BOARD MEETING DATE: November 5, 2010
AGENDA NO. 29

REPORT:

Refinery Committee 

SYNOPSIS:

The Refinery Committee met Friday, August 18, 2010. Following is a summary of that meeting. 

RECOMMENDED ACTION:

Receive and file.
 

Dennis Yates, Acting Chair
Refinery Committee

Attendance

Mayor Dennis Yates, Acting Committee Chair, called the meeting to order at approximately 10:00 AM.  Also present at the AQMD were Judith Mitchell and Dr. Joseph Lyou, with Dr. William Burke joining via videoconference and Jane Carney joining via teleconference.

Overview of Proposed Amendments to SOx RECLAIM Program

Dr. Laki Tisopulos, Assistant Deputy Executive Officer with Planning, Rule Development and Area Sources, gave a presentation on the legal mandates to reduce SOx emissions, staff’s proposed SOx shave and the methodology applied, RTC reductions, and future water demands [Attachment]. Mayor Yates inquired about the main source of SOx pollution. Dr. Tisopulos responded that ocean-going ships are the main contributors to SOx emissions. RECLAIM sources contribute approximately 25 percent to the overall SOx emissions.

Mayor Yates asked if the 2007 AQMP identified the committed reductions in SOx as three tons per day and whether the industries were pointing to that figure. Dr. Barry Wallerstein, Executive Officer, responded that the AQMP is a snapshot in time and detailed analyses are prepared during rulemaking to identify available emission reductions and such estimates can be higher or lower than the preliminary estimate in the AQMP.

Dr. Lyou added that in an Appendix in the AQMP, it states “It should be noted that during rule development all SOx sources in RECLAIM will be subject to a thorough BARCT evaluation to achieve the maximum feasible SOx reductions”.

Board Member Mitchell inquired on the 3 ton per day AQMP estimate and staff’s proposed reduction of over 6 tons per day. Dr. Tisopulos responded that staff’s proposal of a 55% shave reflects an RTC (RECLAIM Trading Credit) reduction of 6.1 tons per day by 2019. Dr. Lyou indicated that between the original staff proposal and the current staff proposal there’s a 1.4 ton per day difference. Dr. Wallerstein responded that after the last Refinery Committee Meeting, meetings were held with various refiners to review detailed data for their specific refineries. After holding internal discussions with the consultants and a review of the numbers, staff amended its proposal. Dr. Elaine Chang, Deputy Executive Officer, explained that there were three reasons that contributed to the change: (1) staff excluded some very costly controls at a single facility (2) staff extended the compliance date from 2017 to 2019 and incorporated appropriate growth assumptions in the methodology presented and (3) staff recently completed audited emissions rather than reported emissions.

Joe Sparano, WSPA Executive Advisor, Rod Spackman from Chevron, and Stan Holmes representing Exxon-Mobil presented an alternative to staff’s proposal. At the conclusion of the presentation and discussion on their alternative proposal, Joe Sparano reiterated that they are committed to meeting the three tons per day requirement under the 2007 AQMP. They also expressed concern with staff’s proposal on shave methodology. However, WSPA is prepared to work with staff on addressing their concerns. The WSPA representatives pointed to their $2.7 billion cost estimate as more accurately representing the cost to reduce the SOx emissions and that staff had underestimated these costs.

Board Member Mitchell asked why, according to staff, there was no need to remove electrostatic precipitators (ESPs). Dr. Tisopulos responded that ESPs are installed to control predominantly directly emitted particulates in order to meet the Rule 1105.1 standards. The wet gas scrubbers are mainly used to control SOx emissions. Based on feedback received from the consultants, staff does not believe that any of the ESPs will need to be removed.

Dr. Lyou inquired on whether consideration was given to the physical layout of the refineries and whether this makes sense to each individual refinery. Dr. Tisopulos stated that both sets of consultants had a walkthrough of the refineries to identify a location and also heard concerns expressed by each refinery. Several refiners did not agree with the locations recommended by the first set of consultants. Alternative locations were recommended by Norton Engineering in response to comments received, which has contributed to increasing the original costs by approximately 20 percent.

Dr. Tisopulos reviewed the projected potable water demand, availability of recycled water and well water for the scrubber technology. Board Member Mitchell inquired on the geographic range of distribution for the Harbor Water Project and Dr. Lyou asked the water purveyors if they could meet the water demand increase. Water purveyors attending the meeting included Uzi Daniel (West Basin Municipal Water District), Joe Walters (West Basin Municipal Water District, and Jesus Gonzalez (LADWP – Water Recycling Group). They responded to the Committee Members’ questions that the pipeline is built to serve the harbor corridor area and that they would be able to meet the demands to supply recycled water at the required levels.

Dr. Burke commented that he was pleased to see WSPA and staff members partnering on resolving the issues at hand. He stressed the importance on meeting our legal obligation under the law to meet SIP commitments, implement all BARCT for existing sources, and demonstrate equivalency to Command and Control regulations.

Dr. Lyou requested staff to prepare an analysis of the difference between the cost estimates of $2.7 billion (WSPA) and $750 million (staff’s consultants). In addition, he requested site visits to the refineries to observe the proposed physical location of equipment.

Board Member Carney requested a copy of both consultant reports and the draft CEQA document.

Public Comments

Adrian Martinez, NRDC, requested both presentations by staff and WSPA be made available on the district website. He also requested that the environmental community have an opportunity to present at the next Refinery Committee meeting.

Meeting adjourned at 12:25 pm.

Attachment (ZIP, 4434k)

Presentations and Minutes

Note: The Attachment includes the minutes from the August 18, 2010, September 22, 2010 and October 14, 2010 Refinery Committee meetings.