EXECUTIVE OFFICER MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA JR. BUILDING CALEPA HEADQUARTERS BUILDING 1001 I STREET SIERRA HEARING ROOM SACRAMENTO, CALIFORNIA WEDNESDAY, NOVEMBER 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 STAFF Mr. Mike Scheible, Deputy Executive Officer Mr. Bob Barham, Deputy Chief, Stationary Source Division Mr. Tom Jennings, Senior Staff Counsel Ms. Cheri Rainforth, Industrial Section Mr. Dean Simeroth, Chief, Criteria Pollutants Branch Mr. Gary Yee, Industrial Section ALSO PRESENT Mr. Mike Ingham, Chevron-Texaco Mr. Tom Livingston, Bosch (via teleconference) Mr. Gordon Schremp, California Energy Commission PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii INDEX PAGE Opening remarks by Deputy Executive Officer Scheible 1 Item 04-02-1 1 Deputy Executive Officer Scheible 1 Staff Presentation 1 Mike Ingham 17 Gordon Schremp 18 Tom Livingston (via teleconference) 19 Closing remarks by Deputy Executive Officer Scheible 23 Adjournment 24 Reporter's Certificate 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Good morning, 3 and happy almost Thanksgiving. And our apologies for 4 having this hearing on the day before Thanksgiving. But 5 this is an action that we have to move quickly on, and it 6 was a good day to find an available hearing room, so we're 7 moving. 8 The November 24th, 2004, public hearing of the 9 Air Resources Board Executive Officer will come to order. 10 My name is Mike Scheible. I'm the Deputy Executive 11 Officer of the California Air Resources Board. 12 Our Executive Officer, Mrs. Catherine 13 Witherspoon, has delegated to me the authority to conduct 14 this public hearing to consider an emergency action to 15 delay the January 1st, 2005, implementation date of the 16 diesel fuel lubricity standard. The emergency action is 17 being sought to avoid potential supply disruptions of 18 California diesel fuel supply if the implementation date 19 is not extended. 20 Mr. Simeroth of the ARB staff, would you please 21 introduce this item and begin the staff's presentation. 22 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION 23 CHIEF SIMEROTH: Thank you, Mr. Scheible. 24 As you stated, the staff is requesting a 120-day 25 delay of the January 1st, 2005, implementation date of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 diesel fuel lubricity standard. 2 The specification is a new standard that would 3 likely require refiners to increase the use of lubricity 4 additives to diesel fuel. Lubricity is a measure of the 5 ability of diesel fuel to provide wear protection on 6 internal contact components in diesel engine fuel systems. 7 California diesel fuel containing lubricity 8 additives has been shipped in the common carrier pipeline 9 with little contamination effects until last month. It 10 was expected that the common carrier pipeline operator 11 serving California would allow this practice to continue 12 until the 15 parts per million sulfur standard comes into 13 effect in 2006. 14 This would allow time for additive injection 15 equipment to be installed in the fuel terminals in 16 California. However, at an American Society for Testing 17 and Materials Committee meeting late last month, industry 18 found that possible jet fuel contamination due to sharing 19 the common carrier pipeline with diesel fuel containing 20 lubricity additives has become a more significant concern 21 than previously realized. 22 Diesel fuel containing lubricity additives can 23 contaminate subsequent shipments of jet fuel to the extent 24 that the jet fuel being shipped can fail its respective 25 fuel specifications. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 With this increased level of concern in the 2 industry, the operator of the California pipeline system 3 announced on October 26 that effective immediately diesel 4 fuel containing lubricity additives could not be shipped 5 in its pipeline. Other pipeline operators in the United 6 States announced similar prohibitions. 7 However, in the last ten years, California 8 refiners have used lubricity additives in diesel fuel and 9 distributed the additized product through the common 10 carrier pipeline. During this time only two instances of 11 contamination have been reported that can be associated 12 with this practice. In these two instances, jet fuel 13 immediately followed low sulfur diesel fuel additized with 14 lubricity additives. This contamination was detected and 15 the fuel was diverted. 16 Following discussions between the common carrier 17 pipeline operator, California refiners, and state 18 regulatory agencies, on November 5th, 2004, the pipeline 19 operator notified suppliers they will allow the transport 20 of California diesel fuel treated with historical levels 21 of additives for an interim period only until fuel 22 additization blending equipment can be installed at the 23 terminals. Additionally, they will coordinate product 24 shipments to minimize the possibility of jet fuel 25 contamination. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 Because the installation of terminal additization 2 equipment cannot be done immediately, consideration of a 3 120-day delay in the January 1st, 2005, implementation 4 date of the diesel fuel lubricity standard is necessary. 5 At this time we'll call on Ms. Cherie Rainforth, 6 an Air Resources engineer of the Industrial Section, to 7 present the item. 8 Ms. Rainforth. 9 MS. RAINFORTH: Thank you, Mr. Simeroth. 10 Good morning. 11 Today I will present the staff's proposal for an 12 emergency amendment delaying the January 1st, 2005, 13 implementation date for the diesel fuel lubricity standard 14 for 120 days. 15 I will start with some background information, 16 followed by a discussion of the issues related to the need 17 for the delay. Then I will describe the staff proposal 18 and impacts. 19 Finally I will conclude with the staff 20 recommendation. 21 --o0o-- 22 MS. RAINFORTH: I will begin with some background 23 information. 24 --o0o-- 25 MS. RAINFORTH: Diesel fuel lubricity is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 measure of the ability of diesel fuel to provide surface 2 contact lubrication. 3 Adequate fuel lubricity is required to protect 4 fuel pumps and injection systems, that rely on fuel as a 5 lubricant, from excessive wear. 6 Fuel lubricity is provided by trace components in 7 the fuel that are composed of surface active molecules. 8 Unfortunately, the process that reduced sulfur 9 compounds, hydrotreating, also reduces the level of these 10 trace components that provide the fuel with lubricity. 11 --o0o-- 12 MS. RAINFORTH: In 2003, the Air Resources Board 13 approved a lubricity standard for California diesel fuel 14 to assure that adequate diesel fuel lubricity is provided 15 as the implementation date for the 15 ppm sulfur standard 16 approaches. 17 --o0o-- 18 MS. RAINFORTH: This ARB lubricity standard uses 19 the High Frequency Reciprocating Rig, or HFRR, lubricity 20 test and specifies a maximum wear scar diameter of 520 21 microns. 22 The implementation date for this standard is 23 January 1st, 2005. 24 However, there is a provision in the regulation 25 to sunset the standard if the California Department of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Food and Agriculture, Division of Measurement Standards, 2 or DMS, adopts and enforces a lubricity standard that is 3 at least as stringent. 4 --o0o-- 5 MS. RAINFORTH: Since the approval of the ARB 6 standard, the American Society for Testing and Materials, 7 or ASTM, adopted a diesel fuel lubricity standard 8 identical to the ARB standard. 9 This ASTM standard also becomes effective on 10 January 1st, 2005. 11 By California State law, DMS is required to adopt 12 and enforce the specifications set forth by ASTM for 13 diesel fuel. 14 However, ASTM is currently voting on a ballot to 15 delay the effective date of their standard until January 16 1st, 2006. 17 --o0o-- 18 MS. RAINFORTH: Diesel fuel lubricity was 19 recognized as a concern in 1988 when ARB first approved 20 the statewide sulfur and aromatic hydrocarbon standards. 21 --o0o-- 22 MS. RAINFORTH: A Governor's task force was 23 formed in 1993 to study diesel fuel quality issues. 24 This task force issued a report in 1994 which 25 recommended a minimum fuel lubricity level based on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 Scuffing Load Ball-on-Cylinder Lubricity evaluator test or 2 SL-Bocle. The recommended standard was a minimum scuffing 3 load of 3,000 grams. 4 --o0o-- 5 MS. RAINFORTH: Since that time, refiners have 6 voluntarily maintained a minimum lubricity level of 3100 7 grams scuffing load based on the SL-Bocle test. 8 --o0o-- 9 MS. RAINFORTH: Consequently, Lubricity additives 10 have been in use since at least 1993. 11 Currently, 11 of the 15 California refineries 12 producing CARB diesel use lubricity additives to some 13 degree. 14 Additization rates in use today typically range 15 from 30 to 200 parts per million. 16 It is expected that in order to meet the January 17 1st, 2005, lubricity standard, additization rates will 18 increase by 25 to 50 ppm. 19 --o0o-- 20 MS. RAINFORTH: However, in 2006, when the 15 ppm 21 sulfur standard is implemented, it is expected that 22 additization rates will increase significantly. 23 --o0o-- 24 MS. RAINFORTH: EPA diesel generally receives 25 less hydrotreating than CARB diesel. This is illustrated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 by the fact that the average sulfur content of EPA diesel, 2 340 ppm, is significantly higher than that of CARB diesel, 3 140 ppm. 4 Additionally, EPA diesel is not required to meet 5 a maximum aromatic standard. 6 Consequently, lubricity additive use is not as 7 prevalent nationally than in California. 8 However, it has been estimated that 30 to 40 9 percent of current production may require additization in 10 order to meet the ASTM lubricity standard. 11 In 2006, with the implementation of the 15 ppm 12 sulfur standard, all fuel may require additization. 13 --o0o-- 14 MS. RAINFORTH: Both Europe and Canada have 15 adopted more stringent standards than the ARB standard. 16 They require a maximum wear scar diameter of 460 17 microns based on the HFRR test. 18 This more stringent standard would generally 19 require additization for lubricity improvement. 20 For Canada, this standard is one of several in 21 its cafeteria style standard. 22 --o0o-- 23 MS. RAINFORTH: I will now discuss the issues 24 considered in developing the proposal. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 MS. RAINFORTH: California diesel fuel has 2 historically been additized at the refinery and then 3 shipped through the common carrier pipeline. This does 4 introduce a risk of lubricity additive contamination of 5 the subsequent fuel shipment. 6 Lubricity additives by nature are surface active 7 compounds and can adhere to the pipeline wall. The fuel 8 shipment following the additized diesel may pick up 9 additive off of the pipeline wall. If jet fuel follows 10 the additized diesel, lubricity additive contamination may 11 cause the jet fuel to fail its fuel specifications. 12 There are two known instances of jet fuel 13 contamination in California in the last ten years. In 14 both cases, jet fuel immediately followed additized low 15 sulfur diesel and the contamination was detected and the 16 fuel diverted. 17 Due to the successful history and the minimal 18 increase in additization expected in order to meet the ARB 19 2005 lubricity standard, no change in pipeline policy was 20 expected until 2006. It was felt that the possibility of 21 jet fuel contamination was an issue that was manageable by 22 sequencing fuel shipments. 23 --o0o-- 24 MS. RAINFORTH: Recently, however, the level of 25 concern regarding the possibility of jet fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 contamination was raised significantly in the stakeholder 2 community, leading to a ban of lubricity additives in the 3 California common carrier pipeline. 4 The expected increase in additive use due to the 5 implementation of the ARB and ASTM lubricity standards 6 brought this issue to the forefront. 7 The ASTM joint subcommittee E and J Task Force, a 8 joint subcommittee of both diesel and aviation fuel 9 subcommittees, met on October 22nd of this year to discuss 10 this issue. At this meeting studies were presented on the 11 possible effects of lubricity additive contamination on 12 jet fuel. The studies were preliminary and details and 13 details were not available at the meeting. However, the 14 level of concern regarding the detrimental effects was 15 raised considerably on the basis of the information 16 presented. 17 --o0o-- 18 MS. RAINFORTH: As a result of this meeting, on 19 October 26th the operator of California's common carrier 20 pipeline issued a notification to product shippers on its 21 pipeline that effective immediately no diesel fuel 22 containing lubricity additives would be permitted in the 23 pipeline. 24 --o0o-- 25 MS. RAINFORTH: This additive ban threatened an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 disruption of California's diesel fuel supply. California 2 refiners, the pipeline operator, and state agencies held 3 multiple teleconferences to discuss the possible impacts 4 and options for dealing with this ban. 5 It was estimated that nearly 50 percent of the 6 California diesel supplied would be impacted by this. 7 Additization at the terminal had not yet the been 8 implemented and the work around options available were not 9 feasible. 10 The large volume of diesel fuel impacted could 11 not be transported by truck due to the limited number of 12 trucks and drivers available. Additive splash blending 13 into the trucks at the terminals had too many safety 14 concerns to be allowed. 15 --o0o-- 16 MS. RAINFORTH: Early in November Kinder Morgan 17 announced an interim pipeline protocol to be in effect 18 until additization at the terminals could be arranged. 19 --o0o-- 20 MS. RAINFORTH: This interim pipeline protocol 21 was to allow time for terminal additization to be 22 implemented. 23 This protocol allows the shipment of diesel fuel 24 containing lubricity additives with the stipulation that 25 additization rates remain at historical levels. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 Kinder Morgan will coordinate fuel shipments to 2 assure that jet fuel will not immediately follow diesel 3 fuel containing lubricity additives. 4 --o0o-- 5 MS. RAINFORTH: In order to allow time to arrange 6 additization at the terminals, Kinder Morgan has requested 7 a delay in the January 1st, 2005, lubricity standard 8 implementation date. 9 The implementation of the 520 micron maximum wear 10 scar diameter standard is expected to increase 11 additization levels. It is felt that any increase in 12 additization levels would increase the risk of downstream 13 contamination. 14 Terminal additization will not be installed and 15 operational for most terminals by the January 1st, 2005, 16 implementation date. 17 --o0o-- 18 MS. RAINFORTH: As you are aware, the jet fuel 19 contamination issue is an national concern. Multiple 20 pipeline operators outside of California have instituted a 21 ban of diesel fuel containing lubricity additives. And 22 similar to the situation within California, additization 23 at the terminal is not available at the majority of 24 locations. 25 Additionally, the current inventory of injection PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 equipment is not adequate to equip all U.S. terminals by 2 the January 1st date. 3 --o0o-- 4 MS. RAINFORTH: Consequently, there is a 5 possibility of delay in the effective date of the national 6 ASTM lubricity standard. 7 As of October 18th of this year, 21 states, 8 including California, have adopted the newest version of 9 the ASTM diesel fuel specification, D 975, which includes 10 the lubricity standard. However, because of the 11 possibility of jet fuel contamination, the inability to 12 additize at the terminals, and in order to assure adequate 13 supplies of diesel fuel and jet fuel, North Carolina has 14 been the first state to issue a letter suspending 15 enforcement of the standard until October 1st, 2005. 16 For similar reasons, the California Division of 17 Measurement Standards will extend enforcement discretion 18 if requested by letter of application. 19 An ASTM ballot to revise the effective date of 20 the ASTM standard to January 1st, 2006, was issued on 21 October 22nd and closed at the beginning of this week. We 22 do not yet have the results of this ballot. 23 --o0o-- 24 MS. RAINFORTH: I will now begin my presentation 25 of the staff proposal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 --o0o-- 2 MS. RAINFORTH: The Air Resources Board is 3 authorized to amend a regulation on an emergency basis 4 contingent upon the finding that the amendment is 5 necessary for the immediate preservation of the public 6 health and safety or general welfare. 7 --o0o-- 8 MS. RAINFORTH: However, an amendment adopted on 9 an emergency basis remains in effect no more than 120 days 10 unless the adopting agency follows up this amendment with 11 one that complies with the procedural requirements for a 12 normal amendment. Hence, the maximum delay that we can 13 propose for this emergency amendment is 120 days. 14 --o0o-- 15 MS. RAINFORTH: Our proposal is to delay all of 16 the 2005 phase-in dates for the lubricity standard until 17 May 1st, 2005, the 120th day after the original 18 implementation date. 19 Kinder Morgan is projecting that they will have 20 some form of terminal additization in place, possibly tank 21 blending, by the May 1st date. 22 The delay does not apply to vehicular diesel fuel 23 represented as having sulfur content not exceeding 15 24 parts per million. Currently all 15 ppm sulfur diesel is 25 being transported by truck from the refinery terminal to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 the end user, so this fuel is not impacted by the pipeline 2 restriction regarding additization. 3 --o0o-- 4 MS. RAINFORTH: This delay is necessary to avoid 5 disruption of diesel fuel supplies if refiners are unable 6 to ship fuel through the pipeline that has been adequately 7 additized to meet the new lubricity standard. 8 --o0o-- 9 MS. RAINFORTH: This proposed delay will not 10 generate any adverse impacts. There should be no adverse 11 impact on diesel fuel production; nor should there be any 12 adverse environmental impact since refiners will be 13 maintaining their voluntary minimum lubricity standard. 14 Lastly, there will be no adverse economic impact 15 for either individuals or businesses. 16 --o0o-- 17 MS. RAINFORTH: The staff recommends that a 18 finding of emergency be made based on the disruption of 19 diesel fuel supplies that would occur if the lubricity 20 standard is implemented prior to having the capability of 21 terminal additization. 22 The staff recommends that the implementation 23 dates of diesel fuel standard -- diesel fuel lubricity 24 standard, with the exception of 15 ppm sulfur diesel, be 25 delayed until May 1st, 2005. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Staff would like to ask your consideration of the 2 proposed emergency amendments to delay the January 1st, 3 2005, implementation date of the diesel fuel lubricity 4 standard. 5 The staff would be glad to answer any questions 6 now. 7 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Thank you, 8 Cherie, for that very complete presentation and 9 explanation of the situation. 10 I don't have any questions. It's very clear. 11 So what I'd like to do now is begin the public 12 testimony portion of this hearing. I'm going to do this 13 in two phases. First we're going to get the witnesses, if 14 any, that are here in Sacramento and wish to testify. And 15 then we will move to find out whether there are persons on 16 the telephone that also wish to provide testimony. 17 So are there witnesses here in Sacramento? 18 BOARD CLERK ANDREONI: Yes. Just a moment. 19 Okay. 20 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Okay. We 21 have two witnesses signed up. The first is Mike Ingham of 22 ChevronTexaco. And Gordon Schremp of the California 23 Energy Commission. 24 Mike, would you please state your name for the 25 record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 MR. INGHAM: Good morning. Thank you. 2 My name is Mike Ingham, I work for ChevronTexaco 3 Products Company. And I'm here this morning to speak on 4 behalf of ChevronTexaco. 5 Let me begin by thanking the staff and the Board 6 for recognizing the significant challenge that Chevron 7 faces in gearing up to meet the new diesel lubricity 8 requirement. 9 Up until October we were proceeding on the 10 assumption that we would be able to continue injecting 11 diesel lubricity additive at our two California 12 refineries, as we have done for more than ten years now. 13 The new reality is that we will not be able to 14 continue that practice and will instead have to modify our 15 terminals to enable lubricity additive injection. 16 ChevronTexaco has 11 terminals in California from 17 which we supply diesel fuel. Each of those terminals 18 needs to be fitted with additive injection facilities. We 19 have ordered the necessary equipment and we have begun the 20 engineering and the permitting activities. 21 Under the best of circumstances, we estimate it 22 will require at least the first quarter of 2005 to design, 23 permit, install, and commission lubricity additive 24 injection capability in our terminals. 25 ChevronTexaco strongly supports the proposed 120 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 day delay in the lubricity requirement implementation 2 date. 3 I'd be happy to answer any questions that you 4 might have. 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Thank you. 6 I don't have any additional questions. 7 Staff, do you have any questions? 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Thank you. 9 Mr. Schremp. 10 MR. SCHREMP: Thank you, Mr. Scheible. My name 11 is Gordon Schremp. I'm a Senior Fuel Specialist in the 12 Fuels Office of the California Energy Commission. 13 This morning I am here today to address comments 14 to Mr. Scheible and the other ARB members. My comments 15 represent the findings of the staff of the Fuels Office. 16 And I'll start my comments now, and they'll be brief. 17 I'd be happy to answer any questions you may have 18 following my comments. 19 Staff of the Fuels Office agrees with the 20 findings, conclusions, and the recommendations of the Air 21 Resources Board staff on this matter. We believe a delay 22 is necessary to avoid diesel fuel supply disruptions. So 23 we completely agree with what's been presented here today 24 and the recommendation. 25 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Okay. Thank PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 you, Gordon. 2 Any questions from staff? 3 Okay. Thank you. 4 MR. SCHREMP: Thank you. 5 That completes the witness list here in 6 Sacramento. I guess I'll ask for -- are there any parties 7 on the phone that wish to provide testimony to us? 8 MR. LIVINGSTON: Yes. My name's Tom Livingston 9 from Bosch in Farmington Hills, Michigan. And 10 unfortunately a comment I sent was about one minute late 11 in being received in California. But I'd like to ask that 12 to be admitted to the record please. I sent that to 13 Cherie. 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I don't 15 believe there's a problem with that, because we -- our 16 comment period goes to noon today, the written comment. 17 MR. LIVINGSTON: Well, thank you. 18 SENIOR STAFF COUNSEL JENNINGS: Yeah, I think the 19 issue was the written comments were asked to be received 20 by noon yesterday or at the hearing. So by speaking at 21 this time, they will introduce it at the hearing. 22 MR. LIVINGSTON: I don't have a great deal to 23 comment, only in that we, as a diesel fuel injection 24 manufacturer, are concerned about delaying this back any 25 further. And although some of the points I had asked, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 obviously you had -- one point was made, your state has 2 been using pipelines to deliver and transport diesel using 3 diesel lubricity additive. And do you have any experience 4 with that? Well, apparently you did have two occasions in 5 the last ten years, from what I hear in the testimony 6 today. And that kind of answers that question. 7 But I guess I wonder how badly -- how much of 8 that's treated and is that a realistic problem that you 9 can expect in the future at the current levels of 10 additization? That was one question. 11 And, secondly, I guess both -- the major point 12 I'd like to make to the people present is -- Cherie is 13 correct. ASTM is now currently adjudicating and going 14 through their process to try and pass their year delay in 15 this. 16 And I guess I would ask that if -- with ASTM's 17 process, if it comes back that the experts in that field 18 judge that it is not with merit to delay it another year, 19 that this Board would then take that into consideration in 20 their own rulemaking process and put quite a bit of 21 credence on that. 22 Now, again, that's not yet decided It won't be 23 decided till December. So that jury is still out. But I 24 think from the point of view of an equipment manufacturer, 25 we certainly would oppose any additional delay in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 requirement for the spec. And it sounds to me as if the 2 State of California has decided to delay an enforcement of 3 it as well, if I understood it correctly. And maybe that 4 would be enough for the parties involved who are having 5 real difficulty meeting this to get their processes in 6 place and make it happen. 7 And that's basically all I have to say. 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Okay. Just 9 to respond a little. Our proposal is to delay the 10 application or our requirement for 120 days, and then it 11 would go into place. We continue to desire to have the 12 lubricity standard apply. But given the situation that 13 the pipeline operator will not accept fuel that has 14 contained greater than historical levels of lubricity 15 additives, we feel the only way we could implement the reg 16 is to provide sufficient time for the necessary equipment 17 to be installed at terminals. 18 And we would have to go see in the future if 19 other actions have some impact and consider that through 20 the normal regulatory process. But we are not considering 21 a delay of a year in the actual application of the 22 lubricity standard. 23 Is that correct, staff? 24 SENIOR STAFF COUNSEL JENNINGS: That's correct. 25 MR. LIVINGSTON: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Any questions 2 of this witness by staff? 3 Okay. Are there other parties on the phone that 4 would like to testify? 5 Hearing none. 6 I will now move to the next step. 7 We have a number of written comments. And at 8 this time I'd like the staff to identify those so it's 9 clear to all parties what we have received and what we 10 haven't received. 11 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION 12 CHIEF SIMEROTH: Mr. Scheible, we received a letter from 13 an oil refining company. They're supporting the delay for 14 the 120 days. They also provided additional information 15 on why they seeking that. 16 We received the aforementioned comment from Bosch 17 as well. 18 We also received a written comment E-mail from 19 Mike Ingham of ChevronTexaco. And you heard his position 20 earlier. 21 We also received a letter from Western States 22 Petroleum Association also supporting the delay. 23 The Engine Manufactures Association submitted a 24 letter asking that we not do this delay. However, they 25 felt if it is needed, then it should be no more than 120 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 days. 2 And I think that covers all the written 3 submittals. 4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Thank you, 5 Mr. Simeroth. 6 At this time, I'd like to close the record. And 7 based on the record and the testimony, I will review all 8 of that. And the staff will be making a recommendation to 9 our executive officer on this matter. And we will 10 probably be doing that in the fairly near future since we 11 need to complete the action in time for it to take effect 12 prior to January 1st. 13 Based what I've heard to date, it's fairly likely 14 that the recommendation will be to act as the staff has 15 recommended. We will then submit that to the Office of 16 Administrative Law. And if I understand it correctly, 17 they have a ten-day period of review. And if we gain 18 their approval, it will go into effect after that. 19 I'd like to thank all the witnesses for their 20 time and comments. I'd like to especially thank the 21 staff, who worked hard to pull together this hearing on 22 short notice and on a day when many of us would rather be 23 doing something other than business. But business has to 24 be done first. 25 So thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 And at this time I'll close the hearing, unless 2 counsel advises me I need to comment on something else. 3 SENIOR STAFF COUNSEL JENNINGS: You could 4 indicate that we're now closing the record. 5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Okay. And as 6 I said, the record is now closed. And only comments 7 received by this time will be considered in the matter. 8 And thank you all. 9 (Thereupon the California Air Resources Board 10 meeting adjourned at 9:32 a.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 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 29th day of November, 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