to 6 be sent to the Office of Environmental Health Hazard 7 Assessment and go through the process, and then come back 8 to us. 9 So as long as your comments are germane to this 10 one, it's fine. But you'll find if you wander into that 11 arena, trying to -- then I'll have to step in. 12 MR. DICKSON: Okay. I understand that. In fact 13 what I want to do is focus you specifically -- certainly 14 you're entitled to all the information, all the facts -- 15 to have all the facts in front of you before you make a 16 decision. 17 I mean it's particularly important that facts not 18 be kept out of the picture. And we do think that there is 19 a lot that were not in the Board's -- in the staff's 20 presentation, with regard to risk, that has not been in 21 front of you. 22 I would begin by talking about the standard -- 23 CHAIRPERSON LLOYD: But, again, risk comes under 24 the identification. And then we have to come up with a 25 control measure. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 MR. DICKSON: And my understanding is that the 2 standard that you all are here to enforce is under Section 3 39666(c), which directs you to set the lowest achievable 4 level of emissions, unless the Board determines based on 5 an assessment of risk that an alternative level of 6 emission reduction is adequate or necessary to prevent 7 endangerment of public health. 8 We believe that it is critical that you all have 9 in front of you that information that you can make that 10 choice, that choice that the law really asks you to set. 11 Set the lowest level considering the assessment of risk in 12 determining whether or not -- whether or not an 13 alternative level of emission reduction is adequate or 14 necessary to prevent an endangerment of public health. 15 That's really what we want to principally talk about. We 16 think that's the key issue here. Which we think requires 17 that you consider risk assessment issues that other 18 agencies, that all other agencies, all other risk 19 management agencies in governments all over the country 20 and all over the world have found -- have evaluated and 21 have found to be determinative of whether or not cancer 22 can be avoided in the use of para-dichlorobenzene based 23 upon levels of emissions that do not -- that are not set 24 at zero, that are not a ban, an absolute ban on para-. 25 Not that you have to agree with this. We certainly don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 think that you have to agree with these other agencies. 2 But we think that you should at least consider risk 3 assessment that these other agencies have used to decide 4 that para-dichlorobenzene can continue to be used and not 5 to be banned. 6 The staff's report did not even mention any of 7 those risk assessments, much less explain why the staff 8 presumably disagreed with them. In other words, those 9 issues, what the U.S. EPA, the USCPSC, and all these other 10 organizations including the World Health Organization have 11 decided -- they're scientific determinations about what is 12 a safe level of exposure to para-dichlorobenzene -- have 13 not even been discussed by the staff. Not only did the 14 staff not advise you about what those decisions were, but 15 the staff did not explain why they should be rejected by 16 you. 17 You've seen their written comments, and we 18 certainly are not going to repeat those. 19 But we think that the evidence -- and Dr. Byron 20 Butterworth, who is an expert in this area, will address 21 some of these scientific issues. 22 But there is evidence that para-dichlorobenzene 23 only shows possible animal cancer only at high exposure 24 levels that produce other kinds of toxicity. And that is 25 why all these other agencies have made a decision that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 para- should not be banned to prevent cancer. You can 2 prevent cancer from para-dichlorobenzene by controlling 3 exposures to para- based upon other toxic endpoints. 4 I'd like to just make six specific observations. 5 As I said 39666(c) requires that you consider whether 6 based on an assessment of risk an alternative level of 7 emission reduction is adequate or necessary to prevent an 8 endangerment of public health. 9 That is a critical issue, and I believe it's your 10 obligation to consider whether there are alternatives. 11 The staff's report does not address that issue. The 12 staff's report does not tell you what these other 13 scientific organizations have made, scientific regulatory 14 organizations, regulatory bodies have made, what their 15 decisions have been, and what the reasons were that the 16 Consumer Product Safety Commission specifically decided 17 that para-dichlorobenzene should not be regulated as a 18 toxic -- as a hazardous product, as a hazardous chemical, 19 because it went through some specific risk assessment 20 determinations, that Dr. Butterworth will address and we 21 think you should consider, in order to comply with that 22 regulatory -- that legal statutory requirement. 23 The staff has not evaluated that issue. It is 24 not even mentioned, these risk assessment rationales used 25 by agency after agency that refused to regulate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 para-dichlorobenzene as a human carcinogen. 2 Third, 39665 requires that the staff consult with 3 affected sources and interested public in preparing a 4 report on the need and appropriate degree of regulation 5 for a toxic air contaminant. 6 Fourth, although the staff did consult with the 7 chlorobenzene industry in connection with the initial 8 staff proposal for the 2004 Consumer Products Regulation 9 amendments, the staff did not -- 10 CHAIRPERSON LLOYD: Can we -- staff wants to 11 respond to -- 12 EXECUTIVE OFFICER WITHERSPOON: Well, ordinarily 13 I don't like to interrupt witnesses. But it's been 14 represented several times that staff didn't consider risk 15 at all in bringing this regulation to the Board. So I 16 wanted to bring your attention to page 357 of the staff 17 report. The top paragraph describes the risk calculation 18 that was performed, admittedly using the risk values as we 19 know them today. And I think the witness is saying that 20 the risk values themselves, the underlying risk values 21 ought to be reexamined. But it is not correct to say that 22 staff did not examine risk at all. I mean we did consider 23 it and address it in the staff report. 24 MR. DICKSON: I certainly apologize if I 25 suggested that the staff did not consider risk value. But PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 the staff did not state in the risk assessment report, 2 that the law requires that they produce, did not state 3 what alternative regulatory bodies have made in terms of a 4 determination of what is an acceptable level of risk, that 5 will still avoid cancer, that will still protect the 6 public health. And the staff did not discuss those or 7 explain why they should be rejected by the Board. 8 And the staff did not consult with industry or 9 affected parties in connection with whether the risk 10 assessments that these other organizations prepared should 11 have been accepted by you all, whether they -- these are 12 agencies which would allow emission reduction levels other 13 than a ban. 14 The staff report completely ignored the Consumer 15 Product Safety Commission decision that 16 para-dichlorobenzene should not be banned under the 17 Federal Hazardous Substances Act. 18 It completely ignored the Environmental 19 Protection Agency decision that para-dichlorobenzene 20 should not be banned as a drinking water contaminant 21 because of cancer. 22 It did not address -- it completely ignored the 23 EPA Risk Assessment Forum report. It completely ignored 24 the World Health Organization IPCS report. It completely 25 ignored the Canadian Health and Environment report. It PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 completely ignored the European Union report. It 2 completely ignored the Australian Government report. It 3 completely ignored the Netherlands report. 4 All of those are risk assessment decisions in 5 which bodies, government and regulatory bodies like you 6 are, whose job it is to protect the public health -- they 7 considered these issues and they decided that 8 para-dichlorobenzene is not going to cause a cancer 9 problem in humans, because of their evaluation of the 10 science, because of their -- because of really the 11 consensus of scientists. 12 All that we're asking you to do is apply good 13 science. And I think that we -- that's not asking too 14 much. I think that really is what should be done by the 15 Board as well as by the staff. 16 The consensus of risk managers all around the 17 world, not only in the U.S. -- the State of Illinois, for 18 example, had a consideration of regulating 19 para-dichlorobenzene as a toxic air contaminant. And the 20 state scientists sat down and decided they would take 21 para-dichlorobenzene off the list of regulators -- 22 regulated chemicals because of this issue, because of this 23 determination, that the cancer effects in rodents from 24 para-dichlorobenzene only occur when there is toxicity in 25 those rodents other than cancer. That was critical a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 decision that EPA made, CPSC made, the World Health 2 Organization made, the European Union made, all of these 3 organizations. It is only this proposal -- it is only 4 this proposal that suggests that you make a scientific 5 determination to ban para-dichlorobenzene on the basis of 6 cancer. 7 For those reasons we really urge you to send this 8 report back to the staff. Let them -- if they disagree -- 9 if the staff disagrees with the science of all these other 10 scientific bodies, CPSC, EPA, the World Health 11 organization -- if staff disagrees, let them explain in 12 their report why they disagree, why are all of those 13 bodies wrong, why are all those scientific experts wrong 14 and they're right and para-dichlorobenzene should be 15 banned. 16 It is not as if you all ban the substance 17 everyday. It's clearly a very unusual and extremely 18 important determination that you have to be making. And I 19 simply urge you to send this report back to the staff, let 20 them address this issue. They never discussed these 21 scientific issues with the industry. They never even 22 talked about why they disagree with those scientific 23 evaluations. 24 Now, you really have a choice. And, again, I 25 don't want to belabor this. But you have a choice. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 you can take what I think is the easy route and accept the 2 Board's proposal -- the staff's proposal, or you can 3 insist on a complete evaluation of these risk assessment 4 issues. Why -- I mean I would think that if I were in 5 your position, I would wonder why is it that CPSC made 6 this decision -- 7 CHAIRPERSON LLOYD: I must say this: In this 8 line of argument, I think this Board before has made tough 9 decisions. And we've been able to go out ahead, in spite 10 of things -- and I can think of one additive for gasoline 11 that this Board has banned, still being debated in China 12 at the moment, it's not being banned elsewhere. And I 13 think we feel that that's held up over a period of time. 14 So the line of argument there, at least -- I'm speaking 15 personally -- is not compelling. 16 MR. DICKSON: And I certainly understand that. 17 You could make a decision. But what I think is important 18 and what is not happening here is that there's no 19 discussion in the report, there would be no discussion in 20 your opinion as to why all of these agencies were wrong. 21 CHAIRPERSON LLOYD: That's a fair argument. I 22 think we'll come back and ask staff about that. 23 Professor Friedman. 24 BOARD MEMBER HUGH FRIEDMAN: If I may -- and then 25 please continue. But I just wanted to inject a comment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 Maybe you can correct me if I'm wrong, but to me 2 the earlier decision in 1989, was it, by the Board, in 3 which I was not privy to participate in, I was not on the 4 Board then, that labeled this para-dichlorobenzene a toxic 5 air contaminant -- I don't know what was presented then 6 and I don't know to what extent at that time other 7 governments or regulators had acted on this or not, 8 similarly or otherwise. But I would like to have a 9 clarification as to whether now when we, having labeled it 10 that, are supposed to regulate it in the most feasible 11 manner, but taking into account alternatives and the like 12 and do a risk assessment, whether that isn't somewhat of a 13 different investigation that we're obliged to conduct, 14 then what may have been decided originally generically -- 15 and we're talking about banning two products, I think, 16 toilet -- 17 EXECUTIVE OFFICER WITHERSPOON: Not banning the 18 product. Banning a toxic contaminant within the product. 19 There are alternatives. 20 BOARD MEMBER HUGH FRIEDMAN: I'm sorry. Yeah, 21 the contaminant within certain specific products. But not 22 all uses of it everywhere. I mean we haven't regulated 23 any other uses, at least I don't -- I think it's only at 24 this point limited to those uses. 25 EXECUTIVE OFFICER WITHERSPOON: Right. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 witness is proposing a burden of proof on regulatory 2 agencies that is not supported by the law. 3 Under state law -- and Diane can elaborate on 4 this -- the Air Resources Board is directed to undertake a 5 process for listing of toxic air contaminants. For many 6 years we have used evidence of carcinogenicity, be it 7 bioassays, Ames tests, animal carcinogen, and then known 8 human carcinogens as sufficient evidence to list 9 substances as toxic air contaminants. And then the law 10 directs you -- without further medical agonizing of in the 11 presence of what other co-pollutants, what other 12 co-diseases, what other conditions of human organisms, 13 does it have a health effect, the law directs you simply 14 to achieve the maximum feasible reductions in those toxic 15 air contaminants by whatever measures you deem to be 16 feasible, cost effective and not disruptive to the 17 marketplace. 18 And so you are not obligated to find whether or 19 not a toxic air contaminant in the presence of other 20 diseases is only a carcinogenic in that instance and only 21 regulated in that instance. Instead you have a broad 22 grant of authority to -- and an obligation to reduce 23 emissions to the maximum extent feasible. You have banned 24 toxic air contaminants in other products. You restricted 25 the use of metals in automotive coatings, simply took them PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 out of there so that the risk of exposure, whatever the 2 ultimate disease outcome might be, was eliminated. And 3 this is analogous to that kind of a regulation where 4 you're saying simply take the compound out of these 5 products; it's not essential to the product's efficacy and 6 it creates some risk which you are legally authorized to 7 eliminate. 8 BOARD MEMBER HUGH FRIEDMAN: So if I understand 9 what you're saying, we are not obliged -- I'll get to the 10 question of whether we have the discretion and may -- but 11 we are not obliged and nor was staff obliged to take into 12 account in making a risk assessment and adopting or 13 proposing a control measure the extent to which others 14 have, for whatever reasons, concluded that it didn't need 15 to be banned in these or similar or other uses. And so I 16 guess the next question is, is that something that we 17 have -- we should consider or might consider, whether 18 we're obliged to or not? 19 GENERAL COUNSEL JOHNSTON: The statute that our 20 testifier refers to does mention risk. But the type of 21 assessment that is done is at the discretion of the Board. 22 And I'll let Bob Jenne, our general staff counsel, further 23 elaborate. 24 SENIOR STAFF COUNSEL JENNE: I think a simple way 25 of putting it is the law requires that staff conduct a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 risk assessment eventually, but it doesn't -- 2 CHAIRPERSON LLOYD: Could you speak up a 3 little -- 4 SENIOR STAFF COUNSEL JENNE: Let me try this 5 other mike. This one works better. 6 The law requires that staff conduct a risk 7 assessment, but it does not require that the staff report 8 must in detail analyze every other risk assessment that 9 has been produced over the last 15 years. I believe the 10 Board would have the discretion to look at those things if 11 they felt it was appropriate. But there certainly is no 12 legal requirement that all those things have to be 13 discussed in the staff report as the witness seems to be 14 suggesting. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I would like 16 to further add that we -- California has an extensive 17 process to evaluate chemicals. And this discussion has 18 occurred on many other chemicals that we have evaluated 19 and that this Board has regulated, which is, they've been 20 determined in the California process to be -- to have the 21 potential to be human carcinogens based on the scientific 22 evidence. That's the case for para-dichlorobenzene. 23 In the case of para-dichlorobenzene, they're 24 regulated in drinking water in California. When emissions 25 come out of sewage treatment plants, because of products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 have gotten into the water, they have to do toxic risk 2 assessments and they're treated as carcinogens. The 3 science as we've developed it and the risk assessment done 4 by our sister agency, OEHHA, treats it as a carcinogen for 5 which there's no known safe level so that risk is 6 proportional to exposure. 7 We in developing a toxic air contaminant measure 8 are obligated under our process to use that risk 9 assessment. There are opportunities in that for parties 10 to come in and say, "New science has been discovered. 11 You've got it wrong. Something else has happened. The 12 risk assessment no longer ought to be done that way." And 13 that process gets argued out. It's not really possible to 14 do that in this situation before the Board. And the 15 section of the law that says an acceptable risk would 16 generally be one in which we could have determined through 17 that process that there's a threshold, and we can regulate 18 the substance so that exposures do not occur above the 19 threshold. 20 In this situation we're proceeding with a risk 21 assessment that says there is no threshold. And we've 22 calculated using the risk assessment and how potent we 23 believe the substances, based on the science as developed 24 through the California process, is. And we've concluded 25 that there are, you know, judging from other things we've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 done, substantial residual risk to consumers that use 2 these products and to the public who happens to live close 3 to places where it goes through sewage treatment plants 4 and that type of situation, that under our law there are 5 readily available alternatives that are cost effective and 6 can reduce, eliminate -- basically eliminate the risk. So 7 were just being very consistent with what we've done with 8 other chemicals in similar situations in terms of how we 9 take risk management decisions in California. 10 Other parties reach other conclusions about what 11 risks are worthwhile regulating and how they apply their 12 regulatory authority. But that's not at issue here. Most 13 of what's being discussed in the health side for us to 14 consider is not something the Board staff could consider 15 in and of ourselves. If it's to be done, it's to be done 16 through the health expertise and the Scientific Review 17 Panel inside of California. 18 BOARD MEMBER HUGH FRIEDMAN: Thank you. 19 I just wanted to get the staff's comments. 20 MR. DICKSON: No, I understand clearly. In fact 21 I appreciate it, because I could point out that a lot of 22 this information that I've talked about, all of these 23 other risk assessments were not 20 years ago. They were 24 within the last 10 years. And a number of them I believe 25 were since the 1997 evaluation of what the cancer risk PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 level is in California. I think that's number 1. And 2 they were not considered at that time. They were not -- 3 those evaluations were not considered when the 1997 4 carcinogenicity assessment was made by the state. 5 But, number 2, I want to just point out again, 6 and remind staff, that Section 39666(c) specifically 7 directs you, directs you to set the lowest achievable 8 level of emissions, and I quote, "unless the Board 9 determines based on an assessment of risk that an 10 alternative level of emission reduction is adequate or 11 necessary to prevent an endangerment to public health." 12 That is an evaluation that you need to make, 13 whether you don't have to ban something because something 14 short of a ban will still adequately protect the public 15 health. That's a critical issue. And we really are 16 talking about good science here. We're not just talking 17 about making emission reductions so that we can achieve 18 the goals set by the litigation settlement. I mean we're 19 really talking about para-dichlorobenzene and whether you 20 really have to ban it, because no one else has throughout 21 the world. 22 I would like to refer to -- and I'd be happy to 23 answer to answer more question. But I'd like to ask Dr. 24 Butterworth to look at some of these issues. 25 Dr. Butterworth has over 25 years of experience PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 in dealing with carcinogenicity, how you measure -- in 2 laboratory animals how you measure whether there's a 3 potential human risk. 4 And Dr. Butterworth was the past president of the 5 Carcinogenesis Specialty Section of the Society of 6 toxicology. He really knows his stuff. And I have sent 7 in a copy of his bio, which I think establishes his 8 credibility in this area. 9 Thanks. 10 BOARD MEMBER McKINNON: Mr. Chairman? 11 CHAIRPERSON LLOYD: Mr. McKinnon. 12 DR. BUTTERWORTH: I realize that we don't have 13 time to go through this entire presentation, so -- 14 CHAIRPERSON LLOYD: Mr. McKinnon had a question. 15 BOARD MEMBER McKINNON: Yeah, just to staff. 16 Now, if the TAC determination indicates no amount is safe, 17 it seems to me pretty difficult for us to get into 18 determining some alternative amount being safe. 19 Okay. Am I -- the TAC determination -- 20 DEPUTY EXECUTIVE OFFICER SCHEIBLE: That's 21 correct. That's been our practice with every TAC to date. 22 When it's been determined through the health evaluation it 23 needs to be treated as a non-threshold carcinogen, then 24 the goal becomes to reduce emissions as much as possible. 25 And I suppose if we could get risk down to one in a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 hundred million, maybe we could cut it off at some very 2 low level. But we've never gotten that, been that 3 successful. So we've always used the reduce emissions by 4 the maximum extent feasible. Where there's a non-toxic 5 substitute that does the same job, then the maximum extent 6 feasible has been reduce for at least this use to zero. 7 BOARD MEMBER McKINNON: Okay. And then I guess 8 as the industry speakers speak, I have a continuing 9 question for each. Is there substitute chemicals that you 10 can use? And if so, what is -- you know, what's the 11 drawback? Are there extensive cost differences or 12 whatever? 13 MR. DICKSON: Let me just come back up to address 14 that question, because -- in the course of the development 15 of the hazard -- of the amendments to the Consumer 16 Products Regulation, there has been a lot of discussion of 17 that. And our written comments addresses as well. If you 18 look at consumer preference, consumers essentially say 19 that para-dichlorobenzene works. There are also some soap 20 products where people put some scent in soap, but 21 consumers don't buy those. They buy para-dichlorobenzene 22 17 to 1, more frequently -- as matter of fact, Walmart has 23 decided not to continue to carry those substitute products 24 because -- and that truly is the one way to determine 25 whether there is a substitute that works, is to look at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 what consumers say. 2 BOARD MEMBER D'ADAMO: Mr. Chairman? 3 DR. BUTTERWORTH: Okay. I'd like to get to the 4 slides. You have my whole presentation here. 5 CHAIRPERSON LLOYD: Ms. D'Adamo. 6 BOARD MEMBER D'ADAMO: I'm sorry to interrupt 7 you. 8 I just think we need further clarification of 9 this legal question. If I'm hearing, Mr. Scheible, 10 correctly, you're saying that the determination that a 11 chemical is a TAC -- is all that we need in terms of 12 health risk assessment, we just refer to the earlier 13 decision on the TAC, correct? 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, we have 15 an extensive process in California to investigate these 16 issues and determine is it a TAC. Once the determination 17 that it's a TAC has been made, what is the proper way to 18 do the risk assessment, how risky is it, and what are the 19 adverse health effects? And then that guides us in the 20 risk management process as: Do we treat it as a 21 carcinogen that doesn't have a threshold? Then we have a 22 long history of how we regulated that. Or is it a 23 substance for which there is a threshold? And then we 24 could go into this determination of: Well, can we 25 regulate it in a way that achieves that? And, therefore, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 basically prescribes an amount use with an acceptable 2 risk. 3 BOARD MEMBER D'ADAMO: Well, I wasn't around 4 either when the determination was made that this 5 product -- or this chemical be classified as a toxic air 6 contaminant. But I am -- I'm very confident in that 7 process and comfortable with it. 8 I came to this hearing today expecting that when 9 the witnesses would attempt to discuss this issue of 10 health-based risk, that I really felt that the process -- 11 that the previous process is what we should rely upon 12 without rehashing it. But then when I took a look at the 13 statute, it appears that there is some leeway. I don't if 14 it's just discretionary or if there's a requirement that 15 we -- when we consider whether or not there's an 16 alternative. But I just looked at the statute quickly, 17 and it appears that there is some grounds anyway for us to 18 be considering a health-based risk. And I'm just 19 wondering how we can reconcile these two issues, that if 20 there is no threshold risk that would be appropriate, how 21 we fold that into the process so that we meet the 22 statutory requirements. I just want to make sure that 23 whatever we end up with here today, that we're on solid 24 ground. 25 SENIOR STAFF COUNSEL JENNE: I think, as Mr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 Scheible indicated, there is the requirement -- there is 2 some leeway that the Board has, as you just said, that if 3 the State Board determines that based on assessment of 4 risk that an alternate level of emission reduction is 5 adequate, then you could -- you have that discretion. 6 But I think where we would disagree with the 7 witness is that the witness is reading that to say the 8 Board is somehow required to look at all the alternative 9 levels and to think about that. To me, it's a discretion 10 that the Board has, but there is no requirement that the 11 Board make this determination in every case. And 12 historically, as Mr. Scheible indicated, that the pattern 13 has been for us to set it at the lowest achievable level. 14 BOARD MEMBER D'ADAMO: And if that's the case 15 perhaps we should somehow incorporate that discussion into 16 the staff report so that the record is clear on that 17 issue, referring back to all the reports that have already 18 been reviewed by this Board and by other state agencies 19 that were incorporated into the TAC process. 20 CHAIRPERSON LLOYD: Mr. Venturini I think had a 21 comment also. 22 Mr. Venturini, if you could also address, during 23 your development of the report did you consider all of the 24 other studies that have been done which the witness 25 mentioned? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 STATIONARY SOURCE DIVISION CHIEF VENTURINI: I'd 2 be happy to. 3 A couple comments. We rely very heavily on -- 4 BOARD MEMBER HUGH FRIEDMAN: I want to be sure 5 they can hear this too. 6 STATIONARY SOURCE DIVISION CHIEF VENTURINI: Can 7 you hear? I have to get very close. 8 As an organization staff relies very heavily on 9 the Office of Environmental Health Hazard Assessment and 10 the Scientific Review Panel in basically telling us how 11 bad a substance is in terms of its toxicity and, more 12 importantly, as a -- is it a carcinogen or not? 13 Once they make that decision and they tell us how 14 bad it is, basically through what we call a potency value, 15 our charge then is to reduce the emissions to the maximum 16 extent feasible, considering a host of factors. And also 17 the statute also tells us that we're to look at the 18 availability of substitute compounds. And, as Ms. 19 Witherspoon said earlier, we have acted before to 20 eliminate toxic substances elsewhere. Part of our 21 proposal today is to eliminate some of the chlorinated 22 compounds. We don't believe in this in some of the other 23 consumer products. As I recall, years ago we banned the 24 use of hexachrome in cooling towers as a corrosion 25 inhibitor because there were viable substitutes. So we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 believe what we're doing here is very consistent with past 2 actions the Board has taken. 3 We are well aware of those other studies that the 4 witness had mentioned. We did consult with OEHHA. And 5 the basic difference, in my mind, is whether or not we 6 should be treating this substance as a carcinogen or not. 7 We do have a letter from the U.S. EPA that 8 supports the staff's proposal. More importantly, on the 9 22nd I received a memo from Dr. Alexeeff, the Deputy 10 Director for OEHHA. And I won't read that. It's in your 11 package. But he basically summarizes that this compound 12 should be treated as a carcinogen for regulatory purposes 13 in California, as indeed it is already regarded for the 14 purposes of the Drinking Water Program, Prop 65, and the 15 Air Toxics Hot Spots Program. 16 So we take that guidance and those are the folks 17 that we look to for expertise. 18 One final thing I'd like to mention is the 19 Scientific Review Panel has established a formal process 20 where if a party believes that there's new science or new 21 information which could have a bearing upon the original 22 risk assessment, they have a process that the panel can be 23 petitioned to review that data. That process is written 24 up. And I'd be very happy to share that process with Mr. 25 Dickson. And if they believe there is new information PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 that would maybe change the original determination, we 2 have a process for that to go through. And he may want to 3 avail himself of that process. 4 CHAIRPERSON LLOYD: So far there's been no 5 petition? 6 STATIONARY SOURCE DIVISION CHIEF VENTURINI: No. 7 MR. DICKSON: If I could just respond to a couple 8 of these points. 9 First of all, para-dichlorobenzene is a TAC, a 10 toxic air contaminant, because it was listed as a 11 hazardous air pollutant by EPA. That was part of the 1990 12 amendments to the Clean Air Act. There was a list of many 13 chemicals. Not just para-, but there was a huge list of 14 chemicals that was added by Congress without a specific 15 scientific assessment. 16 And the Environmental Protection Agency listed 17 these as an HAP. And yet it's the same Environmental 18 Protection Agency that has concluded that it is not a 19 known threshold carcinogen, and in fact it allows 20 para-dichlorobenzene to be in our drinking water. And it 21 would be against the law for EPA to do that if it -- if it 22 felt and this regulation was issued with a thorough 23 evaluation by EPA of the science. And EPA reached the 24 conclusion that this is not a known threshold carcinogen; 25 and that in fact while it does cause cancer in laboratory PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 animals, as Dr. Butterworth will explain it only causes 2 cancer in laboratory animals when other toxicity reach at 3 particular levels, and then as a secondary to that 4 toxicity is the cancer. 5 And that's a critical issue here. There's been 6 no discussion -- and since 1997 when it was listed as a 7 TAC, there had been several risk assessments on a 8 worldwide basis that have not been considered by the 9 staff. Or if they have been considered by the staff, we 10 haven't seen it. In other words, the document on which 11 this conclusion, your proposal, is based does not evaluate 12 all of these risk assessments and these risk assessment 13 issues, which need to be made. And, again, I only remind 14 you of this because the law says right now in the decision 15 that you all are making, you need to evaluate, you need to 16 set this exposure at the lowest level of emissions unless 17 the Board determines based on an assessment of risk that 18 an alternative level of emission reduction is adequate or 19 necessary to prevent an endangerment of public health. 20 That is a critical scientific issue. And we simply urge 21 you to make it on a scientific basis. 22 CHAIRPERSON LLOYD: I hear you use the word 23 "science" time and again. We're well aware of the 24 science. 25 So let me just ask staff. How long has the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 process been going on and how long have you been 2 interacting with the industry? 3 AIR QUALITY MEASURES BRANCH CHIEF BROOKS: We 4 first started out doing a survey in 2002. For this 5 specific process you're talking about? But we first 6 talked about using our air toxics authority in December of 7 2003 when we proposed a limit that effectively banned 8 para-dichlorobenzene. And so we've been working with the 9 industry since that time on specific language. 10 CHAIRPERSON LLOYD: Okay. I'd ask Mr. Dickson 11 and Dr. Butterworth. Have you interacted with the OEHHA 12 scientists or any of the UC panel who looked at -- who 13 have been looking at this chemical? 14 MR. DICKSON: As matter of fact -- well, staff 15 may have mentioned it. Staff came out with its proposal 16 in December. We responded to that proposal. The effect 17 of the proposal would be to ban para-. And we said, "Oh, 18 no, you're going the wrong route." You, the staff, have a 19 legal obligation to prepare a report under a particular 20 section of the statute that we've been talking about. And 21 that specific report requires that you consider 22 alternative risk assessments methods, alternative risks 23 and alternative products. There was no discussion about 24 that until may 7th, 2004, when this proposal came out. 25 That was the very first time that the staff proposed an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 air toxic reduction measure. And that was only in 2 result -- through our comments which said, "No, you, 3 staff, are not looking at the right issues. You have not 4 been having any discussion with us or with any industry 5 about what is the right level of risk here and what is the 6 right assessment of risk." That's what we've been asking 7 for, and we haven't had it until now. 8 CHAIRPERSON LLOYD: Well, I'm not a lawyer, so 9 I'll retreat and turn it over to the lawyers on our Board 10 and our staff. 11 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Let me draw 12 upon my history. There's certain benefits for having been 13 here for 30 years. And I have never -- I don't think the 14 staff has ever interpreted the section of the code as the 15 witness is saying it should be interpreted. That was -- I 16 was in on the original toxics program and in the 17 incorporation of the Board's regulation replacement with 18 the law. And the law's worded the way it is to give the 19 Board flexibility for dealing with non-threshold 20 pollutants. It is not an obligation that said every time 21 we do a regulation of something that's gone through the 22 health assessment process and been determined not to have 23 a threshold, we then have to look at all of the other 24 health evidence on how other parties have managed the 25 risk. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 It's included there so that when we get a 2 substance for which there is an acceptable exposure level 3 that's been determined in the health process, that we can 4 accommodate that in our regulations. So that it's an 5 exception, not a binding obligation to do this as part of 6 our regulatory process. And we have never done it before, 7 even though we have adopted a large number of toxic air 8 control measures. 9 MR. DICKSON: And I certainly don't disagree with 10 staff. I'm not saying it's a binding obligation on you 11 all. I'm only reading the statute. The statute directs 12 you to set the lowest achievable level of emissions -- and 13 I quote -- "unless the Board determines based on an 14 assessment of risk that an alternative level of emission 15 reduction is adequate or necessary to prevent an 16 endangerment of public health." I'm not saying you have 17 to do it. But I sure as heck think that for you to ban a 18 substance without considering whether this applies, 19 without considering whether there's an alternative that 20 doesn't require that you ban the substance, that still 21 allows -- that prevents an endangerment of public health, 22 public risk -- public health. 23 EXECUTIVE OFFICER WITHERSPOON: I don't want to 24 belabor this forever either. But Mike's exactly right. 25 That presumption in law is that the Board will adopt the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 maximum feasible reduction unless you find that you were 2 able to protect public health without it. You have no 3 basis to make that finding here today. You have no basis 4 on any toxics control measure to make that finding. You 5 have to refer it back to the health authorities to tell 6 you if there is an alternate threshold that would be safe 7 enough. So even if the witness were correct, it wouldn't 8 be something the Board could decide. It would be 9 something OEHHA and the Scientific Review Panel needed to 10 decide. 11 So your choice boils down to: Are you willing to 12 proceed with a staff recommendation to ban this chemical 13 today as you have banned chemicals in other products and 14 other applications where alternatives exist, or you wish 15 to wait until such time as there's been a petition and a 16 review which may or may not yield anything different from 17 the evidence that we brought before you? 18 And then one other very large contextual comment. 19 There's been a lot of issue about human carcinogen versus 20 animal carcinogen. The State of California has for 21 decades considered evidence of animal carcinogenicity as 22 actionable in risk management. We do not wait for full 23 evidence of human carcinogenicity. Other agencies do have 24 a higher burden before they will move to regulations or 25 bans. EPA is one of them. They have a higher standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 But California does not. California considers animal 2 carcinogens to be risky -- potentially risky to human 3 health and regulates without full evidence of human 4 carcinogenicities. 5 MR. DICKSON: Let me turn it over to Dr. 6 Butterworth because -- 7 CHAIRPERSON LLOYD: Yeah, we spent nearly an 8 hour. We were emphasizing the science, and all we've had 9 so far are legal arguments. So -- 10 MR. DICKSON: The only thing that I would point 11 out though with staff, is that she says that OEHHA is the 12 one that has to make the decision. The statute that 13 you're working on, that you're deciding under, 39666(c), 14 is a direction to this Board, not to OEHHA. 15 BOARD MEMBER McKINNON: Mr. Chairman? 16 CHAIRPERSON LLOYD: Yes, Mr. McKinnon. 17 BOARD MEMBER McKINNON: I'm going to -- I'll tell 18 you, this may be my last meeting. 19 (Laughter.) 20 BOARD MEMBER McKINNON: But this is -- my job is 21 to protect the health of Californians. It's not to sit 22 here and make guesses. I'm not a scientist. I do know 23 enough about this substance though, that I do know it 24 combines with other materials. I had to shut down a 25 factory over it one time at peril of losing my job. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 I don't think I'm qualified to sit in a hearing 2 and think through how this combines with something else 3 and make a ruling. I think that's what OEHHA in fact 4 does. And to the extent there's a process to do it and 5 you're not engaged in using that process, I have a problem 6 with this whole line. I am not qualified to make that 7 determination. And the State of California has determined 8 that someone else is, and that's OEHHA. 9 And if I'm going to fault, I'm going to fault on 10 the side of safety for Californians. 11 And, frankly, if there's a substitute material 12 that can be used, you know, I have real difficulty making 13 that kind of a judgment as a Board member. It's a -- you 14 know, it would be a hell of a gamble. And I already know 15 what this material does with other chemicals. I have some 16 experience with that. 17 MR. DICKSON: Let me ask -- let Dr. 18 Butterworth -- 19 DR. BUTTERWORTH: Just let me go briefly through 20 the slides. 21 CHAIRPERSON LLOYD: No, we'll give 10 minutes 22 because already, as I said, we nearly chewed up an hour 23 here. And I don't think what you're going to say, looking 24 through your things, that's going to make a difference to 25 what we -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 DR. BUTTERWORTH: I appreciate that. And I'm 2 just going to hit the highlights. But I really appreciate 3 that. 4 (Thereupon an overhead presentation was 5 Presented as follows.) 6 DR. BUTTERWORTH: And it's the kind of science 7 that I think everybody can understand. 8 --o0o-- 9 BOARD MEMBER HUGH FRIEDMAN: Can you turn the 10 volume up please. 11 DR. BUTTERWORTH: I appreciate the opportunity to 12 talk about the appropriate risk assessment for 13 para-dichlorobenzene. 14 Oh, my goodness. What happened? 15 Here we go. 16 Any time a chemical causes cancer you have to 17 take that seriously, and we do that seriously. The more 18 you know about how that chemical produced cancer, the 19 better off you are in understanding what to do and what 20 kind of assessment to make. 21 --o0o-- 22 DR. BUTTERWORTH: Chemical carcinogenesis occurs 23 by progression from normal to precancerous to cancerous 24 cells. This involves successive mutations or loss of 25 function in the genes that control the growth of the cell. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 These are oncogenes and tumor suppressor genes. There are 2 direct or indirect modes of mutation induction. Then 3 there's proliferation of precancerous and cancerous cells. 4 And different chemicals can act on different stages in the 5 process. 6 --o0o-- 7 DR. BUTTERWORTH: So here we have a normal cell 8 that's unaltered. Okay? 9 What's the cancer process? Well, there's a 10 mutational event that occurs producing a precancerous 11 cell, okay? And with this precancerous cell it can grow 12 in population. And we can measure this in animal models. 13 Then there's another mutational event at another growth 14 control gene. And eventually you reach the point where 15 these cells then are autonomous, and that's what a cancer 16 is. 17 So compounds that can directly produce mutagenic 18 events are very dangerous. These are genotoxic or 19 mutagenic carcinogens. So you go directly from here to 20 here to here. 21 But you can do things in an animal model that you 22 couldn't possibly do to a person. You can take this 23 rodent and give it so much compound that its liver dies or 24 its kidney dies. And then the liver has to regenerate. 25 And then the next day you kill it again. And then that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 has to regenerate. And the next day you kill it again. 2 And you go over the lifetime of the animal. So there are 3 different ways of producing cancer. 4 For example, you can have this continual 5 regenerative proliferation and get these mutational events 6 simply because you're forcing the cells to divide. 7 In addition, some animals are prone to cancer. 8 For example, the B6C3F1 mouse that produced the liver 9 cancer with para-dichlorobenzene is already down that path 10 of cancer. And so para-dichlorobenzene and other mitogens 11 can force the growth of these cells. 12 But in both of these cases you need a very high 13 dose. It's an animal model. It's something that would 14 never occur in the human situation. 15 --o0o-- 16 DR. BUTTERWORTH: And so we define the mode of 17 action of a carcinogen as a fundamental obligatory step in 18 the carcinogenic process. Thirty years ago we barely knew 19 what caused cancer. Now we have a clearer understanding. 20 Key examples are mutagenic agents, cytotoxic agents, or 21 mitogenic agents. 22 Now, we're very concerned about the mutagens. 23 And this is where we have the feeling that no matter how 24 low you get, there's always a risk. Even one molecule 25 might produce a risk of cancer. So that's a no safe dose. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 But for agents that are cytotoxic or mitogenic, 2 when you protect against the cytotoxicity you've protected 3 against cancer because the cancer is secondary to all of 4 that. So that's critical in choosing the appropriate risk 5 assessment. 6 Now I'm going to fast forward here to something 7 that I think it's really critical. 8 --o0o-- 9 DR. BUTTERWORTH: When you're talking about other 10 risk assessments, it's not some off-the-wall strange 11 group. California is out of line with the rest of the 12 world. The U.S. EPA -- and we're talking about bodies 13 that have studied 1,4-Dicholrobenzene and concluded that 14 it's nongenotoxic. It's not DNA reactive. It's not 15 mutagenic. The U.S. EPA, the WHO, the European Union, the 16 U.S. Consumer Product Safety Commission, the Australian 17 group and the German group. 18 --o0o-- 19 DR. BUTTERWORTH: Now, this slide has a lot of 20 jargon on it for those that aren't in genetic toxicology. 21 But all of these tests measure whether or not a chemical 22 can damage the DNA, break chromosomes, induce mutations. 23 And this summary from the German group states 24 quite clearly that para-dichlorobenzene was negative in 25 all of these systems including the target tissues for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 cancer. 2 --o0o-- 3 DR. BUTTERWORTH: Okay. We're going to fast 4 forward again. 5 Just very quickly. For example, this is a normal 6 mouse kidney. And this a histological section. I don't 7 know how many histological sections you get to see -- I 8 know we have one physician on the board -- of the kidney. 9 The cells that are dividing that are in S phase are 10 labeled in red here. 11 And if you give something like 12 para-dichlorobenzene -- the slide I'm going to show you 13 happens to be chloroform, but it looks exactly the same -- 14 this is what happens. Tremendous damage, tremendous 15 cell turnover. You can't do that to people. They would 16 be in the hospital long before they would get cancer. So 17 it's rodent-specific phenomenon. 18 --o0o-- 19 DR. BUTTERWORTH: Okay. Now, let's just whip 20 right along here. 21 Okay. Here's the risk assessment. This is a 22 theoretical risk assessment. For example, if you had 100 23 parts per million that produced toxicity in 10 percent of 24 the animals, and you went down to 10 parts per million, 25 you would have a no-observed effect level. Well, that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 good, but that's not safe enough. So you'd probably want 2 to go a thousand times below that, which you do and there 3 would be a safe dose. 4 Now, with a genotoxic carcinogen you have the 5 number of animals with cancer, 10 percent. You go down to 6 10 parts per million, there's no cancer. But you don't 7 have a theoretical hypothetical risk of cancer, and so 8 you'd go -- calculate a one-percent risk. And then you 9 multiply that, say, by the number of Americans in -- the 10 number of people in America, you can calculate the number 11 of people that are likely to get cancer. 12 You can go a thousand times below and there's 13 nothing here. But for cancer there's this theoretical 14 risk of 2,654 people. They don't say about 2,000. They 15 say 2-6-5-4. And you can even go a million times below 16 that dose and still calculate the number of people likely 17 to die. 18 But that only works for the genotoxic 19 carcinogens. 20 --o0o-- 21 DR. BUTTERWORTH: Okay. So use the questionable 22 assumption that's in the proposed ATCM risk assessment. 23 1) 1,4-Dichlorobenzene is a genotoxic carcinogen. It is 24 not. I urge you to go back to all of these other 25 regulatory bodies and see what they've said about it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 They use then this very conservative model. 2 In calculating how many proposed cancers there 3 would be, they talk about the worst possible case. So 4 they assume the person is indoors 24 hours a day, 365 days 5 a year, 70 years they can't leave the house? Are you 6 kidding me. Come on. 7 So the estimated risk is 242 per million. In 8 point of fact the actual risk, if you look at the 9 assessments, they've just presented the upper limit. It 10 is between 0 and 242. 11 Now, by banning the para-dichlorobenzene the 12 estimate is that they would reduce this 145 per million. 13 Not 144. 145. So the estimated reduction of 145 to 3 14 significant figures gives an illusion of reality to a 15 highly hypothetical number. 16 Numerous regulatory bodies agree that 17 1,4-Dichlorobenzene induces rodent cancer via a 18 nongenotoxic mode of action. Accordingly, those bodies 19 currently regulate -- current regulatory decisions are 20 based on those noncancer effects. 21 The choice of the LMS risk model by the ARB is 22 not justified. It places California in a scientifically 23 indefensible position and at variance with the regulatory 24 decisions by the other major authoritative bodies. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 DR. BUTTERWORTH: So what you do? Well, you 2 don't want to expose people to para-dichlorobenzene levels 3 that are toxic. I couldn't agree more. You must protect 4 people. Whatever you have to do to protect them from the 5 toxic effects, that you must do. But when you've done 6 that, you've protected against cancer as well. 7 So in the document that you have that the staff 8 prepared, one of the risk assessments that they used was 9 to estimate maximum chronic noncancer health risk as a 10 hazard index, which is essentially the human exposure 11 versus the major toxic levels. And they found the value 12 to be .00085. In other words, it's not even close. The 13 amount of stuff that people are getting is not even close 14 to a toxic dose. It's also protective against cancer. 15 So environmental levels of 1,4-Dichlorobenzene do 16 not present a toxic or carcinogenic risk to humans. And I 17 would simply urge the Board to go back to other scientific 18 organizations for an additional review on this, because 19 it's fairly important, and I think that really should be 20 done. 21 CHAIRPERSON LLOYD: Thank you. 22 Well, I think, as we suggested, clearly we would 23 be happy, as far as I understand from Mr. Venturini, happy 24 to work with you if you feel it should be taken back to 25 OEHHA. Then if OEHHA looks at the information and decides PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 that they come up with different conclusions, there's time 2 then to come back to us and maybe with a different 3 conclusion well before the time in which this product is 4 banned. But on the basis of what we've seen, it's not to 5 debate that issue with us. 6 DR. BUTTERWORTH: Right. I think that would be 7 good. I would support that. 8 CHAIRPERSON LLOYD: Dr. Friedman. 9 BOARD MEMBER WILLIAM FRIEDMAN: Well, you know, I 10 certainly have -- there is no evidence that this substance 11 works through a genotoxic effect. I agree with that. 12 But there is also no new science concerning this 13 substance, either in animals or in man, certainly no 14 science with respect to effects in man that I've ever read 15 in any of the reports that you have -- that Mr. Dickson 16 has cited. And the basis for all those organizations 17 making the judgments they made is really a lot simpler 18 than what we've been discussing. As you all know, there 19 are two sets of animal studies that people have relied on. 20 One can be dismissed, and that's the kidney rat 21 experiments, for reasons that we understand. 22 The other there was cancer. There's no question. 23 There was liver cancer caused in mice. 24 DR. BUTTERWORTH: In the B6 mouse. 25 BOARD MEMBER WILLIAM FRIEDMAN: And -- well, yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 And you could talk about enzyme pathways and this and 2 that. But cancer occurred, and not all cancer occurs by a 3 genotoxic action. 4 And had they studied Guinea Pigs or Salamanders 5 or whatever, it would have satisfied all the criteria, no 6 arguments about it being a TAC. But they didn't. They 7 studied rats and mice, one of which we're not arguing 8 about. It's not genotoxic but it caused cancer. The 9 other caused cancer by a mechanism that doesn't exist in 10 humans, which is the essence of why it's been dismissed. 11 DR. BUTTERWORTH: No, what I'm saying is that, 12 number one, that mouse that got the liver cancer had the 13 HCS locust -- 14 BOARD MEMBER WILLIAM FRIEDMAN: I understand 15 your -- I know a little bit about this. 16 DR. BUTTERWORTH: And it was by forcing the 17 growth of these lesions that you produce the tumors. It 18 certainly was carcinogenic, no question about it. But 19 it's not -- since it's not DNA reactive, you can't use 20 this unusual risk model. 21 BOARD MEMBER WILLIAM FRIEDMAN: I'm not going to 22 disagree. And we're not going to discuss the science here 23 at this Board meeting. We're going to discuss the 24 deficiencies that you're claiming exist. And I have no 25 objection to other people looking at this at all, from my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 point of view. 2 But I'll tell you, Matt is right on spot. There 3 is no question that this stuff is hazardous to health. 4 And no argument that either one of you are going to make 5 are going to convince me that that's not correct. So 6 that's number 1. 7 The second objective I thought was to reduce VOCs 8 by X thousand tons a year. Now, aren't we supposed to do 9 that? Is that not our job? 10 So I don't -- you know, I frankly care very 11 little whether this is a TAC by somebody else's 12 definition. I know that it's hazardous to health. And I 13 know that we need to reduce VOCs. And to me it boils down 14 to common sense. 15 Yeah, we can go and do what we did with diesel, 16 wait another 11 years before we discuss the fact that it's 17 really toxic. Or we could use our best sense. There is a 18 substitute for this. It doesn't -- it's no more 19 expensive. And reduce any risk to health and at the same 20 time do our job as an air board and reduce volatile 21 organic compounds that are in the air. So what is the 22 issue? It seems fairly straightforward to me. 23 You know, I could say more, I think. But I think 24 I'd rather not. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 CHAIRPERSON LLOYD: Thank you very much. 2 Thank you very much. 3 Ann Heil, Joseph Yost, Melissa Lin Perrella. 4 Again, I think I wanted to indicate that we gave 5 the affected industry appropriate time because we did want 6 it fully aired. But I would appreciate succeeding people 7 testifying, witnesses, if they could keep their comments 8 as germane and brief as possible. 9 MS. PERRELLA: My comments are pretty brief. 10 Good afternoon, Mr. Chairman and members of the 11 Board. My name is Melissa Lin Perrella. And on behalf of 12 the Natural Resources Defense Council, I strongly -- 13 CHAIRPERSON LLOYD: What happened to the other 14 two? 15 MS. PERRELLA: I don't know if I cut before them. 16 I hope that's okay. 17 CHAIRPERSON LLOYD: Well, I guess -- 18 MS. PERRELLA: I'm sorry. 19 CHAIRPERSON LLOYD: Yeah, she can go now. Yeah, 20 as long as we know who it is, yeah. 21 MS. PERRELLA: I'm sorry. I saw no one sitting 22 there so I went ahead. 23 I strongly urge the Board to adopt the proposed 24 amendments to the California Consumer Products Regulations 25 and the proposed airborne toxic control measure for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 para-dichlorobenzene. However, we urge the Board to 2 consider shortening the compliance schedule for both 3 proposals to one year and thank the staff for proposing to 4 shorten the compliance period as to some of the 5 regulations in response to public comment. 6 As outlined in the staff report, consumer 7 products are a significant source of VOC emissions and 8 contribute to the formation of both ozone and particulate 9 matter pollution, which impair lung function, aggravate 10 respiratory illnesses and are associated with premature 11 death. 12 In 2000, consumer products accounted for 13 approximately 80 percent of the total manmade VOC 14 emissions statewide. Moreover, even with significant 15 reductions from controlled measures by ARB factored in, 16 due to population growth, consumer product emissions are 17 expected to make up about 12 percent of VOC emissions in 18 2010. Thus further reductions in VOC emissions from 19 consumer products and other VOC sources are needed if 20 ozone standards are to be achieved. 21 According we strongly urge ARB to exercise its 22 authority to achieve maximum feasible reductions in VOC 23 emissions from consumer products by adopting the proposed 24 amendments to the consumer product regulations. Staff 25 indicates that adoption of these amendments will result in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 VOC emission reductions of approximately 65 percent by the 2 year 2009. 3 Further, the amendments will also result in 4 significant emission reductions in toxic air contaminants. 5 We also support adoption of the proposed airborne 6 toxic control measure for para-dichlorobenzene, or PDCB. 7 As discussed today, PDCB is a potential carcinogen and has 8 been identified in California as a toxic air contaminant 9 and is a federal hazardous air pollutant. Thus the 10 prohibition on the use of PDCB in toilet products, in 11 solid air fresheners, and the removal of air fresheners 12 containing PDCB from the list of products exempt from the 13 Consumer Products Regulations is warranted especially 14 where there are alternative PDCB free products available 15 on the market. 16 In conclusion, we support staff's proposal and 17 strongly urge the Board to shorten the compliance schedule 18 for these regulations especially where substitute products 19 are readily available. 20 Thank you. 21 CHAIRPERSON LLOYD: Thank you. 22 Is Ann Heil here? 23 Okay. Well, I guess we'll do a swap at a 24 discount rate. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 Joseph Yost. 2 MR. YOST: Thank you. 3 Thank you, Chairman Lloyd and distinguished Board 4 members. My name is Joe Yost. I'm Director of State 5 Affairs for the Consumer Specialty Products Association, 6 or CSPA. 7 We have submitted detailed written comments to 8 the Board. I will summarize them very briefly. And I 9 would like to respond to some of the issues raised by the 10 ARB staff's 15-day change, the document that we're 11 presented here earlier. 12 First I'd like to address two threshold matters. 13 I'd like to make sure that the record clearly reflects the 14 fact that the proposed Cons 1 rule making will set very 15 stringent technology-forcing VOC standards. Twenty-five 16 product categories. This proposed regulation represents a 17 significant challenge for our industry and will require a 18 substantial expenditure of money and effort to research 19 and develop new product formulations to meet these new 20 standards. 21 Nonetheless CSPA member companies are committed 22 to working towards meeting these aggressive emission 23 reduction requirements. However, as noted in our 24 comments, there are a number of product categories for 25 which we are asking the ARB staff to conduct a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 technological review one year prior to the effective date 2 of the new standards to determine whether the VOC limits 3 are in fact feasible. 4 Second, I would like to commend the ARB staff for 5 conducting an open and fair rule-making process. I think 6 it's fair to say that the staff exerted considerable 7 effort to ensure that any and all stakeholders could 8 participate in this process. You heard what the 9 Ombudsperson outlined. I can attest to the fact that CSPA 10 participated in all those activities. 11 And as pertains to some specific pot of 12 categories, ARB staff provided the opportunity for 13 stakeholders to present technical demonstrations and 14 conduct discussions regarding concerns about the impact of 15 the proposed standards of product efficacy. 16 In summary, I feel we've received a fair and 17 impartial hearing. 18 I'd like to summarize some of our concerns on 19 specific product categories and specific proposals in this 20 rule. 21 ARB staff proposed a number of modifications to 22 the proposed rule which are set forth in Attachment D. 23 And CSPA has a few but very important remaining concerns 24 that are outlined in this attachment. 25 We will continue to work with ARB staff during PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 the 15-day notice period on these issues. For example, 2 I'd like to specifically state that CSPA is willing to 3 accept the prohibition on chlorinated solvents by the ARB 4 staff. But these reformulations will present serious 5 challenges for some of our companies' products. 6 It's important that our member companies be given 7 sufficient time to complete these reformulations in 8 coordination with effort to meet the new VOC limits. 9 Therefore CSPA supports the currently proposed effective 10 dates for this provision and will work with ARB staff 11 during the 15-day period. 12 And as pertains to an issue that I believe will 13 be addressed during Cons 2 but it was part of the initial 14 proposal here, the proposed rule includes some mass base 15 limits for a number of adhesive removers and other solvent 16 products. While we are willing to accept most of these 17 limits, there are a few subcategories for which these mass 18 base limits may prove to be technologically or 19 commercially infeasible. ARB staff committed to 20 investigate the possibility of reactivity-based limits for 21 these products. And CSPA looks forward to working with 22 ARB staff to develop these reactivity-based limits. 23 In answer to the question that Mr. McKinnon 24 posed, CSPA members are willing to support the ARB staff's 25 proposed action regarding para-dichlorobenzene even though PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 the limit at one year sell-through period may prove a 2 challenge for a number of our companies that manufacture 3 or market these type of products. Specifically CSPA 4 member companies that market para-dichlorobenzene based 5 products already manufacture and/or distribute alternative 6 products that are acceptable to all the markets that they 7 serve. 8 For most, if not all, CSPA members that market 9 these products the phaseout of para-dichlorobenzene will 10 occur well before December 31, 2006 compliance date. 11 And, again, I'd just like to reiterate that we 12 look forward to continuing to work with ARB staff during 13 the 15-day period. Thank you for this opportunity to 14 express our position on this important rule-making 15 process. 16 CHAIRPERSON LLOYD: Thank you very much. And I 17 know that staff has expressed their willingness to work 18 with you during that period. 19 MR. YOST: Thank you, Chairperson Lloyd. 20 CHAIRPERSON LLOYD: Thank you. 21 Ann Heil is back. 22 MS. HEIL: Yeah, I'd like to start by apologizing 23 for being out of the room when you called my name. I was 24 consulting back with the office about issues that had been 25 brought up. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 CHAIRPERSON LLOYD: You have one minute. 2 (Laughter.) 3 MS. HEIL: Anyway, my name is Ann Heil, as 4 everyone has figured out. I'm here today representing 5 Tri-TAC, which is a trade organization for waste water 6 treatment plants or POTW's. We're actually a technical 7 advisory board for the California Water Environment 8 Association, the California Association of Sanitary 9 Agencies, and the League of California Cities. 10 We're here today because of potential water 11 quality impacts of the rule. And we're delighted to say 12 that we're here because of the potentially beneficial 13 adverse water quality impacts of the rule. We're 14 delighted with the way Board staff has been changing over 15 the years and being much more considerate of water issues. 16 And we're really happy to see a rule come to the table 17 that's both good for the air and for the water. 18 So we support both sides of the rule, the 19 para-dichlorobenzene ATCM. Also the other end on toxics, 20 the prohibition on the use of the three toxic air 21 contaminants in the seven consumer product categories. 22 So if you give me more than one minute, I have my 23 show and tell, I have it pretty well wrapped up here. 24 One more layer of plastic. 25 Anyway, what I have here is a little PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 para-dichlorobenzene bathroom cake. It's not very big. 2 But this little guy contains enough para-dichlorobenzene 3 to pollute four million gallons of water. 4 Now, most of this little guy actually isn't going 5 to do down the sewer. Most of it's going to go up in the 6 air and it's going to be breathed in by either janitorial 7 workers installing the cakes, people using the bathrooms, 8 children visiting restaurants with their parents. 9 But a little bit of it does go down the sewer. 10 And when it goes down the sewer, it ends up at one of our 11 waste water treatment plants and it goes either mostly 12 into the air or into the water. The chlorinateds really 13 don't break down very well at treatment plants, as many 14 compounds do. 15 If it goes in the water, despite what you may 16 have heard, EPA does regulate para-dichlorobenzene in 17 drinking water. Para-dichlorobenzene is a carcinogen. 18 Just because they've set a limit for it in drinking water 19 doesn't mean it's safe. There's limits for lots of 20 carcinogens in your drinking water, including the other 21 three toxic air contaminants that we're talking about, 22 methylene chloride, trichloroethylene, and perc and para- 23 all have a five-part pavilion drinking water limits. All 24 the same. I don't think it means EPA needs to think 25 they're safe. It's just the best we can do right now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 So beyond that, the other problem is it goes up 2 in the air. And POTWs have to meet you guys's air quality 3 standards as well, particularly ones relating to cancer 4 risk. We don't want to give our neighbors cancer risk. 5 We provide an important public service. We get 6 biologically hazardous waste out of your streets. It's 7 going down the sewer instead. And we make clean water and 8 clean solids. We don't want to give our neighbors cancer. 9 So really the only way to regulate these is to go after 10 consumers, because we don't have authority to go after 11 residents. You guys have authority to go after residents. 12 That's where it's coming from. 13 We do support a shorter sell-through period, the 14 one that the staff has proposed. We think that the 15 original one was way too long for a product where there 16 are readily available substitutes available at all the 17 janitorial supply stores. So we definitely support the 18 shorter time. 19 The only thing I'll say regarding consumer 20 preference, the issue that's been brought up, is that we 21 did -- and whether these things work, is that we have one 22 of our agencies -- several of them have banned the use of 23 para-dichlorobenzene in port-a-potties, the little 24 chemical toilets at events. And they're doing fine 25 without them. And we did that because the port-a-potty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 waste became a hazardous waste when we used these products 2 in them. The substitutes we've evaluated, they are safe 3 in the water. 4 I guess I won't belabor that. 5 I do want you to be consistent. If this thing is 6 a toxic air contaminant for us, we want it to be a toxic 7 air contaminant for everybody. Let's not knock out one 8 level and still have us -- anyway, I'm rambling a little 9 bit. 10 Let me just say briefly on chlorinated solvents, 11 that we do support that as well. The chlorinated solvents 12 behave like para-. They come into the treatment plant. 13 They either go in the air -- and, again, they're a major 14 component of cancer risk at our plants -- or they go in 15 the water and we have concerns about meeting our water 16 standards. 17 We're recycle water. We do have to meet drinking 18 water limits. And we know it's very important to recycle 19 water in California because we are very short on water. 20 We are still at some of our treatment plants 21 exceeding drinking water standards for the chlorinated 22 solvents. We've been going after them for 15 years. 23 We've gone after dry-cleaners, degreasers, film cleaners, 24 any sort, and we still can't get rid of the perc. It's in 25 the consumer products, in the para- and methylene chloride PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 and the trichloroethylene. It's in the consumer products. 2 We don't have authority over consumer products. That's 3 why we enjoy working with you and your great staff so much 4 on going after these together. 5 CHAIRPERSON LLOYD: Thank you. 6 MS. HEIL: One more visual aid. 7 CHAIRPERSON LLOYD: I thought you supported the 8 shorter time. 9 MS. HEIL: Okay. Regarding the chlorinated 10 solvents. This is a can of chlorinated solvent. This is 11 actually perc. You can buy it at any automotive supply 12 store. A couple years ago you guys banned the perc, 13 methylene chloride, trichloroethylene in automotive 14 cleaning products. But this one ran under the wire 15 because it's for electric parts. And that's what we're 16 going after today, is the use of these in electric parts. 17 We're afraid people will go into the store. Here's a can 18 of perc. If they like perc, they can just grab this one 19 instead of the one labeled brake cleaner. Pretty much the 20 same stuff, go off and use it. So we'd rather not see 21 these -- this one pollutes eight million gallons of water. 22 I think that's it. 23 Thanks. 24 CHAIRPERSON LLOYD: Thank you very much. Worth 25 the wait. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 Thank you. 2 Nidia Bautista, Thomas Donegan, and Richard 3 Pearl. 4 MS. BAUTISTA: Thank you, Chairman. Thank you, 5 members of the Board, staff, public. That was an 6 excellent presentation. 7 With regards to our organization, the Coalition 8 for Clean Air, I think a lot has already been said with 9 your ruling. We really commend the staff here for this 10 proposal before you. We feel that the benefits both to 11 air quality and water quality are much needed. And we 12 commend the staff for revising the amendments to reflect 13 some of the wishes in the public comments to shorten the 14 time -- the compliance period. And we encourage to Board 15 to -- when you're reviewing this, to make sure that it is 16 to the most maximum extent shortened time period that is 17 feasible. We really encourage you to do that. And, 18 again, just want to commend the staff on this and look 19 forward to the adoption of these rules. 20 Thank you. 21 CHAIRPERSON LLOYD: Thank you. 22 Thomas Donegan, Richard Pearl, and Jim Mattesich. 23 MR. DONEGAN: Dr. Lloyd and members of the Board. 24 My name is Thomas Donegan. 25 I represent the Cosmetic, Toiletry, and Fragrance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 Association, or the CTFA. And we're a national trade 2 association representing approximately 600 companies that 3 are involved in the manufacture and distribution of 4 personal care products. About 100 of those companies are 5 based in California and probably another 70 or so have 6 facilities in the state. 7 We've worked with the ARB for many, many years 8 now on reformulation of a number of our products, 9 including hair sprays, antiperspirants and deodorants and 10 many others. 11 By definition, as the total emissions from our 12 products are reduced, and they been reduced significantly, 13 the ability to find additional feasible reductions is also 14 reduced. 15 In the regulation before you today you have two 16 additional categories of personal care products, hair 17 styling products and shaving gels. And they're proposed 18 for regulation to put under future VOC limits. 19 In this regulation the ARB staff has faced a very 20 difficult task of obtaining over five tons of feasible 21 emission reductions from this shrinking pool of consumer 22 product emissions. And while we have just a couple of 23 issues we want to mention that we think deserve further 24 consideration, we want to thank the staff for establishing 25 a process that we believe has been open, extremely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 professional, and has created the kind of dialogue between 2 industry and government that we believe continues to yield 3 real air quality benefits for California consumers. And 4 we look forward to continuing that. 5 In very large part we support the rule. And I 6 just want to mention couple of caveats. 7 First, reflecting on the difficulty of achieving 8 significant reductions in emissions from shaving gels, the 9 ARB staff has proposed two reformulations, one in 2006 and 10 another in 2009. And they've committed to a technical 11 review of the feasibility of that four percent standard 12 some time before the end of 2008. 13 We just want to emphasize that that technical 14 review is a very important element to us of our ability to 15 support this regulation. There are some difficult 16 obstacles to be overcome. We intend to comply with the 17 seven percent standard in 2006. And with that -- with the 18 understanding that we have that review coming up in 2008, 19 we will commit to making every effort to meet the 2009 20 deadline with that four percent standard. 21 Secondly, the ARB staff has proposed regulations 22 for date coding and specifically as to how they apply to 23 multi-product pacts. It's a very complex subject, and the 24 ARB has been working right up to the deadline to try to 25 come up with proposals to meet some of our concerns. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 We've had last minute proposals that we've suggested to 2 them that we think meet them half way. And we very much 3 appreciate your willingness to grant some flexibility in 4 the 15-day period so that we can resolve that. I'm 5 confident that we can resolve it. But I think it just 6 takes further discussion for us to understand their 7 concerns and for them to understand how these products are 8 marketed. So that flexibility will be a big help. 9 Finally, I just raise a concern that I raised in 10 our written comments about confidentiality and taking a 11 firm position in the proposed regulation that these date 12 codes -- product date codes are not eligible for 13 consideration as confidential material. I think that's 14 really a matter for a court to consider ultimately if some 15 company wants to pursue seeking confidential treatment. 16 And the only thing we take issue with is we don't think 17 it's appropriate to just make a categorical statement of 18 that sort in the regulation itself, but we don't propose 19 to debate that any further. Ultimately it's a legal 20 issue. It's something to be -- that will be decided by a 21 court. 22 With that, we support the effort and look forward 23 to working with the ARB in the future. 24 Thank you. 25 CHAIRPERSON LLOYD: Again, and thank you also for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 the industry working closely with staff. Appreciate that 2 very much. 3 Richard Pearl, Jim Mattesich, Katy Wolf. 4 MR. PEARL: Mr. Chairman, members of the Board, 5 good afternoon. My name is Richard Pearl. I'm Vice 6 President of Research and Development for Magic American 7 Corporation in Beachwood, Ohio. 8 Magic American is a member of the CSPA and 9 supports the efforts of the CSPA working with the ARB 10 staff. We believe in the science of reactivity and 11 encourage you to use reactivity-based limits for the Cons 12 2 regulations. We look forward to continue working with 13 the ARB staff. 14 Thank you. 15 CHAIRPERSON LLOYD: Thank you. I believe in 16 reactivity too. 17 (Laughter.) 18 CHAIRPERSON LLOYD: Thank you very much. 19 MR. PEARL: Fifty-eight seconds. 20 (Laughter.) 21 MR. MATTESICH: Mr. Chairman, members. Jim 22 Mattesich with Livingston & Mattesich on behalf of Reckitt 23 Benckiser, a worldwide manufacturer of consumer products, 24 many of which your Board regulates. 25 I'll try to do better than 58 seconds in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 interests of the late hour. 2 We're generally supportive of the regulations as 3 proposed by the staff. And we want to principally thank 4 the staff for their openness, as Mr. Donegan and Mr. Yost 5 have both indicated. 6 We don't always agree, as you know, but we feel 7 as though we get a fair opportunity to make our points and 8 have a legitimate dialogue with the staff. And we want to 9 thank them for that. And we want to be able to continue 10 that dialogue around the most recent proposed 15-day 11 notice provisions so that we don't end up with any 12 misunderstandings about what that new language means, what 13 it's impact will be, and that we don't have any unintended 14 consequences. 15 I have not had an opportunity to talk with my 16 client this morning about that new language. And being 17 lawyer-like for a minute, I can't walk up here and say we 18 support it until I talk to him. Otherwise bad words like 19 "malpractice" arise. And to avoid that I'll just say 20 we're hopeful that we will be able to resolve any issues 21 that arise out of that process. 22 CHAIRPERSON LLOYD: I understand. And, again, 23 appreciate your willingness to work with us on that. 24 Katy Wolf and Doug Raymond. 25 MS. WOLF: Good afternoon, Chairman Lloyd, Board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 members. My name is Katy Wolf and I'm Director of the 2 Institute for Research and Technical Assistance, a 3 nonprofit organization. 4 We've worked with many companies in California 5 over the last decade or so and helped them convert away 6 from chlorinated solvents in many different applications 7 to safer alternatives. And I came here today to just make 8 two points: 9 First, I wanted to commend the Board for phasing 10 out chlorinated solvents in the consumer product 11 categories, including the seven product categories that 12 you're phasing them out in today. 13 And, second, I came here to urge you to move up 14 the date for phasing out the chlorinated solvents. But I 15 see that when the staff gave the presentation, they've 16 already preempted me in asking you to phase them out a 17 year earlier. 18 So just in summary then -- and I'm probably under 19 58 seconds -- I strongly support the regulation and 20 commend the Air Resources Board for its action. 21 Thanks for your attention. 22 CHAIRPERSON LLOYD: Thanks, Katy. Good to see 23 you again, and thanks for all your good work. 24 Doug Raymond. 25 MR. RAYMOND: Mr. Chairman and members of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 Board. Thank you for letting me testify today. I'm here 2 from Diversified Brands of Sherwin Williams. We make all 3 kinds of consumer products. We make everything except 4 pharmaceuticals and personal care. 5 What we're here to do, first and foremost, is to 6 tell you that the staff did an excellent job on this. 7 There were a lot of small and obscure categories. We 8 worked with them over the last seven months. And for the 9 most part we could support this rule. Actually when I 10 left Cleveland yesterday I came out here to support this 11 rule. Unfortunately we've seen the 15-day comment period. 12 And we have two issues that we would like to bring up. 13 One is the accelerated prohibition of the 14 chlorinateds. We believe that for the most part we don't 15 have a problem with the prohibition as it was originally 16 set. We have a problem with the accelerated phaseout of 17 the one year earlier for two categories: One sub-category 18 and one full category. 19 The one sub-category comes under adhesive 20 removers. It's the gasket remover. And the second one is 21 the graffiti remover. Both of these categories 22 predominantly have methylene chloride in them. They -- in 23 the survey they have methylene chloride in them. 24 Currently right now we do not have alternatives. 25 We're working on trying to get those alternatives. We've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 worked with this Board for the last 15 years to get rid of 2 our chlorinateds. We worked with you on the brake cleaner 3 issue to get rid of them. 4 Those two categories right now we can't support 5 the phaseout. 6 CHAIRPERSON LLOYD: No. I think you heard us 7 earlier giving staff flexibility to work with you on that 8 and if there's -- if it's demonstrated it's necessary. 9 MR. RAYMOND: Okay. And that was the second 10 thing. We could support you giving the flexibility to the 11 staff to work with us longer on that. 12 The second thing I'd like to support is, in David 13 Mallory's presentation he talked about working on the 14 Sullivan category review for Cons 2. And in going along 15 with Richard Pearl, we too believe in the MIR rules, and 16 we would like to actually see that start as soon as 17 possible. 18 And then I would just like to follow up on Ann 19 Heil's comments. Fortunately for us that was not our 20 product that she held up. Okay? That was our 21 competitor's. 22 I just wanted to bring to your attention that 23 Carla on your staff took care of that issue with the new 24 reg. It basically does say you cannot use that in 25 automobile maintenance. So you probably will not see that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 in any automotive stores anymore. 2 So thank you very much. 3 CHAIRPERSON LLOYD: Thank you. 4 Staff have any additional comments? 5 Professor Friedman. 6 BOARD MEMBER HUGH FRIEDMAN: I just wanted to say 7 that I really have come to appreciate listening to all 8 this, what staff have been getting their arms around, 9 particularly David Mallory and Janette Brooks and others 10 who worked on this. And I think it should be noted -- at 11 least I'm impressed with the extent to which almost all 12 the speakers, even those who are not entirely in agreement 13 and said there are some issues, have commended the staff. 14 So I think you've done a great job in the best tradition 15 of what we try to do. 16 So I did want to say that. 17 Do we get to -- 18 CHAIRPERSON LLOYD: Well, one of the things I was 19 suggesting, that I would not like to give a false 20 impression here, and finish Mr. McKinnon's Board 21 meeting -- last board meeting early. So I would like to 22 call Dr. Butterworth up to begin continuing his slides 23 presentation. 24 (Laughter.) 25 BOARD MEMBER McKINNON: Mr. Chairman, I'm so glad PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 that you're concerned that I would be disappointed to end 2 early. But we'll let it go this time. 3 (Laughter.) 4 CHAIRPERSON LLOYD: On a serious note, any more 5 discussion from the Board? 6 Again, I was really impressed with the 7 difficulty. And I know we didn't agree with the 8 presentation on the para-dichlorobenzene. But I think you 9 made some issues there. And we would strongly suggest to 10 work with staff, to work with OEHHA on that, which I think 11 is the appropriate piece of that. So we don't want to 12 belittle that piece at all. But we think there's a 13 mechanism there. In this case here it's not before us, as 14 Mr. McKinnon and Dr. Friedman indicated at that time. 15 And, again, I'd like to compliment staff. And, 16 again, clearly there's some open issues to work on, and I 17 think we've given you that flexibility. 18 I have full confidence that if the products don't 19 work or the timeframe, you exercise very good judgment 20 bringing it back to the Board. So I'm very confident in 21 that. And I was delighted to hear the working between the 22 industry and the staff. So that's excellent. 23 So with that I would like -- unless there are any 24 more discussion, I would like to entertain a motion. 25 BOARD MEMBER McKINNON: I'd like move -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 GENERAL COUNSEL JOHNSTON: We need to close the 2 record, and if there's any ex partes -- 3 CHAIRPERSON LLOYD: Oh, sorry. I got carried 4 away. Sorry. 5 I will now close the record on this agenda item. 6 However, the record will be reopened when the 15-day 7 notice of public availability is issued. Written or oral 8 comments received after this hearing date but before the 9 15-day notice is issued will not be accepted as part of 10 the official record on this agenda item. 11 When the record is reopened for a 15-day comment 12 period, the public may submit written comments on the 13 proposed changes which will be considered and responded to 14 in the final statement of reasons for this regulation. 15 Again, a reminder. Any ex parte discussions at 16 this time or disclosures? 17 Seeing none. 18 We do have a resolution before us. 19 BOARD MEMBER HUGH FRIEDMAN: Move adoption of 20 04-6-5. 21 BOARD MEMBER D'ADAMO: Second. 22 CHAIRPERSON LLOYD: Okay. So all in favor say 23 aye. 24 (Ayes.) 25 CHAIRPERSON LLOYD: Anybody against? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 Abstain? 2 Unanimous again. 3 Thank you. 4 Seeing no other agenda items, the June 24th 5 meeting of the Air Resources Board officially bring to a 6 close. 7 Thank you very much indeed. 8 And thank you staff, and El Monte for gracious 9 hosting. 10 Thank you. 11 (Thereupon the California Air Resources 12 Board meeting adjourned at 2:40 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 CERTIFICATE OF REPORTER 2 I, JAMES F. PETERS, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing California Air Resources Board meeting was 7 reported in shorthand by me, James F. Peters, a Certified 8 Shorthand Reporter of the State of California, and 9 thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said meeting nor in any 12 way interested in the outcome of said meeting. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 9th day of July 9, 2004. 15 16 17 18 19 20 21 22 JAMES F. PETERS, CSR, RPR 23 Certified Shorthand Reporter 24 License No. 10063 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345