94-11-1

SUMMARY OF AGENDA ITEM:

The Health and Safety Code (HSC) section 39608 requires the Board to review annually designation of areas of the state as nonattainment, attainment, or unclassified for the State standards. In this year's annual review, the staff considered air quality data collected during the years 1991 through 1993. Based on these air quality data, the staff recommended the following area redesignations:

- Identify the redesignation of Mono County in the Great Basin Valleys
  Air Basin to nonattainment-transitional for ozone that occurred by operation
  of law.

- Redesignate Santa Clara County in the San Francisco Bay Area Air Basin
   as attainment for carbon monoxide.

- Redesignate Orange County in the South Coast Air Basin as attainment for
   carbon monoxide.

- Redesignate San Joaquin County in the San Joaquin Valley Air Basin as
   attainment for carbon monoxide.

- Redesignate Stanislaus County in the San Joaquin Valley Air Basin as
   attainment for carbon monoxide.

- Redesignate the Southeast Desert Air Basin portion of Kern County as
   attainment for sulfur dioxide.

- Redesignate the South Coast Air Basin as attainment for sulfates.

ORAL TESTIMONY:  None

FORMAL BOARD ACTION:

Approved Resolution 94-59 by a vote of 9-0.

RESPONSIBLE DIVISION:  TSD

STAFF REPORT:  Yes (22 pages plus 6 attachments)

SUMMARY OF AGENDA ITEM:

The Clean Air Act (Act) requires that California submit to the U.S. Environmental Protection Agency (U.S. EPA), by November 15, 1994, a revision to the State Implementation Plan (SIP) for ozone nonattainment areas designated as serious, severe, and extreme. The Act sets forth the requirements that this SIP revision must meet. This SIP submittal consists of two discrete elements. The first contained the State-level measures that are the principal responsibility of the Air Resources Board, or, in the case of pesticides, the Department of Pesticide Regulations. The second element of this SIP revision is the local plan element adopted by the local districts' governing board. This element of the SIP revision includes: 1) the attainment demonstration for serious and above ozone nonattainment areas to demonstrate attainment of the federal ozone standard by each nonattainment area's applicable attainment date; and 2) the post 1996 rate-of-progress plans which require each serious and above ozone nonattainemnt area to demonstrate at least a three percent per year average reduction in VOC emissions after 1996 through the attainment year.

Regarding the statewide element of the SIP, staff, at the hearing, presented refinements to the proposed mobile source and consumer products elements and also recommended that the Board approve the Department of Pesticide Regulation's pesticide element for inclusion in the SIP.

Mobile sources account for significant portions of the emissions of ROG and NOx in many districts. The mobile source element is designed to help districts in their efforts to achieve the federal ambient ozone standard by reducing ROG and NOx emissions from most categories of mobile sources. The proposed mobile source element is expected to reduce ROG and NOx emissions in the South Coast Air Basin by 193 and 339 tons per day, respectively, in 2010. These reductions are the result of applying a combination of control measures ranging from near-term measures, such as accelerated vehicle retirement and other market-incentive programs, to longer-term technology-based measures such as more stringent emission standards for virtually all category of mobile sources. In addition, the mobile source element calls for the U.S. EPA to accept the responsibility to adopt national standards for marine vessels, pleasure craft, and interstate trucks as well as for sources preempted from the state's control, such as locomotives, aircraft, and some off-road equipment.

In adopting the statewide elements of the SIP, the Board adopted the SIP as proposed on October 7, with the following modifications to the mobile source element:

- Added new measures for the accelerated retirement of light- and heavy-duty
   vehicles in the South Coast Air Basin, which would produce emission
   reductions of 12 and 24 tons per day of ROG and NOx, respectively, in
   2010. A broad coalition of business interests has agreed to pursue legislation
   to finance this program.

- Removed the measures for the early introduction and use of 1.0 g/bhp-hr
   NOx heavy-duty engines from the plan, and added a longer-term measure
   to consider the use of ultra-low emitting heavy-duty trucks in fleets.

- Modified the measure requiring the use of 2.0 g/bhp-hr Nox heavy-duty diesel
   engines to include consideration of a simultaneous state and federal standard in
   2004, in combination with alternative methods for obtaining reductions in 2002
   and 2003.

- Modified the enhanced LEV/ZEV program for the LDVs measure to exclude
   any reference to a specific numerical standard, but retained the estimated
   emission reductions of ROG and NOx in 2010 of 10 and 15 tons per day,
   respectively.

- Revised the measure setting international standards for marine vessels to reflect
   an updated estimate of the emissions from ships in the South Coast Air Basin,
   and to reflect the use of shipping lane changes and vessel speed reduction to
   obtain the emission reductions.

- Revised the description of the measure for new standards for locomotives to
   describe more accurately the relationship of the measure to the forthcoming
   federal rulemaking for new locomotive engines.

To help the districts meet their rate-of-progress requirements, the staff proposed a consumer product element designed to reduce the VOC emissions to approximately 20 tons per day in the South Coast Air Basin in 2010. The consumer products element of the proposed SIP consists of "near-term," "mid-term," and "long-term" measures. The near-term measures are composed of existing consumer product mid-term measures include the formation of an advisory group, the "Consumer Products Working Group," and regulation of additional consumer product categories. The long-term emission reduction strategies rely on market incentives and new and innovative technologies that are not currently available, but can reasonably be expected provided efforts are made to foster and promote research and development into new technologies.

Staff proposed to update and clarify emissions data and update some text for clarity. Staff also committed to evaluate reactivity as a potential strategy to reduce the ozone-forming potential of emissions from consumer products.

Staff presented to the Board the direct costs of the SIP and its associated economic implications. The SIP's mobile source and consumer products elements are estimated to cost the affected industries about $1.9 billion per year by 2010. Increased control costs would in turn affect the economic activity in California only slightly. The California economy is expected to employ approximately 16.2 million people and produce goods and services valued at about $1.7 trillion in the year 2010. The costs associated with implementation of the SIP would have minimal impact on California employment and output in 2010. The output of California industries would be lower by about $4 billion and employment by about 38,000 in the year 2010 than it would be in the absence of the SIP. The staff's evaluation did not account for the benefits to California businesses that would result from implementation of the planned control measures. These benefits in many instances may more than offset the costs of the SIP's measures.

Presentations were also made to the Board by Loren Kaye, Undersecretary for California Trade and Commerce, Steve Moss, a partner with M.Cubed, and Phillip Romero, Ph.D., Chief Economist, Governor's Office.

ORAL TESTIMONY:

David Howekamp                        U.S. EPA

Doug Henderson                          Western States Petroleum Association

Doug Youngblood                        Texaco

Allan Zaremberg                           California Chamber of Commerce

Alice Greuel                                  Frontier Building Supply

Ken Churchill                                United Parcel Service

Bob Bartlett                                  Mayor, City of Monrovia

Bob Wyman                                 NMMA/Coalesce

David Page                                   American Airlines

Denny Zane                                  Coalition for Clean Air

After hearing testimony from the above witnesses, the Board adjourned and continued further testimony on the statewide elements of the SIP on November 10, 1994.