Abate Technologies International, Inc.

ATI QUARTERLY
4TH QUARTER 2002

 

NO-FAULT INSPECTIONS
STUDIES FOR LOW VOC MATERIALS
NEGOTIATED RULEMAKING
CLEAN AIR ACT (CAA) POLICIES UNDER DISCUSSION
PRESIDENT BUSH'S CLEAR SKIES INITIATIVE
ARCHITECTURAL COATINGS ISSUE BEFORE SUPREME COURT

 

NO-FAULT INSPECTIONS
No-fault inspections have existed at the South Coast Air Quality Management District for about 10 years. Under this program, a facility is inspected but no enforcement action is taken during the inspection, even if violations are found. In addition to immunity from penalties, the information gathered during the inspection is kept confidential. The inspected facility is given a 14-day grace period to come into compliance with AQMD rules or file a variance petition with the agency's hearing board.

Recently, industry representatives have made comparisons between the District's program and the EPA's. The main difference between the two is that the EPA allows a six-month grace period. Industry representatives have argued that the AQMD's rule should be no less restrictive than that of EPA. They feel that 14 days to correct a violation is not long enough for a small business to come into compliance.

Staff is currently in discussions with EPA and industry groups about whether further flexibility is necessary.

 

 

NEGOTIATED RULEMAKING
Modeled after an EPA formal negotiated rulemaking process, the AQMD will conduct a pilot program for the metal finishing rules. The proposed control measures stem from the 2000 Air Toxics Control Plan, which included control of emissions from metal finishing operations, nickel plating operations (proposed Rule 1426) and chromium emissions from plating and anodizing operations (proposed amended rule 1469).

The agency is experimenting with the process, which involves various stakeholder groups, agency staff and a facilitator. The goal is to reach consensus on some or all of the proposed regulation before the rule is formally issued as a proposal. The impartial facilitator guides discussions amongst the participants. The presumption is that a consensus-based rule will require fewer resources to enforce, promote high rates of compliance and result in fewer litigations. If the process proves successful, the Board may expand the program in the future.

 

 

PRESIDENT BUSH'S CLEAR SKIES INITIATIVE
The White House recently announced the Clear Skies Initiative-- an emission reductions program that will target Nitrogen Oxides, Sulfur Oxides and mercury. The proposal will be a mandatory multi-pollutant, market-based cap and trade program for power generators. It will reduce and place caps on SO2, NOx and mercury.

The Environmental Protection Agency (EPA) estimates that power generation currently contributes 63% of SO2, 22% of NO2 and 37% of man-made mercury to the environment.

The option to trade should provide sources with flexibility in determining how to meet their reduction requirements. The reductions can be achieved via the installation of control equipment, switching to lower emitting fuels, increasing efficiency or acquiring allowances among other options. The EPA hopes to guarantee the achievability of environmental goals through emission caps and significant automatic penalties. The agency cites early reductions and the development of innovative technologies as some of the benefits of the cap and trade program approach.

The primary form of mercury reduced under the initiative will be ionic mercury, which currently comprises almost half the mercury from power plants.

The Clear Skies program entails the following:

  • Regulators set cap levels;
  • Allowances are issued by the government and can not be created elsewhere;
  • One allowance is surrendered for each ton of pollutant emitted;
  • If a source's emissions exceed the number of allowances it holds, there will be automatic financial penalties, future allowances will be offset by each ton exceeded, and all additional penalties under the Clean Air Act are available to be used as well.
  • Penalties are not flexible or negotiable.
Compared with the current regulations, the President's proposal will reduce SO2 emissions by an additional 25 million tons, NOx emissions by an additional 10 million tons and mercury by an additional 20 tons nationwide, over the next ten years.

Coal-fired power plants currently produce 19% of the electricity generated in EPA Region IX (Arizona, California and Nevada areas). This contribution of coal-fired generation will decrease in the region to about 16% by 2010 and 14% by 2020. Clear Skies is projected to reduce SO2 emissions from power generators by 8.5%, NOx emissions by 22% and mercury emissions by 23% by the year 2020.

The ten largest (over 1495 MW) plants in Region IX are a combination of nuclear, hydro, coal, petroleum and gas-fired units. The major electric utilities include: Pacific Gas and Electric Co., Southern California Edison Co., Los Angeles Department of Water and Power, Salt River Project and Arizona Public Service Co.

In 1999, the EPA reports the average retail electricity price in EPA Region IX (AZ, CA, NV) at 8.63 cents/kWh. The average national retail price was 6.66 cents/kWh. By the year 2020, the retail electricity prices under Clear Skies are projected to decrease to approximately 8 cents/kWh for Region IX and 6 cents/kWh for the nation.

The EPA anticipates that the reductions under Clear Skies would be sufficient to replace New Source Review requirements for the electric power sector. The agency may determine that some of the NSR requirements are unnecessary and propose that they be replaced in the event Clear Skies becomes legislation.

 

 

STUDIES FOR LOW VOC MATERIALS

High-performance low-VOC waterborne coatings:
Southwest Texas State University will develop a prototype high-performance wood and metal coatings using Polyol-a hyper-branched vegetable oil polyol phosphate ester. The new coating is expected to have a VOC content of 50 grams per liter or less for some formulations. The SCAQMD has granted $20,000 to research and development of the coating. The agency reports that the use of Polyol would "reduce the cost of the coating, improve its durability, and improve its adhesion."

Low-VOC cleaning materials:
The SCAQMD executed a $355,000 contract with the University of Tennessee, the Graphic Arts Technical Foundation and the Institute for Research and Technical Assistance to assess, develop and demonstrate low-VOC cleaning solvents. The study is a result of a provision in the Solvent Cleaning rule (Rule 1171) that requires a complete Technical Assessment of low VOC technologies for cleaning of lithographic printing ink application equipment by July 2004. The objective of the project is to investigate whether or not Rule 1171 limits are feasible. In the event the study shows the current limits to be infeasible, staff would propose less stringent limits based on the study's finding.

The study will include the comparison for cleaning performance, cost effectiveness, environmental impacts, and other trade-offs for the high-VOC processes currently used and the newly developed low-VOC solvents.

The University of Tennessee, IRTA and GATF will form a team to accomplish the project goals. GATF will develop the low-VOC materials at their testing laboratory using state of the art lithographic printing equipment. IRTA will work with local lithographic printers to develop and field test new aqueous and low-VOC materials and judge their effectiveness. The University of Tennessee will test the solvents developed by GATF and IRTA for compatibility with blankets and rollers and independently verify the performance test results.

 

 

CLEAN AIR ACT (CAA) POLICIES UNDER DISCUSSION

1. Clean Air Act Federal Toxics Program (Title III):

    1. Equivalency-Allow equivalency based on a toxic emission reduction basis, revisit monitoring reporting and recordkeeping requirements, and streamline rule equivalency determination process.
    2. MACT Hammer-When EPA fails to establish a MACT standard, facilities are to submit a permit application for an individual MACT determination. The AQMD would like an allowance for local toxic rules to be deemed equivalent to MACT requirements.
    3. Residual Risk-MACT standards are technology-based and do not take into account remaining risk after full implementation or provide risk based exemptions or threshold level. An integrated approach, which considers both technology and residual risk, is needed.

2. Clean Air Act Federal Operating Permits Program (Title V):

No action is proposed at this time other than monitoring and providing support for SIP approval of the AQMD's variance rule.

3. State Implementation Plan (SIP):

    1. New Policy Applicability-Petition EPA to judge SIP revisions of rules based on policies in effect at the time they are submitted.
    2. SIP Flexibility-Deletion of infeasible requirements where there is no interference with CAA requirements.
    3. Federal Control Measure Commitment-Stakeholders will encourage congressional delegation to urge EPA's implementation of federal measures as part of its budget application process.
    4. SIP Gap-Evaluation and streamlining of SIP approval process is recommended. AQMD will lend staff to EPA so as to expedite the process.

4. Transportation Conformity-Allow the use of planning assumptions in SIPs approved within the last five years.

5. Federal Funding-Pursue more funding from federal grant programs.

6. New Source Review:

    1. Emission Offsets-Expand options for facilities subject to New Source Review offset requirements.
    2. Cost Exception for Lowest Achievable Emission Rate-Allow cost considerations in LAER determinations.
    3. Discount of Emission Reduction Credits at time of use-Allow ERC discounting to BACT levels at the time of generation and not at the time of use.
    4. New Source Review Requirements for Relocations-Some relocations should be exempt from LAER requirements.
    5. Demonstrated in Practice-Allow the use of capacity levels which reflect the actual practice of the specific industry being looked at.
    6. Reactivation-Adopt a formal federal rule to clarify reactivation policy issues.
    7. Incentives for Energy-Efficient Technologies-Request EPA to develop policies to encourage energy efficiency.

7. Economic Incentives Program:

    1. Environmental Benefit-Provide specific examples of environmental benefit options.
    2. Multi-Pollutant Reductions-Allow separate tracking of emission credits for multi-pollutant reductions.
    3. Monitoring, Recordkeeping, and Reporting-Eliminate requiring "best possible" MRR so long as compliance can be verified.
    4. Clean Air Investment Funds-Provide local jurisdictions added flexibility in program development.
    5. Confidential Information-Allow for trade secrets and other sensitive facility information to remain confidential

AQMD staff plans to work with EPA and four stakeholder groups to further discuss CAA policy interpretations. These four groups are:

  1. Title III group
  2. State Implementation Plan group
  3. New Source Review group
  4. Economic Incentives Program group

 

 

ARCHITECTURAL COATINGS ISSUE BEFORE SUPREME COURT
On May 14, 1999, AQMD adopted Rule 1113 (Architectural Coatings) which, tightened VOC requirements for paints, varnishes and other coatings. The reductions from the amendments were estimated at 22 tons of VOC's per day.

The National Paint and Coatings Association opposed the rule and subsequently filed a lawsuit in the Fourth Appellate District Court of Appeal in Santa Ana. The Appellate Court ruled that AQMD had not properly adopted the 1999 amendments to Rule 1113.

AQMD intends to submit an appeal -- formally known as a petition for review -- to the State Supreme Court. In addition, the agency already has started preliminary work to re-adopt the rule. Staff believes there is sufficient evidence showing that compliant coatings are available in all categories of the rule. They plan to present a report to the board changing the rule's effective date from July 1, 2002 to July 1, 2003

If the state Supreme Court grants AQMD's petition for review, the 1999 amendments to Rule 1113 will remain in effect. If the court denies AQMD's petition for review, the appellate court will instruct the trial court to order AQMD to vacate the 1999 rule amendments. The 1996 version of the rule with the 2001 amendments would remain in effect.

 

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