BOARD MEETING DATE: April 3, 2009
AGENDA NO. 24
PROPOSAL:
Stationary Source Committee
SYNOPSIS:
The Stationary Source Committee met Friday, March 20, 2009. Following is a summary of that meeting. The next meeting will be April 17, at 10:30 a.m., in Conference Room CC8.
RECOMMENDED ACTION:
Receive and file.
Dennis Yates, Chair
Stationary Source Committee
Attendance
The meeting began at 10:30 a.m. Present were Dennis Yates, Dr. Joseph Lyou, Ronald Loveridge (left at 10:55 a.m.), Jane Carney and Dr. Burke (attended by videoteleconference). Absent was Michael Cacciotti.
INFORMATIONAL ITEMS
- Rule 317 – Clean Air Act Non-Attainment Fees Status Report
Dr. Laki Tisopulos, Assistant Deputy Executive Officer for Planning, Rule Development & Area Sources, presented a status report on proposed amendments to Rule 317 which would extend the provisions of the rule to the South Coast Air Basin. Two proposals have been developed and were reviewed. The difference between the two proposals is in how the rule baseline is determined. Dr. Joseph Lyou noted that he has been following this rule development closely and may introduce an alternative proposal at the April Board Meeting. Dr. Lyou expressed concern that companies may artificially inflate their baselines to minimize fee payments. Three stakeholders testified regarding their concerns with the fee proposal.
Jill Whynot, Director of Strategic Initiatives, briefed Committee Members on staff’s initial efforts related to PAR 1138 – Control of Emissions from Restaurant Operations. Charbroiling directly emits PM2.5. Chain-driven charbroilers have been controlled through the adoption of Rule 1138 in November 1997. This proposed amendment would address under-fired charbroilers, which collectively are a large emission source. Amendments to the rule must be considered due to Health and Safety Code requirements for all feasible measures. The Bay Area Air Quality Management District adopted a rule for under-fired charbroilers in 2007.
Ms. Whynot described staff’s initial proposal, some of the areas being investigated, and early input from working group members. Work is underway to evaluate a variety of possible methods to reduce fine particulate emissions at reasonable costs. The rule is scheduled to come to the Board in September.
Mohsen Nazemi, Deputy Executive Officer, Engineering & Compliance, provided a status update on adding Phase II Enhanced Vapor Recovery Controls to Gasoline Dispensing Facilities (GDFs). First, he briefly described the distinction between Phase I and Phase II operations at a GDF: Phase I covers the operations of delivering gasoline to the underground storage tank at the station and Phase II covers the operations of delivering gasoline from the underground storage tank to vehicles. Enhanced vapor recovery (EVR) was adopted into law by CARB in 2000. The regulation is set up with a compliance deadline four years after the effective date of a system being certified. Phase I effective date was April 2001 and the compliance deadline was April 2005. At that time, many facilities did not comply and had to obtain orders of abatement from the Hearing Board. The Phase II had an original effective date of April 2003 but was delayed until April 2005 when the first system was certified. So, the compliance deadline for Phase II is April 1, 2009. The Governing Board amended Rule 461 in March 2008 to provide incentive for operators to plan ahead to come into compliance ahead of the deadline. One of the reasons for EVR is that CARB conducted a compliance audit and found that the equipment was not operating as certified. A lawsuit was filed and as a result of the settlement on the state implementation plan, CARB agreed to adopt the EVR program.
The emission reduction from Phase II EVR alone was expected to be about 3.1 tons/day statewide and almost half of this is from the South Coast Air Basin. Recently, CARB has conducted additional tests and is estimating as much as three times higher emission reductions. Two modules are required in the near future:
- One is the Phase II EVR which includes more stringent certification standards that lead to improved equipment life, spitless nozzles that will reduce nozzle spillage, and devices to manage the tank pressure.
- The second is the In-station Diagnostic (ISD) system which is an electronic monitoring system that alarms the station when some parts are not operating correctly. The deadline for new or modified systems to comply was April 1, 2005 when the first certified system became available. Existing systems would have to comply by April 1, 2009 which is four years after the effective date. For ISD systems, there are different compliance dates dependent on the station throughput. For stations needing to comply with both requirements, they will most likely install both systems at the same time.
AQMD did extensive outreach to ensure stakeholders are aware of this deadline. AQMD conducted four conferences, the first one in June 2007, and two sets of compliance advisories to over 5,000 listed entities. Staff worked with fire departments to ensure that they were aware of this coming deadline and with cities and other planning agencies. As of today, it is estimated that 40% of the facilities are still non compliant, and about 38% have completed the upgrade; the rest are exempt from these requirements because they have an aboveground storage tank or are considered non-retail stations that fuel only newer vehicles with on-board carbon canisters such as rental car agencies.
There are three certified systems now – one was certified in 2005 and two others were certified in 2008. There is no delay in ordering vacuum assisted systems. There is a three-week lead time in filling orders for the balance systems for some distributors. Financing options are available. However, there are difficulties in obtaining financing if one has a credit problem or has been in business for a short period of time. On a statewide basis, AQMD staff has been working with CARB and other districts. The general consensus is that the April 1 deadline should be upheld because the state law has been ineffective and there has been a four-year period to achieve compliance; more importantly, maintaining the deadline is equitable for those operators that have spent the money and done the work to comply with the law.
Mayor Yates indicated that the majority of those that have achieved compliance are probably company-owned stations and the franchisees are the ones having problems. The consensus among local districts and CARB is to allow continued operations while the stations are completing the upgrade through stipulated orders for abatement. Some other districts, especially smaller districts that do not have their hearing boards readily available, will opt for enforcement or compliance agreement. The AQMD’s approach will allow all stations to operate provided that they sign an agreement to come into compliance. A group-stipulated order for abatement and a settlement agreement will be sought in this case to expedite the process, with additional time allowed through the end of the year to come into compliance. Penalty will be reduced if a company did due diligence by filing their application by the end of last year and also if it is not a major company which is not an oil company or a company with more than 50 stations. The penalty is also less if they achieve compliance earlier.
Mr. James White, Regulatory Affairs Manager for BP ARCO, addressed the committee. Mr. White was disappointed that the enforcement guidelines have not been released yet. He believed that an earlier release of the guidelines would have served as incentives for early actions to come into compliance. He continued to point out that his company did not wait and acted early. As of last year, ARCO had 615 facilities and is in the process of selling all their stations to independent business people. They have 47 stations left to complete out of 615; 21 are in construction, 12 are in permitting, and 14 will start construction between now and April 1. In South Coast, they have three stations that still need permits from local agencies even though they started last year. There were no other public comments.
Ms. Carney asked for the cost of the upgrade. Mr. Nazemi replied that depending on the size of the facility, the cost ranges from forty to ninety thousand dollars. Ms. Carney inquired about the small business loan program. Mr. Nazemi explained the history of AQMD’s Air Quality Assistance Fund Program which was originally required under state law in 1989 with a sunset clause in 1999. In 1999, AQMD did not discontinue the program but worked with other programs to enhance service. Presently, the Air Quality Assistance Fund has about one and a half million dollars left and AQMD has begun looking into using the fund for small business type gas station. Mayor Yates also remarked that with the major oil companies like BP selling off all their gas stations to franchisees, code enforcement should be stepped up because of his impression that operators are less rigorous in maintenance of their equipment. Dr. Burke commented that he is concerned that the regulation has a specific compliance date and yet we are not shutting down those that are non-compliant on that date. He is not clear why AQMD would entertain those operators that are not planning to comply. Mr. Nazemi clarified that the stipulated order for abatement is set up only for those that agreed to come into compliance within a set time period and pay penalties while they operate. For those who refuse to upgrade and sign the agreement, they are subject to enforcement actions and may be tagged out of service meaning that they cannot operate their stations. Once a station is tagged out, it no longer has the option to sign the agreement and continue to operate, it must upgrade and comply before it can operate. Mayor Yates followed up and indicated that those not in compliance will pay a fine. Dr. Lyou pointed to the practicality of shutting down two thousand gas stations at once. Mr. Kurt Wiese replied that AQMD has had similar experience in the past during Phase I implementation. Dr. Lyou inquired about the process of a group order for abatement. Mr. Wiese replied that each station has to sign a declaration to their individual case and stipulates to the order. Dr. Lyou agreed to the approach, that the operators who acted and complied should be rewarded and those who waited should face the consequences. There was no other discussion on this matter.
WRITTEN REPORTS
All written reports were acknowledged by the Committee.
OTHER BUSINESS
Mohsen Nazemi brought up the subject of the May Stationary Source Committee meeting which is currently scheduled for May 15th, the same day as the Governing Board Retreat. He suggested that the Committee meeting be rescheduled to May 22nd and per Mayor Yates’ request staff will be checking the availability of the Committee Members.
PUBLIC COMMENTS
There were no public comments.
Mayor Yates announced that the next Stationary Source Committee meeting will be on April 17, 2009.
The meeting was adjourned at 11:55 a.m.
Attachments (DOC, 59k)
March 20, 2009 Committee Agenda (without its attachments)