# Final Statement of Reasons for Rulemaking

Including Summary of Comments and Agency Responses

PUBLIC HEARING TO CONSIDER THE ADOPTION OF PROPOSED REGULATIONS

TO REDUCE EMISSIONS FROM DIESEL AUXILIARY ENGINES O N OCEAN-GOING

VESSELS WHILE AT-BERTH AT A CALIFORNIA PORT

Public Hearing Date: December 6, 2007 Agenda Item Number: 07-12-06

### TABLE OF CONTENTS

Contents Page

I. General ....................................

................................................... ............................ 1

II. Modifications Made to the Original Proposal and Additional Documents Made Publicly Available ............................

................................................... ........... 5

A. Availability of Modified Text..................

................................................... .......... 6

B. Nonsubstantive Changes .........................

................................................... .... 12

III. Summary of Comments and Agency Responses to the Original Proposal............ 13

IV. Summary of Comments and Agency Responses to the Modified Text ................. 81

V. Corrections to Non-Cancer Health Impacts and Valuations and to References in the Technical Support Document ...... .......................................... 102

List of Tables

Table I: Comments Received During the 45-day Co mmnet Period......................... 14

Table II: Comments Received During the 15-day Co mment Period......................... 81

Table III: Estimated Total Health Benefits Asso ciated with Reductions in Hotelling

Emissions from Container Ships, Passenger Ships, an d Reefer Ships.... 103

Table IV: Undiscounted Unit Values for Health E ffects ........................................... 10 41 State of California

AIR RESOURCES BOARD

Final Statement of Reasons for Rulemaking Including Summary of Comments and Agency Responses

PUBLIC HEARING TO CONSIDER THE ADOPTION OF PROPOSED REGULATIONS

TO REDUCE EMISSIONS FROM DIESEL AUXILIARY ENGINES O N OCEAN-GOING

VESSELS WHILE AT-BERTH AT A CALIFORNIA PORT

Public Hearing Date: December 6, 2007

Agenda Item No.: 07-12-06

I. GENERAL

In this rulemaking, the Air Resources Board (the Bo ard or ARB) is adopting two identical regulations under different titles in the Californi a Code of Regulations (CCR): 1) section 2299.3, title 13, CCR; and 2) section 93 118.3, title 17, CCR. Both sections will be referred to collectively hereafter as the “ regulation.”

The regulation will reduce the public’s exposure to air pollutants from ships docked or “hotelled” at California’s major ports. Specifical ly, the regulation will significantly reduce emissions of oxides of nitrogen (NOx) and diesel pa rticulate matter (diesel PM) from diesel-fueled auxiliary engines used aboard ocean-g oing ships while docked or at-berth at a California port. In addition, CO 2 (a greenhouse gas) emissions from at-berth ocean-going vessels will also be reduced. The regu lation supports the Board’s Risk

Reduction Plan to Reduce Particulate Matter Emissio ns from Diesel-Fueled Engines

and Vehicles

(approved in September 2000), the Goods Movement E mission Reduction Plan (2006)

, and the State’s Assembly Bill (AB) 32 (2006) targets fo r greenhouse gas

reductions.

This rulemaking was initiated by the October 19, 20 07, publication of a notice for a public hearing on December 6, 2007 (“45-day Notice” ). A “Staff Report: Initial Statement of Reasons” (Staff Report) and “Technical Support Document” (TSD) were also made available for public review and comment s tarting October 19, 2007. The Staff Report, which is incorporated by reference he rein, describes the rationale for the proposal. Appendix A to the Staff Report contained the text of the proposed regulations, which adds a new section 2299.3 to tit le 13, CCR, and an identical new section 93118.3 to title 17, CCR. The TSD, which i s incorporated by reference herein, describes the basis of the proposal in more detail. All of the documents referenced above were posted on October 19, 2007, to the ARB’s internet site for this rulemaking: http://arb.ca.gov/regact/2007/shorepwr07/shorepwr07 .htm

.

At the December 6, 2007, hearing, the Board receive d written and oral comments on staff’s proposed regulation. At the conclusion of the hearing, the Board adopted Resolution 07-57, in which it approved the adoption of the originally proposed regulation2

with suggested modifications discussed at the heari ng. ARB staff suggested the modifications in response to public comment. The m odifications were set forth in a five-page document entitled “Staff’s Suggested Modi fications to the Original Proposal,’” distributed at the hearing, and included as Attachm ent B to the Resolution. In

accordance with section 11346.8 of the Government C ode, the Board directed the Executive Officer to incorporate the modifications into the proposed regulatory text and to make such modifications available for a suppleme ntal comment period of at least 15 days. The Executive Officer was then directed e ither to adopt the regulations with such additional modifications as may be appropriate in light of the comments received, or to present the regulations to the Board for furt her consideration if warranted in light of

the comments.

The text of the modifications to the originally pro posed regulation, the incorporated documents, and additional supporting documents were made available for a supplemental 15-day comment period by issuance of a “Notice of Public Availability of Modified Text and Availability of Additional Docume nts” (“15-day Notice”). The 15-day Notice with four attachments were mailed on August 22, 2008, to all parties identified in section 44(a), title 1, CCR, and to other persons g enerally interested in the ARB’s rulemaking concerning ocean-going vessels. These f our attachments included a copy

of Resolution 07-57 with Attachment B entitled “Sta ff's Suggested Modifications to the Original Proposed Regulation Order,” the revised re gulatory language, and two documents that staff added to the rulemaking record . All documents were also published on August 22

, 2008, on ARB’s website. An email message announci ng and linking to this posting was transmitted to the more than 2,000 parties that have subscribed to ARB’s “shorepower” list serve for not ification of postings pertaining to emissions from docked ocean-going vessels.

The 15-day Notice gave the name, telephone, and fax number of the ARB contact person from whom interested parties could obtain th e complete texts of the additional incorporated documents and the modifications to the original proposal, with all of the modifications clearly indicated. The deadline for submittal of comments on the staff’s suggested modifications was September 8, 2008.

Four written comments were received during the supplemental 15-d ay comment period. Staff did not make additional modifications in resp onse to those comments.

After considering the comments, the Executive Offic er issued Executive Order R-08-013, adopting new section 2299.3 to title 13, CCR, and new section 93118.3 to title17, CCR, and adopting the incorporated documen ts.

This Final Statement of Reasons (FSOR) updates the Staff Report by identifying and providing the rationale for the modifications made to the originally proposed regulatory text as a result of public comment and staff analys is after the Staff Report was issued.

This FSOR also summarizes written and oral comments the Board received on the proposed regulatory text during the formal rulemaki ng process and the ARB’s responses to those comments.3

Documents Incorporated by Reference.

The following documents are incorporated by referen ce in the regulation: (1) “Verification Procedure, Warranty and In-Use Co mpliance Requirements for In-Use Strategies to Control Emissions from Diesel Engines ," 13 CCR 2700 et seq.; (2) 40 Code of Federal Regulations (CFR) Part 94, “ Control of Emissions from Marine Compression-Ignition Engines”; (3) Annex VI of the 1973 International Convention for the Prevention of Pollution from Ships, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78); (4) ARB Method 100 – Proced ures for Continuous Gaseous Emission Stack Sampling,” 17 CCR 94114; (5) Interna tional Standard ISO 8178-1(E):1996, “Reciprocating Internal Combust ion Engines – Exhaust Emission

Measurement – Part 1: Test-Bed Measurement of Gaseous and Particulate Exh aust Emissions”; (6) International Standard ISO 8178-2(E ):1996, “Reciprocating Internal Combustion Engines – Exhaust Emission Measurement – Part 2: Measurement of Gaseous and Particulate Exhaust Emissions at Site”; (7) International Standard ISO 8178-4(E):1996, “Reciprocating Internal Combust ion Engines – Exhaust Emission Measurement – Part 4: Test Cycles for Different Eng ine Applications”; (8) Bay Area Air Quality Management District Source Test Procedure ST-1B, “Ammonia Integrated Sampling,” dated January 1982; (9) International S tandard ISO 8754:2003(E),

“Petroleum Products – Determination of Sulfur Conte nt – Energy-Dispersive X-Ray Fluorescence Spectrometry,” Second Edition, 2003-07 -15; and (10) International Standard ISO 8217, “Specifications of Marine Fuels Requirements for Marine Residual Fuels,” (as revised in 2005).

One document has been omitted from the original lis t of incorporated-by-reference documents listed in the Informative Digest section of the 45-day Notice. The Bureau of

Customs and Border Protection’s Form 1300 has been eliminated because the requirement for submitting these forms to the ARB w as removed in staff’s modifications to the original proposal. The ISO marine fuel spec ification listed in (10) above has been added to the original list because it was reference d in definitions added to the regulation in staff’s modifications to the original proposal.

The 10 documents listed above are readily available from the ARB upon request and

were made available in the context of this rulemaki ng in the manner specified in Government Code section 11346.5(b). The documents are incorporated by reference because it would be cumbersome, unduly expensive, a nd otherwise impractical to print them in the CCR. Existing ARB administrative pract ice has been to have specifications, test procedures, and similar documents incorporated by reference rather than printed in the CCR because these specifications and test proce dures are highly technical and complex. They include “nuts and bolts” engineering protocols and laboratory practices and have a very limited audience. Because the ARB has never printed complete test procedures and similar documents in the CCR, the di rectly affected public is accustomed to the incorporation format utilized the rein. These test procedures and similar documents as a whole are extensive, and it would be both cumbersome and expensive to print these lengthy, technically compl ex procedures for a limited audience4

in the CCR. In addition, printing portions of the test procedures that are incorporated by reference would be unnecessarily confusing to the a ffected public.

Fiscal Impacts

Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive Officer has determined that the regulatory action w ill create costs to some local agencies. The governmental agencies affected by th e proposed regulation are the port authorities, which are departments under the applic able cities. The ports affected by the proposed regulation are the Ports of Hueneme, L ong Beach, Los Angeles, Oakland, San Diego, and San Francisco. Also affected is the cruise terminal at the Port of Long Beach which is owned by the City of Long Beach . In general, the tenants operate the terminals, and the port may make major infrastr ucture improvements, the costs for which may be recovered from the tenants through the lease agreements. The other ports own and manage the operation of the port, so these ports have other fee mechanisms to recover their capital investments.

The total cost expected to be expended by the port authorities to add shore-power equipment to their facilities ranges between $4 mil lion to $86 million for the affected ports. The fiscal impact is defined as the costs i ncurred to the local agencies in the three fiscal years starting with the 2008/2009 fisc al year. Staff anticipates that the port authorities would begin to make payments during fis cal years 2008/2009, 2009/2010, and 2010/2011 for the necessary shore-power equipme nt to satisfy the 2014 milestone. The fiscal costs range from $1 million to $12 milli on for this three year period.

No State agencies will be affected by the proposed regulation as a result of a State agency operating an ocean-going ship. However, the ARB will need additional resources to adequately enforce the provisions of t he regulation. ARB's Fiscal Year (FY) 2008-2009 budget includes two staff positions to perform compliance outreach and

other enforcement efforts for this and several othe r newly adopted regulations that target emissions from port and other goods-movement related activities. These two positions are to be funded at $140,000 per position per year or $280,000 annually. Staff estimates that the workload for performing the nece ssary outreach and other enforcement activities for this regulation specific ally will require 1/7 of each PY or 2/7 PY total ($40,000).

Consideration of Alternatives

The proposed regulation was the subject of discussi ons involving ARB staff, local air districts, affected shipping companies, terminal op erators, ports and others. A discussion of two alternatives to the regulatory pr oposal is found in Analysis of Alternative Regulatory Approaches, Section I, Chapt er X (pp. X-24 through X-25) of the Technical Support Document. ARB staff recommended against both alternatives.5

The two alternative regulatory approaches were: 1) targeting the highest-emitting ships to obtain the necessary reductions, or 2) using bes t available control technology (BACT) on auxiliary engines while the ship is hotelling.

ARB originally considered approach 1 before choosin g the “visits or emissions reduction” approach contained in the proposed regul ation. Approach 1 would “tag” the ships that make the most visits to specific ports a nd make them use shore power or an equivalent control technology to reduce hotelling e missions. For example, a requirement under this regulatory approach might st ate “container ships making more than four visits to a California port in 2014 must turn off their engines or use an alternative control technology.” ARB estimated tha t this regulatory approach would be as effective as the proposed regulation, but abando ned this approach because of the complexity and difficulty of tracking the ships tha t would be required to reduce emissions. Many of these ships could be reposition ed elsewhere, while other ships would replace them in California service, creating excessive recordkeeping requirements and practical enforcement challenges.

The second alternative that ARB staff considered is requiring ship companies to install BACT on their auxiliary engines. For the purpose o f determining a potential costeffectiveness of this approach, staff chose selecti ve catalytic reduction (SCR) for NOx emissions reductions and diesel oxidation catalyst (DOC) for diesel PM emissions reductions. Staff estimated the average cost-effec tiveness for NOx reductions using SCR to range from $11,000 to $21,000 per ton reduce d, which may be considered comparable to the $12,800 per ton achieved by the p roposed regulation. The costeffectiveness for diesel PM reductions using this a pproach, estimated at $1.7 million per ton, is more than twice as high as the $690,000 per ton of diesel PM emissions achieved with the proposed regulation. Considering the unproven application of these technologies for marine engines, fewer total emissi ons reductions, and much higher

cost-effective values for diesel PM emissions reduc tions, staff rejected this alternative regulatory approach.

The Board has determined that no other alternatives considered by the agency or that have otherwise been identified and brought to the a ttention of the agency would be more effective in carrying out the purpose for whic h the regulatory action was proposed

or would be as effective and less burdensome to aff ected private persons than the action taken by the Board.

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL AND ADDITIONAL

DOCUMENTS MADE PUBLICLY AVAILABLE

Various modifications were made to the original pro posal to address comments received during the 45-day public comment period an d to clarify the regulatory language. These modifications are described below and include staff-proposed modifications that the Board approved on December 6 , 2007, changes that the Board directed staff to make, and subsequent modification s made in response to public comments and to improve the proposed regulation’s c larity. The 15-day Notice,6

together with a copy of the proposed regulation wit h changes indicated, was posted on August 22, 2008, for a period of public review and comment that ended on September 8, 2008. Notification was sent to person s who had expressed an interest in the regulation during the course of rule developmen t and review, including all individuals described in subsections (a)(1) through (a)(4) of s ection 44, Title 1, CCR. By these actions, the modified regulations were made availab le to the public for a supplemental comment period pursuant to Government Code section 11346.8. ARB not make additional substantive changes in response to publi c comments received but, certain nonsubstantive changes were subsequently made and a re detailed in subsection B

below.

A. Availability of Modified Text

The following is a description of the substantive m odifications provided for public comment from August 22, 2008 through September 8, 2 008, arranged by section number. Identical modifications were made to propo sed section 2299.3, title 13, CCR, and to the proposed Airborne Toxic Control Measure in section 93118.3, title 17, CCR.

All references below to section 2299.3 and section 93118.3 are to the indicated sections in title 13 and 17, CCR, respectively

Applicability and General Exemptions: Subsections 2 299.3(b) and 93118.3(b)

Staff moved the fleet de minimis vessel visit crite ria, originally in section (d)(1)(D), to the general exemption section of the regulation, becaus e this was a more logical location for the language.

Container-ship fleets making fewer than 25 visits t o a California port, refrigerated-cargoship fleets making fewer than 25 visits to a port, and passenger-ship fleets making fewer than five visits to a port are exempt from th e requirements of the regulation. At the Board hearing, the Board directed staff to chan ge the de minimis fleet visit requirements from a port-visit basis to a statewide -visit basis, depending on staff’s economic analysis of such a modification. Staff pe rformed an economic analysis of such a change to the regulation and presented the r esults in Attachment III to the 15-day Notice. Staff concluded the ships that woul d be affected are infrequent visitors to California, the estimated emission reduction ben efits would be small, and the cost-effectiveness of amending the de minimis visit criteria on a statewide basis would be substantial. Consequently, staff kept the origi nal de minimis fleet visit criteria that are based on port visits.

Definitions: Subsection 2299.3(c) and 93118.3(c)

Eight definitions were modified, three were deleted , and five were added to the definitions section of the regulation.7

Modified Definitions

The term “marine diesel fuel” has been changed to “ marine gas oil or marine diesel oil”

in the definition of “baseline fleet emissions” and “post-baseline fleet emissions” to be consistent with the emission rates specified in sec tion (e)(3). Additional changes were made to the definition of “post-baseline fleet emis sions” to clarify that various control techniques can be used to reduce fleet emissions in the equivalent emissions reduction compliance option.

The definition of “emergency event” has been modifi ed to include a more comprehensive list of events where the utility may not be able to provide power to the port. The definition of “fleet” has been modified to clarify that a fleet is based on one type of vessel and includes both owned and chartere d vessels and that the master’s

control of a vessel does not constitute “direct con trol,” as that term pertains to fleet operators. The definition of “person” has been mod ified to clarify the inclusion of consortiums and other business relationships that a re found in the shipping industry. The definitions for “terminal” and “terminal operat or” have been modified to clarify the

intent that affected terminals should also include facilities used for loading and unloading of passengers, as passenger vessels are a ffected by the regulation. A

clerical correction was made to the definition of “ utility” to correct the Public Resources

Code section number referenced in this definition. The definition of “visit” has been modified to clarify that when a vessel makes separa te and sequential visits to berths at a port within a specified amount of time, the fleet can count these types of visits as one visit for purposes of calculating the number of vis its the fleet’s vessels made to the port.

Deleted Definitions

Definitions for “IMO,” “Landlord Port,” and “Operat e an Auxiliary Diesel Engine” were deleted from the regulation. These terms are not l ocated in the regulation, and are, therefore, not necessary to define.

Added Definitions

A definition has been added for “baseline fleet pow er generation” because this term is used in the new reduced onboard power generation ca lculation requirements. A definition of “charter agreement” has been added be cause this term is now used in the

definition of “fleet.” A definition of “marine die sel oil” has been added because this term is now used in the emission rates specified in sect ion (e)(3). A definition of “marine gas

oil” has been added because this term is used in th e emission rates specified in section (e)(3). A definition of “regulated California waters” has b een added because the term is used in the exemption to the regulation for vessels passing through these waters without stopping at a California port (i.e., “innoc ent passage”).8

Vessel In-Use Operational Requirements: Subsection 2299.3(d) and 93118.3(d)

Reduced Onboard Power Generation Option (d)(1):

This subsection was modified so that at-berth opera tional requirements for auxiliary engines are based on a combination of limiting engi ne use during a specific percentage of a fleet’s vessel visits, and reducing power gene ration from the fleet’s vessels’ auxiliary engines by the same percentage. Staff ad ded this second requirement because onboard electricity generation is directly related to emissions and is, therefore,

a better measure of emissions reduction than visits alone. Staff believes that requiring a fleet to reduce the onboard power generated while at berth, in combination with requiring auxiliary engines to be shut down for a s pecific number of vessel visits, will result in emission reductions that are more aligned with staff’s emission reduction targets. Staff renamed this compliance option the “reduced onboard power generation option.”

Staff made numerous changes to section d(1) to addr ess the new operational requirements and to restructure some requirements f or clarity. The original requirements for 2014 and 2020 have been modified t o account for the new onboard power reduction requirement and new requirements fo r 2017 have been added to assure a reasonable rate of progress between the 20 14 and 2020 requirements. The three-hour or five-hour auxiliary engine use limita tions requirements that were in the original 2014 and 2020 requirements have been moved to a new area within this section to reduce redundancy. The emergency event and fede ral inspection delay exemptions to the three-hour or five-hour auxiliary engine use limitations that were in section (e) of the original regulation have been moved to this sec tion because this is now a more logical location for these requirements. Based on the Board’s directive, staff added language to this section to clarify that when a ves sel visit meets the emergency event exemption criteria when intending to connect to gri d-based shore power, that visit will be counted as a “shore-power visit” but the emissions from that visit will be excluded from the fleet’s onboard power reduction requirements. The same treatment will apply to visits meeting the federal inspection delay exempti on. Staff also clarified in this section that a shore-power-equipped ship is required to use shore power whenever it visits a berth equipped with compatible shore power except w hen the shore-power-equipped berth at the terminal is already occupied with a ve ssel receiving shore power, or when shore power equipment on a vessel fails and the mas ter of the ship is unable to repair it during the visit.

Equivalent Emissions Reduction Option (d)(2):

In response to public comments, staff consolidating the three emission reduction options to one technology-neutral compliance option and schedule to streamline the emission-reduction option and to provide more flexi bility to affected fleets. Staff renamed this option the “equivalent emissions reduc tion option.” Fleets choosing the equivalent emissions reduction option will now have only one compliance schedule and can achieve the percent emission reductions by choo sing one or more control9

techniques, including grid-based shore power, non-g rid-based shore power (distributed generation), and alternative ship-side or shore-sid e control technologies. Based on the Board’s directive, staff added language to this sec tion to clarify that the at-berth emissions from a vessel that experienced an emergen cy event when it intended to use grid-based shore power as a control technique can b e excluded from the fleet’s baseline and post-baseline emissions calculations. Staff ad ded incentives for early reduction efforts by fleets, by allowing them to accumulate a nd use emission credits to satisfy future emission reduction requirements for early or excess reductions achieved under this option. Staff also added a limit for ammonia slip when Selective Catalytic Reduction (SCR) is used as an onboard alternative e missions control technology to be consistent with the requirement already in the regu lation for SCR used with non-grid shore power equipment, (d)(2)(E)4.

Limitation on Changing Compliance Options (d)(3):

Staff added provisions to limit the conditions under which a fl eet can switch from the reduced onboard power generation option to the equi valent emissions reduction option. The new language is intended to prevent fleets from circumventing the earlier emissions reduction targets of the equivalent emissions reduc tion option by initially choosing the reduced onboard power generation option, then subse quently switching to the equivalent emissions reduction option.

Calculations for Power Reductions and Emissions Red uctions: Subsections 2299.3(e) and 93118.3(e)

Reduced Onboard Power Generation Calculations (e)(1 ):

Staff added procedures for a fleet to follow to cal culate the percent reduction of its vessels’ at-berth auxiliary engine power generation to demonstrate compliance with the new power reduction requirement in this option. Th e default power loads by ship category and the measured power requirements that w ere originally in the emission

reduction calculations section have been moved to t his section because the information will now be needed in the power reduction calculati ons. Staff also clarified that onboard power generated during visits experiencing an emerg ency event or federal agency delay exemption to the three- or five-hour engine l imitation shall be excluded from the fleet’s power reduction calculations as previously discussed in changes to section (d)(1).

Equivalent Emissions Reduction Calculations (e)(2):

Staff added language to this section to clarify tha t the at-berth emissions from a vessel that experienced an emergency event when it intende d to use grid-based shore power as a control technique, can be excluded from the fl eet’s baseline and post-baseline emissions calculations as previously discussed in c hanges to section (d)(2). To encourage early reduction efforts, staff added prov isions for fleets to obtain fleet emission credits (FEC) for early and excess emissio n reductions that can be applied10

toward the fleet’s future compliance requirements. Staff has clarified the default

emission rates for diesel PM to address the fact th at at-berth auxiliary engines can operate on marine gas oil fuel and marine diesel oi l fuel. The default power requirements by vessel category and measured power requirements have been removed from this section because they are now incl uded in the reduced onboard power generation calculations as discussed above. In response to public comment, staff added language to allow the use of alternativ e test methods to those specified in the regulation for determining engine emission rate s. Finally, language has been added to clarify that the Executive Officer may request p eriodic testing of distributed generation equipment used to provide non-grid shore power to a vessel.

Terminal Plan Requirements: Subsections 2299.3(f) a nd 93118.3(f)

Staff modified the terminal plan requirements for t wo purposes: 1) to align with the new reduced onboard power generation and equivalent emi ssions reduction options; and 2) to include more criteria for terminal operators to follow when developing the plan.

Staff revised Table 2 to reflect the fleets’ new co mpliance options and dates. The plan requirements are now specific to either the “reduce d onboard power generation option” or the “equivalent emissions reduction option.” A schedule has been added for reviewing and approving terminal plans.

The reduced onboard power generation option plan re quirements, (f)(2), expand upon the requirements in the original grid-based shore p ower option, which includes a

discussion of modifications to the terminal infrast ructure, the port infrastructure, and the utility infrastructure that are needed to allow aff ected fleets to satisfy requirements in (d)(1). Additional discussion must now be included on ship activity at the terminal and projected power demands. The terminal plan must al so include a discussion of currently available power at the terminal. In addi tion, it must provide a schedule for each activity needed to implement any necessary imp rovements to the terminal, port, or utility infrastructure to supply any additional pow er that will be needed at the terminal by the 2014, 2017 and 2020 compliance dates.

The equivalent emissions reduction option plan, (f) (3), must now include information on ship activity at the terminal and a description of, and implementation schedule for, the control techniques that will be used to reduce the at-berth emissions of affected fleets so that the fleets can satisfy the requirements in (d)(2) by the 2010, 2012, 2014, 2017, and 2020 compliance dates.

Reporting and Recordkeeping Requirements: Subsecti on 2299.3(g) and 93118.3(g)

The vessel plan, annual statement of compliance, an d recordkeeping requirements have been modified to align with the new provisions in the reduced onboard power generation and equivalent emissions reduction optio ns. Staff also modified this section11

to clarify some requirements. A discussion of the reporting and recordkeeping requirements for each compliance option follows:

Reduced Onboard Power Generation Option (g)(1):

Staff has clarified that a vessel fleet plan is req uired for each California port that is visited by the fleet, where the fleet’s visits do n ot fall below the de minimis fleet visit exemptions specified in (b)(3)(E), to conform the p lan submittal dates to the new compliance dates in this option, and to provide mor e detail on the information to be included in the initial plans and updates. This de tailed information will better assist ARB staff in determining the fleet’s ability to meet th e requirements for the applicable compliance dates.

Staff has clarified that the annual statement of co mpliance must demonstrate that the fleet is in compliance with the regulatory requirem ents at each California port visited by

the fleet. Additional information on each vessel i n the fleet is now required in the annual statement to assist ARB staff with determining the fleet’s compliance with the new provisions in the reduced onboard power option.

Staff made a number of changes to the recordkeeping section to clarify the requirements, eliminate submittal of unnecessary in formation, and to ensure ARB staff has the necessary information to verify emergency e vent and federal agency delay exemptions to the three-hour or five-hour engine us e limitations, and to verify onboard shore-power equipment failures.

Equivalent Emissions Reduction Option (g)(2):

Staff modified the vessel plan requirements to clar ify that a vessel fleet plan is required for each California port that is visited by the fle et, where the fleet’s visits do not fall below the de minimis fleet visit exemptions specifi ed in (b)(3)(E), to conform the plan submittal dates to the new compliance dates in this option, and to provide more detail on the information to be included in the initial pl ans and updates. This detailed

information will better assist ARB staff in determi ning the fleet’s ability to meet the requirements for the applicable compliance dates. In addition, staff added language to ensure that fleets switching from the reduced onboa rd power compliance option to the equivalent emissions reduction option submit an upd ate vessel plan that complies with the requirements in this section.

Staff conformed the initial submittal date for the annual statements of compliance to the new compliance dates in this option, clarified that the annual statement of compliance must demonstrate that the fleet is in compliance wi th the emission reduction requirements at each California port it visits, and clarified the compliance period for the baseline and post-baseline emission calculations. To better assist ARB staff with determining the fleet’s compliance with the equival ent emissions reduction option, specific information is now required for each vesse l in the fleet. In addition, the fleet12

must indicate if fleet emission credits (FEC) will be used to meet the applicable reduction requirements.

Staff made a number of changes to the recordkeeping requirements to clarify the requirements, eliminate submittal of unnecessary in formation, and to ensure ARB staff has the necessary information to verify emergency e vents.

Violations: Subsections 2299.3(h) and 93118.3(h)

Staff added formulas for determining the number of violations within the applicable compliance period when a fleet or ship is found to be out of compliance. Adding the formulas provided a more reasonable approach to det ermining violations to the regulation requirements than the assumption that th e fleet was out of compliance every day within the compliance period. Formulas were de veloped for five noncompliance scenarios: fleets failing to achieve the baseline power reduction requirements; fleets failing to achieve the limited engine use visits pe rcentages; fleets failing to achieve both of these requirements; fleets failing to achieve th e applicable emission reduction percentages; and shore-power equipped ships failing to use shore power during a visit to a berth that had compatible shore power.

Supporting Documents and Information

In accordance with Government Code section 11347.1, the following documents were added to the rulemaking record with public notifica tion provided in the 15-Day Notice:

• Staff’s Cost Analysis and Conclusions for Potentia lly Modifying the De Minimis

Fleet Visits Criteria from an Individual Port Basis to a Statewide Basis.

• Examples of Calculating Number of Violations.

Other Changes in Modified Text

In addition, certain subsections and paragraphs wer e rearranged and other minor modifications were made throughout the regula tory text to improve clarity; to correct spelling, typographical errors, punctuation , and grammar; to make numbering adjustments; and to correct citations and reference s. These modifications were

included in the strikeout/underline version of the regulatory text that was provided for public comment with the 15-day Notice.

B. Nonsubstantive Changes

ARB has made minor nonsubstantive changes to the fi nal regulation order to correct punctuation, typographical errors, to make numberin g adjustments, and to improve accuracy and clarity. The changes made do not mate rially alter any requirement, right,13

responsibility, condition, prescription, or other r egulatory element of any California Code of Regulations provisions.

III. SUMMARY OF COMMENTS AND AGENCY RESPONSES TO TH E ORIGINAL

PROPOSAL

The Board received numerous written and oral commen ts during the 45-day rulemaking comment period (October 19, 2007 to December 6, 200 7). A list of commenters is set forth in Table I below, identifying the date and fo rm of all comments that were timely submitted. Following the list is a summary of each objection or recommendation made regarding the proposed action, together with an exp lanation of how the proposed action has been changed to accommodate the objection or re commendation, or the reasons for making no change. The comments have been group ed by topic. Comments were received from government agencies, ports, industry representatives, individuals, and environmental organizations supporting and objectin g to specific terms of the proposed regulation. Suggestions received ranged from not a dopting a regulation to control atberth emissions from ocean-going vessels to strengt hening and accelerating the requirements in the regulation. Many commenters ex pressed support of ARB adopting a regulation to control at-berth emissions from oce an-going vessels, but also wanted specific changes to the requirements in the regulat ion. ARB did receive seven individual support letters and 75 identical form le tters solely expressing support for the regulation. For brevity, the form letters are not included in Table I.14

Table I: Comments Received During the 45-day Comm ent Period

Abbreviation Commenter

ALA Bonnie Holmes-Gen

American Lung Association of California Oral testimony: December 6, 2007

ALLEN Gina Allen

Written testimony: November 12, 2007 ANDERSON Stephen and Betty Anderson

Written testimony: December 3, 2007 AZA Amy Zimmerman

Amy Zimmerman & Associates Written testimony: November 9, 2007

BAAQMD1 Jack Broadbent

Bay Area Air Quality Management District Written testimony: October 10, 2007

BAAQMD2 Jack Broadbent

Bay Area Air Quality Management District Written testimony: November 16, 2007 BCLAC1 Enrique Chiock

Breathe California of Los Angeles County Written testimony: October 26, 2007

BCLAC2 Nicole Shahenian

Breathe California of Los Angeles County Oral testimony: December 6, 2007

CAL1 Robert Cross

CleanAir Logix Written testimony: December 3, 2007

CAL2 Eric Witten

CleanAir Logix Oral testimony: December 6, 2007

CAMP Scott Johns

Clean Air Marine Power Oral testimony: December 6, 2007

CCA Tim Carmichael

Coalition for Clean Air Oral testimony: December 6, 2007 CCP Rupal Patel

Communities for Clean Ports Oral testimony: December 6, 2007

CLB1 Bonnie Lowenthal

Vice Mayor City of Long Beach Written testimony: December 5, 200715

CLB2 Rhey Lee

Office of Vice Mayor Bonnie Lowenthal City of Long Beach Oral testimony: December 6, 2007 CLIA Terry Dale

Cruise Lines International Association Written testimony: December 4, 2007 CMTA Joseph Lyons

California Manufacturers and Technology Association AB 32 Implementation Group Oral testimony: December 6, 2007

CSB John Larson

City of Seal Beach Written testimony: November 5, 2007

DW Bob Hoffman

Dock Watts Oral testimony: December 6, 2007 EHC Joy Williams

Environmental Health Coalition Oral testimony: December 6, 2007

ENVORG1 Jane Williams

California Communities Against Toxics Angela Johnson Meszaros California Environmental Rights Alliance

Robina Suwal

California Safe Schools Jesse Marquez

Coalition for a Safe Environment

Joel Bush

Communities for Clean Ports Cynthia Babich

Del Amo Action Committee

Elina Green Long Beach Alliance for Children with Asthma Martha Dina Arguello Physicians for Social Responsibility

Shabaka Heru Society for Positive Action Written testimony: October 19, 2007

ENVORG2 Tom Plenys

Coalition for Clean Air Diane Bailey

Natural Resources Defense Council

Bonnie Holmes-Gen American Lung Association of California Jesse N. Marquez16 Coalition for a Safe Environment

Joel Bush

Communities for Clean Ports

Elina Green Long Beach Alliance for Children with Asthma

Tina Andolina Planning and Conservation League Bill Magavern

Sierra Club California

Don Anair

Union of Concerned Scientists Written testimony: October 4, 2007

ENVORG3 Candice Kim

Coalition for Clean Air Diane Bailey

Natural Resources Defense Council

Bonnie Holmes-Gen American Lung Association of California Jesse Marquez

Coalition for a Safe Environment

Joel Bush

Communities for Clean Ports Angelo Logan

East Yard Communities for Environmental Justice Joy Williams

Environmental Health Coalition

John Kaltenstein

Friends of the Earth

Elina Green Long Beach Alliance for Children with Asthma

Joel Ervice Regional Asthma Management and Prevention

Initiative Statewide Bill Magavern

Sierra Club California

Don Anair

Union of Concerned Scientists Written testimony: December 5, 2007 ERM Larry Hottenstein

ERM Written testimony: December 5, 2007

FOE1 Teri Shore

Friends of the Earth Written testimony: October 10, 200717

FOE2 John Kaltenstein

Friends of the Earth Oral testimony: December 6, 2007

GARDNER Valerie Gardner

Written testimony: December 3, 2007

IBEW Kevin Norton

International Brotherhood of Electrical Workers Oral testimony: December 6, 2007 LAPEER Georgianna La Peer

Written testimony: November 27, 2007 MAERSK Jim Flanagan

Maersk Inc. Oral testimony: December 6, 2007 NRDC Diane Bailey

Natural Resources Defense Council Oral testimony: December 6, 2007 OMCC Joseph Haraburda

Oakland Metropolitan Chamber of Commerce Written testimony: October 16, 2007

PERATA Senator Don Perata

California State Senate Written testimony: November 30, 2007

PGE1 Mark Krausse

Pacific Gas and Electric Company Written testimony: October 16, 2007 PGE2 Wendy Mitchen

Pacific Gas and Electric Company Oral testimony: December 6, 2007

PMSA1 John McLaurin

Pacific Merchant Shipping Association Written testimony: December 3, 2007

PMSA2 T.L. Garrett

Pacific Merchant Shipping Association Oral testimony: December 6, 2007 POAKLAND1 Omar Benjamin

Port of Oakland Written testimony: October 15, 2007

POAKLAND2 Matt Davis

Port of Oakland Oral testimony: December 6, 2007 POLA Ralph Appy

Port of Los Angeles Written testimony: December 6, 2007

POLB1 Thomas Jelenic

Port of Long Beach Oral testimony: December 6, 200718

POLB2 Robert Kanter

Port of Long Beach Written testimony: December 6, 2007 SCAQMD1 Barry Wallerstein

South Coast Air Quality Management District Written testimony: December 5, 2007 SCAQMD2 Henry Hogo

South Coast Air Quality Management District Oral and Written testimony: December 6, 2007

SES Seiichi Tsurumi

Sound Energy Solutions Written and Oral testimony: December 6, 2007 TILLMAN Cheryl Tillman

Written testimony: November 12, 2007

UCS Don Anair

Union of Concerned Scientists Oral testimony: December 6, 2007

WOEIP James Fine

Brian Beveridge West Oakland Environmental Indicators Project Written testimony: November 7, 200719

A. Support for the Regulation

1. Comment: In support of regulation as proposed. (CAL2, CLB 1, CLB2, CAMP, CSB, IBEW, PGE2)

Response: Duly noted and appreciated.

B. Legal Authority

2. Comment: The Board’s ability to regulate marine sources, d erived from Health & Safety Code Sections 43013, 43018, and 39666, exp licitly authorizes ARB to regulate marine sources only to the extent that it is not preempted by federal law. The regulation would require many vessels to retrof it or perform modifications to

conform to its standards or to conform to an Emissi on Reduction Option under this rule. The requirements for vessels to retrofi t or perform modifications to their ships and engines are beyond the authority of the S tate and are facially inconsistent with any assertion that this regulatio n presents a simple “in-use” regulation. Moreover, such retrofits and or modifi cations can affect the stability, structural integrity and general safety of the ship . Any imposed requirements or changes that can result in such impacts are the pur view of the U.S. Coast Guard and the classification societies as designated by a ship’s flag state. (PMSA1)

Response: ARB disagrees that the regulation would require ves sels to retrofit or perform modifications to their ships and engines. The regulation is not prescriptive. There are two compliance paths: the Reduced Onboard Power Option and the Equivalent Emissions Reduction Option. The first o ption requires the vessel operators to shut down their auxiliary engines while in port. Presumably, the vessels would have their electrical requirements met in some other man ner, such as utilizing shore-based power. The second option simply establishes emissi on-reduction goals. The regulation does not tell vessel operators how to meet these go als, nor does it tell operators what equipment they must use to meet these goals or how to operate such equipment. The regulation provides operators with flexibility to m eet these goals, permitting them to use any number of alternative emission control strategi es that they choose.

Furthermore, the regulation expressly states in (b) (2): “Nothing in this section shall be construed to amend, repeal, modify, or change in an y way any applicable U.S. Coast Guard requirements. Any person subject to this section shall be responsible for ensuring compliance with both U.S. Coast Guard regulations and the requirements of this section, including but not limited to, obta ining any necessary approvals, exemptions, or orders from the U.S. Coast Guard.”

As discussed in Chapter IV of the Technical Support Document, there are many vessels that already use shore power while docked, which me ans that the use of shore power as an emissions reduction option does not violate C oast Guard regulations. Moreover, vessel operators have flexibility to use alternativ e emission control strategies to achieve20

emission reductions. Thus, there is no reason to be lieve that a vessel operator will have difficulties in complying with both the regulation and existing Coast Guard regulations.

3. Comment: The retrofit requirements of the proposed regulat ion will be preempted under Section 209(e) of the Clean Air Act . Congress further added Paragraph (e)(2), which allows California to adopt standards and other requirements relating to the control of such engine s, other than those identified in subpart (1), upon receiving authorization of U.S. E PA. (PMSA1)

Response: ARB disagrees. While the U.S. EPA has determined t hat California engine retrofit requirements must receive U.S. EPA authori zation, this regulation does not require vessel operators to retrofit or modify mari ne engines.

Section 209(e) of the federal Clean Air Act (CAA) g enerally prevents states from adopting emission standards for new nonroad engines . Marine vessel engines are by definition considered nonroad engines. However, Se ction 209(e) does not prohibit states and their political subdivisions from regula ting the use of marine engines once placed into service. Such in-use requirements, whe ther adopted by a state or local government, including California or its political s ubdivisions, are not subject to potential federal preemption and therefore do not need U.S. E PA authorization to implement. Permissible in-use requirements include, but are no t limited to, hours of usage and daily mass emission limits. The limit to such in-use req uirements is that they can neither place additional requirements on the original engin e manufacturer nor require a retrofit of the engine.

Although some may interpret the regulation as impos ing in-use operational requirements, there is still no conflict with the U .S. EPA regulation governing engines used on ocean-going vessels. The U.S. EPA regulati on (40 CFR Part 94) applies only to new engines; regulates only NOx, particulate mat ter (PM), total hydrocarbons (THC), and carbon monoxide (CO); and is less stringent tha n the regulation for controlling NOx

and diesel PM. The federal regulation applies to manufacturers of new engines (i.e., generally, those for which equitable title h as not yet been transferred) and rebuilders of engines, whereas the regulation appli es to engines that are already installed on vessels that are operating in regulate d California waters. Thus, there is no conflict with the U.S. EPA regulation because compl iance with both the State regulation and the federal regulation is reasonably feasible.

Nevertheless, the CAA specifically allows Californi a to seek a waiver of potential preemption for its nonroad engine regulations, incl uding marine vessel engine regulations. To do so, California first adopts its regulations and then seeks authorization from U.S. EPA to enforce its regulati ons. ARB intends to seek a waiver from U.S. EPA for this regulation after it becomes effective.

4. Comment: During the adoption of EPA’s Nonroad Emission-Contr ol Program’s rulemaking regarding control of emissions from mari ne engines, U.S. EPA determined that marine emission control proposals “ should be considered in the21

broader context of EPA’s nonroad emission-control p rograms, international activities, including MARPOL Annex VI, our previous marine emission control program, European Union initiatives, and activities at the state level.” (Federal Register, Vol 67, No. 103 at pp. 37553.) The Air R esources Board should consider the adoption of their marine emission cont rol proposal in at least as broad of a rulemaking context as U.S. EPA in order to fairly evaluate their rulemaking using the proper totality of the record. (PMSA1)

Response: The Board adopted the regulation in a broad rulemaking context after staff developed the regulation in a transparent and publi c process. During the regulatory development process, ARB was aware of other related activities taking place on an international scale, including MARPOL Annex VI and efforts by the International Organization of Standardization (ISO) to develop a standardized shore-to-ship power
system.

The 1997 MARPOL standards were established by the I nternational Maritime Organization (IMO) at the International Convention on the Prevention of Pollution from Ships. The standards provide limits on NOx emissio ns from ships, depending on engine speed. The 2005 U.S. EPA category 3 standar ds are an implementation of international standards agreed to by 136 countries; the agreement is commonly known as MARPOL Annex VI. Ships built on or after 2000 a re required to emit approximately 6-12 percent less NOx, depending on engine speed. Although ARB was aware of these developments, their relevance to the regulation was minimal.

ARB believes that the international efforts to deve lop standardized connections for shore power are more relevant. Recognizing the imp ortance of standardizing shore power connection at ports throughout the world, the ISO formed a working group under its Technical Committee 8, Ships and Marine Technol ogy, to develop a standardized shore-to-ship power system. The Port of Los Angele s is a member of this working group. Subcommittees have been formed to explore a number of issues related to developing a shore-to-ship power standard, includin g power demand, voltage, reliability, power transfer, equipment location, power outlets, and cable management systems. The objective is to establish Publicly Available Sp ecifications (PAS), which will allow ports and carriers to refer to an official document that provides shore-to-ship power specifications.

ARB believes that the Board used the proper totalit y of the record when adopting the regulation.

C. Do Not Adopt Regulation

5. Comment: The Clean Air Action Plan adopted by the ports sho uld be allowed to proceed in a timely manner. Voluntary efforts will largely achieve the goals set in the Plan. ARB should step back from the proposed r egulation. (PMSA2)22

Response: The San Pedro Bay Ports Clean Air Action Plan (Pl an), adopted by the Ports of Los Angeles and Long Beach in November 200 6, addresses only those two ports. Furthermore, the emissions reductions estim ated in the Plan by FY 2010/2011 (4.1 tons per day [TPD] of NOx and 0.09 TPD of dies el PM) represent less than 25 percent of the total hotelling emissions in thes e ports. The ARB regulation to reduce hotelling emissions will achieve 75 percent emissio n reductions by 2020 at these two ports and four additional ports: San Diego, Oaklan d, San Francisco, and Hueneme. The Plan is a good start but is inadequate to prote ct public health in communities surrounding California’s major ports.

6. Comment: In lieu of adopting the regulation, PMSA recommen ds developing a memorandum of understanding (MOU) between the marin e industry and the Board. The MOU would be fully actionable and compr ehensive and consistent with Port plans, and would be developed such that e arly adopters are not punished, recognizes that some ships and marine ter minals will be better suited for shore side power in the short-term than others, and acknowledges the lack of an international standard. (PMSA1)

Response: ARB disagrees that an MOU would be as effective and health-protective as the adopted regulation. This regulation helps to a chieve several health-related goals of the Board, including reducing diesel PM, reducing e missions from goods-movement activities, achieving and maintaining ambient air q uality standards, and reducing Greenhouse Gas (GHG) emissions to help mitigate the effects of global climate change. These goals and the regulation’s ability to help fu lfill them are explained in Chapter I of the Technical Support Document (TSD). An MOU would not achieve all of the benefits of the regulation and would, therefore, be less eff ective.

D. Exemptions to Ports

7. Comment: I do not think it is wise to extend exemptions to a ny port users for any reason at the expense of our children and commu nities. These regulations need to reflect our determination to illuminate pro blems resulting from port pollution if not as an enforceable solution as a go al. (ANDERSON)

Response: ARB believes that some general and specific exempti ons to the regulation are needed. The regulation identifies general exem ptions to its requirements: (1) vessels in “innocent passage,” (2) vessels owne d or operated by local, State, federal or foreign governments in government non-commercial service, (3) steamships, (4) auxiliary engines using natural gas, and (5) ve ssels in fleets not meeting the de minimis vessel-visit criteria. Exemptions 1 - 4 ar e discussed in Chapter VI of the TSD. Exemption 5 exempts container-ship fleets making fe wer than 25 visits to a California port, refrigerated-cargo-ship fleets making fewer t han 25 visits to a port, and passengership fleets making fewer than five visits to a port from the requirements of the regulation. This exemption was originally included in a different section of the regulation but was moved to the general exemption section beca use it was a more logical location.23

The regulation also includes exemptions to specific provisions in the regulation so that vessels are not penalized for violations that are d ue to unforeseen events beyond the vessel’s control. These exemptions include visits experiencing an emergency event or a delay by a federal agency. The regulation requir es vessels complying with the Reduced Onboard Power Generation option to run thei r auxiliary engines no more than three to five hours while docked at a berth, depend ing on the type of power switching capability of the vessel. The regulation provides an exemption to the three- or five-hour operation limits for visits experiencing an emergen cy event or a delay by a federal agency as defined below:

a. An emergency event has been defined as those ti mes when the utility cannot provide power because of a transmission or distribu tion emergency, when the utility must reduce grid-based shore power to the p ort because of a natural disaster, or when the utility must reduce grid-base d power to the port in response to the California Independent System Opera tor or the Los Angeles Department of Water and Power declaring a Stage 3 e mergency or to avoid a Stage 3 emergency. These types of events are expec ted to occur infrequently.

b. A ship’s departure may be delayed due to obligat ions imposed by federal agencies such as the U.S. Coast Guard or some other branch of the Department of Homeland Security. As with emergency events, these types of delays are expected to occur infrequently.

ARB believes that these exemptions allow flexibilit y to address certain rare circumstances but are sufficiently limited so that the emissions occurring during the exempted events will be minimal.

E. Other Ship Categories

8. Comment: Tankers, bulk carriers, and tugs should not be ex empt from this

regulation. Tankers remain a major contributor to port emissions, accounting for roughly 20 percent of ship visits to California . Further, 45 percent of tanker visits are to Bay Area ports. Bulk carriers are also a significant contributor to hotelling emissions and are expected to be the second largest NOx contributor of the various vessel categories in 2010—second only to container ships. Finally, ARB has continued to del ay including shore power for tugs, first as part of the harbor craft regulat ion and now in the current form of this rule. ARB must step in to ensure these sou rces do not emit pollution while sitting idle for extended periods of time in California’s harbors. (ENVORG2)

9. Comment: Include tanker ships docking at refineries and ca r carrying ships. (WOEIP)24

10. Comment: In San Diego, the bulk ships are a large part of the current problem, and, in fact, comprise all the ships that berth in National City. Cement ships make relatively few calls but stay in port for seve n to ten days at a time. The port’s current maritime business plan identifies gr owth opportunities in bulk fruit, steel and other bulk cargo, so it seems probable th e source of emissions will increase. We urge the Board to address bulk carrie rs in the near future with a rule requiring shore power or equivalent reductions . (EHC)

11. Comment: Place high priority on the second phase of regula tion for tankers, vehicle carriers, tugboats, and cargo ships. (FOE2)

12. Comment: We are concerned that delaying rulemaking on tank ers, bulk ships, and vehicle carriers would delay achievement of the targeted SIP emission reductions and, therefore, urge the Board to place high priority on these vessel categories and proceed expeditiously with developin g and adopting this second phase of the regulation as early as possible in 200 8. (SCAQMD1)

13. Comment: The ISOR indicates that container ships, refriger ated-cargo ships, and passenger ships are the most attractive candida tes for cold-ironing because these ships spend a sufficient number of hours at b erth, and have an ample power demand while hotelled. However, the regulati on only applies to three types of ships and does not address the frequency o f ships based on stated criteria related to emissions. (PMSA1)

14. Comment: If a vessel meets criteria at any of California’s public ports or private marine terminals it is hard to understand why some vessels should be exempt based on the location of their port call versus oth ers who may meet fewer of the criteria calling at a listed port. (PMSA1)

Response: ARB initially intended to develop a regulation affe cting all six vessel categories; however, during the regulatory process, it became apparent that two distinct regulatory approaches were necessary to achieve emi ssion reductions from all of the vessel categories. ARB chose to first address cont ainer ships, passenger ships, and refrigerated-cargo ships—vessel categories that acc ount for more than 80 percent of the emissions from hotelling vessels and for whom s hore power is a cost-effective emissions reduction technique. These vessel catego ries are similar in that they have high power demands (4-15 MW) and that the vessels i n their fleets make frequent visits to the same ports on a regular basis. By addressin g these three vessel categories, the regulation specifically applies to the six ports at which these vessels regularly call.

In contrast, the other ship categories—vehicle carr iers, bulk and general-cargo ships, and tankers—typically have lower power demands (0.5 -1 MW) and have few vessels in their fleets that visit California ports regularly. To have kept all six vessel categories in one regulation would have created a more complex an d unwieldy regulation, significantly delaying its development and implemen tation (thus delaying emission benefits).25

ARB has now begun the regulatory process to develop a cost-effective regulation to reduce hotelling emissions from the other three ves sel categories. Since all California ports receive visits from ships in the remaining th ree categories, there will be more ports evaluated than the six identified in the regulation . Furthermore, ARB is also evaluating shore power for tug boats as part of this regulator y process. ARB expects to bring a regulation for the Board’s consideration to reduce at-berth ship emissions for the other ship categories in 2009.

F. Fleet De Minimis Visits Limits

15. Comment: This regulation in its current form exempts contain er fleets that visit a port less than 25 times per year and passenger ship s that visit less than five times per year. This could result in a significant loophole because polluting ships may not be required to comply. Requirement should apply to each vessel rather than to fleets so that cruise lines and shippers ca nnot create subsidiaries to evade public health compliance. (BCLAC2)

16. Comment: The regulation in its current form exempts contai ner fleets that visit a port less than 25 times per year and passenger ship s that visit less than five times per year. We are concerned that this may evo lve into a significant loophole and recommend that the requirement be expanded to i nclude a per vessel threshold of two visits on top of the fleet wide re quirements so that cruise lines and shippers cannot create subsidiaries to evade th e rule. (ENVORG3)

17. Comment: “Fleets,” for the purpose of this regulation, are s pecific to the port visited (Los Angeles and Long Beach are considered one port), not the shipping company and therefore could create a problem for th e smaller ports like Oakland. A shipping company could choose to visit Oakland le ss often, in order to be exempt from the regulation while visiting that port . Discourage gaming by changing the definition of “fleet” for purposes of exemption from this regulation, to be all ships in the company fleet visiting any Cali fornia port. (PGE1)

18. Comment: Suggest that for container ships, the 25 visits p er port be changed to 25 visits to California in a year. Do the same for passenger cruise ships and extend to all of California ports. (UCS)

19. Comment: Close loophole that exempts container fleets visiti ng less than 25 times and passenger ships that visit less than f ive times per year. We feel this threshold is too high and could potentially be gamed. Hoping that thoughtful consideration could be given to ratcheting that thr eshold down at the very least during final compliance in 2020. Our preferred thr eshold would be any more than two visits per year to any California port. (NRDC)

20. Comment: All visiting passenger ships should use shore pow er at berth. Container and reefer ships should also face a per v essel threshold of two visits26

on top of fleet requirements to inhibit companies f rom circumventing the rule. (FOE2)

21. Comment: This rule should require all cruise vessels visit ing California to use shore power while at berth. (BCLAC2, ENVORG3)

22. Comment: Strengthen the criteria for passenger ships. Str engthen the criteria that there should be a per ship rather than per vis it requirement. (ALA)

23. Comment: Add threshold for individual ships. (EHC)

24. Comment: If these exemptions are approved as is, ARB staff should monitor their use to ensure they are not abused. (FOE2)

25. Comment: ARB must evaluate annually that container ship vi sits for fleets falling below the 25 visits to a port de minimis li mit do not exceed three percent of all container ship visits to California. (ENVORG2)

26. Comment: In 2006, the Port of Oakland had approximately 1,90 0 unique ship calls, of which 93 percent were of fleets composed of 25 or more vessels. A very small fraction would not be subject to this rule. ( POAKLAND2)

Response: Staff proposed to exempt from the requirements of the regulation container-ship fleets making less than 25 visits to a California port, refrigerated-cargoship fleets making less than 25 visits to a port, a nd passenger-ship fleets making less than five visits to a port. At the Board hearing, the Board expressed its intent to modify these de minimis values to apply on a statewide bas is, not an individual port basis, but directed staff to determine if this proposed modifi cation would be cost effective.

ARB conducted an economic analysis of modifying the de minimis visit criteria to a statewide basis and determined the following:

• As adopted, the regulation captures 96 percent of the vessel visits for the three ship categories, and reduces NOx and PM emissions b y an estimated 75 percent

in 2020.

• If the regulation were modified using statewide de minimis visit criteria, less than one percent of vessel visits would be additionally affected, resulting in less than one percent additional NOx and PM reductions.

• The cost of capturing these additional vessels and visits would result in costeffectiveness values that would be up to 20 times h igher than the average values of the adopted regulation.

Based on the high cost-effectiveness values determi ned for those fleets that would be affected by a statewide de minimis visit criteria a nd the small amount of emission27

reductions that can be generated, ARB chose not to change the visit criteria to a

statewide basis. A detailed discussion of the anal ysis was included as Attachment III to the 15-day Package.

ARB believes that adding a two-visit threshold per ship to the fleet de minimis visit criteria or that the criteria be changed to apply t o individual ship visits instead of fleet visits would also result in high cost-effectiveness values with little additional emission

reduction benefits.

With respect to the passenger vessel visit comments requiring all passenger ships to connect to shore power when visiting a California p ort, nearly all of the passengervessel visits (95 percent) and the associated emiss ions have been captured in this regulation. There are companies whose visiting fle ets made fewer than three visits to a given port in 2006, many of them making only a sing le visit to California that whole year. Those visits are a small percentage of the total, a nd were not found to be cost-effective for this regulation.

With regard to the loophole and monitoring concerns of several commenters, ARB has addressed them in the regulation through the compli ance reports and collection of the ports’ wharfinger data. ARB is requiring that the shipping companies submit compliance statements and the ports submit wharfinger data ann ually to the ARB. ARB will be able to determine if fleets are modifying their operatio ns to stay below the 25-port-visit or five-port-visit de minimis criteria. ARB can also monitor if the 25-visits limit continues to capture the majority of the visits in the three shi p categories, as it does now. If, during the regulation’s implementation, ARB determines tha t vessel fleets appear to be circumventing the requirements of the regulation by manipulating their vessel visits to California ports, ARB will consider proposing to th e Board modifications to the regulation to prevent these practices in the future

.

27. Comment: The requirement of 25 visits per year needs to be detailed. Is this to any California port or 25 visits per port? Twenty- five visits is too many, as it suggests, depending on interpretation, that a ship may visit the Port of Oakland nearly every other week without being required to a dopt shore power. These “de minimis” levels are loopholes that should be elimin ated from the rule. (WOEIP)

Response: The 25-visit limit applies to an entire fleet that visits a single port, not to an individual ship. The majority of vessels calling o n the Port of Oakland are part of fleets that exceed the 25-ship-visits limits. Please see previous response for discussion about

de minimis criteria.

G. Compliance Schedules

Note: Because staff received a multitude of comments on i ts originally proposed compliance schedules—and subsequently modified the schedules before the Board hearing—staff has listed all of these related comme nts together before responding to them. To do otherwise would create significant red undancy in the responses.28

Additional responses to specific comments are provi ded after the general discussion of the compliance schedules.

Accelerate Schedules

28. Comment: Why wait another seven to ten years to fix a prob lem when we have the resources and technology to help it now. (ALLEN )

29. Comment: Significant emissions reductions are possible now with alternative technologies that will result in air quality relief today and not seven years from now. (CCP)

30. Comment: The proposed regulation allows industry to postpo ne emission reductions until 2014 when utility-based grid power is available. (AZA, TILLMAN)

31. Comment: The regulation should encourage early action by p orts, shipping companies and technology providers as soon as possi ble, rather than waiting for the state mandate to go into effect in 2014. Early emission reductions are perhaps the most important emission reductions give n the extremely high levels of emission from ships in ports. (FOE1)

32. Comment: Phase in early compliance instead of deferring al l compliance until 2014. (BCLAC2)

33. Comment: Accelerate compliance timeframe. (ALA, SES, CCA, UCS)

34. Comment: Timeline is too slow and too lax. The timeline re quires no dockside emission reductions until 2014 in spite of the fact that technologies for immediate reductions are available and financially feasible. (WOEIP)

35. Comment: The compliance schedule for grid-power systems is too relaxed. (BAAQMD1)

36. Comment: The 2010 and an interim 2012 deadline will send a clear signal to ports, terminal operators, and shipping lines to sh ift toward shore power quickly and incrementally. (BCLAC2, ENVORG2, ENVORG3)

37. Comment: Implementation of the San Pedro Port’s Clean Air Action Plan will be hastened and more certain if ARB requires these mor e immediate, short-term reductions. (ENVORG2, ENVORG3)

38. Comment: Need interim targets for grid-based power option because of long lead time for shore power and should make these the same as non-grid-based alternatives. (SCAQMD2)29

39. Comment: In ARB’s March 2006 report, Evaluation of Cold Ironing Ocean Going Vessels at California Ports , ARB found that 20 percent of ship calls utilizing cold-ironing by 2010 is both technologica lly feasible and cost effective. (CCP, ENVORG1)

40. Comment: ARB’s Goods Movement Emission Reduction Plan (GME RP) committed to a shore power strategy that would requ ire at least 20 percent of ship visits to use shore power by 2010. ARB must i ncorporate this specific provision into the regulation. (ENVORG2, ENVORG3).

41. Comment: ARB should set aggressive short-term and interim deadlines beginning in 2010 and 2012 to meet goals set in the GMERP. (ENVORG1, FOE1)

42. Comment: Early emission reduction target of 2010 will assi st GMERP goal of 20 percent of ship visits using shore power by 2010 . (FOE2, ALA, BCLAC2)

43. Comment: CARB may not meet its diesel risk reduction plan’ s (DRRP) 2010 target of 75 percent reduction of health risk from diesel PM unless regulations such as this one accelerate compliance. (BCLAC2).

44. Comment: ARB’s DRRP commits to reducing the risk from dies el pollution by 75 percent by 2010 but we are concerned that ARB is not on track to meet this target. Every regulation ARB is considering must b e in line with the significant reductions that must happen by this date. (ENVORG2, ENVORG3)

Do Not Accelerate Schedules

45. Comment: The proposal to accelerate the proposed schedule is unrealistic due to: 1) the schedule for providing grid-based power; and 2) the viability of alternatives. (POLB1, POLB2)

46. Comment: POLB is working with Southern California Edison to accomplish the required capacity enhancements as well as ensure th at service to each terminal

is enhanced to accommodate additional loads. Const ruction of the necessary improvements could extend well beyond the CARB’s co ld ironing implementation date in 2014, and given the phased nature of the wo rk, we have limited ability to move up completion of the initial work. Concerned about the impact the retrofitting of existing terminals will have on ten ants and cargo moving activities. For example, large segments of an operating termina l must be disrupted to install underground conduits, ship berths must be taken off -line for days or weeks to install outlets and system-wide outages will be req uired to upgrade the terminal electrical system. All these elements can combine to delay cargo operations and can have unintended consequences to the economy—bac king up ships, delaying cargo handling, as well as train and truck traffic congestion. We must carefully plan how multiple concurrent retrofit projects can take place while minimizing the30

delay in cargo movement. We do not believe acceler ation of the implementation schedule could be achieved. (POLB1, POLB2)

Make the Schedules More Similar or Technology-Neut ral

47. Comment: Harmonize compliance time for all energy sources. (EHC)

48. Comment: Establish equal timelines based on emission reduc tions regardless of the technology. (AZA)

49. Comment: Grid-based shore power must comply with the same timeline as alternative technologies. (ENVORG1)

50. Comment: Modify the rule to “level the playing field” in t erms of compliance timelines for grid-based and alternative shore powe r technologies. (WOEIP)

51. Comment: The regulation should have a single, technology-n eutral compliance path. (BAAQMD2)

52 Comment: Support uniform timeline for compliance, but ask r egulation’s pace be set by the most aggressive technology that’s ava ilable now. (CCP)

53. Comment: It is unfortunate that the current regulation con tains differing compliance schedules depending on which method is s elected. Port authorities, terminal operators, and vessel owners will be hinde red in their planning and decision-making by the lack of a single compliance schedule for all potential solutions. This proposal may have the effect of de laying any implementation at all until the latest possible date which would post pone the emission reductions benefits that can be implemented in the near term i f a common compliance date was available. (POAKLAND1)

54. Comment: Create a level playing field by requiring all shi ps reduce auxiliary engine emissions 20 percent by 2010. (PGE1)

55. Comment: The regulation should include a single compliance schedule of 20 percent of ship visits to California ports use s hore power by January 1, 2010, 40 percent by January 1, 2012, 60 percent by Januar y 1, 2014, and 80 percent by January 1, 2016. (BCLAC1, BCLAC2, BAAQMD1, ENVOR G2, ENVORG3, CCP, FOE1)

56. Comment: Shipping fleets should be allowed to comply with the mix of technologies that best suits their operational need s. (BAAQMD1)

57. Comment : The regulation should address only emission redu ctions and be technology-neutral. Flexibility in the regulation will allow the Port of Oakland and31

its partners to continue to develop and refine alte rnative emissions reduction technologies. (OMCC)

58. Comment: Supports technology-neutral standards. (UCS)

59. Comment: The regulation should ultimately level the playing field between all emission reductions technologies, whether they are electrification by utility or non-utility generation or a new advancement in alte rnative control technology. (FOE1)

60. Comment: Level the playing field for all technologies to b e implemented. (AZA, MAERSK)

61. Comment: Requesting that ARB set the standards along with timeframes to meet those standards and then basically stand back and allow industry to seek out the technology that will result in the required emissions reductions. (MAERSK)

62. Comment: Let the stakeholders decide what to do as long as they achieve the desired emission reductions. (DW)

63. Comment: Technical neutrality. The current language contai ns a single presumptive solution which is grid power, with a gl ancing nod to the possibility of one or two tentative options. (CAL1)

64. Comment: Allow a certain amount of flexibility for busines ses to comply with requirements. (CMTA)

65. Comment: Regulation should be flexible by not requiring ho w the emission reductions are achieved. If a requirement is 50 pe rcent in 2014, for example, there should not be a prescription requiring half t he ship visits to shut off their engines completely. It should be open to, for exam ple, shutting off 50 percent of the engines all the time or some combination that a chieves the desired results. (PGE1)

66. Comment: Include a common implementation date for all alte rnative solutions. Staggering the implementation dates will create a r ecipe for confusion for carriers/operators as they try to quantify what the cost/benefit ratios are among the alternative options. Carriers/operators will ta ke a “wait and see” approach. Staggering will retard technological growth. Certai n solutions will have advantages while others are disadvantaged. Stagger ing will result in increases in emissions as cargo volume and ship visits increa se during the intervening years. (CAL1)

67. Comment: Compliance standards within the proposed regulati on serve to thwart new technological solutions that are available toda y. This is because the32

regulation is based on a presumptive solution, whic h is port electrification. (LAPEER)

68. Comment: The regulation may create a multi-tiered playing field, favoring one emission reduction technology over another. The re gulation dramatically favors a solution only realized years into the future whil e discouraging presently available new technologies. (FOE1)

69. Comment: The standards and timelines issued under this rul e will negatively impact existing and ongoing innovation and impair i nvestment in alternative technologies. This rule also has the potential to penalize and discourage those who would otherwise work to develop and adopt alter native technologies sooner than 2014. The rule should not punish those who le ad the industry as early adopters of new and innovative technologies, but sh ould seek ways to compliment their efforts. (PMSA1)

70. Comment: The proposal has a different schedule and a diffe rent emission standard depending on which technology is used to d eliver power to vessels. This approach would favor the use of grid power ove r that from alternative technologies at the expense of earlier emission red uctions and irrespective of which source of power is the cleanest. The regulat ion provides no quantifiable incentive for ports or marine terminal operator to take aggressive steps to

achieve emission reductions sooner than 2014. Cons equently, the approach could impede the more rapid deployment of alternati ve technologies capable of producing quantifiable emission reductions as soon as 2010. (PERATA)

71. Comment: Concerned that alternative technology which would secure early and critical emission reductions from shore power are i n effect being penalized. As written, the timelines and percentages for complian ce are set differently for gridbased shore power; non-grid-based shore power and a lternative control technologies; and hybrid combinations of electricit y from grid, non-grid and alternative control technologies. The slowest and most relaxed schedule for compliance is placed on grid-based shore power whic h will create conditions for industry to choose the slowest and most relaxed com pliance. There is a possibility for industry to, as the grid-based dead line approaches, argue for delaying compliance on the grounds that it is not r eachable. (ENVORG1)

72. Comment: The regulation has different requirements includi ng different compliance dates for those choosing grid power and those choosing an alternative such as the Wittmar system. The regula tion disadvantages ports like Oakland that are in position to reduce emissions so oner. For example, under the current draft, if a port wants to use grid power, i t is required to reduce emissions 50 percent by 2014. If a port chooses an alternati ve it is required to reduce emissions by 20 percent in 2010 and by 2014 it woul d be required to reduce emissions by 60 percent. This arrangement discoura ges and penalizes early action. (PGE1)33

73. Comment: The rule penalizes alternative compliance technol ogies by requiring adherence to a more stringent implementation schedu le compared with gridbased power. Requirements should favor near-term, low-cost solutions that provide immediate emission reductions with bridge t echnologies until the grid or zero-emissions distributed generation technologies are available at cost-effective prices. (WOEIP)

Make the Schedules More Aggressive

74. Comment: The Ports of Los Angeles and Long Beach are well underway in implementing the San Pedro Ports Clean Air Action P lan shore power measure. The Ports envision that grid-based electric power t o be their primary technology. Alternative technologies such as distributed genera tion would provide significant emission reductions as the grid-based infrastructur e is constructed and the proposed changes would ensure the emission reductio ns are realized as early as possible. (SCAQMD1)

75. Comment: We recognize that there may be additional costs a ssociated with the more aggressive compliance schedule that we recomme nded which had a 2010 compliance date for both options. However, we beli eve that vessel operators can take a longer lead time technology path such as gri d-based shore power for the longer term compliance targets and in the interim d eploy more near-term solutions without incurring substantial economic im pacts. (SCAQMD1)

76. Comment: We evaluated the capital and operating costs of s everal alternative solutions for a typical terminal with specified num ber of calls and vessels and assuming 20 percent compliance in 2010:

o Grid-power = $2.30 per TEU

o Fuel cell = $3.40 per TEU

o Purchase of LNG-power dockside generator with SCR = $0.80 per TEU

o Rental of generator assuming $1000/hr usage fee = $3.50 per TEU

Based on the analysis, the additional cost of compl iance can be easily borne by the vessel operators (and the Ports of Los Angeles and Long Beach covering the cost of shore-side grid power) who would be able to recoup the cost to implement one or a combination of the technologies through a modest increase in per TEU charge. (SCAQMD1, SCAQMD2)

77. Comment : The regulation should require, regardless of tec hnology, that 30 percent of all ship visits to CA ports use shore power by 2010, 60 percent by 2012, 80 percent by 2014, and 100 percent by 2016. (ENVORG1)

78. Comment : Raise the 50 percent compliance requirement for 2020 to 90 percent. (WOEIP)34

79. Comment: Recommend the following revised compliance schedu le:

Date Reduced Onboard

Power Option (Grid) Equivalent Emission Reduction Option 1

January 1, 2010 20% visits and power

demand 1,2 20% reduction

January 1, 2012 40% visits and power

demand 1,2 40% reduction

January 1, 2014 60% visits and power demand 1 60% reduction

January 1, 2017 70% visits and power demand 1 70% reduction

January 1, 2020 80% visits and power demand 1 80% reduction

1. In addition, all ships must use shore power if available. 2. Equivalency may be demonstrated on a port-wide basis based upon a submittal by the Port Authority.

An equivalency demonstration on a port-wide basis s hould be allowed for the 2010 and 2012 requirements under the Reduced Onboar d Power Option in recognition of the lead time needed to construct th e infrastructure at individual terminals. The Port Authority would submit the equ ivalency demonstration. The proposed regulation is on a vessel operator basis a t this time so on average, it should come out to be the same port-wide. (SCAQMD1, SQAMD2)

80. Comment: We believe our recommended schedules are feasible given the current state of existing and developing technologi es. San Pedro Ports Clean Air Action Plan calls for significant use of grid-suppl ied shore power to reduce hotelling emissions which will result in about a 20 percent reduction in NOx emissions by the 2010/2011 timeframe. Other contro l technologies, such as DG and after treatment systems, offer alternative mean s of compliance for fleets. Use of shore-side after-treatment systems is also b eing demonstrated at the Port of Long Beach this year which is potentially capabl e of achieving over 90 percent

reductions in NOx and PM emissions. SCR has also b een successfully installed and tested on an auxiliary engine onboard a contain er vessel achieving 90 percent reduction in NOx. (SCAQMD1)

81. Comment: Add an exemption in section (e) for vessel operat ors complying with sections (d)(2)(A)(1) and (d)(2)(A)(2), if the oper ator can demonstrate, prior to 2014, that meeting the emission reduction targets i s not feasible due to physical limitations, safety, or other reasons. The operato r must demonstrate that the only choice is grid-based power and show progress t o developing the necessary infrastructure to meet the emission reduction targe ts of sections (d)(2)(A)(3) and (d)(2)(A)(4). (SCAQMD1, SCAQMD2)35

82. Comment: We recommend the following changes to the regulat ory language (SCAQMD1):

1. Change Table under section (g)(1) to have subseq uent terminal plan updates beginning in 2011 under the Grid-Based Shor e Power option. 2. Change subparagraphs (h)(1)(A) and (h)(2)(A) so that all vessel fleet plans be submitted no later than July 1, 2009, rega rdless of compliance approach. 3. Specifically, revise Table 3 under section (h)(2 )(A) to reflect submittal of initial vessel plans by July 1, 2009, with subseque nt submittals every two years to 2019.

Supports the Revised Compliance Options

83. Comment: We support the staff-proposed changes that will c reate level playing field for alternative measures, such as DG systems, so they can continue to emerge and mature and serve as long-term options fo r ports like Oakland that might not be able to deliver a cost-effective grid power option. (POAKLAND2)

Do Not Support the Revised Compliance Options

84. Comment: The NOx emission reductions for the current propo sal compared to the emission reductions under Section (d)(2)(B) of the October 2007 release are 1.6 tons per day (TPD) less in 2010, 2.6 TPD less i n 2012, and 1.9 TPD less in 2014. South Coast needs those reductions. (SCAQMD1 , SCAQMD2).

Response to All Compliance Schedule Comments: ARB received more comments about the originally proposed compliance schedules than any other component of the proposed regulation. Taking into account all of th ese comments, ARB revised the proposed regulation significantly before taking it to the Board for consideration of approval in December 2007. Below is a thorough dis cussion of the compliance schedules, both those originally proposed in Append ix A to the Staff Report and those ultimately adopted by the Board. ARB agrees that e mission reduction benefits must be realized as early as possible and that no particula r technology should be given preference over another to achieve these emission r eductions.

Original Proposal

The original proposal included four compliance sche dules—one for the grid power option and three for the emission reduction option. The table below depicts these originally recommended options:36 Date Limited Engine

Operation (Grid) Reduced

Emission Operation (Grid) Reduced

Emission Operation (Non-Grid) Reduced

Emission Operation (Both)

January 1, 2010 - - 20% of

emissions

January 1, 2012 - - 40% of

emissions 20% of

emissions

January 1, 2014 50% of visits 50% of emissions 60% of

emissions 50% of

emissions

January 1, 2016 - - 80% of

emissions -

January 1, 2020 80% of visits 80% of emissions - 80% of

emissions

The overall intent of these original schedules was to recognize that grid-based shore power would take time to implement because of the s ignificant infrastructure requirements associated with it, while alternative technologies could be deployed within

a shorter timeframe.

Although one of the goals in the Goods Movement Emi ssion Reduction Plan (GMERP) was to require 20 percent of the ship visits to Cal ifornia’s ports to use shore power by 2010, ARB did not propose a 2010 compliance require ment for grid-based shore power. Grid-based shore power implementation will require extensive modification to port and

terminal electrical infrastructures. In some cases , a significant upgrade to the utility grid is needed to bring the additional electrical power to the port. Such modifications are likely to require environmental review, permits, an d complex construction—construction activity that needs to be coordinated with an opera ting terminal—which is likely to take up to five years to complete. The proposed regulat ion’s initial milestone of 2014 for shore power allows for five years for initial imple mentation.

Nevertheless, earlier reductions will occur from sh ore power projects already planned at some California ports. Emissions reductions from v essels using shore power at Long Beach and Los Angeles will occur well before 2 014 because of commitments made in the Clean Air Action Plan. If the plan is fully implemented, ARB anticipates reductions of 1,300 tons of NOx emissions and 37 to ns of PM emissions by 2011, which represents a reduction in emissions of 15 percent f or NOx and 20 percent for PM of emissions in 2011 at the ports. The ports are cont inuing to update the Clean Air Action Plan, and it is likely both ports will identify add itional reductions for shore power prior to 2014. In addition, to satisfy the 2014 milestone, ARB anticipates that emission reductions as a result of the regulation will begin in 2011 and significant reductions will

occur in 2012 and 2013.

The regulation requires that 50 percent of the vess el visits connect to shore power in 2014 as opposed to the GMERP’s strategy for a shore power that requires 60 percent of the vessel visits use shore power by 2015. ARB pro posed a compliance date one year

earlier to allow the NOx emission reductions from t he proposed regulation to be used to37

satisfy the South Coast air basin SIP for attaining the PM 2.5 ambient air quality standard. By moving the date up one year, ARB proportionally reduced the percentage of vessel visits from 60 percent to 50 percent. In 2020, the regulation satisfies the GMERP goal of 80 percent shore power (or equivalent).

The originally proposed “non-grid” schedule assumed that alternative technologies could be deployed more rapidly. These technologies include distributed generation; emission controls installed on the ships (e.g., par ticulate control traps, selective catalytic reduction units, alternative fuels); or emission co ntrols installed at the wharf (e.g., a “bonnet” capture-and-treat technology). ARB had pr oposed an aggressive schedule of 20, 40, 60, 80 percent emission reductions by 2010, 2012, 2014, and 2016, respectively.

Revised Compliance Schedules

As mentioned above, ARB considered the comments rec eived about the original compliance schedules and revised the schedules befo re taking the proposed regulation to the Board in December 2007. The compliance sche dules in the regulation, as adopted by the Board in December 2007 are as follow s:

Date Reduced Onboard

Power Option (Grid) Equivalent

Emissions Reduction Option

January 1, 2010 Ships must use

shore power if

available 10% reduction

January 1, 2012 Ships must use

shore power if

available 25% reduction

January 1, 2014 50% visits and

power demand 50% reduction

January 1, 2017 70% visits and

power demand 70% reduction

January 1, 2020 80% visits and

power demand 80% reduction

For the grid-based shore power compliance path, now called the “Reduced Onboard Power Option,” ARB proposed to keep the targets of 50 percent and 80 percent of visits using shore power for 2014 and 2020, respectively, but also to require a similar percentage of onboard electricity generation to be reduced. Onboard electricity generation is directly related to emissions; theref ore, it is a better measure of emissions

reduction than visits alone. To assure a reasonabl e rate of progress between 2014 and 2020, ARB proposed an interim 2017 milestone of 70 percent of fleet visits using shore power while reducing onboard electricity generation by 70 percent. ARB also emphasized that ships with the capability of using shore power must use shore power38

when visiting a berth that was capable of providing the power in a technically compatible manner, although that requirement was in the origin al proposal.

In adopting the regulation, the Board concurred wit h staff that 2014 was a reasonable initial requirement for grid-based shore power beca use of the extensive capital improvements required at the 31 affected terminals at six California ports, as well as the

hundreds of vessels that must be retrofitted to acc ept shore power.

ARB reduced the other three originally proposed com pliance options to a single option called the “Equivalent Emissions Reduction Option.” Furthermore, ARB aligned the requirements of this option more closely with the R educed Onboard Power Option, thereby reducing any unintentional weighting of one option over the other, as some commenters had asserted with the original proposal. As with the Reduced Onboard Power Option, the regulation now has an interim 201 7 target. Finally, to further balance the two options, the regulation provides an incenti ve with the Equivalent Emissions Reduction option for early or additional emissions reductions. Please see the response to Comments 86-98 for a description of this incenti ve program.

The Equivalent Emissions Reduction Option allows an y technology to be used to reach the emission reduction targets, including shore pow er. This option is entirely technology

neutral.

In response to Comments 28-44 regarding acceleratin g the compliance schedule for grid-based shore power, ARB maintains that 2014 is a reasonable initial target to allow all 31 affected terminals to design the shore power infrastructure, receive CEQA approval, build the infrastructure while the termin als are still fully active, and work with the local electrical utilities to provide sufficien t power to the terminals.

More specific to Comments 39-42, ARB disagrees that the ARB’s March 2006 draft
report, Evaluation of Cold Ironing Ocean Going Vessels at C alifornia Ports (Evaluation Report), found that 20 percent of ship calls utiliz ing cold-ironing by 2010 is both technologically feasible and cost effective. The p urpose of the draft Evaluation Report was to determine if cold-ironing was feasible at Ca lifornia ports and to determine which ocean-going ship categories were the most attractiv e candidates for using shore power as a means of reducing at-berth or hotelling emissi ons. The draft Evaluation Report concluded that cold-ironing is feasible at Californ ia ports (at the time the report was released, shore power was already being installed a t the Ports of Los Angeles and Long Beach). It also concluded that the most attractive vessel candidates for shore power, based on cost-effectiveness analyses that were perf ormed on each ship category, are passenger ships, container ships, and refrigerated cargo ships

 ships that make frequent visits to a California port, spend a suffi cient number of hours at berth, and have an ample power demand while hotelling. The draft r eport was intended as a prelude to ARB’s development of this regulation and did not in clude recommended dates for cold-ironing ships in California. These dates were to be determined later as ARB developed this regulation.39

The draft Evaluation Report did illustrate the pote ntial emission benefits from cold-ironing ocean-going ships for 2010, 2015, and 2020, which are the target dates

included in ARB’s Goods Movement Emission Reduction Plan (GMERP, 2006). The GMERP identifies numerous strategies for reducing e missions from all significant emission sources involved in goods movement in Cali fornia, including ocean-going vessels. For controlling hotelling emissions, the GMERP established a goal of utilizing shore power for 20 percent of the ship visits to Ca lifornia ports by 2010, 60 percent of visits by 2015, and 80 percent of visits by 2020. However, as mentioned earlier, ARB determined that it would be unrealistic to require all terminals to have grid-based shore power available by 2010 because of the lead time re quired to install the equipment. Consequently, ARB did not include a shore-power vis it requirement for 2010 or 2012.

Regarding Comments 43 and 44, the Board approved th e Risk Reduction Plan to

Reduce Particulate Matter Emissions from Diesel-Fue led Engines and Vehicles (Diesel RRP) in 2000. The Diesel RRP presented inf ormation on the available options for reducing diesel PM and recommended regulations to achieve these reductions. The Diesel RRP’s scope was broad, addressing all catego ries of mobile and stationary engines. It included control measures for all off- road diesel sources, such as those covered by this regulation. The goals of the Diese l RRP are to reduce California’s diesel PM emissions and associated cancer risks by 75 percent by 2015, and 85 percent by 2020 from the 2000 levels. ARB maint ains that the regulation adopted by the Board in December 2007 will help meet the goals of the Diesel RRP.

ARB agrees with Comments 45 and 46 that an accelera ted shore-power schedule is

infeasible.

In response to Comments 47-66, ARB believes that by reducing the compliance options from four to two and more closely aligning those op tions to each other, any perceived or unintentional preference within the regulation for one technology over any other has been eliminated, especially with additional incenti ves for early emission reductions in the Equivalent Emission Reduction option.

Although the two compliance options are now similar and balanced, ARB believes it is unrealistic to merge the two options into one, tech nology-neutral schedule, as requested by several of the commenters. ARB maintains that a lternative technologies can be deployed earlier than 2014 since the considerable i nfrastructure requirements of gridbased shore power are not applicable (although shor e power can be used for this compliance option); therefore, some earlier complia nce targets are appropriate for the Equivalent Emissions Reduction option. Regarding t he Equivalent Emissions Reduction option itself, it is

technology neutral: any technology capable of mee ting the emission reduction targets is allowable.

Comments 67-72 state that the regulation discourage s alternative technologies because of the inequity of the originally proposed complian ce schedules. ARB believes that it has addressed these concerns by modifying the compl iance options into two, more similar paths, providing additional early-emission credits for the technology-neutral40

Equivalent Emissions Reduction option. Furthermore , the 2010 and 2012 emissionreduction targets of 10 percent and 25 percent, res pectively, are more modest than the originally proposed 20 percent and 40 percent. ARB recognizes that there are only a couple of shore-side alternative technologies that may be available by 2010 to reduce at-berth emissions: non grid-based shore power sys tems such as the Wittmar liquid natural gas engine system, and after-treatment syst ems such as the Advanced Maritime Emissions Control System being developed b y Advanced Cleanup Technologies, Inc. Both of these technologies are at the “proof of concept” stage and will take some time to be fully demonstrated, comme rcialized, and deployed at the ports. Ship-side alternative controls such as Sele ctive Catalytic Reduction (SCR) may also be available by 2010, but these too are at the demonstration stage. Therefore,

ARB believes that the 2010 and 2012 emission-reduct ion targets in the regulation, although less stringent than those originally propo sed, are more realistic and appropriate.

Comments 73-76 and 80 mention using available techn ologies as “bridge” technologies, achieving emission reductions early while grid-base d shore power can be installed. When developing the regulation, ARB concluded that by requiring alternative technologies for shorter-term emission reductions w hile waiting for shore-power infrastructure to be installed for the long term es sentially doubled the cost of the regulation.

For example, ARB estimated it would cost $125 milli on to install shore power infrastructure at the Ports of Long Beach and Los A ngeles in order for terminals to satisfy their fleet’s 2014 shore-power visits requi rements. If these fleets were also required to comply with a 20 percent emission reduc tion by 2010 and 40 percent reduction by 2014, ARB estimates that the cost to c omply with these reductions using distributed generation would be another $150 millio n, assuming $1,000 per operating

hour.

Specific to Comment 76, the commenter did not provi de the basis for the cost-per-TEU figures presented, so ARB cannot replicate those es timates. Nevertheless, ARB disagrees that the technologies recommended for dep loyment by 2010 are fully developed or commercially available. For example, grid power at all of the 31 affected terminals will not be in place by 2010; fuel cells capable of supplying adequate power to a vessel (for example, one megawatt to five megawat ts for container ships) require many hours to start-up and shut down, and they have a large footprint, thereby making them poor candidates for shore power; and the porta ble generator mentioned is only in the “proof of concept” stage—this equipment could n ot be deployed by 2010 on the scale that the commenter has suggested.

For the reasons enumerated above, ARB believes that a more aggressive emissions reduction schedule, as suggested in Comments 77-79 is unrealistic. In response to Comment 78, ARB is requiring an 80 percent reductio n by 2020, not 50 percent

reduction.41

Comments 80 and 81 suggest that alternative technol ogies are available for immediate deployment. ARB believes that these technologies a re promising; however, the technologies to which the commenter referred are st ill in a “proof of concept” stage. These technologies have not been deployed to date, nor are they commercially available yet. A wide deployment by 2010 is unreal istic.

Comment 82 requests specific text changes to the re gulation. The first two proposed revisions are based on the commenter’s request to h ave grid-based shore power requirements beginning in 2010. Since there are no such requirements in the regulation, these revisions are unnecessary. ARB r evised the regulation to address the third proposed revision: Whereas the commenter wan ted biennial submissions of vessel plans starting on July 1, 2009, the regulati on now requires submittal of these plans, including updates, by July 1 of 2009, 2011, 2013, 2016, and 2019.

H. Early Reductions and Extra Time

85. Comment: Shipping lines that achieve early emission reduct ions by any acceptable method should receive additional time in reaching the end goal of the regulation. (BAAQMD1)

Response: ARB disagrees. We feel that the most important goa l of this regulation is to meet the 50 percent emission reductions by 2014 and ultimately the 80 percent emission reductions by 2020. The regulation to red uce emissions from hotelling vessels in California’s ports will help meet several health -related goals of the Board, including reducing diesel PM, reducing emissions from goods-m ovement activities, achieving and maintaining ambient air quality standards, and redu cing GHG emissions to help mitigate the effects of global warming.

Over the last several years alone, federal and Stat e agencies have adopted plans to reduce emissions and associated health risks as qui ckly as possible in the Federal Clean Air Act, the Diesel Risk Reduction Plan, and the Emission Reduction Plan for the

Ports and Goods Movement in California.

The federal Clean Air Act (CAA) requires the United States Environmental Protection Agency (U.S. EPA) to establish National Ambient Air Quality Standards (national standards) for pollutants considered harmful to pub lic health, including fine particulate matter (PM 2.5 ) and ozone. Set to protect public health, the nat ional standards are adopted based on a review of health studies by expe rts and a public process. The South Coast Air Basin (Air Basin), which is home to the two largest ports in California, the Ports of Los Angeles and Long Beach, exceeds th e national standards for both

ozone and PM 2.5 . Consequently, a State Implementation Plan (SIP) is required for the Air Basin that outlines how and when the region wil l attain the national standards.

Although ARB originally considered a draft proposal with an early credit mechanism, it was ultimately decided that such an approach was no t appropriate. The U.S. EPA requires the Air Basin to meet the PM 2.5 standards by 2015, but the emission reductions42

must be in place by 2014. The emission reductions achieved by the regulation will play an essential role in assisting the South Coast Air Basin with meeting its 2014 PM 2.5 deadline as well as its future ozone deadlines.

SIP requirements are not the only timely commitment s for reducing emissions as quickly as possible. In 2000, the Diesel Risk Reduction Pl an to Reduce Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles ( Diesel RRP) was developed by the ARB which presented information on the availabl e options for reducing diesel PM and recommended regulations to achieve these reduct ions. The Diesel RRP’s scope was broad, addressing all categories of mobile and stationary engines. It included control measures for all off-road diesel sources, s uch as those covered by the regulation. The ultimate goal of the Diesel RR is an 85 percent reduction from 2000 levels, in California’s diesel PM emissions and ass ociated cancer risks by 2020. The regulation will reduce diesel PM emissions and the local health impacts from ships docked in California’s ports and will assist the Bo ard with meeting the 2020 Diesel RRP goal.

In April 2006, the Board approved the Emission Reduction Plan for the Ports and Goods

Movement in California (GMERP). The GMERP identifies strategies for reduc ing emissions created from the movement of goods throug h California ports and into other regions of the State. The GMERP is part of the bro ader Goods Movement Action Plan (GMAP) being jointly carried out by the California Environmental Protection Agency and the Business, Transportation, and Housing Agency.

The GMERP identifies numerous strategies for reduci ng emissions from all significant emission sources involved in goods movement, includ ing ocean-going vessels, harbor craft, cargo handling equipment, locomotives, and t rucks. Specific to hotelling emissions, the GMERP established a goal of utilizin g shore power for 20 percent of the ship visits to California ports by 2010, 60 percent of visits by 2015, and 80 percent of visits by 2020. While the regulation would represe nt a significant move toward satisfying the GMERP goals by requiring specific ve ssel types to shut down their engines while docked, the final requirements of the regulation are consistent with the emission reduction goals in the GMERP.

ARB recognizes that incentives for early emission r eductions are necessary and have included criteria for accumulating and using fleet emission credits in the final regulation under the equivalent emissions reduction option. Additionally, there are other government programs that can provide financial assi stance as incentives for early reductions. See the response to Comments 86-98 for a discussion of early action credits and government funding. There are several incentive program options available to help California reach its goals for cleaner air.

I. Emission Credits and Incentives for Early Compli ance

86. Comment: Incentives in the form of additional emissions cr edits for early adoption would provide a strong incentive for ocean carriers and marine43

terminals to address the issue of at-berth vessel e missions, resulting in

emissions reductions much sooner than the 2014 dead line currently included in the regulation for the first phase of implementatio n. Absent incentives, the regulated community will take a “wait and see” atti tude because technology is evolving rapidly and the infrastructure for utility -based shore power does not exist in many places at the moment. An incentive for ear ly adoption would drive the development of new technology and harness the power of the marketplace, which will ultimately result in more cost-effective technologies that would achieve the emission reductions goals now rather than later . (OMCC)

87. Comment: Early adoption incentives relieve much of the unc ertainty that carriers now face with regard to election of emissi ons elimination/control technologies. With early adoption incentives, carr iers and terminal operators can

be certain that their investments will not become s tranded. Early adoption incentives will result in cleaner air sooner, may h ave the positive effect of creating competition among carriers to gain recogni tion as environmental leaders, can assuage skeptical investors, corporate boards, and other financial institutions to support related investments, and wi ll inspire new technological solutions beyond the current crop. (CAL1)

88. Comment: This regulation as written will not reduce a sing le ounce of harmful emissions until January 1st, 2014, at the earliest when mandated reductions go into effect. As written, the proposed regulation o ffers no incentives for early adopters to achieve compliance before being forced to. Incentives for early adoption of alternative control solutions are essen tial to encourage ocean carriers, vessel owners and terminal operators to u se proven emissions preventative technologies that are available now. ( LAPEER)

89. Comment: Early emission reductions are the most important emission reductions. Supports the inclusion of firm financi al incentives in the regulatory language to encourage shipping lines into action no w, rather than waiting for a state mandate to go into effect in six years. ARB should work with the ports to determine any additional incentives that can be pro vided to shipping lines that adopt early compliance of the regulation before the first 2010 compliance deadline. (BCLAC1, ENVORG1)

90. Comment: Incentives for early action have the real potenti al to spur innovative control strategies to cut hotelling emissions which are the largest single source of

emissions at the Port of Oakland. While Wittmar Te chnologies has pioneered an innovative control strategy, incentives for early a ction can both advance this technology and spur the development of other new ap proaches. (BAAQMD2)

91. Comment: The draft regulation lacks the incentives for ear ly adoption that were included in earlier drafts of the regulation. (POAK LAND1)44

92. Comment: Incentives for early adoption, once considered, now redacted from the latest version need to be replaced. (CAL1)

93. Comment: An earlier draft of the regulation recognized the benefits of a regulatory incentive to achieve early reductions an d we strongly request that the concept be added back into the final version presen ted to the ARB Board. Without incentives for early compliance, we believe very little actual reductions will occur before 2014, at least in our region. (BA AQMD1)

94. Comment: The current version of the regulation should be r ewritten to include such incentives, as the July 12 th version did. (ENVORG1)

95. Comment: The regulation should include a financial incenti ve to lure shipping lines into action now, rather than waiting for a st ate mandate to go into effect in six years. (BCLAC1, ENVORG1)

96. Comment: Early action incentives should be provided for al l compliance options. (WOEIP)

97. Comment: Establish emission credit bank for early complian ce. (AZA)

98. Comment: We support staff’s proposed modifications for cre ating incentives for early reductions. (POAKLAND2)

Response: ARB concurs that incentives will help bring earli er emission reductions and will encourage the development of new alternative c ontrol technology. To that end, ARB recommended at the Board hearing that the regul ation be modified to provide early compliance incentives for the Equivalent Emissions Reduction option. This incentive provides a third method of encouraging early emissi on reductions—Proposition 1B funds and the Carl Moyer program being the other tw o. Funds from these sources are available for either compliance option.

The Equivalent Emissions Reduction option requires vessel fleets to reduce their emissions by 10 percent in 2010, 25 percent in 2012 , 50 percent in 2014, 70 percent in 2017, and 80 percent in 2020. This compliance opti on is entirely technology-neutral— emissions reductions can be achieved using a variet y of techniques. The regulation encourages early reductions for this compliance opt ion in the following manner: NOx and PM emission reductions achieved prior to 2010 o r in excess of the 2010 and 2012 requirements may be credited to the vessel fleet fo r later use if a shortfall of emission reductions is experienced. In other words, if a fl eet fails to meet its emission reduction target for a specified period, it can withdraw any credits it may have earned for early or excess emission reductions to make up for the short fall. A fleet can use its emission credits toward compliance with its 2010, 2012, and 2017 emission reduction requirements. (The 2014 and 2020 requirements must be met; no credits may be used.) ARB believes the fleet emission credits wil l allow the advancement of new45

control technologies by encouraging shipping compan ies to invest in them in the early stages of implementation.

The Carl Moyer Program and Proposition 1B funding a re two sources of financial incentives for achieving early emission reductions under the grid-based shore power option. Under the Goods Movement Emission Reductio n Program, Proposition 1B authorizes the Legislature to appropriate $1 billio n in bond funding to the Board to incent the early reduction of air pollutants and as sociated health risk from freight movement along California’s priority trade corridor s. In February 2008, the Board established a funding target of $100 million for sh ore-power and cargo-handling projects. Berths that accommodate cargo shipping a nd will be retrofitted for grid-based shore power are eligible for Prop 1B funding. In o rder to be eligible for funding, grid-based shore power must be installed and in ope ration at least two years prior to a regulatory requirement for that technology or level of emissions control. Passenger-ship terminals are not eligible to receive funding under this program, since they are not involved in goods movement; however, Carl Moyer Pro gram funds are available.

The Carl Moyer Program is implemented through the c ooperative efforts of ARB and the local air districts. Shore power projects at termi nals or on vessels subject to the regulation must be complete and operational no late r than January 1, 2011, in order to achieve three years of surplus emission reductions and be eligible for Carl Moyer funding.

The three sources of incentives (Carl Moyer funding , Proposition IB funding, and the fleet emission credits) are mutually exclusive—that is, applicants may choose only one of the options.

99. Comment: Whatever the ultimate regulatory compliance deadl ine, there ought to be incentives for early action for proven techno logies that can reduce hotelling emissions by 90 percent or more. (WOEIP)

Response: ARB has added provisions for establishing and usi ng fleet emission credits for early or excess reductions, as discussed above. Although ARB does not believe that there are alternative control technologies ava ilable now that can reduce hotelling emissions by 90 percent, the deployment of such tec hnologies would be eligible if early

or excess emission reductions are realized.

100. Comment: Here is an alternative (to staff’s July 12, 2007 dr aft) that we think is preferable. Within a given fleet, all visits where auxiliary engines are not used in 2008 receive a credit of 1.5 visits against regulat ory requirements in a future year (for example, 2016). Visits in 2009 that are clean ed up (regardless of whether the grid or other options are used) are worth 1.25 visits against the future year requirements. If the regulation has no mandatory r equirements for 2010, then visits in 2010 that are cleaned up receive a credit of one visit against the future year. If there is no mandatory requirement for 201 1, then visits in 2011 that are cleaned up receive a credit of 0.9 visits against t he future year. Credits end whenever the regulatory requirements start.46

Because of the complimentary auxiliary engine fuel rule, and the drop in hotelling emissions starting in 2010, the above approach gets more total reductions than a no-incentive approach. We do not believe the recor d keeping for incentives will be too administratively difficult. While we believ e that the example provides significant incentive for shipping lines to act ear ly, we urge you to get the perspective of the shipping lines, and all parties with an interest in the regulation. (BAAQMD2)

Response: As discussed in the response to Comment 85, ARB i nitially proposed a similar incentive approach early in the rule develo pment stage, but ultimately decided that such an approach was not appropriate. The emi ssion reductions achieved by the regulation will play an essential role in assisting the South Coast Air Basin with meeting

its 2014 PM 2.5 deadline as well as its future ozone deadlines. In stead of deferring emission reductions beyond 2014 or 2020, ARB develo ped an incentive program based on fleet emission credits, as described in the prev ious comments.

101. Comment: It is particularly disappointing that no early ac tion incentives are included considering that development of compliance strategies for AB 32 has embraced shore side power as an early action measur e. One viable option is to

commit an allocation of carbon credits such as a fi xed price discount relative to auction prices to those who install shore power ear ly. (WOEIP)

Response: The Board identified this regulation as a discrete early action measure for reducing greenhouse gas (GHG) emissions, as require d under AB32. Although the regulation is primarily aimed at reducing NOx and P M emissions, using grid-based shore power instead of operating diesel-fueled auxi liary engines while at berth will result

in a co-benefit of CO 2 emission reductions. The incentives discussed ear lier will help accelerate the reductions in all hotelling emission s, including GHGs. Regarding carbon credits, ARB staff is currently proposing for Board adoption a Scoping Plan that includes a cap-and-trade-program. If the Board adopts a Pla n that includes a market-based system, ARB staff will begin developing the details of that program through a separate rulemaking process.

J. Shore-Power-Equipped Ships

102. Comment: Some of the terminals have gone ahead and provide d for shore power. Because of their proactive stance, will all vessels now calling at those terminals be required to plug in? I don’t think yo u want to penalize early compliance behavior. I believe that the intent was actually to provide a mechanism to develop credits. (PMSA2)

Response: ARB recognizes that some terminals are already prov iding shore power or will be installing it in the near future in respons e to a number of efforts already underway at the ports. One of these efforts is the San Pedr o Ports Clean Air Action Plan, which includes a shore power measure for the Ports of Lon g Beach and Los Angeles. The47

measure’s goal is to have, by fiscal year 2010/2011 , at least one berth with shore power capability at each of the container- and passenger- ship terminals at the two ports. With this infrastructure in place, the plan estimates th at about 1,000 ship visits will use shore power in fiscal year 2010/2011. Terminals are also installing shore power as a condition for expanding operations or renewing leas es. ARB expects these conditions to include requirements for shore-power visits, suc h as shore power being used for at least some minimum number of ship visits to a termi nal per year.

Regarding the perception that the regulation would penalize these early applications of shore power, the commenter is referring to provisions in subsection (d)(1)(I). This subsection requires an individual ship that is equi pped with shore power capability to use shore power whenever it visits a berth equipped to provide compatible shore power, regardless of the fleet’s compliance requirements i n (d)(1), the Reduced Onboard Power compliance option. This requirement would ap ply only if both the berth can provide and the ship can receive the shore power. ARB included this provision because

of the immediate emission reduction benefits that c an be realized from ships connecting to grid-based shore power.

While it is true that no early incentives are avail able for fleets choosing the Reduced Onboard Power option—where the “if you have it, you must use it” shore-power requirement is—early shore-power visits can be a me chanism to develop credits under the regulation’s Equivalent Emissions Reduction opt ion. Under this option, fleets can generate credits in the early stages of implementat ion that will allow them more flexibility with meeting the later emission reducti on requirements. Specifically, fleet

emission credits can be accumulated for emission re ductions achieved before or in excess of those required by the 2010 requirements a nd in excess of those required by the 2012 requirements. A fleet can use its emissio n credits toward compliance with its 2010, 2012, and 2017 emission reduction requirement s. Fleets choosing this option may decide to use shore-power visits as an early-re duction mechanism to generate credits, if one or more of their ships are capable of receiving shore power and visit a berth with compatible power.

K. Early Action Credits and Public Funds

103. Comment: Early reductions paid for with public funds shoul d not get a double benefit of early action credits plus public funds. (WOEIP)

Response: ARB agrees that recipients of public funds, such as those available through Proposition 1B or the Carl Moyer Program, should no t also receive the early action credits provided in the Equivalent Emissions Reduct ion option. ARB modified the regulation to prohibit such a possibility. Specifi cally, the modified language states that emission reductions that are a result of a project that has received incentive funds through a contract or other binding agreement from the ARB or a local air district are not eligible emission reductions for fleet emission cre dits.48

L. Standardization of Shore Power

104. Comment: The assumption of the regulation seems to be that a commonly accepted international standard already exists and provides uniform specification

for vessels to retrofit that will enable them to ac cess shore power infrastructure at all California ports. No international standard or uniform specification exists for

vessels to retrofit that will enable them to access shore power. All installations to date have been done on a case-by-case basis with li ttle to no consideration of the ability to use the vessel retrofits at other po rts. (PMSA1)

Response: ARB agrees that there is not yet an international standard for shore power. However, the lack of an international standard for shore power does not affect the use of shore power at California ports. The Ports of L os Angeles and Long Beach have developed standards for the implementation of shore power at their ports, including identifying service voltage, design load, and speci fying design requirements for shore power receptacles. To date, one terminal has insta lled shore power equipment conforming to this standard and an additional three terminals will be so equipped by the end of 2008. By fiscal year 2010/2011, pursuant to the San Pedro Bay Ports Clean Air Action Plan (CAAP), the two ports will have 25 bert hs that are shore-power ready that will satisfy these design standards. Additionally, as of mid-2008, eight new container ships have been built with shore power capability t hat is compatible with standards of the Ports of Los Angeles and Long Beach, and 17 exi sting container and passenger vessels have been retrofitted to use shore power co mpatible with these standards.

Recognizing the importance of standardizing shore p ower connection at ports throughout the world, the International Organizatio n of Standardization (ISO) formed a working group under its Technical Committee 8 (Ship s and Marine Technology) to develop a standardized shore-to-ship power system. The Port of Los Angeles is a member of this working group. The objective is to establish Publicly Available Specifications (PAS), which will allow ports and ca rriers world-wide to refer to an official document that provides shore-to-ship power specific ations.

105. Comment: Request that ARB work with foreign and domestic por ts, terminals, and shippers to help create IMO/ISO standardization for shore power connectors, voltages, and related cable management systems. Th is will help ensure that terminals and vessels will standardize power system s in the Pacific Rim ports and beyond. (POLA)

Response: ARB agrees and is willing to assist port staff in creating IMO/ISO standards for shore power.

M. Building Grid Infrastructure

106. Comment: It is unclear who is responsible for supplying the dock infrastructure. The terminal operator is required to complete a pla n, but the regulation does not49

identify who will be financially or physically resp onsible for installing and maintaining the shore power infrastructure. (CLIA)

Response: The regulation requires the vessel fleets to redu ce their auxiliary-engine

emissions while docked. Unless the emissions reduc tions can be achieved solely through onboard technologies, these fleets cannot m eet these goals without shore-power infrastructure or shore-based equipment being added to the terminals that these fleets visit. The regulation does not identi fy which entities are responsible for the installation of this shore-based equipment. ARB co nsidered putting such specific requirements into the regulation, but the affected ports differ from one another in that some are landlord ports—that is, the ports lease th e terminals to terminal operators through contractual agreements—while other ports ar e the terminal operators themselves. Ultimately, ARB decided that the regul ation should not mandate the responsibility for installing shore-side equipment and that the goals of this regulation will only be satisfied if the affected entities cooperat e with each other. For example, the timely installation of shore-power infrastructure d epends upon the cooperation between the local utility, the port, the terminal, and the ship fleet operator. ARB believes that there is a strong, business-related incentive for t hese partners to accommodate the

needs of the vessel fleets that call on California ports. The regulation allows the affected parties to work cooperatively to achieve t he goals of the regulation.

107. Comment: Transformers and any frequency converters must be a shore as these are large pieces of equipment that could not reasonable be placed onboard a passenger ship. The need for on-dock shore power equipment for passenger ships should be specifically recognized in the regu lations. (CLIA)

Response: ARB disagrees that the regulation should explicit ly recognize the need for on-dock shore power equipment for passenger ships. The regulation is not technologically prescriptive. The details for the necessary infrastructure improvements and ship modifications to implement shore power are left to the cruise lines and the

terminals at which the vessels call. ARB notes tha t for the purposes of estimating the cost effectiveness of the regulation on passenger s hips, ARB included the cost of a shore-side transformer at the passenger terminals. Finally, Carl Moyer funds are

available for the installation of these shore-side transformers at passenger terminals. The Ports of San Francisco and San Diego have been awarded such funds.

N. Cost of Grid-based Shore Power

108. Comment: By favoring one particular technological solution over another, this rule will impose a severe financial hardship on the Port without providing a substantial incremental benefit in the air quality situation in our neighboring communities. (POAKLAND1)

Response: ARB disagrees that one particular technical solutio n is favored over the other. The regulation provides flexibility in achi eving its emission reduction goals. Please see the discussion of the options in respons e to Comments 28-84.50

109. Comment: We have been made aware that the Port of Oakland and other container ports in California have consistently rai sed concerns about the high cost of utility-based shore power for ports that ei ther lack sufficient electrical infrastructure or in some cases power supply to sup port the additional electrical demand created by shore power loads. The new deman d created by utilitybased shore power may fall during times of peak ele ctrical load which would stress that system at the Port of Oakland and in th e larger service area. We are concerned the cost may cause terminal operators and shipping lines to consolidate their operations elsewhere thereby weak ening the Port’s competitive position. (OMCC)

Response: ARB is aware that, if the terminal operators at the Port of Oakland— working with the carriers who visit those terminals —choose shore-based grid power to meet the requirements of the regulation, additional electrical infrastructure will be needed in and around the port. This is also true o f the Ports of Long Beach and San Diego.

The regulation does not require shore power; other alternative technologies to reduce

emissions from vessels that are docked at the berth s are allowed. Nevertheless, since many vessels visiting the Port of Oakland will be s hore-power capable (because they will be using shore power at the Ports of Long Beac h or Los Angeles), ARB determined that shore power is a cost-effective approach to co mpliance at the Port of Oakland, as elucidated in Chapter X of the TSD.

110. Comment: The electrical infrastructure to support the trad itional method of cold ironing at the Port of Oakland simply does not exis t with the electrical system already operating at or near capacity during peak d emand times. The cost of creating the additional substations and conveyance for the power needed to support cold-ironing in Oakland would exceed $90 mi llion. (POAKLAND1, OMCC)

111. Comment: We have serious concerns over any rule that would mandate a power-grid-only shore power requirement. Grid shor e power in Oakland is estimated to cost $90 million and, comparing it to the annual maritime revenues of approximately $120 million, would create severe hardship. Also, the Port is currently in debt $1.5 million due to previous impr ovements to terminals. It will be difficult to recover these costs through tariffs in lease agreements, as our position as a discretionary port of call requires u s to provide the most costeffective services to continue to deliver economic benefits to local, regional, and state economies. (POAKLAND2)

Response: Please also see response to the previous comment. Although the regulation does not mandate grid-based shore power, ARB is aware that compliance with the regulation will require extensive capital investment. Nevertheless, the health benefits derived from reducing the exposure to the nearby communities from the51

emissions from vessels docked at ports are substant ial, making the regulation both cost-effective and health-protective. ARB believes that the $90 million estimated cost to support cold-ironing at the Port of Oakland is a re asonable estimate and is consistent with the $80 million estimate in Chapter X of the T SD. PG&E stated that they have sufficient electrical capacity to provide power to the Port for shore power, but the infrastructure to deliver the power must be constru cted. ARB illustrated in the TSD that shore power is cost effective at the Port of Oaklan d when shore-power capable vessels make calls at the Port. In addition, funding is av ailable through the Proposition 1B Program to help reduce the costs for compliance.

112. Comment: The infrastructure contemplated is enormously exp ensive with most recent estimates exceeding $1.8 billion. There are no funds to build it and no public appetite for public funding of projects of t his magnitude. Grid solution will require expensive retrofits on ships that will be i ncompatible with other technologies worldwide driving businesses away from CA ports. (CAL1)

Response: ARB disagrees that the regulation will cause vessel s to discontinue calling on California ports because of the expense of compl iance. ARB estimated in Chapter X of the TSD that the $1.8 billion compliance cost wo uld represent $25 - $40 per container for the container-ship carriers (less than five per cent of the typical value of the goods in the containers) and would add 15 percent to the cos t of a typical cruise. Shore power is already required for many passenger-ship visits in Alaska and Seattle, and the Ports of Los Angeles and Long Beach have committed to using shore power extensively to reduce emissions from docked vessels, as stated in their Clean Air Action Plan.

O. Availability of Grid Power

113. Comment: There is ample power available for shore power, a nd there are 12 power plants currently being planned that were i nitially approved by the AQMD this summer and several solar power plants bei ng approved in the Inland Empire. (IBEW)

Response: ARB agrees that there is ample power available to m eet the requirements of the regulation, even if grid-based shore power i s selected as the compliance path by

all of the affected vessel fleets.

ARB determined that the estimated potential peak lo ad of 205 megawatts and the potential annual electrical use of 643 Gigawatt-hou rs for shore power by 2020 will represent less than one-quarter of one percent of t he State’s overall annual power consumption, based on the projected power consumpti on information in the most recent Integrated Energy Policy Report from the California Energy Commission. Furthermore, the four electrical utilities affected by the regul ation—Pacific Gas and Electric (PG&E), Los Angeles Department of Water and Power (LADWP), Southern California Edison (SCE), and San Diego Gas & Electric (SDGE)—confirme d with ARB that they all had adequate electricity supplies for shore power.52

114. Comment: Grid-power is at or near capacity right now and n o new generation is planned to offset this new demand. Early implement ations will require additional peak power to be brought on-line to supply the dema nd and this power is dirty power. Infrastructure to provide power to berth wi ll take years to install and will be delayed due to litigation. (CAL1)

115. Comment: The presumptive solution of port electrification is flawed. Costs are staggering (estimated to be $1.2 billion statewide) and electrifying a port means years of construction to install infrastructure to receive electrical power that is not available. There are no plans or budgets to build new generation capacity to supply this power. (LAPEER)

Response: ARB disagrees. As mentioned above, the four affect ed electrical utilities have all indicated that they have sufficient electr icity supply to meet the requirements of the regulation, even assuming that all of the vesse l fleets choose grid-based shore power as their compliance path.

ARB understands that additional electrical infrastr ucture, including transmission lines, will have to be constructed to bring the electricit y to the terminals at some of the ports. The electrical utilities have been working with the ports to provide the necessary electrical infrastructure in a timely fashion to me et the requirements of the regulation. SCE and LADWP have publicly guaranteed sufficient p ower to the Ports of Long Beach and Los Angeles, respectively.

116. Comment: The grid is not the gold standard and existing te chnologies are available that are as clean and in many cases clean er than the grid. It is impossible to know what the grid emissions footprin t is as it varies by time of year, day, and load pocket. (CAL1)

Response: ARB concurs that emissions related to electricity g eneration varies temporally and geographically, and as a practical m atter, cannot be estimated in real time. Nevertheless, if the electricity supplied to the ports is considered “marginal electricity,” that is the power is assumed to be ad ded to the grid at the time of the demand, some simplifying assumptions can be made.

According to the four electrical utilities providin g power to the ports, the source of marginal electricity is typically combined-cycle ga s turbines (CCGTs). Electricity from coal-fired plants, hydroelectric dams, solar and wi nd sources, and nuclear plants are all part of the baseload electrical demand, as is a sig nificant amount of natural-gas-fired electricity. Additional electrical demand—the “mar ginal” demand—is typically from more natural-gas-fired equipment: CCGTs. This CCGT ass umption is shared by the California Energy Commission (CEC), the California Public Utilities Commission (CPUC), and the AB 32 Climate Action Team Economics Subgroup, as discussed in Chapter IX of the TSD.53

Even considering this consensus position on the sou rces of marginal electricity generation, ARB offered a range of potential GHG em ission reductions in the TSD. In any case, the grid-based electricity emits less GHG emissions per unit of power than the auxiliary engines on the vessels. ARB believes that an alternative source of electrical power, such as distributed generation, s hould be GHG-equivalent to the grid. Finally, ARB recognizes that the grid will be getti ng cleaner over time as AB 32 requirements take effect on the electricity sector.

P. Provision to Address Shore Power Not Available a t Port by 2014

117. Comment: Include a provision in the regulation to delay impl ementation for each port that is not equipped to provide shore power. As written, industry would have to use shore power beginning in 2014, even if it is unavailable at a port of call. (CLIA)

Response: The four electrical utilities serving the four port s at which passenger ships call (San Francisco, Los Angeles, Long Beach, and S an Diego) have stated that they will be able to provide sufficient power to the por ts for compliance with the regulation. ARB understands that adequate time is necessary to design, approve, and construct the electrical infrastructure required to accommodate t he vessels calling on California’s ports, which is why ARB chose 2014 as the first per formance standard for those choosing to use grid-based shore power. Many comme nters wanted an earlier compliance date, but ARB believes that the 2014 dat e in the regulation is reasonable for all 31 affected terminals to have shore power insta lled if they chose that compliance path.

Q. Adjustments for Grid-Power Interruption

118. Comment: There should be a variance or some exemption if t he grid is actually interrupted or not able to provide the power. If t here is interruption by something outside of the ship or terminal operators’ control, they should be given a pass. (DW)

119. Comment: There are parallel efforts going with greenhouse gas, with CARB and the PUC, which deals with the electric market, not only how we can collectively reduce greenhouse gas emissions, but how we can imp rove reliability of the grid. ARB should consider, on occasion when there is a gr id emergency or stage one or two alerts where it was facing rolling blackouts , that suppliers of grid power are allowed to interrupt that supply and allow the ship s to power up for a brief few hours; maybe a few hours per year. That would help improve resource adequacy as well as part of the utilities response measure. That’s something to consider down the road as something that the California ISO would very much welcome. (DW)54

120. Comment: If the utility cannot provide power to the ship t hrough no fault of the ship’s operator, it should not be penalized for the failure by the power utility. That should not be counted in the overall compliance. (P MSA2)

Response: ARB agrees that there should be adjustments to a fl eet’s compliance requirements when there is interruption to grid pow er during a ship’s visit. At the Board hearing, the Board directed staff to modify the reg ulation to ensure a fleet is not penalized when a ship is unable to shut down auxili ary engines and connect to grid-based shore power when at berth because of an emergency event beyond the

vessel’s control. Staff addressed the Board’s conc ern by making several changes to the regulation.

The definition of emergency event has been modified to include a more comprehensive list of events where the utility may be unable to p rovide power to the port. These events now include the period of time when the utility can not provide power because of a transmission or distribution emergency, must reduce grid-based shore power to the port because of a natural disaster such as an earthquake or fire, or must reduce grid-based power to the port in response to the California Ind ependent System Operator or the Los Angeles Department of Water and Power declaring a S tage 3 emergency or to avoid a Stage 3 emergency if one is anticipated.

In addition, the regulation includes provisions in the Reduced Onboard Power and Equivalent Emissions Reduction compliance options t o allow for adjustments to a fleet’s compliance requirements for visits meeting the defi nition of emergency event.

Fleets choosing the Reduced Onboard Power option mu st shut down the onboard auxiliary engines during a certain percentage of th eir vessels’ visits to a port and supply the power to the vessels by some other means, most likely grid-based shore power. Furthermore, the fleets must also reduce their onbo ard electrical generation by the same percentage. For example, by 2014, vessel flee ts choosing the Reduced Onboard Power option must shut down their auxiliary engines for 50 percent of their visits and reduce their fleet’s onboard electrical power gener ation by 50 percent. The regulation now specifically allows visits experiencing an emer gency event to be counted as a shore-power visit. Furthermore, the onboard electr ical generation that would have been reduced during the visit is removed from the fleet’ s baseline generation. In other words, the visit counts as a shore-power visit for the fle et, but the required reduction of onboard electrical generation is forgiven for emergency eve nts.

Fleets choosing the Equivalent Emissions Reduction compliance option must reduce the at-berth auxiliary engine emissions from their vessels’ visits to a port by certain percentages. The fleets may choose grid-based shor e power, non-grid-based shore power (distributed generation), or other ship-side or shore-side control techniques to reduce at-berth emissions. This option also includ es a calculation formula a fleet must use to demonstrate compliance with the emission red uction requirements. The formula requires fleets to determine their vessels’ at-bert h emissions at the port before and after application of the alternative control technique(s) . Comparison of the two cases defines55

the percent emissions reduction achieved for the ap plicable compliance period. ARB modified the regulation to now allow the auxiliary engine emissions from visits experiencing an emergency event to be excluded from both the fleet’s baseline and post-baseline emission reduction calculations, simi lar to the provision in the Reduced Onboard Power option.

R. 3 - 5 Hour Limit on Operating Auxiliary Engines

121. Comment: As the regulation is currently written, ships are given three to five hours within docking to power down their auxiliary engines. While some flexibility is needed in allowing the ships to safely connect, ARB can encourage operators to hook up as soon as safely possible in order to p rotect public health. Require ships to power down auxiliary engines as soon as sa fely practicable instead of allowing a blanket 3-5 hours that is likely only ra rely necessary. (ENVORG3)

122. Comment: Allowing for three hours before switching to shor e power seems unreasonable and unjustified. Instead, ships shoul d be required to plug in to shore power as quickly as practicable. (WOEIP)

Response: ARB disagrees. ARB believes the three- and five- hour limits to connect and disconnect a ship from shore are reasonable. T he Reduced Onboard Generation option of the regulation allows three hours of auxi liary engine operating time for ships that use synchronous power transfer systems and fiv e hours of auxiliary engine operating time for ships that do not use synchronou s power transfer systems.

For the typical ship visit, after the ship is tied to the berth, the ship and the ship’s crew are subject to inspection by the Department of Home land Security. Until the ship is cleared by the department, the port’s labor cannot board the ship and the ship’s crew cannot leave the ship. Any shore power equipment c annot be brought on board the ship or equipment on the ship cannot be accessed un til the ship is given clearance by the Department of Homeland Security. The inspectio n typically takes an hour, and the ship’s auxiliary engines are operating during this time. After the ship receives clearance, the necessary connection between the sho re and the ship can be completed. Once connected, the ship’s power source can then be switched from ship-based power to grid-based power. The auxiliary engines are shu t down for the rest of the ship’s visit until the ship is nearly ready to leave port. The movement of equipment, connecting of cables, and power transfer is expected to take abou t an hour. Before the ship leaves the berth, the reverse procedure will take place: auxiliary engines are turned back on, the ship switches back to ship-based power, and the cables are disconnected and, if necessary, returned to the shore. This, too, is ex pected to take an hour for vessels using synchronous power transfer systems. Therefor e, for these ships, the auxiliary engines are likely to operate the first two hours o f the ship’s visit and the last hour of the ship’s visit.

A ship that does not use synchronous power transfer systems will experience a total loss of power. Very few ships will be using non-sy nchronous power transfer systems;56

consequently, nearly all the ships using shore powe r will be limited to three hours of operating time for a visit to a California port. I n the case of power transfers that do not use synchronous power transfer systems, the regulat ion allows five hours because the resulting loss of power during the power transfer p rocess disables the ship’s navigation system. Three hours is needed at the end of the sh ip’s visit to restore the navigation
system.

For vessel fleets that choose to use grid-based sho re power to comply with the Equivalent Emissions Reduction option, they have a built-in incentive to connect to shore power as quickly as practicable. This option requires auxiliary engine emissions to be reduced by specific amounts (e.g., 10 percent , 25 percent, 50 percent, etc.). To maximize emission reductions while in port, the ves sels will want to be plugged in for as long as possible. As long as the auxiliary engines are operating, no emission reductions are taking place.

S. Other Alternative Technologies

123. Comment: Other technologies should also be considered as a means to achieve shorter term reductions to complement the u se of shore power such as the” Bonnet” technology being tested in Long Beach that captures smokestack

exhaust at the dock and cleans it with onshore SCR technology. (ENVORG 2)

124. Comment: We are not against cold-ironing, but it is a shor e-based technology that does not travel with the vessel. As a global carrier, we want a solution that stays with the vessel. We have put an SCR unit on a vessel. We have waste heat recovery on a ship that captures the heat out of the smoke stack and puts it back into energy to drive the vessel. We are curre ntly working on an electronic scrubbing device but need time to get this technolo gy up and running. There is a timing issue on how fast we can clean up the enviro nment. (MAERSK)

125. Comment: We support the use of shore power and other prove n technologies as a supplement to shore power. (IBEW)

Response: The Equivalent Emissions Reduction option of the regulation allows the use of alternative technologies, whether shore-side or ship-based. Please see response to Comments 28-84 for a more detailed disc ussion of this compliance option.

T. Distributed Generation

126. Comment: There are conflicting definitions of portable pow er generation equipment under the Portable Equipment Registration Program (PERP) versus the regulation. The regulation inappropriately tre ats equipment that is properly registered under the PERP program as distributed ge neration (meaning stationary). The CARB staff arbitrarily imposes a n ew definition by requiring physical movement between air districts as an absol ute pre-condition for the designation as “portable.” (CAL1)57

127. Comment: We do not agree that the Wittmar System generator is distributed generation. The generator is registered in and in full compliance with CARB’s PERP program. If classified as distributed generat ion, the generator is subject to unreasonable emission levels for a mobile applicati on and has a negative effect on its mobility. Classify the system as PERP equip ment. (PGE1)

Response: Under the Equivalent Emissions Reduction option, fl eets can use non-gridbased shore power equipment, such as a shore-side g enerator, to meet emission reduction requirements. For purposes of this regul ation, it is irrelevant whether this nongrid-based shore power equipment is classified as p ortable equipment or distributed generation (the regulation refers to this technolog y as “distributed generation”). Shore power generated from a source other than the grid m ust meet emission standards specified in the regulation.

128. Comment: ARB should specifically consider the successful d emonstration project at the Port of Oakland where a shore-side g enerator operating on natural gas was used to supply on-board electricity as a vi able alternative. This technology should be built into the regulation as a n option if proven to achieve significant verified emissions reductions. We were a strong supporter of the pilot project and the public funding from the Bay Area Ai r Quality Management District that was invested to complete the proof of concept. (FOE1)

129. Comment: Senator Perata supports the use of mobile, distributed generation technologies to provide shore-side power to ocean-g oing vessels at the Port of Oakland. The benefit of this strategy is its poten tial to be deployed quickly, achieving important emission reductions sooner than could be achieved if the Port and its tenants simply wait for grid power to be available to shippers calling at the port. (PERATA)

130. Comment: The Port of Oakland successfully demonstrated a s hore-side generator that will be operated on natural gas in a pilot project to demonstrate its feasibility and environmental impacts. This techno logy should be considered as an option if proven to achieve significant verified emission reductions particularly

as an interim solution until electric infrastructur e is widely available at ports and terminals. (ENVORG2)

131. Comment: We support proven and viable pathways to immediat e emission reductions through the use of alternative technolog ies such as low-emission dockside generators which have shown to deliver com parable and immediate emissions reductions benefits to grid-based power. (BCLAC1, ENVORG1)

132. Comment: All viable and proven technologies that reduce do ckside emissions need to be considered and encouraged in the regulat ion in order to achieve immediate reductions. (FOE1)58

133. Comment: ARB should help monitor the air emissions benefit s of alternative shore-side power technologies as means to achieve m ore immediate emissions reductions and complement the use of shore power. (ENVORG2)

Response: The regulation allows the use of all emission red uction strategies, including the shore-side generator that was demonstrated at t he Port of Oakland. At this time, however, the shore-side generator and other potenti al alternative technologies are still at the “proof of concept” stage of development. Fo r example, the Port of Oakland demonstration proved that a shore-side generator ca n be used to supply power to a ship through the ship’s bow-thruster system. Howev er, to be used on a commercial basis, there are a number of technical issues that need to be resolved, including: limited space availability at the dock, the ability of the shore-side generator to provide all the necessary onboard power requirements (so that t he ship’s auxiliary engines can be shut down completely), and the need to retrofit shi ps to use the power provided by the shore-side generator on a more routine basis.

In addition, as discussed in responses to Comments 28-84, the use of shore-side generators as an interim solution adds significant costs to reducing at-berth emissions. These added costs would likely delay the implementa tion of grid-based shore power by diverting both technical resources and capital.

134. Comment: PG&E has been an important part of the effort to use liquefied natural gas for mobile shore-side power generators developed by Wittmar Cold Ironing and we believe this system offers many bene fits to the Port of Oakland and West Oakland community. A demonstration comple ted on July 18 th of this year, on the 800-foot container ship APL China reduced NOx emissions by 89 percent, PM10 by 99 percent, SOx by 100 percent, and CO 2 by 50 percent. The Port of Oakland has made it clear that they can not afford to pay for grid extensions, estimated at $90 million, and prefer th e Wittmar system. Under the right conditions, the Port could cold-iron every sh ip call with the Wittmar system by 2010. (PGE1)

135. Comment: The cold ironing demonstration at the APL terminal showed the following reductions can be achieved tomorrow: NOx - 98 percent, CO - 57 percent, PM10 - 100 percent, SOx - 100 perc ent, and CO 2 - 42 percent. (WOEIP)

136. Comment: Sound Energy Solutions is a proponent for LNG-fuele d on-dock power generation as a technology that is available today and has emission rates that are comparable to grid-based power. (SES)

137. Comment: The demonstration of the distributed power generati on system technology in Oakland has shown that this technolog y delivers comparable

emission reductions benefits to those derived from grid power at a substantially lower cost. These types of alternatives would be h ighly preferable to installing a grid-based power system at the port. (POAKLAND1)59

Response: ARB agrees that there are air quality benefits th at can result from replacing the power provided by the ship’s auxiliary engines with power from a clean shore-side generator. However, the estimates provided by the commenters represent the case where the ship’s auxiliary engines are shut down an d the power provided by the shoreside generator provides all the necessary power nee ded by the ship. The overall benefits are significantly reduced when the emissio ns from the auxiliary engines are taken into account while the shore-side generator i s being connected and disconnected from the ship—activities that usually take a total of three hours—and if the auxiliary engines must continue to operate, even at reduced l oad, because the shore-side generator is unable to provide all the necessary po wer for the vessel.

The impact of the three-hour connection and disconn ection time can reduce the emissions benefit provided by using shore-side gene rators by six to fifteen percent. Furthermore, the shore-side generator used in the d emonstration was rated at 800 kilowatts (kW). Although ARB understands that the commercial unit may be able to provide more power, the power demand for a typical container ship is one megawatt (MW) and can be as high as 5 MW if the ship is carr ying refrigerated containers. In this case, the generator would only be able to offset 20 percent of the electrical power needed by the ship, achieving only 20 percent air q uality benefit.

ARB believes that it is premature to consider using shore-side generators to provide electricity for all ships visiting a port. As disc ussed above, the use of a shore-side generator to replace a portion of a ship’s electric al power demand has reached the proof of concept stage. There are a number of issu es that need to be resolved and additional demonstrations before the technology wou ld be considered commercially ready. Once the technology is considered commercia lly ready, then it is appropriate to consider more wide-scale deployment of the technolo gy.

Finally, ARB disagrees that the emissions benefits from using shore-side generators are comparable to the emission benefits resulting from grid based shore power. See

discussion below.

U. Emission Standards for Distributed Generation

138. Comment: Current language effectively penalizes available alternative technologies by placing onerous exhaust control lim its on these technologies in later years. The control mechanisms to achieve the se levels do not yet exist. This creates an uneven playing field by placing art ificial burden on one category of solutions without corresponding down-year requir ements for grid power. This guarantees retarding any advancement in alternative technologies including renewable energy sources. (CAL1)

139. Comment: For the South Coast Air Basin, alternative technolo gies proposed to achieve the emission reduction target should be bes t available control technology (BACT). Although the District supports alternative s, they believe that these60

sources must meet a maximum allowable NOx limit tha t is more in line with the grid power NOx limits and consistent with local sta tionary source regulations for internal combustion engines or boilers. Specifical ly, revise (d)(2)(E) to require NOx emissions for non-grid-based shore power equipm ent to be no greater than 0.2 g/kW-hr before Jan. 1, 2014, and no greater tha n 0.03 g/kW-hr beginning January 1, 2014. The 0.03 g/kW-hr standard is the average utility base level now

and will be in the district’s local rule that will be going before its Board in January [2008]. The district believes the above st andards can be met after 2014. (SCAQMD1, SCAQMD2)

140. Comment: Add a BACT requirement as SCAQMD requested. (CCA, ENVORG3)

Response: ARB disagrees that emission limits for distributed generation (DG) will penalize available alternative technologies by plac ing onerous exhaust control limits on these technologies in later years.

The regulation requires, prior to January 1, 2014, that non-grid-based power sources satisfy a NOx emission standard of 2.0 grams per ki lowatt-hour (g/kW-Hr), which is the emission standard for a newly manufactured spark-ig nited off-road engine. This standard is necessary to ensure the use of clean en gines for DG. For comparison, the average NOx emission rate from the grid, on a state wide basis, is 0.13 g/kW-Hr. ARB recognizes that the emissions from the grid are var iable on a seasonal and daily basis; however, the power supplied from the grid to the po rts is likely to be generated by a natural-gas combined-cycle gas turbine (CCGT). NOx emissions from CCGTs are typically 0.02 g/kW-Hr, cleaner still than the stat ewide grid average. (See Comment 116 for a more detailed discussion on power generat ion for shore power.)

By January 1, 2014, the regulation requires shore-s ide generators to satisfy a more stringent NOx emission standard of 0.2 g/kW-Hr, whi ch is equivalent to a spark-ignited engine using Best Available Control Technology (BAC T). The application of BACT reduces NOx emissions by an order of magnitude. Ev en at this level, however, the shore-side generator would be 50 percent higher tha n the average NOx emissions from the grid when the requirements of the regulation ar e fully implemented or about 10 times higher than the emissions from a natural g as combined-cycle power plant.

ARB believes that the BACT emission level for NOx i s appropriate for distributed generation; however, ARB deferred the BACT standard for four years (from 2010 to 2014) so that the shore-side generators could be de ployed early and would result in emission reductions much sooner than a grid-based o ption. A liquid-natural-gas-fueled engine not using BACT is still much cleaner than th e diesel-fueled auxiliary engines on the ships. These engines typically emit 85 percent less NOx emissions than the vessel’s auxiliary engines and do not emit any diesel PM. H owever, since the auxiliary engines on the vessels will be running for some period of t ime before switching to DG power, the overall efficiency for NOx reduction will be closer 70 to 80 percent, with diesel PM reduction at 85 to 95 percent.61

We disagree that the 2010 and 2014 emission standar ds should be lowered to 0.2 g/kW-hr and 0.03 g/kW-hr, respectively. The 0. 03 g/kW-hr NOx limit is equivalent to the emissions from a well-controlled combined cycle power plant. These standards, if implemented, would discourage, if not prohibit, the development and use of non-grid based power generation to reduce at-berth ship emis sions. ARB recognizes, however, that local air districts can set more stringent emi ssion limits for this equipment.

141. Comment: Relying on alternative technologies while followi ng the path to gridbased shore power would potentially double the cost of emission reduction strategies. It would also strain the resources of the port’s engineering staff to meet the near-term and long-term cold-ironing solut ions. (POLB1, POLB2)

142. Comment: While the Port of Long Beach envisions that alter natives to gridbased power have an important place in reducing emi ssion from ships, this technology is not currently mature, cannot meet the power needs of many vessels, and will be most suitable for vessels not targeted by the proposed regulation such as bulk ships. (POLB1, POLB2)

143. Comment: No technology has been demonstrated that meets th e requirements of the proposed regulation. Currently available te chnologies, which are being investigated, have either insufficient capacity for the vessel loads envisioned at our facilities and/or require significant infrastru cture improvements similar to the grid-based shore power system. (POLB2)

144. Comment: A disadvantage of distributed generation systems is that they require significant amount of space on the wharf adjacent t o the vessel. As a result, the proposed technology would not eliminate the need fo r infrastructure or save time. The Port does not have the space in front of quay c ranes for the equipment and

would need to locate it in terminal backlands with the necessary trenching and wharf improvements at the berth. (POLB1, POLB2)

Response: ARB agrees that it would be too costly and burdensome to include requirements that would essentially mandate the ins tallation of both shore power equipment and interim alternatives in order for a f leet to comply with the regulation.

ARB estimates that installing an alternative technology system in addi tion to a grid-based shore-power system would double the cost of compliance. For example, ARB estimated it would cost $125 million to install shore power infrastructure at the Ports of Long Beach and Los Angeles in order for te rminals to satisfy their fleet’s 2014 shore-power visits requirements. If these fleets w ere also required to comply with a 20 percent emission reduction by 2010 and 40 percen t reduction by 2014, ARB estimates the cost to comply with these reductions using distributed generation would be $150 million, assuming the use of distributed ge neration would cost $1,000 per hour.62

V. Quantifying Emission Reduction Claims for Altern ative Technologies

145. Comment: Alternative controls through the regulation’s Emiss ion Reduction Option provision must be limited to viable strategi es, guarantee equivalent emission reductions and be subject to public review . The current regulation does not propose sufficient criteria for determining whi ch alternative strategies would provide quantifiable and enforceable emission reduc tions and would benefit nearby communities as well as regional air quality. (BCLAC1, ENVORG2)

Responses: ARB shares the commenters’ concern that the reducti ons resulting from the use of alternative control techniques must be q uantifiable and enforceable. The ARB has years of experience in the review of variou s emission reduction strategies to ensure that the strategies are viable. Some of the recent programs where ARB staff has reviewed emission reduction strategies include the Distributed Generation Certification Program, where the emission rate of t he equipment must be certified to emission standards, and the Equipment Pre-Certifica tion Program, where the claims of a product manufacturer must be supported by emissio n measurement data. The requirements in the regulation to ensure that the a lternative control techniques are quantifiable and enforceable are based on this coll ective experience.

Specific to this regulation, there are a number of safeguards to ensure that the emission reductions are quantifiable and enforceable. These safeguards include the following: 1) establishing control factors using approved emis sion measurement techniques; 2) requiring annual statements of compliance for ea ch fleet, including emission information for each ship; 3) requiring recordkeepi ng for each ship in the fleet, including identifying technology and control factor used, and records of equipment failure or malfunction; and 4) reserving the right of ARB to r equest additional source testing or other type of monitoring. Some of this information may be considered confidential; ARB will make information available upon request as all owed under the Public Records Act (Government Code section 6250 et seq.).

W. Alternative Emission Reduction Measurement

146. Comment: Shore power provides a means of measuring emission reductions. With the electric meters, every megawatt-hour or ki lowatt-hour actually measures so many pounds or tons of emission reduction. Staf f should encourage as part of the implementation, which may be a later phase, the use of metered delivery of power, whether it’s from distributed generation or from the grid itself, to measure the tons reduced of NOx, PM, and CO2. (DW)

Response: ARB concurs that electricity use is an acceptable surrogate for estimating emissions, which is why the regulation requires onb oard power generation to be reduced as well as requiring vessel visits to use s hore power. The regulation requires each affected terminal to keep records of utility b illing statements for terminals where shore power utilization is monitored separately fro m the electrical power usage of the other activities at the terminal. Although this in formation alone cannot be used to63

directly determine if the fleet is complying with t he regulation, it is an essential component of compliance determination.

X. Baseline Fleet Emission Calculations

147. Comment: Commenter is interested in how the rule will accura tely and

reasonable calculate baseline fleet emissions for n ew/expanding shipping activities that might occur after rule is in effect . How will new fleets to Oakland in

the future be able to calculate reasonable emission reduction targets when baseline emissions are essentially zero now? (POAK LAND2)

Response: The baseline in the regulation does not refer to past operational history, but instead refers to a fleet’s operation without the u se of emission control techniques for the compliance period. The baseline refers to the “before controls” case and the postbaseline refers to the “after controls” case. Com parison of the two cases defines the percent reduction achieved for that compliance peri od.

For the Reduced Onboard Power Generation option, th e baseline refers to the power requirements of the fleet over the compliance perio d. The reduction of onboard power generation is determined by comparing the actual po wer produced by the auxiliary engines to the baseline power usage for the entire fleet during the applicable compliance period. For the Equivalent Emission Red uction Option, the baseline refers to the fleet’s emissions over the compliance period , with no implementation of emission reduction techniques other than cleaner fuels manda ted by the auxiliary engine fuel regulation. The emissions reduction is determined by comparing the emissions of the fleet, after implementation of strategies to reduce emissions, to the fleet’s baseline emissions for the applicable compliance period. Th e applicable compliance period, as defined in the regulation, is a calendar quarter fo r applicable requirements on January 1, 2014 and later, and a calendar year for all applicable requirements prior to January 1, 2014.

148. Comment: We are concerned that this provision, as written, m ay create a significant loophole. The suggested use of statewi de fleet averages is specifically troubling as an alternative control st rategy given the difficulty to enforce them and the likelihood for disproportionat e emission impacts on local communities. CARB should remove the proposal for t he use of statewide fleet averages under the Emission Reduction Option. CARB should exclude operational controls (e.g. shorter ship visits, low er auxiliary engine loads while at dock, etc.) from meeting the requirements of the Em issions Reduction Option. Only measures that are verifiable, reproducible, an d enforceable should be permitted to satisfy this provision. (BCLAC1, ENVOR G2)

Response: ARB agrees that fleet averaging, while providing flexibility for compliance, is also more challenging to enforce. To ensure tha t the fleets are complying with the regulation, the fleet operators will be required to file vessel plans that identify the types of controls used on each ship; file annual complian ce statements that include detailed64

information on compliance for the entire fleet; and keep records for each ship, including the ship’s emissions and technology used to reduce the ship’s emissions.

Additionally, the regulation does not allow the use of statewide fleet averages—fleets are port-specific. That is, a company that has shi ps visiting the Ports of Los Angeles

and Oakland would have two fleets: one fleet for t hose ships visiting Los Angeles and another fleet for those ships visiting the Oakland. By defining fleets in this manner, emission reductions are required at both locations. There should not be any disproportionate emission impacts on local communit ies.

Finally, the procedures for determining compliance with the regulation does not allow any credit for operational controls, such as shorte r ship visits or lower auxiliary engine loads. As discussed in response to Comments 118-12 0, power reductions or emission reductions are based on comparing the baseline scen ario, which represents the case where no emission reduction techniques would have b een applied, to the case where

the vessels’ emissions are reduced with emission re duction techniques. Additionally, the emission reduction techniques must be quantifia ble, enforceable, and the reductions repeatable from visit to visit.

Y. Test Methods

149. Comment: The emission measurement method for diesel PM in section (f)(4)(B)3 should allow CARB Test Method 5 or U.S. EPA Reference method 5 and 202. Accepted CARB standard methods s hould be utilized to provide consistency in PM measurements. The ISO 817 8 Test Methods needlessly require a dilution tunnel, 5 stable test modes, and a different temperature (125 o F) defining PM. Auxiliary engine exhaust stack di ameters and gas velocity are normally within the range to allow standard isokinetic PM sampling. (ERM)

Response: ARB agrees. ARB added a provision in the regulation that allows the flexibility of using alternative test methods upon the written approval from the Executive Officer. This provision is found in section (e)(4) (B)(3) of the regulation.

Z. Terminal Plans and Affected Terminals

150. Comment : The proposed regulations threaten the viability of the established business models in operation at the ports of Califo rnia, potentially upsetting existing lease agreements, and will throw our ports out of balance with ports throughout the rest of the country and internationa lly. (PMSA1)

Response: ARB disagrees. Shore power is being implemented at many ports in California. By the end of 2008, five terminals at the Ports of Los Angeles and Long Beach will have at least one berth equipped wi th shore power equipment. In addition, the Ports of Long Beach and Los Angeles h ave adopted a Clean Air Action Plan that proposes to have 25 berths shore power re ady by fiscal year 2010/2011.65

Shore power applications are being considered at th e Ports of Oakland, San Francisco, and San Diego. The number of shore power projects underway or in the planning stage undermines the commenter’s assertion that this regu lation threatens the viability of established business models at California ports.

While California ports will remain in the forefront of shore power implementation for the next few years, there is growing world-wide interes t in shore power. Princess Cruise Lines already uses shore power at terminals in June au, Alaska, and Seattle, Washington. China’s largest port operator plans to introduce shore power this year, and the Port of Busan, South Korea, plans to install ei ght shore power systems by early next year. Additionally, 14 ports in the United States, Europe, Asia, South America, and Australia have committed to investigate the feasibi lity of building facilities to accommodate shore power. In a few years, Californi a ports will not be alone in having shore power-ready berths.

151. Comment: The terminal lessee or terminal operator is not the appropriate entity to prepare the electrical infrastructure plan for t he following reasons: (PMSA1)

- The terminal lessee or operator does not hold a ri ght of property ownership of the terminal. As such, a terminal operator does no t have any effective rights to implement or control the plan.

- Marine terminal operators have from time-to-time f ound themselves going for multiple years without a renewal and are forced to operate on month-to-month lease terms with their landlord port. This is prob lematic because the cost of such an infrastructure improvement can only be carr ied over the existing term

of the lease.

- The terminal will have only a short-term interest in the property and will not retain economic benefits of the improvements beyond the terms of the lease, which may adversely affect the ability of the termi nal lessee or operator to recover the cost of the improvement over a reasonab le time period.

- Requiring the terminals lessee or operator to deve lop and implement the plan may result in unequal implementation between termin als located at the same port. For example, a terminal lessee with a substa ntial period remaining on a lease may be able to develop a plan with the Port i n which the long term lessee would derive substantially greater benefit t han a lessee with a short time remaining on his lease and have no guarantee o f a lease renewal.

- Potential tax liability issues resulting from impr ovements added to the terminals which may be not be equally divided betwe en the various terminals within a port.66

152. Comment: For the following reasons, the appropriate entity f or planning of infrastructure installation is the port authority: (PMSA1)

- The port authority, as the landlord, is responsibl e to provide infrastructure to accommodate basic terminal and ship operations need s. Since the Ports will be making the improvements and will be the entity e xperiencing the long-term benefits of the infrastructure, they should be resp onsible for planning for the cold-ironing infrastructure.

- Under commercial lease terms, the landlord is resp onsible for maintaining the property to existing regulatory code. The port aut hority acting as landlord is responsible for providing necessary improvements to reflect the requirements mandated by this regulation. The port authority is able to pass on additional costs sustained during an existing lease of a termi nal when the parties engage in a scheduled financial review which provid es for revenue adjustments.

- The port has greater financial assets than termina ls that can be used to obtain better financial packages to underwrite the cost of shore power infrastructure. For example, most public ports hav e a diversified portfolio of assents beyond marine terminal operations that can be the basis of accessing capital markets. Additionally, the bonding capabil ities available to public port authorities or their respective governing cities al low them access to large amounts of capital and recover this capital over a much longer period of

amortization.

- The ports can act as a lead agency for the purpose of the California Environmental Quality Act (CEQA). Terminal lessees or operators cannot act as lead agency for CEQA.

- Because of the port’s overall responsibilities, th e port is able to resolve potential conflicts in installation of infrastructu re that may occur between terminals located at the same port.

153. Comment: It is inappropriate for the terminal operator to be responsible for the plan. Terminals have no land use authority, no abil ity to do CEQA or issue permits to ourselves. Would be more appropriate on a port-wide basis to assign that responsibility to the port authorities who wou ld do the planning documents and appropriate approvals, and through their leasin g authority, can amortize the cost against the broad number of terminal operators to take out some of the variability that’s reflected in the cost effectiven ess numbers. (PMSA2)

Response: ARB disagrees. The terminal operators are the mo st appropriate entity to coordinate the development of the plan because of t heir working relationship with the vessel fleet operators, who are required by the reg ulation to reduce the emissions from their fleets. Since the terminal operators provide a service to the vessel operators, the67

terminals and vessel operators have a business rela tionship that the landlord ports— which include the Ports of Los Angeles, Long Beach, and Oakland—do not share with the vessel fleets. The landlord ports lease the te rminal property to the terminal
operator.

The responsibility of submitting the terminal plan should not be confused with the obligation to provide the infrastructure necessary to execute the plan. ARB considered putting requirements into the regulation that manda ted the responsibility for installing shore-side equipment, but determined that it was in appropriate and problematic to dictate terminal/port business relationships and co ntractual obligations and realized that the goals of this regulation will only be satisfied if the affected entities cooperate with each other. For example, the timely installation o f shore-power infrastructure depends upon the cooperation between the local utility, the port, the terminal, and the ship fleet operator. ARB believes that there is a strong, bus iness-related incentive for these partners to accommodate the needs of the vessel fle ets that call on California ports. The regulation allows the affected parties to work cooperatively to achieve the goals of the regulation.

Since all four entities have important roles with r egard to the installation of shore power infrastructure, ARB believes that the most efficien t way to develop a plan for installing the infrastructure is to have one entity act as lea d in the development of the plan. The one entity would then work with the other three par ties to develop a plan that

coordinates the activities of the four entities. A s noted, the terminal operators, because of their working relationships with the vessel flee ts that call on their terminals, are the logical choice to coordinate the plan.

For example, the electrical power demand for shore power can only be established with information provided by the vessel fleet operators. Only the vessel fleet operators can provide information on the electrical power needs f or their ships and the number of visits these ships will make to California ports today and in the future. Typically, several different fleets visit a terminal, and the informat ion must be obtained from all fleets visiting the terminal to establish the necessary po wer requirements. This is the most important information provided in the terminal plan

.

Additionally, only the vessel fleet operator can pr ovide information on the physical details of the ships and the shore power capabiliti es of the ships for 2014 and beyond. Important information includes: the size of vessel s, to help locate where sockets should be placed at the berth; the electrical system of th e vessels, to determine how much infrastructure (e.g., cable reels) will be needed a t the terminals versus onboard the vessels themselves; and the location of the shore-p ower connection on the vessel, which may affect the position of the ship at the be rth (starboard or port?). All the above will have a bearing on the design of infrastructure on the shore.

ARB disagrees that the terminal operator cannot pre pare the terminal plan as a result of the terminal operator not holding a right of proper ty ownership, potential lease issues, or potential tax liabilities resulting from the new el ectrical power infrastructure for shore68

power. These issues do not affect the coordination and development of the terminal plan, but are issues to be considered when developi ng the milestones in the plan.

ARB also disagrees that ports are the appropriate e ntity for the terminal plan because as landlords the ports are responsible to provide i nfrastructure for basic terminal and vessel operations and to maintain the property to e xisting code, or that the ports have greater financial assets than the terminals, or tha t the ports have the responsibility to address CEQA concerns and issue permits. While the se points are pertinent for the execution of the plans (i.e., constructing the nece ssary infrastructure), they do not support the argument that the ports are better cand idates for coordinating the plan. As discussed above, the terminals are better suited fo r determining the needs of their customers, the vessel fleet operators that are requ ired by the regulation to reduce their

emissions.

154. Comment: Staff should be committed to providing detailed cri teria for the terminal plan, such that if the terminals prepare t hese plans satisfy these criteria, the plan will be approved. (PMSA2)

Response: Staff agreed at the Board hearing that it would w ork with the terminal operators on the plans. To that end, staff revised the terminal plan portion of the regulation to add additional detailed criteria, whi ch was included in the 15-day modifications to the regulation, and has worked wit h the commenter and his clients to develop a draft template for the plans. ARB will c ontinue to work with the terminal operators regarding the preparation of the terminal plans.

155. Comment: These inequities will be heightened by the thresh olds developed by the proposed rule, for example, in that a general c argo terminal that receives 49 general cargo visits and then one container or r eefer vessel would be subject to installing infrastructure for that one vessel, b ut another terminal that receives 49 passenger vessels calls would be exempt. The re gulation also includes all container vessels, reefers, and passenger vessels r egardless of the number of visits to a California port, the length of stay or the power demand of those vessels. (PMSA1)

Response: The commenter may be confusing the requirement fo r submitting a plan,

which is based on a threshold of 50 vessel calls to a terminal by affected ships (container ships, passenger ships, and refrigerated -cargo ships) with the requirements imposed on the vessel fleet operators to reduce the ir hotelling emissions and subsequently their reliance on the terminal operato rs to accommodate their needs. For example, because the regulation affects passenger-s hip fleets that make five or more visits to a California port, a passenger terminal t hat receives 49 passenger-ship calls— although exempt by the regulation from submitting a plan—would nevertheless be compelled to meet the needs of its customers by ins talling shore power infrastructure, plan or no plan. Again, the requirement for submit ting a terminal plan should not be confused with an obligation to provide the necessar y infrastructure. The desire to keep current customers (i.e., vessel fleets) and to attr act new customers is more of a69

business plan, one that should compel the terminals and the ports to work together to accommodate the vessels’ needs to comply with the r egulation.

The regulation requires affected fleets of containe r ships, passenger ships, and refrigerated-cargo ships either to reduce the use o f auxiliary engines by some percentage or to reduce the emissions from the flee t by some percentage. Even in 2020, when that percentage reaches 80 percent, 20 p ercent of the fleet’s activities are not subject to the requirements of the regulation. Therefore, one visit by a ship affected by the regulation would not require a terminal to a dd shore power infrastructure.

156. Comment: Designation by type of vessel without provisions to excuse infrequent calls of low duration and activity canno t be justified on the basis of air quality improvements and is clearly arbitrary and c apricious under the stated objectives of reducing emissions from vessels at be rth. In addition, designation of only certain public port authorities as ports su bject to this rule is also discriminatory. (PMSA1)

Response: The regulation requires affected fleets of contai ner ships, passenger ships, and refrigerated cargo ships to either reduce the u se of auxiliary engines by 80 percent or reduce the emissions from the fleet by 80 percen t. Ship fleet operators have the ability to exempt from the regulation “20 percent” of their fleet’s activity, including visits associated with ships that are infrequent visitors or ships that stay in port a short

duration for all visits. ARB notes that for most a ffected fleets, the 80 percent criteria typically affects all the ships in the fleet that m ake four or more visits to the port.

Since the regulation affects three ship categories, the affected ports are those to which these ship categories call—the six ports identified in the regulation. When ARB addresses the other ship categories—tankers, bulk a nd general cargo ships, and vehicle carriers—other ports may be affected by a s eparate rulemaking.

AA. Cost Effectiveness of the Regulation

157. Comment: The cost to implement shore power is tremendously v ariable. To help minimize the cost impact of the regulation, th e regulation should be revised

to add cost-effectiveness thresholds above which te rminal operators and ocean carriers would be allowed to pursue less costly mea ns of reducing at-berth emissions. The current regulation does not provide for any such consideration. (PMSA1)

158. Comment: We want to ensure that the costs of compliance are fairly allocated.

We would like to work to ensure that the emission r eduction goals are met and the costs to achieve these goals are lowered as muc h as possible. (CMTA)

Response: ARB agrees the cost to implement shore power is v ariable and stated such in the TSD. On the other hand, the regulation does not prescribe any particular technology to be used for compliance, so a “less co stly” means of reducing at-berth70

emissions is certainly allowed. In fact, ARB expec ts the affected businesses to comply with the regulation through the most cost-effective means possible, which is why the regulation provides flexibility. Industry (i.e., t he “marketplace”) is best suited to determining how to comply with the regulation. ARB believes that the affected vessel categories and the ports on which they call have be en fairly treated by the regulation. Who ultimately bears what costs of the regulation w ill be determined by the market (i.e., through typical business practices).

159. Comment: In the assignment of cost, staff failed to identify the ports as direct contributors. Staff assumed that the landlord port s will eventually recover their costs through modifications to terminal leases, whi le the non-landlord ports will recover their capital costs through fees collected from the carriers. Port costs are real and should be accounted for. (PMSA1)

Response: ARB concurs that the ports will incur costs due t o the regulation. Nevertheless, in Chapter X of the TSD, ARB allocate d the costs for the regulation among the vessel fleet operators, the terminals, an d the utilities. The vessel fleet operators are responsible for costs associated with retrofitting their vessels with emission-reduction equipment or shore-power capabil ity. For the shoreside infrastructure, ARB divided the costs between the u tilities, for electrical improvements beyond the port’s property, and the terminals, for cost improvements within port
property.

The improvements beyond the port’s property are rel ated to the utility service that brings electrical power to the port, which varies widely b etween ports. Some ports, such as the Port of Los Angeles, have existing electrical i nfrastructure to serve their shore power requirements better than others, such as the Port o f Long Beach. The improvements within port property are either: 1) improvements t o the port-wide electrical system; or 2) improvements to the terminal electrical system. ARB assigned the cost for the improvements within port property to the terminals, assuming that ports would install the improvements and recover the costs from the termina ls.

160. Comment: The cost analysis does not evaluate the benefits of the voluntary efforts moving forward without the proposed regulat ion. In addition, while not yet implemented, the San Pedro Bay ports have already a dopted their Clean Air Action Plan to equip terminals with the necessary i nfrastructure over the next few years. There is no analysis of the benefits result ing from implementing the plan without the proposed regulation. (PMSA1)

Response: ARB applauds the Ports of Los Angeles and Long Be ach for adopting and implementing the Clean Air Action Plan (CAAP). The CAAP is a five-year plan that focuses on reducing emissions from all sources visi ting and operating at the two ports, including ships, trains, trucks, and cargo-handling equipment. One of the measures in the CAAP proposes the use of shore power to reduce at-berth ocean-going vessel emissions. The measure indicates, by fiscal year 2 010/2011, that at least one berth will have shore power capability for each of the contain er and passenger ship terminals at71

the two ports or 25 berths in total. With this inf rastructure in place, the plan estimates that about 1,000 ship visits will use shore power i n fiscal year 2010/2011.

ARB believes the shore power measure in the CAAP re presents an aggressive initial implementation of shore power within the two ports. At full implementation, the CAAP proposal will reduce NOx emissions by 15 percent an d PM emissions by 20 percent. This regulation builds on the CAAP in requiring gre ater utilization of shore power, requiring the use of shore power for 80 percent or more of all visits made by container and passenger ships to the two ports by 2020, or an equivalent emission reduction.

Because the reductions in the CAAP are not mandated by a regulation, the reductions resulting from implementing the plan are included i n the overall reductions of the regulation. In the TSD, ARB estimated that, prior to 2011, reductions achieved by the regulation were essentially due to the implementati on of the CAAP measures. Since the Board adopted the regulation in 2007, however, there have been other early shorepower projects being proposed to take advantage of early incentives, such as Proposition 1B and Carl Moyer funds.

161. Comment: It is not clear what benefit the auxiliary fuel reg ulation and voluntary efforts already underway contribute to the cost eff ectiveness of the regulation.

There is confusion of the claimed benefits of the r egulation in light of the pending low-sulfur fuel regulation for ships. There is no analysis of the costs and benefits of these regulations after full implementation of l ocal measures and compliance, whether regulatory or voluntary, with the standards envisioned under the current existing laws and voluntary measures taken as a who le. (PMSA1)

Response: When estimating the air quality benefits of the reg ulation, ARB excluded any reductions that have been or will be achieved b y other regulations pertaining to auxiliary engines on ocean-going vessels. For exam ple, when the Board adopted the regulation, the auxiliary fuel regulation was alrea dy in effect. That regulation required the use of 0.5 percent sulfur marine distillate fue l by January 1, 2007. The use of this fuel reduced emissions from auxiliary engines on oc ean-going vessels by 75 percent for diesel PM and six percent for NOx. These benefits were to increase in 2010, when the auxiliary engine fuel regulation was to require 0.1 percent sulfur fuel to be used.

ARB did not double-count the emission reductions ac hieved by the fuel regulation, but built on the success of that regulation. Despite l itigation and uncertainty regarding the auxiliary engine fuel regulation, ARB believes that regulation will be in place when this regulation becomes effective.

On the other hand, ARB included the emissions reduc tions and costs claimed by plans,

such as the San Pedro Ports Clean Air Action Plan b ecause, as a plan, it was not a binding regulation. This regulation overlays the p lan and becomes binding.72

BB. Health Benefits Analysis of the Regulation

162. Comment: Sulfur oxides are a significant precursor to PM 2.5 emissions. ARB’s GMERP finalized in April of 2006 did not fully quan tify the health impacts associated with the secondary particulate formation of sulfates. The plan did note however that as new information emerges about the contribution of sulfates to the health impacts from ambient levels of fine p articles, it may be necessary to accelerate implementation of the strategies in the plan (GMERP, p. 119). It is our understanding that ARB anticipated folding in t hese health impacts over the course of ensuing months. Based on the most recent scientific data, ARB should incorporate these impacts into the analysis of the regulatory costs and health benefits to fully capture the morbidity and mortali ty associated with ship pollution. ARB’s staff report should fully reflect the health benefits of this regulation and incorporate the most recent scientific research inc luding impacts from particulate sulfate. (ENVORG2)

Response: ARB agrees with the commenter that the Staff Repo rt should fully reflect the health benefits of the regulation. At the time the potential health benefits were assessed, analytical tools were not available for a ssessing the contribution of sulfur oxides (SOx) to the health impacts from PM 2.5 emissions; consequently, these impacts were not considered as part of the health benefits for this regulation. Furthermore, ARB assumed that the auxiliary engine fuel regulation w ould have already reduced SOx emissions by 80 percent, perhaps climbing to 96 per cent if lower-sulfur fuel were available by 2010. Therefore the vast majority of any health benefits associated with sulfates are captured under the auxiliary engine fu el rule.

The Pacific Merchant Shipping Association (PMSA) fi led suit in federal district court challenging the auxiliary engine fuel regulation as preempted emission standards under Clean Air Act section 209(e). In May 2008, the 9 th Circuit Court of Appeals upheld the lower court’s granting of summary judgment against ARB’s enforcement of that regulation. The Board subsequently adopted another fuel regulation, Fuel Sulfur and Other Operational Requirements for Ocean-Going Vess els within California Waters and 24 Nautical Miles of the California Baseline (2008) , to reduce emissions from all engines and boilers onboard ocean-going vessels. This regu lation will recapture the emissions reductions achieved by the regulation contested by PMSA and broaden those reductions to other engines and boilers. The fuel regulation, in conjunction with our regulation to reduce hotelling emissions, will sign ificantly reduce at-berth SOx

emissions.

163. Comment: We expect greenhouse gas (GHG) reductions from this regulation to be significant. We are pleased that this rule is n ow proposed to be a part of the implementation of AB 32 early action measures. ARB must ensure that all GHG reductions are quantified and that ARB’s analysis o f regulatory costs, health benefits and cost-effectiveness incorporated these reductions by apportioning part of the costs to GHG reductions. ARB must quan tify the GHG reductions73

associated with rule. ARB’s analysis of regulatory costs, health benefits, and cost-effectiveness must adequately account for thes e reductions. (ENVORG2)

Response: ARB agrees that the reductions of GHG should be q uantified, but disagrees that part of the cost of the regulation s hould be apportioned to GHG reductions. The regulation was intended to reduce the emissions of PM and NOx from ships that are docked at California ports. The PM emission reductions support the ARB’s effort to reduce exposure to toxic diesel PM and help meet air quality standards

for PM 2.5 . In addition, the NOx emission reductions resulti ng from the regulation will also assist districts that do not yet satisfy the o zone ambient air quality standards. ARB expects that most affected shipping companies will use shore power to comply with the regulation. The use of shore power, as compared to operating the ship’s auxiliary engines, will result in significant reductions of G HG. Consequently, the GHG reductions are a by-product of the effort to reduce the at-ber th ship emissions of PM and NOx. Being a by-product, the GHG reductions have no regu latory cost associated with them, but ARB did quantify the potential GHG emission red uctions in Chapter IX of the TSD.

164. Comment: The impacts and benefits of this regulation are ove rstated due to the

uncertainties inherent in the emission factors for ship auxiliary engines using the fuels assumed for this regulation. (PMSA1)

Response: ARB disagrees. The impacts and benefits of this regulation were based upon emission factors that have been publicly revie wed through the development of the ARB regulation entitled Auxiliary Diesel Engines An d Diesel-Electric Engines Operated On Ocean-Going Vessels Within California Waters And 24 Nautical Miles Of The California Baseline (2005) , and the Goods Movement Emission Reduction Plan (GMERP, 2006). As part of these proceedings, ARB s taff performed a critical review of the available information on ship engine PM emissio ns (See white paper: A Critical Review of Ocean-Going Vessel Particulate Matter Emi ssion Factors, 2007).

Regarding the perceived uncertainty of fuel types t o be used, see response to Comment 161 for a discussion on fuel assumptions, litigatio n, and recent Board actions. ARB

believes that low-sulfur fuels will be used in auxi liary engines when the requirements of this regulation take effect—the base case for the a nalysis as indicated on page five of Chapter V of the TSD. If heavy, high-sulfur bunker fuel is being used instead of cleaner-burning distillate fuels, the impacts and b enefits of this regulation will be significantly greater and the cost-effectiveness wo uld be even more favorable.

165. Comment: The health risk assessment done for this regulation is too limited geographically to determine the actual emission red uction benefits. The modeling domain used was for the San Pedro Bay port s only and did not include the entire regulated area with regard to the multip le ports affected in this rulemaking. In order to understand the full benefi ts and costs of implementing this proposed regulation, CARB needs to do the appr opriate modeling to determine the impacts and benefits based on the pop ulation densities, proximity, and exposure time to the vessels throughout the sta te. (PMSA1)74

Response: It was appropriate to conduct the health risk ass essment for the San Pedro Bay area because this is where the majority of vess els subject to the regulations are traveling, and likely encompasses the communities s ubject to the highest health risks. We recognize that other areas will experience diffe rent health impacts and are preparing health risk assessments for other areas. For example, ARB has been developing a health risk assessment for the Port of Oakland and the West Oakland community since early 2006. A draft health risk as sessment was released spring 2008 and is expected to be finalized by the end of the y ear. Together, these two risk assessments represent nearly 90 percent of the tota l visits affected by this regulation.

Health risk assessments require complex computer mo deling that is labor intensive. It would not be appropriate to delay the regulations b y months or even years to evaluate all areas of the State. In addition, the health ri sk assessment for the Ports of Los Angeles and Long Beach focused on diesel PM. T he regulations also reduce NOx and SOx emissions. These pollutants have additiona l health impacts to citizens living
near ports.

CC. Greenhouse Gases

166. Comment: We expect greenhouse gas (GHG) reductions from th is regulation to be significant. We are pleased that this rule is t he first Early Action Measure for AB 32, the Global Warming Solutions Bill. Any meth od of compliance that would cause increased greenhouse gases should not be allo wed, especially where compliance options exist that reduce GHGs. All com pliance pathways should be

held to the GHG standards set for Distributed Gener ation – for example the Wittmar LNG shore power equipment. We support the South Coast Air Quality Management District’s (SCAQMD) recommendation that alternative technologies should be BACT. Ensure that compliance pathways me et GHG standards to guarantee the maximum potential GHG reductions poss ible through this rule. (ENVORG3)

167. Comment: We ask the ARB to continue to reduce GHG. The GH G reductions from the proposed regulation can be significant in achieving early reductions keeping with the spirit of AB 32. Compliance should be held to the GHG standards set for distributed generation or a highe r standard to ensure maximum potential reductions through this rule. (BCLAC2)

168. Comment: Concerned that there isn’t a broader policy to pr event any greenhouse gas backsliding with this rule, meaning some alternatives compliance strategies may cause increases in greenh ouse gases. Where there are no other feasible means to comply, maybe that c an be considered. But in this case, we feel there are feasible alternatives that would be positive on greenhouse gasses meaning we would see reductions. Request that a clause be put in to prevent backsliding of GHGs. (NRDC)75

169. Comment: The staff proposal does include standards for NOx and PM emissions. However, does not believe that greenhou se gas emissions have been treated equally in this regulation. Would lik e to see some protections in the regulation against backsliding at a minimum to ensu re that we move forward and get the emission reductions we all desire. (UCS)

Response: As stated in Chapter IX of the TSD, the regulation will reduce CO 2 emissions by 122,000 to 242,000 metric tons in 2020 . The regulation achieves these reductions automatically as a co-benefit of the die sel PM and NOx emission reductions. ARB estimated these potential greenhouse gas (GHG) emissions reductions by assuming shore power will be used as the compliance path of choice, so the auxiliary engines on the vessels would be shut down and power would come from the grid. The marginal electricity from the grid that would be ne eded to supply the vessels would come from combined-cycle gas turbines, which produc e less CO 2 per kilowatt-hour than the auxiliary engines, hence the CO 2 emission reductions.

The regulation requires that distributed generation (DG) equipment, such as that provided by the “Wittmar” unit, provide electricity that is GHG-equivalent to the grid: 500 grams/ kilowatt-hour. This requirement essenti ally prohibits fuels other than natural gas (e.g. diesel) from being used in DG equipment, maximizing the emission-reduction benefits of the regulation.

ARB did not recommend such a CO 2 limit for other alternative technologies that do n ot generate and provide electricity as a method for ac hieving the reductions. These technologies, such as a capture-and-treat system (i .e., the “bonnet” technology), particulate filters, or selective catalytic reducti on (SCR) units, can significantly reduce criteria pollutants and/or toxic air pollutants but may slightly increase GHG emissions. However, it is unlikely that these technologies wou ld be used widely; therefore, ARB expects overall reductions in GHGs. ARB believes t hat the flexible approach to reducing NOx and PM emissions from hotelling ships that is provided by a full range of possible alternative technologies is paramount for the effectiveness of the regulation.

Since CO 2 emission reductions are a natural co-benefit of th e regulation, ARB asserts that any slight reduction in GHG benefits from the application of alternative technologies is minimal and acceptable.

170. Comment: AB 32 clearly places responsibility on the ARB in regards to implementing climate policies. It would be better for our climate policies and our state in general if we have ARB overseeing AB 32 ef forts instead of having this piecemeal approach we are now seeing with the CEQA debate. (CMTA)

Response: ARB agrees that AB 32 clearly gives ARB the authori ty to reduce greenhouse gases in California. Nevertheless, ARB must count on other State agencies, local governmental agencies, and industry to work as partners to achieve the challenging goal of significantly reducing GHG emis sions in the State.76

171. Comment: In the utility industry there is a lot of debate on the generation, when a utility procures that power, who owns the GHG att ributes that may be a tradable asset down the road. I would propose that GHG attributes be owned by entity implementing shore power. (DW)

Response: ARB understands and notes the comment. It is prema ture to determine the ownership of “tradable assets” related to GHG emiss ion reductions. AB 32 requires the Board, by January 1, 2009, to design and adopt an o verall plan (the Scoping Plan, or Plan) to reduce GHG emissions to 1990 levels by 202 0. ARB staff is currently working on the Plan, which will be presented to the Board f or consideration of adoption in

November 2008.

A cap-and trade system for reducing GHG emissions i s expected to be part of the proposed Plan taken to the Board. Should the Board adopt a cap-and-trade system as part of an overall strategy to reduce GHG emissions , the technical and administrative details of that system would still have to be devel oped. The Board has until January 1, 2011, to adopt the necessary regulations to implement the Plan, which, as mentioned, may include the cap-and-trade system. T he “credits” for reducing GHG
emissions, and the market in which these credits wo uld be traded, has yet to be

determined.

DD. Enforcement/Jurisdiction

172. Comment: We urge you to watch closely over enforcement. W e think that you may need some additional resources to enforce this regulation. We would like to work with ARB to help with enforcement to make sure we are getting the public health benefits and emission reductions expected. ( ALA)

173. Comment: We strongly urge the ARB to include strong enforcem ent provisions into this regulation. Vessels should be required t o provide supporting documentation to the ARB enforcement officials upon request and quarterly progress reports should be made public. The approp riate authority should conduct frequent terminal checks, both to monitor p rogress of shore power infrastructure development and the actual usage of shore power by docked

vessels. The ARB should work with other state and federal agencies to gain efficiencies in enforcing this regulation. Specifi c language must be included to clarify that upon adoption of this regulation, the use of shore power will no longer exempt an operator from the requirements of other c urrent or future marine rules.

California needs a full suite of control measures w hich build on one another to address pollution from ships—not one measure that c an rely on any number of alternative options—many of which may be the subjec t of future regulation. (ENVORG2)

Response: ARB agrees with the comments. ARB's FY 08-09 budge t includes two staff positions to perform compliance outreach and other enforcement efforts for this and77

several other newly adopted regulations that target emissions from port and other goods-movement related activities.

A significant portion of this regulation is dedicat ed to ensure compliance with the emission standards of this regulation. First, term inal plan operators are required to submit terminal plans to the Executive Officer deta iling the changes to their facility to accommodate the vessels that will need to satisfy t he emission reduction goals of the regulation. Second, the responsible official of ea ch affected fleet must submit an annual compliance statement certifying compliance with the requirements from the previous year. Finally, each affected fleet is subject to r eporting and recordkeeping requirements. These records will be subject to ins pection by ARB and local air district

enforcement staff.

Some of information the regulation requires fleets to maintain may be considered confidential; ARB will make information available u pon request as allowed under the Public Records Act (Government Code Section 6250 et seq.).

Finally, ARB will continue to work with shipping co mpanies, terminal operators and ports to ensure compliance with this regulation. ARB int ends to work with the affected organizations to develop the necessary forms, provi de for electronic submittal, and provide any necessary assistance, such as training workshops. ARB believes effective outreach will enhance compliance with the regulatio n.

With regard to other regulations containing shore p ower exemptions, ARB will review and revise the shore power elements in these regula tions as necessary.

174. Comment: ARB should maintain jurisdictional control. Don’t place the jurisdictional responsibility on the local agencies . (CMTA)

Response: ARB will continue to work as partners with the loca l air districts to enforce rules and regulations, including this one. The loc al air districts may have permitting authority for some of the equipment deployed for co mpliance with this regulation. For example, some shoreside equipment, such as a shore- side generator or a “capture-andtreat” unit (i.e., the “bonnet” technology unit), i s considered stationary equipment, subject to local air district permits and enforceme nt.

175. Comment: Ships should not be subject to fees and penalties u ntil adequate power is available for all ships calling at Califor nia ports. (PMSA1)

Response: ARB believes that adequate power will be available to meet the requirements of the regulation. See the response t o Comments 28-84 regarding the discussion of compliance schedules. ARB determined the performance standards in the Reduced Onboard Generation option schedule base d on discussions with the utility companies, ports, terminal operators, and vessel fl eet operators. The requirements are phased-in, and ARB believes that these requirements are reasonable. To wait until all78

ships calling at California ports have adequate pow er before enforcing the regulation is unreasonable and will unnecessarily delay emission reductions and health benefits.

EE. Circumvention of Public Disclosure Process

176. Comment: We are concerned that ARB is circumventing the publ ic disclosure process by not making public the latest draft of sh ore power regulations released in early October. We understand that the only part ies that have officially been notified are the Ports of Los Angeles, Long Beach, and Oakland. A matter of such critical importance to California’s environmen tal and public health should not only be decided by the ports. We ask that you amend this current draft to reflect our recommendations as stated above, and di stribute a revised draft widely and publicly with the required time necessar y for public comment before the regulation comes before the ARB Board of Direct ors. (ENVORG1)

Response: ARB disagrees strongly with the comment that ARB ci rcumvented the public disclosure process during the development of the regulation.

As in all regulatory development processes, ARB hel d both public meetings and individual meetings with stakeholders in the develo pment of this regulation. During the informal regulatory process, ARB held five workgrou p meetings and three community outreach meetings. ARB also participated in numero us meetings with various individual stakeholders—typically meetings with one or more st akeholders to either gather information, obtain feedback on proposed regulatory concepts, or address concerns. These meetings were held with representatives of th e ports, environmental groups, emission reduction technology developers, terminal operators, and vessel fleet operators. The regulation was developed in an open forum with full disclosure during the regulatory development process.

Regarding the allegation that ARB staff shared with the ports a draft proposed regulation to which other stakeholders had no acces s, ARB assumes the commenter is referring to a time period just prior to the public ation of the Staff Report. During the week of September 24, 2007, ARB released the most c urrent draft regulation and held three workshops and two community meetings at vario us locations in the State. At these meetings, ARB discussed additional revisions it intended to make to the draft regulation.

ARB revised the draft proposed regulation several t imes leading up to its submittal to the Office of Administrative Law (OAL). ARB commun icated with several stakeholders—ports, utilities, local air districts, and consultants—as it continued to make revisions. ARB submitted the draft proposed r egulation to OAL on October 9, 2007.

Because there had been some late revisions to the d raft proposed regulation discussed at the prior workshops and public meetings, ARB hel d a final workshop during the 45-comment period—on November 9, 2007—to obtain add itional public input on these79

proposed revisions. ARB had issued the notice of t his workshop on October 25, 2007,

less than a week after the commencement of the 45-d ay comment period.

ARB continued to work with stakeholders during the 45-day comment period, and ultimately revised the proposed draft regulation su bstantially before presenting it to the Board on December 7, 2007, at a public hearing. Th e development of this regulation, with all of the revisions to the draft proposed reg ulation that continued through the Board hearing, was conducted in an open, transparen t, and publicly accessible manner.

FF. Supports Port Drayage Truck Regulation

177. Comment: We support the proposed port drayage truck rule a nd urge the Board to adopt the measure. The Port of Long Beach and L os Angeles Boards have approved a progressive ban that eliminates dirty dr ayage trucks serving the two ports. The ports’ and CARB’s programs together pro vide a comprehensive approach to addressing port drayage emissions. (POL B2)

Response: This comment was included in a letter that addresse d comments on this regulation as well as on ARB’s proposed Port Drayag e Truck Regulation. Both regulations were presented to the Board on December 6, 2007. Because this comment does not address this regulation, ARB does not prov iding any response to the comment.

GG. Comments by Reference

The following comments and documents were requested to be incorporated by reference into the rulemaking file (PMSA1):

PMSA correspondence with Dr. Pingkuan Di, CARB, Nov ember 21, 2005, regarding

comments on the “Draft Diesel Particulate Matter Ex posure Assessment Study for the Ports of Los Angeles and Long Beach.”

Response: The letter provided comments on a draft ARB repor t: Diesel Particulate Matter Exposure Assessment Study for the Ports of L os Angeles and Long Beach

, October 2005. The report was subsequently finalize d April 2006, after considering all comments, including the above. Because these comme nts were addressed in the final version of the report, ARB does not respond to the letter’s comments in this FSOR.

PMSA correspondence with Mr. Mike Waugh, CARB, Apri l 5, 2006 regarding comments on the “Preliminary Draft Evaluation of Cold-Ironin g of Ocean-Going Vessels at

California Ports.”

Response: The letter provided comments for ARB’s draft repo rt: Preliminary Draft Evaluation of Cold-Ironing of Ocean Going Vessels a t California’s Ports (Evaluation Report). This report evaluated the technical and c ost-effectiveness of using shore power (cold-ironing) to reduce at-berth emissions f or ocean going vessels based upon ship category. The report estimated the cost-effec tiveness of using shore power three80

different ways: for all ships that visit a port, f or all ships that made three or more visits to a port, and for all ships that made six or more visits to a port. Estimates of costeffectiveness were made for each ship category and for each port the ship category visited in 2005. While the final regulation is ver y different than the proposal reviewed in the Evaluation Report, ARB did consider all of the comments raised in this letter in the development of this regulation, particularly in the cost-effectiveness calculations. Because this letter did not address the regulation as it was published at the beginning of this rulemaking process, ARB does not respond to th e letter in this FSOR.

PMSA correspondence with Clerk of the Board, CARB. April 19, 2006, regarding comments on the “Proposed Emission Reduction Plan f or Ports and Goods Movement

in California.”

Response: This letter provided comments on the Proposed Emi ssion Reduction Plan

for Ports and Goods Movement in California . This report provided a plan to reduce emissions from the movement of goods, including act ivities at California ports. Because these comments do not apply to the regulation, the FSOR does not respond to the

comments in this letter.81

IV. SUMMARY OF COMMENTS AND AGENCY RESPONSES TO THE MODIFIED

TEXT

Four written comments were received on the changes made to the regulation during the public comment period for the 15-day Notice (August 22, 2008 to September 8, 2008).

A list of commenters is set forth in Table II below , identifying the date and form of all comments that were timely submitted. Following the list is a summary of each objection or recommendation made regarding the proposed actio n, together with an explanation of how the proposed action has been changed to acco mmodate the objection or recommendation, or the reasons for making no change . The comments have been grouped by topic.

Table II: Comments Received During the 15-day Co mment Period

Abbreviation Commenter

ACTI John Powell ACTI Engineering Written Testimony: August 27, 2008

TBI William G. Gotimer, Jr. Trailer Bridge, Inc. Written Testimony: September 3, 2008

MAERSK B. Lee Kindberg, Ph.D.

Maersk Inc. Written Testimony: September 8, 2008

PMSA John McLaurin Pacific Merchant Shipping Association Written Testimony: September 8, 200882

A. Legal Authority

1. Comment: The ARB is preempted by federal law from implementi ng the regulation. The Board’s authority in this rulemaki ng, derived from Health & Safety Code §§ 43013 and 43018, explicitly authorizes ARB to regulate marine sources only to the extent it is not preempt ed by federal law. The Board’s authority derived from Health & Safety Code §39666 is also subject to federal preemption. In addition, the State’s statutory aut hority to regulate emissions from mobile non-road sources is, to any extent, derived directly from the explicit grant of such authority under federal law. These regulat ions, similar to the previous regulations on auxiliary and diesel electric engine s, have exposed several fundamental problems concerning the State’s authori ty to impose such a regulation on vessels, both U.S.-flagged and foreig n-flagged. Specifically, PMSA believes that the proposed regulations’ paragraph ( d) should not be adopted. This section places requirements on vessels that ar e inconsistent with, and contradictory to, existing statutes, court decision s and other provisions of law, and they exceed the rulemaking authority of the Boa rd. (PMSA)

2. Comment: In 1990, Congress amended the Clean Air Act (“CAA”) to authorize the U.S. Environmental Protection Agency (US EPA) t o adopt emission standards and other requirements related to the con trol of emissions from nonroad sources. Congress amended Section 209, which p ertains to motor vehicle emission adding Paragraph (e) (1):

No state or any political subdivision thereof shall adopt or attempt to enforce any standard or other requirement relating to the control of emission from either of the following new non-road engines or non-road vehicles subject to regulation under this chapter... (PMSA)

3. Comment: The CAA further defines a “non-road engine” as “an internal combustion engine (including the fuel system) that is not used in a motor vehicle.” (42 U.S.C. section 7550(10)). The require ments of the regulation require the modification of the vessel that is preempted un der the CAA. The evidence of the requirement to retrofit can be found in the fir st definition of in the regulation, “Alternative Control Technologies” (§ (c) (1)) that allows for anything “other than shutting down the engine.” Because of the required modification of t he vessel to comply, regardless of resulting emission reductions , the regulation is clearly in conflict with federal law and should not be impleme nted. (PMSA)

4. Comment: PMSA and CARB have both previously commented extens ively on case law that make it clear that this proposed regu lation is preempted by the CAA, the Port and Waterways Safety Act (PWSA) and O PA 90 (including Engine Manufacturers Association v. US EPA, 88 F.3d 1075 ( D.C. Cir.1996) and United States v. Locke, 529 U.S. 89 (2000)). For this reg ulation the same arguments apply, as the state of California is preempted unde r federal law from imposing regulations that result in modifications to the ves sels or their operation. (PMSA)83

5. Comment: In summary, the proposed regulation should be inval idated because it violates the Congressional intent of the Clean A ir Act, PWSA, OPA90, in

addition to the commerce clause and other federal s tatutes, and violates the general preemption principles that “give force to t he long standing rule that the enactment of a uniform federal scheme displaces sta te law.”

Response: These comments are outside the scope of the 15-da y changes; however, see response to Comments 2-4 in 45-day comment resp onses.

B. Do Not Adopt Regulation

6. Comment: The planning and acknowledgment of this rule will result in substantial costs to the industry that could affect the long term use of California ports as a gateway for imported and exported goods. Therefore it is imperative that the industry and CARB work to avoid otherwise unnecessary disruption of goods to and from California. The clearest and mos t direct way to work towards a mutually acceptable outcome that will yield signi ficant results similar in scope and affect to those that are expected to accrue fro m the proposed rulemaking would be to work out a Memorandum of Understanding between industry and the

Board.

To make the MOU fully actionable and comprehensive and consistent with Port plans, adopted pursuant to our proposed changes, it would need to be developed under a scenario that doesn’t punish early adopters , recognizes that some

vessels and marine terminals will be more suited fo r shore side power in the short-term than others, and acknowledge the lack of an international standard. We believe that the costs would be substantially re duced, the benefits accrued would be similar in significance to those presented to the Board at present, and that in such a scenario the proposed rules that are currently before you, with the exception of paragraphs (d), (e) and (f), could mov e forward without major industry opposition or the threat of litigation han ging over the Board.

A final consideration in favor of a voluntary MOU a pproach is the existence of the 1B bond funds, and the potential of other funding s ources, that could be used to provide shore side infrastructure and/or ship retro fits in the absence of a regulation but would be restricted, if not preclude d, after the regulations are approved. (PMSA)

Response: These comments are outside the scope of the 15-da y changes; however, see response to Comments 5-6 in 45-day comment resp onses.

C. Regulated California Waters

7. Comment: the inclusion of the definition of “regulated Calif ornia waters” is unnecessary and is in conflict with other definitio ns in the regulation.84

PMSA has previously documented our concerns about t he creation of the artificial concept of “Regulated California Waters” that is contrary to the authority granted to California by the federal government and has no basis in statute. In addition to those concerns, we strongly object to t he inclusion of this definition in this regulation since it is entirely out of context . While we strongly believe that California is preempted by federal law from impleme nting this regulation, no one is contesting that California has control over the waters and Ports within three

nautical miles of the California baseline. We read ily concede that all California Ports are well within California’s jurisdiction of three miles from the baseline.

Therefore, not only is this definition unnecessary, the inclusion of this definition is also inconsistent and in conflict with the already included definition of California Ports in the regulation. The definition of “Califo rnia Ports” for this regulation is restricted to six ports: Hueneme, Long Beach, Los Angeles, Oakland, San Diego, and San Francisco. The definition within th e “Regulated California Waters” includes “all California ports,” not just t he six that are subject to the regulation creating conflicting and confusing defin itions of California Ports that

could lead the reader to believe that all Californi a Ports are covered.

The staff justification that the definition of “Reg ulated California Waters” is needed because it is included in section (b) (3) (A ) is more easily and clearly resolved by modifying that section as follows:

“Ocean-going vessel voyages that consist of continu ous and expeditious navigation through any of the Regulated California Waters for the purpose of traversing such bodies of water without entering Ca lifornia internal or estuarine waters or calling at a port, roadstead, or terminal facility, “continuous and expeditious navigation” included;”

Since the State of California has no claim or reaso n to affect the innocent passage of vessels there is any reason for the arti ficial concept of “Regulated

California Waters” to further confuse and conflict with the stated purpose of the regulation to be imposed only on limited types of v essels at six selected ports in California. In order to avoid the conflicting defi nition of California Ports, and clarify that the application of the regulation only applies to the six ports listed

above the obvious solution is to remove the definit ion of “Regulated California Waters” from the regulation. (PMSA)

8. Comment: The proposed definition of "Regulated Waters" is to o broad and exceeds the scope of California's authority. There is no adequate legal authority cited for this broad definition, as mandated under California Government Code Section 11346.2(a) (2), and confirmed by recent cou rt decisions. The stated

intent of this definition for this section could be accomplished with much more general language, removing the question of jurisdic tion. (MAERSK)85

Response: ARB disagrees that the definition of “Regulated C alifornia Waters,” as used in this regulation, is too broad. The definition o f Regulated California Waters is tied to the exemption in subsection (b)(3)(A). Subsection (b)(3)(A) exempts from the requirements of the regulation “ocean-going vessels voyages that consist of continuous and expeditious navigation through any of the Regul ated California Waters for the purpose of traversing such bodies of water without entering California internal or estuarine waters or calling at a port, roadstead, o r terminal facility....” This regulation uses the same definition of “Regulated California W aters” as is used in other ARB regulations that affect ocean-going ships. Read to gether, the definition of Regulated California Waters has been modified to exclude voya ges that do not result in visiting a port, roadstead, or terminal facility; therefore, s uch voyages are exempted from the requirements of the regulation.

ARB also disagrees that the use of Regulated Califo rnia Waters within this regulation is confusing. The term is only used in conjunction wi th subsection (b)(3)(A). As discussed above, the exemption clearly exempts ships travelin g through Regulated California Waters from the regulation for those trips that do not involve a stop at a port, roadstead, or terminal facility. Otherwise, the regulation cl early affects container vessels, passenger vessels, and refrigerated cargo vessels w hen these vessels are docked at berth at a California port, a California port being defined as one of six ports: Hueneme, Los Angeles, Long Beach, Oakland, San Diego, and Sa n Francisco.

D. Include Boiler Emissions

9. Comment: The sentence from Requirements and Compliance Sched ule (d) (2) (A) “...Specifically, at-berth auxiliary engi ne emissions must be reduced by 10 percent by January 1, 2010, 25 percent by Januar y, 2012, ...” should be modified to read “Specifically, at-berth emissions must be reduced by...” where the words ‘auxiliary engines’ have been deleted. (A CTI)

10. Comment: At-berth emissions include boiler emissions, and th e ACTI system will reduce boiler emissions as well as auxiliary e ngine emissions, resulting in lower total emissions than if only the auxiliary en gines were considered. Total emissions reductions should be the criterion. (ACTI )

Response: ARB disagrees. The intent of the regulation is t o reduce emissions from auxiliary engines on ocean-going ships. The emissi ons from boilers are outside the scope of this regulation. Boiler emissions from oc ean-going vessels were addressed in ARB’s ocean-going vessels engines and auxiliary boi lers regulation that was adopted by the Board in July 2008.

E. Other Ship Categories

11. Comment: Even if limited to California’s Territorial Water s, this proposed regulation is a violation of the Commerce Clause of the Constitution. The regulation at hand affirmatively and facially discr iminates in fact and in practical86

effect against only selected vessels types, calling at selected ports. In so doing, the State is actively discriminating against vessel s by choosing to regulate only those vessels that are engaged in interstate and fo reign commerce. In fact, PMSA is not aware of any single vessel, much less a ny container, “reefer,” or cruise vessels, plying intercoastal waterways in a purely intrastate capacity that meets the proposed definition of “Oceangoing Vessel .” Simply put, this rule imposes requirements, fees, and penalties that only impact international trade and interstate commerce without any commensurate im pacts on, or regulatory parity for, any other vessels involved in intrastat e trade. (PMSA)

Response: ARB disagrees. To the extend that a fleet is onl y involved in intercoastal waterways trade and commerce, that fleet would be s ubject to the regulation if the fleet visits an affected port 25 or more times. The regu lation affects all fleets that visit one of the affected ports 25 or more times, whether the fl eet is involved in international, interstate, or intrastate trade. For related discu ssion, see response to Comments 15-26 in 45-day comment responses.

12. Comment: The Regulation is inherently discriminatory in natu re. (PMSA)

PMSA has previously commented on the fact that the regulation is discriminatory, arbitrary and capricious, (PMSA comment letter of D ecember 3, 2007) and will not repeat those comments here but do include them by reference. However, we expand on those previous comments with another exam ple of staff’s own assessment of alternatives that highlights that the selected regulatory process was not only discriminatory, but that its principle motivation for the proposed regulation was staff convenience rather than emissi on reductions.

Staff states, as part of the “Analysis of Alternati ve Regulatory Approaches” on page X-24 and X-26, “ 1) targeting the highest-emit ting ships to obtain the necessary reductions . . . Staff estimated that thi s regulatory approach would be as effective as the proposed regulation. An advant age to this approach is that it would identify the most cost-effective ships from w hich to reduce emissions; however, staff abandoned this approach because of t he complexity and difficulty of tracking the ships that were required to reduce emissions.”

In other words, staff decided that the most cost-ef fective and appropriate regulation should be discarded because it would be too difficult for staff to administer. Instead staff decided to that the regul ation should only apply to three pre-selected types of vessels and they did not need to address either the frequency of visits, engine loads, or consider actu al emissions from specific vessels at berth. The regulations simply require th at terminals that receive more than 50 vessel calls in 2008 must complete terminal plans under the regulation. But only fleets of container, reefer vessels that m ake more than 25 visits to any of the six selected California ports, or passenger vessels that receive more than 5 annual visits will be subject to the regulation. In contrast, any other type of vessel, regardless of how many visits it makes to t he same ports, or the amount87

of emissions from that vessel are exempt from the r equirements of the regulation. Designation by type of vessel without provisions to excuse infrequent calls of low duration and activity cannot be justified on the ba sis of air quality improvements and is clearly arbitrary and capricious under the s tated objectives of reducing emissions from vessels at berth. As such, with thes e provisions the regulation is discriminatory in nature and arbitrary and capricio us in application. In order for this regulation to avoid being clearly discriminato ry it should be applied to vessels based on the stated criteria that can be directly r elated to emissions from those

vessels.

Response: These comments are outside the scope of the 15-da y changes; however, ARB disagrees that the regulations ARB developed to reduce at-berth emissions are affirmatively and facially discriminatory. ARB int ends to develop regulations to reduce at-berth emissions from all ship types in a cost-ef fective manner. See response to Comments 8-14 in 45-day comment responses.

ARB disagrees that the regulation is discriminatory , arbitrary and capricious. As discussed in response to Comments 8-14 in 45-day co mment responses, the ARB intends to develop regulations to reduce at-berth e missions from all ship categories. This regulation, the first regulation to require at -berth emission reductions, affects three ship categories—container ships, passenger ships, a nd refrigerated cargo ships. A second regulation will be developed to reduce the a t-berth emissions from the other ship categories.

ARB disagrees that one of the alternative regulator y approaches was abandoned

because it would be too difficult for ARB to admini ster. This approach would target the highest-emitting ships, typically the ships that ma ke the most visits to a port, to obtain the necessary reductions. As stated in Chapter X o f the TSD, “...staff abandoned this approach because of the complexity and difficulty o f tracking the ships that were required to reduce emissions.” The issues related to the tracking of ships with this approach are: 1) concern that ship operators could operate fleets to avoid thresholds identified in the regulation; 2) greater opportunit y for inadvertent noncompliance by fleets—operators may not know which ships in their fleets should be in compliance due to constant re-deployment of ships; 3) significant tracking and recordkeeping requirements (greater than what is required by this regulation); and 4) enforcement

issues. It was for all of the above reasons that t he ARB decided to develop the regulation based on fleet emission reductions appro ach—not because the alternative imposes an unacceptable administrative burden to AR B.

F. Clarification of Vessel Type and Requirements

13. Comment : Please confirm that the definition of “type of v essel” when referring to “fleet” means the broad type (container, tanker, et c.), and not the individual class or size ship. The latter approach would greatly se gment the fleets, resulting in significantly increased resource demands to ensure compliance without commensurate environmental benefit. (MAERSK)88

Response: “Type of vessel” refers to the broad type of vess el, e.g., container ship fleet. The type of vessels does not refer to indiv idual classes of ships.

14. Comment: The modified regulation requires additional clarifi cation of the requirements of vessel fleets. PMSA has received c omments that additional clarification of the intended application of § (d) (1) and § (d) (2) to vessel fleets is needed to avoid future confusion and inappropriate application of § (d) (2). We suggest some specific language in the Applicability and General Exemption Sections (§ (b) (b)), to the effect that “vessels f leets must communicate their decision to pursue vessel connection to a grid base d shore power pathway under § (d) (1), that must be implemented on or before Ja nuary 1, 2014, or a equivalent emission pathway under section § (d) (2), that may include multiple strategies to reduce emissions from a vessel at berth that may in clude grid based shore power, distributed generation, or other methods to reduce emission from a vessel at berth beginning on or before January 1, 2010. Th e pathway selection must be made by the vessel fleet and communicated to the ex ecutive officer by to July 1, 2009.” (PMSA)

Response: ARB believes the regulation is clear with regard to choosing a compliance option. The two compliance paths are called “optio ns,” and there is language in the regulation that further clarifies choice—the introd uctory language in (d)(1)(A) and (d)(2)(A). Nevertheless, instead of imposing addit ional requirements, staff will continue to conduct substantial public outreach, including h olding workshops, and providing informational material on ARB’s webpage, to ensure affected companies are aware of the regulation’s requirements.

G. Complexity of Compliance Options

15. Comment: We appreciate the inclusion of alternative complian ce options and definition of requirements for credit for early act ion. However, we are concerned about the growing complexity and intrusiveness of t hese and other sections of the proposal. (MAERSK)

Response: ARB understands that the regulation can be consid ered complex. ARB believes that some of the complexity of the regulat ion was removed by consolidating the four previous compliance options into two, more-sim ilar options.

The flexibility of the regulation provided by the t echnology-neutral Equivalent Emissions Reduction option necessarily requires considerable testing, record-keeping, and reporting to assure compliance. A variety of techn ologies could be used for compliance, each of them subject to verification of performance and proof of deployment.

Significant revisions, released as part of the 15-d ay revisions, included the early and excess emission reduction program, and revisions to the emergency event definition and the impact of these revisions on compliance. T hese two revisions were requested by several commenters, and the inclusion of these r evisions required additional text, as89

indicated by this commenter. ARB anticipates addit ional outreach efforts to assist the affected terminals, ports, utilities, and ship oper ators in complying with this regulation through additional workshops and the availability o f fact sheets and compliance material through ARB’s webpage.

16. Comment: For alternative compliance, the required reductions are calculated vs. a baseline defined as operating the auxiliary engin es on MGO. (MAERSK)

a. It is unclear whether a cost justification was d one using this basis.

b. It is unclear without more lengthy analysis how this might impact selection of alternative reduction technologies. However this pr ovision appears to raise the bar significantly for alternatives to shore pow er. Alternative technologies must also be “verified,” which has been demonstrate d to be a slow and potentially costly process, which has been seen in other applications (e.g., diesel trucks) to result in periods without adequate verified commercially-available technologies.

Response : The 45-day version of the regulation included th e requirement that the

baseline emissions be determined based on the use o f marine diesel fuel. The auxiliary engine regulation, which was expected to be effecti ve when this regulation is in place, allows the use of both marine gas oil and marine di esel fuel. To be consistent with the requirements of this regulation, the 15-day revisio ns subsequently clarified that the baseline can be based on either marine gas oil or m arine diesel fuel. The intent of this requirement was to allow only reductions to be used for compliance with the regulation that have not been encumbered by regulations that a re in place—in this case, the auxiliary engine regulation. As discussed in the r esponse to Comment 161 in the 45-day comment responses, the auxiliary engine regu lation will reduce the emissions from uncontrolled levels of NOx emissions by six pe rcent and PM emissions by 75 percent. Because this provision was intended to reflect the emission impact of existing regulations, no cost justification was don e or was necessary for this provision.

Finally, this provision which reflects the expected emissions when the regulation becomes effective, should have no impact on the dev elopment of alternative control technologies to satisfy this regulation.

The regulation does not require that alternative co ntrol technologies be accredited through the verification program. Instead, the reg ulation has a procedure that ensures

the reductions from the use of alternative control techniques are quantifiable and enforceable. In most cases, an initial emission me asurement will be necessary. If the same technology is used on several ships, then only a representative sample would

needed to be tested. After the initial source test , the regulation requires follow-up emission measurements or appropriate monitoring to ensure that the technology is operating properly.90

The verification procedures for in-use strategies t o control emissions from diesel engines require a significant amount of testing for a technology to be verified. This regulation does not require any additional testing for technologies that are verified for marine engines.

H. Emission Credit Use

17. Comment: Early reductions and excess reductions cannot be ap plied to 2014, but can be applied to other compliance dates. No r ationale is given for this. All compliance dates should be eligible for early reduc tion and excess reduction credits—early reductions are beneficial to the comm unity and should be encouraged. (MAERSK)

Response: ARB agrees that early reductions are beneficial t o the community and should be encouraged. The intent of adding the ava ilability of early and excess fleet emission credits is to provide the necessary incent ives such that the fleets will reduce

emissions earlier and maximize the reductions. Con versely, the use of these fleet

emission credits will result in fewer reductions at later dates. For example, a fleet that can produce 100 tons of early credit prior to 2010 can use these fleet emission credits for compliance with 2010. The fleet complies for t he purposes of the regulation, but in actuality, the fleet has a 100 ton shortfall for 20 10. ARB believes the early and excess

fleet emission credits are worthwhile as an incenti ve, but should not compromise important milestones in the regulation for 2014 and 2020. As discussed previously, the regulation’s reductions are necessary for the South Coast Air Basin’s compliance with

the PM 2.5 ambient air quality standard in 2015. These reduct ions must be in place January 1, 2014, to be accredited toward complying with the ambient air quality standard. Consequently, the regulation does not al low the use of these credits for the 2014 milestone. To ensure that the regulation obta ins all the reductions at full implementation, the regulation does not allow the u se of these credits for the 2020 milestone. For both milestones, the diesel PM redu ction is also significant and warranted for public health protection.

I. Calculations of PM Emissions

18. Comment: Calculation of PM emissions: It is not clear what standards apply to the methods used to calculate early action reductio ns, which is new to this rule. Page II-25 of the Revisions to Title 13 states that :

(C) In lieu of test data measured pursuant to parag raph (A) or (B) above, the following emission rates may be used as default val ues:

• 13.9 g/kW-hr for NOx.

• 0.38 g/kW-hr for PM if 0.11 to 0.5 percent sulfur marine gas oil or marine

diesel oil is used as a fuel.

• 0.25 g/kW-hr for PM if 0.10 or less sulfur content marine gas oil or marine

diesel oil is used as a fuel.91

This language states effectively, that the differen ce between the current ARB requirement and actual fuel sulfur cannot be used w ithout testing. Such an application would not provide credit to an operator who voluntarily used lower sulfur fuel than required under the [now-suspended] auxiliary engine fuel rule.

We believe that a calculation that takes into accou nt specific fuel sulfur content, rather than just allowing two levels would more app ropriately drive operators

towards lower-sulfur fuel. Since such calculation methods exist, we believe that

this should be substituted for the calculation abov e. Our calculations show that the difference between the actual and required fuel sulfur can be very important in estimating emissions reductions for early action credits. (MAERSK)

Response: The calculation procedures outlined in subsection (e) of the regulation are intended to determine compliance with the requireme nts of the regulation: determining the percentage of onboard power reduction or the pe rcent reduction in emissions from the ship’s auxiliary engines. Consequently, these calculation procedures do not apply directly to the determination of fleet emission cre dits.

The regulation does not specify specific calculatio n procedures for determining fleet emission credit. Fleet emission credits will be gr anted by the Executive Officer of the Air Resources Board, pursuant to the regulation, if the reductions can be quantified, and the reductions can be characterized as either early reductions—reductions occurring prior to the regulation requiring the reduction—or reductions exceeding the requirements of the regulation at the time the redu ctions are generated. The specific procedure that is appropriate to use to calculate f leet emission credit will depend upon the type of reduction. There is no single method t o quantify all potential emission reduction options. Consequently, the regulation al lows flexibility in the method that is used to quantify fleet emission credits, including the method proposed by the

commenter.

Finally, in the calculation procedure outlined in s ubsection (e) of the regulation, a number of default values were provided. These defa ult values were intended to simplify the calculations for the affected fleet operators b y allowing the use of values that are consistent with “average values.” These values may not be representative of all cases, but the regulation allows the ship fleet operator t o provide their own values, if the values are supported with emission testing or other type o f support information.

J. Shore Power and Other Technologies

19. Comment: We reiterate our positions that shore power (“col d ironing”) is only one of a portfolio of reduction approaches, and sho uld not be treated separately. (MAERSK )

a. Shore power is an expensive and inflexible techn ique, which benefits only those ports with significant installed infrastructu re, and then only when92 sufficient power is available and vessel engines ar e fully transitioned and off

line.

b. More holistic approaches to vessel emissions red uctions can yield greater reductions more quickly and at lower cost. These in clude fuel switching, on-board and shore-based after-treatment techniques , engine and vessel design improvements, exhaust heat recovery, and hig her efficiency on-board operating/control equipment for high energy use app lications like refrigerated

containers.

c. Over-segmentation and prescriptive technology re quirements will reduce investment in other technology innovations.

Response: ARB agrees that shore power will require the port s, terminals, and ship operators to invest significantly in technology to allow shore power usage. However, such investment will result in significant emission reductions. Given that the use of grid-based shore power will be the technique of cho ice to reduce emissions when ships are at-berth, the regulation was developed consider ing two compliance options: grid-based shore power and the use of emission redu ction techniques that obtain an equivalent emission reduction. These techniques co uld include shore power, distributed generation, on-board emission reduction devices, or shore-based emission reduction devices. In summary, the regulation provides an op tion—the Equivalent Emissions Reduction Option—that allows different emission red uction techniques to be used to provide the necessary emission reductions, as long as these reductions can be quantified and are enforceable.

ARB agrees that prescriptive technology requirement s will reduce the development of innovative techniques. ARB believes the suggested modifications affecting the compliance methods and schedules addresses this con cern. These revisions, part of the staff’s suggested modifications approved by the Board and issued as a 15-day revision, both simplify the compliance options and also provides for a technology neutral path to comply with the regulation.

K. 3 - 5 Hour Auxiliary Engine Use Provision

20. Comment: There will be a period of time during shore power c onnect and also prior to shore power disconnect when the auxiliary engines will be operating. This time is not accounted for. (ACTI)

Response: For fleets that are complying with the Reduced On board Generation option of the regulation [(d)(1)], the regulation limits t he operation of auxiliary engines to three hours per visit for each visit that is intended to comply with the requirements of (d)(1). See response to Comments 121and122 in 45-day commen t responses, for more detail regarding the establishment of this limit.93

L. Violation Calculations

21. Comment: The section on calculating violations defines an en tirely new approach to such calculations. (Pages 43-45 of Atta chment II and also Attachment IV). The staff reports recognize that t his is a change and state that the constants selected were “mathematically determi ned to achieve the effective

economic disincentive.” No detail on this mathemat ical determination was provided, and the 15-day comment period is insuffic ient for careful analysis of the potential legal and economic ramifications. We are not aware of other rules

where the number of violations is calculated based on emissions or energy use divide by an arbitrary constant. As written this is not a “mere clarification” of the previous rule but an entire new penalty scheme, the function of which is untested and unclear. This hardly putting the regulated com munity on notice as to what their damages may be, even for inadvertent complian ce. This leads to a final point: the formulae do not take into account inten t and good faith efforts at compliance or force majeure, and thus may be too ri gid and inequitable. (MAERSK)

Response: The ARB disagrees that subsection (h) of the regu lation defines an entirely new approach to calculating violations. Furthermor e, this revision is not a clarification: staff recommended, and the Board approved, that rev isions to the violations subsection of the regulation needed to be made to clearly deli neate what is a violation when the vessel fleets do not comply with the fleet-averagin g provisions of the regulation. (See Attachment B of Resolution 07-57.)

ARB held a workshop on February 22, 2008, to discus s with stakeholders proposed revisions to the regulation, including revisions to violations section. The proposed

revisions to the violations section were well-recei ved because they better defined when violations of a fleet-averaging requirement occurre d during a compliance period.

Without the revisions, some interpreted that if a v essel fleet did not meet the requirements of the regulation—say, did not meet th e minimum percentage of visits using shore power in a calendar quarter—then the fl eet was in violation for the entire quarter, regardless of the amount of the shortfall. Fleets that barely missed the performance standard during a compliance period wou ld have as many violations as those that did not come close to the performance st andard.

ARB proposed mathematical formulae in the revised r egulation to determine the number of violations occurring when a fleet-averaging requ irement was not met during a compliance period, thereby alleviating this inequit y. The concept of determining the

number of violations based on mathematical formulae has been used in other ARB regulations. For example, this concept is used in the ARB regulation: alternative control plan regulation for consumer products and a erosol coating products— Title 17, CCR, section 94546.94

Regarding the specifics of the formulae, ARB develo ped the formulae to provide sufficient disincentive for noncompliance. ARB cal culated several scenarios of noncompliance—not using shore power or control equi pment, etc.—determined the cost of that noncompliance, and developed formulae that, at a minimum, would result in a potential penalty three to four times as high as th e cost of noncompliance. ARB did not provide a penalty schedule for noncompliance, as th ose penalties are determined on a case-by-case basis using criteria in the Health and Safety Code. The formulae only

determine the number of violations.

Please note that subsection (e) of the regulation a ddresses regulatory relief from requirements due to emergency events. In these cas es, the fleet calculations are adjusted and therefore not subject to enforcement a ction. The emergency event definition includes many cases where the ship opera tor intends to use shore power, but shore power is unavailable due to equipment breakdo wn or utility power issues—the “good faith effort” of the ship operator is recogni zed by the regulation in that this visit is not counted against the fleet.

M. Terminal Plan

22. Comment: The Terminals’ Plan Responsibility should be on the Port Authorities. While PMSA is appreciative of the efforts by CARB s taff to take some reasonable steps in accommodating the complexities of the inte rnational maritime industry, the proposed regulations still threaten the viabili ty of the established business models in operation at the ports of California, pot entially upset existing lease agreements, and will throw our ports out of balance with ports throughout the rest of the country and internationally. (PMSA)

23. Comment: As we have repeatedly asserted, PMSA continues to b elieve a more reasonable approach would be to place this planning burden upon the port authorities which are the only entities with land-u se authority, retain ownership of capital improvements, and have the same access to c argo and vessel forecasts as terminal operators. We believe that the elevatio n of the terminal plans to Port plans will not only result in more robust and accur ate predictions of future fleet operations but will also result in a more uniform a pproach to implementation of the requirements of the regulation and infrastructu re investment. (PMSA)

Response: These comments are outside the scope of the 15-d ays changes; however, see response to Comments 150-156 in 45-day comment responses.

24. Comment: The fleet and vessel plans due beginning July 2009 now require individual vessel detail out through 2020. This is an extraordinary timeframe and level of detail for an industry where redeployments of vessels and whole routes is common. Our operations experts report the followin g challenges with the proposed requirements:95

a. Marine terminals do not have the vessel informat ion required to develop a plan that is valid for any extended period. The te rminal is not responsible for planning and deciding which ships call at their ter minal.

b. Carriers change their plans frequently—every thr ee months is a typical frequency. Any projection of vessels calls into th e distant future is thus highly unreliable. (MAERSK)

25. Comment: While PMSA appreciates the extensive efforts of sta ff to develop instructions and forms for the terminal operators t o assist in the preparation of terminal plans, our primary concerns remain that, w ithout the full cooperation of the Port authorities, public utilities, and the oce an-carriers, the information requested of the terminal operators is unlikely to be more than a “best guess.” This is especially true when the terminal plans pro vided in July 2009, will have to predict the deployment and characteristics of use o f vessels beginning as late as 2014. Given the highly dynamic nature of internati onal trade the accuracy and value of these predictions are likely to be inaccur ate requiring extensive modifications at a future date. (PMSA)

Response: ARB agrees that long-range forecasts of ship move ments to and from California ports are difficult to prepare with a hi gh level of confidence, especially beyond 2014. However, such estimates are necessary to ens ure that the development of the shore-side infrastructure is adequate and that the ships are modified so that they will be able to use the infrastructure to satisfy the requi rements of the regulation. For example, a vessel fleet operator may have plans to bring mor e or larger vessels to the terminal in the next several years. Larger vessels require hig her levels of power; more vessels may require additional berths to be electrified.

For the terminal plans, which are due by July 1, 20 09, the regulation requires the terminal operator to provide information on the shi pping activity and the schedule for providing the shore-side infrastructure necessary f or the fleets to satisfy the requirements of the regulation. The regulation ass umes that the terminal operator will work with the operators of the fleets that frequent their terminal to provide the necessary information on the fleets for the terminal plan. T he information identified in the regulation for the fleet is provided on a fleet bas is and no information is required for any specific ship. ARB only expects that the ship oper ators will provide the best estimate and, if necessary, these estimates can be updated a s part of plan updates, as required by the regulation.

For the vessel plans, the regulation requires detai led ship information for the applicable milestone. However, since the vessel plans are due six months prior to the applicable milestone, ARB believes that the fleet ship operato rs are able to provide specific information on the affected ships for the milestone that is applicable six months after the plan is submitted to the Executive Officer of the A RB. In recognition that the ship operators have historically changed their ship acti vity plans frequently, the regulation requires only fleet level information for other mil estones that will become applicable96

after six months. Finally, we note that the inform ation provided is a plan, not a

commitment.

N. Annual Statement of Compliance

26. Comment: An annual statement of compliance is required start ing March 2011. This report requires vessel specific emissions calc ulations, TEU capacities and calculated energy use.

a. We would like to confirm that the required repor ts are annual and not expected to be updated with each vessel redeploymen t.

b. There is no legal definition of vessel TEU capac ity. Nominal capacity is declared by each vessel owner.

c. We also question whether the paperwork burden ha s been considered for both the industry and the staff. (MAERSK)

Response: The annual statement of compliance is filed once a year, representing compliance with the regulation for the previous yea r. The fleet information provided for the annual statement of compliance should address v essels that visited one of the six California ports affected by the regulation for the previous year. Redeployment of individual vessels does not affect compliance. The compliance report will simply indicate which vessels in the fleet visited that po rt, how many total visits were made by the fleet, what mitigation measures were employed f or those visits, and whether or not the applicable performance standards were met by th e fleet for the compliance period.

ARB understands that there is no legal definition o f twenty-foot-equivalent unit (TEU) capacity for container ships and, consequently, the re is some variation in the reported TEU capacity in the industry. However, since TEU c apacity is related to the overall size of the vessel, and therefore is one of the indicato rs of the potential power usage by the ship, it provides ARB staff with a cross reference to check the power usage listed for the fleet in the annual statement of compliance. A nom inal TEU capacity for a vessel can be used for reporting, as long as that figure is us ed consistently.

ARB understands that the recordkeeping requirements of the regulation can appear burdensome. The degree of recordkeeping is related to the flexibility of the regulation— numerous technologies can be used for compliance, a nd each of these technologies and their employment must be well-documented—and th e fact that the vessels sail away. When the regulated source—the vessels—depart , an enforcement officer must rely on records to determine what occurred during t he visits. For example, if the vessel were to use shore power during a visit, a log of co nnection, electrical use, and disconnection could confirm that. Recordkeeping co sts were included in staff’s cost analysis for this regulation.

Moreover, while fleet averaging provides the affect ed fleets flexibility for satisfying the requirements of the regulation, it is also more dif ficult to enforce. Compliance cannot be verified by testing one ship. Instead, the enforce ment is based on recordkeeping for the97

entire fleet. The proof that the fleet is complyin g with the regulation is based on records kept for each ship in the fleet and the subsequent reports—the annual statement of compliance—submitted to the Executive Officer. The records to be retained by the fleets are the minimum necessary to demonstrate com pliance with the rule.

ARB intends to work with the affected fleets to min imize the recordkeeping efforts by developing the necessary forms, providing for elect ronic submittal, and providing assistance, such as training workshops. Additional ly, the development of these forms will clearly define what is necessary to demonstrat e compliance with the regulation.

O. Cost Effectiveness

27. Comment: We stand by the comments on this program which we submitted in 2006 (Attachment A), and feel they have not been fu lly addressed

. Therefore, we ask that these be incorporated again into the recor d. In particular, our comments on cost effectiveness and economic impacts were not addressed; as documented, we believe the cost effectiveness analy sis is inaccurate, and therefore the underlying justification for the rule is unsupported. In addition, no new cost-impact data is provided in these revisions , and we believe the impacts could be significant. (MAERSK)

28. Comment: The ultimate cost and benefit of the modified regul ation are significantly different from those of the regulatio n approved by the Board. PMSA and others have previously commented that there is substantial uncertainty of the impacts and benefits of this regulation primarily d ue to the uncertainties in the cost of the shore-side infrastructure, the cost to modify the vessels, and the variability in vessel visit duration and auxiliary engine load while at berth. Now, because of the additional requirements that vessel fleets’ compliance will now be enforced on percent emissions reductions in additio n to percent vessel calls, our members are faced with a radically different regula tion. The economic impacts of meeting both requirements has not been assessed any where in the record supplied by staff. The cost-effectiveness of adding this requirement is nonexistent and, we believe significant. Because of t his radical change to the nature of the regulation, the consequences of which were n ot provided to the Board when making there decision, PMSA insists that the e conomic impacts of the revised regulation be completed and the results of that analysis be provided for full public review and comment. Following the publ ic review, the regulation, with the completed staff analysis, should be submitted t o the Board for reconsideration. (PMSA)

Response: ARB disagrees that the cost-effectiveness analysi s for the regulation is inaccurate. Additionally, the first commenter indi cated that comments provided on the ARB draft report: Evaluation of Cold-ironing Ocean -Going Vessels at California Ports (2006), particularly the comment on cost effectiven ess and economic impacts were not

addressed.98

As discussed in the section “Comments by Reference” of the 45-day Comments, the comments on this report are not directly applicable to the regulation. However, ARB

considered all of the comments received on the 2006 Draft Evaluation report, and discussed these comments extensively with stakehold ers at a workshop on January 11, 2007.

For example, ARB revised the hotelling times for sh ips used in the analysis in response to the comment that hotelling times for 2004 were n ot representative due to labor issues. In response to the comment that ships are regularly re-deployed to different parts of the world by ship operators, ARB assumed, for the cost-effectiveness analysis, that each ship would be re-deployed during the regu latory period which resulted in twice the number of ships being equipped with shore power equipment. Consequently, the cost to modify ships represents about 80 percent of the total cost for the regulation. In response to the comment that sample terminals do no t correctly represent the container industry as a whole, cost-effectiveness estimates w ere provided in Chapter X of the TSD that indicated the range of cost-effectiveness on a terminal basis for all terminals affected by the regulation. These terminal-based c ost-effectiveness analyses used the specific data applicable to that terminal, includin g hotelling times unique to the ships that visit the terminal and the ship specific chara cteristics for that terminal during 2006 (power needs, number of visits, etc). Finally, in response to the comments on the cost of electrical power, ARB consulted with the utiliti es and used the appropriate electricity utility tariff schedules for shore power.

ARB agrees that there are uncertainties in determin ing the impacts and benefits of the regulation. Because of this uncertainty, ARB took a conservative approach in developing the cost-effectiveness analysis by using conservative estimates of cost of shore-side infrastructure and ship retrofit costs—v alues that were not the highest in the range of information collected by ARB, but were wel l above the average of the range of information collected by ARB. In addition, as disc ussed above, the variation of hotelling times was accounted for in the terminal specific an alysis. In summary, the regulation is cost-effective using ARB’s conservative approach. ARB anticipates that the actual costs will likely be lower and the regulation will prove to be more cost-effective than staff estimated. For example, the auxiliary engine fuel price used in the cost-effectiveness analysis conducted for the TSD was $550 per metric ton. Since that time, fuel prices have reached as high as $1,300 per metric ton and c ontinue to hover around $1,000 per ton. At those prices, turning off the auxiliary en gines and using shore power would be

even more cost-effective.

While significant changes to the compliance options of the regulation have been made, and issued as part of the 15-day modified regulatio n order, these revisions do not affect the overall cost of the regulation. As discussed a bove, the regulation has two paths for compliance. The main compliance option initially w as based upon requiring a certain percentage of visits satisfy a limited auxiliary en gine operation limit. The regulation’s cost was based upon compliance with this option, si nce the technique of choice will most likely be grid-based shore power. As part of the 15-day modified regulation order, an additional requirement was added that requires t he fleets’ onboard electrical99

generation be reduced by 50 percent in 2014, 70 per cent in 2017, and 80 percent in 2020. ARB added this provision before the Board he aring to assure sufficient emission reductions would be achieved with grid-based shore power. Power requirements are directly related to emissions.

The impact of this revision on most fleets is that no additional ships will need to be modified to add shore power equipment, but some shi ps in the fleet may need to be modified sooner. ARB has determined that only one of the 64 affected fleets may need to modify one additional ship. As indicated in Cha pter X of the TSD, the regulation is expected to affect 1,450 ships, and the cost to mod ify ships is 80 percent of the total cost of the regulation: the cost to modify this ad ditional ship is insignificant compared to the total cost to modify all 1,450 ships. Conseque ntly, the revision is not expected to change the cost of the regulation.

29. Comment: We particularly question the cost-effectiveness of shore power when layered on top of other emissions reductions p rograms such as vessel engine fuel and technology requirements and vessel speed reduction. (MAERSK)

Response: See Comment 161 in the 45-day comments responses on assumptions regarding applicable baseline fuel. ARB assumed th at the auxiliary engine fuel regulation would remain in place when this regulati on takes effect. The costs and benefits of the regulation were based on this assum ption. If heavier, higher-sulfur fuels are used in auxiliary engines when this regulation takes effect, the benefits of this regulation will mushroom, as the emission reduction s credited to this regulation will be substantially greater.

In addition, the vessel speed reduction (VSR) progr am that is being considered by ARB would have no impact on reducing at-berth emissions and therefore would also have no impact to the cost effectiveness of the regulation. The VSR regulation would only affect the emissions of the ship while the ship is traveli ng in open waters.

P. 15-Day Comment Period

30. Comment: The 15-day comment period is entirely too brief f or full analysis of changes so far-reaching and detailed. This is espec ially true for a notice issued after business hours on a Friday in late August, wh en many people are on vacation or out of the office. (MAERSK)

a. Under California Government Code Section 11346.4 (a), CARB is required to provide notice of its proposed regulations at least 45 days prior to the hearing and close of any public comment period. We note CA RB is allowing only 15 days for public comments in response to the regu lations published on August 22, 2008. This is not adequate time. The 15-day period must be expanded to 45 days as the 15-day comment period is not authorized by law.

Under California Government Code Section 11346.8 CA RB is allowed to100 adopt or amend an existing proposed regulation allo wing 15 days public notice only when changes to a proposed regulation a re "nonsubstantial," "solely grammatical in nature," or "sufficiently re lated to the original text that the public was adequately placed on notice."

b. The changes announced on August 22, 2008, are su bstantive, complex and require careful evaluation as an entirely new propo sal. Entirely new sections and new definitions were added, and the calculation s methodologies provided for alternative compliance require additional techn ical analysis. In addition, the approach to defining number of violations based on energy use or pounds emitted appears to break entirely new ground. The fact that Staff took eight months to write the modifications is evidence enough that these are complex, substantive and merit a new public review period as this is, in reality, a new proposed set of regulations.

c. These changes materially alter the scope of the rules and the timetables for compliance, and are much more than mere clarificati ons. We reserve the right to submit additional comments within 45 days upon a more thorough review of the proposal.

Response: ARB understands that the 15-day revisions were su bstantial compared to the proposed draft regulation originally released O ctober 9, 2007, but disagrees that the 15-day comment period was too brief to review these revisions.

After considering stakeholder input during the 45-d ay comment period, staff recommended to the Board a proposed regulation that contained significant

modifications. These modifications were enumerated in Attachment B of Board Resolution 07-57. As staff began making these and Board-directed revisions to the adopted regulation, staff held a workshop on Februa ry 22, 2008, to distribute and discuss with stakeholders the revised regulation.

Furthermore, staff met personally with representati ves of the commenter on March 6, 2008, to discuss the revised regulation, a s released for the February workshop. Staff also held joint workshops with the Port of Los Angeles on May 7, 2008, and the Port of Long Beach on May 1, 2008, to discu ss the requirements of the revised regulation. Representatives for the commenter atte nded all three workshops. Although the last edits to the regulation were not completed until shortly before the 15-day comment period, staff asserts that there was ample opportunity to discuss the revised regulation.

Moreover, staff disagrees that the 15-day revisions should be subject to a 45-day

review. California Government Code Section 11346.8 (c) states, in part: “No state agency may adopt, amend, or repeal a regulation whi ch has been changed from that which was originally made available to the public p ursuant to Section 11346.5, unless the change is... (2) sufficiently related to the orig inal text that the public was adequately placed on notice that the change could result from the originally proposed regulatory101

action. If a sufficiently related change is made, the full text of the resulting adoption, amendment, or repeal, with the change clearly indic ated, shall be made available to the public for at least 15 days before the agency adopt s, amends, or repeals the resulting regulation.” ARB released for public review the re vised regulation as 15-day revisions on August 22, 2008. The revisions to the regulatio n were sufficiently related to the original text and well within the scope of original notice.

Q. Proprietary Information

31. Comment: Some of the information requested may well consti tute confidential or proprietary business information, yet provisions to safeguard against unauthorized and inappropriate public disclosure ar e not included in the rules. (MAERSK)

32. Comment: We are concerned about the potential release of p roprietary

information included in these forms and in the flee t plans. CARB should provide a process to allow for companies to specify that th e information they are providing is proprietary in nature and should not b e made public without expressed written permission. (PMSA)

Response: ARB agrees that some of the information that is r equired by the regulation for the annual statement of compliance may be confi dential. The Responsible Official signing the annual statement of compliance should i dentify which portions of the statement are considered confidential. Any informa tion identified as confidential in the annual statement of compliance will be treated as c onfidential pursuant to the California

Public Records Act.102

V. CORRECTIONS TO NON-CANCER HEALTH IMPACTS AND VALUAT IONS,

AND TO REFERENCES IN THE TECHNICAL SUPPORT DOCUMENT

ARB notes the following corrections to the non-canc er health impacts and valuations and to the references in the Technical Support Docu ment.

1. Non-Cancer Health Effects and Valuations

ARB underestimated the non-cancer health impacts an d valuations that were presented in Chapter VIII of the Technical Support Document. ARB did not take into account the

emission reductions from 2020 to 2030 from containe r ships when determining the health impacts that would be avoided from implement ing the regulation and the economic value of avoiding those impacts. The maj ority of ships impacted by the regulation will be container ships. These ships ar e periodically deployed to other areas of the world requiring other ships to be reposition ed to serve California ports. These other ships will need to be retrofit in order to co nnect to shore power when at a California port. Consequently, ARB assumed a longe r lifetime for the regulation (2009- 2030) when determining the costs to container ship companies for complying with the regulation and the total emission reductions attrib uted to implementing the regulation.

Non-Cancer Health Effects

The statewide cumulative impacts of the emissions r educed through this regulation from year 2009 through 2030 are approximately:

• 990 premature deaths (280 to 1700, 95% confidence interval (CI))

• 210 hospital admissions due to respiratory causes (140 to 290, 95% CI)

• 390 hospital admissions due to cardiovascular caus es (250 to 600, 95% CI)

• 29,000 cases of asthma-related and other lower res piratory symptoms (11,000 to 46,000, 95% CI)

• 2,400 cases of acute bronchitis (0 to 5,100, 95% C I)

• 170,000 work loss days (140,000 to 200,000, 95% CI )

• 1,000,000 minor restricted activity days (810,000 to 1,200,000, 95% CI)

The following table lists the impacts associated wi th primary and secondary diesel emissions separately. The methodology for estimati ng these health impacts can be found in Appendix A of the Emission Reduction Plan for Ports and Goods Movement in California (ARB, 2006) 1

.

1 http://www.arb.ca.gov/planning/gmerp/march21plan/a ppendix_a.pdf103

Table III: Estimated Total Health Benefits Associa ted with Reductions in

Hotelling Emissions from Container Ships, Passenger Ships, and Refrigerated Cargo Ships (2009-2030) *

Endpoint Pollutant # of Cases

95% C.I. (Low) # of Cases

(Mean) # of Cases

95% C.I. (High)

PM 78 280 490

NOx 200 710 1,200 Premature Death

Total 280 990 1700

PM 39 61 84

NOx 96 150 210 Hospital admissions (Respiratory) Total 140 210 290

PM 71 110 170

NOx 180 280 430 Hospital admissions (Cardiovascular) Total 250 390 600

PM 3,200 8,400 13,000

NOx 8,100 21,000 33,000 Asthma & Lower Respiratory Symptoms Total 11,000 29,000 46,000

PM 0 690 1,500

NOx 0 1,700 3,600 Acute Bronchitis

Total 0 2,400 5,100

PM 42,000 50,000 58,000

NOx 100,000 120,000 140,000 Work Loss Days

Total 140,000 170,000 200,000

PM 230,000 290,000 340,000

NOx 580,000 710,000 840,000 Minor Restricted Activity Days Total 810,000 1,000,000 1,200,000

* Health effects from primary and secondary PM are la beled PM and NOx, respectively. The sum of PM and NOx impacts may not equal the total given du e to rounding.

Economic Valuation of Non-Cancer Health Effects

The table below lists the valuation of avoiding var ious health effects, compiled from the ARB and U.S. EPA publications

 updated in 2006 dollars. The valuations based on willingness to pay (WTP), as well as those based on wages, are adjusted for anticipated growth in real income.104

Table IV: Undiscounted Unit Values for Health Effe cts (At various income levels in 2006 dollars) A

Health Endpoint 2007 2009 2030 References

Mortality

Premature death ($ million) 8.2 8.3 9.5 U.S. EPA (1999, p. 70-72, 2000, (2004, p. 9-121)

Hospital Admissions

Cardiovascular ($ thousands) 44 45 57 ARB (2003), p . 63

Respiratory ($ thousands) 36 36 47 ARB (2003), p. 6 3

Minor Illnesses

Acute Bronchitis 452 454 474 U.S. EPA (2004), 9-158

Lower Respiratory Symptoms 20 20 21 U.S. EPA (2004) , 9-158

Work loss day 192 198 273 2002 California wage data, U.S. Department of Labor

Minor restricted activity day (MRAD) 64 64 67 U.S. EPA (2004), 9-159

A The value for premature death is adjusted for proje cted real income growth, net of 0.4 elasticity. Wage-based values (Work Loss Days) are adjusted for projected real income growth, as are WTP-derived values (Lower Respiratory Sympto ms, Acute Bronchitis, and MRADs). Health endpoint values based on cost-of-illness (Cardiovas cular and Respiratory Hospitalizations) are adjusted for the amount by which projected CPI for Medical Care (hospitalization) exceeds all-item

CPI.

Benefits from the implementing the regulation are s ubstantial. ARB estimates cumulative benefits over the period from 2009 to 20 30 to be nearly $5.7 billion using a three percent discount rate or $3.1 billion using a seven percent discount rate 2 . A large proportion of the monetized benefits results from a voiding premature death. The estimated benefits from avoided morbidity are appro ximately $87 million with a three percent discount rate and nearly $49 million with a seven percent discount rate. Approximately 71percent of the benefits are associa ted with reduced PM from NOx emissions, and the remaining 29 percent from direct PM emissions.

2. References

There were title names and date errors in the refer ences for various chapters in and appendices to the Technical Support Document (TSD). In addition, one reference was inadvertently included in a chapter and appendix to the TSD. ARB notes the following corrections to the references by chapter and append ix.

2 ARB follows U.S. EPA practice in reporting results using both three percent and seven percent discoun t

rates.105

1) References at the end of Chapter III:

Dates were changed to three references and should a ppear as follows:

Port of Oakland. Maritime: Terminal Specifications ; October 12, 2007. http://www.portofoakland.com/maritime/terminal.asp

Port of Long Beach. Trade/Commerce: Cargo/Tenants – Containerized, Dry Bulk, Liquid Bulk, Break Bulk & Ro Ro ; October 12, 2007. http://www.polb.com/economics/cargotenant/default.a sp

Port of Los Angeles. Facilities: Passenger Terminal, Automobile Terminal , Breakbulk Terminals, Container Terminals, Dry Bulk Terminals, and Liquid Bulk Terminals ; October 12, 2007 http://www.portoflosangeles.org/facilities.htm

2) References at the end of Chapter IV:

Dates were changed to two references and should app ear as follows:

Hollman, Michael (MPH). “Cold ironing gathers mome ntum.” Germanischer Lloyd
nonstop . Edition 2: 26-27. February 2006. http://www.glgroup.com/images/glgroup/nonstop_2006-02_E.pdf

Port of Los Angeles. “Evergreen Group’s First ‘Gre en’ Mega Ship, Ever Superb, Makes Her Maiden Call at the Port of Los Angeles.” Press Release. September 20, 2006. http://www.portoflosangeles.org/Press/REL_Ever_Supe rb_First_Call.pdf

3) References at the end of Chapter VII:

The date was deleted from one reference and changed for four others and should appear as follows:

Advanced Cleanup Technologies, Inc. ACTI When Experience Counts ; Informational

Brochure

Public Utilities Commission (PUC). Chapter 3, Arti cle 1, Section 451-457; Public Utilities Code. Date accessed: October 17, 2007. http://www.leginfo.ca.gov/cgi-bin/displaycode?secti on=puc&group=00001-

01000&file=451-467

Sea to Sky Pollution Solutions. WiFE on Demand ; October 2, 2007. http://www.seatoskypollutionsolutions.com/solution- wife.php106

U.S. Department of Transportation Maritime Administ ration Office of Shipbuilding and Marine Technology. Energy Technologies. Newsletter No. 3 , Spring 2003. http://www.marad.dot.gov/nmrec/energy_technologies/ images/ETNo3Spring03.htm Date accessed: October 17, 2007

U.S. Department of Transportation Maritime Administ ration Office of Shipbuilding and Marine Technology. Energy Technologies. Newsletter No. 2 , Fall 2002. http://www.marad.dot.gov/nmrec/energy_technologies/ images/ETNo2Fall2002.htm Date accessed: October 17, 2007.

In addition, the following reference was deleted as it does not pertain to the chapter:

Joseph Calavita, California Air Resources Board. P ersonal communication. October 5-6, 2006.

4) References at the end of Chapter VIII:

The date was changed in one reference, and the titl e was changed in another. The references should appear as follows:

Metallextraktion AB (MEAB). September 2003. http://www.meab-mx.se/en/index.htm

United States Environmental Protection Agency, Asse ssment and Standards Division, Office of Transportation and Air Quality. Draft Regulatory Impact Analysis: Control of Emissions from Nonroad Diesel Engines . EPA420-R-03-008. CD-ROM. April 2003. http://www.epa.gov/otaq/cleaner-nonroad/r03008.pdf

5) References at the end of Chapter X:

Dates were changed to three references and should a ppear as follows:

Pacific Gas and Electric Company. “Tariff Book.” Pa cific Gas and Electric Company.
March 19, 2005. http://www.pge.com/tariffs/ERS.SHTML#ERS (PG&E, 2005)

San Diego Gas and Electric. “Electric Tariff Book - Commercial/Industrial Rates.” San Diego Gas and Electric. May 29, 2005. http://www.sdge.com/regulatory/tariff/elec_commerci al.shtml

Southern California Edison. “Regulatory – SCE Tarif f Books, General Service –

Industrial Rate Schedules.” Southern California Edi son. April 14, 2005. http://www.sce.com/AboutSCE/Regulatory/tariffbooks/ ratespricing/businessrates.htm107

6) References at the end of Appendix B:

The date and title was changed in one reference and should appear as follows:

California Air Resources Board. A Critical Review of Ocean-Going Vessel Particulate

Matter Emission Factors ; October 9, 2007. In press.

7) References at the end of Appendix F:

The date was deleted from one reference and changed for another and should appear

as follows:

Advanced Cleanup Technologies, Inc. ACTI When Experience Counts ; Informational

Brochure

DieselNet. Diesel Emission Control ; DieselNet Technology Guide

. August 29, 2007. http://www.dieselnet.com/tech/engine_control.html

In addition, the following reference was deleted as it does not pertain to the chapter:

Joseph Calavita, California Air Resources Board. P ersonal communication. October 5-6, 2006.