BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY CENTRAL VALLEY AUDITORIUM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, DECEMBER 9, 2004 9:00 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Dr. Alan Lloyd, Chairperson Ms. Sandra Berg Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Mr. Henry Gong, Jr., M.D. Mr. Ronald O. Loveridge Supervisor Barbara Patrick Ms. Patricia Salas Pineda Mrs. Barbara Riordan STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Ms. Diane Johnston, General Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Tschogl, Ombudsman Ms. Catherine Witherspoon, Executive Officer Ms. Lori Andreoni, Board Secretary Mr. Richard Bode, Health and Exposure Assessment Branch Mr. Bart Croes, Chief, Research Division Ms. Monique Davis, Air Resources Engineer, Stationary Source Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. Scott Fruin, Research Division Ms. Barbara Fry, Chief, Measures Assessment Branch Ms. Cynthia Garcia, Population Studies Section, Research Division Ms. Renee Kemena, Manager, Planning and Regulatory Development Section Mr. Earl Landberg, Air Pollution Specialist, Planning and Regulatory Development Section Mr. Jeff Lowry, Staff Air Pollution Specialist, Off-Road Controls Section, MSCD Mr. Floyd Vergara, Staff Counsel Dr. Barbara Weller, Manager, Population Studies Section ALSO PRESENT Mr. Don Anair, Union of Concerned Scientists Ms. Diane Bailey, NRDC Mr. Ed Benton, Redwood Rubber Mr. Tom Faust, Redwood Rubber Mr. Clay Hinkie, IEA Ms. Bonnie Holmes-Gen, American Lung Association Mr. Don Keski-Hynnila, Detroit Diesel Corporation Ms. Barbara Kanegsberg, Plasma Technologies, Inc./International Thermal Spray Association Mr. Joseph Kubsh, MECA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED ALSO PRESENT Mr. Darryl Mack, UC Davis Mr. Jed Mandel, EMA Mr. Steve Norris, Plsama Technologies, Inc. Ms. Kathryn Phillips, Environmental Defense Mr. David Piech, International Truck Mr. James Unmack, Unmack Corp. Environmental Health and Safety Mr. Larry Sherwood, Sacramento AQMD & CAPCOA Mr. Richard Smith, San Diego APCD Ms. Gayle Sweigert, Manager, Air Quality Data Branch, PTSD Ms. Diane Takvorian, Environmental Health Coalition Ms. Jane Williams, California Communities Against Toxics Ms. Stephanie Williams, CTA Ms. Deborah Whitman, Private Citizen Mr. Paul Wuebben, South Coast AQMD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v INDEX PAGE Pledge of Allegiance 1 Roll Call 1 Opening Remarks 2 Item 04-11-1 Chairperson Lloyd 3 Executive Officer Witherspoon 4 Staff Presentation 4 Q&A 10 Item 04-11-2 Chairperson Lloyd 17 Executive Officer Witherspoon 18 Staff Presentation 19 Q&A 30 Item 04-11-4 Chairperson Lloyd 41 Executive Officer Witherspoon 41 Staff Presentation 42 Ombudsman Tschogl 63 Q&A 65 Mr. Mandel 68 Mr. Kubsh 97 Item 04-11-5 Chairperson Lloyd 101 Executive Officer Witherspoon 103 Staff Presentation 103 Ms. Williams 114 Mr. Smith 139 Mr. Wuebben 141 Ms. Holmes-Gen 146 Mr. Mandel 150 Mr. Keski-Hynnila 168 Mr. Piech 174 Mr. Sherwood 185 Ms. Bailey 186 Mr. Anair 188 Motion 191 Vote 192 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX CONTINUED Item 04-11-04 Chairperson Lloyd 192 Executive Officer Witherspoon 193 Staff Presentation 195 Ombudsman Tschogl 206 Q&A 208 Mr. Hinkie 215 Mr. Norris 216 Mr. Unmack 230 Ms. Kanesberg 232 Ms. Williams 238 Mr. Mack 242 Ms. Takvorian 245 Motion 252 Vote 254 Item 4-11-6 Chairperson Lloyd 254 Executive Officer Witherspoon 254 Staff Presentation 254 Ms. Whitman 273 Public Comment 281 Adjournment 290 Reporter's Certificate 291 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 CHAIRPERSON LLOYD: Good morning. The December 3 9th, 2004, meeting of the Air Resources Board will now 4 come to order. 5 Ms. Pineda, will you please lead us in the Pledge 6 of Allegiance. 7 BOARD MEMBER PINEDA: Please join me. 8 (Thereupon the Pledge of Allegiance was 9 recited in unison.) 10 CHAIRPERSON LLOYD: Thank you. 11 Will the Clerk of the Board please call the roll. 12 SECRETARY ANDREONI: Ms. Berg? 13 BOARD MEMBER BERG: Present. 14 SECRETARY ANDREONI: Ms. D'Adamo? 15 BOARD MEMBER D'ADAMO: Here. 16 SECRETARY ANDREONI: Supervisor DeSaulnier? 17 SUPERVISOR DeSAULNIER: Here. 18 SECRETARY ANDREONI: Dr. Gong? 19 BOARD MEMBER GONG: Here. 20 SECRETARY ANDREONI: Ms. Kennard? 21 Supervisor Patrick? 22 SUPERVISOR PATRICK: Here. 23 SECRETARY ANDREONI: Ms. Riordan? 24 BOARD MEMBER RIORDAN: Here. 25 SECRETARY ANDREONI: Supervisor Roberts? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 Ms. Pineda? 2 BOARD MEMBER PINEDA: Here. 3 SECRETARY ANDREONI: Mayor Loveridge? 4 BOARD MEMBER LOVERIDGE: Here. 5 SECRETARY ANDREONI: Chairman Lloyd? 6 CHAIRPERSON LLOYD: Here. 7 Before we start today, I would just like to state 8 that there are a number of rumors out there has been 9 announced a replacement for Secretary Tamminen. There has 10 been no announcement from the Governor's office at this 11 time. So I want to allay any rumors to that effect. We 12 will wait in due course for the official announcement to 13 come out from the Governor's office. 14 I'd also like to say yesterday we had a very 15 successful meeting of the Hydrogen Highway Network. I'd 16 like to thank all the people who participated in that, 17 particularly the ARB staff. 18 Just to inform the Board, the process there is 19 now the panel has come up with its final report -- very 20 close to final report. There was a final panel meeting. 21 And so it will be submitted to the Governor and the 22 Legislature to move ahead in conjunction in response to 23 the Executive Order to provide a hydrogen highway network 24 throughout California, which sets us on a path to reduce 25 petroleum dependency, et cetera. This clearly is not a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 short-term thing. It's a longer-term effort. 2 But I was delighted yesterday that the 3 representatives from basically all over the world who came 4 to advise us on that. And they recognize that California 5 is in the leadership role, with the Governor setting the 6 pace and Secretary Tamminen. So I'm very encouraged with 7 the progress. A lot of effort to come, a lot of 8 challenges. But we don't see any show-stoppers there. So 9 I just want to keep you informed. And maybe after the 10 report is submitted to the Governor, maybe we could have 11 staff present that to the Board to get an update there. 12 So with that, I don't know if any of my 13 colleagues want to make any statements at this time. 14 Seeing none, we will move ahead to the first 15 agenda item. I'd like to remind anyone in the audience 16 who wishes to testify on today's agenda items to please 17 sign up with the Clerk of the Board. Also, if you've a 18 written statement, please provide 30 copies to the Board 19 Clerk. 20 The first item on the agenda is 4-11-1, Monthly 21 Informational Health Update. Today's health update is on 22 recently published findings from the East Bay 23 San Francisco Children's Respiratory Health Study, which 24 examined the effect of traffic on children's health. 25 With that, I'd like to turn it over to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 Ms. Witherspoon to introduce the staff presentation. 2 EXECUTIVE OFFICER WITHERSPOON: Good morning, 3 Chairman Lloyd and members of the Board. 4 Children are one of our most sensitive 5 populations. The East Bay Children's Respiratory Health 6 Study is one of the first in the United States to look at 7 the effects of traffic-related pollutants on children's 8 health. The study shows an association between 9 traffic-related pollution and respiratory symptoms in 10 children attending schools located near major roads. 11 This study provided support for Senator Escutia's 12 Bill, SB 352, that prohibits the approval of new school 13 siting within 500 feet from the edge of the closest 14 traffic lane of a freeway or other busy traffic corridor. 15 In addition, the population of children in this study are 16 from ethically diverse families. And about 31 percent of 17 the families have incomes at or below the federal poverty 18 level, making this a particularly vulnerable population. 19 Ms. Cynthia Garcia will make today's 20 presentation. Cynthia. 21 (Thereupon an overhead presentation was 22 presented as follows.) 23 MS. GARCIA: Thank you, Ms. Witherspoon. And 24 good morning, Chairman Lloyd and members of the Board. 25 Today's health update will discuss a study by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 Office of Environmental Health Hazard Assessment titled, 2 "The East Bay Children's Respiratory Health Study: 3 Traffic-Related Air Pollution Near Busy Roads." This 4 study was designed to explore the association between 5 respiratory symptoms and exposures to traffic-related air 6 pollutants among children living and attending schools 7 near busy roads. The children in the study were 8 economically disadvantaged and may be more susceptible to 9 adverse health impacts from air pollution exposure. 10 --o0o-- 11 MS. GARCIA: There is a growing body of 12 literature that links traffic air pollution exposure to 13 respiratory health in children. These studies have been 14 done mostly in the Netherlands and the United Kingdom. 15 Most of the studies have used ambient monitors which 16 typically do not directly measure impacts of traffic or 17 have used surrogates of exposure to traffic, such as 18 residential proximity and traffic volume. Very few have 19 measured direct emitted traffic pollutants, such as black 20 carbon, nitric oxide, carbon monoxide, and particulate 21 matter. 22 In addition, it is unknown how well these studies 23 can be extrapolated to the U.S. population since vehicle 24 and population factors may differ. Therefore, there is a 25 need to develop and test accurate measures of traffic, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 its association to respiratory health in California. 2 --o0o-- 3 MS. GARCIA: This study was conducted as a 4 school-based cross-sectional study in Alameda County in 5 2001, and recruited a total of 1,109 students between 3rd 6 and 5th grades. The study area was comprised of ten 7 neighborhoods. School sites were selected to represent a 8 range of locations upwind and downwind from major roads. 9 In addition, schools were selected to have similar 10 demographic characteristics, such as race, ethnicity, and 11 indicators of socioeconomic status so that the affects of 12 traffic exposures would not be masked or confounded by 13 these factors. 14 The investigators obtained information on 15 bronchitis symptoms and asthma, demographics, home 16 environmental factors, and activity factors using parental 17 questionnaires in English and Spanish. 18 This study measured concentrations of traffic 19 pollutants at schools, including PM10, PM2.5, total 20 nitrogen oxides, nitrogen dioxide, nitric oxide, and black 21 carbon. The investigators assumed that traffic-related 22 pollutants measured at the neighborhood schools would be a 23 good proxy for the children's overall exposure to these 24 pollutants. This study was done in a region with 25 relatively moderate regional pollution levels, which made PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 it possible to look at the impacts of pollution related to 2 nearby traffic. 3 --o0o-- 4 MS. GARCIA: The study population was ethnically 5 diverse. In addition, the study population was of lower 6 socioeconomic status, which may contribute to their 7 susceptibility to pollutant effects due to the lack of 8 access to health care, poor housing characteristics, and 9 poor nutrition. Thirty-one percent of the households 10 reported household incomes below the federal poverty line. 11 And 49 percent of the parents had a high school education 12 or less. 13 This map illustrates the study area and the 14 location of the schools in relation to major roads with 15 the traffic counts for both car and truck traffic. 16 --o0o-- 17 MS. GARCIA: The Bay Area has strong prevailing 18 winds, and this study found that downwind direction and 19 proximity to major roads was an important determinant of 20 increased exposure to traffic pollutants. This study 21 found higher concentrations of black carbon, NOx, and NO 22 at schools located downwind from freeways, as compared 23 with those schools upwind or further from major road 24 traffic sources. 25 For children residing at their current address PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 for at least one year, investigators found a modest but 2 significant increase of 5 to 8 percent in bronchitis 3 symptoms and asthma symptoms in children in neighborhoods 4 with a higher concentration of traffic pollutants. 5 The higher effect estimates found with black 6 carbon, NOx, and NO suggest that fresh traffic emissions 7 may play a role in the increased respiratory symptoms seen 8 in this study. Although these pollutants may serve as 9 indicators of exposure to traffic-related pollutant 10 mixtures, they may also act as causal agents themselves. 11 The concentration of NOx, NO, and black carbon were highly 12 correlated. However, the relative effects of diesel truck 13 traffic versus total vehicle traffic could not be studied. 14 ARB is supporting a new analysis of the East Bay 15 study data to improve exposure estimates and better 16 characterize association between respiratory health and 17 traffic pollutant exposure. Measurements of personal 18 exposure to traffic pollutants are not feasible in large 19 population-based studies. Therefore, the new study funded 20 by the ARB will use a combination of geographic modeling 21 approaches together with ambient monitoring data of NOx 22 and NO2 within the neighborhoods to estimate children's 23 total exposure, including both school and residential 24 exposure. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 MS. GARCIA: The findings from the East Bay 2 Children's Study agree with the results from California 3 Exposure Studies, including the ARB-funded study from the 4 Southern California Particle Center and Supersite. The 5 graph demonstrates that very high levels of black carbon 6 next to freeways in Los Angeles drop rapidly to background 7 levels within 150 meters for both the 405 freeway, with 8 less than 5 percent trucks, and the 710 freeway, with more 9 than 25 percent trucks. 10 --o0o-- 11 MS. GARCIA: The findings from the study are 12 consistent with previous investigations in Europe. The 13 results of this study helped support the passage of the 14 School Siting Bill authored by Senator Martha Escutia in 15 2003. This bill amends the Education Code to ensure that 16 new school sites are prohibited within 500 feet from the 17 edge of the closest traffic lane of a freeway or other 18 busy traffic corridors. This bill acknowledges that 19 setbacks from freeways are beneficial for children's 20 health. 21 In addition, the results from the East Bay 22 Children's Respiratory Health Study support the need for 23 additional measures that reduce emissions and exposures to 24 traffic air pollution in order to improve children's 25 health. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 --o0o-- 2 MS. GARCIA: This concludes my presentation. I 3 will be happy to answer any questions. 4 CHAIRPERSON LLOYD: Thank you. 5 Dr. Gong. 6 BOARD MEMBER GONG: I wanted to thank you very 7 much for that interesting summary. I think that this is 8 an important study -- initial study from OEHHA regarding 9 children's respiratory health. A very straightforward 10 study looking at two important symptoms. 11 And, as usual, as a scientist, I'd say I'd 12 redesign the study and say they should have also looked at 13 the traffic profile, as you mentioned, about whether or 14 not they're diesel trucks, et cetera. I would assume 15 there are. Your second slide shows a picture of the 16 traffic there. I guess that's from that same corridor, I 17 assume. So there's certainly trucks there. So I assume 18 there's lots of diesel floating around as well. 19 Also, I would have been very interested to know 20 about school absences. With these children having these 21 symptoms, theoretically there should be an increase in 22 school absences for respiratory reasons. And that's been 23 done in Southern California, as you probably know. 24 One corollary question I have is, in the picture, 25 there are these barriers alongside the freeway. And I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 know in Southern California these barriers can be that 2 short or low, but also very high. And I guess they're for 3 sound protection for the community. And I was just 4 wondering is there any data regarding how effective these 5 barriers might protect against particles from getting from 6 the freeway to the community? Is there any data? 7 RESEARCH DIVISION CHIEF CROES: This is Bart 8 Croes, Chief of the Research Division. 9 There was a study done by Caltrans of the affect 10 of the sound barriers on reducing CO concentrations. 11 That's a 25-year-old study when the sound barriers were 12 lower. 13 We are going through an annual research 14 solicitation process right now. One of the submitted 15 ideas is to investigate this issue for particulate matter 16 with current height and sound barriers. 17 BOARD MEMBER GONG: Theoretically, it might even 18 increase the concentration of particles on the freeway. 19 RESEARCH DIVISION CHIEF CROES: That's certainly 20 possible. And something that the study would look into, 21 both the concentrations at the shoulder as well as on the 22 other side of the barrier. 23 BOARD MEMBER GONG: Fascinating. Thank you. 24 CHAIRPERSON LLOYD: Thank you. 25 Sandra. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 BOARD MEMBER BERG: Do we have any data on how 2 many schools on the 710 or the 405 or on the freeway, that 3 we were doing the study, that are within 500 feet? 4 POPULATION STUDIES SECTION MANAGER WELLER: In 5 this particular study, or just all of the schools within 6 California that are within 150 feet? There are 173 7 schools within California that are located 150 feet from a 8 major traffic freeway -- meters. I'm sorry. 9 One-hundred-fifty meters from the major traffic, 10 California wide. 11 CHAIRPERSON LLOYD: Thank you. 12 Supervisor DeSaulnier. 13 SUPERVISOR DeSAULNIER: I just want to thank 14 staff. I think it's terrific this work we're doing, not 15 just in the East Bay, but the Fresno Asthma Study and 16 other studies related to children's health. And I hope -- 17 not to be redundant, but I hope we're communicating with, 18 certainly, the Alameda County Health Department about 19 these findings. And I mentioned before, our Health 20 Department is in the process of doing an asthma study in 21 the northern end of this corridor. 22 And then, lastly, just given we just had a 23 conference in the Bay Area about good movements -- and 24 it's related to the Doctor's comments. As we look at this 25 corridor coming away from the Port of Oakland and look at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 from a transportation standpoint. But also related to 2 this, moving some of the goods into the valley more on 3 rail, it will be interesting to see how those efficiencies 4 from a transportation standpoint also might relate to 5 improved health benefits for everyone in those corridors. 6 Just as an observation, not like the Port of Long 7 Beach and Los Angeles and San Diego, I assume the whole 8 issue of greater imports and as these ports get more and 9 busier and busier and the neighborhoods around them 10 transition from industrial to more warehouse space and the 11 goods movement goes further and further away, those 12 traffic-related infrastructures, I assume, will also 13 relate to the health impacts of the neighborhoods. So as 14 we go through this, it would be nice to have those sort of 15 impacts correlated. 16 Thank you, Mr. Chairman. 17 You look bored, Catherine. 18 EXECUTIVE OFFICER WITHERSPOON: I was nodding in 19 agreement. 20 SUPERVISOR DeSAULNIER: I just thought it was me. 21 CHAIRPERSON LLOYD: Mayor Loveridge and Ms. 22 Pineda. 23 BOARD MEMBER LOVERIDGE: Sort of related, but 24 somewhat different focus. Driving to San Diego a couple 25 weeks ago, I was struck by the proximity, the closeness of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 the new tracts being approved -- housing tracts right next 2 to freeways. Not old decisions. These are current 3 decisions being made by Boards of Supervisors and City 4 Councils. If it has affects on kids at school, which 5 ostensibly spend some time inside classrooms with frequent 6 air conditioning and so forth, it seems to me that the 7 question of almost more importance is, what does it mean 8 to live 24 hours a day next to freeways? 9 And I say this -- I know we don't want to 10 interfere with the land use decisions the locals made, but 11 it seems to me from the information that's here, we need 12 to understand the relationship between living near a 13 freeway and potential health effects. And without that 14 information, we're going to continue to make decisions 15 that place people at risk next to freeways. Might not 16 change what we do, but I think we need to have information 17 that's here in forms that are not simply studies, but 18 offering at least health judgments that we can make as we 19 consider land use choices. 20 POLLUTION STUDIES SECTION MANAGER WELLER: One of 21 the things that the follow-on study is going to do is to 22 look at the exposures of the kids in their homes as well 23 as the schools so they can try to get some correlation of 24 the total exposure and, you know, living near heavy 25 traffic versus going to school near heavy traffic and how PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 both of those play into exposure for children. 2 BOARD MEMBER LOVERIDGE: I guess my plea is, at 3 some point this information needs to go from inside here 4 to outside to local decision-makers with the City Councils 5 and Boards of Supervisors. 6 EXECUTIVE OFFICER WITHERSPOON: Mayor Loveridge, 7 we're also working on a land use policy guidance document, 8 which would convey to local governments what we know about 9 freeways and their affect on public health and other 10 source categories which cause a risk to adjacent 11 populations. We've been through years of development of 12 that document, and it will probably be before the Board 13 next spring. 14 BOARD MEMBER LOVERIDGE: The only other point is 15 that a fellow named Art Weiner is a major research 16 scientist, who has done a lot of work in this area, has a 17 major essay in SKAGGS, the state of the region, which 18 centers on the effects of people living near freeways. 19 And this particular document gets wide circulation in 20 Southern California. 21 CHAIRPERSON LLOYD: Maybe we can get a copy. 22 That would be great. Thank you. 23 BOARD MEMBER PINEDA: I was going to raise an 24 issue that Mayor Loveridge raised, which I think he raised 25 more effectively than perhaps I could have. So thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Another point that I wanted to raise is that you 2 mentioned that you chose a site where there were low 3 levels of regional pollution. Is there any point in now 4 taking the study to the next step where you actually go to 5 a site where there are high levels of regional pollution 6 to see what the compounding effect would be? 7 POLLUTION STUDIES SECTION MANAGER WELLER: Well, 8 you can, actually. We do have a study a proposal to look 9 at traffic and affects on children in L.A. that is going 10 to go to our Research Screening Committee within the next 11 couple of days. And that would look at the effects of 12 traffic on children in areas of low socioeconomic status. 13 So, again, similar to this study in bringing in the 14 socioeconomic effects of the children that may make them 15 more vulnerable as well as the traffic effects. 16 BOARD MEMBER PINEDA: Thank you. 17 EXECUTIVE OFFICER WITHERSPOON: I was going to 18 say we've also collaborated with the South Coast Air 19 Quality Management District on their MATES studies, MATES 20 I, MATES II, MATES III, which is an attempt to 21 characterize maximum risk values in Southern California 22 and then to apportion them. It's where the data came from 23 that said 70 percent of statewide risk is diesel related. 24 So we certainly have information about peak concentrations 25 with them teasing back out in proximity to what and where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 it is all coming from. That's been the challenge. 2 BOARD MEMBER BERG: I just have a follow-up 3 question for the Mayor. I think you brought up a great 4 point about passing down the information. But is there a 5 disclosure requirement to disclose to the people that are 6 buying new homes along the freeway on the health effects? 7 BOARD MEMBER LOVERIDGE: No. They only do it for 8 airports. They don't do it for freeways. 9 CHAIRPERSON LLOYD: I think it's significant also 10 if you look at the slide here when we talk comparison 11 between the 405 freeway and the 710 in L.A., they bottom 12 out at very different levels. So the 710 which is 13 saturated with trucks is much higher. 14 So I think it gets back to also Mayor Loveridge's 15 comment and Supervisor DeSaulnier's comment that as we get 16 more and more traffic coming from the ports, we can maybe 17 expect to see this and how it might raise the regional 18 levels. And I don't know whether -- we clearly go out to 19 300 meters. I don't know at what point that really drops 20 off. Clearly, it can get into the overall regional thing. 21 But there's still a difference. So if you're living in 22 the region surrounding the 710, obviously that's going to 23 be much worse than around the 405. Thank you very much. 24 We now move on to the next Agenda Item, 04-11-2, 25 recent in-vehicle measurement studies and the importance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 of in-vehicle exposures. Much of the Air Resources 2 Board's focus is on reducing emissions and meeting ambient 3 air quality standards. However, we are also concerned 4 about human exposure, especially when those exposures may 5 be greater than ambient air monitors indicate. 6 As this item will describe, for pollutants such 7 as diesel particulate, the majority of the person's 8 overall exposure may occur during the time spent in 9 vehicles. Therefore, our agency's success in reducing 10 on-road emissions from vehicle emissions has double 11 benefits, both cleaner ambient air as well as reducing 12 in-vehicle exposures. And, again, this is an area where 13 some of the more modern cars have filters and the intakes 14 obviously have a tremendous benefit for the occupant. 15 Vice versa also, those people who maybe can't afford some 16 of those have both exposed higher concentration and don't 17 have the benefit of some of the air scrubbers. 18 So with that, I'd like to turn it over to 19 Ms. Witherspoon to begin the presentation. 20 EXECUTIVE OFFICER WITHERSPOON: Thank you, 21 Chairman Lloyd. 22 As we discussed during last month's Board 23 meeting, particulate matter plays a critical role in the 24 adverse health effects California citizens experience from 25 air pollution. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 Ultrafine particles are especially harmful 2 because of their high surface area, penetration deep into 3 the lungs, and their ability to penetrate cell membranes. 4 Mobile sources are an important source of 5 ultrafine particles, and as we are increasingly learning, 6 play a big role in daily exposures. 7 As Dr. Lloyd indicated, we are not only exposed 8 to the tailpipe emissions from motor vehicles as we go 9 about our daily lives, we are also exposed to concentrated 10 levels of these pollutants as we travel inside motor 11 vehicles. Dr. Scott Fruin from the Health and Exposure 12 Assessment Branch in the Research Division has studied the 13 issue of in-vehicle exposures for several years and worked 14 on both of the studies that he will be presenting today. 15 Dr. Fruin. 16 (Thereupon an overhead presentation was 17 presented as follows.) 18 DR. FRUIN: Good morning, Chairman Lloyd and 19 members of the Board. My talk today will discuss 20 exposures to air pollution that we receive in vehicles and 21 how these contribute to overall exposures. For vehicle 22 related pollutants, such as diesel PM, this contribution 23 is quite significant, although we do not frequently 24 measure it. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 DR. FRUIN: First, I will provide an overview of 2 in-vehicle exposure findings and demonstrate not only how 3 significant they are, but also why they are so high. 4 Next, I will briefly discuss several in-vehicle studies 5 conducted in California and their use in estimating 6 in-vehicle exposures. Finally, I will summarize the 7 implications of these studies, including what they tell us 8 about exposure reduction potential and our progress. 9 --o0o-- 10 DR. FRUIN: Vehicles are not built to be air 11 tight. The pressure changes on a moving vehicle can lead 12 to dozens of air exchanges per hour, even if windows are 13 closed. By comparison, a home typically only has one or 14 two air exchanges per hour. 15 Another major aspect of in-vehicle exposures is 16 roadway concentrations of vehicle-related pollutants are 17 typically several times higher than ambient 18 concentrations. Furthermore, concentrations at the center 19 line of the road are highest and can be several times 20 higher, again, than the concentrations on the side of the 21 road. It is these centerline concentrations that reflect 22 the air getting into your vehicle. 23 For example, using results from the ARB-sponsored 24 study in Sacramento and L.A. in late 1997, aromatic 25 compounds like Benzene were four to eight times higher PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 inside vehicles than in ambient air. For vehicle-related 2 pollutants that have no evaporative component, the 3 in-vehicle ambient ratio is often higher. For example, 4 diesel PM concentrations inside vehicles are believed to 5 be 5 to 15 times higher than ambient based on black carbon 6 measurements. Compounds with short atmospheric lifetimes 7 appear to have the highest concentration ratios, such as 8 1,3 Butadiene. 9 --o0o-- 10 DR. FRUIN: These high vehicle concentrations 11 contribute a lot to a person's overall exposure. On 12 average, Californians spend about 90 minutes per day in 13 vehicles. This is about 6 percent of a 24-hour day. But 14 for a compound with multiple sources like Benzene, the 15 in-vehicle fraction of total exposure is 15 to 20 percent. 16 For pollutants like diesel PM, the fraction is 30 to 55 17 percent. Finally, the fraction for shorter-lived 18 pollutants, such as 1,3 Butadiene or ultrafine particles 19 may be even higher. Therefore, although we only spend 6 20 percent of our day driving, we get up to half of our 21 exposures to vehicle-related pollutants during that time. 22 --o0o-- 23 DR. FRUIN: These high fractions of overall 24 exposure can be demonstrated from the ARB-sponsored study 25 of 1997. This study was conducted by the Research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 Triangle Institute and was one of the first studies to use 2 real-time instruments to measure diesel-related pollutant 3 concentrations inside vehicles. 4 Real-time black carbon was measured, which is a 5 sensitive indicator of diesel PM. Although it is not an 6 unambiguous marker for diesel PM in ambient air, it is on 7 roadways because diesel vehicles are by far the dominant 8 source. 9 The study focused on following diesel vehicles 10 where possible. We call this a chase study. In order to 11 use the study results to estimate actual diesel PM 12 concentrations during typical driving, the black carbon 13 measurements had to be disaggregated into components and 14 reconstructed statistically. 15 --o0o-- 16 DR. FRUIN: Turns out the dominant factor 17 affecting in-vehicle black carbon in the study was the 18 type of vehicle followed. Impacts varied by more than two 19 orders of magnitude. Roadway backgrounds were about five 20 micrograms per cubic meter, several time higher than urban 21 background. On average, gasoline-powered passenger cars 22 had no black carbon contribution. However, if a 23 gasoline-powered car showed visible smoke, it generated 24 similar black carbon impacts as a diesel-powered car, 25 although this was fairly rare. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 The physical configuration of the vehicle and the 2 location of the exhaust was also an important factor. For 3 example, vehicles with exhaust close to the ground at the 4 back of the vehicle, such as diesel passenger cars, caused 5 higher in-vehicle black carbon than tractor-trailer big 6 rigs, which have the exhaust located high and at the front 7 end of the vehicle. 8 A direct comparison of exhaust effects can be 9 seen by comparing the different impacts of exhaust height 10 for the transit buses as shown in red. 11 --o0o-- 12 DR. FRUIN: Most people will not purposely follow 13 a diesel vehicle if they have a choice. To correct for 14 following diesel vehicles more often than what would be 15 typical, the data was disaggregated by type of vehicle 16 followed under various road and congestion conditions. 17 They were then randomly sampled and reconstructed using 18 representative fractions of time spent driving under those 19 conditions. For congested areas such as Los Angeles or 20 the Bay Area, diesel particulate matter concentrations of 21 11 to 33 micrograms per cubic meter were derived. Smaller 22 cities such as Sacramento had about half of these 23 concentrations. 24 The concentrations from simulating realistic 25 driving were only about a third of the chase study PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 concentrations, but were still 5 to 15 times higher than 2 ambient. When diesel PM concentrations and other micro 3 environment were added to the analysis and combined with 4 studies of where people spend their time, the in-vehicle 5 exposures appeared to contribute from 30 to 55 percent of 6 total exposure. At 6 percent of your day, the time spent 7 in vehicles is obviously the most important route of 8 diesel PM exposure on a per time basis. 9 --o0o-- 10 DR. FRUIN: One interesting implication of these 11 results is that on-road emissions are much more affective 12 at producing exposures than off-road emissions. This is 13 because the majority of diesel PM emissions occur off 14 road, but contribute little to exposures compared to 15 on-road emissions. Reducing a given mass of on-road 16 emissions produces two to five times the health benefits 17 than an equal reduction in off-road emissions would 18 produce. 19 --o0o-- 20 DR. FRUIN: The next study was carried out in 21 Los Angeles in 2003 by staff in the Research Division, 22 including Dane Westerdahl and myself. We followed the 23 route shown. This included freeway driving on the 710 to 24 Long Beach, known for its high truck traffic from the 25 port, as well as the 110 freeway north to Pasadena, with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 almost no diesel traffic on its northern portion. The 2 pollutants listed on the right were all measured 3 continuously during these runs. 4 --o0o-- 5 DR. FRUIN: Here are typical concentrations 6 during the 75-mile long route, which took just over two 7 hours. You can see that high correspondence between 8 ultrafine particle counts, black carbon, and NO. The 9 first peak on the left corresponds to getting on the 110 10 freeway near the USC campus. 11 The area of highest concentrations on the left 12 correspond to the time on the 710 south freeway, followed 13 by a short drop immediately upon existing the freeway in 14 Long Beach. 15 The region of low concentrations occurred during 16 parking on residential street. 17 The next rise corresponds to the trip back, 18 including time on the 110, the freeway with light truck 19 traffic. The time parked on a Pasadena side street is the 20 next low point. 21 Overall, the pollutant concentrations between 22 freeway and low traffic residential areas reflected about 23 a 100-fold difference. Some of the concentration spikes 24 you see represent high emitters. But in this case, 25 driving neither chased nor avoided any particular vehicle. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 --o0o-- 2 DR. FRUIN: Here's a visual example of a 3 high-emitting diesel vehicle almost obscured by smoke in 4 front of the diesel truck on the right. This produced 5 very high black carbon and PM mass, but only a moderately 6 high ultrafine particle count. 7 High black carbon or high mass emitters are 8 generally quite visible and contrast to the previous smoky 9 truck. This mid-'80s Ford truck produced no visible 10 emission but was one of the highest emitters of particles 11 observed. These two examples illustrate how different 12 vehicles can be high emitters of different pollutants and 13 that high ultrafine emissions are not visible. 14 --o0o-- 15 DR. FRUIN: Here's another high ultrafine 16 particle emitter. This time a gasoline-powered van. Out 17 of tune and older gasoline-powered vehicles and gasoline 18 vehicles undergoing hard accelerations can also produce 19 high emissions of ultrafine particles. 20 --o0o-- 21 DR. FRUIN: The concentrations listed in this 22 table are from four freeway circuits on four different 23 days. Concentrations of ultrafine particle counts, NO, 24 and black carbon all increase by over an order of 25 magnitude from the residential area of Long Beach at the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 top of the chart to the high truck traffic of the 710 2 freeway. 3 The ultrafine particle concentrations on the 710 4 at 200,000 per cubic centimeter are 200 times greater than 5 inside this CalEPA building. That means 20 minutes on the 6 710 takes nearly three days to equal inside this building. 7 The CO2 increases are also interesting. Long 8 Beach, at 420 parts per million, is not far above the 9 global background of about 375 parts per million, but 10 concentrations increased markedly on all roads, even 11 arterial roads. 12 --o0o-- 13 DR. FRUIN: When ultrafine particle counts are 14 plotted against the annual average daily truck counts made 15 by the California Department of Transportation, Caltrans, 16 the relationship is remarkably linear. Truck volumes and 17 emissions on average appear consistent enough to be 18 predicted by already compiled truck count measures. In 19 contrast, total traffic volumes or traffic conditions such 20 as speed or congestion were much less predictive of 21 ultrafine particle concentration. 22 --o0o-- 23 DR. FRUIN: To estimate the contribution of 24 in-vehicle ultrafine particle concentrations to total 25 exposure, for a typical L.A. resident, we can use the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 following average concentrations and average time spent in 2 various micro environments. For these concentrations, the 3 in-vehicle time contributed 54 percent of total exposure 4 similar to the upper end of the diesel PM estimates. 5 --o0o-- 6 DR. FRUIN: Illustrated another way, the pie 7 chart on the left shows a typical time spent with indoor 8 environments in yellow and in-vehicle environments in 9 gray. The chart on the right shows the dominant role 10 played by in-vehicle time on ultrafine particle exposures. 11 The time you spend on freeways, especially during your 12 commute, and the volume of traffic, truck traffic, will 13 strongly influence in fraction. 14 --o0o-- 15 DR. FRUIN: Besides being important in 16 calculating exposures, on-road measurements are a good way 17 to determine our progress in reducing vehicle emissions. 18 Like tunnel studies, they represent large sample sizes but 19 can also cover large geographic areas. 20 The reductions in gasoline-powered vehicle 21 emissions can be seen when comparing the in-vehicle study 22 of the late '80s by the South Coast AQMD, one of the first 23 in-vehicle studies ever conducted, with the 1997 ARB 24 Study. Here the ambient VOC measurements from the South 25 Coast study in the late '80s matched the in-vehicle VOC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 concentrations in the late '90s. This indicates great 2 progress in cleaning up gasoline-powered vehicles during 3 the 1990s. For diesel related pollutants, results between 4 1997 and 2003 appear more mixed. But we now have good 5 baselines from which to measure future progress when the 6 2007 fuel and diesel vehicle standards begin to take 7 effect. 8 --o0o-- 9 DR. FRUIN: The primary messages from this 10 presentation are the importance of in-vehicle exposures 11 and their large contribution to total exposure for 12 vehicle-related pollutants. The length of your commute 13 and the conditions under which it occurs can strongly 14 affect your exposures. The volume of diesel traffic 15 appears to be a key driver for pollutants like ultrafine 16 particles. In addition, the short-term affects of 17 following particular vehicles can be quite high. 18 --o0o-- 19 DR. FRUIN: Finally, the location of emissions 20 matter. On-road emissions produce greater exposures than 21 off-road and low exhaust location of higher impacts than 22 high exhaust. Therefore, when you consider the 23 contributions of in-vehicle exposures to total exposure, 24 reductions in on-road diesel emissions are by far the most 25 effective way to reduce people's exposure to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 vehicle-related pollutants. 2 --o0o-- 3 DR. FRUIN: As ambient air particulate matter has 4 been linked to increased incidents of heart disease, one 5 area of growing research is investigating the possible 6 links between in-vehicle particle exposures and heart 7 disease. One recent study found an association between 8 being in traffic and greater risk of heart attack in the 9 following hour. Another study found cardiac rhythm 10 changes and blood effects in healthy North Carolina 11 troopers after their shifts. 12 One ARB study proposed for next year will 13 investigate the effect of ultrafine particle exposures on 14 freeway driving on cardiovascular and blood markers. 15 This concludes my presentation, and I'll be happy 16 to answer any questions. 17 CHAIRPERSON LLOYD: Thank you very much. That 18 was a great presentation. 19 Just one clarification before I entertain 20 questions from my colleagues. 21 On the slide you talk about -- slide 15 you talk 22 about truck volume. And just take the Long Beach freeway, 23 the 25,000 trucks a day, and then you've got north/south. 24 Is that 25 total or 25 going each way? 25 DR. FRUIN: That's each direction. So 25,000 per PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 day average. 2 CHAIRPERSON LLOYD: So 50,000. It's about a 3 1,000 an hour -- 2,000 an hour on that. It's just 4 amazing. Thank you. 5 Ms. D'Adamo. 6 BOARD MEMBER D'ADAMO: Thank you for that report. 7 It was very interesting and also pretty frightening. 8 Just a couple of questions regarding -- well, 9 first of all, I haven't spent much time on the 710. Could 10 you compare the emissions in-vehicle on the 710 to a 11 typical freeway elsewhere where it is stop and go, five 12 miles an hour, or waiting in a drive-through where you're 13 just basically idling along with five or ten cars ahead of 14 you? Could you compare the exposures to the highest ones 15 that you noted on the 710? 16 DR. FRUIN: Yeah. I don't think anything can 17 beat the 710, because it has the highest diesel truck 18 traffic volumes. 19 An interesting thing about stop-and-go traffic is 20 if there is any wind, often the emissions will blow past 21 you, particularly big rigs. So you may be getting some 22 fairly low concentrations during congested or stop-and-go 23 conditions, even though our dynamometer studies show that 24 stop-and-go and creep may be the worst emission rates from 25 vehicles. So there is a complicated function between PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 emissions and speed and following distance. 2 But in general, a more congested condition 3 related to heavy truck traffic is the worst condition to 4 be in, and the 710 is probably the worst we can find. 5 BOARD MEMBER D'ADAMO: And then what are the 6 plans with this report regarding outreach? I'm just 7 seeing tremendous possibilities, maybe in conjunction with 8 spare the air campaigns. This would, I hope, give people 9 a further incentive to get out of their cars. 10 DR. FRUIN: Absolutely. I think this is one of 11 the more powerful reasons to support mass transit, and try 12 to shorten the length of your commute, and in general try 13 to avoid putting yourself in a situation where you have to 14 deal with driving under congested conditions as a regular 15 part of your life. 16 BOARD MEMBER D'ADAMO: But any specific outreach 17 component that the staff is looking at with this? 18 EXECUTIVE OFFICER WITHERSPOON: We haven't 19 thought that far ahead. But I think you're right. It 20 both leads right into public education campaigns and spare 21 the air, but also to campaigns for Carl Moyer Funds, 22 campaigns for our Diesel Risk Reduction Program. It all 23 ties together. It's a very powerful message, and we're 24 starting here. And I certainly would appreciate any 25 suggestions Board members have for the kinds of outreach PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 we should do. 2 BOARD MEMBER D'ADAMO: I would just say spare the 3 air in conjunction with what the local districts are 4 doing. That comes to mind right away. 5 I believe, Catherine, you may have mentioned at 6 the beginning, or Dr. Lloyd, about the newer vehicles and 7 some of the in-cabin controls. But that wasn't part of 8 the presentation. I'm just curious -- I know my car has 9 that, but I don't know if that is standard on newer 10 vehicles and what, if anything, we might be able to do to 11 mandate -- well, first of all, I don't know to what extent 12 that helps to mitigate these effects. And if so, what 13 sort of authority would this Board have in mandating those 14 types of devices on vehicles, on new vehicles? 15 DR. FRUIN: Well, you do get some benefit from 16 air filtration with particles, not with the gaseous 17 pollutants. And you also do need to have a fairly new and 18 fairly tight car for it to make a difference. Otherwise, 19 the air exchanges often overwhelm many your filtration 20 flow rates. 21 We looked at one aftermarket filter system to 22 look at how effective it was. And it was only effective 23 if the car was so tight under recirculation conditions 24 that you actually get CO2 concentrations high enough to 25 make you tired and dizzy. So it's a limited benefit. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 like Dr. Lloyd said, it's just benefiting yourself. And 2 it's not really solving the problem to take an approach 3 this way. 4 But as far as our ability to regulate the car 5 filters, I'm not sure what authority we have. 6 CHAIRPERSON LLOYD: We really have to look at 7 cradle-to-grave exposure there. 8 DR. FRUIN: I don't feel it's a good approach to 9 the problem of individual filtration. 10 CHAIRPERSON LLOYD: Yes, Ms. Berg. 11 BOARD MEMBER BERG: I understand on that freeway 12 that is the thoroughfare to get goods from the port up to 13 the truck terminal. How has the Alameda corridor 14 affected -- has that been successful in taking some of the 15 trucks off of the freeway? 16 And the other thing is, my understanding is that 17 the trucks do start at -- I mean, I do travel the 710 18 every day. And the trucks actually start after rush hour 19 traffic in the morning. And so I think that we have to 20 have a balance between we need our goods from the port to 21 the trucking terminals. And so how are we going to strike 22 a balance in that? 23 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think the 24 Alameda corridor has increased the amount of goods that 25 are trained out of the port area, so, therefore, trucks PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 have been eliminated from the freeway. The countervailing 2 issue is there's been such a growth in the port activity 3 that the actual amount of truck traffic on the 710 has 4 been increasing, because there has not been enough switch 5 to rail at the port to offset the growth. But had the 6 corridor not been there, the situation would be even more 7 dire. 8 CHAIRPERSON LLOYD: Dr. Gong. 9 BOARD MEMBER GONG: I'd like to applaud you for 10 this very revealing summary and review. It actually gave 11 me some chest pain when you were talking about the 710. 12 As you've heard, several of the Board members do have to 13 drive on the 710 to and from home. But that is of great 14 concern. That freeway really stands out. And I assume 15 there are probably other, perhaps, port-related freeways 16 in California and elsewhere in the country that have the 17 same issues with on-road ultrafine particle exposure. 18 And as you were going through your litany of 19 different conditions, I kept thinking to myself the 20 familiar real estate phrase, location, location, location. 21 And that's really a lot of what we're dealing with here. 22 Whether you're driving in the middle of the freeway or 23 whether you're living next to the freeway or next to the 24 port or wherever, it really is location and how far you 25 are from the source on the freeway. You're right in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 mix, right there, which is amazing. 2 And I was very happy to see the next to last 3 slide or whatever about the health effects. Obviously, 4 all this doesn't have any health effects. And I think the 5 recent New England Journal article that you referenced 6 about people dying -- not that one. People dying within 7 an hour after freeway, bicycling, or whatever travel, I 8 think is poignant, being in traffic and heart attack in 9 the following hour. I don't know if it's diesel related 10 or not in that particular study. I think it was from 11 Europe. 12 But we do know that diesel inhalation can cause 13 lung inflammation and also systemic inflammation acutely. 14 And if you keep repeating this process, once in the 15 morning and once in the evening, you're sort of setting 16 yourself up, particularly if you are already, health-wise, 17 susceptible to heart attacks or strokes or angina, chest 18 pains. 19 So I applaud the work of the Research Division 20 for continuing work on this particular freeway topic. 21 Thank you. 22 CHAIRPERSON LLOYD: Ms. Pineda and then 23 Supervisor Patrick. 24 BOARD MEMBER PINEDA: I just want to applaud this 25 excellent study and encourage work in trying to enhance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 public awareness around this issue. 2 And I also had a question as far as, you know, 3 what we can do. What about trying to shift more of the 4 truck traffic to after-hour commuter traffic or late in 5 the evening? I was associated with a manufacturing plant. 6 And when we expanded our facility, one of the conditions 7 of our operating permit was that we had to shift truck 8 traffic to the evening hours. 9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think 10 that's an issue which has benefits and problems. Right 11 now at the port, the port operations are basically during 12 the daytime hours. There's labor and other considerations 13 for that. Also, at the community level, you probably 14 would get a reduction in traffic congestion and perhaps a 15 net reduction in emissions along the corridors. But if 16 the trucks are moving through the neighborhoods in greater 17 numbers at night, you have neighborhood issues. 18 It's not something with a simple answer. I think 19 there would be pros and cons of doing that. Also it's 20 being examined from the simple standpoint of there's not 21 enough capacity to move all the goods coming into the 22 ports to their destinations. And so longer hours are 23 being looked at from that perspective. But it's a major 24 issue we have to deal with in terms of just the volume of 25 traffic and goods. And the transportation system is not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 really set up to handle it all. 2 CHAIRPERSON LLOYD: Supervisor Patrick. 3 SUPERVISOR PATRICK: Thank you very much, 4 Mr. Chairman. 5 I would like to thank you very much for bringing 6 this information forward. I think that a good place to 7 start in terms of outreach would be CAPCOA, because I 8 think that all of the air pollution control officers 9 should be informed of this and the district governing 10 boards should be as well. 11 And one of the reasons why I feel so strongly 12 about this is that we have incentive dollars either 13 through Carl Moyer or other programs. And this study has 14 tremendous implication for how those incentive dollars 15 should be used. 16 And so I applaud your effort. I think this is 17 tremendous information that the public should be aware of. 18 And, certainly, those of us that are in the capacity of 19 issuing incentive dollars, I think that we need to, again, 20 keep our eye on the ball and where are we getting the most 21 bang for our buck. I hate to use all these goofy little 22 statements, but they're absolutely true in terms of public 23 health, where are we going to maximize dollars for good 24 public health. Thank you. 25 CHAIRPERSON LLOYD: You mentioned that you didn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 see the role of car filters -- or may be helpful but maybe 2 doesn't solve the problem. But what about personal masks 3 when you're going on such heavily traveled freeways? 4 DR. FRUIN: Again, I think that might help a 5 little bit with the particles and the ultrafine particles, 6 but they'd be as good as masks would be in a typical 7 occupational setting, which is better than nothing but 8 still pretty limited. A really high functioning mask 9 needs fitting and it's very involved. So some benefit, 10 but not much. 11 CHAIRPERSON LLOYD: Of course, to me, it really 12 reminds and reinforces, I think, the need for our goal of 13 getting to zero and near zero emissions from all sources. 14 And that, clearly, is the most effective way. And at 15 least we're seeing some of that progress, which is great. 16 By the way, Jed, we didn't sit there and make you 17 listen to all this stuff before, but hopefully you will 18 take it back to your members. 19 MR. MANDEL: I thought that was one of the 20 official follow-up items. 21 SUPERVISOR DeSAULNIER: Make him sit in traffic 22 on the 710. 23 CHAIRPERSON LLOYD: Any more questions? Any 24 other comments? 25 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 Dr. Lloyd, one thing I wanted to add. This is Richard 2 Bode. 3 I heard so many comments about outreach. I just 4 wanted the Board to know that we get numerous requests 5 from local districts and the local governments as well. 6 So we try to take the information we present here and take 7 it back to the local areas as well. In fact, I was in 8 Los Angeles on Monday. The City of La Canada wanted to 9 hear about the Children's Health Study, the East Bay 10 Study. So one form is these health updates and the 11 webcast of those. I'm thinking more and more we've been 12 luring people to those. So this provides a great 13 opportunity to present that information. 14 CHAIRPERSON LLOYD: Excellent. 15 GENERAL COUNSEL JOHNSTON: Also if I may mention, 16 some of you may be familiar with the U.C. Berkeley 17 Wellness Letter, and this study was their lead article in 18 their January addition. And they had various suggestions 19 also for limiting exposure, including driving on arterial 20 roads rather than freeways and following distances and 21 people just being aware of their risk of exposure while on 22 the freeway. 23 CHAIRPERSON LLOYD: Great. Thank you. 24 Since it's not a regulatory item, it's not 25 necessary to officially close the record. So we'll move PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 on to the next agenda item. Give a moment while we change 2 staff. 3 I presume if Board members need any more copies 4 of either of those presentations, they can contact you. 5 EXECUTIVE OFFICER WITHERSPOON: Of course. And 6 any suggestions for forums and other places to give this 7 talk. I'm sitting here just running through all the 8 possibilities. 9 CHAIRPERSON LLOYD: The next Agenda Item is 10 04-11-4, Proposed Amendments to the California Off-Road 11 Emissions Regulation for New Diesel Engines and Equipment. 12 In January 2000, this Board set Tier 2 and Tier 3 13 emission standards for new off-road diesel equipment. 14 Since then, significant advancements in emission control 15 technologies have occurred such that further reduction 16 from these engines are now feasible. 17 At this point, I would like to turn it over to 18 Ms. Witherspoon to introduce staff's presentation. 19 EXECUTIVE OFFICER WITHERSPOON: Thank you, 20 Chairman Lloyd and members of the Board. 21 Since you adopted Tier 2 and Tier 3 standards for 22 off-road diesel engines in January of 2000, the U.S. 23 Environmental Protection Agency moved ahead with a Tier 4 24 rulemaking for the same category of engines. That federal 25 rule was promulgated in June of this year. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 Staff is proposing to align with the more 2 stringent Tier 4 standards, and to take advantage of other 3 features in the federal rule that will enhance our 4 certification and enforcement processes. We are also 5 making a few adjustments to close some loopholes in the 6 federal rule as it would apply in California. 7 With that introduction, I'd now like to turn the 8 presentation over to Mr. Jeff Lowry of the Mobile Source 9 Control Division, who will provide you with a detailed 10 overview of staff's Tier 4 proposal for off-road diesel 11 engines. Mr. Lowry. 12 (Thereupon an overhead presentation was 13 presented as follows.) 14 STAFF AIR POLLUTION SPECIALIST LOWRY: Thank you, 15 Ms. Witherspoon. Good morning, Chairman Lloyd and members 16 of the Board. 17 Today's presentation will summarize the staff's 18 proposal to amend California's existing emissions 19 regulations for new off-road diesel engines and equipment. 20 Locomotives and commercial marine vessels are not being 21 considered in this rulemaking. 22 Staff is proposing to harmonize California's 23 requirements for non-preempt off-road diesel engines with 24 those promulgated by the United States Environmental 25 Protection Agency on June 29th of this year. The adoption PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 of harmonized standards is the best way to ensure that the 2 emission benefits of the Tier 4 Program will be fully 3 recognized in California. 4 --o0o-- 5 STAFF AIR POLLUTION SPECIALIST LOWRY: The 6 presentation begins with the explanation of the role 7 off-road diesel engines play in contributing to 8 California's emissions inventory compared to other mobile 9 sources. It then discusses the need for additional 10 emission reductions. After that, the focus turns to the 11 proposed Tier 4 regulation. 12 Staff is recommending the adoption of more 13 stringent exhaust emission standards for particulate 14 matter and NOx, as well as the adoption of enhanced 15 implementation and compliance provisions, which staff 16 believes are necessary to ensure successful and 17 enforceable Tier 4 Program in California. 18 Finally, the benefits of staff's proposal and the 19 costs of implementation will be presented, followed by a 20 discussion of issues that have yet to be resolved, and a 21 summary of the facts supporting staff's recommendation to 22 adopt its proposal. 23 --o0o-- 24 STAFF AIR POLLUTION SPECIALIST LOWRY: Diesel 25 engines are used in a variety of applications and are the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 preferred choice where durability and fuel economy are 2 primary considerations. Off-road applications include 3 agricultural, construction, and general industrial 4 equipment. Some familiar examples are tractors, portable 5 generators, transport refrigeration units, irrigation 6 pumps, compressors, and the caterpillar scraper shown on 7 this slide. The scraper is one of many types of off-road 8 diesel equipment employed by the Los Angeles County 9 Sanitation District and is in frequent operation nearly 10 every day of the year. 11 Another example where off-road engines and 12 equipment can be found include new residential and 13 business construction sites, highway maintenance, farms, 14 shipping ports, quarries, and rail yards. 15 The contribution of off-road diesels to society 16 and to the California economy in particular goes without 17 question. Diesels provide us with the ability to build 18 shelters. They help to feed us. They clean up our trash. 19 And they enable many aspects of our daily lives. 20 Unfortunately, off-road diesel engines are also 21 significant sources of harmful emissions that can diminish 22 the quality of life or endanger it all together. 23 --o0o-- 24 STAFF AIR POLLUTION SPECIALIST LOWRY: In 1998, 25 particulate matter from diesel exhaust was identified by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 the state of California as a toxic air contaminant. 2 Studies have estimated that diesel particulate matter 3 emissions from all sources are responsible for 70 percent 4 of the total potential cancer risk from all toxic air 5 components. Unlike for ozone, there is no safe level of 6 exposure to diesel particulate matter. 7 --o0o-- 8 STAFF AIR POLLUTION SPECIALIST LOWRY: In this 9 slide, some of the health impacts associated with diesel 10 particulate matter are listed. Other impacts include 11 increased incidents of lung cancer and cardiovascular 12 disease. Children, the elderly, and those with 13 preexisting health problems are most at risk. Putting 14 things in perspective, the number of premature deaths 15 caused by diesel particulate matter each year is 16 comparable to the number of annual deaths from automobile 17 accidents. 18 --o0o-- 19 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 20 shows the California counties and air basins that are in 21 non-attainment with the Federal Ambient Particulate Matter 22 2.5 Standard. Over 90 percent of the particulate matter 23 in diesel exhaust falls into the particulate matter 2.5 24 classification, which consists of particles less than two 25 and one-half microns in diameter. These very small PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 particles can absorb cancer-causing substances and can 2 penetrate deep into the lungs, triggering the adverse 3 health impacts indicated in the previous slide. 4 --o0o-- 5 STAFF AIR POLLUTION SPECIALIST LOWRY: Here's a 6 similar illustration of the counties and air basins 7 currently designated as non-attainment with respect to the 8 Federal Ambient 8 Hour Ozone Standard. Over 50 percent of 9 California's air basins fall within this designation. 10 These air basins, as well as those identified in the 11 previous slide, will continue to remain in non-attainment 12 or beyond their attainment due dates unless additional 13 control measures are deployed and implemented to reduce 14 California's inventories of ozone and particulate matter. 15 --o0o-- 16 STAFF AIR POLLUTION SPECIALIST LOWRY: Here we 17 see the statewide baseline inventories of combined 18 hydrocarbon and NOx for off-road diesel engines in the 19 years 2000, 2010, and 2020. These estimates reflect only 20 the regulations previously adopted by this Board. 21 Off-road emission estimates are separated into 22 two categories: One, representing locomotives and 23 commercial marine vessels, which are not subject to the 24 proposed regulations; and a second, representing the 25 remaining off-road diesel engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 From the chart, we see that both the non-road and 2 off-road inventories expressed in tons per day are 3 Decreesing over time as a result of previous Board 4 activity. However, the off-road contribution which starts 5 of at 32 percent in 2000 nearly equals the non-road 6 contribution by 2020. 7 In this similar slide, the mobile diesel 8 statewide baseline inventories for particulate matter are 9 shown for the same three years. Here, we see that 10 off-road diesel engines are responsible for a much larger 11 share of particulate matter emissions than non-road diesel 12 engines for each of the years specified. Off-road diesels 13 even surpass the contribution from locomotives and marine 14 vessels through 2010, despite being subject to more 15 stringent standards. 16 --o0o-- 17 STAFF AIR POLLUTION SPECIALIST LOWRY: These pie 18 charts illustrate the division of regulatory authority 19 affecting California's off-road diesel engines by 20 categorizing them into two groups: Non-preempt and 21 preempt. Non-preempt engines are the only ones that the 22 Air Resources Board are authorized to regulate under the 23 Federal Clear Air Act. This category includes all new 24 diesel engines, except those used in farm and construction 25 equipment under 175 horsepower. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 The United States Environmental Protection Agency 2 is responsible for regulating California's preempt 3 engines. While it is clear that preempt engines dominate 4 the emissions contribution, non-preempt engines are still 5 a significant source of pollution. This will become more 6 evident when we discuss the benefits of the Tier 4 7 standards. 8 --o0o-- 9 STAFF AIR POLLUTION SPECIALIST LOWRY: As 10 mentioned at the beginning of this presentation, staff is 11 proposing to harmonize California's off-road diesel 12 regulations with the Federal Tier 4 Non-Road Diesel Rule. 13 This includes very stringent exhaust emission standards 14 based on the use of catalyzed particulate filters and 15 advance NOx aftertreatment technologies that will be 16 borrowed from non-road diesel engines meeting the 17 heavy-duty 2007 standards. These technologies are 18 expected to reduce particulate matter emissions for some 19 engines by over 90 percent and NOx emissions by over 85 20 percent. 21 The adoption of harmonized standards by this 22 Board will ensure a greater degree of emission reductions 23 from California's non-preempt off-road diesel engines by 24 empowering the state to independently administrate the 25 Tier 4 Program and to verify compliance and address PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 violations if or when they should occur. 2 Staff's proposal also contains a number of 3 enhancements, including a new test cycle for the 4 certification of off-road diesel engines that will provide 5 more representative emission measurements than the 6 existing state test cycle. 7 --o0o-- 8 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 9 shows the five power categories specified in kilowatts 10 that define the scope of applicability for the Tier 4 11 Rule. Next to each of the power categories is the picture 12 of an off-road equipment type that typically falls within 13 the associated range. The off-road is very diverse in the 14 types of applications found spanning the fields from 15 portable generators, to tractors, to earth-movers, and to 16 mining trucks, just to name a few. 17 --o0o-- 18 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 19 again shows the five Tier 4 power categories and 20 corresponding implementations schedules for introducing 21 the standards. 22 Here, we see the first wave of particulate matter 23 standards that will be introduced under the Tier 4 24 Program. These levels, which begin as early as 2008, will 25 likely not be based on the use of advanced aftertreatment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 Starting in 2011, however, very stringent particulate 2 matter standards will begin taking effect with levels as 3 low as two-hundreths of a gram per kilowatt hour for 4 engines in the 130 to 560 kilowatt range. 5 Particulate matter levels continue to drop in 6 succeeding years for all engines except those under 19 7 kilowatts. At this low end of the power spectrum, the 8 cost of particulate matter control becomes significant as 9 it approaches the cost of the engine itself. 10 --o0o-- 11 STAFF AIR POLLUTION SPECIALIST LOWRY: Similarly, 12 the first wave of Tier 4 NOx and combined hydrocarbon and 13 NOx standards show only a small reduction in emissions 14 from the previous standards, if any. However, significant 15 NOx reductions will be realized for all power categories 16 above 56 kilowatts starting in 2014 as NOx aftertreatment 17 begins to be phased in. Full implementation of the Tier 4 18 Standard is not required until 2015 across all power 19 categories. 20 --o0o-- 21 STAFF AIR POLLUTION SPECIALIST LOWRY: Here, we 22 see a graphical comparison of the existing three tiers of 23 off-road diesel standards for hydrocarbon and NOx. Here's 24 the same chart with the addition of Tier 4 standards shown 25 in red. The impact of the Tier 4 Standards are clearly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 significant, especially for engines between 56 and 560 2 kilowatts. 3 In this slide, we see the same comparison for 4 off-road diesel particulate matter standards. Note that 5 for engines between 56 and 130 kilowatts, there are no 6 existing Tier 1 Standards. The Tier 4 Standards for 7 particulate matter represent emission reductions of over 8 90 percent with respect to the previous standards for 9 engines between 19 and 560 kilowatts. 10 --o0o-- 11 STAFF AIR POLLUTION SPECIALIST LOWRY: Here, we 12 show the types of emission control technologies that are 13 expected to be used to meet the final Tier 4 standards. 14 Advanced exhaust aftertreatment, such as catalyzed 15 particulate traps, NOx absorbers, and possibly selective 16 catalyst reduction, are among the list of likely 17 candidates. With the possible exception of selective 18 catalyst reduction, all these technologies will require 19 diesel fuel with less than 15 parts per million sulfur 20 content. Such ultra-low sulfur fuel is scheduled to be 21 available throughout California by 2006 and nationwide by 22 2010. 23 --o0o-- 24 STAFF AIR POLLUTION SPECIALIST LOWRY: To show 25 the importance in the magnitude of the proposed standards, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 this next slide provides comparison of off-road diesel 2 standards versus non-road heavy-duty diesel standards 3 pertaining to NOx on a 200-kilowatt engine. Off-road 4 diesel standards have historically lagged behind by 5 non-road diesel standards by a period of several years, 6 despite the similarity in engine technologies. 7 Designing off-road engines to reliably meet 8 emission standards under all conditions, given the wide 9 and diverse range of applications in off road, can be 10 challenging. Non-road engines, by comparison, are 11 typically operated under predictable and uniform 12 conditions, making the development of reliable emission 13 control systems somewhat less complex. Starting in 2011, 14 however, staff's proposal will provide virtual parity 15 between off-road and heavy-duty non-road diesel engine 16 standards. 17 --o0o-- 18 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 19 similarly compares particulate matter standards between 20 off-road and heavy-duty non-road engines. Again, virtual 21 emissions parity would be achieved in 2011, with the 22 adoption of staff's proposal. 23 --o0o-- 24 STAFF AIR POLLUTION SPECIALIST LOWRY: To 25 facilitate the off-road industry transition to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 proposed Tier 4 Standards, several options are provided 2 that allow manufacturers to introduce compliant engines 3 according to schedules that may better fit their 4 production roll-out strategies. This is accomplished by 5 allowing the Tier 4 NOx Standards to be phased in over a 6 period of either two or three years at rates of 50 percent 7 or 25 percent respectively. 8 A similar approach alternately allows all engines 9 to meet an interim Tier 4 NOx Standard over the same two 10 or three years equal to the weighted average of the 11 phase-in standards. Additionally, a few provisions exist 12 for small engines below 56 kilowatts that are meant to 13 further ease the transition to the new standards by 14 delaying or relaxing the stringency of the requirements. 15 Allowing manufacturers a choice in how they implement the 16 new standards may help them avoid costly disruptions in 17 plan production. 18 --o0o-- 19 STAFF AIR POLLUTION SPECIALIST LOWRY: To further 20 ease the task of compliance on the manufacturers, staff is 21 proposing the renewal of two programs that were originally 22 adopted by the Board in 2000 to facilitate the transition 23 to the Tier 2 and Tier 3 Off-Road Diesel Standards. These 24 programs either expire or are no longer applicable once 25 the Tier 4 Standards take effect. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 The first program, averaging banking and trading, 2 allows engine manufacturers to certify some Tier 4 engine 3 families that exceed the specified emission standards, so 4 long as the average emission levels for the manufacturer's 5 Tier 4 fleet are at or below the appropriate Tier 4 6 Standards. 7 The second program, equipment manufacturer 8 flexibility, allows equipment manufacturers to temporarily 9 produce equipment during the Tier 4 time frame with 10 engines that meet the earlier Tier 3 Standards for a 11 percentage of their production. Staff is also proposing 12 to harmonize with the federal relief provisions for 13 unanticipated and unavoidable technical circumstances by 14 permitting equipment manufacturers to produce additional 15 flexibility allowances when such an event occur. Staff 16 also proposes that small business be allowed to delay 17 compliance with the Tier 4 proposal several years beyond 18 normal implementation start dates. 19 --o0o-- 20 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 21 describes the proposed requirements for ensuring that 22 engines and equipment certified at the Tier 4 Standards 23 continue to meet those standards in use over their entire 24 useful lives. Tier 4 engines must be certified to the 25 not-to-exceed limits to guarantee the emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 performance of the engine during all modes of operation, 2 not just those encountered on a test cycle. These limits 3 are based on the not-to-exceed limits previously adopted 4 for heavy-duty non-road diesel engines. 5 Staff also proposes that the thresholds for 6 defect reporting be revised such that they become 7 proportional to engine power and the number of engines in 8 a family. They should reduce the number of reports being 9 submitted by manufacturers for some small volume 10 applications, while providing a more representative 11 sampling base for larger volume and larger horsepower 12 engines. 13 Staff proposes to allow the use of in-use 14 adjustment factors to provide certifying manufacturers a 15 cushion that would avoid enforcement actions on the basis 16 of small exceedances of the standards in use due to 17 unanticipated circumstances. 18 Staff is also proposing to retain the authority 19 granted it by this Board in 2000 to independently 20 investigate in-use compliance issues pertaining to 21 non-preempt engines, and to force compliance with the 22 California regulations as necessary. 23 --o0o-- 24 STAFF AIR POLLUTION SPECIALIST LOWRY: To 25 encourage engine and equipment manufacturers to produce PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 and use cleaner engines earlier than required, staff is 2 proposing an incentive program that allows manufacturers 3 to delay meeting otherwise required standards and test 4 procedures for a number of engines in exchange for 5 bringing in a multiple number of those engines prior to 6 the applicable Tier 4 start dates. 7 This slide shows some of the benefits that can be 8 earned. One specific benefit would be the introduction of 9 ultra-low NOX engines that will be certified to 0.2 grams 10 per kilowatt hour, or half of the final Tier 4 Standard. 11 --o0o-- 12 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 13 identifies requirements in staff's proposal that differ 14 from those in the federal Tier 4 regulation, but which 15 staff believes are necessary to ensure a successful and 16 enforceable Tier 4 Program in California. 17 The labeling enhancements are designed to ensure 18 that all engines used in California can be readily 19 identified by Air Resources Board investigators, and 20 confirmed to be legal for use in California in a timely 21 manner. Labels may also be used to verify eligibility for 22 a future Carl Moyer or Retrofit Program. The labeling 23 requirements proposed by U.S. EPA are insufficient to meet 24 the needs of Air Resources Board programs. In particular, 25 the lack of labeling requirements for remanufactured PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 engines is a large concern to staff and will be discussed 2 later in the presentation. 3 The certification requirement ensures that 4 California has the authority to address violations of the 5 regulation in an expedient and appropriate manner with 6 respect to flexibility engines. The replacement engine 7 reporting requirement ensures that the Air Resources Board 8 will be notified whenever a manufacturer sells a 9 replacement engine in California. 10 --o0o-- 11 STAFF AIR POLLUTION SPECIALIST LOWRY: Here we 12 see the benefits of the federal Tier 4 Rule and staff's 13 proposed regulations from an emission's perspective and a 14 health perspective. The table in this slide shows the 15 estimated statewide reductions for each pollutant in 2020. 16 Note that the NOx reductions from non-preempt 17 diesel engines under California control is greater than 18 the reduction from California's federally preempt engines, 19 although preempt engines are estimated to be responsible 20 for 59 percent of the total off-road diesel baseline NOx 21 inventory in 2020. This occurs as a result of more 22 stringent standards being required for engines greater 23 than 175 horsepower, the cutoff for preemption. And it 24 demonstrates the value of California having control over 25 its own Tier 4 Program. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 The health benefits shown are for the combined 2 federal regulation in staff's proposal. By 2030, 900 3 premature deaths per year will be prevented in California, 4 and $6.3 billion a year will be saved in health-related 5 expenditures. These estimates were calculated using the 6 scaling process documented in the U.S. EPA's regulatory 7 analysis for its non-road Tier 4 rule. 8 --o0o-- 9 STAFF AIR POLLUTION SPECIALIST LOWRY: No 10 additional costs above those required by the federal 11 program are expected to be incurred as a result of staff's 12 proposal. Harmonizing with the federal regulations spares 13 engine and equipment manufacturers the potential cost of 14 designing and producing separate engine families to meet 15 multiple engine standards or implementation dates. 16 The estimated California cost effectiveness 17 associated with adoption of staff's proposal would be 18 approximately 58 cents per pound of combined non-methane 19 hydrocarbon and NOx reduced and $7.55 per pound of 20 particulate matter. These estimates are based on the 21 federal calculation of cost effectiveness. In actuality, 22 however, there are no costs to the state associated with 23 staff's proposal because the U.S. EPA's estimates already 24 include California. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 STAFF AIR POLLUTION SPECIALIST LOWRY: Although 2 no workshops were held during the development of staff's 3 proposal, staff has held discussions with the off-road 4 industry and has presented versions of the proposal during 5 the Clean Air Plan and SIP Summit events in 2004 and prior 6 to that in 2003. 7 Recent discussions with industry have raised the 8 need to clarify or modify several of staff's proposed 9 amendments. This slide lists the requirements at issue 10 and how staff intends to address them subsequent to this 11 hearing. The first two bullets document revisions meant 12 generally to clarify staff's intentions regarding the 13 original proposal. The last bullet on the slide refers to 14 changes that U.S. EPA will be making to its Tier 4 15 regulation. 16 To preserve harmonization between federal and 17 California requirements, should the Board adopt staff's 18 proposal at this time, staff asked that the Board 19 authorize the Executive Officer to incorporate, as 20 appropriate, any or all of the changes made by U.S. EPA 21 once they have become final by means of our 15-day 22 process. 23 Upon Board approval, a detailed description of 24 all changes and the rationale inspiring them will be made 25 available in an official notice of public availability of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 modified text to be released for comment after this 2 hearing. 3 --o0o-- 4 STAFF AIR POLLUTION SPECIALIST LOWRY: Here is an 5 issue that was identified during staff's discussion with 6 the off-road industry, and which remains unresolved. 7 Staff has learned that many manufacturers engage in the 8 practice of remanufacturing engines from components 9 previously belonging to multiple engines of possibly 10 varying emissions configurations. The resulting product 11 is an engine that may not conform to a California 12 certified configuration, which is required under current 13 ARB and U.S. EPA regulations as highlighted in this slide. 14 Further, it would be virtually impossible for an 15 inspector to visually confirm that a remanufactured engine 16 is properly equipped with required emission control 17 systems to perform at a specific level of emissions 18 performance without a label indicating the certified 19 configuration to which the engine family could be 20 compared. 21 --o0o-- 22 STAFF AIR POLLUTION SPECIALIST LOWRY: This slide 23 briefly explains the remanufacturing process and how it 24 differs from a traditional engine rebuild. In essence, 25 the remanufactured engine loses its identity as the result PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 of being reassembled from multiple engines that may only 2 share general emission similarities. 3 To further complicate matters, remanufactured 4 engines may be sold in various stages of assembly, which 5 makes it difficult to ensure that the engine will still be 6 meeting the equivalence requirement of a certified 7 configuration after installation and equipment, because 8 the final assembler could add inappropriate components 9 that would affect emissions. 10 --o0o-- 11 STAFF AIR POLLUTION SPECIALIST LOWRY: Staff 12 believes that the labeling of remanufactured engines is 13 essential to verify that these engines have been assembled 14 correctly and are performing at an emissions level equal 15 to the engines they replace. It would be detrimental to 16 California's emissions goals should a large number of 17 controlled engines be replaced with uncontrolled engines. 18 As advanced aftertreatment becomes prevalent in 19 the years ahead, it becomes extremely important for the 20 aftertreatment to remain on the engine after the engine 21 has been remanufactured to prevent the regression of 22 emission benefits. 23 Staff has had numerous discussions with industry 24 on this matter, but has not reached agreement primarily 25 because of concerns over liability with respect to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 remanufactured engines. Staff has proposed regulatory 2 language that would hold the final assembler responsible 3 for installing appropriate components on the engine under 4 certain circumstances. Staff intends to continue working 5 with the off-road industry to resolve this issue and is 6 reasonably confident that a solution will be found. 7 --o0o-- 8 STAFF AIR POLLUTION SPECIALIST LOWRY: This final 9 slide highlights the main points from presentation. 10 First, staff's proposal provides significant 11 benefits. Foremost are the long-term health benefits, 900 12 premature deaths prevented and a savings of 6.3 billion. 13 Next, staff's proposal is feasible. The 14 necessary technologies for implementing the Tier 4 15 requirements either already exist or should be proven 16 years in advance of the Tier 4 implementation date, since 17 the same technologies will be utilized in meeting the 18 heavy-duty non-road diesel requirements scheduled for 19 2007. 20 And, finally, staff's proposal is cost effective. 21 The benefits from staff's proposal would likely be 22 realized without additional cost to the off-road diesel 23 industry beyond those already needed to comply with the 24 federal regulation, since staff's proposal harmonizes 25 California and the federal non-road diesel requirements. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 This concludes the staff's presentation. Staff 2 is ready to answer any questions the Board may have. 3 CHAIRPERSON LLOYD: Thank you. 4 Madam Ombudsman, would you please describe the 5 public participation process that was followed during the 6 development of this regulation and share with us any 7 comments or concerns at this time. 8 OMBUDSMAN TSCHOGL: Thank you. I'm pleased to do 9 that. 10 Mr. Chairman and members of the Board, the 11 off-road emissions regulations for diesel engines and 12 equipment have been developed with input, as you heard, 13 from the Engine Manufacturers Association and the 14 Association of Engine Manufacturers and Western States 15 Petroleum Association. 16 The regulatory process of staff's proposal began 17 indirectly in 2001 as part of a cooperative effort with 18 the U.S. EPA to develop the federal Tier 4 Non-Road Rule. 19 After publication of the Federal Tier 4 Rule on 20 June 29th, 2004, staff began preparing the regulatory 21 package for adopting the Federal Tier 4 Standards in 22 California. 23 On November 29th, 2001, staff surveyed more than 24 800 subscribers on mobile source listserve via e-mail 25 requesting information about the development of advanced PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 aftertreatment technologies and concerns regarding 2 implementation, timing, and durability. 3 Two U.S. EPA public hearings were held to discuss 4 the Federal Tier 4 Non-Road Rule: One on June 10th in 5 2003 in Chicago, Illinois; and the other on June 17th, 6 2003, in Los Angeles. Approximately 100 persons attended 7 each of these publics hearings with representatives from 8 the diesel engine and equipment industries, regulatory 9 agencies, environmental groups, fuel providers, and the 10 public. 11 Staff held Tier 4 discussions in Sacramento at 12 the Clean Air Plan Workshop and at the SIP Summit Workshop 13 in February 2002 and January 2004 respectively. Nearly 50 14 stakeholders attended each workshop, and there was a 15 similar cross-representation of participants. 16 In addition, several conference calls were held 17 with EMA through October through December of 2004. 18 Individual companies also provided input during various 19 phases of the regulatory development process. 20 On August 23rd, 2004, staff posted a letter to 21 the ARB's website indicating staff's intent to adopt 22 standards for California's off-road diesel engines at the 23 December 2004 Board hearing to harmonize with U.S. EPA 24 Tier 4 Standards. An electronic announcement was sent to 25 all subscribers of the mobile source listserve that same PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 day informing all interested parties that the letter had 2 been posted. 3 The staff report was published on the web, along 4 with proposed regulatory amendments on October 22, 2004. 5 The public notice was mailed to stakeholders. Several 6 mailing listserves were used. Together, these lists 7 represent 1,490 subscribers, although some subscribers may 8 be common to more than one list. The notice was also sent 9 to all subscribers on the mobile source listserve which 10 has approximately 850 subscribers. 11 This concludes my comments. 12 CHAIRPERSON LLOYD: I thought it was a speech. 13 OMBUDSMAN TSCHOGL: I wanted to be complete. 14 CHAIRPERSON LLOYD: I should have stated at the 15 beginning of this item, we've taken the two items related 16 to diesel exhaust out of order, and the thermal spraying 17 is later. So some of you might have been a little bit 18 confused. So after this, we'll do the chip reflash. 19 I had just one question before I turn it over to 20 my colleagues there. When we talk about -- what are the 21 typical lifetimes for fleet turnover. So, clearly, we're 22 implementing these standards by 2011. And I realize there 23 may not be a typical one for different categories. But 24 how long do these engines last and the equipment? 25 STAFF AIR POLLUTION SPECIALIST LOWRY: They can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 last up to 32 years. Their halfway point is 16. Their 2 useful life is 16. 3 CHAIRPERSON LLOYD: It may take quite a while for 4 these new standards to weave themselves through the -- 5 okay. And that's obviously important in some of the 6 rebuild. 7 Any other questions of my colleagues? With that, 8 then I would like to ask if the two -- sorry. Ms. Berg. 9 BOARD MEMBER BERG: I apologize. I did have a 10 question. 11 On one of the public comments from the 12 Association of Equipment Manufacturers, they listed a 13 concern on the technical hardship relief that we were 14 duplicating efforts. In other words, we have the same 15 criteria to grant a hardship relief, but they would have 16 to apply to the EPA and then also apply to the ARB. Could 17 staff make comment as to why we feel that we need the 18 duplication? 19 EXECUTIVE OFFICER WITHERSPOON: Certainly, Ms. 20 Berg. 21 We feel that it's important to preserve 22 California's right to make an independent judgment about 23 the technical feasibility of regulations. If we were 24 certain that it'd be a purely technical determination at 25 the federal level, I'm sure we'd agree with EPA on its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 conclusions. But at times other factors enter into 2 federal decision-making, so it's important that California 3 have a voice, if a decision were to be rendered that took 4 into account other factors that we wouldn't think bore on 5 a feasibility determination. 6 BOARD MEMBER BERG: Are we going to require that 7 these manufacturers do duplicate work? Are we going to 8 give some sort of weight to the fact that the EPA granted 9 their hardship request? I mean, from a manufacturer's 10 point of view, to do it twice, could we then go to EPA and 11 say if you get a California exemption that the EPA should 12 look at that favorably? Is there something we can do so 13 these people don't have to do duplicate work? 14 EXECUTIVE OFFICER WITHERSPOON: Yes, there is. 15 We have done similar kinds of harmonization for 16 verification of diesel aftertreatment devices. We can 17 work with EPA to agree on what the standards of proof are 18 for a feasibility determination and to agree on common 19 sets of data so it's not a duplicate effort. I'm merely 20 suggesting that we might want to make an independent 21 judgment at times. 22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: 23 Actually, there's not duplicate work. The documentation 24 that they submit to EPA is the same thing they would give 25 to us. It would just be if our staff were doing a quick PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 review of it and finds there's something done at the 2 federal level that doesn't look right to us, then we would 3 react. But the manufacturer wouldn't have to do anything 4 twice. 5 And the whole concept here is to preserve the 6 ability of California, if necessary, to make independent 7 judgments on this rule making. Otherwise, we are, except 8 for this one issue of labeling, deferring this to the 9 federal government since they did set standards that we 10 think are protective enough for California's air quality. 11 But we didn't want to give up our ability to enforce -- 12 our ability that when we see something that doesn't look 13 right, to go ahead and take an independent action. But we 14 are not, you know, duplicating everything by any means. 15 BOARD MEMBER BERG: Okay. Thank you. 16 CHAIRPERSON LLOYD: Thank you very much. 17 I'd like to call the two witnesses, Jed Mandel 18 and Joseph Kubsh. 19 (Thereupon an overhead presentation was 20 presented as follows.) 21 MR. MANDEL: Good morning. Jed Mandel 22 representing the Engine Manufacturers Association. 23 --o0o-- 24 MR. MANDEL: I guess in particular, I'd like to 25 introduce myself to the newest members of Board. I missed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 the inaugural meeting in October. But I do very much want 2 to let you know that myself, personally, and the Engine 3 Manufacturers Association looks forward to working with 4 the newly constituted Board and all of its members on 5 various projects we're going to look forward to addressing 6 with you today and in the future. 7 Today, the Board is proposing to align its 8 non-road regulations with the historic EPA Tier 4 Rule, a 9 rule that requires the non-road engine and fuel industries 10 to take another bold step to reduce emissions from 11 non-road diesel engines and equipment. 12 The engine industry already has made significant 13 strides to reduce emissions in response to the fully 14 aligned EPA and ARB Tier 1 and Tier 2 Rules implemented in 15 1996 and 2001, and beginning in 2006, EPA and ARB's 16 aggressive Tier 3 Rule, which will result in even cleaner 17 engines. 18 Throughout this historic period of non-road 19 engine emission reductions, all of the benefits have come 20 from improvements in engine technologies. But as 21 witnessed in the Heavy-Duty On-Highway Rule, a systems 22 approach linking improved engine technologies, clean 23 fuels, and aftertreatment technologies, will produce even 24 further dramatic emission reductions. 25 It's rare that I come with slides. This is for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the newer Board members. This is like, what he's doing? 2 But I actually wanted to show our slides are even more 3 impressive than the staff's slides in showing the 4 emissions reductions that have been achieved and will be 5 achieved in the non-road category and what a tiny, tiny 6 box that we are absolutely aiming to get our engines' 7 emissions into as we see the Tier 4 rule. 8 --o0o-- 9 MR. MANDEL: If you go to the next slides. This 10 is the tier to tier percentage reductions. And, overall, 11 we're looking at essentially a 99 percent reduction from 12 unregulated levels, which I think is truly amazing and 13 historic. 14 Applying those technologies from on-highway 15 engines to non-road engines will be a huge engineering 16 challenge. And unlike on-highway engines, non-road 17 engines are produced in a much wider power range, less 18 than 8 horsepower to greater than 3,000 horsepower 19 compared to the approximately 150 horsepower to 600 20 horsepower range of on-highway engines and typically in 21 much lower volumes. 22 And I think I only have two quick more slides. 23 If we go -- 24 --o0o-- 25 MR. MANDEL: This just shows the emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 standards shown in a matrix rather than graphically. 2 CHAIRPERSON LLOYD: You said this was better than 3 staff's? 4 MR. MANDEL: This one may not be. But this one 5 is EPA's. We just put our name on it. If you go one more 6 slide -- 7 --o0o-- 8 MR. MANDEL: -- this is a representative engine 9 manufacturer. And I thought the picture actually might 10 give you a better image than my saying less than 8 11 horsepower to greater than 3,000 horsepower. The box 12 that's represented on the slide is essentially the 13 on-highway product line, approximately 150 to 600 14 horsepower. And if you look at all those other engine 15 displacements and power ranges and essentially engine 16 families, that's the workload burden that this particular 17 engine manufacturer -- and it's very representative of 18 all -- are going to need to do and are committed to do as 19 part of this Tier 4 Rule. So it's not just applying the 20 on-highway technologies to an on-highway horsepower range, 21 but in a much, much broader range of products with much 22 smaller volumes. 23 Non-road engines -- I think that's it for the 24 pictures. Non-road engines also are used in a vastly 25 larger number of specialized applications, and by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 thousands of equipment manufacturers, compared to perhaps 2 a few dozen on-highway applications and by a small number 3 of truck builders. And the non-road equipment customers' 4 need are highly specialized, including the requirement for 5 multiple duty cycles, the capability to operate in harsh 6 environments, and the need for high reliability and 7 durability. 8 As such, it is critical that the timing of the 9 Tier 4 Standards are correct. Spreading the 10 manufacturers' cost and workload is essential. Of course, 11 timing for us is not just lead time. It also is 12 stability, the period between changes and emission 13 standards. Engine and equipment manufacturers need an 14 adequate period of time in which to recoup their 15 substantial capital investments. Providing adequate lead 16 time and stability will not alone address all of the 17 diversity and complexity issues. Compliance flexibility 18 is also essential to minimize the potential for market 19 disruptions, which can add adverse and economic 20 environmental impacts. 21 Even with lead time, an adequate period of time 22 of stability, and reasonable compliance flexibility, the 23 customers' perceived satisfaction with the anticipated 24 level of performance expected from their new non-road 25 engines and equipment will be critical. The non-road PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 engine and equipment customer is a very sophisticated 2 purchaser, with strict requirements for owning and 3 operating costs, with high expectations for reliability 4 and performance -- and this is key and partly in response 5 to a question you asked staff -- with the ability to 6 maintain and retain their older equipment almost 7 indefinitely. 8 So lack of customer acceptance of new products 9 with new technologies can result in diminished turnover of 10 older higher emitting engines, pre-buys of less advanced 11 engines, and the failure to achieve anticipated emission 12 benefits. We can't let that happen. 13 Of critical importance to achieving the air 14 quality goals associated with the Tier 4 Rule is alignment 15 between all regulating bodies worldwide. EPA worked with 16 the European Union, Japan, and others to assure there 17 would be global alignment, that an engine, wherever 18 produced in the world, could be sold anywhere in the 19 world. 20 Critical, of course, to achieving global 21 alignment is assuring a 50-state harmonized U.S. 22 Regulatory Program. EPA worked very closely with ARB 23 during the Tier 4 Rule development process to assure that 24 California's special interests would be addressed as what 25 all stakeholders recognized must be a harmonized rule. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 The bottom line is that we must make sure that 2 ARB's intent to align with EPA is achieved. And 3 obviously, we strongly, strongly support that intent. 4 For various internal reasons, ARB staff have 5 decided not to simply incorporate by reference the entire 6 text of EPA's Tier 4 Final Rule. However, the 7 requirements of the Tier 4 Rule are so manifold, so 8 varied, and so complex that the California version of the 9 regulatory language may end up including some technical 10 inaccuracy or an error that could prevent the Executive 11 Officer from issuing an Executive Order for an engine that 12 all parties could concede ought to be certified. We 13 shouldn't let that happen either. 14 In our written comments, we have recommended a 15 simple sentence that preserves all of ARB's authority and 16 discretion, while at the same time assuring that an EPA 17 compliant engine not somehow technically complying with 18 ARB's regulations because of just the translation error 19 from the EPA style of incorporating these regulations to 20 the California style, but for some area that was just not 21 anticipated, would somehow not be eligible for an 22 Executive Order. So we hope that the Board will direct 23 staff to include a sentence of some kind that would give 24 ARB that discretionary authority while preserving its 25 independent authority. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 With that backdrop, there are a handful of issues 2 relating to today's ARB rule-making that concern us, all 3 of which are detailed in our written comments. In 4 particular, as part of the federal Tier 4 process, EPA has 5 proposed a series of critically important technical 6 amendments. For the most part, the technical amendments 7 affect test and measurement procedures and, not 8 surprisingly, are technical in nature. But it is 9 essential that EPA and ARB align on all of those 10 devil-in-the-detail technical rules. 11 Again, we fully support the staff's intent to 12 address these issues in 15-day notice changes at the 13 appropriate time. But I very much noted the staff's 14 position, which is they'll do it where they think it 15 appropriate to do it. We, as the regulated industry, to 16 some degree are asking all of us to commit to having 17 aligned test procedures and measurement procedures. The 18 technical experts will get it right. And we know that EPA 19 is reaching out to industry, to other stakeholders, and 20 clearly ARB staff to get their technical amendments right. 21 However EPA finalizes them, our urge to this Board is to 22 direct the staff to align. We can't afford to have those 23 technical details be different. 24 Next, ARB staff has proposed what appears to be 25 relatively innocuous provisions designed to address PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 potential issues relating to the way in which 2 remanufactured non-road diesel engines are labeled. 3 However, in reality, the staff's proposal would, for the 4 first time, regulate the engine remanufacturing industry 5 and force unnecessary changes in the way it does business. 6 The Board must recognize that the remanufacturing 7 industry consists of entities that have relationships with 8 new engine manufacturers, but also entities that are 9 totally independent and oftentimes small businesses. If 10 this Board feels the need to regulate remanufacturing 11 processes, let's work together with all of the affected 12 stakeholders, identify the problems, if there are any, and 13 the workable solutions. 14 But we don't believe that it is appropriate to 15 proceed today with a significant new regulatory proposal 16 buried in a rule intended to align standards for new 17 engines -- not remanufactured engines -- with EPA's 18 program, for which there has been no outreach, no 19 workshops, and no due process. The remanufacturing 20 portion of the staff's proposal should not now be adopted. 21 Finally, we recognize that ARB has some specific 22 labeling concerns, and has identified the need for some 23 specific narrow labeling changes. We are not opposed to 24 certain narrow changes in the Tier 4 labeling 25 requirements. However, EPA's technical amendments solve PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 many of ARB's concerns. And we hope that ARB will not 2 move towards a different solution than what EPA has 3 already recognized in their technical amendments. 4 Other of ARB's concerns are temporal in nature. 5 Focus, for example, on labeling certain flexibility 6 program engines prior to Tier 4. In other words, for just 7 a narrow period of time. But in our view, ARB does not 8 need to adopt new rules to address those temporal 9 concerns. EMA members already on a voluntary basis label 10 such engines, and those labels site the EPA regulations 11 that ARB's rules adopted by reference. 12 The ARB proposal would require the design and 13 release of hundreds of new Tier 1 and Tier 2 labels simply 14 to include a specific reference to Title 13 rather than 15 the federal citation, the one that ARB already 16 incorporates by reference, in its adoption, its assignment 17 with the federal program. Candidly, that's ridiculous. 18 The current labels contain all of the information 19 needed to support the inspection of those flexibility 20 program engines, and we urge that the Board not allow the 21 staff to enforce a very temporary change when the industry 22 already voluntarily is meeting their concerns. 23 EMA is also concerned about staff's 24 recommendation for a special Executive Order for 25 flexibility engines. The apparent reason for this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 proposal is to give ARB regulatory authority over those 2 engines, but ARB already has regulatory authority over 3 those engines. The consequence of the proposal would be 4 to mandate annual recertification and labeling of these 5 engines. Such an approach defeats the purpose of the 6 flexibility program, which is to allow the manufacturer to 7 continue the production of a limited number of previous 8 tier engines. 9 There's no question that Tier 4 will be 10 extraordinarily challenging and will require an enormous 11 effort. Engine manufacturers are committed to meeting the 12 Tier 4 challenge, to continuing to do our part to reduce 13 emissions, and to work with ARB to assure that the 14 expressed intent of a fully assigned, harmonized, 15 nationwide Tier 4 Rule is implemented. We urge the Board 16 to direct the staff to work with us and address our 17 concerns through the 15-day notice process. 18 That concludes my remarks, and I'd be pleased to 19 answer any questions that you might have. 20 CHAIRPERSON LLOYD: You made a number of 21 comments. I'd like to hear staff's response to some of 22 those. 23 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: If I 24 could, Dr. Lloyd, just to give the bigger picture issues 25 that are at stake here that Jed has identified. And I'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 let the staff try to identify what we've actually done to 2 resolve these, because we have made an attempt to resolve 3 each one. But the -- 4 CHAIRPERSON LLOYD: Let me just ask, would more 5 time help to get resolution? 6 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I don't 7 think so. We've been working on these labeling issues. 8 This has been the biggest issue on this rule for a long 9 time with the engine manufacturers. And we have worked 10 out at least the three major categories. I think we've 11 largely solved two of the three. There's only one 12 remaining. 13 But if, you know, there still are refined 14 solutions that are appropriate, we can still do that 15 within the 15-day period. But I think if we just throw it 16 aside and start off, it's going to waste a lot of effort 17 and probably blow this issue far out of proportion, given 18 the resources that are needed to go through another 19 rule-making or another process. 20 CHAIRPERSON LLOYD: What about the comment of 21 basically not giving due process to the remanufacturing? 22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think 23 it boils down to the fact that if you are tearing up these 24 engines and putting them together in a different form that 25 affects emissions, that's already against the law. You're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 not supposed to do that. That's tampering with the 2 engine. 3 And so what it really boils down to is asking 4 that people put a label on the engine or the incomplete 5 engine, whichever it is, at the time that they do the 6 rebuild. And that just assures that the right parts go 7 back on, that the right turbocharger, that the right 8 aftertreatment, or whatever else it will be, goes on these 9 engines. And, remember, these engines, they last in 10 vehicles that are 30 years old. So they do get rebuilt 11 many times or several times at least during their life. 12 And all we're asking is we need to be able to 13 know when we do a Carl Moyer Program, when we do an 14 Enforcement Program, various things like that, we look at 15 these vehicles, we'd like to what the vehicle is, what 16 emissions standards it's supposed to meet and so that we 17 can conduct those kinds of programs. 18 It just seems to me that from the standpoint of 19 whether a label is put on or not, or in these other cases 20 whether the national label has to say and Title 13 on it, 21 is really not a very big issue. I mean, it's a 22 straightforward requirement. Yes, we are debating the 23 national rule, but the execution of the solution is just 24 to do these things on a national basis and one label. And 25 it doesn't make a big difference, I don't think, to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 manufacturers. They haven't even produced these labels 2 yet. There's no reason why they can't put additional 3 information on them. 4 On the rebuilds themselves, if they're rebuilding 5 them the way they are, it's just a question of slapping a 6 label on it. If they're not rebuilding it the way they 7 are, then we've got a big emissions problem. And, you 8 know, this at least is a good step forward to make it 9 clear to everybody that they have got to put the right 10 parts on the engines to preserve the emission levels they 11 were originally certified to. 12 CHAIRPERSON LLOYD: You're not concerned about 13 the comment that basically this is a remanufactured engine 14 done under the disguise of new engines, there's any 15 problem with that, with the process? 16 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I don't 17 personally think so. The point is they're supposed to 18 maintain the emission performance of the original engine 19 for the life of the engine. It's just like saying, well, 20 I'm going to rebuild my gasoline engine. And because it's 21 old or it's near the end of its life, I think I'll throw 22 away the catalytic converter while I'm at it and put it 23 back without one. And that's something we don't allow. 24 This is just saying -- they actually take these 25 engines apart, put a block in one, block it full of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 blocks, and another bucket full of turbochargers and 2 another bucket full of cam shafts or various other parts. 3 And they can be put back together with parts that fit, but 4 don't necessarily preserve the emission certification. 5 This just helps say this engine, if it's a Tier 1 6 engines, needs to be put back together with Tier 1 parts. 7 If it's a Tier 3 engine, with Tier 3 parts. It needs to 8 be so labeled. If the manufacturer does a short block, 9 which is only a partial engine, they need to put a label 10 on that that says this engine, when completed, has to have 11 Tier 3 parts on it. The final one that comes out says 12 this engine is equipped with Tier 3 parts, so we know what 13 that engine is supposed to do. And you can't really 14 figure that out if the engine doesn't have some kind of 15 label that's not traced back to someone who has the 16 obligation to say this is the way the engine went 17 together. 18 CHAIRPERSON LLOYD: Jed. 19 MR. MANDEL: Dr. Lloyd, if I might. This 20 colloquy, a little bit, just points out the reason why 21 there should be some process to fully engage and 22 understand the issues and come up with a comprehensive 23 proposal. 24 Let me just give you a couple of specific 25 examples. Tom was specifically talking in a couple of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 instances on what we would call a rebuild, not a 2 remanufactured engine. And we don't have the same level 3 of concern at all about the labeling requirements in the 4 staff's proposal with respect to rebuilt non-road engines. 5 Just to grossly characterize it, a rebuild is 6 when someone takes their equipment and with the specific 7 engine in it, takes that engine out, rebuilds it through a 8 process that sort of reconstitutes its performance, and 9 puts it right back in the piece of equipment in which it 10 was removed. That's a rebuilt engine. And the identity 11 of the engine and its emission characteristics and its 12 application are obviously identifiable, well known. 13 As Tom also described, but sort of mixed in the 14 same discussion, a remanufacturing process is where 15 there's an engine that no longer has life left in its 16 application, perhaps the application itself. We're 17 obviously talking non-road. So some piece of non-road 18 equipment has deteriorated or no longer is being used. 19 It's removed. But the iron, the metal, the pieces, the 20 parts still have potential secondary life to them. And 21 that engine is literally broken apart into all of its 22 individual components, cleaned, processed -- much more 23 significant processes than I could possibly describe to 24 you -- separating into pieces, and put back together into 25 a configuration, that I can tell you from our discussions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 internally among EMA members, with ARB, does have an 2 emissions profile to it. It is not an unregulated engine. 3 But to the degree that staff is now raising 4 issues, which we are happy to work on with this Board as 5 to how that process should work, what emissions 6 configuration or standards should those engines meet, how 7 should they be labeled, let's work to do that. But the 8 way the industry works, simply trying to label it and 9 directing a labeling is not possible. In many cases, the 10 bits and parts are coming from a non-highway truck engine, 11 a non-road Tier 2 engine, a marine engine. Because the 12 turbochargers may be similar, the pistons may be similar, 13 and they can then be put together. It really is 14 regulating a different industry. 15 And I'm also concerned we're not doing this 16 essentially full blown the right way, again, just within a 17 huge Tier 4 Rule -- a hugely significant Tier 4 Rule 18 trying to address this other issue. There is no similar 19 requirement of on-highway diesel engines, which also get 20 rebuilt and remanufactured and reprocessed. And, 21 presumably, given this discussion we've now had, and the 22 staff has identified a concern of theirs, we ought to 23 address the on-highway side as well. And we're prepared 24 to roll up our sleeves and work with you on that. But it 25 just strikes me that we ought to do this with all the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 effected stakeholders, including those folks who do the 2 remanufacturing who have not been engaged in this process 3 because they saw this as the harmonized Tier 4 non-road 4 rule and didn't see it coming. 5 CHAIRPERSON LLOYD: Bob. 6 MOBILE SOURCE DIVISION CONTROL CHIEF CROSS: When 7 an engine is manufactured, it has its identity. In other 8 words, it is a certified piece of equipment that has all 9 of the pieces that match up and make it have a specific 10 emissions level. And while they're characterizing a loss 11 of identity in the manufacturing process, in fact, the 12 block which goes into the manufacturing process typically 13 has serial numbers or a tag which says this block, you 14 know, is of DDC, for example, which would then have a 15 certified configuration associated with it. If the engine 16 manufacturers are now assembling that block in anything 17 other than the configuration which that label says, 18 they're hampering, and it's illegal. 19 All we're saying is that through the process of 20 remanufacturing, the engine should retain that identity so 21 that the engine that comes out at the end has the same 22 emission control capability as the one that came in, or 23 better. And the concern with this loss of identity is 24 that the components which make the emission levels on a 25 diesel engine physically look the same. In other words, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 you can put injectors in an engine which are much larger 2 than the injectors which came in to make more power, but 3 it's going to be a higher-emitting engine. You can change 4 turbochargers with some of the same results depending on 5 what you do with injectors. You can change pistons and 6 change emissions. There's all this stuff that you can 7 change that would make an engine physically look the same, 8 but have much higher emissions. 9 And what we're saying is that the industry should 10 be already taking care of this. If it's not, it needs to 11 do that. All we're asking is that the engine retain its 12 identity as it's already required to. 13 The main reason that there's a big deal also 14 about the labeling is because when they get into the 15 field, our inspectors need to know what they are. If the 16 engine loses its identity through the remanufacturing 17 process, then when you go out in the field and you want to 18 say, well, is this -- then you have a problem there as 19 well. 20 So, in fact, we've had that already with some of 21 our retrofit program. With the Trash Truck Program, we 22 have a bunch of engines that have lost their identity. 23 And we're trying to figure out what they are so we can 24 figure out what to do to retrofit them. If the engines 25 were properly labeled during the remanufacturing process, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 that wouldn't have happened. We think it needs to be done 2 and that it's pretty straightforward. 3 CHAIRPERSON LLOYD: Ms. Pineda, do you have a 4 question? 5 Ms. Berg. 6 BOARD MEMBER BERG: I have a couple of comments, 7 but one on the aligning of the testing and the measuring 8 procedures, maybe could you comment? Because I think 9 that's a very valid point that was made. 10 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes. I 11 think what's happened is EPA has proposed these technical 12 changes, but they're not final yet. So we couldn't 13 incorporate them into our rule making. What we're hoping 14 is if they proceed on the schedule they've promised, that 15 it will occur during the process where we're finalizing 16 our reg and we would then incorporate them. If they do 17 remain as they are now, as purely technical and not 18 effecting the stringency of the standard, we would just 19 incorporate them. 20 The only reason that issue came up is you never 21 know. In their final rule making, something might change, 22 which effects the stringency of the standard, and we would 23 rather be able to say we don't like that or put some 24 pressure on to see that not happen. So it's just 25 preserving ARB's ability to have some leverage to make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 sure that nothing weakens the overall effectiveness 2 standard. As far as the technical detail, we've reviewed 3 them, commented on them, no problem if they are the way 4 they are in the EPA proposal. 5 BOARD MEMBER BERG: So would we expect that we 6 will be able to be in alignment? 7 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: That's 8 the expectation. And if EPA is slow at doing this and 9 doesn't finalize it, we'll go ahead and finalize our regs 10 and come back to the Board with another regulatory change 11 to incorporate those revisions. But we're hoping the 12 timing will be such that that we can just do it under the 13 15-day change and save another trip to the Board. 14 BOARD MEMBER BERG: I do think it's incumbent on 15 us to really twist EPA's arm, because once again, it just 16 makes it so difficult on the manufacturers who are not 17 only selling within the United States, but worldwide, to 18 have all these duplicate standards. And so whatever we 19 can do to do that. 20 I'm concerned whether the remanufacturing issue 21 has had due process and if we truly understand all the 22 components of that. 23 EXECUTIVE OFFICER WITHERSPOON: On that point 24 specifically, I think what I would recommend is that the 25 Board proceed to adopt the labeling proposal today, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 because we think that's very straightforward and 2 reasonable, but that staff continue to explore and 3 investigate this remanufacturing issue to see whether we 4 have all the right requirements ourselves to have 5 addressed it. And if need be, we'll bring it back before 6 you. But we really feel that labeling is not onerous and 7 should be done as a matter of course, and we might have 8 tripped over an enforcement problem. And the protests 9 about the labeling suggest there's more to it than meets 10 the eye. So we will look into it further. 11 BOARD MEMBER BERG: I appreciate that. Thank you 12 very much. 13 CHAIRPERSON LLOYD: Ms. D'Adamo. 14 BOARD MEMBER D'ADAMO: Just to doublecheck, could 15 Legal staff respond to the due process issue? 16 GENERAL COUNSEL JOHNSTON: Most certainly. The 17 45-day notice had all the information about the labeling 18 requirements and other requirements that pertain to the 19 remanufacturers, so we're not certain -- and as you heard 20 from Ms. Tschogl, there was extensive notification and 21 distribution of the 45-day notice, plus, there was these 22 opportunities at workshops to discuss these issues. So 23 from a legal standpoint, we're quite satisfied that there 24 was due process. I can ask our Staff Counsel Floyd 25 Vergara if he has anything to add as well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 STAFF COUNSEL VERGARA: No. That pretty much 2 describes the process. We feel that due process was 3 adequately achieved. 4 MR. MANDEL: But there were no workshops. It's 5 called a labeling provision. And in all fairness to the 6 staff who I think absolutely approached this problem as 7 being merely of labeling, it was in the course of our 8 discussions over the last month or two that I think 9 they've realized there is more to this issue than just 10 labeling. That's the whole point. If I were an 11 independent remanufacturer, with all of the efforts on the 12 rule that staff has undertaken, I don't think I would have 13 seen I'm about to be regulated. It's just want going to 14 be surfaced. So -- 15 CHAIRPERSON LLOYD: It sounds as though 16 Ms. Witherspoon had the solution to that. Did you hear 17 her solution? 18 MR. MANDEL: I did, absolutely. And I appreciate 19 it, except it's a little bit sleeves off the vest, because 20 all the staff has proposed is a labeling requirement. And 21 they're saying, let's go ahead with our labeling 22 requirement, and if there's more that we need, we'll come 23 back to you. It's the labeling requirement that's going 24 to force, as a practical matter, this industry to be 25 regulated. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 And, please, we're not objecting to the staff 2 proceeding with a proposal and this Board considering it. 3 Let's figure out what the issues are. But what Bob Cross 4 said about how the industry works and what the issues are 5 exactly how it does work. We are very responsive. At 6 least the EMA members, who do remanufacturing, are 7 absolutely producing an as good, if not better, 8 configuration. But the processes for doing that are going 9 to be complicated. 10 And just to pick up on Bob's example, because you 11 heard it and it sounded compelling, yes, the block has an 12 identity with the serial number. But the label can be on 13 many other different parts. And the ultimately 14 remanufactured engine may have a block from a Tier 2 15 non-road engine. It may have a turbocharger from a Tier 3 16 engine. It may have pistons from an on-highway engine, 17 all of which had previous identities. What's the identity 18 of the remanufacturing engine you're going to label? And, 19 yes, it's as good or better, but what -- 20 MOBILE SOURCE DIVISION CONTROL CHIEF CROSS: It's 21 illegal. 22 MR. MANDEL: Well, then -- 23 MOBILE SOURCE DIVISION CONTROL CHIEF CROSS: 24 You're not supposed to be doing that. 25 MR. MANDEL: Well, I believe that is absolutely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 the way the industry is doing it. And if it's illegal, 2 there ought to be enforcement actions. But I suspect it's 3 not illegal. And in any event, what this suggests is that 4 we better take a look at the remanufacturing process and 5 adopt appropriate regulations to make sure that it does 6 what this Board wants it to do. But -- 7 EXECUTIVE OFFICER WITHERSPOON: I think 8 Mr. Mandel is making my point for me, that we should have 9 a labeling requirement and that we should explore it and 10 we might have an enforcement action and not just a 11 regulatory one. Because he's confirming that what the 12 industry has tended to do has veered away from the 13 emission standards and anti-tampering provisions, and we 14 need to clean that up. 15 CHAIRPERSON LLOYD: Ms. D'Adamo. 16 BOARD MEMBER D'ADAMO: And to include in that 17 process that you've just outlined on-road as well. 18 EXECUTIVE OFFICER WITHERSPOON: I'd like to have 19 Mr. Cackette speak to the on-road versus off-road aspect 20 that Jed brought up. 21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Well, I 22 think if we do that, we would look at the on-road. But as 23 you'll find out -- or you've heard already on the reflash 24 issue, the rebuilds are becoming less and less frequent on 25 the on-road. That's why we're having problems with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 chip reflash. They're going a million miles, and often 2 they get sent off somewhere else. But in this case, we 3 focus on this one because the engines get rebuilt so many 4 times in that 32-year life that we've talked about for 5 some of this equipment. So we would look at both. But, 6 clearly, the concern arises with the off-roads primarily. 7 MR. MANDEL: And rebuilds versus 8 remanufacturings, Tom, because we can't throw -- you say 9 the rebuilds -- 10 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I meant 11 remanufactured. I'm sorry. 12 MR. MANDEL: But there's a difference. 13 CHAIRPERSON LLOYD: Thank you. Thank you, Jed. 14 We'll have some more discussion on this. 15 BOARD MEMBER RIORDAN: Mr. Chairman, the only 16 thing I would say is that -- it appears that we will 17 continue to look at this and to evaluate it. If there are 18 people -- and I don't know whether they would be 19 manufacturers or some other type of business that does 20 this, and that Jed knows of them, we need to have your 21 input as to who then we should be talking to and working 22 with. I mean, staff may know all of this, but I don't. 23 And so it may be there are some key people there that are 24 very important to this further discussion which I think is 25 merited. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 MOBILE SOURCE DIVISION CONTROL CHIEF CROSS: We'd 2 be, at the lower staff level, happy to do that. I think 3 we just feel that the requirement in the regulation that 4 the engine retain its identity should be clear so when we 5 talk to the stakeholders, we're on solid ground. 6 BOARD MEMBER RIORDAN: And whomever these 7 stakeholders are, that's, in my mind, a question. If they 8 weren't a party or did not understand what our notices 9 said, we'd better know who they are so we can bring them 10 in so we can have this discussion. 11 It seems to me that it's very clear there's no 12 problem with rebuilds. It's this remanufacturing. And 13 then you begin to wonder is remanufacturing sort of as we 14 said, or is it recycling in a sense. It's hard to know. 15 So I think we would benefit from the discussion for 16 further information. 17 CHAIRPERSON LLOYD: I think you make a very good 18 point, Ms. Riordan. I think the thing that concerned me 19 was the process. And then Jed yesterday said we don't 20 want people coming into the hearing room in the future 21 that say, well, we weren't aware this was happening and it 22 had a big impact on us. I think you've maybe got a 23 solution, and ask staff to work with Jed through the 24 15-day process. And if something really jumps out and 25 really -- come back to us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 Ms. Pineda. 2 BOARD MEMBER PINEDA: I would like to just 3 support that during that 15-day that there is a very -- 4 even to the labeling requirement, that there is a real 5 open discussion, so if there is something that is raised, 6 that we have an opportunity to decide whether or not other 7 action is appropriate. 8 MR. MANDEL: Thank you, Dr. Lloyd. I know I've 9 taken an enormous amount of time. If I could summarize, 10 because I think there were a couple points I made that we 11 so focused on the remanufacturing issue and just the 12 remanufacturing issue. 13 One of the things that struck me about the 14 staff's proposal was they were concerned when there were 15 aftertreatment on these devices, that these engines have 16 to be manufactured, they be remanufactured with the 17 aftertreatment. 18 We have a significant amount of time between now 19 and that actuality with aftertreatment to still work on 20 this problem. So I still hold to -- I request that you 21 defer the remanufacturing issue and press the staff to 22 come back to you promptly. 23 I want to remind you that we also asked for 24 language that would allow the staff to certify and give an 25 Executive Order to an engine that somehow in an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 unanticipated way might not have been in technical 2 compliance with this translation from federal speak to 3 California speak in an intent to align. And we just think 4 that would be an awful result and I think curable through 5 the 15-day notice. And then strong direction to the staff 6 to align on the technical amendments. I appreciated Mr. 7 Berg's comments. And we've got to have that, must have 8 it. 9 EXECUTIVE OFFICER WITHERSPOON: Dr. Lloyd, I have 10 one more suggestion. Instead of a customary 15-day 11 comment, we do 30- or 45-day so we have a chance to search 12 out all the affected parties and engage in a meaningful 13 dialogue. And then also, as in every case, if bigger 14 issues come up than we've discussed today, we'll be back 15 before the Board for your direction and deliberation. 16 CHAIRPERSON LLOYD: Thank you. 17 MR. MANDEL: We appreciate that very much. And 18 the staff has been working with us on this draft of 15-day 19 notice, and we are getting there. 20 CHAIRPERSON LLOYD: Thank you very much. 21 Before Joe speaks, I'd like to recognize some 22 international visitors we have at the back. My friend 23 Professor Daisho from Waseda University and advisor to the 24 government. And then we have Mr. Hirano. I don't know 25 where he is there. Mr. Tange, good to see you again, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 Mr. Tomuro. Again, thank you very much. But I think it's 2 an indication they are coming over discussing some of our 3 greenhouse gas regulations, some of the hydrogen programs. 4 And I have personally known Professor Daisho and interact 5 with him. I know he's a fountain of knowledge, and one of 6 the areas where, in fact, we work with Japan, compare 7 notes, and see how we can improve the standards. So great 8 welcome to you, Profession Daisho. Sorry I can't spend 9 some more time. It's great to see you again. And thank 10 you all for coming. 11 We look forward to continuing to work with Japan 12 and with your organizations. And, hopefully, on the 13 hydrogen side, we'll work with you as we bring the 14 hydrogen highway to fruition. So thank you very much for 15 coming. And have a very pleasant rest of your trip. 16 At this point, I'd like to invite Joe Kubsh. 17 MR. KUBSH: Good morning, Mr. Chairman, members 18 of the Board. My name is Joe Kubsh. I'm the Deputy 19 Director of the Manufacturers' Emission Controls 20 Association. 21 And I'm here today to add our industry's strong 22 support to the Tier 4 harmonization that you all are 23 considering here this morning. Our industry was a strong 24 supporter of the original EPA proposal on Tier 4 non-road 25 emissions back in 2003. And we believe, as indicated in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 the staff report, that a significant opportunity does 2 exist to significantly reduce emissions from non-road 3 engines by using the system strategies that has become the 4 buzz word of today's engine emission technology 5 discussion. That is a systems approach that includes 6 advanced engine designs, advanced emission controls, and 7 the use of clean fuels, like ultralow sulfur diesel fuel. 8 I did want to indicate that our industry, as well 9 the engine manufacturers, are working very hard on making 10 clean diesels a reality. As most of you know, diesel 11 particulate filters will be standard equipment on on-road 12 highway engines starting in 2007. 13 And there's also considerable experience with the 14 use of emission controls in some of these non-road 15 categories that we're talking about here this morning. In 16 fact, by our count, more than a quarter of a million 17 non-road engines have been equipped with either oxidation 18 catalysts or diesel particulate filters worldwide in the 19 past ten-plus years. Most of that experience comes in 20 areas like the mining industry and in the materials 21 handling industry where these kinds of controls, 22 especially with respect to particulate matter, have been 23 put on for occupational health related issues. 24 Certainly appreciate Jed's slide about the 25 diverse nature of the non-road environment, and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 certainly agree that this non-road environment is very 2 diverse in terms of the numbers of manufacturers, the 3 kinds of applications, the numbers of engines that we're 4 talking about here today. But our industry has 5 considerable experience in dealing with the whole array of 6 engines that are out there. We've worked with engine 7 manufacturers to put catalysts on weedwhackers and put 8 selective catalytic reduction on ocean-going vessels. And 9 we're going to continue to work very hard with the engine 10 manufacturers to make Tier 4 a reality in the non-road 11 environment. 12 In fact, recently we polled our members with 13 respect to their commitment on developing diesel 14 technology, and our industry is investing in excess of a 15 billion and a half dollars to make clean diesel a reality. 16 So we're just here to indicate our strong commitment to 17 make non-road diesel engines part of the clean diesel 18 solution. And we're here to work with staff and our 19 customers, the engine manufacturers, to make that a 20 reality. 21 And with that, I'd be happy to answer any 22 questions you might have. 23 CHAIRPERSON LLOYD: Thank you, Joe. And thank 24 you for that continued work you do with the membership 25 there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 Questions or comments? 2 Thank you very much. Any other questions from 3 the Board or any further comments from the staff? 4 EXECUTIVE OFFICER WITHERSPOON: No further 5 comments. 6 CHAIRPERSON LLOYD: I will now close the record 7 on this agenda item. However, the record will be reopened 8 when the 15-day notice of public availability is issued. 9 Written or oral comments received after this hearing date, 10 but before the 15-day notice is issued, will not be 11 accepted as part of the official record on this agenda 12 item. 13 When the record is reopened for a 15-day comment 14 period, the public may submit written comments on the 15 proposed changes, which will be considered and responded 16 to in the final statement of reasons for the regulation. 17 Any ex parte communications from my colleagues? 18 I did talk to Jed Mandel on Tuesday of this week 19 very briefly on this item, and it was consistent with his 20 comments today. 21 Ms. D'Adamo. 22 BOARD MEMBER D'ADAMO: Mr. Chairman, it's my 23 understanding, though, that instead of the 15-day, that it 24 will be 45. Is that what staff is recommending? 25 EXECUTIVE OFFICER WITHERSPOON: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 BOARD MEMBER D'ADAMO: And with the proposed 2 action item for staff to engage in discussions regarding 3 the issues presented today. 4 I would like to move Resolution Number 04-4-3 5 with 45-day modification. 6 CHAIRPERSON LLOYD: And with the direction to 7 staff to work with the manufacturers, et cetera, et 8 cetera. 9 BOARD MEMBER RIORDAN: I'd second the motion. 10 CHAIRPERSON LLOYD: All in favor say aye. 11 (Ayes) 12 CHAIRPERSON LLOYD: Anybody against? 13 Thank you. And thank you, staff. 14 And, Jed, I don't know whether you heard that, 15 but don't expect us to be too nice on the next item. 16 We'll take a ten-minute break until 11:30 by the 17 clock before we go on. 18 (Thereupon a recess was taken.) 19 CHAIRPERSON LLOYD: The next agenda item is 20 04-11-5, an update on the Low NOx Software Installation 21 Program, also known as chip reflash, on heavy-duty diesel 22 trucks and other heavy-duty diesel vehicles. It sounds as 23 though we've been here before. 24 In March of this year, the Board adopted a 25 regulation requiring the installation of corrective PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 software in certain diesel trucks. However, we decided to 2 stay that regulation temporarily pending the results of a 3 voluntary program to reflash the affected trucks. 4 We heard an interim report from staff in October 5 that the voluntary program wasn't doing as well as we all 6 had hoped. However, we withheld final judgment until 7 today so that truck manufacturers and their dealers would 8 have every opportunity to meet our Phase 1 target of 35 9 percent emission reductions. 10 We need to make two decisions. We need to decide 11 whether the voluntary program has met its first target of 12 35 percent emission reduction. Very simple task. Second, 13 we need to determine whether it's likely that the 14 manufacturers and their dealers will meet the second 15 target of 60 percent emission reduction by the end of May 16 this year. If we have any doubt about those two 17 milestones, then it is incumbent upon us to resume the 18 regulatory approach we approved in March. 19 Let me remind my colleagues that it is not 20 necessary for the Board to take any further regulatory 21 action at this time. The chip reflash regulation is 22 already adopted. All we need to do is direct the 23 Executive Officer to file that regulation with the Office 24 of Administrative Law so it can become effective. 25 Again, I want to say in this case how much we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 appreciate working with the California Truck 2 Association -- I've got that wrong -- Trucking 3 Association, and so we'll hear more, I know, from them. 4 But this is a case where we really did our very best on 5 that part of it. 6 So with that background and to provide additional 7 details, I'd like to turn it over to Ms. Witherspoon to 8 introduce the item and begin the staff presentation. 9 EXECUTIVE OFFICER WITHERSPOON: Thank you, 10 Chairman Lloyd. Since staff already covered the 11 background on the chip reflash regulations and alternative 12 voluntary compliance program at the October meeting in 13 Fresno, I'm going to dispense with opening remarks and 14 turn the presentation over to Mr. Earl Landberg who will 15 brief the Board on the final results of Phase 1. 16 Earl. 17 (Thereupon an overhead presentation was 18 presented as follows.) 19 AIR POLLUTION SPECIALIST LANDBERG: Thank you, 20 Mr. Witherspoon. Good day, Chairman. 21 We are here today to provide results for the 22 Heavy-Duty Diesel Engine Software Upgrade Program that the 23 Board approved in March of this year. The results I'll 24 present today cover the period from April 1st to the 25 voluntary program's November 1st reporting date. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 --o0o-- 2 AIR POLLUTION SPECIALIST LANDBERG: In my 3 presentation to you today, I will discuss the background 4 for this program, including a brief history of the federal 5 Consent Decrees and the California-specific Settlement 6 Agreements, the software upgrade regulations, which the 7 Board approved in March, and the efforts and results of 8 the voluntary program to install low Nox software to 9 reduce emissions of oxides of nitrogen, called NOx, from 10 eligible engines. 11 --o0o-- 12 AIR POLLUTION SPECIALIST LANDBERG: While you've 13 heard much of this before, I want to briefly review 14 background information to set the stage for the approved 15 regulation and the voluntary program. 16 --o0o-- 17 AIR POLLUTION SPECIALIST LANDBERG: Prior to the 18 1990s, mechanical controls were used to control the engine 19 parameters that effect diesel emissions. As emission 20 standards became more stringent in the early 1990s, engine 21 manufacturers replaced the mechanical controls with 22 computer-controlled systems. Some engine manufacturers 23 inappropriately used the computer controls to design 24 engines that passed emission compliance tests, but that 25 emitted significantly more NOx during real-world driving, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 particularly during on-highway driving. The high NOx 2 emissions that occurred during real-world driving were two 3 to three times higher than NOx levels measured over 4 emission compliance tests. These high NOx emissions are 5 referred to as off-cycle NOx, and the computer programming 6 that created these high emissions is called a defeat 7 device. 8 --o0o-- 9 AIR POLLUTION SPECIALIST LANDBERG: In 1998, the 10 U.S. Department of Justice, the U.S. EPA, and the ARB 11 negotiated legally-binding agreements with the affected 12 engine manufacturers to partially mitigate the high 13 off-cycle NOx emissions caused by their engines. The 14 federal agreements are called Consent Decrees, while the 15 California-specific agreements are called Settlement 16 Agreements. 17 One of the provisions in the Consent Decrees and 18 Settlement Agreements is a Low NOx Rebuild Program. The 19 Low NOx Rebuild Program requires the engine manufacturers 20 listed on this slide to provide a fix to the high NOx 21 emissions created by their use of defeat devices. The fix 22 is called low NOx software upgrade, or chip reflash. 23 Under the Low NOx Rebuild Program, the low NOx software 24 upgrade is to be installed at the time of engine rebuild 25 or upon request by the vehicle owner or operator. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 --o0o-- 2 AIR POLLUTION SPECIALIST LANDBERG: When we 3 negotiated the Consent Decrees and Settlement Agreements, 4 both the U.S. EPA and ARB expected engine rebuilds to 5 occur at about 300,000 to 350,000 miles of operation, 6 depending on type of heavy-duty diesel vehicle. However, 7 it turns out that engines are lasting up to 750,000 to one 8 million miles before a rebuild is necessary. As a result, 9 relatively few low NOx software upgrades have been 10 installed. In fact, as of the end of March 2004, only 13 11 percent of the engines eligible for low NOx software 12 upgrades have been reflashed. 13 --o0o-- 14 AIR POLLUTION SPECIALIST LANDBERG: One solution 15 to reduce the high off-cycle NOx emissions is to require 16 the installation of low NOx software upgrades on every 17 eligible engine as soon as possible. 18 --o0o-- 19 AIR POLLUTION SPECIALIST LANDBERG: The 20 regulation approved by the Board in March is applicable to 21 1993 through 1999 model year heavy-duty diesel trucks, 22 school buses, and motor homes that are equipped with 23 specific 1993 through 1998 model year engines that have 24 high NOx emissions. We include the 1999 model year 25 vehicles because some of these use 1998 model year PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 engines. 2 The regulation applies to all heavy-duty diesel 3 vehicles with applicable engines that operate in 4 California. This includes vehicles registered out of 5 state that travel into and within California. The 6 regulation excludes engines that are not electronically 7 controlled or for which low NOx software has not been 8 developed. 9 --o0o-- 10 AIR POLLUTION SPECIALIST LANDBERG: The 11 regulation, approved by the Board in March, provides the 12 following phase-in compliance schedule to meet the 13 requirements to install a low NOx software in each 14 applicable engine's electronic control module. The 15 phase-in implementation schedule is based on the model 16 year of the engine to receive the low NOx software upgrade 17 and is structured to minimize the workload for engine 18 dealers and distributors. This slide shows the 19 implementation schedule for the regulation approved by the 20 Board in March of this year. 21 --o0o-- 22 AIR POLLUTION SPECIALIST LANDBERG: At the March 23 2004 hearing, the Board approved the mandatory NOx 24 software upgrade regulation proposed by the staff, but 25 also approved the implementation of a voluntary program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 which included performance targets, first of which the 2 manufacturers reported on in November. 3 In approving the voluntary program, the Board 4 directed the staff to withhold filing the regulation with 5 the Office of Administrative Law until the Board had a 6 chance to review the results of the voluntary program. 7 This means the regulation is a backstop only to be 8 implemented if the Board determines the voluntary program 9 has not achieved its emission reduction targets or if 10 achieving future emission reduction targets does not 11 appear sustainable. The Board also suggested we might 12 obtain a glimpse of how the voluntary program is working 13 by looking at data collected through the summer. This is 14 the reason why we reported to you in October, six weeks in 15 advance of today's Board meeting. 16 --o0o-- 17 AIR POLLUTION SPECIALIST LANDBERG: The voluntary 18 program is a cooperative effort between the vehicle 19 owners, California Trucking Association, California 20 dealers, the engine manufacturers, and the ARB staff to 21 install low NOx software upgrades on a voluntary basis. 22 The goal of this program is to achieve the same emission 23 reductions by 2008 from California-registered heavy-duty 24 diesel vehicles as could be achieved through the 25 regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 --o0o-- 2 AIR POLLUTION SPECIALIST LANDBERG: Part of the 3 Board's action in March 2004 was to establish performance 4 targets for the voluntary program. The first target was 5 to achieve 35 percent of the emission reduction benefits 6 of the regulatory program from reflashes performed since 7 the voluntary program's inception in April through the end 8 of October. Based on the results I'll present today, the 9 Board must also determine whether or not the voluntary 10 program is sustainable to meet the future targets. 11 --o0o-- 12 AIR POLLUTION SPECIALIST LANDBERG: I'm now going 13 to discuss the outreach efforts by the various parties 14 involved in the voluntary program. We have been actively 15 involved in outreach efforts since March 2004. We have 16 worked closely with the California Trucking Association, 17 the engine manufacturers, and the Software Upgrade 18 Coordination Group to raise awareness of this program. 19 Specifically, we generated and mailed out over 60,000 20 letters in English and in Spanish to owners of 1993 21 through 1999 model year heavy-duty diesel vehicles. We 22 sent letters to truck owners, motor home owners, and to 23 school districts. We initiated telephone calls to 24 approximately 200,000 authorized dealers and distributors 25 to inform them of the voluntary software upgrade program. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 In addition, we also responded to telephone calls 2 from numerous vehicle owners about the low NOx software 3 installation program and had bilingual staff available to 4 assist in these efforts. ARB enforcement staff 5 distributed a low NOx software upgrade brochure and 6 staffed a booth at the International Truck Show in Anaheim 7 in September to promote low NOx software upgrades. 8 --o0o-- 9 AIR POLLUTION SPECIALIST LANDBERG: The engine 10 manufacturers also conducted some outreach to promote the 11 voluntary program. Their efforts included sending letters 12 to their dealers and distributors authorized to perform 13 low NOx software upgrades to inform them of the voluntary 14 program. They also conducted follow-up calls to 15 authorized dealers and distributors to resolve 16 implementation issues that invariably occur within any 17 program. Also, the engine manufacturers agreed to cover 18 the cost of replacing the engine's electronic control 19 module, called the ECM, if it ceased to function properly 20 as a result of the reflash process. 21 --o0o-- 22 AIR POLLUTION SPECIALIST LANDBERG: At the March 23 hearing, the California Trucking Association committed to 24 conduct extensive outreach throughout the state to raise 25 awareness of and promote participation in the voluntary PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 program. As we reported in October, the California 2 Trucking Association came through on that promise, and 3 we'd like to publicly thank everyone involved for their 4 huge efforts, particularly Stephanie Williams and Stacy 5 Heaton. 6 The California Trucking Association held outreach 7 events in its regional unit areas to raise awareness 8 within the trucking community. As part of these outreach 9 event meetings with authorized dealers and distributors 10 were conducted to specifically inform them of the program, 11 answer questions, relay the experience of other dealers 12 and distributors, and to assess their level of program 13 awareness. 14 To top off these meetings, a lunchtime barbecue 15 for dealers and distributors and truckers was held and 16 allowed participants to get their questions answered and 17 allow the truck owners to network with area dealers and 18 distributors authorized to perform reflashes. 19 The California Trucking Association also 20 participated at the International Truck Show in September 21 to promote the voluntary program and personally contacted 22 large fleets to inform them of the program. 23 --o0o-- 24 AIR POLLUTION SPECIALIST LANDBERG: This graph 25 puts the voluntary program's total progress to date into PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 perspective. As of the March 2004 Board hearing, enough 2 vehicles have been reflashed to achieve 18 percent of the 3 NOx emission benefits we'd expect from reflashing the 4 total eligible California-registered vehicle population. 5 These emission benefits occurred in the absence of the 6 voluntary program or a regulation, Consent of programs, or 7 at the time of engine rebuild. 8 At the end of August, enough vehicles had been 9 reflashed to achieve 20 percent of the total NOx emission 10 benefits expected under the voluntary program. These 11 reductions are reflected in the September reporting 12 results, which are shown in the second bar of this graph. 13 The third bar shows the NOx emission benefits achieved by 14 the end of October. As you can see, the voluntary program 15 achieved 22 percent of the total NOx emission benefits 16 expected. As previously stated, the emission-based 17 performance target for the November reporting period 18 within the voluntary program is 35 percent. 19 --o0o-- 20 AIR POLLUTION SPECIALIST LANDBERG: While the 21 previous slide showed the total progress for meeting the 22 voluntarys program's first performance target, this slide 23 shows each affected engine manufacturer's individual 24 progress in achieving the 35 percent emission reduction 25 target. As you can see, none of the engine manufacturers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 were successful in meeting the voluntary program's first 2 performance target. Detroit Diesel Corporation, or DDC, 3 was the closest manufacturer at 30 percent. 4 --o0o-- 5 AIR POLLUTION SPECIALIST LANDBERG: In addition 6 to analyzing manufacturers' compliance with the 35 percent 7 target, staff has also evaluated the sustainability of the 8 program in order to determine the potential to comply with 9 the second target of 60 percent. Staff evaluated both the 10 average reflash rates over the voluntary program as well 11 as the best monthly reflash rate. 12 --o0o-- 13 AIR POLLUTION SPECIALIST LANDBERG: On this 14 slide, we can see the percent of reflashable fleet that 15 was reflashed per month. This is the lower line. The 16 average reflash rate is approximately 0.5 percent per 17 month. The peak of 0.8 percent occurred in September. 18 The line at the top of this chart is the percent of 19 reflashable engines that would have been needed to be 20 reflashed each month to achieve the first 35 percent 21 target. 22 --o0o-- 23 AIR POLLUTION SPECIALIST LANDBERG: If we project 24 out the average rate of reflashes that has occurred from 25 April to the end of October, we would expect that 26 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 percent of the eligible engines would have been reflashed 2 by the end of May 2005. If we took the highest average 3 monthly reflash rate that has occurred to date and project 4 that out to the end of May, we would expect to have 28 5 percent of reflashable fleet reflashed. 6 --o0o-- 7 AIR POLLUTION SPECIALIST LANDBERG: In 8 conclusion, none of the engine manufacturers were able to 9 meet the first 35 percent target before the end of 10 October. Based on the sustainability evaluation, it 11 appears that the engine manufacturers are also not on 12 track to hit the 60 percent target by the end of May. 13 Staff recommends that the Board direct staff to 14 file the regulation with the Office of Administrative Law, 15 and that we should begin the regulation implementation 16 once it is approved by the OAL. 17 That concludes my presentation. Thank you for 18 your attention. 19 CHAIRPERSON LLOYD: Thank you. 20 Questions from my colleagues? 21 With that, we'll go straight into our witness 22 list. I'd like to call up Stephanie Williams, Richard 23 Smith, and Paul Wuebben. 24 MS. WILLIAMS: Good afternoon. And thank you for 25 a chance to testify before the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 Before I start, I'd like to point out on January 2 7th, there's a hearing on the 710 freeway and the impact 3 to drivers and the trucking industry on congestion at 4 ports. You're aware, Alan, that we've been running 5 legislation for a number of years trying to get the ports 6 open 24/7. This is in conjunction with the bill we're 7 running with Senator Alacon regarding port congestion. 8 CHAIRPERSON LLOYD: Where's the conference? 9 MS. WILLIAMS: It's in Wilmington at Banning 10 Park. It's not a conference. It's a legislative hearing. 11 The Labor Committee is holding a hearing. 12 To move ahead on the voluntary program, I'd like 13 to go back a little because it's a new Board and you 14 weren't around when all of this happened. But there was 15 an agreement made between the Department of Justice and 16 the Federal EPA and the California Air Resources Board on 17 off-cycle emissions. And we bought these vehicles 18 certified meeting EPA standards. We weren't at the table 19 when these agreements were made. And at the time, anyone 20 would have known that 300,000 miles on a diesel truck when 21 we have million-mile warranties isn't reasonable. But 22 because we weren't at the table, we didn't have the chance 23 to tell you or EPA or the Department of Justice. 24 So you signed an agreement, an agreement that you 25 have to have an EPA waiver to get changed, and you have to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 go to the Department of Justice. And that's not going to 2 take a year, two years, or three years. This is a legal 3 filing that you made, a promise that you made. And the 4 engine manufacturers did not say that they committed a 5 crime. They said this was cheaper than going to court. 6 So we're in a really interesting situation where 7 my members, who weren't at the table -- and we complained 8 miserably that we weren't at the table -- are now looking 9 at a regulation that would go after the truckers who were 10 not a party to the agreements, not invited in at the table 11 even after the comment period, and now we have a 12 regulation where they would be the one that would be sited 13 and have to go to have a vehicle changed that they bought 14 in good faith. So there's a lot of legal issues here that 15 have not come forward. And I believe that a voluntary 16 program makes that mess go away. 17 And I'm going to give you an example of a 18 regulation that's misthought and goes to court. The South 19 Coast AQMD had Rule 1190, the waste haul rule. And they 20 wanted to have natural gas trucks instead of diesel 21 trucks, regardless of the emission standards. And people 22 went to court. And it goes through to same process, all 23 of these cases. It started in 1999. It goes to Region 9. 24 Region 9 approves anything environmental, and it gets 25 kicked off to the Appeals Court. It takes five years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 And still, right now, we are waiting -- they're 2 asking you to give them a waiver because they lost in the 3 Supreme Court so they can do it through another avenue. 4 So the garbage haulers in that area have not bought trucks 5 since 1999. If they would have just stayed home and 6 ignored the garbage trucks there, regular turnover would 7 have happened. And since 1999, the 2004 emission 8 standards have come about. So the emission reductions 9 lost by even being involved are huge. If they would have 10 not been there, the air would have been cleaner. 11 So when you look at these problems between the 12 industry and the engine manufacturers and trying to push 13 technology that's not acceptable to the consumer, you have 14 problems with air quality that are not in the best 15 interest of the public. And we'd like you to think of the 16 best emission reduction scenario, not the best lawsuit 17 scenario. Because the voluntary program, even if it's 2 18 percent, 5 percent, 7 percent a month, it is going to be 19 now, and it will happen in two years. If you go to court, 20 in five years, we'll be talking about this. In 2010, I'll 21 be standing here talking about the court suit is over, 22 what are we going to do on the reflash? That's a fact. 23 There's documentation in the waste rule that shows you 24 what happens when things go to court. 25 You also have another option. You can go back to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 the U.S. Department of Justice and seek compliance, 2 because if the engine manufacturers aren't complying with 3 the Consent decree, why are you going after us? So those 4 are the questions you need to ask yourselves today. 5 We would prefer that you forgo the litigation 6 trap, because that's what it is, and help us get the 7 emission reductions that we need through the voluntary 8 program. 9 I'd like to go over some of the hurdles that 10 we've had and try to find a way to make this work in a 11 time frame allotted. There are 58,000 trucks that were 12 supposed to be reflashed. We have roughly 42- to 44,000 13 trucks out there that still need to be reflashed. We 14 started this May 23rd -- the voluntary program -- I'm 15 sorry -- March 23rd. The dealer letters were not 16 completed until June 1st. So we couldn't start until June 17 1st. So this program was delayed two months. So what was 18 supposed to be an October deadline realistically is two 19 months later than October, because through no fault of 20 ours, the dealer letters were not out. 21 When we started marketing the program, we put in 22 Caltrux, our magazine, go get your trucks reflashed, and 23 call your dealer. Here's how you do it. Everyone who 24 called their dealer was rejected. There was no 25 information in the industry. Dealers had no idea that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 this was supposed to happen. And they weren't happy about 2 the labor rates or the fact that they would be putting 3 aside good business for what is a very small amount of 4 money. 5 So we had to go unit to unit and talk to the 6 dealers. And we were very successful in Northern 7 California. Once the dealers understood it and they knew 8 they were going to be compensated, we could get them to do 9 it. And then we could move our members through the dealer 10 shops. But when we got to Southern California, there's 11 only four authorized dealers in Southern California. 12 There's truck manufacturers that can do it, but they don't 13 have to anything to do with the authorized dealers. We 14 have Valley Detroit in the City of Industry. We have two 15 Cummins Cal Pacifics, and we have a Petersons Power 16 Systems for CAT. 17 So you can see that if 60 percent -- we believe 18 60 percent of the trucks are in Southern California. And 19 what's 60 percent of 44,000? That's what would have to go 20 through those four dealerships in how much time? They 21 would completely go out of business. So we have to come 22 up with a more creative way to do this. And I think that 23 we, through our trials and errors, have done that. 24 I had a conversation with one of the largest 25 dealers in Los Angeles, L.A. Freightliner. And between PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 L.A. Freightliner and L.A. Peterbilt, those are truck 2 manufacturers. And the way we buy vehicles is not like 3 cars. We pick an engine, and then we pick the truck it's 4 going to go into. So we actually buy from the truck 5 manufacturer. 6 We should have gone to the truck manufacturers in 7 the beginning. The truck manufacturers aren't part of the 8 Consent Decrees. They're separate from the engine 9 manufacturers. They're willing to do this, but they need 10 to be sure that they're not putting good money aside for 11 bad money. When they're paid 55, $60 to do these 12 reflashes, there's risk, these older vehicles. Once you 13 get in there and start doing things, things can go wrong. 14 So the truck dealers who can do more than one engine, they 15 can do Cummins, they can do Detroit Diesel, they can do 16 Caterpillar, they're the ones we really need to focus on. 17 I asked Conan Barker, who is the owner of the 18 three L.A. Freightliners, one of the larger dealers, if we 19 were to provide funding, if we were to give them $100,000 20 and if a computer was provided, could they hire a person 21 to do just this? And he said yes. I said the Air 22 Resources Board likes to see things that are enforceable, 23 would you go into a Memorandum of Agreement with the Air 24 Resources Board and commit to doing this? He said yes. I 25 asked would other dealers -- truck dealers -- time to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 forget about authorized engine manufacturers, because 2 these trucks are beyond their warranty life. Would other 3 dealers do this? Yes, if they knew they could cover their 4 costs. 5 So we have a choice here. We can move ahead and 6 pass a regulation which goes directly to court, which 7 Region 9 is going to -- the courts in this area will 8 approve and will go to the appeals court. And then the 9 EPA waiver happens, and then you go to the Department of 10 Justice, and you have to hope the Department of Justice 11 believes that the engine manufacturers should have known 12 better when the ARB signed an agreement that wasn't 13 adequate. 14 So we're asking that, one, you look at the true 15 intent of what the program is. You want to get emission 16 reduction. You have -- how many trucks were just -- 22 17 percent. Went from 15 percent to 22 percent, 7 percent of 18 the 58,000 trucks. We can keep doing that. And we're on 19 an upscale, now that we know what we're doing. Most of 20 the trucks are in Los Angeles. We completely failed in 21 Los Angeles. They told us no. We can't sell through 22 that. We figured a way to do it. We have an enforceable 23 way to do it. The Air Resources Board can go into 24 Memorandums of Agreement with the dealers, and we don't 25 have to go to court. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 So I'm asking that you rethink the staff 2 proposal, because you get zero emission benefits with your 3 proposal for five years. With my proposal, you have the 4 minimum of what you see, 2 percent a month, if you look at 5 the four-month period. You have the minimum, and you have 6 the possibility of huge emission reductions quickly 7 without having to pay attorneys' fees. Thank you. 8 CHAIRPERSON LLOYD: Thank you. 9 Any questions? 10 Yes, Ms. Pineda and Mayor Loveridge. 11 BOARD MEMBER PINEDA: Could we get staff to 12 respond to some of the comments that were made? 13 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Let me 14 try a couple of them. First of all, the process that was 15 described about going to the Department of Justice or the 16 EPA to go through the courts on a Settlement Agreement, we 17 have a separate Settlement Agreement. We don't go through 18 the Department of Justice. We don't go through the courts 19 that way. So that wasn't quite right. Obviously, if 20 there was a lawsuit, which is Stephanie's point, that will 21 take the normal time it takes to get a lawsuit and 22 possible appeals to occur. So that point is valid. 23 About mailing out the letters, the implication 24 was that the dealers did not get any information from any 25 of the parties in a timely manner, June. In fact, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 letters went out at the end of April. So, yes, that did 2 cause a one-month or so delay or maybe almost two months 3 from the time of the Board meeting. But they did go out. 4 I think the problem was more that the dealers either did 5 not read them, did not understand them, or did not embrace 6 them, rather than not get the information. 7 Regarding the capacity to reflash these engines 8 in Southern California, Stephanie said there are four 9 dealers in California that can do that. In fact, there 10 are 29 in Los Angeles and Orange County and 18 in 11 San Diego. We looked at the capacity. The capacity is 12 clearly there to do this. The reflashes were only 13 occurring at the rate of two to three on average per 14 dealership per month. So it's pretty clear that there's 15 the capacity to do many, many more to meet either the 35 16 percent or the 60 percent goal, if you could get the 17 trucks in and if the dealers would actually do the work 18 when they do come in. 19 And as far as signing MOAs or MOUs with dealers, 20 that is an alternative approach. And she's said that one 21 major dealer or -- a truck dealer does service would do 22 that. But there are hundreds in the state. And we have 23 to -- 200 I think was the number on the slide. And we'd 24 have to try to do this with all of them, because remember, 25 our goal is not to get just a few more or do better next PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 month than we did last month. We're trying to get them 2 all reflashed. And we're at 20-something percent now, and 3 our target within a year is to be at 80 percent. And 4 that's not going to be accomplished by just approaching 5 those who maybe have seen the light or see a business 6 opportunity here all of a sudden. We have to get them 7 all. And I think that would be a fairly protracted 8 process. 9 MS. WILLIAMS: The dealers can say no. And all 10 four said no in the L.A. region. So you can't force 11 businesses that have nothing to do with this to do 12 reflashes. So we disagree with the denominator. If they 13 say no, they're not on the list. And they won't do them. 14 Or when people come in, they won't ask them to do it. We 15 have to have participants to do this. 16 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: There 17 are not four doing it in Southern California. There are 18 29 doing it in Los Angeles and Orange County. They are 19 dealers that did not participate. I think the difference 20 in the numbers is I think Stephanie is talking about the 21 Peterbilts, which are the truck dealers that also service 22 engines. But there's also other dealers that are 23 authorized to do this, including those that are arms or at 24 least associated with the engine manufacturers themselves. 25 MS. WILLIAMS: But these are for warranty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 vehicles. These are old vehicles. They go to truck 2 manufacturers to be serviced. They would never go to a 3 new engine authorized place where they handle warranty 4 issues to have their truck repaired. Yeah, it's an idea, 5 but it's not realistic. 6 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: They 7 could go there, because that's where a lot of the reflashs 8 go. 9 CHAIRPERSON LLOYD: Mayor Loveridge had a 10 question. Did you finish? Sorry. 11 BOARD MEMBER PINEDA: I guess my only concern is 12 it doesn't appear like there has been sort of direction 13 dialogue between CTA -- 14 MS. WILLIAMS: No. We worked really well 15 together on this, actually. 16 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I've 17 talked to Stephanie at least twice this week, so has my 18 staff. We have had a lot of conversations. 19 MS. WILLIAMS: We hit some hurdles, and we didn't 20 understand the dealer relationships. We didn't understand 21 you can't do the mobile. We expected to be able to do 22 mobile. You can't do it, because there's only certain 23 companies under franchise, and I guess it's big dollars 24 we're talking about that have these computers that can do 25 the software. So all the big ideas of going to fleets we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 could not do. 2 CHAIRPERSON LLOYD: New colleagues on the Board, 3 be aware, I think Stephanie indicated something earlier 4 on, but when she gets upset, we get miserable. 5 MS. WILLIAMS: That's not true. 6 CHAIRPERSON LLOYD: Mayor Loveridge. 7 BOARD MEMBER LOVERIDGE: Two kind of questions, 8 and this may not be an accurate or fair comparison. But 9 just trying to think of fundraising. The easiest funds 10 you have you raised at the beginning. It seems to me just 11 looking at the numbers that maybe the most interested, the 12 most anxious, the most willing have stepped up, and that 13 the next 78 percent are the more difficult than the first 14 22. 15 MS. WILLIAMS: No. We're on a tick up. I mean, 16 it took a long time to figure out how to do it. Even the 17 ARB is really good at it now. They've got the number. 18 They've got a database. Keep in mind, we don't know where 19 these trucks are. They just put the database together. 20 We were calling -- I have 19 staff people working on this. 21 We had to hire two new staff people. We have our entire 22 sales staff. We have all the environmental staff, and we 23 hired two new people in our grassroots area to call 24 everybody with a motor-carrier permit. We have to figure 25 out if they have the trucks. Now that we have the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 database that says here's where the trucks are, at least 2 we're not searching for needles in haystacks. We were 3 cold calling. 4 BOARD MEMBER LOVERIDGE: If you look at the chart 5 19, I guess, at what point would you -- this is the total 6 reflashes performed to reach 35. At what point would you 7 say it's not working? 8 MS. WILLIAMS: Here's what I say, as the person 9 who's got half my staff working on this program. I think 10 that if you measure this in May and we didn't reach 35 11 percent, then we should consider the regulation. But the 12 regulation means five years of stopping. And we stopped 13 because all the funding stopped. So at what point do you 14 look at the everything stops towards everything moves 15 forward? 16 CHAIRPERSON LLOYD: I think that was the 17 rationale we used originally. I think that was the 18 compelling case made that we should give the voluntary 19 program a chance to work, and we gave it a chance twice. 20 But no matter which way you look at these numbers, it 21 doesn't look as though they're going to get anywhere near 22 the targets we want. 23 MS. WILLIAMS: Well, in January, February, and 24 March is our slow season. We're in peak season right now, 25 too. So September's numbers are surprising because people PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 are pulling their trucks off the road during retail season 2 and Christmas season. 3 CHAIRPERSON LLOYD: What percentage of the trucks 4 operating in California are members of your Association? 5 MS. WILLIAMS: We've done most of our fleets. We 6 have. But there's a couple out there like Ryder, Penske, 7 Hertz. They're kind of waiting to start their 8 implementation, because they can do it in-house as a 9 warranty. But we wanted to get through some of the kinks. 10 And that emission control kink was a big kink. And the 11 engine manufacturers have stepped up and they're paying 12 for that. There was some issues with Cummins originally. 13 We went to fleets and we didn't have all the information, 14 so we had to go back a second time and redo trucks. 15 So I mean, we had a four-month period to bring up 16 a program that is huge. You're asking 58,000 trucks to be 17 reflashed. And we did the best we could, but some of the 18 things that came out didn't happen. We don't have the 19 database of eligible engines. We're searching for needles 20 in a haystack. CTA doesn't have it, so we can't call 21 these people. The dealers didn't like the program. 22 Didn't want to do it. Now they're up and running and 23 people are comfortable with it. 24 Why do you want to stop right now when you got 25 started? At least you should go through May, because this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 is when trucks are out of service. January, February, 2 March, they're going into get reserviced after the heavy 3 peak service and before the ag season starts. So at least 4 you have those three months so you have -- even if we stay 5 at the same rate, we'd have another 3,000 trucks reflashed 6 before you went to zero. But at what point -- you decide 7 when to go to zero, because zero is zero emission 8 benefits, and lawsuits take five years. We know this. 9 The waste rule is a perfect example. 10 CHAIRPERSON LLOYD: Supervisor DeSaulnier. 11 SUPERVISOR DeSAULNIER: From my new colleagues, I 12 just want to mention that Stephanie actually isn't that 13 upset today. 14 MS. WILLIAMS: No, I'm not. 15 SUPERVISOR DeSAULNIER: She's much more 16 demonstrative when she's really upset. I must admit D.D. 17 and I were talking about how much we miss Matt on this 18 issue, particularly when Jed gets up. 19 And I really think you've done a great job, and I 20 think it hasn't been the least bit effected. I think it's 21 been genuine and you tried your very best. But it seems 22 to me there are two basic problems or challenges for you. 23 There's the one problem of education and letting your 24 members know they need to do these things. But the bigger 25 thing I've heard is even the folks who get into the shop PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 for repair then choose for whatever reason not to go ahead 2 and get the chip reflash done. 3 MS. WILLIAMS: They were rejected, but we fixed 4 that. 5 SUPERVISOR DeSAULNIER: That's all taken care of? 6 MS. WILLIAMS: ARB was great. You should have 7 seen them. The staff went to the dealers -- 8 SUPERVISOR DeSAULNIER: I'm sorry. Something's 9 happened. Something is wrong with my medication. 10 MS. WILLIAMS: We teamed up against the dealers. 11 It was great. But at first they didn't want to do it. So 12 our members get rejected, and we'd call and tell them, and 13 they'd go talk to dealers, and they'd talk them into it, 14 and they did a really good job. 15 SUPERVISOR DeSAULNIER: So in March when you and 16 Jed and I stood down there after the hearing and both of 17 were you quite enthusiastic that you were going to get 18 these numbers done, what you're saying is you're still 19 going to get the numbers done, you just need a little more 20 time? 21 MS. WILLIAMS: Yes. Exactly. Until May at 22 least. And we're really having a hard time in L.A. with 23 the dealers. And we need to continue what we're doing. 24 And I think after May -- I don't know we can afford it 25 after May. I mean, we're looking at in-kind contributions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 of up to $1 million on this program from our staff. If we 2 can't get 35 percent by May, we're not going to get it 3 done. But why stop now, because you're going from 4 whatever we're doing now, which isn't great, but it's the 5 best we can do, to nothing. And at least if we go through 6 January, February, March, the trucks are out of service 7 and that's when we have the most likelihood of getting the 8 trucks. 9 SUPERVISOR DeSAULNIER: I hope you understand at 10 least speaking from me, human nature being what it is -- 11 and this isn't directed at you or your folks. But the 12 level of trust because of the whole genesis of this -- and 13 at least for my own perspective of who's at fault, it's 14 just hard to keep going and saying, you know, just give us 15 one more chance. And that's not directed at you. 16 MS. WILLIAMS: I understand that. But you're 17 going to get zero emission reduction. You may feel 18 better, but the air is not going to get any cleaner. 19 SUPERVISOR DeSAULNIER: And as the Chairman said, 20 we've had that argument put to us before, and that's why 21 we've gone as far as we have. Thanks, Stephanie. 22 CHAIRPERSON LLOYD: Thanks. 23 Ms. Berg. 24 BOARD MEMBER BERG: I really am sympathetic to 25 the fact that the truck drivers are put in a very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 difficult situation. I also understand they're in 2 possession of this piece of equipment, and unfortunately, 3 possession is nine-tenths of the law. So it's an 4 unfortunate situation. 5 But maybe staff can explain to me how are we 6 going to enforce this and why is this going to get better 7 under a regulated situation? How are we going to check 8 these engines if we have a hard time finding these trucks 9 and where they are and getting them enforced to get a 10 better result than continuing the voluntary result? 11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Let me 12 try to answer that. First of all, we do know where the 13 trucks are. We sent out 60,000 letters, and they went to 14 the owners of the trucks. So that's not an issue. 15 I think the only issue was Stephanie was the 16 legal reasons why we can't just give people's addresses 17 and names to another organization outside of government. 18 But to address specifically the issue of 19 enforcement, we have a smoke inspection program now, and 20 that's been in place since the 1990s. And the enforcement 21 is patterned after that. We have teams of people who do 22 random inspections of trucks for high smoke. And if the 23 truck has objectionable smoke coming out, they are issued 24 a citation. And the citation is $800. And if they clear 25 it by doing the repairs in 45 days, then the citation fee PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 penalty is reduced to $300. So that's how it works now. 2 It's worked very well. We have a very high rate of 3 compliance, and the number of smoky trucks has dropped 4 from the 35 percent range down to 6 or 7. 5 We would do the same thing actually at the same 6 time with trucks, is that we would like to see whether the 7 vehicle had been reflashed. And you can tell by plugging 8 into its computer whether that's happened. If it had not 9 been reflashed by the deadline or some cushion after the 10 deadline, then they would be issued a citation. 11 BOARD MEMBER BERG: Are we currently coordinating 12 with the smoky program to tell the truck driver you need 13 to get in to get this reflashed as well? Are we helping 14 the voluntary program from that aspect as well? 15 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Yes. 16 We've had those people out doing PR information and doing 17 reflashes and everything else. 18 EXECUTIVE OFFICER WITHERSPOON: We thought one of 19 the biggest enticements in the voluntary program might be 20 the information that if they didn't go out voluntarily, 21 take a little time out of their day and get the computer 22 reflashed, that there would be a regulation later and 23 penalties later. That turned out to not be enough 24 inducement. So we think the actual regulation and the 25 actual fines will prompt more people to ask for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 reflash and get into the service bays. 2 BOARD MEMBER BERG: You know, I know it seems 3 like a small percentages of time. But when you make your 4 living being out on the road, I would just submit to you 5 that it isn't small to the truck driver. And they have 6 been put into a difficult situation through no fault of 7 their own. So I do think we've got to be sensitive to the 8 truck drivers and penalizing them. 9 And so I'm not quite sure what the regulation 10 calls for as far as penalties and payment and that we 11 would be able to say, okay, we are stepping up one more, 12 and if you don't get it done, this is the second notice. 13 Your third notice, you will get penalized. I just think 14 it's a very difficult situation when you hold -- and I 15 wonder from a legal perspective, and maybe Legal could 16 comment on this, is how do you hold one group accountable 17 for what another group did? 18 GENERAL COUNSEL JOHNSTON: Well, I think the 19 premise of the regulations is simply that they direct that 20 the truck owner-operator go in to have it reflashed. Then 21 the responsibility is for the dealer that's doing the work 22 to get compensation from the manufacturer for the cost of 23 the service so that both the service costs and the costs 24 of the chip itself would be borne by the engine 25 manufacturers, not the truck drivers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 So where the regulation goes is simply to ask 2 them for their time to come in and have the truck out of 3 commission for that time. But all the other costs would 4 be borne by the -- at least with the 15-day modifications 5 that are proposed or may be proposed would be borne by the 6 manufacturer. 7 BOARD MEMBER BERG: So there wouldn't be any 8 penalty assessed to the truck driver? 9 EXECUTIVE OFFICER WITHERSPOON: Only if they fail 10 to go in and get the chip reflashed by the deadline 11 specified in the regulation. There's time provided for 12 them to comply. 13 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I'd 14 like to add, to make it not sound perhaps as cold and hard 15 as I did the first time around. We did the smoke 16 inspection program. When the deadlines came, we did have, 17 you know, a period in which we didn't issue citations that 18 had the monetary penalty. We said go do it and you're out 19 of compliance. You can get it fixed the following way. 20 Here's some helpful information how to do it. But if we 21 catch you the next time, you will have to pay a penalty. 22 So there was a ramp up to try to blend outreach and public 23 education with the harder arm of actual enforcement. 24 MS. WILLIAMS: We weren't opposed to the 25 regulatory program until EMA said they couldn't pay for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 it. They were going to court. So their program doesn't 2 work because EMA is going to court because they're not 3 paying for it. As soon as it goes into a regulation, we 4 have to pay. That's why we want it voluntary, because 5 we're willing to do it. We don't want to have to pay for 6 it. Plus, there's a cost for taking a truck out of 7 service, which is far more. It's a day out of service. 8 So that's a $500 to $800 cost to the truck owner. 9 CHAIRPERSON LLOYD: Ms. D'Adamo. 10 BOARD MEMBER D'ADAMO: Thank you, Mr. Chairman. 11 Well, first of all, I would just like to go on 12 record that I really think that staff did a tremendous 13 job. The Trucking Association did a tremendous job, and 14 you all gave it a good hard try, and it doesn't look like 15 it worked. And so I, for one, am ready to go with the 16 reg. Enough is enough. 17 And what I would like to focus on personally at 18 this point is just to make sure that the burden really and 19 truly does fall on the parties where it belongs, and that 20 is the engine manufacturers. So I just want to make sure, 21 first of all, if there are no changes today, does this reg 22 go into effect immediately? And if there are any changes, 23 how long would it take? Because I do have some clarifying 24 language that I would like for the Board to consider 25 regarding who would be responsible. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 EXECUTIVE OFFICER WITHERSPOON: If there were no 2 changes made to the regulation, it would be submitted to 3 the Office of Administrative Law within a week or two. 4 And we just have to finish the final packaging. If, 5 instead, the Board directed any amendments to the 6 regulatory language, we would circulate those for 15-day 7 comments, respond to the comments received, update the 8 filing package, and then submit it to the Office of 9 Administrative Law perhaps a month from now, month or two 10 months. Depends how substantive the comments are. 11 BOARD MEMBER D'ADAMO: And then having said that 12 then, I would just like to go through a couple of changes 13 that I would like perhaps some clarification, if needed. 14 First of all, that the engine manufacturers 15 provide the software free of charge and that the engine 16 manufacturers must reimburse dealers for the labor 17 installation costs. And that the authorized dealers must 18 provide the software free of charge to the truckers. And 19 the reason for this is that we just don't want the dealers 20 charging the truckers when the manufacturers are providing 21 the software free of charge. 22 And then the last point, this issue was raised 23 today and also in October regarding the problem of dealers 24 just not dealing with this issue. And I understand that 25 quite a lot has been done. But I do think we may want to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 look at some sort of penalty structure for authorized 2 dealers or distributors that continue to refuse to install 3 the reflashes. If the truckers are going to get these 4 reflashes done by the compliance dates, we need to make 5 sure that everyone is working together on this. 6 So those would be the changes that I would 7 recommend with 15-day change. 8 CHAIRPERSON LLOYD: Ms. Riordan. 9 BOARD MEMBER RIORDAN: If we were to move to the 10 regulatory mode, are we going to reissue some sort of a 11 notice to the truck owners? 12 EXECUTIVE OFFICER WITHERSPOON: Yes. 13 BOARD MEMBER RIORDAN: And so we would sort of 14 help -- we would give -- it may have been in the report 15 and, obviously, maybe I was drifting at that time. How 16 long would they have to do that? 17 EXECUTIVE OFFICER WITHERSPOON: Could staff put 18 back up the slide of the schedule that's in the original 19 regulation? There it is. Those are the compliance dates 20 in the regulation. 21 BOARD MEMBER RIORDAN: Okay. So '93, '94 would 22 have not a lot of time; correct? 23 EXECUTIVE OFFICER WITHERSPOON: We believe it's 24 sufficient time. But you're right, it's a compressed time 25 table. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: It 2 would basically be about two months. 3 EXECUTIVE OFFICER WITHERSPOON: We wouldn't wait 4 until the final action by OAL to notify. If the Board 5 took the action today, we would get notices out today it 6 was immediately coming. 7 BOARD MEMBER RIORDAN: Because that does take 8 some time to go over to the Administrative Law Department. 9 EXECUTIVE OFFICER WITHERSPOON: It does. 10 BOARD MEMBER RIORDAN: But we can notice people 11 and give them a heads-up? 12 EXECUTIVE OFFICER WITHERSPOON: We can. And we 13 have the mailing list ready to go. 14 BOARD MEMBER RIORDAN: Thank you. 15 CHAIRPERSON LLOYD: Seeing no more questions, 16 thank you, Stephanie. 17 Richard Smith, Paul Wuebben, and Bonnie 18 Holmes-Gen. And probably after that, we may check and 19 take a lunch break. 20 MR. SMITH: Good afternoon, Mr. Chairman and 21 members of the Board. My name is Richard Smith. I'm the 22 Director of the San Diego County Air Pollution Control 23 District. 24 The chip reflash program is important to us from 25 an emissions reduction perspective. The program itself is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 a program about engines that are in violation of emission 2 requirements and how to best bring those engines into 3 compliance with the regulatory requirements, such that we 4 achieve the emission reductions that are necessary for us 5 to help improve the public health and to do that in a 6 timely manner. 7 Clearly, the emissions reductions that we're 8 talking about are very substantial. For San Diego County 9 alone, we're talking about 2 1/2 to 3 1/2 tons per day of 10 NOx emissions. We regulate right now, and we've done so 11 for years, emission reductions categories for NOx at the 12 stationary source level that are much less in terms of 13 tons per day and much more costly in terms of cost 14 effectiveness than the chip reflash program would give us. 15 In addition, the program is clearly a feasible 16 measure and it's clearly cost effective. The only 17 question is how to best achieve the compliance. Earlier 18 this year, your Board generously allowed the affected 19 industry to achieve compliance on a voluntary basis. As 20 you've heard today, that approach has not achieved the 21 required results, and it doesn't appear that future 22 targets will be met using a voluntary approach as well. 23 From an emissions reduction perspective, we think 24 it's time now to require the compliance through 25 regulation, and we would urge you to take the necessary PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 steps to implement by regulation the emission reductions 2 necessary to achieve compliance to the chip reflash 3 program. 4 Thank you for your consideration of my comments. 5 And I appreciate being here today. 6 CHAIRPERSON LLOYD: Thank you very much, Dick. 7 Thank you. 8 Paul Wuebben and Bonnie Holmes-Gen. 9 MR. WUEBBEN: Good afternoon, Mr. Chairman, 10 members of the Board. I'm Paul Wuebben, the Clean Fuels 11 Officer with the South Coast Air Quality Management 12 District. Appreciate this opportunity to comment on this 13 important issue. 14 As you heard from your staff, the voluntary 15 program has achieved an 18 percent penetration so far, 16 moving in seven months from 13 percent, or a 5 percent 17 increase. We think that while the efforts of the trucking 18 industry have been very commendable for those who have 19 participated, it is very clear that there is a 20 shortfall -- a significant shortfall, and perhaps to 21 paraphrase a comment I made at the last hearing on this, 22 evidently a Boston Red Sox miracle comeback can only 23 happen once in a lifetime. It's just simply not going to 24 occur in this instance. So even with a sluggish start, it 25 would appear clear now that there is a disparity between PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 the goals of the voluntary program and what is actually 2 achievable in practice. 3 So we do concur with your staff recommendation 4 and strongly support its adoption, mainly that you move 5 immediately at this point to file the mandatory regulation 6 with the Office of Administrative Law. And just to add to 7 that, we do believe and agree with your staff that there 8 is really no credible basis at this juncture to assume 9 that anywhere close to the 60 percent target could be met 10 by May of next year. In fact, you just heard Stephanie 11 refer to the possibility of maybe reaching 35 percent. I 12 think the possibility of 60 percent by May is virtually 13 off the table at this point. 14 So we do think that at the heart of this issue is 15 a fundamental highly -- basically a non-compliance issue 16 with in-use emission standards. And we shouldn't consider 17 this as just a routine emission control strategy. 18 We do appreciate also the tremendous and 19 outstanding efforts that have been made by the CTA and 20 your Board and staff to make the program work on a 21 voluntary basis. But there are some serious 22 implementation issues because of the difficulties of 23 recurring all of the costs at the dealer level. 24 And there have been some suggestions that you 25 heard earlier to possibly augment the voluntary program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 about some possible additional public funds. We think 2 that would not be a reasonable approach at this point, 3 that engine manufacturers should not be relieved of their 4 obligations to fully comply with the intent of the 5 settlements. And, therefore, we would urge that you deny 6 any consideration of the subsidization of some of those 7 costs. And, in fact, that the truck owners not be held 8 liable for those costs, but that the full burden be placed 9 on the manufacturers to comply with the program. 10 I should also point out, I've been asked 11 specifically by our Executive Officer to highlight this. 12 That should there unexpectedly be some litigation on this 13 whole question, assuming that you move to a mandatory 14 program, our Executive Officer and Chief Counsel are 15 committed to bringing a formal proposal to our governing 16 Board in which we would ask for their support to join ARB 17 in a lawsuit in any fashion that you would deem 18 appropriate, be it as an informal intervener, as an amicus 19 supporter, et cetera. We think that would be some 20 additional support and perhaps helpful. 21 Now, the emission increases that we've heard 22 about regarding this program we believe are significant, 23 extraordinary, and fundamentally unnecessary. The 24 shortfall between the 35 percent target and the 22 percent 25 emission reduction, that 13 percent, has already resulted, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 in effect, in an increase of four to five tons of NOx 2 emissions, which in our view is very significant. 3 So basically, the past actions of your Board in 4 delaying the filing are, in many respects, a model for 5 regulatory restraint, and we applaud that. But now the 6 facts on the ground are clear and inescapable that it 7 really is time to mandate change. 8 And so in closing, I'm reminded of what Coach 9 John Wooden observed after UCLA lost to their Saturday 10 basketball game in Anaheim, namely that "never confuse 11 activity with achievement." Now Coach Wooden also 12 understood that certain actions must be squarely met with 13 consequences. So we urge the Board to immediately file a 14 regulatory measure with OAL as the only appropriate 15 consequence in this matter. So thank you very much. 16 CHAIRPERSON LLOYD: Thank you, Paul. You made 17 the point about the excess emissions. How do you respond 18 to the argument that file a lawsuit, then we go into a 19 hiatus? 20 MR. WUEBBEN: Well, we'd consider that scenario 21 inherently speculative. We haven't heard the engine 22 manufacturers overtly commit to a litigation approach. 23 Perhaps the morale onus of this question may animate them. 24 There may be some last minute conversion of will, if you 25 will. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 But at the same time, it could certainly occur. 2 But whether it will be five years or two years, who really 3 knows. And so I think that it's very hard to make 4 judgments about assuming that zero takes place in light of 5 the fact we're getting very little out of this program. 6 And the other thing is that when you really look 7 at the -- it's taken seven months to achieve a 4 percent 8 increase in emissions, that is, the 18 percent went to 22 9 percent over a seven-month period. It would take over 10 five years, 63 months, at that same rate to achieve a 60 11 percent. And that's obviously still short of the full 12 implementation. 13 So we think that the mandatory program is one 14 that would guarantee the success. Yes, there may be some 15 litigation risk, but risk is not the same as certainty. 16 So we think that is well worth, you know, the judgment 17 that the -- on balance that there's a strong rationale to 18 proceed, as you heard the recommendation of your staff. 19 CHAIRPERSON LLOYD: Thank you, Paul. 20 Ms. Pineda. 21 BOARD MEMBER PINEDA: I just have a comment. You 22 know, I'm very -- I like voluntary programs that are 23 effective in achieving the goal. And while I'm also 24 empathetic to the plight of the truckers, I am concerned 25 that if we don't go forward with the regulations, even PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 from the CTA perspective, it appears we're not going to be 2 able to achieve the targets. And so I don't know -- we'll 3 end up back here again revisiting the same issue that the 4 target hasn't been achieved, so we will have just delayed 5 the process. 6 And I also think it's important that when there 7 is a voluntary program, if we choose not to go forward 8 with the regulation, we're really kind of sending the 9 message that the voluntary program really isn't a serious 10 thing. You sort of undermine the voluntary program. So, 11 you know, it's unfortunate that this has come about the 12 way it has. And, again, I am empathetic to the truckers. 13 But I really feel that we have no choice but to go forward 14 with the regulation in this situation. 15 CHAIRPERSON LLOYD: Thank you. So, Bonnie, you 16 can cut your testimony. 17 MS. HOLMES-GEN: I can what? Quickly. 18 CHAIRPERSON LLOYD: I was the joking, of course. 19 But this will be the last witness we take before lunch. 20 And we'll take a half-hour break, because we're not going 21 to be able to get through all the witnesses before lunch. 22 Thank you. 23 MS. HOLMES-GEN: Again, I'm Bonnie Homes-Gen with 24 the American lung Association of California. 25 And as we did last March, we're urging you today PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 to move ahead and adopt the mandatory regulation that 2 would require the engine manufacturers to complete the 3 reflashes by the end of next year. 4 And I just have to say that especially in light 5 of all the compelling recent health studies that you've 6 heard about in your health updates on ozone mortality, on 7 children's health, this morning you just heard a very 8 compelling study on traffic impacts, increases in asthma, 9 and bronchitis symptoms in children going to school near 10 busy roadways -- 11 CHAIRPERSON LLOYD: But remember this morning was 12 on particulate -- 13 MS. HOLMES-GEN: The traffic study was -- 14 CHAIRPERSON LLOYD: On NOx. 15 MS. HOLMES-GEN: The particulate matter was the 16 in-vehicle study. But the other one was children going to 17 school near busy roadways where there's a mix of 18 pollution. 19 We believe it's incumbent upon you to move ahead 20 with the easy, cost-effective, long overdue regulation. 21 As you know, this is 30 to 40 tons per day of excess NOx 22 emissions that you can clean up in a time when we're 23 fighting for every ton of emission reductions. Some of 24 the regulations you're putting forward are achieving 25 portions of tons of emission reductions. We need these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 reductions to improve public health, to meet our SIP 2 goals. 3 The bottom line is it was reprehensible that the 4 engine manufacturers installed these default devices on 5 1993 to 1998 trucks, buses, and motor homes in the first 6 place. It's reprehensible that these engines have been in 7 use, some of them for over a decade, without a fix. And 8 it's reprehensible we're in this position today, again, of 9 having to deal -- trying to deal with this mess, and it 10 has not been cleaned up yet. 11 As you know, we were not in favor of the 12 voluntary approach. It was certainly a long and difficult 13 discussion at the Board hearing last March. I would say 14 that it was reluctantly agreed to by the Board members 15 because of your concern and frustration with the 16 situation. And basically it was a last chance deal, a 17 deal that gave the engine manufacturers more time than 18 under the proposed regulation. Actually, it gave them 19 even a better deal than the regulation, which should have 20 been an incredibly strong incentive to go ahead and move 21 ahead and make the program work. 22 They did not hold up their end of the bargain. 23 As you know, the reflashes were not even close to the 24 goal. And it's not even projected those reflashes would 25 catch up in the near future. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 We're urging you to put a stop to this now. 2 Stand up for the breathers by adopting this regulation, 3 and please do not be swayed by threats of litigation. And 4 we also strongly support the tightening amendments that 5 were suggested by Ms. D'Adamo to mandate that engine 6 manufacturers must pay for the reflash and ensure that the 7 full burden is placed on engine manufacturers and not the 8 truckers. 9 So just in conclusion, why stop the voluntary 10 program? Because it's not working, because people with 11 asthma are suffering serious health effects, because the 12 high ozone levels are causing serious health effects in 13 all individuals, and it's causing premature deaths in some 14 populations. Again, please move ahead, adopt the 15 regulation today, stop this situation, and achieve this 16 easy cost-effective reduction in nitrogen oxide emissions 17 to improve the air and protect public health. 18 CHAIRPERSON LLOYD: Thank you. 19 Let's take a break until 1:30 promptly on the 20 clock, we'll start again. 21 (Thereupon a lunch recess was taken.) 22 EXECUTIVE OFFICER WITHERSPOON: So you know, I 23 was just served in both state and federal a lawsuit on the 24 greenhouse gas emission standards. And staff will be 25 passing around to you the federal court case, which we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 received yesterday. They're making copies right now of 2 the state case. And in January, we'll have a closed 3 session at the Board meeting to discuss both of them. 4 CHAIRPERSON LLOYD: Who is we? 5 EXECUTIVE OFFICER WITHERSPOON: Who's -- 6 CHAIRPERSON LLOYD: We sued -- 7 EXECUTIVE OFFICER WITHERSPOON: I'm the sole 8 defend named in the lawsuit in my official capacity as the 9 Executive Officer. 10 (Laugher) 11 BOARD MEMBER RIORDAN: I told her we'd send 12 anything she needed to make her comfortable wherever you 13 may be. 14 CHAIRPERSON LLOYD: So with that, I'd like to 15 call up Jed Mandel, Don Keski-Hynnila, and David Piech. 16 MR. MANDEL: Good afternoon. Again, it's Jed 17 Mandel with the Engine Manufacturers Association. 18 As I was reviewing my files concerning the low 19 NOx reflash program in preparation for today's hearing, I 20 was reminded of that great line from a little local 21 California group, "What a long strange trip it's been." 22 But I was also reminded of another phrase associated with 23 that song, which is "Keep on Truckin." 24 Simply stated, EMA and its member believe that 25 ARB should keep on truckin with the voluntary program, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 I'll tell you why. First, we should all acknowledge and 2 give credit to the fact that the voluntary program has 3 provided more benefits than otherwise would have occurred 4 under either of the other two alternatives, the previously 5 existing reflash program under the Settlement Agreements 6 or any attempt to implement a mandatory program. The 7 voluntary program on that basis alone has been a success. 8 The Board should take credit for that, and the voluntary 9 program should not be abandoned. 10 Second, we also should acknowledge there was 11 significant ramp-up issues in getting the voluntary 12 program off the ground. Many of those issues were 13 discussed at the October Board meeting and in my October 14 20th letter to Dr. Lloyd. While I don't think we need to 15 revisit the details, we must remember in assessing the 16 voluntary program, we can't pretend to think that it 17 commenced immediately at the end of March. It really 18 didn't begin until the end of June. And even then, there 19 were implementation issues, and as a result, a slow start. 20 The importance of that slow start cannot totally be 21 resigned to a historical footnote on the voluntary 22 program. 23 If the Board should decide to abandon the 24 voluntary program and move to a mandatory regulatory 25 program, the Board must recognize that a whole new ramp-up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 effort will be required to reclimb the learning curve to 2 implement a regulatory NOx reflash program. 3 Third, as we look at the success to date of the 4 voluntary program, we also must remind ourselves that the 5 benchmarks that were established last March were just 6 that, benchmarks. They are not binding on the Board. The 7 Resolution that the Board adopted merely states that the 8 Executive Officer should return to the Board in December 9 2004 with an evaluation of the results of the voluntary 10 program for Board review. 11 Well, here we are. And let me state that the 12 results of the voluntary program are disappointing, when 13 comparing late October data against reflash rate targets 14 that were established in March, assuming that the program 15 would start immediately and without flaws. If we knew 16 then what we know now, however, I don't think anyone would 17 have thought that the end of October benchmarks were at 18 all realistic, at least not anyone who was truly 19 interested in seeing a voluntary program be successful. 20 So, what has happened since the end of October? 21 The anecdotal information that I have received from engine 22 manufacturers shows the number of reflashes -- the reflash 23 rate is continuing to increase from month to month. The 24 rate in September was better than August. October better 25 than September. And November better than October. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 expect that to continue if the voluntary program 2 continues. We expect that to come to a screeching halt if 3 the voluntary program ends. My point is that the momentum 4 under the voluntary program is building, and we ought to 5 build on it. 6 To that end, engine manufacturers are committed 7 to offer added benefits to the voluntary reflash program. 8 Once again, we are willing to put our money where our 9 mouth is. As a reminder, engine manufacturers agreed to 10 pay for NOx reflashes under the voluntary program even if 11 the reflash was conducted separately from an engine 12 rebuild. Engine manufacturers, otherwise, have no such 13 obligation. They committed to doing so in order to make 14 the voluntary program work, and they have lived up to that 15 commitment. 16 What we have seen, however, is that truckers and 17 dealers are, nevertheless, reluctant to get the low NOx 18 reflash. In response, engine manufacturers have begun to 19 provide added incentives to further encourage reflashes 20 and will continue to offer such incentives if the 21 voluntary program continues. 22 Our efforts alone, of course, cannot guarantee 23 the success of the voluntary program. The outstanding 24 efforts of CTA to date will also have to continue. And we 25 need even more effort from ARB itself. Every time the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 program has been promoted by ARB, there has been an 2 increase in the reflash rate. Such efforts must continue 3 and must increase. 4 And in assessing the voluntary program and the 5 merits of its continuation, we also urge the Board to 6 consider the alternative. As I said at the outset, the 7 voluntary program has been a demonstrable success because 8 it has provided more benefit than any other available 9 alternative. The ultimate measure for determining whether 10 it should continue is not whether abstract interim 11 benchmarks have been achieved. No, the test for 12 continuing the program is whether a regulatory program 13 would do any better. And we submit that it would not. 14 A regulatory program has huge negatives 15 associated with it. As stated above, there will be an 16 enormous ramp-up effort. The mandatory regulations are 17 directed at truckers and dealers. Historically, programs 18 directed at those parties, the original snap idle rule, 19 for example, have resulted in acrimony, enforcement 20 nightmares, round after round of debilitating 21 administrative challenges, and litigation. 22 In addition, the mandatory program, which by 23 definition applies to engines prior to rebuild, is an 24 emissions standard subject to EPA's waiver authority. ARB 25 will not be able to enforce mandatory reflashes until it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 receives a waiver, which clearly will delay the start of 2 the program. 3 Furthermore, a mandatory program does not assure 4 that reflashes will be free to truckers. Quite the 5 contrary. It only states that dealers should provide and 6 install a low NOx kit upon request. Dealers are free to 7 charge for such services. And nowhere does it state that 8 such reflashes will be paid by the manufacturer. 9 But let's be candid. The intent behind the 10 regulations is to trigger a payment obligation by the 11 engine manufacturer under the Settlement Agreements. 12 Under those agreements, engine manufacturers are only 13 obligated to pay for reflashes if such reflashes are 14 conducted as part of an engine rebuild. So we do not 15 believe that the mandatory program will require 16 manufacturers to pay for the reflash. 17 But even if that is not true, engine 18 manufacturers are never obligated to reimburse the dealer 19 for any amount beyond that specifically set forth in the 20 Settlement Agreements. And that's part of the problem 21 with any reflash program outside of the Settlement 22 Agreement. The reimbursement rate for the dealers was 23 more than adequate for a reflash done as part of an 24 overall rebuild, when there's an enormous amount of 25 additional work that the dealer is doing. The truck is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 already out of service and the incremental costs for doing 2 a reflash can easily be covered by a modest reimbursement 3 rate, I believe a half an hour, in some cases, an hour in 4 others, under the Settlement Agreements. The economies of 5 scale make that work. 6 But it has been evident over the past few months 7 dealers are not aggressively pushing stand-alone 8 reflashes, because it is not cost effective for them to do 9 so. We have been working to address those issues in the 10 voluntary program, and progress there is being made. 11 However, a regulatory mandate does not make the issue go 12 away. Dealers won't get any more reimbursement. That is 13 clear. And they likely will get less. 14 Worse, however, there is a substantial 15 likelihood, indeed almost a certainty, that this move to a 16 regulatory program will trigger litigation under the 17 Settlement Agreement and under the Clear Air Act. And 18 such litigation will be directed at the heart of the 19 mandatory program, ARB'S underlying authority to mandate 20 reflashes. Such litigation will substantially impinge the 21 likelihood of the regulatory program providing any 22 near-term benefits. And it likely will lead to 23 confirmation that ARB has no authority to adopt or enforce 24 low NOx reflashes, because ARB conclusively bound itself 25 to the terms of the Settlement Agreements. In any event, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 such litigation would show that ARB would need a waiver 2 from EPA to proceed with a program that clearly has been 3 characterized as a standard. 4 Further, a move now to a mandatory program is 5 likely to terminate the participation of some or all 6 manufacturers in the existing voluntary program. So on 7 the one hand, we have a voluntary program that has 8 provided demonstrable benefits to date, that has overcome 9 its learning curve, that has positive momentum upon which 10 we can build, that has the commitment of CTA, that has the 11 commitment of engine manufacturers, and the added promise 12 of additional incentives. And that is exactly the kind of 13 voluntary cooperative program that ARB should bend over 14 backwards to see succeed. 15 On the other hand, we have a regulatory mandate 16 that will have ramp-up issues, that will trigger 17 substantial acrimony and disputes with truckers, that will 18 create enforcement issues and costs, that fails to address 19 the twin issues of who pays and who gets reimbursed, that 20 will trigger litigation under the Settlement Agreements, 21 and that will terminate the increasing benefits of the 22 voluntary program, with no assurance of any near-term 23 benefits for the regulatory program. 24 With that choice, we think the answer is clear. 25 Keep on truckin with the voluntary program. We will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 commit additional resources to make it a success. Please 2 give it more time. Be happy to answer any questions the 3 Board member may have. 4 CHAIRPERSON LLOYD: Thank you, Jed. 5 So you gave a wonderful delivery of a flawed 6 script. But that was -- we do keep on truckin, but we've 7 been down the yellow brick road before. 8 MR. MANDEL: Mixed metaphor there, but I like it 9 anyway. 10 CHAIRPERSON LLOYD: I think you've covered all -- 11 MR. MANDEL: I guess what troubles me is I heard 12 the presentation this morning, and I've heard several 13 Board members already express their personal views, which 14 obviously we respect. 15 I very much regret that when we framed the 16 issue -- and framing is very important in making good 17 decisions. The Board has framed the decision as a failure 18 to achieve the benchmarks that were set in March. I don't 19 believe that is the right way to look at the problem. The 20 way to look at the problem is to frame it as to what other 21 alternatives do you have and what more success will you 22 get through some other program. 23 And I think I have fairly and neutrally 24 represented the significant issues associated with a 25 regulatory program. And we have shown that the reflash PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 rates have increased. When I prepared my beautifully, 2 in-advance prepared remarks, Alan, I only had some 3 anecdotal information. I was shared information yesterday 4 from Cummins Engine Company who could not be here today. 5 Their reflash rate in August, September, October was about 6 150 to 160 vehicles. It was 750 in November. And 7 Cummins, for example, is one company that has publicly 8 stated -- I'm sure the staff has seen it -- a document 9 that went to their dealers offering their dealers $200 for 10 every voluntary reflash. Again, it's a very new program. 11 I think November 9th was the date that memo. And also 12 offering their customers $100 reimbursement towards their 13 purchase of Cummins' parts. 14 So these added incentives will make a difference. 15 There are other manufacturers who are willing to undertake 16 similar kind of efforts if the program goes ahead. And I 17 also want to remind the Board that it's not just putting 18 added incentives to the voluntary program. To be honest 19 about it, it's the loss of existing incentives. It was 20 mentioned by the staff and in an earlier testimony that 21 manufacturers, while it was not part of the original 22 program, we did in the ramp-up efforts in figuring out 23 issues to get this program started, manufacturers all, to 24 a person, agreed to pay for the costs of repairing the 25 electronic control model, the ECM, if it should turn out PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 to be damaged as part of the voluntary NOx reflash 2 program. That's a significant added incentive. That goes 3 away under any kind of a regulatory mandate program. 4 CHAIRPERSON LLOYD: Yes, Supervisor DeSaulnier. 5 SUPERVISOR DeSAULNIER: Jed, maybe I'm making 6 this overly simplistic, but forgetting legal arguments as 7 much as we can. I don't understand if we're committed to 8 accomplishing getting the reflashes done, and you admit 9 we're making progress, what difference does it make? It 10 sounds like it's just a pride thing. Whether it's 11 regulatory or it's voluntary, we're making progress. Why 12 wouldn't there be at least business discussion about 13 lawsuit versus we're making these commitments, why don't 14 we go ahead with it? 15 MR. MANDEL: I'm so glad you asked that question, 16 because I realized that I really have never expressed some 17 of the underlying principle concerns as to why we are 18 concerned about a mandatory program, besides philosophic 19 concerns about authority and having agreed to Settlement 20 Agreements. 21 If this Board adopts a regulatory mandate, other 22 states are free to opt into it. And the costs that are 23 associated with this program will be multiplied 24 exponentially across the country. And we cannot afford 25 it, and we will, for that reason, be compelled to fight PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 California's efforts, because we cannot afford to have 2 this program become a mandate nationwide. 3 Again, EPA, ARB entered into agreements with 4 manufacturers resolving all of the disputes against the 5 use of allegations of engines that had defeat devices. 6 That's all been settled. There really is no further claim 7 that ARB or EPA has on manufacturers, unless they're not 8 living up to their obligations, in which case there's an 9 absolute clear mechanism under the Consent Decrees or the 10 Settlement Agreements. 11 Supervisor DeSaulnier, we are very concerned 12 about trying to be constructive to work with ARB, because 13 we realize that California has a unique air quality 14 problem. That was some of my comments, frankly, a year 15 ago as we started talking about this. But setting the 16 precedent of a mandate is something that we cannot live 17 with. 18 EXECUTIVE OFFICER WITHERSPOON: Supervisor 19 DeSaulnier, if I might. The statement Mr. Mandel just 20 made is premised on the theory that these are emission 21 standards within the meaning of the Federal Clean Air Act 22 and require a waiver and can be copied by other states. 23 We do not believe they are emissions standards. We 24 believe this is an enforcement action to accomplish the 25 goals of the previous settlement. That is not true they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 travel to other states. 2 SUPERVISOR DeSAULNIER: I just have one other 3 question. 4 MR. MANDEL: I'm really confused by that. I 5 should be quiet. I don't understand the comment at all. 6 SUPERVISOR DeSAULNIER: I want to see if you can 7 be quite. 8 MR. MANDEL: It's a test. 9 SUPERVISOR DeSAULNIER: I only have one other 10 question. It was more to my recollection, which I admit 11 as I'm getting older is failing me. But I remember 12 standing down here with you and Stephanie after March. 13 And the distinct impression I took from that, which I 14 shared with some of my friends in the environmental 15 movement, was you thought this was very doable. So I am 16 disappointed. I actually left and thought, well, here's 17 their chance. They're going to do it, and you get a lot 18 of good will from that. What happened? And especially 19 given the financial concerns you just mentioned, I would 20 have thought you would have been even more motivated to 21 make it happen. Why didn't it happen? 22 MR. MANDEL: It didn't happen for a lot of 23 reasons, for which no one should be blamed. It took us 24 several months to figure out the database to get 25 notifications to dealers. I know this may not resonate to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 Board members, but these dealers are independent 2 businesses. In many cases, sometimes even more 3 significant businesses even than the manufacturer for whom 4 they are dealers. Getting a letter out from the engine 5 manufacturers to the dealers and figuring out how this 6 program worked just on that level takes time and takes 7 effort. 8 Systems had to change. Communications had to go 9 out. We had to figure out matching up information with 10 respect to vehicle identification number and engine serial 11 number. We had to figure out the first people who came in 12 who may have been ahead a little bit of the dealer 13 notification and were turned away, how to unravel all of 14 that and sort of unpeel the onion, if you will. 15 There was a learning curve. When I spoke with 16 you in March, did I have any clue as to what that learning 17 curve was? Clearly not. If we had, I think we would have 18 been, all of us, much more realistic about coming back in 19 December with an October cutoff of data and expecting to 20 have the significant positive results. 21 But I can also sit here and say, knowing what I 22 know and knowing what you know, that I truly and honestly 23 believe that the air quality of the state of California 24 will benefit more from continuing our efforts and 25 improving on our efforts in the voluntary program, which PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 will be improved on, than proceeding to an acrimonious 2 process that will target others. And it's being 3 characterized now as an enforcement action. If it's an 4 enforcement action, since when does this Board need to 5 adopt regulations to proceed with an enforcement action? 6 Enforcement actions don't need regulations. I think that, 7 as I said, I don't understand how a regulation clearly 8 designed to reduce emissions is now an enforcement action. 9 SUPERVISOR DeSAULNIER: Thanks, Jed. That's all 10 for me. 11 CHAIRPERSON LLOYD: Ms. Berg. 12 BOARD MEMBER BERG: I heard from Stephanie that 13 maybe we might get to 35 percent in May if we continued 14 the voluntary program. Clearly, that's not good enough. 15 We were supposed to be at 35 percent in November. What 16 I'm hearing from you is we're ramping up and that we could 17 possibly get back more on track. I don't think we're all 18 singing from the same song here. 19 MR. MANDEL: Again, what we have to remind 20 ourselves is that the target, the benchmark, the 35 21 percent, in all fairness, was a made-up number. It's what 22 the staff and this Board felt reasonably comfortable back 23 at the end of March ought to be how we would measure the 24 success of this program. And that's failed. 25 BOARD MEMBER BERG: I understand that ramping up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 takes longer. What I'm saying is that we're supposed to 2 be at 60 percent next year sometime. 3 MR. MANDEL: Well, I think that -- 4 BOARD MEMBER BERG: And I'm hearing that's not 5 possible. 6 MR. MANDEL: I don't know what's possible, when. 7 What I do know is that there will be more reflashes under 8 a voluntary program than under a mandatory program in the 9 next year or two or whatever the time frame is. And 10 that's where I think the Board ought to try to take the 11 bird in the bush in terms of what it has and what it can 12 build on, what it can achieve, than proceed with a 13 mandatory program that's going to have all of the same 14 problems and then some. 15 And I think it was Mayor Loveridge who asked an 16 earlier witness, what do you think would be the measure of 17 success on a voluntary program? I'm not getting it 18 exactly right, Your Honor. But what I would say is there 19 is no measure of success for the voluntary program other 20 than there's one more reflash than otherwise would have 21 occurred under any other program. 22 BOARD MEMBER BERG: Is it fair to say we wouldn't 23 even be discussing this if the engine companies had done 24 what they were supposed to do in the first place? 25 MR. MANDEL: If that is the case, someone ought PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 to go and challenge the engine companies as to what they 2 should have done in the first place, because they have 3 done everything that they were supposed to. They entered 4 voluntarily into Settlement Agreements. And, again, I was 5 not part of that, and I don't have the particulars. But I 6 think the public record is clear that there was no 7 admission of guilt. There was no agreement. But those 8 companies in their business decision working with the 9 State of California and the federal government concluded 10 it would be better to enter in a voluntary settlement of 11 the dispute than to proceed to litigate. And they have 12 lived up to the letter of the law to those agreements. 13 That really is the point. And I think, in all candor, the 14 staff, the Board isn't happy with the agreement it made 15 with the engine manufacturers and is trying to 16 renegotiate. 17 BOARD MEMBER BERG: I appreciate that point, and 18 could staff just comment on that for me? 19 EXECUTIVE OFFICER WITHERSPOON: There were two 20 clauses of the Settlement Agreements: One of them was 21 that the engines would be reflashed upon rebuild; and the 22 other clause, or upon request by the owner of the vehicle. 23 And we are attempting to invoke the second clause through 24 this action. We believe it's consistent with the 25 Settlement Agreement. There was also representation at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 the time the settlement was reached that rebuilds would 2 occur more frequently. That, in fact, have been the case. 3 There have been arguments back and forth whether we should 4 have known better that we were changing to million-mile 5 vehicles rather than 300,000, 400,000 mile. 6 But EPA and the Air Resources Board both in their 7 written statements on the Settlement Agreement and Consent 8 Decrees premise them upon a more rapid rate of turnover 9 and the tonnage reductions that would accrue, and that 10 error was not corrected or brought to light until much 11 later in the process. So it was a fundamental assumption. 12 We can point fingers back and forth about who should have 13 been more forthcoming or known better. But the end result 14 is the terrible impact on public health from excess 15 emissions. And that's what this regulation goes to, is 16 trying to correct it. 17 It's a very simple procedure. It's a change to 18 the computer program. It takes all of 10 to 15 minutes to 19 actually run it. We did a demonstration for Board members 20 months ago. It takes a few hours out of service, perhaps 21 a day if you have to schedule it with other activity. And 22 we don't think those burdens are too onerous for any of 23 the parties affected in light of the public health impact 24 we're trying to address. 25 BOARD MEMBER BERG: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 CHAIRPERSON LLOYD: Questions? 2 Thank you, Jed. 3 MR. MANDEL: Thank you. 4 CHAIRPERSON LLOYD: Don Keski-Hynnila, David 5 Piech, Larry Sherwood. 6 MR. KESKI-HYNNILA: Good afternoon. I'm Don 7 Keski-Hynnila representing Detroit Diesel Corporation. 8 As you all know, DDC has actively participated 9 with industry and the Air Resources Board in the 10 development and implementation of the voluntary reflash 11 program. I appreciate having this opportunity before you 12 today. This is my first opportunity before the Board to 13 provide the Board DCC's comments regarding the success to 14 date of this program and to make our recommendations. 15 Earlier this week, DDC provided a letter and an 16 analysis of progress to the staff and to the Board, to 17 Chairman Lloyd. It's not my intent to review all the 18 detail of the analysis, but I do want to highlight the 19 important points. 20 Our analysis showed at the end of October, DDC 21 had reflashed just over 29 of the known matched baseline 22 population, which is an agreement with ARB's analysis. 23 Time has passed since then, and more reflashes have 24 occurred. As we stand here today, we believe that we're 25 at a level of 32 percent, projecting from October 28th and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 using the October reflash rate. 2 DDC spent a great deal of time reviewing 3 available into from the 822 units reflashed in California, 4 but not matching the database. We wanted to learn more 5 about what those reflashes were. Many of these units were 6 not California registered. However, we did identify 213 7 of these units that were California-based according to the 8 available claim report information. Adding these units to 9 the reflash tally and to the baseline population brings up 10 the reflash level to 35 percent to date. And this 11 analysis does not take any credit for the reflash to 12 out-of-state vehicles that are operating in California and 13 from which California is deriving benefit. 14 Another important point to note from the analysis 15 is that the monthly reflash rate for matched units was 16 three times higher during the last two months than during 17 the prior four months. This up-trend rate was very strong 18 in establishing a trend line pointing towards the next 19 target. Based on success of the program, we are asking 20 the Board to permit DDC to continue with the voluntary 21 program. 22 There are some additional comments that we'd like 23 to make for your consideration. DDC and industry have 24 taken all the necessary actions under the Consent decrees. 25 We've also met our obligations under the voluntary reflash PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 program as it was laid out in the beginning. In fact, 2 we've gone further than what the program requirements were 3 by agreeing to replace any engine control units that have 4 become damaged in the course of being reflashed, and that 5 was a hindrance to the program early on. 6 Staff asked for more, and I'll tell you how our 7 efforts have been stepped up in the last months to grow 8 the reflash rate. The reflash rate grew significantly at 9 our Southern California location where the benefit is 10 needed the most. Our service outlets staffed up in recent 11 months to accommodate the reflash demand that has been 12 very high there. One location in particular increased 13 their staff level to increase their capacity from 15 a day 14 to a maximum of 50 a day. 15 Further, they worked with a local grocer to use a 16 parking lot to cue up the trucks to organize all the 17 trucks that had been lining up outside their shop. There 18 wasn't room in the streets. They did this voluntarily 19 without you and I asking them to do that. They'll 20 maintain this level of effort as long as there's a 21 voluntary program and as long as the level of demand 22 dictates. 23 Further, because of these capacity constraints, 24 DDC committed at a recent CTA event to reflash units at 25 customer sites. The effect of this new level of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 commitment will be seen in the coming months. 2 We also talked to the truckers directly that were 3 being reflashed to hear their thoughts and understandings 4 and understand their motivation. They are supporting the 5 voluntary program, because they don't want to get caught 6 up in yet more regulatory programs, especially when they, 7 the truckers, may have to absorb the costs. They also 8 know that the ECM will be replaced if it is damaged during 9 the reflash. Now, that's an incentive to come in and 10 reflash. The free reflash has effectively become a free 11 health check of their ECM with the possibility of a 12 replacement, and it comes with the voluntary program. 13 We think it is clear that DDC's program is 14 proving successful. Today, our reflash level is at 34, 15 and according to ARB's analysis, the emission benefit is 16 even higher than indicated by the reflash count. We are 17 at the target level. And with the tripling of the monthly 18 reflash rate in the last months and with the stepped up 19 initiatives, we are at a path to meeting the next goal. 20 DDC is committed to the voluntary program. We 21 strongly believe that ARB should continue on the voluntary 22 path. DDC is offering their commitment to continue 23 efforts to sustain and grow the program. However, this 24 cannot occur should ARB move to mandatory program. So the 25 choice is really yours, to either stop the voluntary PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 program and lose its benefits or to keep it moving 2 forward. And we ask that you choose the latter. 3 CHAIRPERSON LLOYD: This is really good news that 4 you're actually hitting the target, which the previous 5 speaker said was unrealistic. So I appreciate that very 6 much. 7 Staff, is there any opportunity here for, if we 8 go ahead with the mandatory program, for the carve-out for 9 the companies who have obtained the target? 10 EXECUTIVE OFFICER WITHERSPOON: Yes, there is. 11 You might remember at the March Board hearing we discussed 12 the possibility of manufacturing specific mandates so the 13 regulation would only apply to those who had not met the 14 targets but would continued to be stayed for those who 15 were on the right path. So you have that option. 16 CHAIRPERSON LLOYD: Ms. D'Adamo asked me a 17 question in terms of enforcement, would it be clear to the 18 team that this would be a DDC engine? 19 PLANNING AND REGULATORY DEVELOPMENT SECTION 20 MANAGER KEMENA: Yes, it would. They would be able to 21 pull the computer information up. 22 CHAIRMAN LLOYD: Ms. D'Adamo. 23 BOARD MEMBER D'ADAMO: I think that's a good 24 idea, Mr. Chairman. 25 So would this company stay on the voluntary path PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 and continue to aim for the targets as outlined? And then 2 what would happen in the event that at any certain phase 3 they don't meet the target? Would we have to direct you 4 to put them into the mandatory program if they don't meet 5 the remaining targets? 6 EXECUTIVE OFFICER WITHERSPOON: Well, that's up 7 to you and what instructions you give us today. One 8 possibility is that we would apply the regulation to them. 9 The other is we might articulate a penalty and work that 10 out directly with Detroit Diesel if they were somehow not 11 to meet future targets on the voluntary path. But we 12 could structure something specific for them, giving them 13 whatever directions you provided. 14 BOARD MEMBER D'ADAMO: And then a question of the 15 witness. Doing the reflashes at customer sites, is that 16 giving you the confidence you're going to be able to meet 17 the remaining targets? 18 MR. KESKI-HYNNILA: No, not that alone. I think 19 word is getting around on ECM replacement, and there is 20 the threat of litigation that is causing a lot of people 21 to come and obtain the reflashes. 22 I think for the reflash at customer sites to work 23 there has to be -- you know, this has to be done in 24 combination with Stephanie's group outreaching to those 25 folks to call us and get us to their shops. Because we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 don't know who are the fleets right now that are desiring 2 of the reflashing. So a little bit of outreach on CTA's 3 part, a little bit of outreach on ARB's part, and we would 4 be restating our continuation of the voluntary program. I 5 think those elements together will make it effective. 6 CHAIRPERSON LLOYD: Thank you for taking the 7 voluntary program so seriously. 8 CHAIRPERSON LLOYD: Ms. Riordan. 9 BOARD MEMBER RIORDAN: Yes. Just a question 10 about these carve-outs or potential carve-outs for those 11 who are demonstrating that they're successful. Besides 12 the one at Detroit Diesel, do we have others that would be 13 close to that? 14 EXECUTIVE OFFICER WITHERSPOON: No. It's just 15 Detroit Diesel. 16 BOARD MEMBER RIORDAN: Thank you. 17 CHAIRPERSON LLOYD: Ms. Pineda. 18 BOARD MEMBER PINEDA: I would definitely support 19 a carve-out if DDC has done what we've asked as part of 20 the voluntary program. I really think it would be 21 unfortunate that they would be penalized for their good 22 efforts. So I definitely strongly support that. 23 MR. KESKI-HYNNILA: Appreciate that. Thank you. 24 CHAIRPERSON LLOYD: Thank you very much. 25 David Piech, Larry Sherwood, Kathryn Phillips. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 MR. PIECH: Good afternoon, Mr. Chairman and 2 Board members. I'm David Piech with International. I'm 3 here to support the voluntary program and to continue the 4 voluntary program. 5 Really like to make three points. And one is 6 that the voluntary program is working and is giving 7 benefit. I want to emphasize that. Again, to the extent 8 that we're not at the level of DDC, we've gone from about 9 a 1 percent reflash rate prior to this year to right now 10 in California we are over 11 percent. We're actually got 11 recent numbers, and we have seen that uptake. The 12 benefits are there. 13 And I do want to especially thank the ARB staff, 14 the CTA, and its member and also the people at 15 International that have been promoting this program out 16 there. 17 One perspective on that is that prior to this 18 program starting, compared to what we have done under the 19 program, we've done three times the amount of vehicles 20 here in California than we have in the prior 54 months. 21 So in five months of the program starting in June to 22 today, we've done three times the amount in five months 23 that we did in 54 months prior to that. So that is a 24 credit to the ARB staff and especially a credit to CTA. 25 To the extent those benefits are increasing, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 numbers that were put up there and the chart that was put 2 up there is really misleading, as I would say. In the 3 period prior to December of 2003, we were reflashing at a 4 rate of about .03 per day. Okay. That's a very low 5 number. From January through August of this year, we 6 reflashed at a rate of 0.24 per day. In September and 7 October, we reflashed at a rate of 0.70 per day. And in 8 the last numbers since October 28th through December 7th, 9 we've been reflashing at a rate of 1.42 per today. 10 Why is that important? One of the discussions 11 that we've had with the Board was a concern not only of 12 reaching the 35 percent threshold, but also of the numbers 13 of reflashes reaching some plateau. And right now we're 14 still seeing an increase in that rate. We haven't seen 15 that plateau. So we're still seeing -- as some earlier 16 people had commented on, we're not seeing these early 17 adopters. We're seeing people come in at a high rate. 18 And those fruitions are coming because of the 19 marketing effort. This is really a marketing program out 20 there to the truckers to get them to come in. 21 International has held up its end of the bargain. 22 And more importantly, International has gone beyond its 23 end of the bargain. We have been very proactive with the 24 staff, providing them necessary information in a very 25 timely manner. The staff has been appreciative of us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 We've been out there. We've called the dealers. We've 2 contacted some of the fleets out there. More importantly, 3 we've actually gone out and had advertisements in the 4 papers, in the L.A. Times, the Sacramento, Fresno, and 5 Modesto Bee. Again, it's a marketing effort. You cannot 6 just ring the bell and assume you're going to get all the 7 numbers there. You know, we're still seeing people come, 8 the truckers come in. 9 So the next steps that we were anticipating in 10 the voluntary program is to go out there and do some of 11 the field reflashes. Again, keep up the marking effort 12 and try to get those fleets. 13 One other big thing is that we need time to do 14 this. It cannot happen over night. And to the point 15 that -- this has been a challenging target. And we are 16 only at 11 percent. But 35 percent is the target and 17 we're moving towards that target. 18 I just want to highlight the smoke program that 19 was highlighted earlier. Excellent. Went from 36 percent 20 down to 6 percent, 84 percent reduction. Took 11 years to 21 do that. The program started in 1993. A couple other 22 points are that even some of the other programs that are 23 out there for recalls and other things don't even reach 24 some of the levels that we're trying to aspire to. Some 25 programs are only at 35 percent of a recall rate, 45 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 percent, 72 percent. And these are for mandatory 2 programs. 3 And one of the things that is implicit in the 4 mandatory program that is being proposed to continue on 5 here is that on those dates certain, you will have 6 100 percent of those vehicles reflashed. And I challenge 7 you that right now the voluntary program is providing the 8 benefits today, call it -- emissions are reduced than in 9 the future. And I would challenge you, the Board, is that 10 to see -- if you were to go to a mandatory program, if 11 that assumption is true, you know. This voluntary program 12 has been under excruciating scrutiny. We have had 13 reporting periods within three and four days after the 14 close of the date. And we have met that obligation. 15 We've been providing data to the staff. 16 And I'm just pleading with you that, let this 17 come to fruition. Let's see what's going to happen with 18 the voluntary program. Because we had that compacted 19 period. It was only about five months. Let's see what 20 happens. Anything else from the -- I would entertain 21 anything from the Board if you have any questions. 22 CHAIRPERSON LLOYD: I think we gave you a 23 challenge earlier. I'm not sure that you came up way 24 short of that. 25 The other thing, correct me if I'm wrong, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 thought I understood you saying early on in 54 months you 2 did 1 percent and the last several months you came up to 3 11 percent. So how can you say this was a short time 4 frame? That was a voluntary period of 54 months, and you 5 just did 1 percent? 6 MR. PIECH: The nature of our Consent Decrees and 7 we are a different Settlement Agreement than the other 8 manufacturers. We only involve model year 1988 466, 530 9 engines. Only one model year. So it takes time for those 10 engines to be brought in for servicing for rebuilds. As 11 an example, within the Settlement Agreement, there's a 12 mileage requirement, in addition to having an engine 13 rebuilt. And it is generally known, the staff, EPA all 14 know, a school bus only goes about 10- or 12,000 miles a 15 year. So even before you reach the threshold, even before 16 that engine is rebuilt, it just takes time. And that's 17 what we're asking for here. And that's where we have gone 18 above and beyond and presented and contacted the people 19 out there in the field to have this done. 20 CHAIRPERSON LLOYD: Questions? 21 Mayor Loveridge? 22 BOARD MEMBER LOVERIDGE: Just help me out. You 23 need to reflash the engines. What difference do -- you 24 want to reach that goal. Why does it make a difference to 25 you whether it's voluntary or mandatory? The objective is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 to do them. 2 MR. PIECH: There's several problems as we would 3 see just implementing the mandatory program. First off is 4 the customers, and as we see going now from here and has 5 been suggested that another letter go out. Initially when 6 this went out, there was a letter from the ARB, and there 7 was confusion out there. We had a lot of calls from 8 confused truckers as far as, what does this mean? Do we 9 have to do it? And the program wasn't even started at 10 that point in time. 11 In addition to that, we would anticipate -- 12 assuming that everybody wants to come in -- and as myself, 13 sometimes you wait until the last minute to do your 14 Christmas shopping. If we assume that April 29th people 15 show up with their trucks -- and I'm not talking the 16 four-and-a-half per dealer. It's going to be dealers 17 where the trucks are at. That is going to be mass 18 confusion. You may not have their parts all on the shelf 19 to have all that done. 20 In addition, you know, the dealers are very 21 concerned at that point in time it's going to interrupt 22 their normal flow of business. As you heard earlier, DDC 23 is ramping up additional people. You can't just snap your 24 fingers and have this done. It does take time. Fifteen, 25 thirty minutes depending on what happens, and you have to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 have that vehicle prepped. So there is a time factor in 2 that. And we're concerned that's going to cause confusion 3 out here in California. 4 CHAIRPERSON LLOYD: Well, as you know, our 5 concern is public health, and that's why we want this done 6 as soon as possible. 7 Ms. Berg. 8 BOARD MEMBER BERG: I guess I don't understand. 9 If we have known this, you said, for 55 months -- I mean, 10 this has been a five-year process between the Settlement 11 Agreement and now. And as a new Board member, it strikes 12 me how the testimony for the voluntary program is like we 13 just thought about it yesterday. We've had this problem 14 for a few years, it seems to me. And why is it now that 15 we need additionally more time? And what is more time 16 going to change? 17 MR. PIECH: Again, the nature of the Settlement 18 Agreement and Consent Decrees was that this would be not 19 be an interruption of service to the truck owner. It 20 would be a done on a service event that the entire truck 21 is out, i.e., on a rebuild. And that was projected. And 22 we had -- International presented data as an example. 23 Like I said, a school bus on the average is 12,000 miles a 24 year. That is federally-accepted information, and even 25 school districts will go out there and support you on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 that. 2 Just 185,000 miles from medium to heavy-duty 3 engine divided by twelve, that's a period of time before a 4 rebuild would occur. And to that extent, you know, we 5 presented that over that time by the time that that truck 6 is rebuilt, it's not going to be a problem. Again, we're 7 talking about only one model year for an engine. 8 This is nothing new for us, for International. 9 We've been very proactive with the staff and actually with 10 EPA about having these done. If somebody comes in and 11 requests it, we have for a period of time been doing that 12 normally. 13 But what we have a concern about is those people 14 that would take those vehicles out of service. And I 15 think you've heard Stephanie talk about before, they don't 16 want to pay for it. They don't want to pay for the trucks 17 downtime for service or anything else. They are looking 18 for somebody to reimburse them for that downtime. And 19 that is one of the concerns that we have had. We have 20 had -- there's been two lawsuits on that. We have won 21 those lawsuits. And, you know, we just want to move 22 forward on this, and that's why we think that the 23 voluntary program is the way to do it. We think that the 24 benefits are now rather than later. And that's why the 25 voluntary program should go forward. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 CHAIRPERSON LLOYD: Thank you. 2 Ms. Pineda. 3 BOARD MEMBER PINEDA: Can you speak a little more 4 to the lawsuit? Those actually went to the issue of a 5 rebuild assumption? 6 MR. PIECH: There are two lawsuits, one here in 7 California and one federally. But, essentially, what was 8 asked within the lawsuits, was plaintiffs in those 9 lawsuits requested the judge to make the engine 10 manufacturers, International, make us apply the reflashes 11 immediately. And what the judge looked at is the 12 Settlement Agreement. The Consent Decrees are the 13 governing documents on this, and that it should go 14 forward. 15 Within those lawsuits, the plaintiffs were also 16 asking for money, i.e., because there would have been 17 downtime. And the judge never went to that point. But, 18 clearly, the Consent Decrees and Settlement Agreements are 19 the governing documents on this move forward. 20 BOARD MEMBER RIORDAN: I have heard you mention 21 school buses at least on two occasions in your 22 presentation. So help me understand, because we've been 23 talking about trucks and things. Did your decree then 24 include school buses? You have some engines in school 25 buses that needed the reflash? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 MR. PIECH: Yes. And we provided this 2 information to the staff. We have school buses at various 3 locations. These engines do go into model year 1988 4 school buses. San Diego School District and others, we've 5 got a specific list. And, again, what we have seen over 6 time is, you know, through the efforts of the staff -- as 7 an example, there's a state agency that as of October 8 27th, their reflash rate was 35 percent. As of December 9 7th by the staff's work with them, they're at 84 percent 10 today. 11 BOARD MEMBER RIORDAN: It would seem to me that 12 your company, in at least the school bus issue, could have 13 easily made some commitment to a portable system that we 14 observed here in our building where you go out -- because 15 those school buses are used very early in the morning and 16 they're used later in the afternoon. A lot of them are 17 sitting during a certain portion of the day. And you 18 could have done those on site so easily. 19 MR. PIECH: Again, we're looking at the next 20 phase. The school buses weren't brought in, so we're 21 looking at trying to do the outreach to that. 22 Understand -- well, you have to have a technician. You 23 have to have the equipment to do that. 24 BOARD MEMBER RIORDAN: Well, yes. You'd have to 25 make that commitment. But that's an easy way to make the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 number of 35 percent very quickly. And then some school 2 districts don't functional at all during the summer. 3 Those buses sit for days, not in any form of heavy 4 utilization. So they're very easy to get to. So I'd 5 suggest, if you have some to do, that's the easiest way, 6 just take the machine to them. 7 MR. PIECH: To the point, though, to getting the 8 35 percent school districts, the school buses only 9 represent about 6 percent of the entire vehicles out 10 there. 11 BOARD MEMBER RIORDAN: And that may be. But that 12 would have been an easy 6 percent to take off the top. 13 CHAIRPERSON LLOYD: Thank you. 14 I'm going to surprise my colleagues on the Board. 15 I've got four witnesses all in favor of the regulation. 16 And we've got written statements from Larry and the 17 others. If anybody feels compelled to come in and speak 18 or they get paid because they speak, that's fine. But, 19 clearly, we know the sentiments in support of that. So in 20 the hopes of trying to shorten this a little bit, does 21 anybody mind not speaking? 22 MR. SHERWOOD: I think I can be fairly quick. 23 But I'm representing both -- 24 CHAIRPERSON LLOYD: I guess the public employee, 25 you have speak. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 MR. SHERWOOD: My boss sent me over here. 2 CHAIRPERSON LLOYD: But basically if you 3 summarize your letter -- 4 MR. SHERWOOD: Yeah. And I'm also here 5 representing CAPCOA. So I think we supported -- both 6 CAPCOA and the Air Districts supported the original 7 regulation, because it is so critical to our district and 8 a number of others in the area or in the state. But we 9 also supported delaying the implementation of it when the 10 CTA came up with the voluntary program. And although we 11 applaud their efforts, progress has just been way, way too 12 slow. So we recommend that you should go with the staff 13 recommendation to forward it to AOL. 14 CHAIRPERSON LLOYD: Thank you. I guess Kathryn 15 Phillips isn't here, so she lost her turn. And then we 16 have Diane wants to say something. 17 No, Bonnie. Sit down. 18 MS. BAILEY: Good afternoon, Chairman Lloyd -- 19 CHAIRPERSON LLOYD: Are you reading from the same 20 letter that we have? Okay. 21 MS. BAILEY: I will keep this very brief, but I 22 do feel that this seems to be a little bit of a pattern 23 that some of the environmental advocates testify last and 24 get cut off quite frequently. 25 So I just want to start by saying that if there PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 are any members on the Board that have any reservations 2 about moving forward with the mandatory rule, I'd like to 3 have a little bit of a discussion. And maybe in that way 4 we can keep this brief and then I'll spare you my long 5 testimony. 6 SUPERVISOR DeSAULNERI: You want a motion now? 7 CHAIRPERSON LLOYD: Do any Board members -- 8 MS. BAILEY: If there are any questions, we want 9 to make sure no questions go unanswered because we feel so 10 strongly on this issue. There's such a long record of 11 cheating and misleading the public, and we feel there are 12 a lot of public health impacts at stake here that -- 13 CHAIRPERSON LLOYD: I think you've heard the 14 Board express those concerns. No. I'm serious, Diane. 15 If you can add something to it, but I think by know you've 16 got a flavor of at least where many of the Board members 17 are coming from, I think along the sentiments of your 18 request. 19 So do any Board members want to ask a question? 20 MS. BAILEY: Well, I also want to add that Todd 21 Campbell with the Coalition for Clear Air wanted to be 22 here today, and he's very sick. And I think he shares my 23 sentiments in saying he asked me to represent the 24 Coalition in saying that we're deeply disappointed with 25 the voluntary program. And we strongly urge you to move PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 forward filing the mandatory program. 2 CHAIRPERSON LLOYD: Do you have a problem with 3 rewarding the company that was able to achieve the target? 4 MS. BAILEY: We have no problems allowing them to 5 continue on the voluntary program as long as they've met 6 those agreed-upon targets. 7 CHAIRPERSON LLOYD: Thank you. 8 Don, you pass? 9 MR. ANAIR: I'm Don Anair with the Union of 10 Concerned Scientists. 11 I just wanted to say we fully support 12 implementing the mandatory regulation. We just want to 13 make sure it's clear in the regulation that the engine 14 manufacturers are required to pay for any of the work that 15 goes into upgrading these engines. 16 I had some other comments, but I think you've 17 heard them all or made them yourselves. 18 CHAIRPERSON LLOYD: Thank you. I think Ms. 19 D'Adamo was going to address that issue. 20 So any other questions from Board members or 21 comments from staff? 22 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 23 CHAIRPERSON LLOYD: I will now close the record 24 on this agenda item. However, the record will be reopened 25 when the 15-day notice of public availability is issued. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 Written or oral comments received after this hearing date 2 but before the 15-day notice is issued will not be 3 accepted as part of the official record on this agenda 4 item. 5 When the record is reopened for a 15-day comment 6 period, the public may submit written comments on the 7 proposed changes, which will be considered and responded 8 to in the final statement of reasons for the regulation. 9 I think that we have a Resolution. I think Ms. 10 D'Adamo wanted to make some additions. 11 There's no ex parte now. Is there any ex parte 12 now? 13 GENERAL COUNSEL JOHNSTON: Ex parte before the 14 vote. 15 CHAIRPERSON LLOYD: There is an ex parte. 16 Ex partes. 17 And I have one, again talking to Jed Mandel a 18 couple of days ago along the lines of the discussion today 19 and his testimony today. 20 Ms. Berg. 21 BOARD MEMBER BERG: Yes. I had a phone 22 conversation with Don Anair from the Union of Concerned 23 Scientists and Bonnie Holmes-Gen from the American Lung 24 Association, and our conversation was consistent with the 25 testimony today. I also had a telephone conversation with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 Paul Wuebben, the Clean Fuels Officer of the South Coast 2 Air Quality Management District; and Chung Liu, the Deputy 3 Executive Officer from Southern California Air Quality 4 Management District. And our conversation was consistent 5 of their testimony today. 6 CHAIRPERSON LLOYD: Thank you. 7 Dr. Gong. 8 BOARD MEMBER GONG: I had a telephone 9 conversation with Chung Liu of South Coast Air Quality 10 Management District consistent with I think previous 11 testimony. 12 CHAIRPERSON LLOYD: Anyone else? 13 BOARD MEMBER D'ADAMO: Yes, Mr. Chairman. 14 Yesterday, I had a telephone conversation with 15 Seyed -- and, Ms. Witherspoon, could you -- 16 EXECUTIVE OFFICER WITHERSPOON: Sadredin. 17 BOARD MEMBER D'ADAMO: Sadredin from the San 18 Joaquin Unified Valley Air Pollution Control District. 19 And he raised an issue that was not discussed today, and 20 that is the specific emission benefits that the San 21 Joaquin Valley would receive with the mandatory program. 22 CHAIRPERSON LLOYD: Thank you. 23 We have a Resolution before us. And I think, Ms. 24 A'Damo, you're going to introduce some amendments. 25 BOARD MEMBER D'ADAMO: Yes, Mr. Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 Earlier, I raised several concerns that I believe 2 that we need to have further clarification and I'd like to 3 just quickly go over those again. 4 First of all, that the engine manufacturers must 5 provide the software free of charge. The engine 6 manufacturers must reimburse dealers for the labor 7 installation costs. That the authorized dealers must 8 provide the software free of charge to the truckers. And 9 then also that staff put together a penalty program that 10 related to authorized dealers or distributors that refused 11 to install reflashes at all or in a timely manner, and 12 that they do so within a 15-day change period. And, 13 additionally, I think that we should include the carve-out 14 for Detroit Diesel consistent with the existing phasing 15 that we have under the voluntary program. 16 BOARD MEMBER PATRICK: And I'll second that. 17 BOARD MEMBER RIORDAN: I'll second to. 18 BOARD MEMBER PINEDA: I have a question to 19 counsel on the penalty for authorized dealers who refuse, 20 is there any issue raised by that? 21 GENERAL COUNSEL JOHNSTON: There are penalties 22 provided in the Health and Safety Code for vehicle-related 23 enforcement questions. And so we could apply the general 24 penalties structure that's already in the Health and 25 Safety Code in this situation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 CHAIRPERSON LLOYD: Supervisor Patrick. 2 SUPERVISOR PATRICK: Thank you. I, too, wanted 3 to declare that I had a conversation with Seyed Sadredin 4 yesterday about specific impacts to the valley and how 5 important moving forward with this is to our accomplishing 6 our air quality goals. 7 CHAIRPERSON LLOYD: Thank you. We've got a 8 motion. Do I have a seconder? 9 SUPERVISOR PATRICK: I seconded it. 10 CHAIRPERSON LLOYD: All in favor say aye. 11 (Ayes) 12 CHAIRPERSON LLOYD: Anybody against? No. 13 Abstentions? No. 14 Great. Thank you very much. Thank you, staff. 15 We will take a short pause while we change over. 16 Next item is 04-11-03, a proposed airborne toxic 17 control measure to reduce hexavalent chromium and nickel 18 emissions from thermal spraying. 19 Before turning things over to staff, I would like 20 to acknowledge and express my appreciation to the members 21 of the International Thermal Spraying Association and the 22 Air Pollution Control Districts for the assistance they 23 provided to ARB in the development of this control 24 measure. 25 I'd also like to draw the Board's attention to a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 unique feature in the proposed regulation that is designed 2 to address environmental justice concerns. Staff is 3 proposing that, in addition to emission control 4 requirements, that operating restrictions be imposed on 5 new thermal sprayers to keep those operations out of 6 residential areas. 7 This is not the first rule we have considered 8 that took geographical location into account. As many 9 Board members will recall, we had a similar discussion 10 about backup diesel engines and ultimately decided to 11 impose more stringent conditions on backup engines located 12 on or near school facilities. However, this is the first 13 ARB rule making that takes residential neighborhoods into 14 account. 15 I think it's a very important precedent for the 16 future, particularly as we consider what kind of broad 17 general guidance this Board may wish to provide to local 18 land use planners so we can avoid putting incompatible 19 sources next to one another. And that was highlighted I 20 think in some of the discussions this morning, some of the 21 comments that Mayor Loveridge made. 22 I'd like at this time to turn the item over to 23 Ms. Witherspoon for further comments and introduce the 24 staff presentation. 25 EXECUTIVE OFFICER WITHERSPOON: Thank you, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 Chairman Lloyd. 2 The Board identified hexavalent chromium and 3 nickel as toxic air contaminants in 1986 and 1991, 4 respectively. Hexavalent chromium is one of the most 5 toxic substances ever identified by the Board and 6 continues to receive our highest priority for attention 7 and control. As you may recall, poorly-maintained chrome 8 platers were among the biggest problem we found in Barrio 9 Logan when we did an environmental justice field study in 10 that community in San Diego a couple of years ago. 11 Previously, this Board has adopted measures to 12 reduce hexavalent chrome emissions from plating 13 operations, cooling towers, and motor vehicle coatings. 14 The proposed rule before you today expands that list to 15 include thermal spraying operations and also brings nickel 16 under the same degree of control. 17 In a previous hearing, the Board directed staff 18 to investigate thermal spraying because it is increasingly 19 being used as a substitute for hard chrome electroplating. 20 We're also in the process of updating our existing chrome 21 plating rule to make sure it's stringent enough, given 22 everything we've learned about the real world chrome 23 plating operation. We will be bringing that updated 24 chrome plater rule to the Board sometime next year. 25 The staff presentation on proposed thermal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 spraying ATCM will be made by Ms. Monique Davis of the 2 Stationary Source Division. Ms. Davis. 3 (Thereupon an overhead presentation was 4 presented as follows.) 5 AIR RESOURCES ENGINEER DAVIS: Thank you. 6 Today we will present a proposal Airborne Toxic 7 Control Measure to control emissions of hexavalent 8 chromium and nickel from thermal spraying operations. 9 Today's presentation will include some background on the 10 thermal spraying process, the reasons and the process that 11 we used to develop the proposed ATCM, the requirements of 12 the proposed ATCM, the benefits and the potential impacts, 13 proposed modifications to the proposed regulatory 14 language, and finally, summary and recommendations from 15 staff. 16 --o0o-- 17 AIR RESOURCES ENGINEER DAVIS: First of all, we 18 wanted to give a little brief background on ARB's Air 19 Toxics Program, especially for new staff members. There's 20 a two-part process. One is identification of toxic air 21 contaminants as provided by AB 1807. And as 22 Ms. Witherspoon mentioned, hexavalent chromium was 23 identified in 1986 and 1991. And the second step involves 24 risk management. We've already adopted several Airborne 25 Toxic Control Measures which are for hexavalent chrome. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 In addition, we also have adopted other control measures 2 that are not necessarily Airborne Toxic Control Measures, 3 but they have the benefits of also reducing toxic air 4 contaminants. 5 --o0o-- 6 AIR RESOURCES ENGINEER DAVIS: We'd like to 7 explain a little bit about what is thermal spraying. Many 8 people are not familiar with this process. Materials are 9 heated and sprayed on to a surface to form a coating. And 10 this slide lists some of the common thermal spraying 11 processes that are in use today. The energy that's used 12 to heat the material can either come from combustion of a 13 gas and oxygen or from an electric arc. 14 --o0o-- 15 AIR RESOURCES ENGINEER DAVIS: This is just 16 another picture of a thermal spraying process that shows 17 you how the feed material comes from the back of the gun, 18 the heating sources, and how the molten metal shoots up 19 the front of the gun for plasma spraying. 20 --o0o-- 21 AIR RESOURCES ENGINEER DAVIS: The feed material 22 for thermal spraying consists of powders, wires, or rods, 23 and can contain chromium, nickel, or other toxic air 24 contaminants. And during the thermal spraying process, it 25 can generate air emissions of hexavalent chromium and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 nickel. 2 --o0o-- 3 AIR RESOURCES ENGINEER DAVIS: Thermal straying 4 is used in a very wide variety of industries and for a 5 wide variety of applications that you see on this slide. 6 --o0o-- 7 AIR RESOURCES ENGINEER DAVIS: Portable thermal 8 spraying is also being conducted to maintain and repair 9 large equipment at places such as power plants and 10 refineries. ARB at this point has very limited data on 11 portable spraying operations. Therefore, we have not 12 included them in the proposed ATCM. However, staff will 13 be investigating portable thermal spraying in the future. 14 --o0o-- 15 AIR RESOURCES ENGINEER DAVIS: Most thermal 16 spraying facilities in California already have control 17 devices. This is already a very highly-controlled 18 industry. The most common being the dry filter 19 cartridges, the red objects shown on the slide. And this 20 slide also shows an enclosed booth that's used for thermal 21 spraying. 22 --o0o-- 23 AIR RESOURCES ENGINEER DAVIS: Other control 24 devices also may include HEPA filters and bag houses, HEPA 25 filters being the most effective. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 --o0o-- 2 AIR RESOURCES ENGINEER DAVIS: Now we'd like to 3 discuss what the current requirements are. Currently, 4 there is no thermal spraying regulation in existence in 5 California specifically for this type of process. It's 6 been regulated through air permits, through new source 7 review, and through AB 2588, but there is been no 8 consistant statewide method for controlling emissions of 9 thermal spraying. 10 --o0o-- 11 AIR RESOURCES ENGINEER DAVIS: Now we'd like to 12 go over our reason for developing our proposed ATCM. As 13 was mentioned at the September 2002 Board hearing, the 14 Board directed staff to investigate this process. The 15 concern was that businesses might be switching from the 16 highly regulated hard chromium electroplating to thermal 17 spraying. Hexavalent chromium is very toxic, as was 18 mentioned, and nickel also has several toxic effects and 19 health effects. 20 In addition, another reason is to address our 21 environmental justice concerns and help implement our 22 environmental justice and community health programs. And, 23 finally, as we mentioned, there are no existing thermal 24 spraying regulations at this time. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 AIR RESOURCES ENGINEER DAVIS: I would like to go 2 a little bit over what our development process was to get 3 this thermal spraying regulation developed. 4 --o0o-- 5 AIR RESOURCES ENGINEER DAVIS: We did two 6 surveys. One of them was for manufacturers. One of them 7 was for facilities. This is some information summarized 8 from our facility survey. The main point is there are 9 approximately 51 active operations in California right 10 now, 37 of which use products that contain chromium or 11 nickel. Only about half of them are currently permitted. 12 And most of them conduct spraying in the booth and most of 13 them have control devices. Many of them also have HEPA 14 filters already installed, even though they're not 15 required specifically by regulation. 16 --o0o-- 17 AIR RESOURCES ENGINEER DAVIS: We worked very 18 closely with the districts and other stakeholders to 19 develop an emission estimation methodology. When we 20 started this project, there was no emission methodology 21 that was established for thermal spraying processes. 22 We contacted EPA. We contacted several other 23 states and tried to find one, but there wasn't one out 24 there that was consistently used. We worked hard to pull 25 together as much data as we could from around the county PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 and around the state to develop an emission estimation 2 methodology. 3 We based it primarily on the result of stack 4 tests at actual thermal spraying facilities. We also used 5 scientific research and we got data from industry. This 6 slide summarizes what we estimate to be the total 7 emissions for thermal spraying in California statewide. 8 --o0o-- 9 AIR RESOURCES ENGINEER DAVIS: This slide 10 provides a breakdown of the different districts. Most of 11 the thermal spraying facilities we identified are in the 12 South Coast area, and most of the emissions are also in 13 South Coast area. 14 --o0o-- 15 AIR RESOURCES ENGINEER DAVIS: As part of our 16 development process, we conducted a detailed health risk 17 assessment to identify both cancer and non-cancer health 18 risks. We did it in accordance with the OEHHA, Office of 19 Environmental Health Hazard Assessment, guidelines. 20 For hexavalent chromium, for most things, the 21 cancer risk ranged from less than 1 for most facilities up 22 to 300 for most of them. But there was one operation in 23 the South Coast area that had an estimated cancer risk 24 from thermal spraying that exceeded 2800 per million. 25 In the summer, ARB notified the South Coast of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 our concerns regarding this facility, and we've been 2 working with them closely to reduce the risks from this 3 one operation as quickly as possible. 4 For nickel you can see the estimated risks range 5 from less than 1 to 30. We also found that the nickel 6 exposure could result in acute health impacts, such as 7 allergic sensitization. 8 --o0o-- 9 AIR RESOURCES ENGINEER DAVIS: I would like to go 10 over some of the requirements for the proposed ATCM. 11 Basically, we've broken up the regulation into two types 12 of operations: Existing operation, and then new or 13 modified operations with January 1st, 2005, being the 14 cutoff date for that determination. Our compliance dates 15 for existing facilities would be January 1st, 2006, and 16 for new and modified sources, they would have to comply 17 upon initial start up. 18 --o0o-- 19 AIR RESOURCES ENGINEER DAVIS: For existing 20 operations, we would require what we designate to be the 21 Best Available Control Technology. And for new and 22 modified operations, we would have them install the 23 maximum control efficiency. For example, a HEPA filter 24 could meet that requirement. For all operations that do 25 thermal spraying, we require an emission inventory, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 permitting, monitoring, and recordkeeping. 2 --o0o-- 3 AIR RESOURCES ENGINEER DAVIS: For existing 4 operations, you base your Best Available Control 5 Technology on your emission level. If you're a large 6 source, you would have to put on that maximum control 7 technology. That would be a HEPA filter or something that 8 was equivalent. If you're a very small source and post a 9 low risk, you would have a lower control efficiency 10 requirement for Best Available Control Technology. And 11 the control efficiencies that are specified in the 12 regulation range from 90 percent to 99.97 percent for the 13 maximum. 14 --o0o-- 15 AIR RESOURCES ENGINEER DAVIS: We also have 16 included a provision in the proposed ATCM for what we call 17 remotely located existing operations. It would allow for 18 a 90 percent control efficiency for these operations, with 19 the expectation they would pose a low risk. But it would 20 also require they conduct a site-specific analysis to 21 confirm there is a low health risk. And they would also 22 have to submit annual emission inventories to the 23 districts to confirm they still meet all of the criteria. 24 Remotely located is at least 1640 feet away from a 25 sensitive receptor. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 --o0o-- 2 AIR RESOURCES ENGINEER DAVIS: The modified 3 operations, those are modified after January 1, 2005, they 4 must meet the maximum control efficiency, for example, a 5 HEPA filter or equivalent type of device. If a thermal 6 spraying operation started to use materials that contain 7 chromium and nickel and they currently didn't, but they 8 started to use it after January 1, 2005, that would be 9 considered a modification of the proposed ATCM. And they 10 would have to use the maximum control efficiency device. 11 --o0o-- 12 AIR RESOURCES ENGINEER DAVIS: For new operations 13 that emit hexavalent chromium or nickel, we've established 14 several criteria. One is they must meet the maximum 15 control efficiency, for example, a HEPA filter. 16 Then as was mentioned before, they would be 17 prohibited from operating unless they were located outside 18 of and at least 500 feet from the boundary of an area that 19 was zoned for residential or mixed use. This is 20 equivalent to about a city block, this distance. ARB 21 staff believes this is a prudent distance for protection 22 of public health. 23 The operation must also undergo a site-specific 24 analysis conducted by the district to ensure public health 25 protection. This is an action that was requested by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 districts to ensure even if they have a HEPA filter on and 2 even if they meet the 500-feet criteria, they want to make 3 sure they are protecting public health. 4 --o0o-- 5 AIR RESOURCES ENGINEER DAVIS: What are the 6 benefits and impacts of the proposed ATCM? 7 --o0o-- 8 AIR RESOURCES ENGINEER DAVIS: After the proposed 9 ATCM is implemented, the overall control efficiency for 10 thermal spraying facilities in California would be about 11 98 percent, which is a real good control efficiency. And 12 it would reduce current hexavalent chromium emissions by 13 approximately 80 percent and nickel emissions by about 51 14 percent. Those are not the total for 98 percent, because 15 most of the operations, as we mentioned before, are 16 already controlled very well. 17 --o0o-- 18 AIR RESOURCES ENGINEER DAVIS: After 19 implementation of the proposed ATCM, we assume that the 20 residual cancer risk will be less than one per million to 21 two potential cancer cases per million. Very low residual 22 cancer risk after implementation of the proposed ATCM. 23 --o0o-- 24 AIR RESOURCES ENGINEER DAVIS: We also estimated 25 the economic impacts of the proposed regulation that we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 estimated. Total capital cost of 670,000 and the 2 operating costs and the total annual costs that you see 3 here on this slide. 4 --o0o-- 5 AIR RESOURCES ENGINEER DAVIS: In response to 6 comments, staff is proposing some modifications to the 7 proposed language. 8 We will clarify the definition for a new thermal 9 spraying operation to state that it does not include 10 modification of an existing operation. 11 We will also clarify the definition of inward 12 face velocity for spraying booth for language that's 13 related to cubic feet per minute. 14 We're also proposing to add language to the 15 requirements for new thermal spraying operations to 16 clarify that the 500-foot distance criteria that we 17 mentioned only applies at the time that an authority to 18 construct is issued. This operating restriction is not 19 effective if zoning changes occur after an authority to 20 construct is issued for a new thermal spraying operation. 21 We're also proposing to modify some monitoring 22 requirements to reduce the monitoring frequency for 23 pressure drop and face velocity and to clarify that 24 remotely-located operations are not subject to the 25 monitoring, the face velocity requirement. We feel these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 modifications will not impact the effectiveness of the 2 regulation, but will provide for flexibility for the 3 operators. 4 --o0o-- 5 AIR RESOURCES ENGINEER DAVIS: In summary, we'd 6 like to say the proposed ATCM is BACT, or Best Available 7 Control Technology. The proposed ATCM is consistant with 8 ARB's environmental justice goals by establishing 9 operating criteria for new thermal spraying operations 10 that emit hexavalent chromium or nickel. And the proposed 11 ATCM reduces hexavalent chromium and nickel emissions and 12 the public exposure that's associated with those 13 operations. 14 --o0o-- 15 AIR RESOURCES ENGINEER DAVIS: Staff recommend 16 that the Board adopt the proposed ATCM. And we also 17 recommend that the Board directs staff to address and 18 investigate portable thermal spraying operations, because 19 the current ATCM does not include them at this time. 20 That concludes my presentation. 21 CHAIRPERSON LLOYD: Thank you very much. 22 Madam Ombudsman, but please describe the public 23 participation process that was followed during the 24 developing of this item and share with us any observations 25 or concerns at this time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 OMBUDSMAN TSCHOGL: Sure. Mr. Chairman and 2 members of the Board, staff began working on this project 3 in October of 2002. As you heard, they started with the 4 survey of thermal spraying facility operations. 5 Staff first presented the regulatory language 6 concepts to the public at a workshop on May 4th, 2004. 7 They held a second workshop on June 23th and a third on 8 September 16th. On average, 19 people participated in the 9 public workshops. 10 Staff had three working group meetings via 11 conference calls, three meeting with members of CAPCOA, 12 and many individual calls with industry. 13 Staff also delivered a presentation at the ITSA 14 regional meeting where approximately 70 people attended. 15 Lastly, staff visited three facilities, two in 16 Sacramento and one in Hayward. The staff report and 17 hearing notice were released for public comment on October 18 22nd, 2004. Hard copies were available at the 19 Environmental Services Center, and electronic copies were 20 posted on the ARB website. 21 In addition, the staff report and hearing notice 22 were mailed to 41 thermal spraying facilities, and the 23 hearing notice was e-mailed to twelve planning agencies. 24 Approximately 230 people are on the mailing lists, 25 including industry, districts, and planning agencies. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 listserve also has 37 non-ARB participants. 2 Thank you. 3 CHAIRPERSON LLOYD: Thank you very much. 4 Board members have any questions? 5 Ms. Riordan. 6 BOARD MEMBER RIORDAN: Yes, Mr. Chairman. 7 I just would like to ask the staff -- by the way, 8 that was an excellent presentation. The letter that we 9 received from United Airlines, have we been able to work 10 with them and accommodate some of their interests? 11 MEASURES ASSESSMENT BRANCH CHIEF FRY: Yes, we 12 have worked with then and we've talked to them. They were 13 confused about some of the requirements, and we are 14 proposing to lessen the frequency of inward face velocity 15 measurement requirements. And it turned out they are 16 really not subject to that requirement. And we'll be 17 clarifying that, because they would qualify as a potential 18 remotely-located facility. 19 BOARD MEMBER RIORDAN: That's what I was 20 thinking. As I recall, that area would be a remote area. 21 MEASURES ASSESSMENT BRANCH CHIEF FRY: That's 22 correct. 23 BOARD MEMBER RIORDAN: Thank you. 24 CHAIRPERSON LLOYD: Dr. Gong. 25 BOARD MEMBER GONG: I have several comments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 First of all, hexavalent chromium and nickel are 2 certainly toxic air contaminants and classified as such. 3 And I think that sets them far apart in a sense from our 4 criteria pollutants such as ozone and sulfur dioxide. 5 I have several questions. One is, you did the 6 survey, and I think you mentioned that some of the -- or 7 most of the units' operations had already complied to a 8 certain extent, the existing -- could you give me numbers 9 of that? 10 MEASURES ASSESSMENT BRANCH CHIEF FRY: We found 11 there were -- actually, there are 17 of the 37 facilities 12 that would be impacted by this already have HEPA filters. 13 Some of them were unpermitted, and they chose to install 14 these as a prudent measure on their own without being 15 required to do so. So it's a proven technology that's 16 been used by the industry for a number of years. 17 BOARD MEMBER GONG: I guess the reason I'm asking 18 that question is I was wondering how many operations would 19 be economically impacted with -- 20 MEASURES ASSESSMENT BRANCH CHIEF FRY: 21 Potentially, six. But we actually -- since four of them 22 rarely do thermal spraying, it's a very small part of 23 their business, they may chose to cease doing it. But we 24 could expect two facilities to install controls. 25 BOARD MEMBER GONG: Another question regarding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 the 500-feet distance that you mentioned. How do you base 2 that 500 feet on? 3 MEASURES ASSESSMENT BRANCH CHIEF FRY: We did a 4 conservative modeling analysis using the OEHHA guidelines, 5 and we looked at the existing facilities that are 6 currently controlled with HEPA filters. And we based our 7 emissions on actual source tests of facilities. And we 8 said how far would you have to go out to keep the risk at 9 or below one in a million, assuming that the system is 10 operating at its optimum efficiency. And that would be 11 500 feet. 12 Now, some districts express concern that it could 13 be a huge new operation being sited and that maybe that 14 wouldn't be health protective enough. So they wanted to 15 have the site-specific analysis in there so they could 16 look at worker exposures as well and potential other 17 possibilities. 18 BOARD MEMBER GONG: Okay. This 500 feet, in that 19 500 feet is a margin of safety, essentially is what you're 20 saying. 21 MEASURES ASSESSMENT BRANCH CHIEF FRY: Right, 22 because the maximum point of impact is at 150 feet. At 23 500 feet is about a block. 24 STATIONARY SOURCE DIVISION CHIEF VENTURINI: I'd 25 also like to add, Dr. Gong, that we did use conservative PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 assumptions in the analysis, so staff are very comfortable 2 that that's a prudent distance for a new hex chrome 3 thermal spraying operation. 4 And there's also the safeguard as well that in 5 addition to that zone, the boundaries for a new facility, 6 there's already required that a new facility still has to 7 undergo a risk assessment. And based on that risk 8 assessment, if you had maybe a very large facility, that 9 that would show up and a district may then decide a 10 greater distance might be required for a new facility. So 11 they built that safety factor in there, if you will. 12 BOARD MEMBER GONG: How do you measure large 13 versus small source? 14 MEASURES ASSESSMENT BRANCH CHIEF FRY: It depends 15 on the amount of materials that they use that contain 16 chromium or nickel. 17 BOARD MEMBER GONG: You don't actually do air 18 monitoring outside the plant or anything like that? 19 MEASURES ASSESSMENT BRANCH CHIEF FRY: We have 20 done -- the emission estimates are based on emission 21 source tests at actual thermal spraying facilities. They 22 did some in the San Diego area that had HEPA filters. 23 They did source testing and measured the emissions, and we 24 modeled those emissions. 25 BOARD MEMBER GONG: I guess this ATCM does not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 apply to new homes that are being proposed to be built 2 near existing operations. 3 MEASURES ASSESSMENT BRANCH CHIEF FRY: Right. 4 That doesn't effect if the planning agencies decides to do 5 something. But our planning guidance document would be 6 making recommendations for that. 7 BOARD MEMBER GONG: Okay. 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And it's not 9 only a decision to build a new home, it's a decision to 10 rezone the land for residential use. So, hopefully, the 11 compatibility would be discussed at the time that that 12 decision is being made. 13 BOARD MEMBER GONG: Okay. I guess you have mixed 14 use land, I guess. So you could build homes on that? 15 MEASURES ASSESSMENT BRANCH CHIEF FRY: Actually, 16 Barrio Logan, there was mixed use. 17 BOARD MEMBER GONG: That's an example of that, I 18 guess. 19 STATIONARY SOURCE DIVISION CHIEF VENTURINI: But 20 our proposal is that you cannot operate a new facility in 21 an area that is zoned residential or mixed use. So we're 22 capturing both of those. So basically you can operate a 23 new facility in an industrial zoned area. 24 BOARD MEMBER GONG: But things happen the other 25 way, too, I guess. That was the other point. But that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 not addressed -- 2 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 3 Mr. Scheible was addressing -- that will hopefully be 4 addressed if there's a zoning change under consideration. 5 BOARD MEMBER GONG: Okay. 6 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And I think 7 in addition to the technical analysis, there's also a 8 philosophy, based on our experience with Barrio Logan and 9 other areas that where you have substances like chrome 10 that are very potent toxic area contaminants and can pose 11 a health risk with relatively small exposures, you have 12 control requirements that are 99.99 percent effective. We 13 want those to be effective 100 percent of the time, but we 14 know that sources will not always operate 100 percent of 15 the time with full control. And so the idea that there be 16 at least some -- I think it was an agreement they should 17 not be in residential areas. 18 And then we have quite a modest distance of about 19 a block, a little bit more than a block, so we don't have 20 one located just across the street or just one lot zoned 21 residential and the next lot isn't. So there's a little 22 bit of extra space there that provides some assistance if 23 the control systems don't work perfectly. 24 BOARD MEMBER GONG: Has the staff presented the 25 results of the Barrio Logan project to the Board? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 EXECUTIVE OFFICER WITHERSPOON: Yes, we have. 2 But we'd be happy to do private briefings for you or any 3 other Board members that would like to hear about that. 4 CHAIRPERSON LLOYD: Ms. Berg. 5 BOARD MEMBER BERG: I just want to make sure on 6 the limitation of the 500 feet that we don't feel we are 7 duplicating any other zoning effort or causing a problem 8 for other agencies that are responsible for making sure 9 within the cities that things are properly built where 10 they're supposed to be and they're not stepping on toes. 11 MEASURES ASSESSMENT BRANCH CHIEF FRY: We did 12 send our information to land use agencies, and we didn't 13 receive any comments or any concerns. And we're not 14 trying to define for them what the zones are. We're just 15 saying that you can't operate a new facility within 500 16 feet of the zone. So they haven't expressed any concerns. 17 EXECUTIVE OFFICER WITHERSPOON: I think that's 18 the correct way to characterize it. The biggest onus 19 would be on the proponent of the new thermal sprayer that 20 wished to locate in a particular lot that was immediately 21 adjacent to housing. They would have to pick another spot 22 within the mixed use zone or industrial zone in order to 23 acquire a permit from the air district, because this ATCM 24 would require the district not to issue a permit if it was 25 within 500 feet. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 BOARD MEMBER BERG: Okay. Thank you. 2 CHAIRPERSON LLOYD: Seeing no other comments, I'd 3 like to call up the first three witnesses, Clay Hinkie, 4 Steve Norris, James Unmack. 5 MR. HINKIE: I'm Clay Hinkie. I represent the 6 Industrial Environmental Association. We're a group of 7 industries from San Diego, from biotech to aerospace to 8 golf manufacturer, represent a wide variety of industries. 9 This particular ATCM, in particular, is not a 10 concern. We recognize the need to protect the public from 11 hexavalent chrome. But some of the policy decisions being 12 made here I think are troubling. 13 IEA strongly urges the Board to reconsider the 14 500-foot buffer as a means to control the hexavalent 15 chrome. The reason is that we already have been working 16 for a long period of time on land use planning documents 17 that actually will actually inform zoning people who 18 really should be making decision on proper zoning. 19 Co-location is a big issue in this state, and I'm worried 20 what we're going to do is run into policies that are going 21 to be directly in conflict with each other. 22 What I recommend is the Board adopt the ATCM 23 without the zoning or use it as a screening criteria 24 rather than the hard and fast rule. It limits our ability 25 to apply newer technologies. It limits our ability to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 flexible and make local decisions and make it based on a 2 health risk assessment. If you take that out, if you 3 already have acknowledged that the health risk assessment 4 is an adequate means for addressing the health effects of 5 it, then that should be sufficient. 6 What we really should be doing is building the 7 ATCM that will direct districts to be more aggressive than 8 that. I think zoning in ATCMs is a policy decision that 9 really should be carefully looked at before adopting. 10 Thank you. 11 CHAIRPERSON LLOYD: Thank you. 12 Any questions? 13 Thank you. 14 Steve Norris, James Unmack, Barbara Kanegsberg. 15 MR. NORRIS: Ladies and gentlemen of the Board, 16 good afternoon. I'm Steve Norris. I'm a Plasma 17 Technology Supervisor in Torrance, California. 18 We've been working with aerospace and for the 19 past 35 years applying coatings to aircraft parts 20 essential for their flight. Our business really is to 21 keep these planes going, to make sure they're safe. 22 That's part of our coating going into the engines. We 23 work for Northrop Grumman, Boeing, and some others. 24 We've been working with the staff of the Air 25 Resource Board to develop this ATCM. But we believe that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 it should be deferred for further studies. Plasma 2 Technologies is a member of the International Thermal 3 Spray Association. It's a 70-member organization 4 comprised of powder manufacturers, equipment 5 manufacturers, and sprayers. And they're there to promote 6 the improving of thermal spray operations. 7 Plasma Technologies supports HCAT, which is the 8 Hard Chrome Alternative Team, sponsored by the Army and 9 Navy. This is something that has been put into place to 10 help reduce plating. Plasma Technology is not a plating 11 company. Has nothing to do with plating. And when we 12 hear chrome and hex chrome and that sort of thing, we get 13 concerned as well. And the problem is, is that there's a 14 lot of anxiety about that particular compound, the nickel 15 and hex chrome. And we see this as a very exciting way of 16 going from plating to thermal spray. 17 We understand that this was based a lot on the 18 1986 Sawatari study, which is really irrelevant to what 19 we're doing. Sawatari used pure chromium powder. We use 20 a ceramic chrome oxide and also a tungsten carbide cobalt 21 chrome 4 percent, not 99 percent. There's a big 22 difference between plating, and there's a huge difference 23 in what we can offer to the environment. It's night and 24 day. 25 Plasma Technology is committed to working with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 CARB and others to sponsor tests. Dr. Sawatari, when he 2 was doing this study that's mentioned in the report, used 3 the maximum setting of 1100 amp years. We traditionally 4 use 700 at the very top end. Her principle objective was 5 to create the maximum amount of hexavalent chrome fumes. 6 That's something we cannot do, now only to our employers, 7 but our coatings would not work at all. We are under the 8 strictest guidelines from Boeing, Northrop Grumman, and 9 from the Federal Aviation Administration to comply 10 totally. 11 And we're inspected regularly. And we're 12 inspected regularly sometimes twice, three times a year by 13 the South Coast AQMD. We are a fully permitted agency -- 14 or company that does keep records, that does do annual 15 emission reports. And they're aware of everything that 16 we're doing. 17 One of the things we are calling for is a study. 18 There has not been any studies. Even Monique Davis gave a 19 great presentation -- and we support her good work. We do 20 think this thing should be deferred -- said this had only 21 been going on since last November. The problem is with 22 that is there hasn't been thermal spray studies. There's 23 no regulations. There's no studies. There's nothing 24 definitive. We need to have scientific studies to make 25 sure that this thing works. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 And we called on -- even in the Smith report 2 that's mentioned, it goes on to say -- they mention in 3 testing, please conduct further tests. These tests need 4 to be done. There's no standardized test and there still 5 hasn't. That was 1994. 6 We've been working with -- surveyed powder 7 manufacturers, filter manufacturers, employees, and others 8 to try to come up with answers. And the problem is there 9 are none, as far as there hasn't been any studies. 10 So we've called upon the State University of 11 New York, Stonybrook to do some studies. They're willing. 12 We talked to GE Ohio, one of the word leading experts in 13 metal to do studies. There willing. We talked to U.C. 14 Irvine. They're interested. We talked to U.C. Davis that 15 we have here today, and they're willing to conduct a 16 study, because there hasn't been any studies done at the 17 gun. 18 There's been studies after the fact in the HEPA 19 filter. And there is no studies to say that HEPA filters 20 are the best things to use. I hear HEPA filter, HEPA 21 filter. They could be considered fire hazards. They do 22 plug up. There are problematic things with them. And 23 what needs to have happen, there needs to be a study to 24 prove that HEPA filters actually work, and that's what 25 we're calling for. We're asking for these things to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 tested. 2 So, please, before you regulate, foster an 3 environment of voluntary compliance, industry 4 friendliness. And please be working with us. I watched 5 as you guys worked with the engine manufacturers for five 6 years on things. This thing has only been going on since 7 last November. And we've been working diligently with 8 CARB to come up with these answers. And we'd like to see 9 some true scientific research done, repeatable, and 10 objective, done at U.C. Davis. Thank you. 11 CHAIRPERSON LLOYD: Thank you. 12 Questions? 13 BOARD MEMBER BERG: I just would like staff's 14 comment on some of the studies and maybe some of the 15 studies that you feel should be done. 16 MEASURES ASSESSMENT BRANCH CHIEF FRY: We believe 17 that sufficient study has been done. Over ten source 18 tests have been done of actual thermal spraying facilities 19 in California using approved test methods by ARB and EPA 20 that have shown consistent results. The HEPA filters, the 21 control efficiencies are certified by the manufacturers. 22 We have documented that hexavalent chrome emissions do 23 occur. And we've done a lot of tests to verify that. 24 What we said about not a consistant method was 25 that because these sources were not previously regulated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 with a consistent rule, there was no standardized 2 methodology for estimating the emissions, not that we 3 couldn't do it, but that in the state there wasn't 4 currently a standardized method. We worked with New York, 5 twelve other states, and we developed this methodology. 6 We made it available to the industry for review 7 in August. We discussed it at two public workshops and 8 had not received any comments until now on the emission 9 methodology. And they do have the availability, if they 10 don't want to use the emission factors that we have, they 11 can do their own source test and use those results to 12 estimate the emissions from their facility and determine 13 what level of control they need. 14 MR. NORRIS: We have done stack testing. We did 15 it in 1991, and it doesn't reflect anything close to these 16 numbers. So we're calling for not stack testing, because 17 that's usually pertinent only to the facility that's being 18 tested. We're looking to see an academic study done under 19 control conditions that can show what exactly what hex 20 chrome products, if any come, out of that gun. I think 21 that it's not only pertinent for the community to know, 22 but for our employees. And we'd really want to know 23 what's coming out of that gun. 24 There hasn't been any studies. There hasn't been 25 any regulations. This is new. And I don't think we can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 do this just in six or seven months. I think we need to 2 really take the time in 2005 and do some studies. And 3 Plasma Technologies is willing to come up and cough up 4 some money. They've already gone to International Thermal 5 Spray, and we've already got some members on board to help 6 offset some of these studies. And we're planning to get 7 any kind of equipment that U.C. Davis needs, the material. 8 We're planning to come up and match whatever -- we're 9 going to ask to come up with whatever the funds CARB can 10 come up with. They're here to work with you guys. We're 11 here to get this thing done once and for all. We don't 12 want to -- 13 BOARD MEMBER BERG: Was Plasma Technology able to 14 participate at the workshops over the last six months? 15 MR. NORRIS: To be perfectly honest, we didn't 16 know about them. And there's several of them that got 17 cancelled. The one that we were planning to got canceled. 18 And it ended up being sort of a workshop at AQMD which we 19 did attend. So that's why we're concerned. We don't want 20 this thing to be rushed through. We want it to be done 21 the right way. We want clear scientific repeatable 22 testing, and not stack testing from one San Diego facility 23 to be used for us. We don't want that at all. What we 24 want is we want a clear academic study, something that's 25 clear. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 BOARD MEMBER BERG: Being in the paint business, 2 not in your field, but in the another, some of the stuff 3 does evolve over time. And I know that I would encourage 4 you and your company and associations to continue to 5 gather information and to work with staff as these things 6 develop. But they do develop over time. And not 7 necessarily can the regulation wait until we get all the 8 information in. So regardless of how the vote goes, I 9 would really encourage your company to continue to produce 10 data and to share it with the CARB staff. 11 MR. NORRIS: We will. 12 CHAIRPERSON LLOYD: Dr. Gong. 13 BOARD MEMBER GONG: Actually, Mr. Norris, I was 14 just wondering for clarification, you gave me the 15 impression that the technique of applying the metals at 16 your facility are different from flame spraying, plasma 17 spraying, twin wire, electric arc, HVOF. 18 MR. NORRIS: NO. We do all of that. 19 BOARD MEMBER GONG: Oh, do you all that? 20 MR. NORRIS: We do all that. What I was saying 21 is we're not a plating company. We're not a plating 22 company. We don't use the same sort of chemicals or 23 process or could possibly create the kind of hexavalent 24 chrome problems that chrome plating does. 25 In fact, the Army and the Navy -- they belong to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 an HCAT. It's Hard Chrome Alternative Team, and they're 2 very excited about using this on landing gear, engine 3 parts, and others to really lower the chrome down to 4 virtually nothing. So it is considered by the Army and 5 Navy as a very good alternative. And this is just recent, 6 so we don't really want to see this squelched right now 7 before we get started or regulated. We want to 8 voluntarily comply. We want to see these studies. We're 9 willing to come up and do something about it. 10 BOARD MEMBER GONG: Are you saying that the 11 results, for example, in your plant would be 12 representative of results of other operations throughout 13 the state? Are you representative of all the other 14 operations, I guess? 15 MR. NORRIS: We would be representative of our 16 own. Our thing is that we're saying the stack tests are 17 good for our -- we've done stack testing. And they're 18 good for our particular facility. It's really a snapshot. 19 Somebody else's stack test is not really relevant to us. 20 And there's different numbers that come up. There's 21 different parameters that are being used. 22 But we're not capable, we don't believe, in the 23 way the gun is made, even the plasma. Definitely HVOF, we 24 couldn't possibly create hardly any hexavalent chrome. 25 That would not be a real good possibility. We want the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 opportunity to prove that. 2 We could do this in several -- within 2005. We 3 don't see any reasons why these tests can't be done. And 4 then you would have real data to base a regulation, not 5 just, you know, we're going to just slam this thing 6 through and slam dunk it. Basically, we've only been 7 working on this thing since last November. So having a 8 vote now would be really premature. 9 Even the staff admitted there hasn't been 10 regulation and studies. We've just done stack testing. 11 And the thing is, we haven't been privy to the stack test. 12 When we asked for the stack testing, we were told we had 13 to wait 30 days. We could possibly get it today. And 14 this is the kind of stuff that, you know, as an 15 industry -- we need to be able to have to be able to 16 review. So that's where we are. 17 CHAIRPERSON LLOYD: Seems to be a disconnect in 18 your statements and what staff has been doing in terms of 19 the outreach and the workshops there, and I don't know how 20 we can resolve that. 21 MR. NORRIS: There's been several of them that 22 have been canceled. 23 CHAIRPERSON LLOYD: But bottom line, particularly 24 when we're dealing with Chrome 6 you know, we really have 25 to protect public health and the concern there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 Anyway, any more questions from the Board? 2 STATIONARY SOURCE DIVISION CHIEF VENTURINI: I'd 3 just like to clarify. In August, as Ms. Fry mentioned, we 4 shared with the industry analysis, the data, the 5 information, the assumptions on which we base the emission 6 factors which provided the basis for this regulation. It 7 is included as Appendix C of the staff reports, about a 8 20-page technical document. 9 In addition to relying on source test data from 10 actual thermal spraying operations, Dr. Gong, the types of 11 processes you mentioned, those are the types of processes 12 from which we were able to obtain source test information 13 where hex chrome was directly measured using ARB's 14 approved test method. 15 There's some mention of the Sawatari study. The 16 only time we used that study was where we had test data 17 that measured total chromium, and it did not have hex 18 chrome. We relied on the Sawatari information which said 19 there was about a 30 percent conversion rate. Other data 20 would suggest that conversion rate could be less than 5 21 percent, could be over 90 percent. We felt that was an 22 appropriate value to use in the absence of those specific 23 tests having specific data. 24 Beyond that, we did consult with -- staff 25 consulted with twelve other states to evaluate what they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 were using in terms of emission factors. And our results 2 were generally consistent with the findings of those other 3 states. 4 So we, at the staff, are very comfortable that 5 our emission estimates present a very reasonable estimate 6 of the emissions of hex chrome that can be expected from 7 these types of facilities. Would we like additional data? 8 Sure. But that would only be to refine what's been done 9 and not to replace it. 10 And one of the reasons in the regulation where we 11 specified emission factors, it was to make it simpler for 12 the companies that are going to have to apply controls to 13 calculate where they fall into the regulation and what 14 their obligation will be. But we also put a provision 15 that if you did not agree with the emission factor, you 16 could do your own source testing, provide that information 17 to the district, and if the district concurred, could use 18 that information. 19 So I guess my suggestion to Mr. Norris might be 20 to conduct those source tests and let that information be 21 the basis for his compliance with the regulation in the 22 South Coast district. 23 MR. NORRIS: Those stack tests can run up to 24 $100,000. So we prefer to put in the control devices 25 since the control devices cost somewhere around $130,000 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 for a bag filter and about $10,000 for a HEPA filter to 2 put on. But they also have about $12,000 a year -- that's 3 for each individual booth that we have. And we have 4 eleven. There would be an additional $12,000 cost per 5 year just to get rid of the cartridges and upkeep. 6 And we've talked to the Fire Department, and 7 there's some big issues with fire in the bag house and 8 putting metal powder, aluminum, which we also spray, into 9 these bag houses creates an explosive situation. And 10 since we use liquid hydrogen, it's a problem. And there's 11 been some problems down in San Diego with fires and 12 explosions in these things. That's one of the reasons why 13 we do some of their business. Some of the powders they 14 don't want to use in bag houses. So there is some 15 questions there, and there is some costs. 16 And like I said, we'd rather spend the money not 17 on stack testing to prove that we're not doing this. 18 We're getting ready to upgrade our equipment anyway. 19 That's not the point. The point is there hasn't been 20 studies. And we don't think that regulations just on 21 general principle should ever go forward without adequate 22 study. 23 HEPA filters may not be stringent enough. They 24 might not even cover the hexavalent chrome problem. But 25 the thing is we'll never know because we're not going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 do studies at the gun. We're going to do studies at the 2 bag filter and create regulations and rules based on 3 something we don't know. 4 I really think that we need to use U.C. Davis, a 5 world-class institution with one of the finest chrome -- 6 hexavalent chrome experts there, Dr. Lavinia there, and he 7 could solve these problems right there. And we'd be 8 willing to help pay for this. And since this is a new 9 thing and we have it in regulation, I think it should be 10 done right. And that is true. The rest of the country 11 have not done testing either. It's one of the things we 12 brought forward to the International Thermal Spray 13 Association. We also brought forth to right now one of 14 our doctors is in Stonybrook right now trying to come up 15 with a way we can do some definitive tests there. 16 We are trying to be proactive and work with CARB. 17 We appreciate their good work, and we also appreciate the 18 fact we don't want to expose our employees to any danger, 19 nor our community. And we're about 50 feet from 20 residential houses. So that's something of big concern to 21 us. And we haven't had a problem until now. I mean, 22 until this was brought up in this last year, AQMD has been 23 in our facility at least twice a year the last 30 years 24 since we've been in existence. And we've taken every one 25 of their recommendations, and we've complied with every PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 one of their orders. So it's like we're here, as good 2 citizens, as good business people, and we're here to help 3 you. 4 CHAIRPERSON LLOYD: Thank you. 5 James Unmack, Barbara Kanegsberg, Jane Williams. 6 MR. UNMACK: Good afternoon, members of the 7 Board, ladies and gentlemen. I'm James Unmack. I'm a 8 Diplomat of the American Academy of Environmental 9 Engineering, a certified industrial hygienist, and a 10 professional engineer registered in the state of 11 California. 12 I'm here speaking in opposition to the ATCM as 13 proposed. The reason why I speak to you is the control of 14 the exposures and emissions is often a very significant 15 cost of doing business, and we want to make sure we get it 16 right. 17 Appropriate controls to effectively and 18 efficiency control emissions require the knowledge of the 19 characteristics of the emissions. To date, that knowledge 20 is not available: Knowledge regarding the conversion rate 21 of chromium to hexavalent chromium in the various thermal 22 spray processes; the factors and operational parameters 23 that control the conversion rate; the particle size 24 distribution of the emissions the various thermal spray 25 processes; and the factors that influence the various PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 particle size distribution. 2 Without this information, control technology 3 cannot be optimized. Requiring what may be unnecessarily 4 conservative controls place an undue cost burden on a 5 vital technology and could possibly drive business out of 6 California. 7 Delaying the adoption of this proposed ATCM for 8 hexavalent chromium and nickel just long enough, maybe a 9 year, to give the ARB time to lead the research to obtain 10 factual information concerning the production of 11 hexavalent chromium and the factors that influence 12 particle size distributions for the various thermal spray 13 processes would allow determination to get the proper and 14 the most appropriate control technology in the standard. 15 With the information developed through this 16 research, we could get the right kind of control devices 17 with better knowledge of how the processes and the 18 parameters that affect the production of hexavalent 19 chrome. We could address the operational parameters to 20 minimize the production of hexavalent chromium. 21 The emission factors presented in Attachment 1 of 22 the ATCM do not address the many operational parameters 23 that effect the omission of hazardous air contaminants. 24 This information derived from an ARB-led research would 25 provide tables and algorithms to better define the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 emission. And users applying this information could 2 reduce their emissions. And, absolutely, this is the 3 ultimate goal of the ATCM is to reduce the emission of 4 hexavalent chrome and nickel. 5 The 2002 study referenced in the excellent work 6 done by your staff here reportedly is actually a 7 cautionary statement in the MSDS. It states that it may 8 produce fumes and it may contain hex chrome. This 9 statement is based on chromium in welding, not thermal 10 spray. If there were scientific studies to support this 11 cautionary statement for thermal spray, one would expect 12 they would be cited in this staff report. Unlike welding, 13 the goal of thermal spray is not to melt the metal powder, 14 but to heat the metal powder to a softening point to 15 achieve a quality coating. 16 There's some language in the proposed ATCM that 17 implies that zero emission is absolutely attainable. And 18 I think we can reword these paragraphs, paragraph C5, F 19 and G in such a way that the intent is clear without 20 implying that the impossible to achieve zero is necessary. 21 And for these reasons, really, I'm asking the 22 Board to delay the adoption until we have a scientific 23 basis that characterizes the emissions so we can provide 24 better control technology. Thank you. 25 CHAIRPERSON LLOYD: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 Questions? 2 Thank you very much. 3 Barbara Kanegsberg, Jane Williams, Darryl Mack. 4 MS. KANEGSBERG: Can you hear me? Cool. 5 Ladies and gentlemen of the Air Resources Board, 6 I'm Barbara, Kanegsberg President of BFK Solutions. I'm 7 an independent consultant with 30 years of experience in 8 clinical chemistry and in surface quality. I'm a 9 recipient of U.S. EPA's Stratospheric Ozone Protection 10 Award, and some of my colleagues refer to me as Ms. Ozone 11 of '96. I'm very proud of that award. I work with 12 communities who are negatively impacted by industrial 13 activities. I'm acutely aware of the criticality and 14 importance of achieving worker safety, neighborhood 15 protection, and environmental protection. 16 I'm opposed to the immediate adoption of the 17 proposed thermal spray ATCM. And I say that as a 18 representative of Plasma Technology, of the International 19 Thermal Spray Association, and as a concerned citizen. 20 Regulations must be based on experimental data, data that 21 is reflective of realistic industrial applications. The 22 studies required to develop the proposed ATCM have not 23 been conducted. 24 I urge that, in 2005, CARB support and foster the 25 experiments required to characterize thermal spray PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 emissions. My colleague, Steve Norris, addressed the 2 inappropriateness of extrapolating from the largely 3 inapplicable 1986 Sawatari study. And, by the way, I've 4 read those reports a number of times, and Sawatari is 5 invoked both directly and indirectly a number of times. 6 And I did not have access to the study until the end of 7 October directly. I tried to get it off the web. 8 Couldn't get it. 9 It actually was done purposely to purposely 10 generate toxic fumes so that toxicologists could basically 11 nuc rats and see what happened to them. It's a totally 12 different purpose for this study. 13 Steve also discussed the willingness of the 14 industrial and academic communities to participate in the 15 straightforward studies required to characterize thermal 16 spray emissions and to optimize the thermal spray process. 17 And I want to reiterate, characterizing thermal spray 18 emissions means you understand what's in them. Because 19 the fact that chrome is used doesn't mean releasing a lot 20 of hex chrome or any hex chrome of significance. 21 And also particle size distribution. You've got 22 to know the particle size distribution. I'm involved in 23 contamination control. A HEPA filter is not the be-all 24 and end-all. Basically, if you're trying to trap large 25 particles, that's like trapping elephants. If you want PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 little bitty fuzzy particles, you want a HEPA filter or 2 OPA filter. You don't want to catch elephants in a 3 butterfly net or vice versa. So we've got to know what's 4 going on. And we don't right now. I also said optimize 5 the thermal spray processes, because I'm fully confident 6 that we'll be able to optimize those processes so the 7 promise can be realized. 8 So why not adopt a precautionary principle. Just 9 say, let her rip. Let's put on all the controls, HEPA, 10 OPA, whatever. Well, the reason is that it's a poor idea, 11 and it's a poor idea for the environment. It's 12 counterproductive to environmental protection. 13 Considerable effort has been expended by industry 14 and by the military through the HCAT Program to develop 15 thermal spray as a preferred substitute for many chrome 16 plating applications. It is expected, albeit assumed, 17 this is an environmentally-preferred process by most 18 people doing the work, the proposed ATCM development of 19 what promises to be an environmentally-superior process. 20 If passed, the negative impact of this ATCM will 21 be wide ranging. The intense regulatory scrutiny will 22 demotivate players who were considering adopting thermal 23 spray. And if tests prove thermal spray to be better, 24 they should be adopting them. 25 The ARB staff reports incorrectly indicates that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 only one facility is going to be significantly impacted by 2 the cost of implementing the proposed controls. What 3 about the consequences of monitoring and recordkeeping for 4 at least 24 other known facilities? That's not been 5 considered. CARB has documented that three facilities 6 will cease thermal spray operations rather than comply 7 with the new regs. 8 The people who are developing thermal spray in 9 the military and in industry think it's an 10 environmentally-sound process. Those three facilities, if 11 the testing proves correct, should be encouraged. And 12 further, since temporary portable operations aren't going 13 to be regulated, the impact of uncontrolled processes on 14 workers and the environment is likely to worsen. 15 Ultimately, I would like CARB to consider the 16 negative impact of the proposed ATCM on development of 17 future alternative processes. Process development cost 18 time, effort, and money. Adopting an ATCM based not on 19 science but on supposition is going to have a chilling 20 effect on any new process development. Believe me, I've 21 seen it before. 22 CARB's outreach includes workshops and 23 presentation to ITSA and meeting with equipment vendors 24 and a lot of vendors for control equipment and others. 25 CARB has received feedback, but no clear data. I'm not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 surprised. I haven't seen a lot of clear data either, and 2 I've talked to lots of people; the military, industry. 3 I've even visited a major filler manufacturer, and I still 4 don't get a good answer from them as to what's coming out 5 of the thermal spray gun. 6 Based on extensive comments I've received, 7 studies to characterize thermal spray emissions are 8 hampered by the specter of regulatory scrutiny. This is 9 not surprising, given the emotions engendered by the mere 10 mention of the words "hexavalent chrome." Lots of times 11 talking with them, I felt like I had joined Harry Potter 12 and had mentioned Lord Valdimar, whose name shall not be 13 mentioned. 14 You know what? This is really stupid. It's 15 ridiculous. It's unscientific, and it's 16 counterproductive. CARB can do outreach beyond 17 presentations and outreach. Thermal spray is expected to 18 be an environmentally-preferred option with minimal 19 release of hazardous materials. And I get this 20 unfortunately not from data, but from attending scads of 21 environmental workshops over the last few years. 22 Because there's no corresponding federal regs, 23 the proposed ATCM could become a model for the entire 24 nation. Rather than exclude a good process that shows 25 great promise to replace plating, I ask that CARB as a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 groundbreaking agency, step up to the plate. I ask that 2 in 2005, CARB provide a neutral, supportive environment 3 for actual testing. CARB can help, for testing, 4 characterization, and process optimization. And frankly 5 to say, well, we'll pass the rule, and it's still going to 6 happen -- it's not going to happen. It will just drive 7 people underground. It will make them more fearful. 8 Who's going to step up to the plate, if they're afraid? 9 No one is going to do it. 10 Do the testing first. Then revisit the need for 11 an ATCM based on experimental data, not on supposition. 12 Thank you. 13 CHAIRPERSON LLOYD: Thank you. 14 Questions? 15 Thank you very much. 16 Jane Williams, Darryl Mack, Diane Takvorian. 17 MS. WILLIAMS: Dr. Lloyd, members of the Board, 18 sorry to be wearing my coat, but it's rather cold in here. 19 And I feel like I should go through my numerous academic 20 achievements. And I've been called the sludge queen, 21 because I worked on sewage sludge for so long. So I don't 22 know if that gives me any currency here. 23 But most of you know who I am. I'm Jane 24 Williams, the Executive Director of California Communities 25 Against Toxics, have 70 members, various community-based PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 environmental justice groups that worked on hexavalent 2 chrome issues and chrome plating issues for a very, very 3 long time. 4 And as I sat and I listened to all the testimony 5 today, the only thing that kept going through my mind was 6 Maggie Perales, whose brother died at the Suva school from 7 exposure to a chrome plater. And my esteemed colleague, 8 Diane, is here to talk about the Barrio Logan. 9 When you look at exposure to hexavalent chromium 10 in a community setting, it is not a pretty sight. And I 11 just want to remind the Board that is why we're here. We 12 are here to regulate the emissions of hexavalent chrome, 13 because there's literally bodies that go along with this 14 issue. 15 Now, I can understand industry saying that, you 16 know, they don't want to be regulated. I've never come to 17 an Air Board meeting where I got industry up here and said 18 yes they want to be regulated. I've never seen it yet. 19 I've been doing this work for 13 years. So it seems to me 20 that being also the Chair of the Sierra Club and the 21 National Air Toxics Committee and trying to get U.S. EPA 22 to do its job to regulate air toxics and having ten stack 23 tests -- if I had ten stack tests in any that I have done 24 nationally, I would be jumping for joy and clicking my 25 heels together. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 It looks like we actually have quite a bit of 2 data here. We have ten actual stack tests. And I hate to 3 ask who paid for those, because, you know, again, this is 4 just like the Air Resources Board having to develop lab 5 methods to find air toxics, because industry won't. So 6 often I see that it's the public and members of the public 7 and the communities that are being affected by exposure to 8 these chemicals that are, again, paying to develop and 9 generate this information. And it seems to me that staff 10 has actually done a very good job. 11 Whether hexavalent chrome is coming out of the 12 gun or not, it seems to me you have a site-specific risk 13 assessment, a site-specific thing where if a member of the 14 industry wants to come in and argue they're not emitting 15 hexavalent chrome in their process, they can choose that 16 site-specific offering to do that. 17 But, again, I evoke, you know, the memory of 18 Maggie Perales' brother and all the other teachers who 19 died at that school, the students who died at that school, 20 the teachers who had miscarriages at that school. We have 21 got to do more to regulate hexavalent chromium. It is a 22 serious public health threat. We have more actual data of 23 deaths from these facilities than any other air issue. 24 And I'm looking forward to the fight over the 25 next chrome rule, which is the platers, the actual PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 platers. 2 And I also want you to know that because I worked 3 with the Speaker's Office this year on their chrome 4 plating rule, that the Department of Defense is actually 5 very, very involved with this. And that's through their 6 program called SEDRS, Strategic Environmental Defense 7 Research Project. We've been very involved with them. 8 They would like to move away from chromium, period. In 9 their -- they have like a ten-year plan to actually get 10 away from the emissions of hexavalent chromium and 11 chromium and nickel, because they see these regulatory 12 juggernauts coming out. So I want to applaud -- they're 13 not here not opposing the rule. And that might give you 14 pause, because I know they're looking at this closely. 15 We're here to support this rule. I want to also 16 bring to your attention Dr. Gong's comments. The land use 17 planning handbook would be hugely valuable here, because 18 it's not just that we have chrome platers and houses. 19 We've got -- you can get a plater. You can get a facility 20 like this and you can have a land use planning agency put 21 residences next door to it. In fact, in Dr. Liu's 22 neighbors, they're putting a day care center next to a 23 chrome plater. And there's nothing we can do to stop it, 24 because it's a local land use decision. So we've got to 25 find a way -- you don't have a way to prevent that from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 happening, but we need to search for one. Because we know 2 the outcomes, and the outcomes are tragic. 3 So I'm going to use this opportunity to say we 4 really need to look at how we can give better guidance to 5 land use planners because, Dr. Gong was right on the 6 money. We can establish this 500-foot buffer. We can put 7 the Best Available Control Technology. We can do 8 everything to protect public health, and a local land use 9 planning agency can go ahead and put a school right next 10 door to that, a day care center right next door to that 11 facility or housing, just because they're not experts in 12 air toxics and may not read the rules. 13 So thank you for the opportunity to comment. And 14 I stand by my qualifications as a sludge queen. Thank 15 you. 16 CHAIRPERSON LLOYD: Thank you. 17 Darryl Mack and Diane Takvorian. 18 MR. MACK: Good afternoon. I'm Darryl Mack. 19 I think I may have made a slight mistake in 20 saying that I was against this proposal. 21 CHAIRPERSON LLOYD: I assume that any researcher 22 wants more money to do research, so I understand why that 23 might be the case. 24 MR. MACK: If we're looking at the issue of 25 pouring Chrome 6 into a creek, I'd say, yeah, we don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 want to be doing that. 2 And we are looking to do -- we would like to do 3 research. And this is the first time I've seen this 4 information. By the way, I like the handout. I'd like to 5 use it for EH&S people to explain what it is we do on 6 campus. We do have a spray booth. And we do do a lot of 7 experiments. We've never seen Chrome 6, but we've never 8 looked for it. So when they asked me yesterday -- we sat 9 through a meeting -- apologize for being nervous. We sat 10 through a meeting, and I had to explain what it is we do 11 because we're creating a new building for our thermal 12 spray process. And they go, "Does it create anything 13 nasty?" I said, "For the most part, it's a fairly clean 14 operation." There isn't a whole lot of chemistry change 15 that's happening, except if you did plasma. Similar seen, 16 high velocity process. 17 And what I'm hearing here is that this is 18 creating a lot of Chrome 6, and I don't see that. The 19 only report that I saw was a report that was handed to me 20 just two days ago showing 30 percent Chrome 6 done back in 21 1986. And my thought was, well, shoot, I'd very much like 22 to see how we can confirm this information. Is it real 23 data or not? And I'd like to see the data that's 24 presented to you guys so I can confirm it. So how do I 25 get that, is my question? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 STATIONARY SOURCE DIVISION CHIEF VENTURINI: We'd 2 be happy to sit down with Mr. Mack and go through the 3 appendix and all the data, the 13 source tests that were 4 done in California to measure hexavalent chrome which we 5 utilized, and be happy to do that. 6 MR. MACK: Were these done in situ, or is it just 7 passive tests? 8 CHAIRPERSON LLOYD: I think it would be 9 appropriate to, you know -- 10 MR. MACK: And this not the right time to ask 11 this sort of question. 12 STATIONARY SOURCE DIVISION CHIEF VENTURINI: 13 Those were done in operating facilities in California. 14 MR. MACK: Okay. So you're actually measuring 15 Chrome 6. Okay. So I was just offering our services. 16 We're right here, 15 minutes away. We're could certainly 17 help in doing some of the research. 18 CHAIRPERSON LLOYD: I think, again, I encourage 19 staff to work with you. And, hopefully, we can, because 20 depending on what we do with the regulation, I still think 21 it would be appropriate. There's data gaps there we can 22 look at. I think it would be appropriate. 23 MR. MACK: If we're processing Chrome 6 -- I'm 24 not a big fan of doing anything bad for the environment. 25 Davis, we don't do anything bad. But over the years, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 there's always a phrase that comes around, data talks, BS 2 walks. If it's good data, it's got to be solid. 3 CHAIRPERSON LLOYD: You generate both of those 4 over at Davis. 5 MR. MACK: Yeah. More or less. So like I said, 6 I'd like to be part -- to help the groups that have just 7 been introduced to this new source of testing, and does 8 HEPA really stop the problem. 9 CHAIRPERSON LLOYD: I think those are all good 10 questions. Unfortunately, very often, we don't have the 11 luxury of having all the data in when we have to make a 12 regulation and we have to protect public health. So, 13 again, I'd encourage staff and the industry to work with 14 you and see if, in fact, there are data gaps we look at. 15 But, again, if we waited to get all the data in in what 16 we're trying to do, we would not be doing our job. 17 MR. MACK: And I understand that. My only 18 concern is that if we introduce measures to stop something 19 that may not work at all, why even bother? 20 CHAIRPERSON LLOYD: I think that's why it would 21 be good to work with you as we go ahead and take some time 22 to do that. 23 MR. MACK: That was it. 24 CHAIRPERSON LLOYD: Appreciate you coming. 25 Diane. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 MS. TAKVORIAN: Thank you, Dr. Lloyd and members 2 of the Air Resources Board for the opportunity to comment 3 today on this important proposed ATCM for thermal spray. 4 My name is Diane Takvorian. I'm the Executive 5 Director of Environmental Health Coalition. We're a 6 25-year-old environment health injustice organization 7 located in San Diego. I also -- we're doing credentials. 8 I'm not the queen of anything, but I did have the 9 opportunity to serve as Co-Chair of the Environmental 10 Justice Advisory Committee and of CalEPA. I don't think 11 anybody would call that a position of royalty. It was 12 fun. 13 I'm happy to be here today not only representing 14 the Environmental Health Coalition, but also representing 15 three other environmental justice organizations who want 16 to add their voices to support for this important rule, 17 the Center for Community Action and Environmental Justice 18 in Riverside/San Bernardino, Communities for a Better 19 Environment in L.A. and San Francisco, and the Silicone 20 Valley Toxics Coalition in San Jose. 21 I want to commend the Air Resources Board staff 22 in as eloquent and massive words as I can for the 23 leadership they've demonstrated in this rule in addressing 24 very important environmental health and justice concerns 25 that our communities have been waiting decades to hear PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 some of the language that's in the rule. Decades. It has 2 not been six months. It has not been four months. It has 3 been decades that our communities have been waiting to 4 hear some of the language and to have some of the 5 protections that are provided in this rule. So this is a 6 long time coming, and we are happy to be here. 7 We appreciate the acknowledgement of the need for 8 the separation of polluting facilities and homes, schools, 9 and other sensitive receptors. That is something that we, 10 our organization, has been working on for nearly 15 years, 11 and we believe this is one of the first times it's been 12 publicly acknowledged. We think it's a very, very 13 important step. We also think that it's something that 14 represents one of the key priorities within the 15 environmental justice recommendations of CalEPA. This was 16 lifted up as something that many, many, many people came 17 before us testifying about, the dangers of these uses 18 being a co-located. And we appreciate the step that 19 you've taken. 20 We are very supportive of the requirement for 21 that new facilities be located at least 500 feet from 22 existing sensitive receptors. And we commend staff for 23 placing ARB in the forefront of public health protection. 24 We think that the ATCM is the right place for 25 this guidance. We believe it's very important for siting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 problems, that siting problems be addressed at the policy 2 level, such as in this ATCM, and not only on a case by 3 case basis. It will not be resolved at only the local 4 level, because land use agencies and local air quality 5 management districts do not have the resources to do this 6 type of evaluation. We need the guidance from the Air 7 Resources Board so those local agencies can do a better 8 job. 9 We also know and appreciate the science that has 10 gone into the development of this rule, but we cannot wait 11 for scientific certainty. The health risk assessments for 12 the sources immediately adjacent to sensitive receptors 13 are, at best, educated guesses about impacts. And that's 14 with all due respect to the scientists. This was proved 15 no more starkly than in the case of Master Plating in 16 Barrio Logan. And the Environmental Health Coalition 17 partnered with ARB on this project where the health risk 18 assessment performed in 1994 estimated a cancer risk of 19 one per million. But after ARB monitoring, we looked at a 20 health risk of nearly 100 per million. So we need act in 21 a precautionary way, and we believe this rule does that. 22 We think that it's very protective of public 23 health, and we urge the ARB to retain this part of the 24 measure. I know you've been asked to remove it. We would 25 strongly urge you to retain it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 We also think that this sends a very strong 2 signal to land use agencies. It's very true what Jane 3 Williams said. It's true that a local agency, a local 4 land use agency could allow residential or school to be 5 built next to a polluting facility. And I don't believe 6 that you have control over that. You do have the ability 7 to send a very strong statement to these land use agencies 8 that you believe that you would not site one of these 9 facilities right next to a home or a school. This means 10 that this is something that we can take home in our 11 communities and talk to land use agencies about. It's a 12 very, very important tool for us to get the land use 13 agencies to change the zoning, to begin to adopt this kind 14 of precautionary thinking. 15 And I thank, Dr. Gong, your question. We think 16 once this rule goes through and coupled with the air 17 quality land use handbook, that will be quite an important 18 tool for us to use in our local communities, and we 19 believe it will be very important. 20 There are two things -- three things we would 21 like to ask your consideration for changing. The portable 22 units we believe should be included this ATCM. We 23 understand you're saying you want to do additional 24 research on this. We do think they have a strong 25 potential to pose acute health risks even if they're only PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 used for 30 days. We're concerned about that. If they 2 can't be included in this ATCM, we hope you will move 3 quickly on that. 4 We believe that the requirement for the HEPA 5 filters should apply to all the facilities so that would 6 be more far reaching. 7 And then the last thing is that we think this 8 addition in regards to the 500-feet requirement being 9 satisfied if the new thermal spraying operation meets the 10 standard at the time authority to construct is issued, 11 that's okay, unless zoning changes are announced well in 12 advance, we have a bunch of authorities to construct that 13 get issued, and then nothing happens. So we would hope 14 that an expiration period can be put into that so there's 15 a reasonable time period between the authority to 16 construct and the authority to operate, that that could be 17 a loophole we think could be solved. 18 Let me say thank you. We think that makes 19 incredible common sense. And the people in the 20 communities that were protected really thank you. I know 21 Jane talked about remembering those who have suffered. I 22 want to tell you -- I want you to remember Roberto 23 Martinez. When I talked to his mother last week -- he's 24 the young boy who lives next door to Master Plating. He 25 hasn't used his inhaler in three months. He's going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 school nearly every day now. He was missing almost 2 50 percent of school. His mom has a job. Their economic 3 situation has improved. I think it has a lot to do with 4 your action. I want to thank you for that. 5 CHAIRPERSON LLOYD: Good news. 6 Staff, on that three suggestions that Diane made, 7 it seems maybe two of the three would be reasonable. I 8 don't know. 9 STATIONARY SOURCE DIVISION CHIEF VENTURINI: On 10 the first one with respect to the portable, we actually -- 11 staff just became aware of portable facilities just 12 several months ago. So we just haven't had the 13 opportunity to do the work necessary to evaluate that. 14 But that is on our plate to do. 15 On the second item, it was a suggestion for HEPA 16 across the board. We basically tiered the regulation 17 based on the emissions of the facility and established a 18 control requirement based on that. To require HEPAs 19 across the board would be a very significant expense. And 20 we tiered this and applied BACT such that each tier the 21 residual would be well down to around that one in a 22 million level. 23 Let me just also mention that we don't 24 specifically require a HEPA filter in the regulation. We 25 establish performance standards, but HEPA is kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 recognized at the state-of-the-art. So someone with 2 another technology that gets the equivalent emission 3 reduction, that is okay. 4 On the last item that had to do with the 5 authority to construct, if it's all right, we'd like to 6 talk to Ms. Takvorian. Maybe there's something we can do 7 to deal with that. 8 CHAIRPERSON LLOYD: Sounds good. 9 Ms. Witherspoon, any further comments? 10 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 11 CHAIRPERSON LLOYD: We'll now close the record on 12 this agenda item. However, the record will be reopened 13 when the 15-day notice of public availability is issued. 14 Written or oral comments received after this hearing date 15 but before the 15-day notice is issued will not be 16 accepted as part of the official record on this agenda 17 item. When the record is reopened for the 15-day comment 18 period, the public may submit written comments on proposed 19 changes which will be considered and responded to in the 20 final statement of reasons for the regulation. 21 Any ex partes communication of my colleagues? 22 Seeing none, then we have a resolution before us. 23 BOARD MEMBER D'ADAMO: Mr. Chairman, I move 24 Resolution Number 04-44. 25 SUPERVISOR PATRICK: Second. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 CHAIRPERSON LLOYD: All in favor say aye. 2 Dr. Gong, did you want to say something. Oh, you 3 wanted to vote. Sorry. 4 All in favor say aye. 5 (Ayes) 6 CHAIRPERSON LLOYD: Anybody against? 7 Abstentions? 8 Thank you. 9 And thank you, staff, for a very important piece 10 of work there. And, again, I encourage you to work with 11 U.C. Davis on this additional work. 12 We'll take a five-minute break, if we may, before 13 next item. 14 (Thereupon a recess was taken.) 15 CHAIRPERSON LLOYD: The final agenda item this 16 year is 4-11-6, an informational briefing on this year's 17 air quality. 18 I think it is very important that we review 19 California's progress towards clean air each year. The 20 most basic measure for tracking progress is emission 21 reductions, and we can take pride in the fact that 22 statewide emissions continue to decline as a result of our 23 control programs. 24 Today's presentation will demonstrate the results 25 of these efforts in terms of measured air quality. We all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 remember that the summer of 2003 was especially conducive 2 to ozone formation. This past summer, we experienced more 3 typical weather conditions. This variability makes it 4 critical that we look at each year's monitoring results in 5 the context of weather conditions and the long-term air 6 quality trend. 7 At this time, I'd like to turn it over to 8 Ms. Witherspoon to introduce the item and begin staff's 9 presentation. 10 EXECUTIVE OFFICER WITHERSPOON: I'm going to turn 11 it over to Gayle Sweigert, Manager of the Air Quality Data 12 Branch to make staff's presentation. 13 (Thereupon an overhead presentation was 14 presented as follows.) 15 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 16 Today's presentation on 2004 air quality will focus on the 17 Federal 1-Hour Ozone and PM10 Standards. 18 --o0o-- 19 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 20 primary driver of our planning efforts are the basis of 21 current state implementation plans. 22 --o0o-- 23 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: I will 24 discuss air quality and weather compared to previous 25 years, both the most recent few years and the long term PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 trend. 2 Finally, I will briefly describe the transition 3 to new Federal standards and the progress made towards 4 state standards. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: I'll 7 start with 2004 ozone air quality, specifically how it 8 stacks up against the Federal 1-Hour Ozone Standards. 9 --o0o-- 10 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: In 11 start, this was a good year in terms of ozone air 12 pollution. When compared to last year, 2004 also provides 13 a good example of how year to year variations in weather 14 can impact ozone levels. Compared to 2003, we saw 15 improvements statewide, especially in the South Coast Air 16 Basin. Coastal districts continued to meet the Federal 17 1-Hour Standard in 2004. The Sacramento region also had 18 improved air quality and is now close to attainment for 19 the Federal 1-Hour Standard. 20 --o0o-- 21 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 22 San Joaquin Valley as well as the South Coast received the 23 fewest ever number of days over the Federal 1-Hour 24 standard. There were no exceedance days in the 25 San Francisco Bay Area or the Sacramento region. Also the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 peak 1-Hour ozone concentrations in 2004 were lower in 2 most areas of California with the notable exception of the 3 San Joaquin Valley. I'll speak more about that a little 4 later. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 7 chart shows the number of days that the Federal 1-Hour 8 Standard was exceeded over the last four years for the 9 three largest urbanized areas in Northern California. 10 It's very apparent that the greatest number of exceedances 11 occurred in the San Joaquin Valley and that this year was 12 much cleaner than the previous three years. The 13 Sacramento region and Bay Area showed similar improvements 14 this year. 15 --o0o-- 16 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Now 17 let's look at Southern California. In the South Coast, 18 days over the standard increased in each of the previous 19 three years and then dramatically Decreesed this year, a 20 somewhat similar trend is seen downwind in the Mojave 21 Desert. San Diego and Ventura continue to average no more 22 than one exceedance day per year over three years, which 23 keeps them in attainment. 24 When we look at the 2004 air quality data, it's 25 important to consider the role that weather conditions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 play year to year. Using the South Coast example, the 2 previous three years had worse than average weather from 3 an air pollution standpoint. With 2003 being extremely 4 conducive to ozone formation, this helps explain what 5 appear to be reversal of air quality progress. However, 6 once more normal weather conditions return in 2004, the 7 exceedance days were way down. Also when we compare this 8 year's exceedance days to those in previous normal weather 9 years, we see substantial progress. For example, in 1998, 10 a similar weather year, there were 60 days above the 11 standard compared with 27 days this year. 12 --o0o-- 13 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Now 14 let's look at a little more detail at four key areas: The 15 South Coast, the San Joaquin Valley, the Sacramento 16 region, and the San Francisco Bay Area. The first three 17 regions are the primary areas that are still in the 18 planning process for the 1-Hour Standard. And the Bay 19 Area only recently meet the standard after a number of 20 years of being quite close. 21 --o0o-- 22 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: I'll 23 start with the South Coast, which is California's largest 24 and most populated metropolitan region. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 2 Overall, 2004 ozone air quality is consistent with a 3 long-term downward trend in air pollution. We have 4 recently talked about the importance of considering annual 5 variations in weather when interpreting air quality data. 6 Again, the progress seen in 2004 reflects average weather 7 conditions compared to more severe conditions last year. 8 The district recorded the lowest peak levels and also the 9 fewest ever number of 1-Hour Federal exceedance days. Now 10 let's look at 2004 as part of the long-term trend. 11 --o0o-- 12 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 13 graph shows the 20-year ozone trend for the South Coast 14 Air Basin. The blue bars represent the number of days 15 exceeding the Federal 1-Hour Ozone standard, and the 16 yellow represents the maximum or peak concentrations. 17 Over the last two decades, there has been a dramatic 18 reduction in both the maximum concentrations and the 19 number of exceedance days. When you consider that 2003 20 had the most days conducive to ozone formation over this 21 entire period, it's clear that the overall trend is very 22 positive. At the same time, these data also show that we 23 still need substantial further emission reductions to meet 24 air quality standards in the years that are especially 25 conducive to ozone formation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 --o0o-- 2 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 3 Another way that we evaluate progress is to track the 4 spacial extent of the air quality problem. The next two 5 maps give you a visual sense of how air quality has 6 improved overtime. This and the next map show contours 7 that represent the average number of days on which the 8 Federal 1-Hour Standard was exceeded. We use the 9 three-year average in part to help address meteorological 10 variability. The red areas had more than 100 days above 11 the standard. The gold areas had more than 50 days. And 12 the green areas had between 3 and 50 days. No areas had 13 less than two exceedance days per year. As you can see in 14 1990, the region's ozone problem was widespread, with the 15 number of communities experiencing more than 100 days 16 above the standard. 17 The next slide takes us to 2004. 18 --o0o-- 19 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 20 Today's map is dramatically different. About 70 percent 21 of the population lives in areas that have two or fewer 22 exceedances per year. These coastal areas are close to 23 compliance with the standard. There were no such areas in 24 1990. Inland areas that averaged 100 or more exceedances 25 in 1990 now average less than 50, as shown in the dark PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 green areas. 2 --o0o-- 3 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Now 4 let's move on to the San Joaquin Valley. While the 5 improvements in this area have not been as dramatic as the 6 South Coast, we have still made progress. 7 --o0o-- 8 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 9 Geography and climate in the San Joaquin Valley can be 10 very conducive to ozone formation. These conditions have 11 hot temperatures and little wind. As a result, multi-day 12 ozone episodes often occur. In 2004, the weather was 13 slightly better than average. During 2002 and 2003, there 14 were numerous multi-day episodes. 2004 had only a single 15 episode lasting only two days. The Valley had nine 16 exceedances this year, the fewest ever during the last 17 20 years. In addition, although the 2004 peak levels were 18 comparable to those in 2002 and 2003, the spacial extent 19 of the exceedances is not as widespread now compared with 20 previous years. 21 --o0o-- 22 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 23 graph shows the exceedance days and peak concentrations 24 for the San Joaquin Valley over the last 20 years. Note 25 that the scale on this and the following graphs are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 different than the ones you saw earlier for the South 2 Coast. The graphs are scaled so that you can more easily 3 see the trend in year-to-year variations. The number of 4 exceedance days has declined about 40 percent during this 5 period, although this is considerable year-to-year 6 variability. Peak levels have not declined much during 7 the last decade. But the spacial extent of the highest 8 concentrations has Decreesed. 9 --o0o-- 10 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 11 next two maps are also similar to the ones we saw for the 12 South Coast. They show the spacial extent of the Federal 13 1-Hour Ozone problem in the San Joaquin Valley for 1990 14 and 2004. The ozone problem in the Valley was not as 15 widespread or extreme as in the South Coast during the 16 same time period. No areas averaged over 50 exceedances 17 per year. The days above the standard were between 3 and 18 50 in the regions surrounding the Fresno and Bakersfield 19 urbanized area. The remaining portion of the Valley 20 averaged two or fewer exceedance days per year. 21 --o0o-- 22 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 23 map shows how the Valley compares in 2004. As you can 24 see, the problem areas still surround Fresno and 25 Bakersfield, but the area's smaller than in 1990. It's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 important to note, however, that as we transition to the 2 more stringent Federal 8-Hour Standard, this picture will 3 change with areas throughout the Valley exceeding the new 4 standard. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Let's 7 now turn to the Sacramento Region 2004. 8 --o0o-- 9 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Air 10 quality relative to the Federal 1-Hour Standard improved 11 significantly in the Sacramento region compared with the 12 previous two years. There were no exceedance days and 13 peak levels were lower. Since 2002, peak levels have 14 decreased substantially and are now at the level of 1-Hour 15 Standard. In Sacramento, the highest ozone concentrations 16 generally occur on days with temperatures in excess of 95 17 degrees. Our analysis indicates that the number of days 18 with hot temperatures and calm winds in 2004 was similar 19 to the previous two years. 20 --o0o-- 21 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: As you 22 can see, the trend in exceedance days shows considerable 23 variability. However, it's important to note that the 24 Sacramento region is close to attainment for the Federal 25 1-Hour Ozone Standard, and averaged many fewer exceedance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 days than either the South Coast or San Joaquin Valley. 2 The long-term trend and the number of days above the 3 standard has generally Decreesed by 60 percent. 4 --o0o-- 5 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 6 last area I'd like to focus on is the San Francisco Bay 7 Area. The Bay Area comprises both inland and coastal 8 areas. And it's the inland areas that experience the 9 highest ozone concentrations and the greatest year-to-year 10 variations. 11 --o0o-- 12 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 13 Currently, the Bay Area attains the Federal 1-Hour 14 Standard with no exceedance days this year. Exceedances 15 are rare and require hot temperatures in excess of 95 16 degrees. Our analysis indicates there were fewer hot days 17 in 2004 than in the previous years. There were also more 18 days with better mixing, which favors the dispersion 19 rather than the build up of ozone. In general, the 20 impacts of weather are much more noticeable in areas such 21 as the Bay Area that are close to the standard. As an 22 area approaches or attains the standard, even changes in 23 weather can cause an up-swing in ozone. Therefore, 24 continued emission reductions are needed in order to 25 ensure attainment under all types of conditions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 As I mentioned earlier, the Bay Area now attains 2 the Federal 1-Hour Standard and over the last six years 3 has averaged three or less exceedance days per year. Peak 4 levels have steadily Decreesed over the last three years, 5 and the 2004 peak was below the standard of 0.112. 6 --o0o-- 7 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Next, 8 I'll move on to particulate matter or PM10 standards. 9 --o0o-- 10 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 11 complex nature of particulate matter pollution make it 12 challenging to interpret area quality data and trends. 13 Seasonal patterns can be different than for ozone. Peak 14 24-hour concentrations generally occur in the fall and 15 winter months. In addition to the 24-Hour Standard, there 16 is also an annual standard that represents the average of 17 all 24-Hour values over a calendar year. In addition, 18 less frequent sampling of ozone and multiple weather 19 scenarios under which high PM can occur can amplify 20 year-to-year variability. 21 --o0o-- 22 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 23 Several factors can influence and cause variability in 24 observed PM10 concentrations. Weather has a large impact. 25 There are two types of weather conditions that cause high PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 PM10. The first is high wind that resulted in windblown 2 dust events. Another is weather conditions leading to 3 atmospheric stagnation that are conducive to the buildup 4 of combustion and secondary PM. The weather conditions 5 leading to stagnation including limited rain fall, colder 6 more humid conditions, and limited mixing. Contributors 7 to high PM10 are enhanced activities on holidays, such as 8 increases in residential wood burning. Finally, natural 9 events, such as wildfires, can cause significant impacts. 10 These factors can result in very different PM10 11 concentrations in different parts of the state in a given 12 year. 13 --o0o-- 14 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: More 15 reasons just discussed, it is more difficult to compare 16 different regions of the state and different years to each 17 other for PM10 than it is for ozone. Because this year's 18 fall/winter PM season won't be over until early 2004-05 19 and the data are incomplete, we looked at PM air quality 20 from July 2003 through June 2004. However, as we move 21 towards a more continuous sampling of PM, we will be able 22 to improve our ability to assess current conditions on a 23 real time basis. 24 --o0o-- 25 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Based PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 on the twelve-month 2003-to-2004 period, a few areas in 2 this the state continue to have a windblown fugitive dust 3 problem, including Mono Lakes and Imperial County. In 4 contrast, urban areas rarely exceed the 24-Hour Standard. 5 And their few remaining exceedances are generally due to 6 infrequent isolated events. For example, the last 7 stagnation episodes was in 2001 for the San Joaquin Valley 8 and in 1997 for the South Coast. Annual average 9 concentrations are also continuing to decline in recent 10 years. 11 --o0o-- 12 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 13 next two slides illustrate the impacts of specific events 14 on PM10 concentrations. In this slide, the 24-hour 15 exceedance resulting from high winds is shown for Imperial 16 County. This slide shows the highly elevated PM10 17 concentrations that occurred on February 18th, 2004 where 18 winds of 40 to 50 miles per hour occurred. 19 --o0o-- 20 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: In 21 another example, the devastating wildfires that occurred 22 in Southern California in the fall of 2003 caused numerous 23 exceedances of the PM10 standard. This slide illustrates 24 the impacts at Escondido in San Diego County, a peak PM10 25 concentration of 179 micrograms per meters cubed was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 recorded on October 29th, 2003. Natural events such as 2 these, while producing severe air quality impacts can be 3 flagged, cannot be used for regulatory purposes since they 4 are uncontrollable events. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 7 graph shows the annual number of exceedances of the 8 Federal 24-Hour Standard for the South Coast and San 9 Joaquin Valley. Since 1990, the number of exceedances has 10 Decreesed by 70 percent. As noted previously, exceedances 11 in recent years are relatively infrequent and generally 12 result from specific isolated events. 13 --o0o-- 14 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: As a 15 result of ongoing control programs, annual average PM10 16 concentrations in the San Joaquin Valley and the South 17 Coast have also Decreesed by approximately 25 percent 18 since 1990. Both areas are now approaching the level of 19 the annual standard. The South Coast State Implementation 20 Plan projects a 2006 attainment date, while the San 21 Joaquin Valley has a projected 2010 attainment date. 22 --o0o-- 23 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Now 24 that you've heard how we're doing in terms of the Federal 25 1-Hour Ozone and PM10 Standards, I'd like to briefly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 discuss the transition to new Federal Standards. 2 --o0o-- 3 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: As you 4 know, several years ago the U.S. EPA adopted more health 5 protective ozone and PM2.5 standards. These standards 6 have triggered new requirements and are now the focus of 7 our planning efforts. Designations for the new 8-Hour 8 Ozone Standard were finalized in June of this year and 9 8-Hour Ozone SIPS are due in 2007. Designations for the 10 national PM2.5 Standards are expected by the end of this 11 year, and PM2.5 SIPS are due in 2008. 12 --o0o-- 13 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 14 slide compares peak 1-Hour and 8-Hour ozone levels in the 15 South Coast. As you can see, the progress made in 16 reducing 1-Hour ozone levels closely tracks the progress 17 in reducing 8-Hour ozone levels. Our analysis also 18 indicates that the relationship between ozone-conducive 19 weather and measured air quality applies for the 8-Hour 20 Standard as well. 21 --o0o-- 22 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Since 23 the 8-Hour Ozone Standard is more health protective than 24 the 1-Hour Standard, there are more non-attainment areas. 25 These include the five largest urban areas, South Coast, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 San Diego, San Joaquin Valley, the Sacramento region, and 2 the Bay Area. In addition, several rural areas including 3 the mountain counties air basin, Butte County in the 4 north, and the southern desert areas are also 5 non-attainment. 6 --o0o-- 7 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Three 8 areas of California are expected to be designated as PM2.5 9 non-attainment areas by U.S. EPA this month. These areas 10 are the San Joaquin Valley, the South Coast, and 11 San Diego. While San Diego exceeds only the Federal 12 Annual Standard, the San Joaquin Valley and South Coast 13 exceed both the 24-Hour and Annual Standards. 14 --o0o-- 15 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: We 16 began monitoring for compliance with new Federal PM2.5 17 Standards in 1999. This slide shows the trend in annual 18 average PM2.5 concentrations for the three expected 19 non-attainment areas. Controls being implemented in these 20 areas for PM10 and ozone have provided ongoing emission 21 reductions for PM2.5 as well. As a result, PM2.5 22 concentrations have been declining over this period. 23 Concentrations in San Diego are now only slightly above 24 the level of the Federal Annual PM2.5 Standard. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: Now 2 moving on to the last part of my presentation, I'd like to 3 highlight the progress we've made towards attaining the 4 State Standards. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: State 7 Standards are more health protective than standards in 8 most cases. Our biggest challenge remains the attainment 9 of ozone and PM standards. The State NO2 Standard is 10 attained statewide, and the State CO Standard is violated 11 only in the localized area of Calexico. Most areas still 12 meet the State Ozone PM10 and PM2.5 Standard. 13 --o0o-- 14 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 15 rest of this discussion will briefly highlight the 16 progress made towards attaining the State Ozone PM10 and 17 PM2.5 Standards beginning first with the state Ozone 18 Standard. 19 --o0o-- 20 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 21 Although most urban areas exceed the State Ozone Standard, 22 there are a limited number of attainment areas. These 23 include some coastal areas, such as San Luis Obispo, and 24 the North Coast Air Basin. While most of California is 25 non-attainment, we have made substantial progress. To PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 highlight this progress, I'd like to show you two maps in 2 the South Coast. These maps are similar to the ones we 3 looked at earlier, except they focus on the State Standard 4 rather than the Federal Standard. 5 --o0o-- 6 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 7 map shows the average number of exceedance days for the 8 State 1-Hour Standard for 1990. Note that over half the 9 air basin is colored red, showing that those areas 10 experienced over 100 exceedance days. 11 --o0o-- 12 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: This 13 map shows the dramatic progress made in 14 years. The red 14 areas representing more than 100 exceedance days are gone, 15 the area with 50 to 100 exceedance days including Santa 16 Clarita and part of the Inland Valleys of the South Coast. 17 A small portion of the coastal area indicated by light 18 green is very close to attaining the State 1-Hour Ozone 19 Standard. I'd like to point out the map on the screen is 20 different than the original hard copy you have in your 21 handouts. The hard copy has an error, and the correct one 22 is up on the screen. 23 --o0o-- 24 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 25 next two slides highlight the progress on attaining the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 state's more stringent PM10 and PM2.5 Standards. 2 --o0o-- 3 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: The 4 PM10 Standard, the trend is similar to progress shown 5 earlier for the Federal PM10 Standard. The South Coast 6 and San Joaquin Valley are still substantially above the 7 State Standard. Sacramento and the Bay Area have lower 8 concentrations and are approaching the level of the State 9 Standard. 10 --o0o-- 11 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: 12 Similar to PM10, PM2.5 also been declining. While the 13 South Coast and San Joaquin Valley have the most severe 14 PM2.5 problems, other urban areas such as the Bay Area and 15 Sacramento are much closer to the standard. 16 --o0o-- 17 AIR QUALITY DATA BRANCH MANAGER SWEIGERT: In 18 summary, the long-term trend shows improved air quality in 19 California. 2004 ozone air quality improved dramatically 20 compared to 2003, a year that was extremely conducive to 21 ozone formation. This year saw more average conditions 22 that produced improved air quality. When we compare this 23 year's exceedance days to those previous normal weather 24 years, we see substantial progress. 25 This concludes my presentation. We would be glad PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 to answer your questions. Thank you. 2 CHAIRPERSON LLOYD: Thank you very much for an 3 excellent presentation. That was great progress just 4 looking at the 15 years. Just amazing what's happening. 5 I guess one simple question, given the extrapolation. 6 When we attain all the standards, when will we be out of 7 business? 8 DEPUTY EXECUTIVE OFFICER TERRY: There's a few 9 folks in the room that will still be here. 10 CHAIRPERSON LLOYD: Any other comments or 11 questions of my colleagues? 12 That's a great job, and really appreciate having 13 the -- I presume also that the Board members can get any 14 CDs of that that they want to use for themselves. 15 We have one witness to testify on this item. So 16 I'd like to call her at this time, Deborah Whitman. 17 MS. WHITMAN: Hello. I would first of all like 18 to thank the Board for giving me this opportunity to speak 19 to you. And I have to apologize. I have a severe sinus 20 infection and bronchitis from all the burning and the 21 pesticide spray near the house where I'm staying. 22 I hadn't planned on speaking today, but as I was 23 listening to all the reports that were coming out, I felt 24 that there were some issues that I kind of wanted to bring 25 out with my own individual studies that I've been doing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 related to my health problems and the air quality in the 2 Sacramento area. 3 And one of the things I did find in my research 4 is that carbon monoxide stays in the blood hemoglobin up 5 to 200 times longer than oxygen. And I haven't seen any 6 reports that talk about that, like the long-term exposure 7 to carbon monoxide in buildings or even in traffic or 8 anything. I'm assuming I haven't -- I'm not a doctor or 9 scientist or anything, but I just know -- 10 CHAIRPERSON LLOYD: We've got a doctor here, a 11 real doctor. 12 MS. WHITMAN: Good. I know from my own personal 13 experience and my health problems that when I'm exposed to 14 carbon monoxide, say, in traffic or anything, I have all 15 kinds of symptoms that show up. One is sinus congestion, 16 headaches. I get nauseous. I don't think clearly. All 17 types of things when I am in poor air quality happen. 18 So anyway, I'd just like to see something in the 19 studies that will represent that how the carbon monoxide 20 gets into the muscle tissue or stored in fat or whatever. 21 And the health effects on any of the reports I've heard 22 today, I haven't heard anything about the health effects 23 of all these reports and how it's effecting the public or 24 anything, except for one where we were talking about the 25 spraying. So I thought that was a good report. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 CHAIRPERSON LLOYD: I also recommend that you 2 talk to the staff, get information, and also get our 3 monthly, quarterly air quality and public health 4 newsletter as well as lots of the report of staff. 5 MS. WHITMAN: I plan to do that. 6 A little of my history. I worked for 26 years 7 with the State of California, and I was forced to retire 8 early because I can't live in Sacramento and I couldn't 9 get a job transfer anywhere else. The air quality is so 10 bad. I had to leave my family my friends. I've been here 11 over 35 years. And I had to leave by myself and go 12 somewhere else because I get sick when I come here. I'm 13 here less than three days and I start getting critically 14 ill. So that's why this is such an interest to me. And 15 I'm going to pursue doing some research and working with 16 U.C. Davis and hopefully with your organization on this. 17 So another thing, when you're talking about the 18 study with the children with exposure in the East Bay 19 Area, I go to the East Bay Area to get well. That's the 20 only -- Emeryville and that area. And so I would like to 21 recommend that the study include like Redding, Sacramento 22 area, specifically Natomas where we just moved, and also 23 San Diego and all of those areas and compare. 24 I've just recently went to Florida. I was there 25 four days, and I felt wonderful. I drove on their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 freeways. I was in Fort Lauderdale. I was in Orlando. 2 And I felt good driving in traffic there. So there's -- 3 you need to compare maybe with Florida and California, the 4 air quality, and how it's affecting the health on people. 5 The other thing was I wanted to talk a little bit 6 about Natomas. My daughter just recently bought a home 7 there, and we moved -- it's been less than a month. I 8 can't go there and stay at her home and visit my grandson 9 without getting ill. 10 And I have to support HEPA filters, because 11 that's the only thing that helps me when I come to 12 Sacramento. I have a HEPA filter in my bedroom. And when 13 I'm in my bedroom with the HEPA filter, I feel great. 14 When I leave my bedroom, I start getting congestion, 15 bronchitis. And all these symptoms start recurring. 16 I also use the HEPA filter at my office at work. 17 And as long as I sat -- I have two of them. As long as I 18 sat at my desk and worked, you know, I feel wonderful. 19 The minute I went to a meeting or had to leave my desk, I 20 would get very ill. And so I'm for HEPA filters. 21 And, also, one of the Board members had asked 22 staff about any type of masks that you could wear when 23 you're in traffic or anything. And a Kaiser doctor did 24 give me a mask 3M makes, and I understand they're the only 25 company that makes these masks. And they're great. I can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 get them at Home Depot, and it's a respirator. And I 2 refused to wear it at first because I was embarrassed to 3 have to wear this and I didn't believe it would make that 4 much difference. But one day I was so sick I had to try 5 it, and it makes such a difference. I could drive in 6 traffic now when I wear that. And I was driving down -- I 7 couldn't understand, because I was driving around Fresno 8 and I was sick. And I started putting this mask on, and 9 it worked. And I'll thinking, well, there's no cars 10 around me. I'm almost the only car on the freeway. It 11 dawned on me the pesticides were affecting my health and 12 my breathing. 13 So those masks work great, and I highly recommend 14 if you're in traffic a lot that you use them. But you 15 have to keep them sealed up when you're not using them, 16 and you need to change them frequently, otherwise, they 17 can probably cause more health problems. I don't think 18 you can wear them on a long-term basis. So I just wanted 19 to add that. 20 Also I just believe that carbon monoxide and 21 pesticides, all these chemicals we're exposed to, creates 22 inflammation on the inside of our bodies. I know it 23 effects my intestines. It effects my breathing problems. 24 I have heart problems. You name it, I have problems. And 25 I notice with my research that I've done it's when I get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 around toxic chemicals these symptoms kind of come out. 2 So -- 3 CHAIRPERSON LLOYD: Good news is the vehicles 4 these days, we're cutting down the emissions 5 significantly. 6 MS. WHITMAN: And I don't feel that the 7 manufacturers are doing enough right now to promote their 8 hybrids. There's only two that I can -- well, three now. 9 Ford has one out. But they're not doing enough. And 10 they're more expensive. I went and looked at a Civic 11 Hybrid and the Civic regular gasoline car, and the Hybrid 12 was $2,000 more. And I don't know who's going to go out 13 and buy a hybrid when they're more expensive. So I just 14 don't feel the manufacturers are doing enough right now on 15 that issue. So that's the difference? 16 CHAIRPERSON LLOYD: Maybe you could summarize, 17 take some additional information back to staff. 18 MS. WHITMAN: I have been planning to do that, 19 but I've been so critically ill, I can't write up all 20 these things. So the first thing I thought I'd do was 21 attend one of these meetings. And I don't know when I'll 22 be back in Sacramento. I had to move out of the area. 23 I'm along the coast now because I can breath there and my 24 symptoms are much less along the coast in Carmel than they 25 are here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 CHAIRPERSON LLOYD: We have our Ombudsman I think 2 also could be helpful talking to you about that. And I 3 think she's familiar with the Monterey area as well so -- 4 MS. WHITMAN: And the other issue I was going to 5 talk about, one other thing that I heard just recently 6 that I wanted to find out more about as well is that I 7 understand -- when I just flew back from L.A., I counted 8 15 agricultural fires. I took photographs and doing video 9 and photographs as well on my research of agricultural 10 fires going near my home or my daughter's home. And 11 anyway -- and I've been sick since I've been here. My 12 grandson who's nine months old has eczema all over his 13 legs, and that's spreading. We can't keep it under 14 control. And it just happened since we moved to this 15 house in Natomas area. And we went to Jamaica on vacation 16 for a week and it all cleared up without medication. When 17 we've been back, he got it again. So -- 18 CHAIRPERSON LLOYD: One of the things you might 19 also talk to some staff about is indoor air quality 20 issues, because maybe the new houses. So I encourage you 21 to talk with staff. 22 MS. WHITMAN: I would just like the Board to 23 encourage staff to work with probably Kaiser, because 24 that's where I've gone for numerous years to deal with my 25 health problems and found out I'm really chemical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 sensitive. And then also U.C. Davis to do some studies on 2 the health effects. And I know your staff has produced a 3 video here titled, I think, "Health Effects of Smog," and 4 I viewed that, and it's an excellent video. But I think 5 more research needs to be done in this area. 6 CHAIRPERSON LLOYD: Thank you very much. 7 MS. WHITMAN: I want to thank you again and see 8 if you have any questions. 9 CHAIRPERSON LLOYD: Thank you very much. Just 10 encourage to you work with our Ombudsman and also staff to 11 make sure you get all the data that we have there. And 12 thanks for coming. And hopefully it's not the air quality 13 that makes you sick in Sacramento. I presume -- 14 MS. WHITMAN: I'm sure it is. I've been driving 15 all over California. And I can tell you within minutes of 16 where there's high levels of carbon monoxide and air 17 pollution just by my symptoms. 18 CHAIRPERSON LLOYD: Thank you. 19 SUPERVISOR DeSAULNIER: Mr. Chairman, maybe it's 20 the political leadership in the East Bay that makes people 21 feel better. 22 CHAIRPERSON LLOYD: I don't know that's -- 23 clearly. I don't know why I overlooked that. 24 Thank you. 25 Well, since it's not a regulatory item, it's not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 necessary to officially close the agenda item. However -- 2 we have an open session. Although no formal Board action 3 may be taken, the Board will allow an opportunity to 4 address the Board on items of interest within the Board's 5 jurisdiction, but that do not appear on the agenda. Each 6 person will be allowed a maximum of five minutes to ensure 7 that everyone has a chance to speak. 8 And I understand there are two people signed up 9 to speak on this item. We have Ed Benson and Tom Faust. 10 I guess both Redwood Lumber. Are they allowed to tag team 11 on this to get five minutes, or is it five minute or -- 12 GENERAL COUNSEL JOHNSTON: Generally, we consider 13 it five minutes per person. 14 CHAIRPERSON LLOYD: So hope that you don't have a 15 team. Thanks. 16 (Thereupon an overhead presentation was 17 presented as follows.) 18 MR. BENSON: Well, good afternoon, Chairman 19 Lloyd, Board, staff. Thank you for the opportunity to 20 bring Redwood Rubber to your attention. Redwood Rubber 21 has the solution to tire waste problem, and this was 22 confirmed by a recent study completed by the Integrated 23 Waste Board Management Board, which you know about. And 24 if you don't, we'll make it available. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 MR. BENSON: Redwood Rubber would like to start 2 building plants to devulcanize used tires, and we need 3 some public assistance. And we're hoping that some of 4 this 75 tire tax could be earmarked for Redwood Rubber. 5 --o0o-- 6 MR. BENSON: I think you're aware of the 7 legislation. 8 Next slide. 9 --o0o-- 10 MR. BENSON: And specifically, in Section 7, to 11 develop markets and new technologies for used tires and 12 waste tires. Redwood Rubber has achieved a patented 13 devulcanize process using ultrasonics, and we seek a $3.8 14 million grant which would cover the equipment costs to 15 build a 4,000 pound per hour devulcanize plant which would 16 recycle 2 million tires a year. This would give us -- 17 Redwood Rubber the ability to get started and in short 18 order would add two more lines of the same size barrel 19 reactor to process 15,000 pounds an hour. And we believe 20 if we can get started with this piloted equipment, within 21 five years we could build five plants and actually recycle 22 all the tires -- all 34 million tires of waste tires in 23 California. 24 --o0o-- 25 MR. BENSON: This is put in here to where -- this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 is a projection of temperature increasing seven degrees 2 over the next 100 years. And we would lose the redwood 3 forest, and Redwood Rubber doesn't want to see that 4 happen. 5 --o0o-- 6 MR. BENSON: The devulcanization process that is 7 described in detail in this report was accomplished with a 8 National Science Foundation Grant. And the beauty of 9 ultrasonics is that the cost the devulcanizing waste tire 10 grind is the cost of the electricity, which is less than 11 two cents a pound. Comparing this to other technologies, 12 it's basically chemicals. The chemicals themselves cost 13 30 cents a pound. And they're polluting. There's a 14 reason that you don't -- there hasn't been a solution to 15 the waste tire problem. It just hasn't been economic. 16 Using ultrasonics is economic. The other fight, you're 17 using ultrasonics versus chemicals is the end result -- 18 the end product maintains over 1,000 PSI tensile strength. 19 These devulcanized waste tires, we have an end 20 product that can be used in the manufacture of new tires. 21 This is where we save on air quality. Every time takes 62 22 pounds of CO2 to produce. And if all of a sudden we're 23 taking waste tires and putting it into tires, it's 2 24 pounds of CO2 you don't have to admit because you've made 25 new product from the waste. So it really will save on air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 quality. 2 Next slide. 3 MR. BENSON: This slide is the ultrasonic barrel 4 reactor that was built with the National Science 5 Foundation Grant. And what it is is the tube, and then 6 you see the thing sticking out of it. Those are the 7 transducers. This is a barrel of titanium. That barrel 8 is three-and-a-half inches in diameter. And then you 9 continuously flow tire crumb through it. And it's in a 10 nanosecond. You just keep running it through. 11 This proven technology resulted in Redwood Rubber 12 getting the patent for devulcanization ultrasonics. The 13 problem with this is that we need to build a nine-inch 14 diameter barrel that would actually increase up to ten 15 fold. This will devulcanize 42 pounds an hour. This is 16 not an economic volume to support the number of employees 17 you need in an operation. So this equipment sits in a 18 warehouse. We need to build a pilot plant that would be a 19 nine-inch tube. In other words, this scaleability is not 20 new technology. It's repeating what's been done. The -- 21 CHAIRPERSON LLOYD: You've had your five minutes. 22 MR. BENSON: All right. May I close in 30 23 seconds? 24 CHAIRPERSON LLOYD: Yeah. 25 MR. BENSON: One more slide, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 --o0o-- 2 MR. BENSON: You have this. Can you see that 3 that the beauty of this is that this is now an economic 4 solution to waste tires. And I'm a financial advisor for 5 Redwood Rubber, and I've been trying to raise capital. 6 They simply won't invest in a start-ups these days. The 7 venture capitalists have a mandate to invest in an 8 operating or gone past the first stage. I found 9 individuals are feeling particularly liquid these days. 10 Redwood Rubber needs this public assistance, but I'm 11 confident we can raise $1,000,000 to go along with this. 12 You'd only be investing equipment, and we can proceed to 13 solve the waste tire problem in California. 14 Thank you very much for your time. 15 CHAIRPERSON LLOYD: Thank you. Do we have -- is 16 Tom going to speak? 17 MR. FAUST: Can we go back one? 18 --O0O-- 19 MR. FAUST: Dr. Lloyd and Board members, I'm Tom 20 Faust, the CEO of Redwood Rubber. And I want to kind 21 of -- I'm the other part of the tag-team. I realize it's 22 the end of the day and everybody wants to go home or fly 23 or wants to go home for the day, so I'll be brief. 24 You know the state under AB 923 generated a new 25 source of income for ARB. It's a two-year average of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 opportunity. It will generate $24 million a year for 2 two years, and we'd like to see some of that. We're only 3 asking for a small portion of that, 3.8 million. We've 4 about a month ago submitted a full scale grant to the ARB 5 for review. We have institutional investors lined up that 6 are interested in investing, but only after the 7 demonstration has been demonstrated. I mean, you should 8 be ecstatic of the opportunity to have 34 times less CO2. 9 Now, the way that is generated -- is calculated, 10 California generates approximately 54 million passenger 11 tire equivalents, and you multiply that times the 62 12 pounds per tire. And you come up to be -- you know, you 13 get the total amount of greenhouse gasses, and then you -- 14 anyway, it's a 34 times improvement over the status quo. 15 It's something that California -- it's energy efficient 16 and it doesn't pollute, and it creates jobs. And several 17 environmental people have already given their stamp of 18 approval, in addition to the State's report. I mean, I 19 urge your support for this concept, and let's help clean 20 up California's air. Any questions? 21 CHAIRPERSON LLOYD: Thank you. Any questions or 22 any questions from staff? 23 EXECUTIVE OFFICER WITHERSPOON: I just want to 24 clarify for the Board the funding source these two 25 gentlemen are talking about is a portion of the Governor's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 financing scheme for the Carl Moyer Program. And it is to 2 be dedicated to an emission control project above and 3 beyond regulations, but specifically for oxides of 4 nitrogen, organic compounds, and particulate matter. 5 You're not authorized to expend the funds for climate 6 change gasses. 7 The 25 million from the tire fees is added to the 8 66 million from DMV smog check adjustments. And I think 9 that the right number plugs into the 54 million that will 10 be generated as air districts raise motor vehicle 11 registration fees by another two dollars. And most of 12 that money flows through to air districts. And they 13 receive and approve projects for funding under the Carl 14 Moyer Program criteria. Since this is probably a waste 15 tire disposal, it needs to be brought before the Waste 16 Board for their portion of the tire fee revenues, and it's 17 more within their jurisdiction than ours. 18 CHAIRPERSON LLOYD: Have you done that? 19 MR. FAUST: I mean, I'd like to -- I have a 20 different point of view. You know, there -- I'm not 21 disputing or arguing that there is a Carl Moyer Program. 22 And the way that I think the plain language controls on 23 the thing -- because I wrote -- I spoke with the author of 24 the bill and his staff before he even passed it at the 25 rainy days of the Legislature. And I have written PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 correspondence that said they support this project being 2 funded through AB 923. There's the Carl Moyer Program, 3 and then there is the separate 75 cents per tire tax that 4 exists. You know, I'm not disputing that there's a Carl 5 Moyer Program. But there is a separate thing, and it says 6 tire emissions. So you know, that's reading into and 7 inventing your own particular use if you want to put it on 8 some other application. But the plain language of the 9 bill says tire emissions. And that's the reason I 10 included the actual language in that particular slide. 11 CHAIRPERSON LLOYD: Well, maybe -- 12 EXECUTIVE OFFICER WITHERSPOON: You know, the 13 witness is correct. There is a different set of statutes. 14 We had interpreted it -- it was a package proposal by the 15 Governor and approved by the Legislature. It was with the 16 understanding that the revenues being generated would be 17 expended under the Carl Moyer Program criteria that exists 18 prior to the time of passage. There is not an explicit 19 cross reference in the tire fee section back to those 20 codes. It's more the general understanding of what was 21 being constructed. 22 CHAIRPERSON LLOYD: Maybe you could provide the 23 information to us, communication with the Legislature, and 24 you've got a nice director. Maybe helpful to do that. 25 MR. FAUST: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 CHAIRPERSON LLOYD: Thank you very much indeed 2 and in the process -- 3 BOARD MEMBER BERG: No. I think it's the slide 4 before that. 5 MR. FAUST: In the slide before that is the 6 language. 7 BOARD MEMBER BERG: So maybe we can make a look 8 at it and get back -- 9 MR. FAUST: Projects that mitigate or remediate 10 air pollution caused by tires. 11 CHAIRPERSON LLOYD: Let staff -- you need to work 12 with staff and understand this. And we're not going to 13 resolve it today. 14 MR. FAUST: Okay. But that's the reason I 15 included that, you know, plain language, you know, 16 controls, not some invented language there after. And as 17 I say, I have a letter from staff saying they supported 18 and -- 19 CHAIRPERSON LLOYD: And that would be helpful to 20 share with us and share with the Director. But thank you 21 very much, indeed. 22 MR. FAUST: Otherwise, I mean I would have 23 opposed the bill until I said -- you know, I would have 24 had notified legislators not to vote for it. But then I 25 said, "Why should I oppose it, because this helps -- this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 is legislation that's beneficial for this particular 2 project." 3 CHAIRPERSON LLOYD: Thank you very much. Thank 4 you for coming. 5 MR. FAUST: Thank you. I want to make one point. 6 It would take twelve months. So the funding could be 7 stretched out, say, an eight month-period. 8 CHAIRPERSON LLOYD: Thank you very much for your 9 time. 10 Seeing no more witnesses, I guess just a chance 11 here to thank my colleagues and staff another exciting 12 year. Hopefully have very well deserved happy holidays 13 and a wonderful New Year. And see you all in the new 14 year. So thank you. 15 So I'll officially bring to a close the December 16 9th, 2004, meeting of the ARB. 17 (Thereupon the California Air Resources Board 18 adjourned at 4:59 p.m.) 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, 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 hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 20th day of December, 2004. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345