AQMD RULE 1472 COMPLIANCE PLANS

This rule is applicable to facilities which own and operate 3 or more emergency diesel Internal Combustion Engines.
Either the Initial Notifications of Exemption or Compliance Plans are required by the AQMD, prior to industry and equipment-specific deadlines stated in the rule. For most types of facilities that deadline was in 2009 or at the latest July 1, 2010. The deadline for filing the required documents for hospitals and colleges is 12/31/2010.

AQMD PERMIT PENALTY HOLIDAY TO EXPIRE

In order to assist permit applicants during the current economic climate, the SCAQMD instituted a permit penalty holiday that allows companies to file applications without incurring penalties and late fees. This temporary permit application holiday started in February 2010 and will run through August 4, 2010. An example would be the case of an existing piece of equipment that has been installed and operated without the required permit.

STATIONARY COMPRESSION IGNITION ENGINES AIR TOXIC CONTROL MEASURE

The California Air Resources Board has announced public workshops to discuss potential amendments to the Stationary Compression Ignition Engine Air Toxic Control Measure (ATCM). A workshop was held in March of this year and another was held in late June. The measure (title 17, CCR section 93115), originally adopted by ARB in 2004, applies to emergency standby engines as well as prime engines.

The ATCM established emission controls on stationary diesel-fueled compression ignition (CI) engines that were greater than 50 brake horsepower. For new emergency standby engines, the ATCM requires these engines to meet a 0.15 gm/bhp-hr particulate matter (PM) emission limit or the Off-Road Compression Ignition Engine Standard (title 13, CCR, section 2423), whichever is more stringent. In California, the Off-Road Standards will become more stringent than the ATCM requirements beginning with Tier 4 engines. The Tier 4 emissions limits will most likely require engine manufacturers to install a diesel particulate filter (DPF) and a selective catalytic reduction (SCR) system on their engines to meet the PM and oxides of nitrogen (NOx) standards. The cost for the former is estimated at $38 per horsepower while that of the latter can be up to $150 per horsepower.

ARB staff is in the process of analyzing the feasibility and costs associated with the existing provisions in the ATCM that require new emergency standby engines to meet the Tier 4 emission standards as specified in the Off-Road Compression Ignition Engine Standards. The agency has set a timeline for proposed amendments to the ATCM to be considered by the Board later this year.

Representatives from the Engine Manufacturers Association have requested that ARB staff consider harmonizing the requirements for new emergency standby engines in the ATCM with federal requirements. The federal rule does not require manufacturers of stationary emergency standby diesel-fueled CI engines to meet the Tier 4 emission standards if add-on controls must be installed. In response to industry’s request, ARB staff agreed to investigate the need for amendments to the ATCM to address concerns raised regarding feasibility and costs of after-treatment controls on new emergency standby engines.

Some of the proposed amendments that staff plans to bring to the Board for adoption in October include:

• A Particulate Matter (PM) emission limit of 0.15 gm/bhp-hr for new emergency standby engines rated between 50 bhp and 175 bhp. Any new emergency standby engine will be a certified Tier 2 or 3 engine for all pollutants and must meet the 0.15 gm/bhp-hr PM emissions limit.
• Restriction of hours to 50 hrs/year and a PM level of 0.15 gm/bhp-hr represents BACT for emergency standby applications.
• Both new and in-use emergency standby engines that are “high use” (an engine that operates more than 400 hours combined within two years for any purpose within a consecutive 3 year period) must reduce diesel PM by 85% or meet 0.01 gm/bhp-hr PM.
• An annual report must be filed to update the inventory and track diesel-fueled CI engines operating in a Demand Reduction Program and is to be provided to both the ARB and the local air District.

RULE 317 — CLEAN AIR ACT NON-ATTAINMENT FEES UPDATE

The South Coast Air Quality Management District (SCAQMD) approved a Rule 317 work plan by staff that purports to move the agency towards compliance with a provision of the Clean Air Act (Section 185) that mandates additional fees for major sources in areas of non-attainment. The South Coast Basin along with the San Joaquin and Sacramento air Districts are being impacted by said provision. Section 185 requires that major stationary sources in severe and extreme ozone non-attainment areas that fail to attain the one-hour ozone standard by the attainment date to either reduce emissions of VOC or NOx by 20% of their attainment year emissions, or pay a fee.

Rule 317 was originally considered at the December 2008 AQMD Board meeting. The Rule was continued throughout 2009 due to strong industry opposition and to allow for development of further Environmental Protection Agency (EPA) guidance and for staff to negotiate with stakeholders. The EPA guidance was issued in January 2010 and the District was also formally notified by EPA in January 2010 that it was under a sanction clock for failure to adopt a rule implementing Section 185 requirements.

In developing the proposal, staff utilized an element of the Clean Air Act [Section 172 (e)] to minimize the economic impact on the regulated community. Representatives from the environmental community are challenging the applicability of Section 172 (e) to Section 185 programs and are objecting to the incorporation of such a provision into Rule 317. The rule relies on attainment year emissions to establish baseline emissions for impacted facilities and provides for flexibility in adjusting this baseline through several optional provisions to account for:

• Recessionary Impacts
• De minimus attainment year emissions
• Aggregation of NOx/VOC baselines
• Multisite baseline aggregation

Under Regulation III, fees paid pursuant to this program will be credited against the source’s annual operating and emissions fees. Alternatively, these fees can also be made available at the facility’s request to pay for emission reduction projects. Staff estimates that the crediting mechanism will reduce the overall fee burden on stationary sources in the South Coast Air Basin by more than 75 percent.

Under an equivalency portion of the rule, funds available for air pollution control programs in the South Coast Air Basin that are surplus to the State Implementation Plan (SIP) will be credited on a dollar-for-dollar basis against the aggregate fee burden from all sources paying Section 185 fees. Staff has identified one state program – AB 118 (Nunez, California Alternative and Renewable Fuel Vehicle Technology, Clean Air and Carbon Reduction Act of 2007) – that may be surplus to the SIP and applicable to Section 185 fees. The rule is estimated to go before the Board for adoption at the end of this year.

EXEMPTION FOR DIMETHYL CARBONATE CONSIDERED

The SCAQMD Stationary Source Committee directed staff to consider a limited exemption of Dimethyl Carbonate (DMC). Proponents of the exemption testified to the committee that there were niche operations for which an alternative to DMC was not available. Opponents of the measure cited the need for a worker exposure study and health issues associated with the use of DMC, as concerns with the proposal.

RULE 1143—CONSUMER PRODUCTS & MULTI-PURPOSE SOLVENTS

The Los Angeles Superior Court recently struck down portions of SCAQMD Rule 1143 (Case # bs119869). The rule would have set a volatile organic compounds limit on paint thinners and other solvents, which would require industry to sell, and consumers to use flammable products such as acetone. The decision was based on violations by SCAQMD of the California Environmental Quality Act (CEQA). Although the District is rescinding the 25 gram per liter limit (for paint thinners and multi-purpose solvents) in the rule as per the court’s decision, it plans to re-adopt the limit with an effective date of January 1, 2011. The District proposes to include additional labeling and public education requirements and other measures necessary to address CEQA-related flammability issues with respect to the use of acetone.

PRECEDENT SETTING TEST METHOD POLICY EMBEDDED IN LUBRICANT RULE

Changes proposed under South Coast Air Quality Management District Rule 1144 — Metal Working Fluids and Direct Contact Lubricants — may have test method related policies associated with them. Facilities impacted by Rule 1144 are struggling with measuring very low (50 grams per liter for vanishing oils, lubricants and metal working fluids) levels of VOCs. The SCAQMD estimates that there are 17 facilities in the South Coast Basin that will be impacted by the rule. According to the agency, these facilities may incur a cost of up to “$2.5 million for VOC content testing.”

The industry is currently seeking ASTM approval for their proposed method (ASTM E1868) “Loss-On-Drying by Thermogravimetry.” However, the ASTM has not approved the method. The rule adoption hinges on the method since the rule could not be enforceable without an appropriate test method. SCAQMD staff has publicly stated that even though ASTM approval is desirable, the agency can devise their own test method, which can be mandated on industry.

The Rule 1144 staff report states:

“An alternative method is SCAQMD Method 313L – Determination of VOC Hydrocarbon Compounds in Lubricants using a gas chromatograph (GC) equipped with a flame ionization detector (FID)…….This method is currently undergoing validation and may be included at a later date.”

The affected industry, represented by their association (the International Lubricant Manufacturers Association), has stated publicly that they will “object strenuously” to the consideration of the AQMD method as a substitute test method. The SCAQMD method can be costly to facilities and may also require suppliers to provide formulation data that they consider proprietary. The test method policy established under Rule 1144 may apply to other industry sectors in the future.

CHANGE PROPOSED FOR RULE 1110.2—EMISSIONS FROM GASEOUS & LIQUID-FUELED ENGINES

Rule 1110.2 applies to gaseous and liquid fueled engines producing more than 50 brake-horsepower. The proposed amendment will add an exemption for one public safety communications site where electricity and natural gas are not available. The exemption will allow the use of diesel engines producing more than 50 brake-horsepower. The rule adoption hearing is scheduled for July 9, 2010.

GREENHOUSE GAS REGULATION FOR BOILERS AND HEATERS

Citing a “large potential” for greenhouse gas (GHG) reductions within the Basin through boiler and process heater efficiency upgrades, SCAQMD staff is recommending changes to Regulation XXVII—Climate Change. According to the agency, the changes would:

• Add a boiler and process heater efficiency protocol;
• Remove the requirement for the California Air Resources Board approval of new protocols prior to being added to Regulation XXVII, due to a lack of CARB resources to review the protocols;
• Forbid harvesting under the forestry protocol;
• Establish a pre-funded bank of certified reductions.

Staff estimates that there are over 2,000 permitted boilers above 5 MMBTU/HR that currently do not employ efficiency measures due to high upfront costs. Staff concludes that “the energy savings result in relatively short payback periods, especially for larger equipment.” The purpose of the proposed efficiency protocol for boilers and process heaters is to establish a method to quantify reductions in GHG emissions and co-benefits resulting from an improvement in the efficiency of a unit. Options to improve efficiency for existing boilers include an economizer or oxygen (O2) trim system.

Co-benefit reductions (i.e. NOx, PM) would not generate credits, but could be used for CEQA mitigation. Boilers and process heaters under this protocol include those units used in medical facilities, educational institutions, office buildings, hotels and industrial facilities.

ODOR AND NUISANCE COMPLAINTS LEGISLATION

A bill introduced by California Senator Wright would authorize air pollution control Districts in California to adopt nuisance regulations that allow Districts not to pursue investigations for complaints that are determined to be “repeated and unsubstantiated.” The SCAQMD is supporting the legislation with amendments that would add criteria used to determine whether a nuisance due to odor has occurred, including but not limited to the following:

1. The number of verified complaints;
2. The number of persons working or residing in the area affected by the subject air Contaminants;
3. The nature and persistence of odors or other effects;
4. The duration of odors or other effects;
5. Impact of the odor on complainants’ use or enjoyment of their property;
6. Nature and extent of damage to persons or property;
7. The nature of the business or operation that is the source of odors or other effects;
8. The nature of the neighborhood as residential, commercial, or industrial that is affected by odors or other effects;
9. Nature of business or property affected.

The bill awaits a hearing in the Committee of Natural Resources.

EPA PROPOSED RULE FOR BOILERS AND PROCESS HEATERS

On April 29, 2010, the Environmental Protection Agency (EPA) issued a proposed rule that would reduce emissions of toxic air pollutants from new and existing industrial, commercial and institutional boilers and process heaters at Major Source facilities. A Major Source is defined as a facility emitting or having the potential to emit 10 or more tons per year (tpy) of any single air toxic or 25 tpy or more of any combination of air toxics.

This rule will apply to two types of units, neither of which burn solid waste:

. Boilers, which burn natural gas, fuel oil, coal, biomass (e.g. wood), refinery gas, or other gas to produce steam. The steam is used to produce electricity or provide heat.

. Process heaters that heat raw or intermediate materials during an industrial process.

The rule would target pollutants such as mercury, lead, cadmium, dioxin, furans, formaldehyde and hydrochloric acid. Proposed requirements include:

• For all new and existing natural gas and refinery gas-fired units, operators would be required to perform an annual tune-up for each unit.
• For all existing units with a heat input capacity less than 10 MMBTU/HR operators would be required to perform a tune-up for each unit once every two years.
• Existing Major Source facilities would also be required to conduct an energy assessment to identify cost-effective energy conservation measures.
• The proposed rule would establish emission limits for all other existing and new boilers and process heaters located at Major Sources for the following:

. Mercury
. Dioxin
. Particulate matter (PM) (as a surrogate for non-mercury metals)
. Hydrogen chloride (HCl) (as a surrogate for acid gases)
. Carbon monoxide (CO) (as a surrogate for non-dioxin organic air toxics)