State of California

Summary of Board Meeting
November 16, 2000

Air Resources Board
Board Hearing Room, Lower Level
2020 L Street
Sacramento, California

MEMBERS PRESENT: Hons. Alan C. Lloyd, Ph.D., Chairman
    Dr. William A. Burke
    Joseph C. Calhoun, P.E.
    Doreen D'Adamo
    Mark J. Desaulnier
    C. Hugh Friedman
    William F. Friedman
    Matthew R. McKinnon
    Barbara Patrick
    Barbara Riordan

00-11-1 Consideration of a Research Proposal

The Board approved Resolution No. 00-37 by a unanimous vote.
00-11-3 Public Meeting to Consider the Proposed Revision 2000 to the Carl Moyer Program


The discussion for this item was approval of revisions to the Carl Moyer Program Guidelines. Initially the Air Resources Board (ARB or the Board) approved the guidelines in February 1999. The program has been operating for two years following the 1999 guidelines. Currently, the program is entering into its third year with $45 million to pay for heavy-duty engine projects and $5 million to pay for infrastructure and advanced technology. Including third year funds, the Carl Moyer Program is providing $98 million in incentives to substantially reduce emissions of oxides of nitrogen (NOx) from mobile source diesel engines. The program also reduces the fine particulate component of diesel exhaust, which contributes to particulate matter (PM) air pollution and is a toxic air contaminant.

The program will continue to operate as intended in the initial program, with ARB distributing Carl Moyer funds to local air districts that implement the program and select the projects. However, staff determined a need to revise the guidelines for four reasons: 1) to incorporate provisions enacted through the Health and Safety Code; 2) to incorporate recommendations that the Carl Moyer Program Advisory Board made to the Governor and the Legislature, 3) to expand the program and provide districts with additional flexibility in selecting projects; and 4) to incorporate technical revisions that would ensure emission benefits remain real, quantifiable, and enforceable. As approved, these revisions would affect projects that are paid for with third year funds and would continue to make this program a huge success.

Staff's proposal included criteria for considering incremental fuel costs from both alternative fuels and alternative diesel fuels on a case-by-case basis. The Health and Safety Code requires ARB to include a method for incorporating incremental fuel costs into the program. Staff's proposal also addressed recommendations made by the Advisory Board to the Governor and the Legislature pertaining to PM emission reduction requirements and goals, as well as districts' matching fund requirement. For PM, ARB would set a 25% PM emission reduction target for the statewide program and a 25% PM emission reduction requirement for a district program where a district is designated as serious non-attainment for the federal PM standard. Districts' matching fund requirement was also revised, capping total statewide matching funds at $12 million, whenever program funding is above $25 million.

Staff's proposal also included emission inventory adjustments based on new approved on-road and off-road models; and expanded project criteria based on ARB's experiences with current and anticipated heavy-duty engine control technologies. Emission benefit calculations were revised to incorporate new emission inventory data. In order to continue funding cost-effective projects, the emission reduction requirement for retrofit and repower projects was decreased from 25% to 15%, and for all projects the cost-effectiveness criteria was increased to $13,000 per ton of NOx reduced. In order to encourage participation from industries that were not able to participate in the first two years, the off-road equipment repower funding caps were removed. Urban transit bus and school bus requirements were also revised to allow purchase or repower with an engine that meets the on-road heavy-duty optional emission standards for NOx, regardless of fuel type.

This program is a huge success and near-term emission reductions continue to be vital to all Californians. The emission reductions from this program help California to meet its clean air commitments under the State Implementation Plan. The program also helps local air districts to meet local transportation conformity plans, thus preventing the loss of federal highway dollars for local areas throughout California. If projects continue to be funded at the same cost-effectiveness level as those funded in the first year, total NOx emission reductions for three years will be about 15 tons per day, with PM emission reductions at about 180 pounds per day.

Demand for project funds continues to grow beyond the amount of funds that the program has received. In order to maintain program continuity and success, it is important to secure a source of continued funding beyond the third year.


Kent Stoddard Waste Management
Dave Smith BP/ARCO
Peter Rooney Pony Pack, Inc.
Rebecca Wood A. Tiechert & Son, Inc.
Christopher Weaver Citizen


The Board adopted Resolution No. 00-39 by a unanimous vote. However, the Board directed staff to work with representatives from Waste Management to clarify "real-world" drive cycles and emission benefits from alternative fuel engines used in stop-and-go applications. In addition, the Board concluded that the Carl Moyer Program has been a huge success and the demand for funding continues to grow beyond the amount of funding appropriated to the program. The Board resolved to continue supporting efforts that would lead to sustained and continued funding for the Carl Moyer Program beyond the third year.


STAFF REPORT: Yes (129 pages + appendices)
00-11-4  Public Hearing to Consider Follow-up Amendments to the California Phase 3 Reformulated Gasoline Regulations


The Air Resources Board approved the Phase 3 Reformulated Gasoline (CaRFG3) regulations at a hearing on December 9, 1999. The regulations prohibit California gasoline produced with the use of methyl tertiary-butyl ether (MTBE) starting December 31, 2002, establish CaRFG3 standards, and made various other changes. At the conclusion of the 1999 hearing, the Board adopted Resolution 99-39, in which it approved the originally proposed amendments with several modifications. A number of items that could not be addressed at the December 1999 hearing were deferred until this Board hearing.

The primary items addressed in the staff's proposal include amendments to accommodate the blending of ethanol in CaRFG3, new regulations to assure consistent quality of fuel grade ethanol, proposed changes to the diesel fuel regulations to offset any increase in emissions associated with the small refiner CaRFG3 standards, and amendments that specify how refiners and gasoline distribution system proprietors can transition from distributing
gasoline produced for one ethanol content level to a gasoline produced for another ethanol content level. The items also included updates to enforcement test methods for CaRFG.

The staff revised the original staff proposal to increase refiners flexibility to transition from one ethanol content to another, and to increase flexibility for ethanol producers to use denaturants. The revisions to the original proposal also include additional small refiner provisions for CENCO Inc., a small refiner in southern California, to produce CaRFG2 for 2 years. CENCO would have to offset any increased emissions, above what would be expected with CaRFG3, through the marketing of a cleaner diesel fuel. Additional changes included simplifying reporting requirements and clarifying issues regarding compliance and enforcement of the regulations.

As part of the testimony at the Hearing, a representative of the California Independent Oil Marketers Association raised concerns regarding the effects of the CaRFG3 regulations on the supply and availability of gasoline to independent oil distributors and the economic effects on their constituent companies. A representative of the Alliance of Automobile Manufacturers expressed their group's concern that the CaRFG3 regulations did not go far enough in gaining additional emission reductions. The representative for Citizens for a Better Environment (CBE) raised issues related to the permitting and environmental review of the small refiner, CENCO. The CBE representative requested that the Board consider delaying actions relating to the CENCO refinery. The Board determined that the issues raised by CBE were the primary responsibility of the local permitting agencies. Paramount Petroleum, another California small refiner, also expressed its interest in being subject to the small refiner provisions of the CaRFG3 regulations. All other testimony was in support of the proposed amendments.

Based on staff's presentation and public testimony, the Board approved the staff's proposal for the CaRFG3 follow-up regulatory amendments to:

1. Accommodate the blending of ethanol in CaRFG3
2. Assure consistent quality of fuel grade ethanol
3. Change the diesel fuel regulations to provide offsets of the emissions associated with the small refiner CaRFG3 standards
4. Improve enforcement test methods for CaRFG
5. Add a small refinery provision for CENCO


John Freel Western States Petroleum Association
Tom Eveland Kern Oil and Refining
Neil Koehler Renewable Fuels Association
Calvin Hodge A 2nd Opinion, Inc.
Loren Beard Alliance of Automotive Manufacturers
Jay McKeeman California Independent Oil Marketers Association
Scott Kuhn Citizens for a Better Environment
John Wright CENCO Refining
Jocelyn Thompson CENCO Refining
Robert Mindess Paramount Petroleum Corporation


The Board adopted Resolution No. 00-40 by a unanimous vote.


00-11-5  Public Hearing to Consider Amending the Test Methods Designated for Determining Olefin Content and Distillation Temperatures of Gasoline


Staff proposed regulatory amendments to the California Air Resources Board's (Board) California Reformulated Gasoline regulations. The amendments change the test methods designated for the measurement of olefin content and distillation temperatures of gasoline.

The Board approved staff's proposal to change the test method for olefins in gasoline to a modified version of ASTM D6550-00, a method based on supercritical fluid chromatography. The modifications are based on data from a round robin study conducted by ARB and the Western States Petroleum Association (WSPA). The modifications include new precision and scope statements and a correlation equation between weight and volume percent. This new test method is more precise than the method it replaces.

The Board delegated authority to the Executive Officer to adopt regulatory amendments to the precision statement, scope statement, and volume percent correlation equation of ASTM D6550-00 as adopted if any such amendments are warranted by new data.

The Board also approved staff's proposal to change the test method for distillation to the latest published version, ASTM D86-99a?1. This new version of the method corrects errors in the previous version and relaxes certain needlessly restrictive timing requirements.


Don Crider AC Analytical Controls, Inc.


The Board approved Resolution No.00-41 by a unanimous vote.


STAFF REPORT: Yes (30 pages)
00-11-6  Public Hearing to Consider Amending the Area Designations for State Ambient Air Quality Standards


The staff recommended that the Air Resources Board (Board) approve the proposed amendments to the area designation regulations with respect to the State ambient air quality standards (State standards).

State law requires the Board to establish and annually review area designations for California. Areas are designated attainment, nonattainment, nonattainment-transitional, or unclassified with respect to the State standards. The nonattainment-transitional category for ozone occurs by operation of law. Area designations are based on the most recently available three years of air quality data. For instance, this year's area designations are based on data collected from 1997-99. Based on air quality data from 1997-99, the Board approved the staff's proposal to redesignate Butte, Glenn, and Mono Counties from nonattainment-transitional to nonattainment with respect to the State ozone standard to reflect those changes that occur by operation of law.

In addition, State law requires the Board to establish area designation criteria and periodically review the criteria, thereby ensuring their continued relevance. The designation criteria describe the procedures the Board must use in determining an area's designation status with respect to the State standards. The staff did not propose any changes to the designation criteria this year.


Kevin F. Tokunaga Glenn County Air Pollution Control District


The Board approved Resolution No. 00-42 by a unanimous vote.


STAFF REPORT: Yes (156 pages)