SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

Final Staff Report for

PROPOSED AMENDED RUL E 1110.2

-- EMISSIONS FROM GASEO US

- AND LIQUID

- FUELED INTERNAL COMB USTION ENGINES AND

RESCISSION OF RULE 1 110.1

– EMISSIONS FROM STATI ONARY

INTERNAL COMBUSTION ENGINES

May 2005

Deputy Executive Officer Planning, Rule Development, and Area Sources Elaine Chang, DrPH

Assistant Deputy Executive Officer Planning, Rule Development, and Area Sources Laki Tisopulos, Ph.D., P.E.

Authors: Martin Kay, P.E ., M.S., Program Supervisor Alfonso Baez, M.S., Senior Air Quality Engineer Howard Lange, Ph.D., Air Quality Engineer II

Reviewed by: Barbara Baird, Principal Deputy District Counsel

Technical Assistance: Chris Abe, Air Quality Specialist Kien Huynh, Air Quality Engineer II Shams Hasan, Air Quality SpecialistSOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

GOVERNING BOARD

Chair: WILLIAM A. BURKE, Ed.D. Speaker of the Assembly Appointee

Vice Chair: S. ROY WILSON, Ed.D. Supervisor, Fourth Dist rict Riverside County Representative

MEMBERS:

MICHAEL D. ANTONOVICH Supervisor, Fifth District Los Angeles County Representative

JANE W. CARNEY Senate Rules Committee Appointee

MIGUEL PULIDO Mayor, City of Santa Ana Cities Representative, Orange Coun ty

BEATRICE J. S. LAPISTO

- KIRTLEY Mayor, City of Bradbury Cities Representative, Los Angeles County/Eastern Region

RONALD O. LOVERIDGE Mayor, City of Riverside Cities Representative, Riverside County

JAN PERRY Councilmember, 9 th District Cities Represen tative, Los Angeles County, Western Region

GARY OVITT Supervisor, Fourth District San Bernardino County Representative

JAMES SILVA Supervisor, Second District Orange County Representative

CYNTHIA VERDUGO

– PERALTA Governor’s Appointee

DENNIS YATES
Coun cilmember, City of Chino Cities Representative, San Bernardino County

EXECUTIVE OFFICER

BARRY R. WALLERSTEIN, D.Env.

### TABLE OF CONTENTS

ii May 2005 BACKGROUND

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

South Coast Air Quality Management District

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

SB700

- Agricultural Operations

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

Current Rule 1110.2

................................ ................................ ................................ . 2

RECLAIM

................................ ................................ ................................ ................ 2

USEPA Reg ulations

................................ ................................ ................................ . 2

CARB Regulations and Guidance

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

AFFECTED SOURCES/EMI SSIONS INVENTORY

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

AQMD Agricultural Operations Survey

................................ ................................ .. 7

Portable Engines

................................ ................................ ................................ ...... 8

Stationary Non

- Agricultural Engines

................................ ................................ ...... 8

CONTROL TECHNOLOGY

................................ ................................ .............................. 8

Diesel Engine Emissions and Emission Control Technologies

............................... 9

Spark

- Ignition (SI) Engine Emissions and Emission Control Technologies

........... 9

Other Technology Options

................................ ................................ ..................... 13

PROPOSED AMENDMENTS

................................ ................................ .......................... 14

Exemptions

– Subdivision (h)

................................ ................................ ................ 14

Requirements

– Subdivision (d)

................................ ................................ ............. 16

Compliance

– Subdivision (e)

................................ ................................ ................ 17

Monitoring and Recordkeeping

– S ubdivision (f)

................................ ................. 17

Test Methods

– Subdivision (g)

................................ ................................ ............. 18

Technology Assessment for PM 2.5



### - Subdivision (h)

................................ ............. 18

Definitions

– Subdivision (c)

................................ ................................ ................. 18

EMISSIONS IMPACTS

................................ ................................ ................................ .... 19

Stationary Non

- Emergency Engines in Agricultural Operations

........................... 19

Portable Engines

................................ ................................ ................................ .... 20

COST

- EFFECTIVE NESS

................................ ................................ ................................ . 20

State Law Requirements

................................ ................................ ........................ 20

Cost

- Effectiveness Calculations

................................ ................................ ............ 20

Cost

- Effectiveness Comparisons

................................ ................................ ........... 21

Incremental Cost

- Effectiveness

................................ ................................ ............. 27

### TABLE OF CONTENTS

iii May 2005 CALIFORNIA ENVIRONME NTAL QUALITY ACT

................................ .................... 28

SOCIOECONOMIC ASSESS MENT

................................ ................................ ................ 28

A ffected Facilities

................................ ................................ ................................ .. 28

Compliance Costs

................................ ................................ ................................ .. 29

Potentia l Impact of fees on Agricultural Sources

................................ .................. 30

COMPARATIVE ANALYSIS

................................ ................................ .......................... 32

Existing Federal Requirements

................................ ................................ .............. 32

AQMD Rules Applying to Gaseous and Liquid

- Fueled Engines

.......................... 38

PERMITTING RECOMMEND ATIONS

................................ ................................ .......... 39

DRAFT FINDINGS

................................ ................................ ................................ ........... 40

REFERENCES

................................ ................................ ................................ .................. 41

APPENDIX A

– COST

- EFFECTIVENESS C ALCULATIONS

................................ ... A

- 1

APPENDIX B

- INCENTIVE FUNDING AV AILABLE FOR

................................ ..... B

- 1

AGRICULTURAL ENGINE EMISSION REDUCTIONS

APPENDIX C

- SB 700 EXCERPTS

................................ ................................ .............. C

- 1

APPENDIX D

- STATIONARY, NON

- EMERGENCY AGRICULTUR AL ENGINES

EMISSIONS INVENTORY

................................ ................................ ........................... D

- 1

APPENDIX E

- EMISSION IMPACTS

................................ ................................ .......... E

- 1

APPENDIX F

- PUBLIC COMMENTS AND RESPONSES

................................ ........ F

- 1Final Staff Report for Proposed Am ended Rule 1110.2

1 May 2005 BACKGROUND

South Coast Air Quality Management District

The South Coast Air Quality Management District (AQMD) is the air pollution control agency for all of Orange County and the urban portions of Los Ang eles, Riverside and San Bernardino counties. This area of 10,000 square miles is home to nearly 16 million people. It is the second most populated urban area in the United States and one of the smoggiest.

AQMD is responsible for controlling emissions pri marily from stationary sources of air pollution. These can include anything from large power plants and refineries to the local dry

cleaner. About 23% of this area's ozone

- forming air pollution comes from stationary sources,

both businesses and residence s. The remaining 77% comes from mobile sources

-- primarily cars, trucks and buses in addition to construction equipment, ships, trains and airplanes. Emission standards for mobile sources are established by the state or federal agencies, such as

the Cali fornia Air Resources Board (CARB) and the U.S. Environmental Protection Agency (EPA), rather than by local agencies such as the AQMD.

Under the Federal Clean Air Act, EPA establishes health

- based air quality standards that all

states must achieve. The Cal ifornia Clean Air Act also establishes requirements for cities and counties to meet. AQMD develops plans and regulations designed to achieve these public health standards by reducing emissions from business and industry. AQMD's strategy of combined

emiss ion reduction of Volatile Organic Compound (VOC) and Oxides of Nitrogen (NOx) is intended to move the AQMD towards the attainment of all federal air quality standards and improve the public health by reducing public exposure to high concentrations of air

c ontaminants. Additional emission reductions of NOx are required to attain and maintain several state and federal standards, including those for ozone, NO 2 , particulate matter (PM), and visibility.

SB700

- Agricultural Operations

Until recently, local air districts were prohibited from requiring permits for agricultural operations such as farms, orchards, ranches, dairies and other confined animal feeding operations. Even conventional equipment such stationary engines and gasoline storage and dispensing eq uipment were exempt from rules that required other types of facilities using them to control their emissions. Agricultural operations represent a significant source of air pollution throughout the state. Emissions from agricultural sources for calendar ye ar 2003 are estimated to be more than 13 tons per day of VOCs, 8 tons per day of NOx, and over 3 tons per day of PM10 in the SCAQMD. Some agricultural operations are major sources of air pollution which federal law (Title V) requires to be subject to air permits. The U.S. EPA proposed disapproving California’s Title V permitting program because of the agricultural exemption and the significant source of air pollution that agricultural operations represent.

Because of the need in California to reduce emi ssions from and require permits for agricultural operations, Senate Bill 700

– Agricultural Air Quality (SB 700) was enacted into law on January 1, 2004, amending California Health and Safety Code Section 42310 and adding Sections 39011.5, 39023.3, 40724, 40724.5, 40724.6, 40724.7, 40731, 42301.16, 42301.17, 42301.18, and 44559. Section 42301.16 eliminated the exemption from the permit system of local air pollutionFinal Staff Report for Proposed Am ended Rule 1110.2

2 May 2005 control districts of certain large agricultural operations. Other sections required rules t o be adopted to reduce emissions from conventional equipment like engines and gasoline tanks, and strictly agricultural operations like confined animal feeding operations. Under SB700 all areas of the state which are designated as "serious" non

- attainment for federal PM10 standards are required to implement:

1) Best Available Control Measures (BACM) to reduce emissions from non

- traditional and

non

- point sources of PM10. These sources include tilling, composting, discing, cultivation, harvesting, raising of animals, etc. AQMD's PAR 403 and PAR 1127.1 will

address these sources.

2) Best Available Retrofit Control Technology (BARCT) to reduce emissions from traditional point sources. These point sources include IC engines, boilers, gasoline fueling and dispensin g, etc. AQMD’s PAR 1110.2 and PAR 461 are intended to address these requirements.

Appendix B describes the new incentive programs that will help agricultural operations comply with new and modified rules that will apply to agricultural operations. Agricu ltural operations are unique in that state law allows only agricultural operations to receive incentive funding to comply with local air district rules. Other types of facilities may only receive funding for voluntary emission reductions not required by a local rule.

Current Rule 1110.2

Rule 1110.2 was adopted in August 1990 to control NOx, carbon monoxide (CO), and VOC from gaseous and liquid

- fueled internal combustion engines (ICEs). For all stationary and portable engines over 50 bhp, it required that either 1) NOx emissions be reduced over 90% to one of two compliance limits specified by the rule, or; 2) the engines be permanently removed from service or replaced with electric motors. It was amended in September 1990 to clarify rule language. It was then amended in August and December of 1994 to modify the CO monitoring requirements and to clarify rule language. The latest amendment in November of 1997 eliminated the requirement for continuous monitoring of CO, reduced the source testing requirement from once every year to once every three years, and exempted nonroad engines, including portable engines. Agricultural engines are exempt from the current rule.

RECLAIM

In 1993 AQMD adopted Regulation XX

– Regional Clean Air Incentives Market (RECLAIM). This regulation established NOx and SOx trading market emission reduction program that allowed over 300 of the largest sources in AQMD to meet the requirements of that program rather than the NOx requirements of other AQMD Rules. Therefore, some engines in AQMD are not subject to the NOx requirements of Rule 1110.2. They are still subject to the VOC and CO requirements.

USEPA Regulations

New Source Performance Standards

Because of a Consent Decree, USEPA is working on developing New Source Performance

S tandards for new, stationary compression

- ignition (CI or diesel) engines and spark

- ignition (SI) engines. The Consent Decree requires standards is for CI engines be proposed in June of 2005Final Staff Report for Proposed Am ended Rule 1110.2

3 May 2005 and promulgated in June of 2006; and standards for SI engines be proposed in May of 2006 and promulgated in December of 2007.

National Emission Standards for Hazardous Air Pollutants

The recent final rule 1 for stationary reciprocating internal combustion engines (RICE) at major sources of hazardous air pollutants req uires that:

• Existing and new 4

- stroke rich burn (4SRB) engines either reduce formaldehyde by 76 percent or limit the formaldehyde concentration to 350 parts per billion.

• New 2

- stroke lean burn (2SLB) engines either reduce carbon monoxide (CO) by 58

percent or limit the formaldehyde concentration to 12 parts per million.

• New 4

- stroke lean burn (4SLB) engines either reduce CO by 93 percent or limit the formaldehyde concentration to 14 parts per million.

• New compression ignition (CI) engines either reduce CO b y 70 percent or limit the formaldehyde concentration to 580 parts per billion.

Formaldehyde and CO are surrogates for reducing the air toxics of concern from RICE. Therefore, by reducing formaldehyde and CO, facilities also will reduce the other air toxic s to
similar levels.

USEPA expects owners or operators of 4SRB engines to install air pollution control devices

known as non

- selective catalyst reduction (3

- way catalyst). Owners or operators of 2SLB, 4SLB, and CI engines likely will install devices know n as CO catalytic oxidation systems to meet the formaldehyde and CO requirements.

Nonroad Engines

USEPA regulates new nonroad engines. Nonroad engines include: engines that propel offroad equipment such as trains and bulldozers, and; portable engines that drive generators and wood chippers and other equipment, and that are moved from place to place. Nonroad engines includes CI and SI engines using diesel fuel, propane, gasoline and other fuels.

The Nonroad Preemption

The Clean Air Act Amendments of 1990 l imit the ability of states and local districts to regulate nonroad engines. Only USEPA can set emission standards for new construction and farm equipment under 175 70 hp. Federal regulations 2 allow California to regulate all other nonroad engines with an authorization from USEPA. States and local districts can also regulate the use of nonroad engines. As amended by USEPA in December 1997, the preemption applies to all nonroad engines, regardless of their date of manufacture.

Nonroad Diesel Engine Regulat ions

USEPA has been regulating new nonroad diesels since 1996 in 40 CFR 89 Subpart A, Appendix A and 40 CFR 85 Subpart Q. Tier 1, Tier 2 and Tier 3 standards are in effect or are partly in effect, and recently adopted and stringent Tier 4 standards will go into effect in the next decade. The emission standards vary by engine size, but as an example Table 1 shows the standards for nonroad diesel engines from 100 ≤ hp < 175.

1 40 CFR 63 Subpart ZZZZ

2 40 CFR 89, Subpart A, Appendix A and 40 CFR 85, Subpart QFinal Staff Report for Proposed Am ended Rule 1110.2

4 May 2005 Table 1. USEPA Nonoad Diesel Engine Emission Standards
175 ≤ hp < 300 (grams/bh p

- hr)

Implementation

Date CO NMHC NOx +

NMHC NOx PM

Tier 1 1996 8.5 1.0

- 6.9

-

Tier 2 2003 2.6

- 4.9

- 0.15

Tier 3 2006 2.6

- 3.0

- 0.15

Tier 4 2012

- 2014 2.6 0.14

- 0.30 0.015

Figure 1 demonstrates the remarkable emission reductions that the Tier 4 emission limits will achieve. These limits are more stringent than Rule 1110.2.

Figure 1. USEPA Nonroad Diesel Emission Standards for a 175 hp Engine

Nonroad Spark

- Ignited (SI) Engine Regulations

USEPA has been regulating new nonroad SI engines ove r 25 Hp since 2004 in 40 CFR 1048.

M ost of these engines use liquefied petroleum gas (propane), with others operating on gasoline or natural gas. USEPA adopted two tiers of emission standards (see Table 2). The first tier of standards, which started in 2004, are based on a simple laboratory measurement using steady

state procedures. The Tier 1 standards are the same as those adopted earlier by CARB for engines used in California. The Tier 2 standards, starting in 2007, are based on transient testingFinal Staff Report for Proposed Am ended Rule 1110.2

5 May 2005 in the laboratory, which ensures that the engines will control emissions when they operate under changing speeds and loads in the different kinds of equipment. USEPA includes an option for manufacturers to certify their engines to a less stringent CO standa rd if they certify an engine

with lower HC+NOx emissions. In addition to these exhaust

- emission controls, manufacturers must take steps starting in 2007 to reduce evaporative emissions, such as using pressurized fuel

tanks.

Table 2. USEPA SI Engine Emis sion Standards (grams/bhp

- hr)

Implementation Date HC + NOx CO

Tier 1 2004 3.0 37

Tier 2 2007 2.0 4.4

Starting with Tier 2, USEPA adopted additional requirements to ensure that engines control emissions during all kinds of normal operation in the fi eld. Tier 2 engines must have engine diagnostic capabilities that alert the operator to malfunctions in the engine’s emission

- control

system.

CARB Regulations and Guidance

CARB Guidance for Stationary Spark

- Ignited Engines

In 2001, CARB published “Determi nation of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Stationary Spark

- Ignited Internal Combustion Engines” as guidance for local air districts in adopting rules for stationary spark

- ignited engines.

Because of compliance problems with engines, it recommended more frequent source testing than Rule 1110.2, and an Inspection and Monitoring Plan requiring periodic monitoring and maintenance, including the use of a portable emission analyzer.

Air Toxic Control Me asures for Diesel Engines

CARB has adopted Air Toxic Control Measures (ATCMs) for both stationary and portable diesel engines. The purpose of these ATCMs is primarily to reduce diesel PM, but they will result in some reductions the other pollutants as wel l. AQMD has adopted its version of the stationary

diesel ATCM in the form of Rule 1470.

Existing stationary agricultural engines were not subject to the stationary diesel ATCM, but CARB has begun staff work on an ATCM for this equipment.

CARB Portable E quipment Registration Program (PERP) Regulation

Health & Safety Code Sections 41750

- 41755 (Assembly Bill 531), effective January 1, 1996, require the CARB to adopt regulations to establish a statewide registration program for portable engines and other equ ipment. The regulation was adopted on March 27, 1997 by CARB.

Portable e ngine owners or operators may register under the statewide program or permit with the AQMD. Those that register with CARB are exempt from AQMD permits and emission requirements.

Pre sently, CARB's statewide PERP has an exemption/prohibition for agricultural portable equipment. CARB's PERP regulations prohibit allowing agricultural sources' portable equipment to register under PERP, unless a local air district adopts or amends its rul es to allowFinal Staff Report for Proposed Am ended Rule 1110.2

6 May 2005 state registration in lieu of local permits. AQMD has not done this, so portable agricultural engines that are subject to permit (not exempt per Rule 219) will be subject to AQMD permits only. It is very important to note that sources may sti ll need to comply with applicable rules, such as 1110.2, even if permits are not required.

Off

- Road Diesel Engines

CARB began regulating new off

- road 3 diesel engines before USEPA, but later harmonized its regulations in Title 13, Chapter 9, Article 4 of th e California Code of Regulations (CCR) with

USEPA nonroad diesel emission standards. On December 9, 2004 CARB approved amendments to incorporate USEPA Tier 4 standards into state law, although the regulation is not final until approved by the Office of Ad ministrative Law. The emission standards will be the same as USEPA’s, but there are some minor differences in other areas.

Off

- Road Spark

- Ignited (SI) Engines

CARB has been regulating new off

- road SI engines over 25 hp since 2001 in Title 13, CCR, Chapter 9, Article 4.5 . The emission standards are shown in Table 3.

Table 3. CARB Offroad SI Engine Emission Standards (grams/bhp

- hr)

Implementation

Date Engine Displacement HC + NOx CO

2002 ≤ 1.0 Liters 9.0 410

2001

- 2003 > 1.0 Liters 3.0 37

These standar ds are less stringent than EPA standards that went into effect in 2004 (see earlier discussion.) However, CARB staff is working on, and has begun workshops for, new regulations

to reduce emissions from both new and in

- use off

- road SI engines.

AFFECTED SO URCES / EMISSIONS INVENTORY

PAR 1110.2 applies to stationary and portable internal combustion engines (ICEs) over 50 brake horsepower (bhp). ICEs generate power by combustion of an air/fuel mixture. In the case of spark

- ignited (SI) engines, a spark plug ignites the air/fuel mixture while a diesel engine relies on heating of the inducted air during the compression stroke to ignite the injected diesel fuel. Most stationary and portable ICEs are used to power pumps, compressors, or electrical generators.

SI engines come in a wide variety of designs such as: two

- stroke and four

- stroke, rich

- burn and

lean

- burn, turbocharged and naturally

- aspirated. SI engines can use one or more fuels, such as natural gas, oil field gas, digester gas, landfill gas, propane , butane, liquefied petroleum gas (LPG), gasoline, methanol and ethanol. ICEs can be used in a wide variety of operating modes such as: Emergency operation (i.e. used only during testing, maintenance, and emergencies), seasonal operation, continuous oper ation, continuous power output, and cyclical power output.

Uncontrolled ICEs, even when burning a clean fuel such as natural gas, have extremely high emissions of NOx, CO and HC. Diesel engines not only have significant NOx emissions but also emit particu late matter (PM) which has been identified as a Toxic Air Contaminant (TAC) by the

3 USEPA uses the term nonroad for the same purpose.Final Staff Report for Proposed Am ended Rule 1110.2

7 May 2005 CARB. Once a substance is identified as a TAC, the CARB is required by law to determine if there is a need for further control. CARB recently approved Airborne Toxic Contr ol Measures (ATCM) for stationary and portable diesel engines. CARB is currently developing an ATCM for

in

- use stationary diesel agricultural engines.

AQMD Agricultural Operations Survey

In order to obtain more information about agricultural sources in A QMD, staff developed a simple one page Agricultural Operations survey form that was mailed out to a total of 1,925 agricultural operations in April and June 2004. The survey basically consisted of nine "Yes/No/ How Many?" type questions regarding size of dairy or poultry farm and of equipment that would traditionally be found in agricultural operations such as ICEs , boilers, heaters, gasoline dispensing/storage, grain conveyor/silo, degreasers and paint spray equipment. The mailing lists were provided di rectly to a Clearinghouse mailing service by the contacted associations (Western United Dairymen, Pacific Egg and Poultry Association, Los Angeles County Farm Bureau, San Bernardino County Farm Bureau, Orange County Farm Bureau, Riverside County Farm Burea u and other agricultural groups) and the Regional Water Quality Control Boards that recently passed rules regarding dairy runoff. The mailing lists were not made available to the AQMD.

885 (46%) survey forms were returned to AQMD with only 473 providin g minimal information for statistical purposes.

Of the 473 surveys, 17 facilities reported using 8 stationary and 5 portable ICEs for irrigation pumps, 11 stationary and 6 portable ICEs for well

- water pumps and one stationary ICE for a

cattle feed mixer. Since PAR 1110.2 still exempts emergency stand

- by engines and wind machines from emission controls, only irrigation pumps, well

- water pumps and other non

exempt engines will be included in the agricultural engine emissions inventory which will

consist of 12 facilities. Follow up contacts with sites that responded to the survey have indicated that all existing stationary SI engines and most existing stationary diesel engines are uncontrolled (Tier 0).

Based on the results of this survey and other informati on provided by agricultural associations and trade groups, the emissions from the 20 surveyed stationary engines was determined to be as presented in Table 4. Exactly one half of the 20 engines are diesel, and the other half natural gas SI engines. The d etailed calculations are shown in Appendix D.

However, this survey may be underestimating the actual emissions due to the 46% survey response. The emissions inventory from stationary engines in agricultural operations will be

estimated based on the follow ing assumptions:

1. Double the emissions from the survey response since approximately 1/2 of the surveys did not respond.

2. The other half of the surveys are assumed to have the same engine statistics.

Therefore, the estimated uncontrolled emissions inven tory from all stationary engines in agricultural operations are as shown in Table 5.Final Staff Report for Proposed Am ended Rule 1110.2

8 May 2005 Table 4. Stationary Agricultural Engines Survey

Engine Class Average

HP Engines Annual Emissions (Tons/Year)

NOx VOC CO PM Irrigation Pumps 120 8 14.1 1.10 3.73 0. 975

Well/Water Pumps 209 11 56.4 2.79 48.8 2.42

Other Engines 210 1 1.14 0.16 4 1.4 0 0.065 8

TOTALS 20 71.6 4.05 53.9 3.46

Table 5. Estimated Emissions Inventory from Stationary Engines in Agricultural Operations (ton s/year)

NOx VOC CO PM

143.0 8.1 108.0 6.92

Portable Engines

CARB estimates that in 2000 17,500 portable diesel engines in California emitted 67.1 tons/day of NOx, 6.7 tons/day of ROG and 4.2 tons/day of PM. Emissions in SCAQMD would be about

45% of th is amount. These emissions should gradually decline as newer CARB

- certified portable engines replace older, higher emitting engines.

Stationary Non

- Agricultural Engines

The 1990 staff report for proposed Rule 1110.2 estimated that Rule 1110.2 would redu ce NOx emissions of 1,289 stationary, non

- emergency engines from 28.0 tons/day to 2.9 tons/day. The proposed amendments will not affect stationary, non

- agricultural emissions.

CONTROL TECHNOLOGY

Stationary agricultural engines coming into Rule 1110.2, fal l into two major categories: (1) compression ignition, i.e., diesel

- fueled, engines and (2) SI engines, which may be fueled by propane, natural gas or gasoline. Since agricultural engines have heretofore been unregulated,

most have no emission controls. In order to comply with Rule 1110.2, owners of these engines will have to install emission controls, replace the engine with a controlled SI engine, or replace the engine with an electric motor.Final Staff Report for Proposed Am ended Rule 1110.2

9 May 2005 Diesel Engine Emissions and Emission Control Technologies

U. S. EPA AP

- 42 4 lists uncontrolled industrial diesel engine emission factors in terms of g/hp

- hr as 14.0 for NOx, 3.03 for CO, and 1.12 for VOC. Since 1996, nonroad diesel engines have been regulated at the federal and state levels through a certification p rogram requiring that the manufacturers certify their engine models to meet certain emission standards, which become progressively more stringent over time. California’s nonroad emission standards are the same as

the federal nonroad standards. The nonroa d emission standards for gaseous pollutants are shown in Table 6. The Tier 4 engines over 75 hp would comply with Rule 1110.2, but they will not be available until 2014. The existing agricultural diesel engines coming into the rule are likely to be

“Tier 0”, i.e., uncertified. However, agricultural engines purchased since 1996 may be Tier 1 or even Tier 2, if purchased new after 2000. 5

.
Add

- on control technologies that are suitable for diesel engines include selective catalytic reduction (SCR) control sy stems for NOx and oxidation catalysts for reduction of CO and VOC. Both of these technologies have been successfully applied to diesel engines. SCR involves injection of urea or ammonia into the flue gas upstream of the catalyst and results in emissions of small amounts of unreacted ammonia. Application of these technologies to a large Tier 1 diesel engine located at a ski resort in the AQMD achieved the NOx, CO and VOC emissions shown in Table 7. Assuming that the engine was designed for emissions to b e approximately 20% below the Tier 1 standards, the apparent emission reductions achieved by the technologies are 90% for NOx, 99% for CO and 74% for VOC. Because of the high costs of the add

- on control equipment for a diesel engine, compared to a SI engi ne, few diesels were retrofitted to comply with Rule 1110.2. Some became subject to the RECLAIM program, and others were removed from

service.

Emulsified fuel is another technology that can be applied to a stationary diesel engine.

Emulsified fuel contai ns water, which has been blended into the fuel using appropriate blending equipment and an additive to create a stable mixture. Separation of the water can, however, occur if the fuel is in storage for too long. Presence of water in the fuel improves com bustion while also lowering the flame temperature. It has been applied primarily to non

- road and

on

- road diesel engines and primarily for reduction of particulate emissions. However, it reduces NOx by only 10

- 20% 6

.
Spark

- Ignition (SI) Engine Emissions a nd Emission Control Technologies

SI engines fall into two major design categories. Four

- stroke, rich

- burn engines are designed to draw just the necessary amount of air to combust the fuel and little, if any, more. These engines operate with exhaust gas O 2 content very near zero. The other category is lean

- burn engines, which are designed to draw substantially more air than is required for combustion and operate with a high level of exhaust gas O2, typically 15%. Larger engines tend to be lean

- burn, and

4 U.S. EPA AP

- 42 Compilation of Air Pollution Emission Factors , Table 3.3

- 1.

5 South Coast Air Quality Management District, Staff Report for Proposed Amended BACT Guidelines, Part D, Non

- Major Polluting Facilities, Regarding Emergency Compression

– Ignition (Diesel) Engines, April 2003.

6 http://www.epa.gov/region1/ec o/diesel/retrofits.html#docFinal Staff Report for Proposed Am ended Rule 1110.2

10 May 2005 Table 6. U.S. EPA Nonroad Diesel Gaseous Emission Standards

— NOx or (NOx+NMHC)/NMHC/CO (g/Bhp

- hr)

Engine

Bhp Tier 1 Tier 2 Tier 3 Tier 4

Interim Tier 4

Final

50 to

<75 1998

6.9

--

-- 2004 (5.6)

-- 3.7 2008 (3.5)

-- 3.7 2012 (3.5)

3.7

75 to

<100 1998

6.9

--

-- 2004 (5.6)

-- 3.7 2008 (3.5)

-- 3.7 2012

2.6

0.14

3.7 2015

0.3

0.14

3.7

100 to

<175 1997

6.9

--

-- 2003 (4.9)

-- 3.7 2007 (3.0)

-- 3.7 2012

2.6

0.14

3.7 2015

0.3

0.14

3.7

175 to

<300 1996

6.9

1.0

8.5 2003 (4.9)

-- 2.6 2006 (3.0)

-- 2.6 2011

1.5

0.14

2.6 2014

0.3

0.14

2.6

300 to

<600 1996

6.9

1.0

8.5 2001 (4.8)

-- 2.6 2005 (3.0)

-- 2.6 2011

1.5

0.14

2.6 2014

0.3

0.14

2.6

600 to

<750 1996

6.9

1.0

8.5 2002 (4.8)

-- 2.6 2005 (3.0)

-- 2.6 2011

1.5

0.14

2.6 2014

0.3

0.14

2.6
≥750 2000

6.9

1.0

8.5 2006 (4.8)

-- 2.6 2011

2.6

0.3

2.6 2015

2.6

0.14

2.6

Note: ppmvd@15%O2 = g/Bhp

- hr x (%EFF HHV /100) / 1.15 x F (F= 253 for NOx, 415 for CO, 727 for VOC as methane)

smaller engines tend to be rich

- burn. Typical emissions of NOx, CO a nd VOC from uncontrolled natural gas

- fired engines are listed in Table 8. The emission factors in the table are

based on U.S. EPA’s AP

- 42 7 . Emissions produced by engines operating on fuels other than natural gas may differ from those listed in Table 8, b ut should be similar. NOx emissions from engines operating on landfill or digester gas should be significantly lower due to the thermal diluent effect of CO2 present in these types of waste gas.

7 U.S. EPA AP

- 42 Compilation of Air Pollution Emission Factors, Tables 3.2

- 2 and 3.2

- 3.Final Staff Report for Proposed Am ended Rule 1110.2

11 May 2005 Table 7. Emissions from Diesel Engine at Snow Summit Ski Resort (A/N 418235)

Concentration

in Exhaust Gas, (ppmvd @ 15% O2) Emission Rate, (g/Bhp

- hr) Tier 1

Emission Standard, (g/Bhp

- hr) Apparent

Reduction

Based on

Uncontrolled

Level = Tier 1 Less 20%, %

NOx 45 0.546 6.9 90

CO 5 0.037 8.5 99

VOC 49 0.21 1.0 74

Ammonia 0.6

-- -- --

In November 2001, CARB published a RACT/BARCT determination for stationary SI engines 8

. This determination, while not aggressive for CO or VOC, identified a number of NOx control technologies that are effective for stationary SI engines (Table 9) and recommended significant reductions in NOx (Table 10). Agricultural SI engines coming into the rule will generally have

none of the emission controls listed in Tables 10 and 11. Lean

- burn SI engines that are already subject to the r ule will generally be equipped with low

- emission combustion improvements,

whereas rich

- burn SI engines will have a three

- way catalyst, also known as selective non

selective catalytic reduction ( NS SN CR), which along with accurate control of the air/fuel rat io to near stoichiometric conditions, simultaneously reduces the three pollutants NOx, CO and VOC.

NOx, CO and VOC emission levels for stationary engines that are required by AQMD’s non

major source BACT guidelines are shown in Table 11. As indicated in t he table, these limits are usually met using NS SN CR on rich

- burn engines and SCR plus oxidation catalyst on lean

- burn engines with low

- NOx combustion modifications built into the engine by the manufacturer. Also shown in the table are apparent pollutant reductions achieved by these technologies based on the typical uncontrolled emission levels shown in Table 8.

8 California Environmental Protection Agency, Air Resources Board, Determination of Reasonably Available Control Technology and Best Availab le Retrofit Control Technology for Stationary Spark

- Ignited Internal Combustion Engines, November 2001.Final Staff Report for Proposed Am ended Rule 1110.2

12 May 2005 Table 8. Uncontrolled Emissions from Natural Gas

- Fired SI Engines *

Rich

- Burn Lean

- Burn

Lbs/MMBtu HHV Lbs/MMBtu HHV

NOx 2.21 4.08

CO 3.72 0. 317

VOC 0.0296 0.118

ppmvd @ 15% O 2 ppmvd @ 15% O 2

NOx 590 1090

CO 1629 139

VOC 23 91

*g/Bhp

- hr = lb/MMBtu x 1.15 / (%EFF HHV /100)

ppmvd@15%O2 = lb/MMBtu x F (F = 267 for NOx, 438 for CO, 767 for VOC as methane)

Table 9. NOx Control Technologies for Stationary SI Engines

Technology NOx

Reduction Capability,

% Comments

Ignition Timing Retard 15

- 30 Reduces efficiency by up to 5%

Pre

- Stratified Charge (PSC) 80+ Not suitable for lean

- burn engines

Low

- Emission Combustion

Modifications 80+ Pre

- combu stion chamber, leaning, ignition system improvement, turbocharger, air/fuel ratio control system. Retrofit kits are available for some engines.

Turbocharger with

Aftercooler 3

- 35

Exhaust Gas Recirculation (EGR) 30

Non

- selective Catalytic Reduction (NS CR) 90+ Three

- way catalyst

— reduces NOx, CO and

VOC. Not suitable for lean

- burn engines.

Selective Catalytic Reduction (SCR) 80+ Requires injection of urea or ammonia to

react with NOx. Unreacted ammonia is emitted. Oxidation catalyst is normally

included to reduce CO and VOC emissions.Final Staff Report for Proposed Am ended Rule 1110.2

13 May 2005 Table 10. CARB NOx RACT/BARCT Determination for Stationary SI Engines (ppmvd corrected to 15% O2)

Rich

- Burn Lean

- Burn

RACT 90% control or 50 ppm NSCR, PSC for waste gases 80% control or 125 ppm

Low

- Emission Combustion or SCR

BARCT 96% control or 25 ppm NSCR, Inspection & Maintenance Program Waste Gases: 90% control or 50 ppm

PSC 90% control or 65 ppm

Low

- Emission Combustion Mod’s

or SCR

Table 11. AQMD BACT Guidelines for Stationary Engines at

Non

- Major Polluting F acilities

PPMVD, corrected to 15% O2 Apparent Reduction by Control Technology Uncontrolled

Emission BACT

Rich

Burn Lean

Burn Rich

- Burn ( NS SN CR)* Lean

Burn (SCR + CatOx) Rich

- Burn ( NS SN CR),

% Lean

Burn (SCR + CatOx),

%

NOx 590 1090 10 9 98+ 99+

CO 1 629 136 69 33 95+ 75+

VOC 23 91 29 25

--- 73+

*Assuming engine is 30% efficient (HHV basis).

Other Technology Options

For some stationary agricultural engines affected by the proposed Rule 1110.2 amendment, other options may be better than adding control equipment to the existing engine to bring the engine into compliance with the rule. These include repowering the engine with a lower

- emission engine or an electric motor. In an engine replacement, only the engine needs to be replaced, and

the balance of system remains the same. Repowering is often the best option for diesel engines. While it is possible to bring a diesel engine into compliance with the proposed amended rule by adding retrofit emission control technologies, it may be less costly and mor e amenable to site conditions to repower. Repowering options include a SI engine equipped with a three

- way catalyst and air/fuel ratio controller, or an electric motor. Repowering with a SI engine will require that the diesel fueling system also be repla ced with a natural gas, propane or even gasoline fueling system. Repowering with an electric motor will require installation of electrical conduit from the nearest source of power with sufficient voltage and current capability.Final Staff Report for Proposed Am ended Rule 1110.2

14 May 2005 PROPOSED AMENDMENTS

The basic purposes of the proposed amendments are to: make agricultural engines subject to the rule; make the rule consistent with state directives prohibiting the use of portable generators for supplying electric power to the grid or to a building, facility, stationary source or stationary equipment except in an emergency affecting grid stability; and clean up and simplify the rule by removing rule language that is no longer needed. References to “owner/operator” are replaced just by “operator” because operat ors are required to obtain permits and comply with the rules. A summary of the proposed amendments follows. They are discussed in order of importance rather

than in subdivision order.

Exemptions

– Subdivision (h)

This is the last subdivision in the rule, but it is useful to discuss it first so that it is understood up front what the proposed changes to the exemptions are.

Agricultural Engines

In paragraph (h)(1), the exemption for all agricultural engines is removed and replaced by an exemption for orcha rd wind machines powered by an internal combustion engine. This type of equipment only needs to be used during subfreezing temperatures, which seldom occur in this District. When these conditions do occur, they are outside the smog season. For these rea sons, they are proposed for exemption. Only 81 engine

- driven wind machines were reported in the 2004 AQMD Agricultural Equipment Survey.

Emergency Standby Engines

The exemption language regarding the limitation on annual operation is changed from “less than 200 hours” to “200 hours or less” to be consistent with Rule 1304(a)(4). Also, the definition of emergency standby engine is proposed to change, as discussed in a later section. Although the broad exemption for agricultural engines will be removed, emergency standby agricultural engines will still be exempt from the requirements of subdivision (d). 229 emergency standby engines were reported in the 2004 AQMD Agricultural Equipment Survey, more than any other type of engine.

Attainment Area Exemption

The current exemption in paragraph (i)(6) is for the eastern

- most area of Riverside County that

was not in the non

- attainment portion of the county. The names of these areas have changed, and the proposed rule amendments in paragraph (h)(6) will incorpor ate these changes.

State

- Registered Portable Engines

State law prohibits AQMD from regulating portable engines registered by the State for operation throughout California. The exemption in proposed amended paragraph (h)(9) is only revised to

refer to the actual registration regulations in the CCR, rather than the authorizing regulation in the State Health and Safety Code.Final Staff Report for Proposed Am ended Rule 1110.2

15 May 2005 Nonroad Engines

Although nonroad engines are exempt from the emission limits of paragraph (d)(1), the exemption in paragraph (h)(10) i s proposed for revision such that portable generators must still comply with a new usage requirement discussed in the next section of this report.

Limited Agricultural Engine Exemption

In response to a request by the California Farm Bureau, a limited exem ption is proposed in paragraph (h)(1 2 ) for agricultural engines

. If an engine is so remote that it cannot be electrified,

or if for some reason beyond the control the engine operator the project cannot qualify for the Agricultural Assistance Fund , then t he operator could comply by installing a Tier 4 nonroad diesel engine by 2014.

The USEPA Tier 4 emission standards are shown in Table 12. The nonmethane hydrocarbon (NMHC) and CO emission standards are considerably more stringent than Rule 1110. 2. The NOx emission standards are also more stringent than Rule 1110.2 , except for engines over 751 hp that are not generator sets. The NOx + NMHC standard for engines < 75 hp is also less stringent than Rule 1110.2. The PM emission standards will likely requi re some kind of aftertreatment, such as a diesel particulate filter, in order to be met. The NOx standards that are 0.5 grams/hp

- hr or less will also likely require some aftertreatment such as SCR or a NOx trap. Engines meetings these standards will begi n to be available , depending on size, from 2011 to

2012.

Table 12

– US EPA Tier 4 Diesel Engine Emission Standards* (grams per hp

- hour)

Maximum Engine Power Application PM NO x NMHC NOx +

NMHC CO

50 < hp < 75 All 0.022

- - 3.5 3.7

75 ≤ hp < 174 All 0.015 0.30 0.14 3.7

174 ≤ hp ≤ 751 All 0.015 0.30 0.14 2.6

hp > 751 Generator Sets 0.022 0.50 0.14 2.6

hp > 751 All others 0.03 2.6 0.14 2.6

* Emission standards are from 40 CFR Part 1039, Section 1039.101, Table 1

Six out of 20 of the agricultural engines surveyed were 75 hp or less. None were larger than 465 hp. It will not be known for a few more years if any of these engines will qualify for the exemption. Because the em ission standards are somewhat higher than the usual BACT requirements for stationary engines, it is proposed that the Tier 4 engines be considered BACT for the engines that qualify for this limited exemption.

Tier 4 emission standards are based on weighted

- average s of many tests at different loads

, whereas AQM D emission limits are based on a single test that could be at only one load.

Because of th is difference, it is proposed that Tier 4 engines be required to meet on an ongoing Formatted: Underline

Formatted: Font: Bold

Formatted: Centered Formatted: Font: Bold

Formatted: Font: Bold

Formatted Table

Formatted: Centered

Formatted: Indent: First line: 0.5"

Formatted: Font: Not BoldFinal Staff Report for Proposed Am ended Rule 1110.2

16 May 2005 basis the “not

- to

- exceed” limits in 40 CFR 1039. 101 paragraph (e) , which are 25 t o 50% higher

than the Table 12 emission standards.

Requirements

– Subdivision (d)

Alternative to Electrification

The original Rule 1110.2 required stationary engine owners to remove or electrify their engines before the year 2000, or control their em issions to meet the emission limits in the rule by 1994. In 1997, the rule was amended to allow owners who chose to electrify or remove the engine to keep them in service if the engines complied with more stringent emission limits equivalent to

BACT. The compliance schedule and emission limits for this are in subdivision (e), Compliance rather than in subdivision (d), Requirements.

The proposed amendment in subparagraph (d)(1)(A) moves the emission limits to the Requirements subdivision, and converts th e limits to ppmvd, based on a typical engine mechanical efficiency of 30%. The original gram per brake horsepower

- hour emission limits are difficult to enforce because of the difficulty in determining in the field engine work output in horsepower

- hours.

New Stationary Engines

A new subparagraph (d)(1)(D) is proposed to be added to the rule to accomplish two purposes. First, it notifies operators of new stationary engines that they are subject to Best Available Control Technology (BACT) of District Regul ation XIII, which are more stringent than the emission limits of Rule 1110.2. Larger agricultural facilities that recently became subject to AQMD permitting requirements may not be aware of this requirement. Second, smaller agricultural facilities (bel ow 50% of the Title V emission thresholds), whose engines are currently exempt from AQMD permits, will be required to comply with the emission limits of Table I of Rule 1110.2 when they install new engines. The Table I emission limits of 11 ppm NOx, 30 p pm NMHC, and 70 ppm CO (corrected to 15& O2 on a dry basis and averaged over 15 minutes), are equivalent to BACT for stationary engines that other facilities must comply

with.

Portable Engines

To be consistent with state directives regarding the use of portable generators 9 10 , it is proposed in paragraph (d)(2)(B) that the amended rule prohibit use of portable engine generators to supply power to the grid or to a building, facility, stationary source or stationary equipment except in an emergency affectin g grid stability or availability, during maintenance and repair operations or in remote locations where grid power is unavailable. The language used in the proposed amendment is identical to the same prohibition in the Statewide Portable Equipment Registr ation Program.

Portable diesel engines, which are not subject to the same stringent emission requirements as stationary engines, emit up to 70 times more NOx per MW

- hr produced than the emission limits

9 California Air Resources Board, Letter from Michael P. Kenny, February 21, 2001.

10 California Air Resources Board, Amendments to the Regulation for th e Statewide Portable Equipment Registration Program (Resolution 04

- 8), 15

- Day Comment Version, May 13, 2004. Formatted: Font: Not BoldFinal Staff Report for Proposed Am ended Rule 1110.2

17 May 2005 on new stationary engines, and 440 times more than the emission limits on new central generating stations.

This was especially a problem during the energy crisis of 2000

- 2001. Many facilities had voluntarily signed up with Southern California Edison (SCE) in the 1990s for interruptible

electric schedules. In return for reduced electric rates, these facilities promised to reduce their electrical demand whenever the electric grid was short of power. For many years there were no interruptions, but starting in 2000 with the energy crisis SCE began requiring these facilities to reduce their electrical loads in accordance with their contracts. Many facilities were unprepared for this, and instead of actually reducing their operations to reduce electric loads, they purchased or rented portable diesel generators to provide electrical power during these interruptions. Portable diesels registered by the State are now prohibited from this.

Staff is proposing, however, that portable generators that meet current BACT requirements for stationary non

- emergency engines and meet all other requirements of Rule 1110.2 be exempted from this prohibition.

Compliance

– Subdivision (e)

Removal of Obsolete Requirements

This subdivision of the current rule is mostly composed of obsolete compliance schedules whose final compliance dates have passed. All of that language is struck by the proposed amendments.

Agricultural Stationary Engine Compliance Schedule

Subparagraph (e)(1)(A) will now provide a schedule for existing stationary agricultural engines to come into compliance wit h the rule, as non

- agricultural engines have already done starting in 1994. For most existing agricultural stationary engines, the schedule requires that an application for a permit to construct be submitted by September 1, 2007, construction to be initia ted by March 30, 2008 (or 30 days after issue of the permit to construct if that date is later), and final compliance by July 1, 2008 (or 60 days after issue of the permit to construct, if that date is later). For Tier 2 and Tier 3 diesel engines and cert ified spark

- ignition engines, these dates are all extended by 18 months. SB 700 requires implementation of BARCT rules by January 1, 2006. That implementation will begin with submittal of a notification of applicability to the Executive

Officer.

New engi nes will have to comply upon installation, although they will also be subject to the even more stringent requirements of Best Available Control Technology, as required by AQMD’s

New Source Review rules.

Monitoring, Testing and Recordkeeping

– Subdivision ( f)

Most of the proposed changes in this subdivision are simply to reorganize and clarify the requirements. For example, the title of the subdivision would be changed to indicate that it includes testing requirements, in addition to monitoring and recordke eping. Significant changes are explained below.

Source Testing for Stationary Engines

Proposed subparagraph (f)(1)(C) would be amended to allow relative accuracy tests required by Rule 218.1 or 40 CFR 75 Subpart E to satisfy the source testing requireme nt of thisFinal Staff Report for Proposed Am ended Rule 1110.2

18 May 2005 subparagraph. Relative accuracy tests compare the emission results from a CEMS to the

simultaneous emission results from a reference method.

Operating Log

The current rule requires operators of stationary and portable engines to maintain a mon thly operating log engine operation and fuel use. Proposed amended subparagraph (f)(1)(E) and paragraph (f)(2) would allow RECLAIM facilities to maintain a quarterly log for engines designated as process units on the facility permit. This is consistent w ith the recordkeeping requirements of the RECLAIM program.

Record Keeping for All Engines

The current rule, in subparagraph (f)(1)(B), only required CEMS data to be maintained for two years and made available for district inspection. Other records did not have to be maintained. That requirement is moved to new paragraph (f)(3) and extended to all the different types of records required for stationary and portable engines. In addition, the two year requirement is extended to five years, consistent with th e requirement for Title V facilities.

Test Methods

– Subdivision (g)

Only minor changes are proposed. One change will clarify that the VOC test method excludes both methane and ethane. Also, the EPA test methods will be deleted, leaving the preferable

Di strict Test Methods. For measurements of VOC emissions, in addition to District Method 25.1, which is presently the only District method specified in the rule, staff is proposing that District Method 25.3 also be specified. The District requires that Met hod 25.3 be used when the VOC concentration is below 50 ppmvd.

Technology Assessment for PM 2.5 - Subdivision (h)

This subdivision in the current rule is proposed to be deleted. It required the Executive Officer do a technology assessment for PM2.5 and re port to the Board by December 30, 1999. This requirement was completed.

Definitions

– Subdivision (c)

Agricultural Engines

A definition of Agricultural Stationary Engine is added as paragraph (c)(1).

Removed Definitions

Because parts of the rule whose com pliance dates have passed are proposed for removal, two definitions are no longer needed. They are the definitions for Non

- Road Engine and Rule 1110.1

Emission Control Plan.

Facility

The definition is revised to be consistent with the definition in Rule 1 302, which includes the definitions for the New Source Review regulation.Final Staff Report for Proposed Am ended Rule 1110.2

19 May 2005 Stationary Engine

An engine is either stationary or portable. The current definition for stationary engine is not entirely consistent with the requirements in the definition for portable engine. The proposed modification will be consistent, because if an engine does not meet the requirements for a portable engine, it will be considered stationary.

EMISSION IMPACTS

The proposed amendments to Rule 1110.2 will have emission impacts on stationary, non

emergency engines used in agricultural operations. The proposed rescission of Rule 1110.1 will not result in emission impacts because it has been superceded by Rule 1110.2.

Stationary Non

- Emergency Engines in Agricultural Operations

The emission reductions for the proposed amendments to Rule 1110.2 are shown in Table 13,

and are estimated based on the difference between current uncontrolled emissions and the controlled emissions after rule requirements are fully implemented. The detailed calculations are shown in Appendix E. The emission reductions were based on reducing emissions by either electrifying an engine, replacing a diesel engine with an SI engine with a catalyst, or adding a catalyst and air/fuel ratio controller to the natura l gas SI engines. For new SI engines that are

Table 13. Expected Emission Reductions for PAR 1110.2 from Stationary, Non

- Emergency Agricultural Engines

Engine Class Emissions (Tons/Year)

NOx VOC CO PM Irrigation Pumps

Current 28.2 2.20 7.46 1. 95

Reductions 28.0 2.16 5.86 1.93

Well/Water Pumps

Current 113 5.58 97.6 4.84

Reductions 112 5.55 92.4 4.80

Other Engines

Current 2

. 28 0

. 328 2

. 8 0. 132

Reductions 2

. 22 0. 277 0. 78 0

. 1 0 7

Total Current

Emissions 143.0 8.11 108 .0 6.92

Total Emission

Reductions 142.0 7.99 99.0 6.84

Total Emissions

After Control 1.0 0.12 9.0 0.08Final Staff Report for Proposed Am ended Rule 1110.2

20 May 2005 replacing diesel engines, the emission limits are based on current BACT limits of 0.15 g/bhp

- hr NOx, 0.15 g/bhp

- hr VOC and 0.6 g/bhp

- hr CO.

Portable Engines

The proposed rule would prohibit the use of portable engine generators to supply power to the grid or to a building, facility, stationary source or stationary equipment except in an emergency affecting grid stability or availability, durin g maintenance and repair operations or in remote locations where grid power is unavailable. It isn’t known how many portable engines are currently doing what would become prohibited under the proposed amendment, probably very few or none. But if an energ y crisis happens again, there could suddenly be a demand to put portable engines to this use. One pre

- 2000 diesel engine rated at 1000 hp, can emit 160 pounds

of NOx in one six

- hour curtailment. Because these electrical interruptions are often during hot summer days when electricity is short, they coincide with the smoggiest conditions in AQMD.

The other amendments affecting portable engines will have no emission impacts.

COST

- EFFECTIV ENESS

State Law R equirements
State law [H&SC 40724] requires local ai r districts to ensure that the cost

- effectiveness of best available retrofit control technology (BARCT) for internal combustion engines used in agricultural applications is similar to the cost

- effectiveness of BARCT for other internal combustion engines su bject to regulation by a district or the state board. Cost

- effectiveness of BARCT for engines used in agricultural applications is also to be compared to a list of available and proposed control measures in the district’s Air Quality Management Plan (AQMP ) arranged

in order of cost

- effectiveness [H&SC 40922]. Also, H&SC 40920.6 requires calculation of cost

effectiveness and incremental cost

- effectiveness for all new requirements.

Cost

- Effectiveness Calculations

Cost

- effectiveness calculations were perform ed for cases that are representative of engines that will be affected by the proposed rule amendment. For each case, the available technology options for meeting the rule requirements were considered. The costs of modifying or replacing the engines can b e largely offset by funding that is available from the Carl Moyer Memorial program (CMP) and the state Agricultural Assistance Program (AAP) (AB923). This Agricultural Assistance Program is the only one of its type that provides state funding for

emission reductions required by a local air district rule. A full explanation of the program is in Appendix B. These funds may be used to compensate the engine owner for engine modification or replacement costs to the extent that these costs exceed the cost that would be incurred in having the existing engine rebuilt. Costs of complying with the rule both with and without AAP funding are shown in Table 14. The cost

- effectiveness results, also with and without AAP funding, are shown in Table 15. The detailed ca lculations and assumptions are provided in Appendix A.

From the AQMD survey of agricultural facilities previously discussed, the basis of the calculation was a facility with two 175 hp engines. This represents the average engine size and number of engines per facility found in the survey. Both diesel and SI engines were considered. Although it is likely that most agricultural engines are uncertified (“Tier 0”), it is possible thatFinal Staff Report for Proposed Am ended Rule 1110.2

21 May 2005 some diesel engines are Tier 1, Tier 2, or even Tier 3 and that some Tier 1 SI agricultural engines may have been installed. Using an operational scenario that is considered in the CMP guidelines 11 to be typical of agricultural engine operation, the calculations were based on 2000 hours per year operation per engine and operatio n at 65% of the engine’s full capacity.

Costs that were considered in the calculations included the cost of replacement or improvement of the engines to meet the emission limits in the rule, any resulting increase in annual operating and maintenance expens e and the cost of source testing every three years as required by the rule.

Cost

- effectiveness calculations followed the discounted cash flow methodology in AQMD’s BACT Guidelines. For each technology option, the present value of the ten

- year cost of the technology and the tons of NOx and VOC reduced by the technology over the ten

- year period were calculated. From these results, the cost per ton of NOx + VOC reduced was calculated. As seen in the third column of Table 15, technology options having cost

- effectiveness less than $19,000 per ton of NOx+VOC reduced are available for all cases considered.

The amount of AAP funding available for a given project is limited by a maximum cost

effectiveness of $13,600 per avoided ton of NOx and VOC, and PM multipli ed by ten. In calculating cost

- effectiveness for comparison to this figure, the annualized value of the funding is considered relative to the annual tons of avoided pollution. The last column of Table 15 shows

the cost

- effectiveness of each technology op tion in dollars per ton of NOx+VOC reduced based on the net cost to the engine owner after receipt of AAP funds . On this basis, technology options having cost

- effectiveness less than $10,000 per ton of NOx+VOC are available for all

cases considered. Ele ctrification of diesel engines results in a net savings to the agricultural facility.

Cost

- Effectiveness Comparisons

The cost

- effectiveness of the proposed rule amendments for agricultural engines, in terms of costs to the engine owner, will be less than t he cost

- effectiveness of the current rule for non

agricultural engines. This is because the agricultural facilities are required to meet the same requirements as the non

- agricultural facilities but only the agricultural facilities can qualify for

state fu nding to reduce the cost to the owner.

State law [H&SC 40724] requires local air districts to compare the cost

- effectiv eness of any proposed rule affect ing agricultural engines to a list of available and proposed control measures in the AQMP arranged in or der of cost

- effectiveness [H&SC 40922].

Table 16 and Table 17 provide a listing of the control measures from the AQMP that have available cost information for stationary and mobile source measures, respectively. Two

methods are used to calculate the cost

- effectiveness of the mobile source measures. The CARB

transmitted the cost

- effectiveness values for the mobile source measures based on incremental cost analyses, published reports and other internal methods. However, the District uses the

Discount ed Cas h Flow method in its calculations, as it has since the 1987 AQMP. The

Discount ed Cash Flow method is more versatile in analyzing complex financial cash flows and is the most widely used cost methodology by major businesses.

11 The Carl Moyer Memorial Air Quality Standards Attainment Program Guidelines

, Chapter 6, Stationary Agricultural Irrigation Pump Engines.Final Staff Report for Proposed Am ended Rule 1110.2

22 May 2005 Table 1 4 . Cost of Bringing Agricultural Engines into Compliance with PAR 1110.2 ($K)

( Facility with two 175 hp engines operated 2000 hrs/yr at 65% capacity

Case Control Technology Installed

Cost Incremental

Annual

O&M Annual

Source Testing AAP

Incentive Net Cost with AAP

Incentive

Installed

Cost Total

Annual

Diesel Engine,

Tier 0 SI Engine + NSCR 84.9 7.3 2.0 78.4 6.5 9.3

Electric 136.9

- 8 .3 0.0 130.4 6.5

- 8 .3 *

Tier 1 + SCR 120.9 46.7 2.0 114.4 6.5 48.7

Diesel Engine,

Tier 1 SI Engine + NSCR 84.9 7.3 2.0 78.4 6.5 9.3

Electric 136.9

- 8 .3 0.0 130.4 6.5

- 8 .3 *

SCR 73.6 45.3 2.0 67.1 6.5 47.3

Diesel Engine,

Tier 2 SI Engine + NSCR 84.9 7.3 2.0 78.4 6.5 9.3

Electric 136.9

- 8 .3 0.0 130.4 6.5

- 8 .3 *

SCR 73.6 45.3 2.0 67.1 6.5 47.3

Diesel Engine,

Tier 3 SI Engine + NSCR 84.9 7.3 2.0 78.4 6.5 9.3

Electric 136.9

- 8 .3 0.0 130.4 6.5

- 8 .3 *

SCR 73.6 45.3 2.0 67.1 6.5 47.3

SI Engine,

Tier 0 NSCR 51.3 15.0 2.0 31.8 19.5 17.0

Electric 147.7 9 .6 0.0 128.2 19.5 9 .6

New Engine + NSCR 84.9 15.0 2.0 65.4 19.5 17.0

SI Engin e, Tier 1 NSCR 51.3 15.0 2.0 31.8 19.5 17.0

Electric 147.7 9 .6 0.0 128.2 19.5 9 .6

*A negative cost means that the facility owner will have a net savings rather than a cost.

Definitions: $K = thousands of dollars Tier 0 = Uncertified Engine (no emi ssion controls) Tier 1, 2, 3 Engine = Engine certified to meet U.S. EPA emission standards SI Engine = Spark Ignition Engine

NSCR = Non

- Selective Catalytic Reduction, a method of reducing NOx, CO and VOC

emissions SCR = Selective Catalytic Reduction, a method of reducing NOx emissions O&M = Operating and Maintenance CostFinal Staff Report for Proposed Am ended Rule 1110.2

23 May 2005 Table 1 5 . Cost

- Effectiveness of PAR 1110.2 for Agricultural Engines ($K per Ton NOx+VOC)

Case Control Technology Cost

Effectiveness Cost

- Effectiveness with AAP

Incentive

Diesel Eng ine,

Tier 0 SI Engine + NSCR 2.2 1.2

Electric 0.9

- 0.8*

Tier 1 + SCR 7.2 5.6

Diesel Engine,

Tier 1 SI Engine + NSCR 4.3 2.2

Electric 1.7

- 1.6*

SCR 15.2 13.0

Diesel Engine,

Tier 2 SI Engine + NSCR 7.1 3.7

Electric 2.7

- 2.6*

SCR 26.3 22.5

Dies el Engine,

Tier 3 SI Engine + NSCR 12.2 6.4

Electric 4.5

- 4.2*

SCR 43.8 37.6

SI Engine,

Tier 0 NSCR 5.1 4.2

Electric 5.3 2.3

New Engine + NSCR 5.5 3.9

SI Engine,

Tier 1 NSCR 18.6 15.5

Electric 15.7 6.9 *A negative cost

- effectiveness me ans that the facility owner will have a net savings

rather than a cost.

Definitions: $K = thousands of dollars Tier 0 = Uncertified Engine (no emission controls) Tier 1, 2, 3 Engine = Engine certified to meet U.S. EPA emission standards SI Engine = Sp ark Ignition Engine

NSCR = Non

- Selective Catalytic Reduction, a method of reducing NOx, CO and VOC

emissions SCR = Selective Catalytic Reduction, a method of reducing NOx emissionsFinal Staff Report for Proposed Am ended Rule 1110.2

24 May 2005 Table 16 . Cost

- Effectiveness Ranking of District’s Stationary Source Co ntrol Measures a

Measure

Number Description Dollars

per Ton Ranking by

Cost

- Effectiv eness

BCM

- 08 Further Emission Reductions from Aggregate and Cement Manufacturing Operations $700 1

WST

- 01 Emission Reductions from Livestock Waste (PR1127) $2 ,000

- $7,000 2

CMB

- 09 Emission Reductions from Petroleum Fluid Catalytic Cracking Units (PR1105.1) $3,500

- $11,500 3

CMB

- 10 Additional Reductions for NOx RECALIM $5,000 4

MSC

- 05 Truck Stop Electrification $5,000 4

WST

- 02 Emission Reduc tions from Composting

(R1133, 1133.1, 1133.2) b $10,000 c 5

CTS

- 10 Miscellaneous Industrial Coatings and

Solvents < $13,500 6

FUG

- 05 Emission Reductions from Fugitive Sources < $13,500 7

PRC

- 07 Industrial Process Operations < $13,500 8

P RC

- 03 Emission Reductions from Restaurant Operations $14,500 9

CTS

- 07 Further Emission Reductions from Architectural Coatings (R1113) < $20,000 10

a The cost

- effectiveness values of these measures are based on the Discounted Cash Flow methodology and four percent real interest rate.

b Control Measure WST

- 02 was adopted January 10, 2003 as Rule 1133

- Composting and Related Operations

– General Administrative Requirements, Rule 1133.1 Chipping and Grinding Activities, and Rule 1133.2

- Emission Re duction From Co

- Composting Operations.

c Cost

- effectiveness based on VOC and NH 3 reductions combined.Final Staff Report for Proposed Am ended Rule 1110.2

25 May 2005 Table 17 . Cost

- Effectiveness Ranking of State and Federal Control Measures*

Measure

Number Description Dollars

per Ton Ranking by

Cost

- Effectiv e ness

OFF

- RD LSI

1 Set Lower Emission Standards for New Off

- Road Gas Engines [Spark

- Ignition Engines 25 hp and Greater] 400 1

SMALL

OFF

- RD

- 2 Set Lower Emission Standards for New Non

Handheld Lawn and Garden Equipment

– Lawnmowers [Spark

- Ignition Engi nes Under 25 hp] 900 2

SMALL

OFF

- RD

- 1 Set Lower Emission Standards for New Handheld Lawn and Garden Equipment

– Weed Trimmers, Leaf Blowers, and Chain Saws [Spark

- Ignition Engines Under 25 hp] 1,250 3

MARINE

- 2 Pursue Approaches to Clean Up the Exi sting

Harbor Craft Fleet

- Cleaner Engines and Fuels 1,300 4

OFF

- RD CI

- 1 Set Lower Emission Standards for New Off

- Road Engines [Compression

- Ignition Engines] 1,500 5

MARINE

- 1 Set More Stringent Emission Standards for New

Harbor Craft and Ocean

- Go ing Ships 3,100 6

AIRPORT

- 1 Pursue Approaches to Reduce Emissions from Jet

Aircraft 3,500 7

MARINE

- 4 Pursue Approaches to Reduce Land

- Based

Emissions at Ports 3,700

- 36,400 8

ON

- RD

HVY

- DUTY

3 Pursue Approaches to Clean Up the Existing and

New Truck/Bus Fleet 3,700 9

FVR

- 1 Increase Recovery of Fuel Vapors from Aboveground Storage Tanks 4,000 10

FVR

- 3 Reduce Fuel Permeation Through Gasoline Dispenser Hoses 4,000 10

CONS

- 1 Set New Consumer Products Limits for 2006 4,500 11Final Staff Report for Proposed Am ended Rule 1110.2

26 May 2005 Table 17 . Cost

- Effectiveness Ranking of State and Federal Control Measures* (Cont.)

Measure

Number Description Dollars/Ton Ranking by

Cost

Effectiv eness

CONS

- 2 Set New Consumer Products Limits for

2008

- 2010 4,500 11

MARINE

- 3 Pursue Approaches t o Clean Up the Existing

Ocean

- Going Ship Fleet 6,000

- 9,400 12

LT/MED

DUTY

- 2 Improve Smog Check to Reduce Emissions from Existing Passenger and Cargo Vehicles 7,500 13

ON

- RD

HVY

DUTY

- 2 Capture and Control Vapors from Gasoline Cargo Tankers 7,500 13

OFF

- RD

LSI

- 2 Clean Up Existing Off

- Road Gas Equipment Through Retrofit Controls [Spark

- Ignition Engines 25 hp and Greater] 7,500 13

OFF

- RD

LSI

- 3 Require New Forklift Purchases and Forklift

Rentals to be Electric

-- Lift Capacity <8,000lbs] 7,5 00 13

FVR

- 2 Recover Fuel Vapors from Gasoline Dispensing at Marinas 8,000 14

ON

- RD

HVY

DUTY

- 1 Augment Truck and Bus Highway Inspections with Community

- Based Inspections 8,800 15

OFF

- RD CI

2 Pursue Approaches to Clean Up the Existing

Off

- Road Equipment Fleet [Compression Ignition Engines] 18,000 16

OFF

- RD CI

3 Implement Registration and Inspection Program for Existing Heavy

- Duty Off

- Road Equipment to Detect Excess Emissions [Compression

- Ignition Engines] 18,000 16

LT/MED

DUTY

- 1 Replac e or Upgrade Emission Control Systems on Existing Passenger Vehicles

– Pilot Program 19,000 17

*Cost

- effectiveness calculated by CARB.

The cost

- effectiveness for stationary source measures ranges from $700 to $20,0 0 0 per ton of pollutant reduced, an d the cost

- effectiveness for mobile source measures ranges from $400 to $19,0 00 per ton of pollutant reduced. The overall range is thus $400

- $20,000 per ton. As shown in Table 15, technologies are available to meet the requirements of the proposed amende d rule

that have cost

- effectiveness less than $20,000 per ton of NOx + VOC reduced and, for the mostFinal Staff Report for Proposed Am ended Rule 1110.2

27 May 2005 part, assuming that most agricultural engines subject to PAR 1110.2 are Tier 0 engines, the cost

effectiveness is expected to range from a savings up to $5 ,600 per ton of NOx+VOC reduced..

Incremental Cost

- Effectiveness

For cases in which an emission control technology is being proposed but a less costly but less effective technology is available, the incremental cost

- effectiveness of the proposed technolo gy versus the less costly technology has to be considered, according to state law. The incremental

cost

- effectiveness is the incremental cost divided by the incremental amount of pollutant reduction achieved by the proposed technology relative to the less costly/less effective technology.

It is unusual with this rule that the lowest

- emission alternative, electrification, is also the lowest

cost alternative. For this option, there is no incremental cost; and in many cases there is an incremental savings. The following incremental cost

- effectiveness analysis focuses on the

lowest

- cost option of those found to be cost

- effective for each case, excluding electrification. Excluding electrification allows examination of the situation in which electrification is not practical, for example in an extremely rural area where the cost of extending the electrical lines

far exceeds the amount estimated. It is for this situation that the incremental cost

- effectiveness

relative to the next most cost

- effective option woul d be significant. Lower

- cost, less

- effective technologies were determined to be available for two cases.

♦ For stationary agricultural diesel engines that are uncertified or certified to Tier 1 or Tier 2, the lowest

- cost non

- electric option for meeting the proposed amended rule where electrification is not practical would be to replace the engine with an SI engine equipped with SNCR. However, a lower

- cost option, although not meeting the proposed amended rule requirements, would be to replace the engine wit h a Tier 3 diesel engine.

♦ For stationary agricultural uncertified or Tier 1 SI engines, the lowest

- cost non

- electric option for meeting the proposed amended rule is to add an NS SN CR system. However,

lower

- cost options for an uncertified engine would be to modify the engine with low

emission combustion modifications or a pre

- stratified charge system, and a lower

- cost option for either an uncertified engine or a Tier 1 engine would be to replace the engine with a Tier 2 engine.

The results of the incremental cost

- effectiveness calculations are shown in Table 18, and the detailed calculations are shown in Appendix A. Criteria for acceptable incremental cost

- effectiveness are much higher than those for basic cost

- effectiveness. For BACT cost

effectiveness an alyses, the incremental cost

- effectiveness criteria are three times the basic cost

effectiveness criteria. Applying a similar convention in this case, the incremental cost

- effectiveness results are considered to be acceptable.Final Staff Report for Proposed Am ended Rule 1110.2

28 May 2005 Table 18 . Results of Incr emental Cost

- Effectiv eness Evaluation

Case Lowest

- Cost

Non

- Electric

Cost

- Effective

Technology Next Most

Effective Technology Incremental Cost

- Effectiveness, $K/ton NOx+VOC

Stationary Agricultural Uncertified, Tier 1 or Tier 2 Diesel Engine SI Engine +

NS CR Replacement with Tier 3 Diesel Engine $48.2

Stationary Agricultural

Uncertified or Tier 1 SI Engine NSCR

NSCR

NSCR Low

- Emission

Combustion

Modifications

Pre

- Stratified Charge

Tier 2 Engine $46.2

$40.4

$14.3

CALIFORNIA ENVIRONME NTAL QUALI TY ACT (CEQA)

AQMD prepared a Draft Environmental Assessment (Draft EA) for the proposed amendments to Rule 1110.2 and the rescinding of Rule 1110.1, which was released for public review and comment on March 18, 2005. The Draft EA concluded that any poten tial adverse environmental impacts were not significant. Therefore, the public is provided a 30

- day public comment and review period ending April 19, 2005. The Draft EA is available at AQMD Headquarters, by calling the AQMD Public Information Center at ( 909) 396

- 2039, or by accessing AQMD’s CEQA website at: www.aqmd.gov/ceqa

.

SOCIOECONOMIC ASSESSMENT

Affected Facilities

PAR 1110.2 has administrative amendments that will affect approximately 2,724 engines at 673

facilities of all industries that have non

- emergency stationary and portable internal combustion engines (ICEs ) over 50 brake horsepower

. However, costs will only be incurred by the agricultural facilities. An agricultural operations survey mailed to 1,9 25 agricultural facilities in April and June 2004 had 885 surveys returned (46% response rate). Based on the surveys

returned

, there were 1 2 agricultural facilities with 20 internal combustion engines . However, the number of agricultural facilities and i nternal combustion engines was doubled to reflect the survey response rate, with the assumption that survey responders are representative of those that did not respond to the survey. Hence an estimated 24 agricultural facilities and 40 internal

combustion engines will be brought into Rule 1110.2 for the first time

.

These agricultural facilities belong to the industries of fruit and tree nut production ( Standard Industrial Classification ( SIC ) 0179 or North American Industry Classification System ( NAICS )

1 11336); ornamental floriculture (SIC 0181 or NAICS 111422) and nursery products (SIC 0181 or NAICS 111421); general farms (primarily crop farms) (SIC 0191 or NAICS 111998 ); andFinal Staff Report for Proposed Am ended Rule 1110.2

29 May 2005 dairy farms (SIC 0241 or NAICS 112120). Although there are agricultural facili ties in all four counties, only an estimated 24 facilities in three of the four counties will be affected by proposed

amendments to Rule 1110.2

. These include two facilities in Orange County (8%), 12 facilities in Riverside County (50%), and 10 facilities in San Bernardino County (42%)

.

The 2004 Dun and Bradstreet data has employment and gross revenue information on seven of the 12 agricultural facilities that submitted survey data. Based on AQMD ’s definition of a small business, two o f these seven facil ities would be classified as small businesses. Based on SBA’s

and CAAA’s definition s of a small business, four facilities would be small businesses. For both definitions, these are the same four facilities.

Compliance Costs

Operators of existing statio nary agricultural engines would comply with the proposed amendments of Rule 1110.2 by replacing their engines with a controlled spark ignition (SI) engine and non

- selective catalytic reduction system (NSCR) or an electric motor, or by adding

an NSCR to an existing SI engine.

The full cost of capital equipment and the difference between proposed and existing operating and maintenance costs are used to reflect the additional costs or savings associated with the proposed amendments. Capital equipment costs r ange from $21,400

- $181,900, depending on engine type, manufacture year (pre/post 1996) and horsepower. Net annual operating and maintenance costs range from a savings of $22,100 to a cost of $8,300 depending on engine type, manufacture year (pre/post 19 96) and horsepower. Savings are expected to result from electrification for existing diesel engines even based on summer on

- peak demand rate schedules while additional costs will be incurred through operating and maintenance costs associated with

NSCR and higher energy costs converting from natural gas to electrification. 12 Capital equipment costs drop significantly when offset by outside funding, with net costs ranging from $2,300

- $12,200, depending on engine type, manufacture year and horsepower. Fund ing through the Carl Moyer Program and Agricultural Assistance Program (AAP) can be used for agricultural sources, and in the case of AAP funding, to satisfy existing regulatory requirements. It is assumed that operators of these engines would take the op portunity to apply for these funds to reduce the compliance costs of the proposed amendments to Rule 1110.2. Table 19 shows control technology and annual operating and maintenance costs for various types of engines, and indicates control equipment costs w ith and without outside funding.

12 Electr ification costs from diesel are based on the proposed Southern California Edison TOU

- PA

- ICE rate schedule, a time

weighted demand rate of $.0592/kWh plus monthly charges of $50.51 per meter charge, $2.89/kWh demand charge and $1.09/kWh summer on

- peak deman d charge. Electrification costs from a spark ignition engine are based on the Southern

California Edison TOU

- PA

- B rate schedule, a time

- weighted demand rate of $.0656/kWh plus monthly charges of $50.51 per

meter charge, $4.18/kWh demand charge and $8.25/kW h summer on

- peak demand charge.Final Staff Report for Proposed Am ended Rule 1110.2

30 May 2005 Table 19

− Control Technology and Operating/Maintenance Costs Per Engine * Proposed Control Technology Control Equipment Costs Without Funding Control Equipment Costs with Funding Annual O&M Costs

Diesel to SI Engine/NSCR $27,100

- $45,300 $3,000

- $12,200** $5,900

- $7,000 cost

Diesel to Electrification $30,900

- $181,900 $2,300

- $6,200 $1,000

- $22,100 savings

SI Engine and NSCR $21,400

- $44,000 $6,300

- $9,000 $7,400

- $8,300 cost

Nat. Gas to Electrification $59,40 0

- $101,400 $8,900

- $12,000 $1,400

- $2,700 cost

*Based on information from control equipment manufacturers. **Higher range of cost based on engine replacement of existing engine purchased in 2004.

Based on an assumption of a ten year equipment life an d a 4% real interest rate, the annualized compliance cost for all agricultural sources is $0.316 million. Assuming the availability of outside funding, the total annualized cost for all agricultural sources would be reduced to $0.040

million. With outsid e funding, the dairy farm industry would incur a savings overall in annualized compliance costs due to the savings in energy costs in converting from diesel to electrification. Annualized compliance costs by affected industry, with and without outside

fun ding, are shown in Table 20.

Table 20

− Annualized Compliance Costs for PAR 1110.2 Agricultural Sources by Industry Without Funding With Outside Funding Industry Annual Cost of Compliance % of Total

Cost Annual Cost of Compliance % of Total

Cost

Frui t an d Tree Nut Production $ 20,723 6.5 % $ 17,057 42.7 %

Ornament al Floriculture & Nursery 24,950 7.9 7,853 19.7

Gener al Farms, Crop Production 135,615 4 2.9 17,486 43.8 Dairy Farms $ 134,954 42.7 %

- $ 2,462

- 6.2 %

TOTA L $ 316,242 100.0 % $ 39,935 100.0 %

The propose d amendments also include administrative changes such as monitoring/recordkeeping and source testing requirements for all stationary and portable engines, which do not have significant socioeconomic costs. Estimated permit processing fees for agricultural sources affected by Rule 1110.2 are $0.015 million, annual operating fees are $0.008 million, emissions fees are $0.006 million and Title V processing fees are $0.0009 million, for a total of $0.031 million.

Potential Impact of Fees on Agricultural Source s

The resolution for proposed amendments to Rule 1110.2 recommends that all agricultural sources be brought into the AQMD permitting system to ensure rule compliance. Preliminary findings show that bringing agricultural sources that are less than half of the major source emissions threshold into the permitting system is no more burdensome than for other industrial sectors under regulation.Final Staff Report for Proposed Am ended Rule 1110.2

31 May 2005 Rule 1110.2 (Emissions from Gaseous

- and Liquid

- Fueled Internal Combustion Engines), Rule 461 (Gasoline Transfer and Dispensing) and Rule 403 (Fugitive Dust) are being amended in June 2005 to incorporate provisions of SB 700 and require agricultural sources to comply with existing AQMD regulations. For Rule 1110.2 and Rule 461, AQMD staff has determined that it

is nece ssary to bring all agricultural sources into the AQMD permitting system in order to ensure rule compliance. SB 700 requires that in order to permit agricultural sources that are under half of the major source emissions threshold, findings need to show tha t it is no more of an economic burden to permit agricultural sources than other industries regulated by AQMD. Analyzing the impact of regulatory fees is also important to consider given that the agricultural sector differs

from other industrial sectors si nce some of its markets are regulated and it may have limitations in passing on the additional costs of production to consumers.

In April and June 2004 AQMD sent an agricultural operations survey to 1,925 agricultural facilities. Of the 885 surveys retur ned (46% response rate), 473 surveys reported having cows/heifers/calves or various types of equipment (internal combustion engines, boilers/heaters, gasoline dispensing/storage equipment, grain conveyor/silo, paint spray equipment or degreasers). The 200 4 Dun and Bradstreet data has employment and gross revenue information on 192 (41%) out of the 473 agricultural facilities reporting animals or equipment. Based on AQMD’s definition of a small business, 114 facilities would be classified as small business es. Based on SBA’s definition of a small business, 124 facilities would be classified as small

businesses.

These agricultural facilities belong to the industries of crop production (SIC 01 or NAICS 111) and animal production (SIC 02 or NAICS 112). Domin ant agricultural industries include the dairy cattle and milk production industry (NAICS 112120), which comprises 59% of the agricultural facilities surveyed. Of these 473 agricultural facilities, there are 7 in Los Angeles County (1%), 12 in Orange County (3%), 222 in Riverside County (47%), and 232 in San Bernardino County (49%).

Agricultural facilities would need to pay permit processing and annual renewal fees on equipment such as internal combustion engines, gasoline storage tanks, and confined animal operations. Permit processing fees would be $380 per piece of equipment of confined animal operation (based on Rule 312 fee structure that expires on June 30, 2005 and the SB 700 requirement that agricultural facilities undergo permitting by that date) a nd annual renewal fees of $208 per piece of equipment or confined animal operation. Some animal operations would not need to pay permit and annual renewal fees depending on the confined animal operation guidelines to be released by CARB. However, for the purpose of this analysis, it is assumed that

dairies with 700 or more cows 13 and all poultry operations would be required to pay permit and annual renewal fees. There is also one Title V facility that would need to pay a permit processing fee of $923 and permit processing and annual renewal fees for individual pieces of equipment or for any confined animal operation on the facility. Agricultural facilities whose total NOx, VOC and CO emissions were under 4 tons per year would be required to pay a flat

emi ssions fee of $77. Agricultural facilities emitting greater than 4 tons per year of NOx, VOC and CO emissions would be required to pay per ton emissions fees of $215 per ton of NOx, $367

13 Based on 2002 data from Santa Ana Regional Water Quality Control Board.Final Staff Report for Proposed Am ended Rule 1110.2

32 May 2005 per ton of VOC, and $4 per ton of CO (greater than 100 tons). Anima l operations would also pay emissions fees based on the number of animals on the facility, using the approved animal

emissions factors.

Based upon data from the agricultural operations survey and from Dun and Bradstreet, it is estimated that permit proc essing fees would be $0.093 million, annual renewal fees would be $0.072 million, emissions fees would be $0.006 million and Title V fees would be $0.0009 million, with total fees estimated at $0.173 million. A ratio of estimated AQMD fees to output

was d etermined using data from REMI Policy Insight, the regional economic modeling software used by AQMD. It is estimated that the agricultural sector will pay 0.01% of their output on AQMD fees. In general, other regulated industrial sectors pay between 0.01 % and 0.07% of their output towards fees 14 , making the percentage for the agricultural sector within this range. The analysis is unable to fully estimate emissions fees for agricultural facilities as emissions will not be reported until 2006. This prelimi nary assessment does indicate that the currently proposed permit processing and annual operating fees to be charged to all agricultural sources would be in line with fees paid by other regulated industries as a proportion of total output generated by these industries.

COMPARATIVE ANALYSIS

As required by Health and Safety Code Section 40727.2, the purpose of this analysis is to identify and compare any other AQMD or federal regulations that apply to the same equipment or source type. Federal Title I and sta te Clean Air Air ( CAA ) New Source Review ( NSR ) requirements, as well as SB700 generally do not address air toxics. However, federal CAA's Title III requirements and state ATCM (AB1807) requirements may apply to agricultural

sources.

Existing Federal Requi rements

On June 15 , 200 4, t h e U.S. EPA issued final requirements to reduce toxic air emissions (formaldehyde, acrolein, methanol, and acetaldehyde) for stationary engines , which are

contained in the National Emission Standard for Hazardous Air Pollutants f or Stationary Reciprocating Internal Combustion Engines (RICE NESHAP). T he RICE NESHAP establish es requirements for large (> 500 horsepower) stationary engines , both CI and SI, located at major sources of hazardous air pollutants.

The RICE NESHAP affect s a few California facilities that are also subject to P A R 1 110.2

. The RICE NESHAP require s installation of oxidation catalysts to reduce hazardous air pollutants (aldehydes) and CO and also specifies recordkeeping, monitoring, and testing requirements.

Ta ble 21 provides a summary of the key elements of P A R 1 110.2 as compared to similar

sections of the RICE NESHAP that are applicable to CI and SI engines.

14 Based on June 2005 Regulation III

— Fees socioeconomic analysis.Final Staff Report for Proposed Am ended Rule 1110.2

33 May 2005 Table 21. Comparison of Key Elements of the federal RICE NESHAP

and P A R 1 110.2 t hat Are Applicable to SI and CI Engines

General Requirements Reciprocating Internal Combustion Engine (RICE)

NESHAP P A R 1 11 0 .2

Applicability Applies to stationary CI and SI engines above 500 HP located at a major source 15 throughout the

U.S. Applies to stationary and

port able CI and SI engines above 50 hp located in the SCAQMD

Targeted Pollutants Formaldehyde and CO 16 NO
x , VOCs, and CO Exemptions New or reconstructed 17 RICE meeting any of the following criteria have no requirements except for an initial notification (with in 120 days of publication of final rule in Federal Register)

• Emergency power

• Those that operate < 50 hrs/yr

• Uses digester or landfill gas

The following existing 18 RICE:

• SI two

- stroke

, lean

- burn (2SLB)

• SI four

- stroke

, lean

- burn (4 SLB)

• CI

• Emergency

• Those that operate < 50 hrs/yr

• Those that u se digester or landfill gas

RICE being tested at test

cells/stands. Portable e ngines registered under the state registration program.

Emergency standby engines which operate ≤ 200 hours p er year and engines powering

orchard wind machines.

Engines used for: fire

- fighting and flood control; research and testing; performance and testing verification; powering other engines or gas turbines during

start

- ups.

Engines operating on San

Clement e Island and in the Eastern portion of Riverside County, outside the

nonattainment areas.

Supplemental engines which only operate from November 1 to April 15 for the manufacture of snow and/or operation of ski lifts.

15 A major source of Hazardous Air Pollutants (HAP) is a plant site that emits or has the potential to emit any single HAP at a rate of 10 tons or more per year or any combination of HAP at a rate of 25 tons or more per year. Although numerous HAP may be emitted from engines, formaldehyde, acrolein, methanol, and acetaldehyde account for e ssentially all of the HAP mass

emissions.

16 USEPA considers CO to be a surrogate for all of the organic HAPs.

17 New RICE if construction began on or after 12/19/02. Reconstructed RICE if reconstruction began on or after 12/19/02.

18 Existing RICE if constr uction or reconstruction began before 12/19/02.Final Staff Report for Proposed Am ended Rule 1110.2

34 May 2005 Emission Limits Existing, new and r econstructed

SI four

- stroke, rich

- burn, (4SRB) stationary RICE:

• Reduce formaldehyde by 76 %

or more

. I f construction or reconstruction began between 12/19/02 and 6/15/04, may reduce by 75% or more until

6/15/07 ; or

• Limit concentration of formaldehyde to 0.35 pp m v d or less @15% oxygen

New and reconstructed le an

- burn and CI stationary engines

2SLB

• Reduce CO by 58 % or more;

or • Limit formaldehyde to 12

pp m v d or less @15%

oxygen . I f construction or reconstruction began

between 12/19/02 and

6/15/04 may reduce to 17ppmvd or less until

6/15/07.

4SLB

• Reduce CO by 93 % or more

; or • Limit formaldehyde to 14

pp m v d or less @15%

oxygen

.

CI Engine

• Reduce CO by 70% or

more; or

• Limit formaldehyde to 0. 58

pp m v d or less @15%

oxygen

. Stationary engines with an Approved Emission Cont rol Plan to electrify, but later chose not: 11 ppm NOx, 30 ppm VOC and 70 ppm CO at 15% oxygen dry

basis.

Engines used in the following applications:

• Electric power generation

• Fired by landfill gas, digester gas, oil field gas or liquefie d petroleum gas (LPG)

• To drive water supply or

conveyance pump except
for aeration facilities

• Internal engine

- compressor applications operating

< 4000 hours per calendar

year Less than 500 bhp: 45* ppm NOx, 250* ppm VOC and 2000 ppm CO at 1 5% oxygen dry basis

Over 500 bhp: 36* ppm NOx, 250* ppm VOC and 2000 ppm CO at 15% oxygen dry basis

*The NOx and VOC limits for engines with a thermal efficiency > 25% may correct limits upward in proportion to their thermal efficiency.

All other engines : 36 ppm NOx, 250 ppm VOC and 2000 ppm CO at 15% oxygen dry

basis

Operating Limitations Existing, new and reconstructed 4SRB stationary RICE:

If c omplying with formaldehyde NoneFinal Staff Report for Proposed Am ended Rule 1110.2

35 May 2005 reduction requirements using oxidation catalyst (OC) :

• Limit OC pressure drop to

< 2 in. w.c increase from

initial test and maintain OC

inlet temperature inlet to

≥ 750 ° F.

If c omplying with formaldehyde reduction requirements and not using an OC :

• Operation limits approved by EPA Administrator.

New and reconstructed lean

- burn and CI stationary RICE:

If complying with CO reduction requirements or formaldehyde reduction requirements using an

OC :

• Limit OC pressure drop to

< 2 in. w.c increase from

initial test and maintain OC

inlet temperatu re inlet to

≥ 450 ° F and ≤ 1350 ° F.

If complying with CO reduction requirements or formaldehyde reduction requirements without

OC :

• Operation limits approved by EPA Testing and Monitoring An initial source t est of all subject

RICE units

Statio nary 2SLB, 4SLB and CI engines complying with CO

limits:

• Semi

- annual testing of CO ( and O2 ) % reduction across catalyst.

• If using OC and continuous parameter monitoring system (CPMS), measure the pressure drop and inlet All stationary engines :

• Non

- resettable totalizing

time meter.

• Conduct a NOx, VOC and CO source test once every 3 years

E ngi nes ≥ 1000 bhp and operating

> two million bhp

- hr per calendar

year:

• CEMS for continuous NOx monitoring.

• An alternative monitoringFinal Staff Report for Proposed Am ended Rule 1110.2

36 May 2005 temperature of catalyti c oxidizer and maintain 4

- hour rolling averages within OC inlet temperature operating limits established during performance test

.

• If not using OC, use CPMS

to monitor and record operating parameters approved by EPA and

maintain 4

- hour rolling

average s of operating parameters within limits established during performance test.

• If using CEMS, measure CO

(and O2 or CO2)

cont inuously at inlet and

outlet of OC and demonstrate CO reduction by 4

- hour averaging period. Conduct annual relative accuracy t est audit (RATA) of CEMS.

4SRB engines complying with formaldehyde limits:

• Measure formaldehyde at 15% O2, oxygen and

moisture at inlet and outlet of

control device.

• If using NSCR, use CPMS to

measure the pressure drop

and inlet t emperature of catalyst and maintain 4

- hour rolling averages within operating limits of catalyst inlet temperature

• If not using NSCR, use

CPMS to monitor operating parameters approved by EPA

and maintain 4

- hour rolling averages of parameters within operating limit s established during performance test.

• If bhp ≥ 5,000, conduct device may be installed upon approval by the

Executive Officer.Final Staff Report for Proposed Am ended Rule 1110.2

37 May 2005 semiannual tests to demonstrate compliance with formaldehyde limits.

All RICE complying with formaldehyde limits:

• Semiannual testing of

formaldehyde.

• If using OC or NSCR, rec ord

pressure drop monthly and

use CPMS to measure catalyst inlet t emperature
maintain 4

- hour rolling averages within operating

limits

• If not using OC or NSCR,

use CPMS to monitor operating parameters approved by EPA and approved parameters from

init ial performance test and

maintain 4

- hour rolling averages of operating limits established during performance test . Recordkeeping and Reporting Keep comprehensi ve records supporting compliance with all applicable provisions of the RICE

NESHAP. Records must be in a form suitable and readily available for expeditious review and be kept for 5 years. Keep all test reports and logs required by rule for 5 years,

incl uding:

Monthly stationary engine log of:

• Total hours of operation

• Type of fuel used

• Fuel consumption

• Cumulative hours of operation since last source

test

Monthly portable engine log of:

• Total hours of operation

• Type of fuel used

• Fuel consumption

RECLAIM process units may keep a quarterly log.Final Staff Report for Proposed Am ended Rule 1110.2

38 May 2005 The proposed amendments to Rule 1110.2 will not change the existing limits for NOx, VOC and CO. Proposed amended Rule 1110.2 does not regulate HAP emissions. The only common targeted pollutant with the RICE NESH AP is CO. Therefore, the existing as well as the proposed amendments to Rule 1110.2 are not in conflict with federal regulations.

AQMD Rules Applying to Gaseous and Liquid

- Fueled Engines

AQMD Rule 4 0 1

– Visible Emissions , which was last amended on Novembe r 9

, 2001 , prohibits

the discharge of emissions into the atmosphere from any single source for period or periods aggregating more than three minutes in any one hour which will cause: a dark or darker shade as that of a number 1 on the Ringelmann chart, as published by the United States Bureau of Mines, or of an opacity equal or greater than number 1 on the Ringelmann chart.

AQMD Rule 431. 1

– Sulfur Content of Gaseous Fuels, which was last amended on June 12

, 1998 , prohibits the sale and use natural gas w ith a sulfur content exceeding 1 6 ppm. Rule 431.1 also prohibits the sale and use of the following gases with a sulfur content exceeding: 150 ppmv in landfill gas; 40 ppmv in refinery gas, sewage digester gas and other gases.

AQMD Rule 431.2

– Sulfur Co ntent of Liquid Fuels, which was last amended on September 15, 2000, prohibits the purchase by stationary source end users of any diesel fuel with a sulfur content exceeding 15 ppm on and after June 1, 2004.

AQMD Rule 1 303

- New Source Review Requirements

, which was last amended on December

6

, 2002

, requires Best Available Control Technology, modeling and emission offsets for any new or modified source which results in an emission increase of any nonattainment air contaminant, ozone depleting compound or a mmonia.

AQMD Rule 1 401

- New Source Review of Toxic Air Contaminants , which was last amended

on May 2

, 2003

, specifies limits for maximum individual cancer risk (MICR), cancer burden, and noncancer acute and chronic hazard index (HI) from new, modified an d existing permitted sources which emit toxic air contaminants (TACs) listed in Table I of Rule 1401. Although numerous TACs may be emitted from engines, formaldehyde, acrolein, methanol, and acetaldehyde account for essentially all of the mass emissions. PAR 1110.2 target pollutants are NOx, VOC and CO.

AQMD Rule 1 470

- Requirements for Stationary Diesel

- Fueled Internal Combustion and Other Compression Ignition Engines , which was adopted on April 2

, 2004 , addresses primarily toxic diesel PM, but also NO x, VOC and CO emissions from new and existing, stationary , emergency and non

- emergency, diesel engines . The requirements of Rule 1470 do not apply to existing agricultural engines installed prior to January 1, 2005.

AQMD Regulation XX

- Regional Clean Air Incentive Market (RECLAIM) superceded many Regulation IV and Regulation XI rules for NOX and SOX for the largest facilities with an emission trading program that achieved equivalent emission reductions, but in a way to allow facilities flexibility in a chieving emission reduction requirements for NOx and SOx by methods

such as add

- on controls, equipment modifications, reformulated products, operational changes, shutdowns, and the purchase of excess emission reductions. Facilities for which emission feeFinal Staff Report for Proposed Am ended Rule 1110.2

39 May 2005 data for 1990 or subsequent year shows four or more tons per year of NOx or SOx, excluding certain exempt sources, are subject to this program. Regulation XX specifically identifies requirements for IC engines, in addition to other specific sources, which include monitoring, reporting and recordkeeping for NOx and SOx emissions.

PERMITTING RECOMMEND ATIONS

AQMD’s current Rule 219

– Equipment not Requiring a Written Permit Pursuant to Regulation III, exempts from permits engines at agricultural facilities if the facility’s emissions are less than 50% of the Title V Thresholds. This means that unless the rule is changed, most agricultural facilities will not require AQMD permits for their existing engines, for modifications to their engines to comply with Rul e 1110.2, or for new engines.

Staff recommends that the agricultural engines that are subject to the requirements of Rule 1110.2 be permitted by the AQMD, regardless of the size of the agricultural operation. Experience in implementing Rule 1110.2 has sho wn that engines require continuous attention by the operator to ensure they operate in compliance with AQMD rules. History has also shown that without a strong AQMD enforcement presence, engine operators do not adequately maintain or operate the engines a nd control equipment to comply with AQMD rules on a continuous basis. It is expected that agricultural engine operators will perform no differently than other operators. The permit is the best mechanism that will allow the AQMD to ensure compliance is ach ieved. Without the permits, compliance staff will have difficulty determining which agricultural facilities are even subject to the rule, making compliance difficult to enforce. Requiring permits for engine modifications and control equipment will assure that the correct steps are taken to achieve compliance with Rule 1110.2. The associated permit fees will also allow the AQMD to recover the increased compliance costs for agricultural engines directly from those facilities, rather than have other fee pro grams subsidize these increased costs.

California Health and Safety Code Section 42301.16 requires district permits for agricultural equipment at facilities below one half of the Title V emission thresholds, provided the AQMD Board, at a public hearing, fi nds that a permit is necessary to impose or enforce reductions of emissions of air pollutants that cause or contribute to exceedances of a state or federal ambient air quality standard and the requirement for a source or category of sources to obtain a per mit would not impose a burden on those sources that is significantly more burdensome than other similar sources of air pollution. Staff will recommend the Board make those findings at the public hearing to consider the proposed amendments to Rule 1110.2. Rule 1110.2 is necessary to reduce NOx, VOC and CO emissions in order to achieve and maintain the state and federal ambient air quality standards for ozone and particulate matter. Without a written permit for those sources subject to the requirements of Rule 1110.2, the standards necessary to ensure the emission reductions are unenforceable. The permit requirement and associated fees are the same as those imposed on all other engine operators subject to the requirements of Rule 1110.2. The

socioeconomic assessment found that the permit fees are reasonable compared to other industries, therefore, the permit is no more burdensome to agricultural operators than it is to other engine operators subject to Rule 1110.2.

In order to implement the permit requirem ent, an amendment to Rule 219

– Equipment Not Requiring a Written Permit Pursuant to Regulation II will be required. Upon the Board approval of the required findings, staff will prepare the appropriate amendment to Rule 219 and bring theFinal Staff Report for Proposed Am ended Rule 1110.2

40 May 2005 rule amendment to a public hearing for Board consideration prior to the implementation date of Rule 1110.2 for agricultural operations.

DRAFT FINDINGS

Before adopting, amending or repealing a rule, the AQMD shall make findings of necessity, authority, clarity, consistency, non

- duplication, and reference, as defined in Health and Safety Code Section 40727. The draft findings are as follows:

Necessity

- The AQMD Governing Board finds and determines that Proposed Amended Rule

1110.2

- Emissions From Gaseous

- and Liquid

- Fuele d Internal Combustion Engines is necessary in order to comply with the requirements of Senate Bill 700

- Agricultural Operations and adopt and implement Best Available Retrofit Control Technology for inclusion in the State Implementation Plan for agricultura l sources

.

Authority

- The AQMD Governing Board obtains its authority to adopt, amend or repeal rules and regulations from Health and Safety Code §§40000, 40001, 40440, and 40720

- 40728.

Clarity

- The AQMD Governing Board finds and determines that Proposed Amended Rule 1110.2 is written and displayed so that the meaning can be easily understood by persons directly affected by it.

Consistency

– The AQMD Governing Board finds and determines that Proposed Amended Rule 1110.2 is in harmony with, and not in confl ict with or contradictory to, existing statutes, court decisions, or federal or state regulations.

Non

- Duplication

– The AQMD Governing Board has determined that Proposed Amended Rule 1110.2 does not impose the same requirements as any existing state or fe deral regulations.

Reference

- In adopting these proposed amendments and proposed rescinding, the AQMD Governing Board references the following statutes which AQMD hereby implements, interprets or makes specific: Health and Safety Code Sections 40001, 4044 0, and 40724 (SB 700).

In addition, the following draft finding will be necessary to require all agricultural engines subject to Rule 1110.2 to obtain AQMD permits, pursuant to Health and Safety Code Section

42301.16

.

Agricultural Engine Permitting

– The A QMD Governing Board finds and determines that: 1) a n AQMD permit is necessary for all agricultural engines subject to Rule 1110.2 to impose

and enforce reductions of NOx and VOC emissions that cause or contribute to the exceedance of ozone and particulat e ambient air quality standard s; and 2) the requirement to obtain a permit is not significantly more burdensome for agricultural engine operators than the permit for other

similar sources of air pollution

.Final Staff Report for Proposed Am ended Rule 1110.2

41 May 2005 REFERENCES

1. California Environmental Protection Agency

- Air Resources Board “Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Stationary Spark

- Ignited Internal Combustion Engines", November 2001.

2. South Coast Air Quality Management District, “Fi nal Staff Report For Proposed

Amendment of Rule 1110.2

- Emissions from Gaseous and Liquid

- Fueled Engines”

November 1997.

3. California Air Resources Board, “Staff Report: Initial Statement of Reasons for Proposed Rulemaking for Proposed Amendments to the Reg ulation for the Statewide Portable Equipment Registration Program”, February 26, 2004.

4. Compilation of Air Pollutant Emission Factors AP

- 42. Volume I: Stationary Point and Area Sources. U. S. Environmental Protection Agency, Research Triangle Park, NC.

5. C alifornia Air Resources Board, "Staff Report: Adoption of the Proposed Airborne Toxic Control Measure for Diesel Particulate Matter from Portable Engines Greater Than 50 Horsepower", February 26, 2004

6. South Coast Air Quality Management District, “Final Sta ff Report For Proposed Rule

1110.2

- Emissions from Gaseous and Liquid

- Fueled Engines” July 1990

### APPENDIX A

________________________________________________________________



### Cost

- Effectiveness Calculations

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix A A

- 1 May 2005

Cost

- Effectiveness Calculations for Rule 1110.2 Application to Agricultural Engines (2005)

HHV Effic.: 30% (SI), 36% (diesel), Hrs/yr operation: 2000, Load Factor: 65%, Engine hp: 175, No. Engines: 2, 4% Real Interes t Rate

PPMVD@15%O2

Case Baseline Controlled % Reduction 10

- Yr Tons Reduced
Control Technology NOx CO VOC NOx CO VOC NOx CO VOC NOx CO VOC NH3

Sta Dsl Tier 0 SI Engine + NSCR 1109 394 255 11 70 30 98.8 78.7 85.9 69.3 11.9 4.8 0.00

Electric 1109 394 255 0 0 0 100.0 100.0 100.0 70.2 15.2 5.6 0.00

Tier 1 + SCR + CatOx 1109 394 255 11 70 30 99.0 82. 2 88.2 69.5 12.5 5.0

- 0.27

Sta Dsl Tier 1 SI Engine + NSCR 546 394 228 11 70 30 97.6 78.7 84.2 33.7 11.9 4.2 0.00

Electric 546 394 228 0 0 0 100.0 100.0 100.0 34.6 15.2 5.0 0.00

SCR 546 394 228 54 2000 300 90.1 0.0 0.0 31.2 0.0 0.0

- 0.27

Sta Dsl Tier 2 SI Engine + NSCR 339 394 141 11 70 30 96.1 78.7 74.5 20.6 11.9 2.3 0.00

Electric 339 394 141 0 0 0 100.0 100.0 100.0 21.4 15.2 3.1 0.00

SCR 339 394 141 54 2000 300 84.1 0.0 0.0 18.0 0.0 0.0

- 0.27

Sta Dsl Tier 3 SI Engine + NSCR 225 394 36 11 70 3 0 94.1 78.7 0.7 13.4 11.9 0.0 0.00

Electric 225 394 36 0 0 0 100.0 100.0 100.0 14.2 15.2 0.8 0.00

SCR 225 394 36 54 2000 300 76.0 0.0 0.0 10.8 0.0 0.0

- 0.27

Sta SI Tier 0 NSCR 590 1629 23 54 2000 300 90.8 0.0 0.0 38.6 0.0 0.0 0.00

Electric 590 1629 23 0 0 0 100.0 100.0 100.0 42.5 71.5 0.6 0.00
New Engine + NSCR 590 1629 23 11 70 30 98.1 95.7

- 32.1 41.7 68.4

- 0.2 0.00

Sta SI Tier 1 NSCR 200 1629 7 54 2000 300 73.0 0.0 0.0 10.5 0.0 0.0 0.00

Electric 200 1629 7 0 0 0 100.0 100.0 100.0 14.4 71.5 0 .2 0.00

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix A A

- 2 May 2005 AAP $K/Ton

Case Technol, $K Testing, $K P.V. 10

- Yr $K/Ton Incentive NOx + VOC

Control Technology Inst'd Ann. Ann. Cost, $K NOx + VOC $K w/ AAP FAC

HP No. Eng's Eng. HP hrs/yr

Sta Dsl Tier 0 SI Engine + NSCR 84.9 7.3 2.0 163.8 2.2 78.4 1.2 350 2 175 2000

Electric 136.9

- 8.3 0.0 67.1 0.9 130.4

- 0.8 350 2 175 2000

Tier 1 + SCR + CatOx 120.9 46.7 2.0 532.7 7.2 114.4 5.6 350 2 175 2000

Sta Dsl Tier 1 SI Engine + NSCR 84.9 7.3 2.0 163.8 4.3 78.4 2.2 350 2 175 2000

Electric 136.9

- 8.3 0.0 67.1 1.7 130.4

- 1.6 350 2 175 2000

SCR 73.6 45.3 2.0 473.6 15.2 67.1 13.0 350 2 175 2000

Sta Dsl Tier 2 SI Engine + NSCR 84.9 7.3 2.0 163.8 7.1 78.4 3.7 350 2 175 2000

Electric 136.9

- 8.3 0.0 67.1 2.7 130.4

- 2.6 350 2 175 2000

SCR 7 3.6 45.3 2.0 473.6 26.3 67.1 22.5 350 2 175 2000

Sta Dsl Tier 3 SI Engine + NSCR 84.9 7.3 2.0 163.8 12.2 78.4 6.4 350 2 175 2000

Electric 136.9

- 8.3 0.0 67.1 4.5 130.4

- 4.2 350 2 175 2000

SCR 73.6 45.3 2.0 473.6 43.8 67.1 37.6 350 2 175 2000

Sta SI T ier 0 NSCR 51.3 15.0 2.0 194.8 5.1 31.8 4.2 350 2 175 2000

Electric 147.7 9.6 0.0 228.4 5.3 128.2 2.3 350 2 175 2000
New Engine + NSCR 84.9 15.0 2.0 228.4 5.5 65.4 3.9 350 2 175 2000

Sta SI Tier 1 NSCR 51.3 15.0 2.0 194.8 18.6 31.8 15.5 350 2 175 20 00

Electric 147.7 9.6 0.0 228.4 15.7 128.2 6.9 350 2 175 2000

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix A A

- 3 May 2005

Incremental Cost

- Effectiveness Calculations

PPMVD@15%O2 Incr. 10

- Yr Tons Technol, $K Testing, $K Incr. 10

- Yr Incr. $K/ton

Case Technology Pair NOx CO VOC NOx C O VOC Inst'd Ann. Ann. Cost, $K NOx + VOC

Sta Ag Dsl Tier 0, 1 or 2 175

- hp Spark + NSCR 54 2000 300 5.4

- 31.0

- 2.9 44.3 12.0 1.0 120.9 48.2

Tier 3 Engine 225 394 36 24.7 0.0 1.0

Sta Ag SI 175

- hp NSCR 54 2000 300 2.0 0.0 0.0 24.2 12.0 1.0 93.5 46.2

Low

- Emiss Comb. +
CatOx 118 2000 300 26.1 0.7 1.0

NSCR 54 2000 300 2.0 0.0 0.0 24.2 12.0 1.0 81.8 40.4

PSC + CatOx 118 2000 300 25.1 2.2 1.0

NSCR 54 2000 300 9.0

- 31.0

- 1.7 24.2 12. 0 1.0 104.0 14.3

Tier 2 Engine 339 394 141 21.5 0.0 1.0

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix A A

- 4 May 2005

Notes: Average engine size (175 hp) and average No. of engines at facility (2) are based on AQMD survey of agriculural facilities. Engine operation of 2000 hrs/yr at 65% load factor is ba sed on "The Carl Moyer Memorial Air Quality Standards Attainment Program Guidelines", Chapter 6, Stationary Agricultural Irrigation Pump Engines.

Baseline emissions are the uncontrolled values (e.g., AP

- 42) or the required value (USEPA Tier), whichever is lower.

Ratio of NOx:VOC g/bhp

- hr for Tier 2 diesel engines assumed same as Tier 1 diesel engines. Ratio of NOx:VOC g/bhp

- hr for Tier 3 diesel engines assumed same as Tier 4 diesel engines. Ratio of NOx:VOC g/bhp

- hr for certified SI engines assu med same as for uncontrolled SI engines. Controlled emissions are based on BACT for engine replacements or the rule requirements (including efficiency ratio multiplie r) for add

- on controls.

Cost of replacement engine: diesel: Tier 1 or 2 $123/hp, Tier 3 $131/hp, Tier 4 $140/hp; SI:Tier 0 $92/hp, Tier 2 $92/hp + $723

$123/hp for Tier 1 or 2 diesel is from SJVUAPCD Proposed Amendments to Rule 4702, Draft Staff Report, January 3, 2005, Append ix C. $131/hp for Tier 3 diesel is based on information fro m manufacturers (15% increase in cost of engine [which is approx. $50/hp]) $140/hp for Tier 4 diesel assumes another 15% increase in cost of engine. $92/hp for SI engine is factored from cost of diesel (75%). Added cost for Tier 2 SI engine of $723 is from USEPA (Final Regulatory Support Document, Control of Emissions from Unregulated Nonroad Engines, EPA420

- R

- 02

- 022, September 2002) escalated at 2.5%

inflation rate. Cost of engine replacement does not take credit for efficiency improvement and lowe r maintenance cost. Cost of NSCR system: $22.06k per eng.+$28.7(hp

- 100) installed, $6.6k per eng.+$7.2(hp

- 100) annual O&M (from CARB RACT/BARCT determination for SI engines, escalated at 2.5% inflation rate). Cost of SCR system: $49.6k per engine+$96(hp

- 100) installed, $22k per engine+$93(hp

- 100) annual O&M (from CARB RACT/BARCT determination for SI engines, escalated at 2.5% inflation rate).

10

- Yr Cost for SCR includes cost to contro l 10

- Yr tons PM created by unreacted ammonia (NH3) (10 ppm in exhaust g as) valued at $4,500/ton (BACT cost effectiveness criterion) Cost of oxidation catalyst: $12/hp (from CARB RACT/BARCT determination for SI engines, escalated at 2.5% inflation rate), 3

- yr catalyst
life assumed. Cost of electrification: $391/hp based on A QMD Contract No. 03143, replacement of 34 diesel pumps with electric pumps.

Cost to connect diesel engine to grid assumed zero based on funding program available from SCE to assist electrification of d iesel engines.

For SI engines, cost for connectio n to grid is assumed to be $10.8k (from CARB RACT/BARCT, escalated at 2.5% inflation rate). Fuel costs used to calculate annual energy cost of fuel switch or electrification ($/MMBtu): Diesel 11.5, Propane 8, Natural Gas 7.6,
Gasoline 15

-- based on inform ation from U.S. Energy Information Agency and So. Cal Gas core rate for water pumping effective 2/1/05. Electrification of SI engine assumes the baseline energy source is natural gas (based on AQMD survey of agricultural faciliti es). Electricity rates fo r conversion from diesel assumed to be SCE proposed TOU

- PA

- ICE rate schedule (time

- weighted average rate $.0592/kW

- hr plus monthly charges of $50.51 meter charge, $2.89/kW demand charge and $1.09/kW summer on

- peak demand charge). Electricity rates for con version from gas assumed to be SCE TOU

- PA

- B rate schedule (time

- weighted average rate $.0656/kW

- hr plus

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix A A

- 5 May 2005

monthly charges of $50.51 meter charge, $4.18/kW demand charge and $8.25/kW summer on

- peak demand charge). Cost of source testing: $3k per engine, ever y 3 years

For incremental cost effectiveness of NSCR vs. Low

- Emission Combustion Modifications (LEC) or Pre

- Stratified Charge (PSC):

LEC or PSC is assumed 80% effective on NOx (CARB RACT/BARCT Determination), and it is assumed that oxidation catalyst can meet
the amended rule limits on CO and VOC.

Cost of LEC for 175 hp engine is $24k installed and no annual cost. Cost of PSC for 175 hp engine is $23k and $1.5k/yr (CARB RACT/BARCT Determination) For incremental cost effectiveness calculations, Ig nition Timing Retard is assumed to be 15% effective on NOx and cost $4.7k/yr (CARB RACT/BARCT) Agricultural Assistance Program (AA P) incentive funds are available to offset cost of modifying or replacing diesel engines, up to $13,600 per ton of NOx+VOC+PM x10 reduced.

For calculation of AAP cost effectiveness, used 0.117 factor for annual value of incentive (10

- yr life, 3% discount rate).

For Socio

- Econ Calculations: Assumed approx half SI engines and 80% of the diesel engines would be electrified and sites that have most hp and most hrs/yr operation would be most likely to be electrified.

For each engine, calculated costs for that engine size and hrs/yr operation and for the number of engines at the site where i t is located

-

- i.e., calculated costs for a facility having N engines all rated at same hp and all engines operating same hrs/yr, then divided by N.

C alculated Agricultural Assistance Program (AAP) cost effectiveness using AA P incentive x 0.117 (10

- yr life, 3% discount rate) divided

b y tpy NOx, VOC, PM x 10.

PM emission from diesel

- fueled engine assumed to be .0022 lb/hp

- hr for Tier 0 (AP

- 42, Table 3.3

- 1) and required values for Tier 1 and above (dependent on hp of engine).

PM emission from SI engine assumed to be .01942 lb/MMBtu (AP

- 42, Table 3.2

- 3 [natural gas]) Installed cost is reduced by AAP incentive. AA P incentive = installed cost

- cost to rebuild engine; up to a cost effectiveness of $13,600
per ton.

Cost to rebuild diesel engine = $1.5k + $.01k x hp, based on de fault rebuild costs used in SJVAPCD CM P Ag pump component) Cost to rebuild SI engine = 3 x cost to rebuild diesel engine, based on information from engine rebuild shops.

### APPENDIX B

________________________________________________________________



### Incentive Funding Available for Agricultural Engine Emission

Red uctionsFinal Staff Report for Proposed Amended Rule 1110.2

Appendix B B

- 1 May 2005 Summary of Incentive Funding Available for

Agricultural Engine Emission Reductions

There are two important new incentive programs for agricultural engine emission reduction projects, one from the State of California, and the other from South ern California Edison Company. The new state Agricultural Assistance Program (AAP) is unprecedented in that it will provide funding to agricultural facilities for emissions reductions required by an AQMD regulation. No other facilities enjoy this kind o f financial assistance.

There are a variety of other AQMD programs (see AQMD’s website at http://www.aqmd.gov/tao/Implementation/index.htm ) that provide incentive funding for

emission re duction projects. However, they cannot fund emission reductions required by AQMD rules. Therefore, the following two programs will be the best source of funding for agricultural engines. Carl Moyer and Agricultural Assistance Programs

Since 1998, the Carl Moyer Memorial (CMP) Air Quality Standards Attainment Program (“Carl Moyer Program”) has provided grants to encourage the owners of heavy

- duty diesel engines to go beyond regulatory requirements by retrofitting, repowering, or replacing their engines with newer and cleaner ones. On January 1, 2005, new legislation (AB 923, Firebaugh)

takes effect which broadens the definition of Carl Moyer Program (CMP)

- eligible projects to include additional agricultural sources.

CMP grants are awarded based on fu nding protocols developed in consultation with local air districts and interested stakeholders, and adopted by the CARB in a public meeting. The definition of “agricultural sources” in AB 923 includes sources such as confined animal facilities and fugitiv e dust, for which there are currently no funding protocols. Projects for which funding protocols exist, such as projects involving agricultural irrigation pump engines, will continue to be eligible for funding.

The legislation requires the CARB to esta blish or update grant criteria and guidelines for covered projects, as revised by the bill, by January 1, 2006. CARB has issued interim guidelines 19 ; however, they will eventually be superceded by CARB

- adopted guidelines. After October 2005, interested pe rsons should consult http://www.arb.ca.gov/msprog/moyer/moyer.htm or CARB

staff to determine if final Board

- adopted guidelines are available.

Table B

- 1 summarizes the significant differences be tween the CMP and the new Agricultural Assistance Program authorized by AB 923 and funded by the $2 motor vehicle registration fee.

19 Carl Moyer Program Advisory: 05

- 002 November 29, 2004Final Staff Report for Proposed Amended Rule 1110.2

Appendix B B

- 2 May 2005 Table B

- 1: Agricultural Source Eligibility for

Carl Moyer Program and $2 Motor Vehicle Registration Fee Incentive Funds

Carl Moyer Program Agricultural Assistance Program

(funded with $2 MV Fees)

Program Criteria* • Reductions must be surplus

• $13,600 cost

- effectiveness limit • Previously unregulated sources

• Within 3 years after rule adoption or before compliance date (whichever is later)

• No surplus requirement

• $13,600 cost

- effectiveness of total

reductions limit

*Summary of eligibility criteria. Please consult the CMP Guidelines 20 and the Program Advisory 05

- 002 for complete eligibility information. .

AB 923 wil l permit the funding of incentive programs to reduce emissions of nitrogen oxides (NOx) , particulate matter (PM) and reactive organic gases (ROG). The bill also authorizes funding for additional agricultural sources. Two funding sources

– the CMP and an additional two dollar surcharge on motor vehicle registration fees are affected. For the purposes of AB 923, agricultural sources are defined in Health and Safety Code Section 39011.5. This section defines an agricultural source as a source of air pollu tion used in the production of crops, or the raising of fowl or animals, that meets any of the following criteria:

• Is a confined animal facility;

• Is an internal combustion engine used in the production of crops or the raising of fowl or animals, except an engine that is used to propel implements of husbandry;

• Is a Title V source; or

• Is a source that is otherwise subject to regulation by a district pursuant to federal law (for example, fugitive dust sources subject to federal control requirements).

For purp oses of the motor vehicle registration fee, self

- propelled agricultural equipment, such as tractors or harvesters, are specifically excluded from the definition of “agricultural sources” under this section of the Health and Safety Code. However, self

- prop elled equipment is eligible for funding under the “traditional” CMP because it is a mobile source.

The CMP and the motor vehicle registration fee program are governed by related but different statutory requirements:

• For CMP projects, emission reductions must be real, surplus, quantifiable, and enforceable. “Surplus” means that the reductions must surpass those reductions required by existing regulatory requirements. Projects must also meet a cost

- effectiveness threshold of $13,600 per ton of emissions r educed.

20 See http://www.aqmd.gov/tao/Implementation/carl_moyer_program_2001.htmlFinal Staff Report for Proposed Amended Rule 1110.2

Appendix B B

- 3 May 2005 • The $2 motor vehicle fee can be used to fund agricultural projects in two ways. The $2 motor vehicle fee can be used to fund agricultural projects meeting the CMP guidelines. In addition, the $2 motor vehicle fee may be used to directly fund ag ricultural projects through a new program called the “Agricultural Assistance Program” (AAP) if specified conditions are met. AAP projects must apply to previously unregulated sources. These projects do not need to provide surplus emission reductions.

At this time, there is already a CMP funding protocol for projects that reduce emissions from agricultural pump engines. As discussed in Program Advisory 04

- 13, projects that reduce emissions from both stationary and portable agricultural irrigation pump engines are eligible for funding. In addition, Program Advisory 05

- 001 modifies the requirements for project life, allowing all agricultural irrigation pump engines (including portable engines) to qualify for funding beyond the December 31, 2004 date spe cified in Program Advisory 04

- 13.:

As discussed above, AB 923 broadens the definition of CMP

- eligible projects to include additional agricultural sources. There are currently no funding protocols for projects that reduce emissions from agricultural sourc es that are not engines. CARB staff is evaluating the eligibility of projects to reduce emissions from the other types of agricultural sources.

Existing law authorizes air districts to assess motor vehicle fees to fund implementation of the

California Cl ean Air Act. AB 923 modifies the law to allow district boards to adopt an additional surcharge of up to $2 to implement any or all of four specified programs: the CMP;

Low

- Emission School Bus Program; a car scrap program; or the new purchase, retrofit, r epower, or add

- on equipment for previously unregulated agricultural sources.

Emission reductions from agricultural projects that meet the CMP guidelines may be funded with the $2 surcharge on motor vehicles. The $2 surcharge on motor vehicles may also be used under a new program called the “Agricultural Assistance Program” (AAP) to directly fund the control of agricultural sources of air pollution, as defined in Section 39011.5.”

Based on the statutory provisions of AB 923, AAP projects must meet all of the following requirements:

– Projects must involve the new purchase, retrofit, repower or add

- on of equipment,

– Projects must reduce emissions from previously unregulated sources ; that is sources that are unregulated as of January 1, 2005, the effective date of the legislation, but are subject to regulation at the time of the grant (this includes agricultural engines),

– Projects must be funded within 3 years of rule adoption or before the compliance date of the rule, whichever is later, and

– The ARB must de termine that the applicable rule complies with Sections 40913, 40914, and 41503 of the Health and Safety Code pertaining to attainment plan measures.

Sections 40913, 40914, and 41503.1 of the Health and Safety Code relate to California Clean Air

Act attai nment plans and the rate of emission reductions required in those plans. District plans must be designed to achieve and maintain the state ambient air quality standards by the earliest practicable date through the use of all feasible measures. CARB routi nely reviews district rules for compliance with these requirements and will treat agriculture

- related rules the same way.Final Staff Report for Proposed Amended Rule 1110.2

Appendix B B

- 4 May 2005 Agricultural irrigation pump engines subject to district rules that limit NOx, ROG or PM emissions from agricultural irrigation pump engines can be funded if those rules take effect after January 1, 2005, as will the proposed amendments to Rule 1110.2. The project must also meet the AAP criteria listed above, and should meet the cost

- effectiveness of total reduction (CETR) limit of $1 3,600 per ton as described below.

Because AAP projects are not required to achieve surplus emission reductions, the cost

effectiveness calculations used in the CMP (which are based solely on surplus reductions) are not appropriate for evaluating these typ es of projects.

However, in order to provide a means for districts to evaluate AAP projects, ARB staff has developed a new metric for the AAP, the “cost

- effectiveness of total reductions” (CETR), where CETR is the annualized cost divided by the emission reductions as if no regulatory requirement

existed:

Annualized Cost ($/year)
Emission Reductions if no Regulatory Requirement Existed (tons/yr)

The emission reductions should be calculated using CMP methodologies and protocols, but assuming no regulator y requirement exists. For example, for agricultural irrigation pump engines, the CETR calculation would generally assume a project life of 7 years, even if a local rule for agricultural irrigation pump engines takes effect in three years.

In order to e nsure that the technologies and costs of projects funded by the AAP are generally comparable to those funded by the CMP, local districts should not directly fund agricultural projects that exceed a CETR of $13,600 per ton of total emissions reduced, but ma tching funds from the engine user or other source are not counted toward the CETR limit.

Southern California Edison (SCE) Incentive Funding and Reduced Electric Rates SCE already has ten different rate schedules for agricultural customers that offer bet ter electric rates to agricultural facilities than to other commercial and industrial customers. Nevertheless, on November 9, 2004, SCE filed an application with the California Public Utilities Commission for expedited approval of additional incentives fo r conversion of agricultural engines to electrical service. SCE’s proposal consists of two incentives to encourage customers to convert to

electrical use: discounted rates over a 10

- year period; and enhanced line extension allowances to help reduce the up

- front costs of the conversion. The proposed new rate schedule, Schedule TOU

- PA

- ICE Time

- of

- Use Agricultural and Pumping internal Combustion Engine Conversion Program, represents approximately a 20%

discount relative to the current Schedule TOU

- PA

- B. Both demand charges ($/kW) and energy charges ($/kW

- hr) are reduced. During the Off

- Peak time period, electric costs will be as low as 4.532 cents per kW

- hr. This is equivalent to buying diesel fuel at $0.63 per gallon, which is

much less than the current co st of diesel fuel, therefore the operating costs of the electric motor will be much less than for a diesel engine. In order to help pay more of the up

- front costs to bring electrical service to an agricultural site, SCE also proposes additional Line Extens ion Adder funding on top off the funding already inFinal Staff Report for Proposed Amended Rule 1110.2

Appendix B B

- 5 May 2005 effect. SCE estimates that a typical 150 hp diesel engine would qualify for an additional $30,000 of funding in addition to the normal funding. Agricultural facilities can get these SCE incentives in add ition to the state AAP incentives when the convert agricultural engines to electric service.

### APPENDIX C

________________________________________________________________



### SB 700 ExcerptsFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 1 May 2005 BILL NUMBER: SB 700 CHAPTERED

BILL TEXT

CHAPTER 479 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2003

APPROVED BY GOVERN OR SEPTEMBER 22, 2003 PASSED THE SENATE SEPTEMBER 11, 2003 PASSED THE ASSEMBLY SEPTEMBER 10, 2003 AMENDED IN ASSEMBLY SEPTEMBER 9, 2003 AMENDED IN ASSEMBLY SEPTEMBER 4, 2003 AMENDED IN ASSEMBLY AUGUST 21, 2003 AMENDED IN ASSEMBLY JULY 14, 2003 AMENDED IN ASSEMBLY JULY 2, 2003 AMENDED IN ASSEMBLY JUNE 26, 2003 AMENDED IN SENATE MAY 13, 2003 AMENDED IN SENATE MAY 7, 2003 AMENDED IN SENATE APRIL 24, 2003

INTRODUCED BY Senators Florez and Sher

FEBRUARY 21, 2003

An act to amend Section 42310 of, and to add Sections 39011.5, 39023.3, 40724, 40724.5, 40724.6, 40724.7, 40731, 42301.16, 42301.17, 42301.18, and 44559.9 to, the Health and Safety Code, relating to air quality.

LEGISLATIVE COUNSEL'S DIGEST

SB 700, Florez. Air quality: emissions: stationary sources: agricultural operations.

(1) Existing law authorizes the board of every air quality management district and air pollution control district to establish a permit system that requires any person that uses certain types of equipment that may cause the emission of air contaminants to obtain a permit. Existing law exempts vehicles and certain types of equipment from those permit requirements.

This bill would eliminate that exemption for any equi pment used in agricultural operations in the growing of crops or the raising of

fowl or animals. To the extent that the bill would increase the number of permits that a district board, electing to establish a permit system prior to January 1, 2004, would be required to issue, the bill would impose a state

- mandated local program.

(2) Existing law defines various terms governing the construction of air pollution control laws in the state, and authorizes the stateFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 2 May 2005 board to revise those definitions to confo rm with federal law.

This bill would define the terms "agricultural source of air pollution" and "fugitive emissions," and would prohibit, notwithstanding the existing authority, the state board from revising

those definitions.

(3) The existing feder al Clean Air Act requires districts to adopt local programs for issuing operating permits to major stationary sources of air pollutants. The existing act defines a stationary source as any building, structure, facility, or installation that emits or may e mit any air pollutant.

This bill would require each district that is designated a serious federal nonattainment area for an applicable ambient air quality standard for particulate matter as of January 1, 2004, to adopt, implement, and submit for inclusi on in the state implementation plan, a rule or regulation requiring best available control measures (BACM) and best available retrofit control technology (BARCT) for agricultural practices at agricultural sources of air pollution to reduce air pollutants f rom those sources for which that technology is applicable for agricultural practices by the earliest feasible date, but not later than January 1, 2006, and would require each district subject to those requirements to comply with a schedule for public

heari ng, adoption, and implementation of the final rule.

The bill would require each district that is designated a moderate federal nonattainment area or an applicable ambient air quality standard for particulate matter as of January 1, 2004, to adopt and

im

plement control measures necessary to reduce emissions from agricultural practices by the earliest feasible date, but no later than January 1, 2007, unless the district determines that those sources do not significantly cause or contribute to a violation o f

state or federal standards.

The bill would require, by January 1, 2005, the state board to review all available scientific information and develop a definition of a "large confined animal facility."

The bill would require, by July 1, 2006, each dis trict that is designated as a federal nonattainment area for ozone as of January 1, 2004, to adopt, implement, and submit for inclusion in the state implementation plan, a rule or regulation that requires the owner or operator of a large confined animal fa cility as that term is defined by the state board to obtain a permit to reduce, to the extent feasible, emissions of air contaminants from the facility. The bill would require the district to perform an assessment of the impacts of the rule or regulation prior to its adoption. The bill would authorize a permitholder to appeal any district determination or decision related to that permit.

The bill would require a district that is designated as being in attainment for the federal ambient air quality stan dard for ozone asFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 3 May 2005 of January 1, 2004, to adopt the same rule or regulation required of nonattainment districts, by July 1, 2006, unless the district board makes a determination that large confined animal facilities will not contribute to a violation of any state or federal ambient air quality standard. The bill would provide the rule or regulation is not required to be submitted for inclusion into the state implementation plan.

The bill would require the California Air Pollution Control

Officers Associa tion, in consultation with the state board and other interested parties, by January 1, 2005, to develop a clearinghouse of available control measures and strategies for agricultural sources of air pollution and emissions of air contaminants from agricultur e operations.

The additional duties for districts under the bill would impose a

state

- mandated local program.

(4) Existing law establishes the Capital Access Loan Program for Small Businesses, administered by the California Pollution Control

Financin g Authority, which provides loans through participating

financial institutions to entities authorized to conduct business in the state and whose primary business location is in the state.

This bill would require the authority to expand the program to

in clude outreach to financial institutions that service agricultural interests in the state for the purposes of funding air pollution

control measures.

(5) Under existing law, any person who violates a rule, regulation, permit, or order of a district is g uilty of a misdemeanor. Because this bill would increase the number of people who are subject to that provision, it would expand the scope of a crime, thereby imposing a state

- mandated local program.

(6) The California Constitution requires the state t o reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that

reimbursement.

This bill would provide that no reimbursement is required by this act for specified reason s.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. (a) The Legislature finds and declares all of the following:

(1) Agricultural operations necessary for growing crops or raising animals are a significant source of directly emitted particulates, and precursors of ozone and fine particulate matter. These emissions have a significant adverse effect on the ability of areas of theFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 4 May 2005 state, including, but not limited to, the San Joaquin Valley, to

achieve health

- based state and fed eral ambient air quality standards.

(2) Since 1999, the agriculture industry has reduced emissions of oxides of nitrogen (NOx) by more than 2000 tons per year, emissions of particulate matter of 10 microns in diameter (PM 10) by more than 500 tons per year, and emissions of volatile organic compounds (VOCs) from agricultural chemicals by more than 20 percent. According to the state board, however, agricultural sources of air pollution still contribute twenty

- six percent of the smog

- forming emissions in the San Joaquin Valley.

(3) In the San Joaquin Valley, a large portion of the sources of particulate emissions are areawide sources whose emissions are directly related to growth in population and the resulting vehicle miles traveled. According to the State Air Resources Board, however, agricultural sources of air pollution account for over fifty percent of the directly emitted particulate air pollution generated in the valley during the fall, amounting to over 170 tons per day of

emissions.

(4) All parties living or operating a business in an area that has been classified as being a nonattainment area with respect to the attainment of federal or state ambient air quality standards share the responsibility of reducing emissions from air pollutants.

(5) The federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.) prohibits the state from adopting emission standards or limitations less stringent than those established under the federal act, including limitations on emissions from agricultural sources.

(6) Division 26 (commencing with Section 39000) of the Health and Safety Code establishes numerous policies and programs to reduce air pollutants for the protection of public health.

(7) The purpose of the act adding this section is to establish a

new set of programs at the state and regional levels to reduce air emissions from agricultural sources in order to protect public health

and the environment.

(b) It is therefore the intent of the Legislature to require the

State Air Resources Board and air quality management districts and air pollution control districts in the state to regulate stationary, mobile, and area sources of agricultural air pollution.

SEC. 2. Section 39011.5 is added to the Health and Safety Code, to

read:

39011.5. (a) "Agri cultural source of air pollution" or "agricultural source" means a source of air pollution or a group of sources used in the production of crops, or the raising of fowl or animals located on contiguous property under common ownership or

control that meets any of the following criteria:

(1) Is a confined animal facility, including, but not limited to,Final Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 5 May 2005 any structure, building, installation, barn, corral, coop, feed storage area, milking parlor, or system for the collection, storage, treatment, and distribu tion of liquid and solid manure, if domesticated animals, including, but not limited to, cattle, calves, horses, sheep, goats, swine, rabbits, chickens, turkeys, or ducks are corralled, penned, or otherwise caused to remain in restricted

areas for commerc ial agricultural purposes and feeding is by means other than grazing.

(2) Is an internal combustion engine used in the production of crops or the raising of fowl or animals, including, but not limited to, an engine subject to Article 1.5 (commencing wit h Section 41750) of Chapter 3 of Part 4 except an engine that is used to propel implements of husbandry, as that term is defined in Section 36000 of the Vehicle Code, as that section existed on January 1, 2003. Notwithstanding subdivision (b) of Section 39 601, the state board may not revise this definition for the purposes of this section.

(3) Is a Title V source, as that term is defined in Section 39053.5, or is a source that is otherwise subject to regulation by a district pursuant to this division or the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.).

(b) Any district rule or regulation affecting stationary sources on agricultural operations adopted on or before January 1, 2004, is applicable to an agriculture source.

(c) Nothing in this sec tion limits the authority of a district to regulate a source, including, but not limited to, a stationary source that is an agricultural source, over which it otherwise has jurisdiction pursuant to this division, or pursuant to the federal Clean Air Act (4 2 U.S.C. Sec. 7401 et seq.) or any rules or regulations adopted pursuant to that act that were in effect on or before January 1, 2003, or to exempt an agricultural source from any requirement otherwise applicable under Sections 40724 or 42301.16, based upo n a finding by the district in a public hearing that the aggregate emissions from that source do not exceed a de minimus level of more than one ton of particulate matter, nitrogen oxides or volatile organic compounds per year.

.

.

. SEC. 4. Section 407 24 is added to the Health and Safety Code, to

read:

40724. (a) Each district that is designated as a serious federal nonattainment area for an applicable ambient air quality standard for particulate matter as of January 1, 2004, shall adopt, implement, and submit for inclusion in the state implementation plan, a rule or regulation requiring best available control measures (BACM) for sources for which those measures are applicable and best availableFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 6 May 2005 retrofit control technology (BARCT) to reduce air poll utants from sources for which that technology is applicable for agricultural practices, including, but not limited to, tilling, discing, cultivation, and raising of animals, and for fugitive emissions from those agricultural practices a manner similar to o ther source categories by the earliest feasible date, but not later than January 1, 2006. The rule or regulation shall also include BACM and BARCT to reduce precursor emissions in a manner commensurate to other source categories that the district show cau se or contribute to a violation of an ambient air quality standard. Each district that is subject to this subdivision shall comply with the following schedule with respect to the rule or regulation imposing BACM and BARCT:

(1) On or before September 1, 2004, notice and hold at least one public workshop for the purpose of accepting public testimony on the proposed rule or regulation.

(2) On or before July 1, 2005, adopt the final rule or regulation at a noticed public hearing.

(3) On or before Janu ary 1, 2006, commence implementation of the rule or regulation.

(b) Nothing in this section shall delay or otherwise affect any action taken by a district to reduce emissions of air contaminants from agricultural sources, or any other requirements impos ed on a district or a source of air pollution pursuant to the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.).

(c) In adopting a rule or regulation pursuant to this section, a district shall do all of the following:

(1) Ensure the size and durati on of use of an internal combustion engine subject to BARCT pursuant to this section is commensurate to the size and duration of use of internal combustion engines subject to regulation by a district or the state board regulated at other stationary sources

.

(2) Ensure that BARCT established pursuant to this section for an internal combustion engine is similar to BARCT for other stationary source engines subject to regulation by a district or the state

board.

(3) Ensure that the cost

- effectiveness of B ARCT for an internal combustion engine subject to this section is similar to the

cost

- effectiveness of BARCT for other internal combustion engines subject to regulation by a district or the state board.

(4) Compare the cost

- effectiveness of BARCT for an internal combustion engine subject to this section to the list of available and proposed control measures prepared pursuant to Section 40922.

(5) Adopt control measures pursuant to this section in order of

their cost

- effectiveness, unless a district de termines that a different order of adoption is necessary due to the enforceability, public acceptability, or technological feasibility of a given controlFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 7 May 2005 measure, or to expeditiously attain or maintain a national or state ambient air quality standard.

( 6) Except as otherwise provided under this section, ensure that any rule or regulation adopted pursuant to this section complies with all applicable requirements of this division, including, but not limited to, any applicable requirements established pursu ant to Sections 40703, 40727, 40728.5, and 40920.6.

(7) Hold at least one public meeting that is conducted at a time and location that the district determines is convenient to the public at which the district reviews the comparison prepared pursuant to paragraph (4).

(d) Nothing in this section limits the authority of a district to regulate a source including, but not limited to, a stationary source that is an agricultural source over which it otherwise has jurisdiction pursuant to this division or th e federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.) or any rules or regulations adopted pursuant to that act. Nothing in this section shall delay or otherwise affect any action taken by a district to reduce emissions of air contaminants from agricultura l sources, or any other requirements imposed upon a district or a source of air pollution pursuant to the federal Clean Air Act. This section may not be interpreted to delay or otherwise affect the adoption, implementation, or enforcement of any measure t hat was adopted, or included in a rulemaking calendar or air quality implementation plan that was adopted, by the district prior to January 1, 2004.

.

.

. SEC. 8. Section 40731 is added to the Health and Safety Code, to

read:

40731. In order to assis t in the development of the BACM, RACM, and BARCT measures specified in Sections 40724, 40724.5, and 40724.6, and to reduce or eliminate emissions of regulated air pollutants and their precursors, the California Air Pollution Control Officers Association, in consultation with the state board and other interested parties, shall, not later than January 1, 2005, develop a clearinghouse of available control measures and strategies for agricultural sources of air pollution and emissions from agricultural operati ons, including, but not limited to, the following sources:

(a) Operations that create fugitive dust emissions, including, but not limited to, discing, tilling, material handling and storage, and travel on unpaved roads.

(b) Confined animal facilities , including, but not limited to, any structure, building, installation, barn, corral, coop, feed storage area, or milking parlor, including, but not limited to, a system for the collection, storage, treatment, and distribution of liquid orFinal Staff Report for Proposed Amended Rule 1110.2

Appendix C C

- 8 May 2005 solid manure fr om domestic animals, including, but not limited to, cattle, calves, horses, sheep, goats, swine, rabbits, chickens, turkeys, or ducks, if those animals are corralled, penned, or

otherwise caused to remain in restricted areas for commercial agricultural purposes, and feeding is by means other than grazing.

(c) Internal combustion engines used in the production of crops or the raising of animals or fowl, except an engine that is used to propel an implement of husbandry, as that term is defined in Section

3 6000 of the Vehicle Code, as that section existed on January 1,

2003.

(d) Other equipment, operations, or activities associated with the growing of crops or the raising of fowl or animals, that emit, or cause to be emitted, any regulated air pollutant, or any precursor to any regulated air pollutant.

### APPENDIX D

________________________________________________________________



### Stationary, Non

- Emergency Agricultural Engines Emissions InventoryFinal Staff Report for Proposed Amended Rule 1110.2

Appendix D D

- 1 May 2005 BASIS:

* 30% thermal efficiency for natural gas engines

* 65% load for all engines

* Uncontrolled diesel engine e mission factors per U.S. EPA AP

- 42 Compilation of Air Pollution Emission Factors, Table 3.3

- 1 14.0 NOx, 3.03 CO, 1.12 VOC and 1.0 PM, all as g/hp

- hr

* Uncontrolled natural gas four

- stroke, rich

- burn engine emission factors per U.S. EPA AP

- 42 Compilation of Air Pollution Emission Factors, Tables 3.2

- 2 and 3.2

- 3 8.47 NOx, 14.3 CO, 0.113 VOC and 0.0749 PM, all as g/hp

- hr

* Tier 1 (175hp < 300hp) diesel engine emission factors per U.S. EPA non

- road diesel emission

standards 6.9 NOx, 8.5 CO, 1.0 VOC and 0.4 PM, all as g/hp

- hr

* Tier 2 (50hp < 75hp) diesel engine emission factors per U.S. EPA non

- road diesel emission standards 4.9 NOx, 3.7 CO, 0.71 VOC and 0.3 PM, all as g/hp

- hr (for NOx and VOC emission factors, the same ratio as in Tier 1 was used)



### STATIONARY IRRIGATION PUMPS

STATIONARY IRRIGATION PUMPS STATIONARY IRRIGATION
PUMPS Annual Emissions (lbs/year)

SURVEY

NUMBER HP Hrs/Year Diesel Natural

Gas N0x VOC CO PM

24 150 300 1 546 7 902 5

54 150 600 1 1814 144 391 129

299 60 438 1 <Tier 2> 183 27 139 11

334 75 1600 1 2418 193 521 172

334 75 1600 1 2418 193 521 172

334 75 1600 1 2418 193 521 172

349 300 3000 1 18135 1445 3908 1287

351 75 364 1 331 4 5 47 3

Tons/Year 14.1 1.10 3.73 0.975Final Staff Report for Proposed Amended Rule 1110.2

Appendix D D

- 2 May 2005 

### STATIONARY WELL/WATER PUMPS

STATIONARY WELL/WATER PUMPS STATIONARY WELL/WATER
PUMPS Annual Emissions (lbs/year)

SURVEY

NUMBER HP Hrs/Year Diesel Natural Gas N0x VOC CO PM

28 4 65 3000 1 28109 2240 6057 1995

28 330 3000 1 19949 1589 4299 1416

28 227 3000 1 13722 1093 2957 974

28 145 3000 1 5275 69 8719 47

85 60 1460 1 1062 14 1756 9

85 150 1460 1 2656 34 4390 23

106 100 270 1 327 4 541 3

339 175 3600 1 7640 99 12628 68

471 200 4320 1 10477 136 17318 93

471 200 4320 1 10477 136 17318 93

471 250 4320 1 13097 170 21648 116

Tons/Year 56.4 2.79 48.8 2.42

OTHER AG ENGINES OTHER AG ENGINES

- UNCONTROLLED Annual Emissions (lbs/year)

SURVEY

NUMBER HP Hrs/Year Diesel Natural

Gas N0x VOC CO PM

153 210 1095 1 Tier 1 2272 329 2795 132

Tons/Year 1.14 0.164 1.40 0.0658

### APPENDIX E

________________________________________________________________



### Emission Impacts

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix E E

- 1 May 2005 EMISSION REDUCTI ONS FOR AGRICULATURAL ENGINES. NOTE: Estimated emission reductions are double the figures below per the assumptions in the Emissions Inventory section of the staff report..

WELL / WATER PUMPS

EMISSION REDUCTIONS WITH
CONTROLS (Tons/Year)

SURVEY

NUMBER Well/Water Pump Stationary Diesel Natural

Gas HP Stationary Operating
Hours/Year Stationary Diesel

Pre

- 1996 mfg date? Natural
Gas with
controls? CONTROL
TECHNOLOGY N0x CO VOC PM

28 1 1 465 3000 Yes Elec trification 13.98 3.03 1.1185 0.9974

28 1 1 330 3000 Yes Electrification 9.92 2.15 0.7937 0.7079

28 1 1 227 3000 Yes Electrification 6.83 1.48 0.5460 0.4869

28 1 1 145 3000 No Electrification 2.64 4.44 0.0353 0.0 233

85 1 1 60 1460 ? NSC R 0.48 0.00 0.0000 0.0000

85 1 1 150 1460 ? NSCR 1.21 0.00 0.0000 0.0000

106 1 1 100 270 No NSCR 0.15 0.00 0.0000 0.0000

339 1 1 175 3600 ? Electrification 3.82 6.43 0.0512 0.0 338

471 1 1 200 4320 No Electrification 5.24 8.82 0.0702 0.0 463

471 1 1 200 4320 No Electrification 5.24 8.82 0.0702 0.0 463

471 1 1 250 4320 No Electrification 6.55 11.02 0.0877 0.0 579

TOTALS 56.05 46.19 2.7728 2. 3 9 99

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix E E

- 2 May 2005 IRRIGATION PUMPS

EMISSION REDUCTIONS WITH CO NTROLS (Tons/Year)

SURVEY

NUMBER Irrigation Pump Stationary Diesel Natural

Gas HP Stationary Operating
Hours/Year Stationary Diesel

Pre

- 1996 mfg date? Natural
Gas with
controls? CONTROL
TECHNOLOGY N0x CO VOC PM

24 1 1 150 300 ? NSCR 0.25 0.00 0.0000 0.0000

54 1 1 150 600 ? SI Engine +
NSCR 0.89 0.15 0.0620 0.0 595

299 1 1 60 438 No(2004) SI Engine +
NSCR 0.08 0.04 0.0087 0.00 42

334 1 1 75 1600 Yes Electrification 1.20 0.26 0.0962 0.0858

334 1 1 75 1600 Yes Electrification 1.20 0.26 0.0962 0.0858

334 1 1 75 1600 Yes Electrification 1.20 0.26 0.0962 0.0858

349 1 1 300 3000 Yes Electrification 9.02 1.95 0.7216 0.6435

351 1 1 75 364 No NSCR 0.15 0.00 0.0000 0.0000

TOTALS 13.99 2.93 1.0809 0.9 64 7

EMISSION REDUCTIONS WITH CONTROLS (Tons/Year)

SURVEY

NUMBER ENGINE

Other Stationary Diesel Natural

Gas HP Stationary Operating
Hours/Year Stationary Diesel

Pre

- 1996 mfg date? Natural
Gas with
controls? CONTROL
TECHNOLOGY N0x CO VOC PM

153 1 1 210 1095 No(1998) SI Engine +
NSCR 1.11 0.39 0.1386 0.05 35

TOTALS 1.11 0.39 0.1386 0.05 35

GRAND

TOTAL
EMISSION
REDUCTIONS 7 1.16 49.51 3.9922 3. 41 8 1

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix E E

- 3 May 2005 Notes: The following basis and assumptions were used in determining the emission reductions for agricultural engines.

Baseline emissions are the uncontrolled values (U.S. EPA, AP

- 42) or the required value (USEPA Tier), whic hever is lower.

Ratio of NOx:VOC g/bhp

- hr for Tier 2 diesel engines assumed same as Tier 1 diesel engines. Ratio of NOx:VOC g/bhp

- hr for Tier 3 diesel engines assumed same as Tier 4 diesel engines. Ratio of NOx:VOC g/bhp

- hr for certified SI engine s assumed same as for uncontrolled SI engines. Electrification of SI engine assumes the baseline energy source is natural gas (based on AQMD survey of agricultural faciliti es).

LEC or PSC is assumed 80% effective on NOx (CARB RACT/BARCT Determination), a nd it is assumed that oxidation catalyst can meet the amended
rule limits on CO and VOC. Diesel PM assumed to be .0022 lb/hp

- hr for Tier 0 (AP

- 42, Table 3.3

- 1) and required values for Tier 1 and above (dependent on hp of engine). Assumed approx half S I engines and 80% of the diesel engines would be electrified and sites that have most hp and most hrs/yr operation would be most likely to be electrified.

### APPENDIX F

________________________________________________________________



### Public Comments and Responses

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 1 May 20 05 

### Comments and Responses

Comments Received at the F ebruary 1, 2005 Public Workshop

The February 1 workshop and documents that were released prior to and at the time of the workshop covered both Phase I and Phase II of the proposed amended Rule (PAR) 1110.2 and proposed rescission of Rule 1110.1. The Phas e I rule amendments will primarily address agricultural engines and other minor amendments. Phase II amendments of Rule 1110.2 will address other issues such as improving the compliance of engines, emission limit changes, and distributed generation emissi on limits. Comments that were received during or in response to that workshop that are pertinent to Phase I of PAR 1110.2 and rescission of Rule 1110.1 are presented and responded to here. Comments that were received during or in response to the February 1 workshop that are pertinent to Phase II of PAR 1110.2 will be presented and responded to in another staff report to be released later.

Julia Lester, Environ International, on behalf of California Farm Bureaus

Federation

Comment: The compliance date in the draft PAR is too early to allow the agricultural community to take advantage of some of the goals stated in the Agricultural Working Group and SB700. There is only a year and a half for industry and the agricultural community to comply, and really on ly half a year to make decisions because of the permitting requirements in the rule. The initial Rule 1110.2 allowed more than nine years to electrify and more than three years to add emission controls. The draft PAR is far more burdensome on the agricul tural community than it was on other affected sources. Also, the proposed compliance schedule is not consistent with the Carl Moyer program or AB923, both of which start in 2006. The agricultural community would therefore not have the ability to understa nd these programs and decide whether or not to utilize them until after some initial permitting is required.

Response: Because new guidelines from CARB may not be ready in time to assure that agricultural facilities can qualify for state funding to comply with the rule by the originally proposed date of January 1, 2007, staff is proposing to extend the date to January July 1, 2008 for older engines and January 1, 2010 for newer engines.

Comment: The draft PAR requires permits for existing and modified eng ines regardless of farm size. This is inconsistent with Rule 219. Under SB700, farms under half the major source threshold cannot be permitted unless there are a variety of findings. There is no indication in the draft PAR of whether or not new engines need permits. It is recommended that the language requiring permits for existing engines be removed so that permit requirements for all engines will be governed by Rule 219.

Response: Rule 1110.2 does not supersede exemptions from permits in Rule 219. T he proposed permit requirement in subparagraph (e)( 2 1 )(A) only applies to engines that are not exempt per Rule 219. However, staff is recommending that the Board make the findings necessary before amending Rule 219 to require permits for all agricultural engines subject to Rule 1110.2.

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 2 May 20 05 Comment: In that the draft PAR requires records of fuel usage, will meters be required

or will records suffice?

Response: Records such as purchase receipts and records of deliveries should be adequate.

Comment: The socio

- economic analysis should account for the type and condition of the engines. Most are pre

- 1996 diesels, which will have to be replaced, re

- powered or electrified. Replacement with SI engine should include the cost of compliance with Rule

461.

Response: AQMD is gathering information on the number, size, and type of engines that exist at agricultural facilities in the region, and the socio

- economic analysis will be based

on this information. The information received to date does indeed indicate that most agricultural engines are relatively old and uncontrolled. If a facility chooses not to repower or replace a diesel engine with an electric motor or a natural gas engine, staff is assuming that it would be replaced by a propane

- fueled engine. Therefore, i t does not seem likely that compliance with the draft PAR would trigger any Rule 461 requirements

Comment: The agricultural community requests a presentation at the next working group meeting of the cost

- effectiveness information and analysis as it stands at that time.

Response: Staff has complied with this request at the Working Group meeting held March 10, 2005.

Comment: The agricultural community would like information regarding the projected total cost impact of the draft PAR on the agricultural comm unity.

Response: The staff report and socio

- economic analysis study will address this impact

. William Pearce, Boeing Co.

Comment: For RECLAIM facilities, quarterly recordkeeping is preferable to monthly recordkeeping since quarterly recordkeeping is alre ady done for RECLAIM.

Response: Staff agreed with this suggestion and revised the PAR to allow a quarterly engine log for an engine that is subject to Regulation XX and listed as a Process Unit on the facility permit.

Bruce Scott, Agricultural Operator

Co mment: Based on past experience, to qualify for grant funds that are available, farmers must invest typically $10,000 to $20,000 for an engineering feasibility study.

Response: The Carl Moyer Program does not require the applicant to perform or submit

an engineering feasibility study. Although the guidelines for the AB923 grant process have not yet been developed, it is reasonable to assume that they similarly will not require an engineering feasibility study. AQMD has previously funded diesel pump repl acements with electric motors where operators did not have to pay for a study.

Comment: Conversion of diesel pumps to electric pumps will make sense in many cases; however, farmers are concerned about the reliability of the grid.

Response: Southern Cal ifornia Edison data from the 10

- year period ending with 2001, show that the maximum power interruption experienced by the average SCE customer

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 3 May 20 05 during that period was 144 minutes in one year. It therefore seems unlikely that power interruptions will have a significant impact on the amount of water pumped when pumps are operating 24/7 or over extended periods of time.

Comment: The cost

- effectiveness calculations should not assume year

- round operation. In some cases, pumping is needed 24/7 during summer and not at all during the remainder of the year.

Response: Staff examined the effect on the cost

- effectiveness results for electrification of assuming that all pumping occurs in SCE’s summer rate season as opposed to being spread throughout the entire year. It was found that cost

- effectiveness actually improves due to the lack of demand charges in months when pumping does not occur.

Terry Ahn, Orange County Sanitation District

Comment: Emission limits in Rule 1110.2 should be stated in g/bhp

- hr rather than

concentration limits because the concern should be with mass emissions rather than

concentrations.

Response: Staff agrees that work

- specific mass emissions such as g/bhp

- hr are ideally a better way to state the amount of pollution being caused by the engi ne. However, determination of g/bhp

- hr requires, in addition to measurement of the pollutant concentration, a determination of the engine efficiency and mass emissions from the engine as well as some fairly complicated calculations. Staff believes that t he potential for error in this process is so great that it outweighs the benefit of using the work

- specific

limits.

Tim French, Engine Manufacturers Association

Comment: The tighter restriction on use of portable generators amounts to essentially a

ban on portable generators and appears to include generators driven by SI engines as well as portable diesel generators. This goes beyond CARB’s restriction on use of portable generators, which is limited to portable diesel generators.

Response: CARB’s restric tion on portable generators is not limited to diesel generators; it includes SI engine

- driven generators as well. The restriction is not a total ban. It prohibits use of portable generators for non

- emergency power supplied to a facility or to the grid bu t does not restrict their use where portable power is genuinely needed such as for portable rock crushers, portable lighting, energy emergency backup to grid power, etc.

Written Comments Received Following the February 1, 2005 Public Workshop

This section summarizes written comments that were received from the public following the February 1 public workshop. Written comments that duplicate other written comments or comments that were received directly at the workshop are not repeated. Again, only comment s that pertain to Phase I of the proposed rule amendments are documented here. Written comments that pertain to Phase II will be documented in a later staff report.

Mike Bukantz, GE Energy

Comment: PAR (d)(2)(B) appears to prohibit the use of portable en gines to provide power at virtually any stationary source. Perhaps it is the District’s intention to clarify

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 4 May 20 05 that PERP registrations are not valid for the purpose of providing power to a stationary source. However, so long as portable equipment can meet emission standards equivalent to BACT (including the statewide DG standards), we feel that the use of this equipment

should continue to be allowed.

Response: Staff agreed with this suggestion and modified paragraph (d)(2) to exempt a portable engine that meets BACT, and also meets all requirements of the rule, from the requirements of that paragraph.

Ed Torres, Orange County Sanitation District

Comment: Regarding PAR 1110.2 ’s definition of “ emergency stan d by engine” (c)(3) , it may be necessary to operate an emergency standby engine under many different situations, not just “while the primary power supply is under repair”. For example, during heavy rainstorms, it may become necessary to operate pumps, using all available primary power to accommodate excess ive peak water flow. In this case additional power needs of the facility may be temporarily satisfied by means of emergency generators. Therefore, we propose to replace “under repair” with “unavailable”.

Response: The current definition for emergency en gines only includes engines that temporarily replace primary power during shortages or interruptions. It does not include engines that operate during peak loads that exceed the capacity of the normal primary power. Engines that provide primary power duri ng peak loads must comply with Rule

1110.2.

Comment: It is not clear why VOC limit is expressed as “measured as carbon” instead of “measured as methane” in the current rule. Your own staff report refers to VOC measured as methane (pp. 13, 14).

Respons e: Since the rule limits are concentration limits, expressing measurement results “as methane” or “as carbon” makes no difference because each has only one carbon atom. Staff proposes to change the language in the rule from “as methane” to “as

carbon” to avoid the implication that methane may be included in the measurement.

Comment: The language restricting the operation of portable generators (d)(2) seemingly contradicts all intentions of mere existence of portable engines as well as recently approved re gulations for stationary Diesel engines. OCSD is conducting significant construction projects requiring temporary electrical power for scheduled activities. In addition, our field operation, such as pumping and line cleaning, require use of portable engi nes. Usage of stationary diesel engines for such purposes is mostly restricted by the recently adopted State regulations and SCAQMD Rule 1470 and providing temporary utility line is absolutely impractical. That is exactly the reason why OCSD and other

pu blically owned treatment works purchase and maintain large fleets of portable engines. Severe restrictions on the portable engines usage established in paragraph (2) (B) would make many of our activities simply impossible. We suggest, therefore, eliminat ing the paragraph or make significant changes in its language (for example, eliminate the words

“ unforeseen ” interruptions and “ remote ” operations and add “ construction ” operations.

Response: The PAR does not prohibit use of a portable generator to power portable equipment, as is generally the case at a construction site. It also does not prohibit the use of portable engines driving pumps or other equipment besides generators. Portable

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 5 May 20 05 generators can also be used for scheduled maintenance and repair acti vities. The proposed rule amendment uses the same language as that recently adopted by CARB in their portable equipment registration rules.

Comment: Replacement of AQMD Method 25.3 by 25.1 in Table VIII may result in significant increase in the measured V OC concentration due to “positive interferences for low concentration of VOC (50 ppm) due to high levels of stack carbon dioxide and moisture” (SCAQMD Source Test Manual, Chapter VI, March 2000). In addition, utilizing dry ice traps (

- 62 o 

### C) instead of mel ting ice (0 o 

### C) together with other, more complicated equipment, makes the testing significantly more expensive and may result in artificially higher results of testing. We suggest making SCAQMD Method 25.3 to

remain a method of choice for VOC measurement.

Response: Method 25.3 is not being replaced by AQMD Method 25.1. Current Rule 1110.2 specifies either USEPA Method 25 or AQMD Method 25.1. The version of PAR 1110.2 that was distributed at the workshop eliminated the option of USEPA Method 25 and speci fied only AQMD Method 25.1. Staff agreed, however, that AQMD Method 25.3 may be a useful alternative if the expected VOC concentration is below 50 ppmvd

and therefore added this alternative to the PAR.

Charles Humphrey, Jr., Southern California Gas Co. an d San Diego Gas & Electric

Co.

Comment: The compliance schedule required by Section (e) is unrealistic, particularly in light of the District’s inability to process even simple permit applications for more complex RECLAIM and Title V facilities within the 180 day time frame required by law. The following changes should be made in section (e) to address this problem for this aspect of the rule:

(e) (1) (A) (ii) By September 30, 2006, or within 90 days of the issuance of a final Permit to Construct ( PTC ) , i nitiate engine and control equipment installation; and

(e) (1) (A) (iii) By January 1, 2007, or within 180 days of the issuance of a final

PTC , complete source testing and have the engines in compliance with the rule.

It should be stressed that for a facil ity that triggers NSR (e.g. engine replacement option) or for larger, more complex installations, these time frames are not even remotely

feasible and the District still needs to address those cases.

Response: Staff has revised the draft rule to allow mor e time if a permit is delayed.

Joseph L. Suchecki, Engine Manufacturers Association

Comment: Farmers may have no viable option but to use diesel

- fueled compression ignition engines because power is needed in very remote locations. In such locations,

alte rnative fuels may not be suitable and it may be cost

- prohibitive to run electrical power transmission lines to the location. In such situations, where diesel

- fueled engines are the only available option, AQMD should establish appropriate and reasonable em issions standards that will allow the continued operations of these engines. The requirements and standards applicable to agricultural operations in Rule 1110.2 should not be so stringent and cumbersome as to force farmers to abandon their operations or b e forced

out of business.

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 6 May 20 05 Response: Although electrification may not be feasible for all agricultural diesel engines, conversion to a spark ignition engine using a clean fuel should be feasible in all cases and is not cost prohibitive. In fact, natural gas and propane are less expensive than diesel fuel per unit of heat input.

Cynthia L. Cory, California Farm Bureau Federation

Comment: Stationary agricultural engines should be allowed to at least January 1, 2010 to comply with PAR 1110.2 because: 1) other engines were given up to 9 years to electrify and over 3 years to retrofit by the previous Rule 1110.2; 2) funding from the Agricultural Assistance Fund (AAF) may not be available in time for a January 1, 2008 compliance date; 3) the proposed San Joa quin Valley Air Pollution Control District (SJVAPCD) Rule 4702 would not require older engines to comply until 2010 and newer engines to even later; 4) the January 1, 2008 compliance date doesn’t provide the minimum compliance period required by AB923 (3 years from date of adoption); and 5) funding programs tend to be significantly oversubscribed.

Response: 1) When it was originally adopted, Rule 1110.2 was applicable to thousands of engines operated by a variety of different industries that were requir ed to make significant capital expenditures to comply with the rule. This does not hold true for the stationary agricultural engines. There are a relatively small number of stationary agricultural engines, and there are public funds available to pay for most of the capital costs. Therefore, the request for extension until 2010 is unwarranted. 2) Staff expects that the awards will be made in March 2006 based on current Carl Moyer guidelines and in March 2007 based on the AAF guidelines being developed, which should provide adequate time. To assure that there is adequate time, staff is proposing to extend the final compliance date for older engines to July 1, 2008. 3) While commenting on SJVAPCD’s SIP obligation and control strategy choices is beyond t he scope of this analysis, AQMD, because of its extreme non

- attainment status, is obliged to implement all feasible measures as expeditiously as possible to make timely progress towards attainment of the ambient air quality standards. 4) AB923 sets no min imum time for compliance dates; it does set maximum times for funding. 5) AQMD has initially set aside $4 million for 2005

- 2006 for AAF. AQMD could consider additional funding for

the AAF for 2007 if the need exists.

Comment: There are stationary agri cultural engines driving pumps that are remote, are often low use, and cannot be replaced by an electric pump. They should be exempt from the emission limits and source testing requirements of Rule 1110.2 if they are replaced by

a certified Tier 3 diesel engine or a certified non

- road, spark

- ignited engine.

Response: Although there are a few CARB

- certified, spark

- ignited (SI), off

- road engines that can meet the emission limits of Rule 1110.2, in general Tier III diesels and CARB certified SI engines em it up to four times as much NOx as allowed by Rule

1110.2. However, the pro po sed exemption paragraph (h)(12) will allow operators of engines that are rejected for electrification by the electric utility or can not receive funding help from the Agricultura l Assistance Fund to comply by installing a Tier 4 diesel by 2014

.

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 7 May 20 05 Comment: Proposed subparagraph (d)(1)(D) is unnecessary and punitive for stationary agricultural engines, and should be removed. Clause (i), which requires BACT for new, permitted ag eng ines, is redundant. Clause (ii), which requires emission limits equivalent to existing BACT for new unpermitted ag engines, sets more stringent standards for new ag engines than other engines. SB700 protects ag engines from burdensome regulations.

Also , permits should not be required for engines at farms below 50% of the major source

thresholds.

Response: Clause (d)(1)(D)(i) may be redundant, but it serves to remind agricultural facilities of the applicability of AQMD’s New Source Review rules. It is AQMD’s intent to require, in accordance with SB700, stationary ag engines to comply with the same permitting and emission requirements as non

- agricultural engines. Staff will recommend the Board to direct staff to start the rulemaking necessary to accomp lish this. Until AQMD permitting rules are revised to require permits for all stationary ag engines over 50 hp, clause (d)(1)(D)(ii) is needed to assure that new, stationary ag engines meet the same emission requirements as new, non

- agricultural engines.

Comment: AQMD should exempt replacement engines from BACT.

Response: AQMD’s New Source Review (NSR) regulations require non

- identical replacement equipment to have BACT. The NSR regulations do, however, exempt functionally equivalent replacements from modeling and emission offsets. Tier 4 diesel engines installed pursuant to the limited exemption of paragraph (h)(12) will be considered to comply with BACT.

Comment: The staff report should clarify that portable engines are not subject to the

emission limits of subdivision (d).

Response: The staff report does say that the exemption for nonroad engines does mean that portable engines do not have to comply with the emission limits in the rule

.

Comment: The applicability notification required in s ubparagraph (e)(1)(A) should: be the basis for an outreach program to inform agricultural facilities of funding opportunities; use a standardized form; and not include the requirement to notify AQMD of the expected means of compliance.

Response: Staff agrees with your first two suggestions, and would like to work with the California Farm Bureau Federation to make that happen. The requirement to include the expected means of compliance, will not be binding on the agricultural facility, but it will help AQMD anticipate the types of projects, permitting requirements and funding needs for agricultural facilities.

Comment: The cost

- effectiveness analysis for electrification should take into account only the existing electric rates, not the reduced rates pr oposed by Southern California Edison Co. but not yet approved by the California Public Utilities Commission.

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 8 May 20 05 Response: The cost

- effectiveness analysis for electrifying natural gas engines does use the current electric rates, and it shows that electrifica tion, even with the higher rates, is still very cost

- effective.

Comment: The board resolution should require AQMD staff to report yearly to the Stationary Source Committed whether any qualified farms will not be able to take advantage of funding programs and if not, the reasons why.

Response: Providing periodic status reports to the Stationary Source Committee on rule implementation and related issues, including funding, is a good suggestion. Staff intends to incorporate the suggestion as part of the a dopting resolution.

Comment: Notwithstanding our first recommendation, the compliance deadline for existing Tier 2 or Tier 3 engines should be consistent with SJVAPCD PR 4702, e.g. would not have to be replaced for up to 10 years after their purchase date . This only represents a few local agricultural engines, at most. As noted in our comments on the

cost

- effectiveness analysis below, owners of these engines may not qualify for funding,

based on the cost

- effectiveness thresholds in the funding programs. We believe that owners who recently upgraded their engines, thus reducing current levels of pollution, should be allowed greater time to replace those engines.

Response: Staff’s cost

- effectiveness analysis indicates that , in most instances, further

reduc tions from these newer engines are feasible and cost

- effective. However, recognizing that these engines are lesser polluting compared to Tier 1 and Tier 0 engines, staff added an additional extension of two years to the compliance dates for Tier 2 and

Tie r 3 diesel engines and certified SI engines (i.e., final compliance date of January 1, 2010).

Comment: The recordkeeping requirements for portable engines include a monthly log of total hours of operation, type of fuel, and fuel consumption. An outreach effort is needed to inform farmers of this new requirement.

We recommend that the compliance date for portable engine reporting requirements be moved to January 1, 2006 and that the Board resolution include an outreach program to farmers concerning the new rule requirements.

Response: Staff agreed with this suggestion and made the suggested change to the PAR compliance date for portable engine recordkeeping. Staff will work with the farm Bureaus to inform farmers of the new requirements.

Comment: Because most agricultural engines are pre

- 1994 engines (e.g. Tier 0), replacing them will obviously produce more emission reductions than replacing newer engines. This is important because the Carl Moyer and AB 923 funding programs have

cost

- effectivene ss thresholds of $13,600 per ton of NO

x 

### reduced. As such, cost

effectiveness should also be reported per ton of NO
x 

### reduced. As shown in the SCAQMD staff’s cost

- effectiveness spreadsheet, replacing new engines (which costs relatively the same as replacin g an older engine) is relatively less cost

- effective than replacing older engines. In some cases, the cost

- effectiveness will be above the threshold

### Final Staff Report for Proposed Amended Rule 1110.2

Appendix F F

- 9 May 20 05 used by the funding programs. This should be reflected in the socioeconomic analysis, particularly as it relates to the cost impacts.

Response: The initial cost

- effectiveness analysis, as presented at the February 1, 2005 public workshop, assumed that all capital costs would be paid by Carl Moyer or AB923 grant funds. Staff was later informed that the AB923 funds will be capped at a maximum

cost

- effectiveness of $13,600 per avoided ton of NOx and VOC emissions and PM emissions multiplied by ten. The revised cost

- effectiveness analysis and socioeconomic analysis take this into account. was revised to reflect this capping criterion.

Comment: the cost

- effectiveness should not be calculated with the incentives; the cost to reduce a given amount of pollution is the same regardless of the source of funds. It would be more appropriate to assess the impact of incen tives on the direct costs to the farmers, such as in the industry impact analysis.

Response: The intent of the cost

- effectiveness analysis is to determine whether or not the proposed rule amendments are financially too burdensome on farmers. The overall cost to society is not an issue since society has already decided to contribute the grant funds via its representative form of government.

Comment: The socioeconomic analysis should take into account the actual in

- use engines on local farms, which are ove rwhelmingly pre

- 1995 diesel engines. The cost and socioeconomic analysis should include absolute costs, with and without incentives, not just cost

- effectiveness.

Response: The cost

- effectiveness analysis does consider pre

- 1995 diesel engines. The

cost

- e ffectiveness presentation in the staff report was revised to show absolute costs with

and without incentives.

Comment: The definition of agricultural stationary engines in PAR 1110.2 is confusing

and not consistent with SB 700. The last sentence should b e deleted.

Response: Staff believes that the referenced sentence is helpful in clarifying that, for purposes of the rule, agricultural engines are limited to those used directly in the growing, raising and harvesting of agricultural products and not those used in processing or distribution of those products.