State of California
AIR RESOURCES BOARD

Golden Gateway Holiday Inn
Emerald Room
1500 Van Ness
San Francisco, CA

April 22, 1981
10:00 a.m.

AGENDA

Page

81-6-1 Public Meeting to Consider Suggested Control 001
Measure for the Control of Hydrogen Sulfide
Emissions from Geothermal Operations at the
Geysers Known Geothermal Resources Area.

81-6-2 Public Hearing to Consider Amendment of Title 13, 137
California Administrative Code, Chapter 3,
Subchapter 5 to Add a Regulation Limiting the
Sulfur Content of Diesel Fuel for Use in Motor
Vehicles in California.

81-6-3 Other Business
a. Executive Session
Personnel
Litigation
b. Research Proposals
c. Delegations to Executive Officer

ITEM NO.: 81-6-1

Suggested Control Measure for the Control of Hydrogen Sulfide
Emissions from Geothermal Operations at the Geysers Known
Geothermal Resources Area.

SUMMARY AND STATEMENT OF REASONS

The Geysers area in Sonoma, Lake, Napa, and Mendocino Counties
contains the world's largest development of geothermal energy to
produce electricity. The area is referred to as the Geysers
Known Geothermal Resources Area (Geysers). Electricity is
produced from "dry steam" extracted from the upper portion of the
area's geothermal reservoir. Currently, about 950 Megawatts
(MWe) of electricity are generated from power plants located in
the Geysers, and the California Energy Commission estimates that
the total potential of the Geysers could be as large as 2700 MWe.

The electric power generated from geothermal resources does not
result in the same air polluting emissions as would be emitted
from an equivalent sized fossil-fuel fired power plant. In the
Geysers the pollutant of primary concern is hydrogen sulfide
(H2S).

On April 27, 1978, the staff presented the Board with a model
control strategy for controlling hydrogen sulfide emissions from
geothermal facilities at the Geysers. The control strategy
proposed H2S emissions limitations for new and existing
geothermal power plants and for stacking (emissions associated
with the venting of steam). At the conclusion of the meeting,
the Board delegated to the Executive Officer authority to modify
the control strategy as necessary and work with the Lake and
Northern Sonoma County Air Pollution Control Districts in
adopting the control strategy. The regulations adopted by the
two districts require a case-by-case analysis for each new power
plant application.

The present air quality permitting process governing geothermal
power plants and the associated wells and steam transmission
lines is in need of streamlining, and contains elements of
uncertainty. New Source review rules currently applicable at the
Geysers require an air quality analysis which generally consists
of air quality simulation modeling, tracer tests, or a
combination of both. The lack of comprehensive ambient air
quality data since 1978 has resulted in disagreement over the
effects on air quality of individual facilities and on whether
the ambient air quality in the Geysers area is improving. The
number of monitoring stations in the Geysers has decreased from 8
to 2 since 1978, and only one has operated continuously since
1978.

Given these unique circumstances at the Geysers, the staff is
proposing a control measure designed to attain and maintain the
state ambient air quality standard for hydrogen sulfide and yet
eliminate the need for ambient air quality analyses for new
geothermal power plants on a case-by-case basis. The control
measure includes hydrogen sulfide emissions limitations
applicable to new and existing power plants, and during stacking
conditions (steam venting during power plant outages). The
reduction in emissions realized from existing units will provide
the growth increment necessary for new units, eliminating any
need for case-by-case modeling analyses. Control technology
currently exists which can achieve a high degree of control of
H2S emissions from new power plants.

The control measure presented in this report eliminates the need
for performing an air quality analysis on a case-by-case basis
and would eliminate the uncertainties surrounding such analysis.
An applicant would be provided the certainty of knowing in
advance the emissions limitations required for obtaining a permit
or positive determination of compliance from the district. In
short, by complying with these technology-based requirements, air
quality can be eliminated as an issue in the siting of geothermal
power plants. Adoption of this suggested control measure will
expedite the permitting of new power plants in the Geysers area
and substantially reduce the costs and time associated with
obtaining permits.

Based on an analysis of information currently available, and
extensive discussion with district officials and industry
representatives, the staff has reached the following conclusions:

A. The state ambient air quality standard for hydrogen sulfide
has been exceeded on numerous occasions at the Geysers.
older, less efficient geothermal power plants and associated
operations have been largely responsible for these
violations. Further development of the Geysers as a
geothermal energy source will depend not only on siting
clean, new power plants but on the reduction of H2S
emissions from existing geothermal operations.

B. Recent air quality data which may indicate some slight trend
toward improvement in air quality due to partial control of
existing power plants are incomplete and inconclusive.
Since 1978, ambient H2S monitoring at the Geysers has been
sparse. An air quality monitoring network should be
re-established at the Geysers.

C. The present air quality permitting process governing
geothermal power plants at the Geysers is cumbersome, time
consuming, and contains a great deal of uncertainty. The
process requires an air quality analysis for each new power
plant application that consists of air quality simulation
modeling, tracer tests, or a combination of both. Such
analyses require assumptions that are subject to a great
deal of controversy.

D. Hydrogen sulfide emissions controls are available or are
expected to be available in the near future to reduce
significantly emissions from existing, uncontrolled, and
intermittently controlled units.

E. Technology is currently available to control H2S emissions
from new power plants to a very high degree, and other
alternative technologies are being developed to achieve the
same high degree of control.

F. The siting of geothermal power plants and related facilities
can be expedited by removing the uncertainties associated
with the current permit process. This can be accomplished
by:

1. Establishing a technology-based H2S emission limitation
for new power plants, existing power plants, and
stacking that provides for attainment and maintenance
of the ambient air quality standard for hydrogen
sulfide; and,

2. Exempting emissions of H2S from new power plants from
the requirements of certain portions of the new source
review rules of Northern Sonoma County, Lake County,
and Mendocino County Air Pollution Control Districts.

The staff recommends the Board take the following actions:

A. Approve the suggested control measure in Appendix A and
request the Northern Sonoma County, Lake County, and
Mendocino County Appendix A and request the Northern
Sonoma County, Lake County, and Mendocino County Air
Pollution Control Districts to consider adopting the
measure within 60 days after approval by the Board; and

B. Direct the staff to work with the appropriate air
pollution control district to re-establish an ambient
air quality monitoring network for the Geysers.

ITEM NO.: 81-6-2

Public Hearing to Consider Amendment of Title 13, California
Administrative Code, Chapter 3, Subchapter 5 to Add a Regulation
Limiting the Sulfur Content of Diesel fuel for Use in Motor
Vehicles in California.

SUMMARY AND STATEMENT OF REASONS FOR PROPOSED RULEMAKING

The national and state standards for particulate matter and the
state standard for visibility have been consistently violated
throughout the state over the past years. In addition, the state
standards for sulfur dioxide (SO2) and sulfates have been
violated in the South Coast Air Basin (SCAB) and Kern County.
The emissions of oxides of sulfur due to the combustion of fuels
contribute substantially to these violations.

In the South Coast Air Basin, about 30 percent of emissions of
sulfur dioxide come from power plants, about 20 percent from
petroleum refining, and about 25 percent from the use of diesel
fuels in stationary and mobile sources. Emissions of sulfur
compounds from the combustion of diesel fuel in motor vehicles
are expected to increase significantly over the next ten years
because of the anticipated rapid penetration of diesel powered
vehicles into the new vehicle sales market and the decreasing
availability of low sulfur crude oils. Board staff estimates
that by 1990, emissions of sulfur oxides from diesel powered
motor vehicles will be approximately 78 tons per day in the SCAB
and 216 tons per day statewide.

Fuel oil burned by power plants and refineries in the South Coast
Air Basin is limited in sulfur content to 0.25 percent and fuel
oil burned by other sources is limited to 0.5 percent by weight.
Emissions from coke calciners, sulfur recovery plants, sulfuric
acid plants and the regenerators of fluid catalytic cracking
units are also controlled. Currently, American Society for
Testing Materials (ASTM) Standard D 975 specifies a limit of 0.5
percent sulfur by weight. That limit was set for the primary
purpose of preventing engine corrosion. The current California
regulation for unleaded gasoline is 0.04 percent sulfur by
weight, and will become 0.03 percent sulfur by weight on January
1, 1982. However, a similar standard for diesel fuel does not
exist.

The staff proposes for the Board's consideration a regulation to
limit to 0.05 percent sulfur by weight diesel fuel manufactured
after January 1, 1985, to be sold, offered for sale, or delivered
for sale at retail in California for use in a motor vehicle as
defined by the State of California Vehicle Code. The staff
estimates that the proposed regulation will reduce emissions of
sulfur compounds from diesel powered motor vehicles by greater
than 80 percent.

By 1990, these reductions in the emissions of sulfur compounds
will produce, according to staff estimates, a 20 percent
reduction in ambient levels of sulfur dioxide and sulfate
particulate matter and a 75 percent decrease in the number of
exceedances of the state ambient air quality standard for sulfur
dioxide in the South Coast Air Basin. In addition, the
regulations will improve visibility in the Basin by, typically,
about 15 percent and reduce the acidity of rainfall in the
surrounding area.

The present limits on the sulfur content of fuels are commonly
achieved by refining low sulfur crude oil, particularly
Indonesian crude oil. The decreasing availability of low sulfur
crude oils, and the increasing production of high sulfur
California heavy crude oils will make it more difficult to comply
with regulations limiting the sulfur content of fuels, unless
refiners install equipment to take sulfur out of the fuel.

To determine the added investment which California refiners would
have to make to produce low sulfur diesel fuel, the staff has
drawn upon the results of the 1985 California Oil Scenario Study
report prepared by Bonner and Moore Associates, Inc. That study
was completed in March 1980 and is helpful in determining the
technological feasibility and economic reasonableness of controls
which would reduce the sulfur content of diesel fuel. In
addition, the staff has conducted surveys of the petroleum
industry to determine the cost effectiveness of desulfurizing
vehicular diesel fuel and has held several workshops with
industry representatives. The staff estimates that the cost of
meeting the proposed regulation will vary from about 0.51 to 1.34
dollars per pound of SO2 reduced with lower cost applicable to
large refiners and the higher cost applicable to smaller
refineries. The after tax cost per gallon of diesel produced
would vary from about 1.5 to 6.4 cents per gallon, with the
production weighted average cost being 3.1 cents per gallon.

Air quality improvements that will follow implementation of the
regulation are expected to extend the lives of between 285 and
889 residents of the South Coast Air Basin in 1985; between 414
and 1378 lives will be extended in the South Coast Air Basin in
1990. The benefits of the regulation increase each year because
increased diesel fuel use would otherwise lead to increases in
ambient sulfur oxide levels each year. In 1985, the economic
benefits of the regulation from reduced health and materials
damage are estimated to exceed the costs of the rule by several
fold.

The staff report contains a detailed discussion of the need for
control of the sulfur content of diesel fuel, the proposed
regulation, the control technology, the benefits, and the
economic and environmental impacts of the propo