Final Staff Report for Proposed Amendments to Rule 2020 SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

FINAL STAFF REPORT

Proposed Amendments to Rule 2020 (Exemptions)

August 18, 2011

Prepared by: Anna Myers, Seni or Air Quality Specialist Carlos Garcia, Senior Air Quality Engineer

Reviewed by: George Heinen, Senior Air Quality Engineer Jessi Fierro, Supervising AQ Specialist, Plan Development Errol Villegas, Strategies and Incentives Program Manager David Warner, Director of Permit Services Samir Sheikh, Director of Strategies and Incentives

I. SUMMARY

The San Joaquin Valley Unified Air Pollution Cont rol District’s (District) Governing Board (Board) adopted amendments to 2020 (Exemptions) on December 20, 2007. The Environmental Protection Agency (EPA) made the final determination the amendments to District Rule 2020 to be acceptable under applicable NSR Regulations; as such, EPA made a final limited approval of amended Ru le 2020 effective on June 10, 2010. EPA

also made the determination that the exem ption in Section 6.20 of Rule 2020 to be ambiguous; therefore also issued a limit ed disapproval on amended Rule 2020. EPA recommended updating rule language to remove am biguity by replacing the statutory

reference to the California Health and Safety Code Section CH&SC with a clear description of the sources co vered by the exemption.

District staff is also proposing to exempt wi nd machines used exclusively in agricultural operations from being required to have a Pe rmit-to-Operate. Wind machines used in the San Joaquin Valley Air Basin (Valley) are used exclusively in agricultural operations and only during winter when the temperature drops below 28 o F in order to protect the crops from freezing. The district does not currently require an operating permit for wind machines; therefore, the proposal to exempt wind machines does not constitute a rule

relaxation.SAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

2 Final Staff Report for Proposed Amendments to Rule 2020 A. Description of Project

Limited Approval Limited Disapproval On May 11, 2010, EPA published in the Federal Register 1 a final limited approval and limited disapproval of District Rule 2020 (E xemptions) for inclusion in the State Implementation Plan (SIP) because of rule defici ency. The final rule is effective June 10, 2010. The EPA final limited disapproval triggered an 18-month sanction clock requiring the District to submit a SIP approv al revision of Rule 2010 by December 10, 2011. Unless the rule deficiency is co rrected and EPA approves the SIP submission before the sanction deadline expires, EPA will impose federal sanctions which include withholding of highway funds and an increased emission offset ratio requirement for stationary sources within the San Joaquin Valley. In addition to the 18-month sanction, the District could face a Federal Implement ation Plan by EPA if the District fails to submit a fully approvable SIP revision of Ru le 2020 within 24 months by June 10, 2012.

Wind Machines To clarify existing District policy, staff is proposing to explicitly exempt wind machines used exclusively in agricultural operations from being required to have a Permit-toOperate. Wind machines are operated only during winter when the temperature drops

below 28 0 F in order to protect the crops from freezing. The NOx emissions from wind machines are not significant because they only operate for a few hours per year during freezing temperature.

B. Rule Amendment Process

There was a public workshop for this rule amending project on June 22, 2011.

These amendments are considered a routi ne administrative action that do not change the rule stringency. Comments receiv ed as a result of the public workshop would be incorporated into the rule projec t as appropriate. The notice of the public hearing for the proposed amendments woul d be published in general circulation newspapers in each of the eight Valley c ounties, and made available for review on

the District website and individual notices w ould be mailed to affected stakeholders.

C. Global Climate Change and Greenhouse Gases

The California Global Warming Solutions Ac t of 2006 (AB 32) created a comprehensive, multi-year program to reduce greenhouse gas (GHG) emissions in California, with the overall goal of restoring emissions to 1990 levels by the year 2020. In the coming years, the Air Resources Board (ARB) and the Legislature will be developing policies and programs to implement AB 32. The Dis trict believes that the evidence and the rationale that climate change is occurring is compelling and convincing. In addition to the long-term consequences of climate change, the District is concerned with the potential ramifications of more moderate but imminent changes in weather patterns.

1 Federal Register/Vol.75, No. 90/T uesday, May 11, 2010/Rules and RegulationsSAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

3 Final Staff Report for Proposed Amendments to Rule 2020 The Valley depends heavily on agriculture for its economy and has developed agricultural practices based on the last several decades of weather patterns. Unanticipated and large fluctuations in thes e patterns could have a devastating effect on the Valley’s economy.

While there are many win-win strategies that can reduce both GHG and criteria/toxic pollutant emissions, when faced with situations that involve tradeoffs between the two,

District staff believes that the more immedi ate public health concerns that may arise from an increase in criteria or toxic pollu tant emissions should take precedence. The San Joaquin Valley Air Pollution Control Dis trict’s Governing Board adopted the Climate Change Action Plan (CCAP) in August 2008. Fo r California Environmental Quality Act (CEQA) requirements, one of the goals of t he CCAP is to establish District processes for assessing the significance of greenhouse gas impacts. The District has developed a policy and guidance for addressing greenhouse gases under CEQA.

The purpose of this rule-amending project is to correct the rule deficiency in Section 6.20 as cited by EPA and to clarify existi ng District Policy. Draft amendments do not change the meaning of current rule language and do not impose new regulatory requirements. Therefore, im plementation of the proposed am endments would not result in foreseeable changes in current operating prac tices. District finds that there is no substantial evidence, in light of the whole record before the District, that the project could have a cumulatively significant impact on global climate change.

D. Comments and Responses

One comment was received for Rule 2020 dur ing the rule amendment process. The comment questioned test methods as quoted in the rule language. Because Rule 4702 (Internal Combustion Engines) and Rule 2020 were presented in a public workshop together and are being taken to the Governing Board for Public Hearing together as one board package, the one comment and response to that comment is included in the Appendix A of the Rule 4702 rule package. Please refer to Appendix A, question 23 for this comment and the District response to it.

II. PROPOSED AMENDMENTS

The proposed amendments to Rule 2020 include new definitions for “agricultural sources”, “Major Source”, and “wind machi ne”. These terms are used to clarify language added in response to the EPA limited approval limited disapproval, and the proposed exemption for wind machines.SAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

4 Final Staff Report for Proposed Amendments to Rule 2020 A. Agricultural Sources

On April 12, 2010, EPA finalized partial approval /partial disapproval of the December 20, 2007 version of Rule 2020. EPA found t hat the limited permitting exemption for agricultural sources of emissions found in se ction 6.20 of the rule was inappropriately ambiguous due to a reference to state law, wh ich law is not in t he State Implementation Plan (SIP).

Specifically, current Rule 2020, Section 6.20, says that the following sources are exempt from permitting requirements:

Agricultural sources, but only to the ex tent provided by California Health and Safety Code, Section 42301.16.

Staff is proposing to remove the ambiguity caused by the reference to state law by restating the intended permitting exemption as follows:

6.20 Agricultural Sources

6.20.1 Agricultural sources at a stat ionary source that, in aggregate, produce actual emissions less than one-half of the major source thresholds from the stationary source. For the purposes of determining permitting applicability, fugitive emissions, exc ept fugitive dust emissions, are included in determining aggregate emissions.

6.20.2 In no case shall the exemption in section 6.20.1 apply to a stationary source required to obtain Title V permits according to Rule 2520 (Federally Mandated Operating Permits).

To support the new language above, staff reco mmends the addition of a definition for “Agricultural Source” to Section 3.0 (D efinitions) of Rule 2020 as follows:

3.1 Agricultural Source: equipment or operat ions that emit air contaminants and that are used in the production of crops or the raising of fowl or animals.

These changes remove the ambiguity caused by referencing the state law but do not change the applicability of the exemption in any way because applying the referenced

state law would lead to the same result.

It should be noted that SB 288 prohibits c hanges to certain permitting requirements such that they relax those requirements in place on December 30, 2002. As discussed more thoroughly in the District’s September 21, 2006 final staff report on a prior version of this same exemption rule revision, this is not a change in requirements at all, but merely an incorporation of existing state law requirements. In addition, all agricultural operations were exempt from permits by st ate law in 2002. Therefore, neither thisSAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

5 Final Staff Report for Proposed Amendments to Rule 2020 change, nor the one discussed below, could relax any permitting requirements that existed at that time, and so SB 288 is not violated.

B. Wind Machines

Wind machines are large fans mounted on towers. They are used to mix the warmer air aloft into the cooler air at ground level in citr us groves in areas that are susceptible to occasional freezing weather, and are intended to keep the citrus crop from freezing. They are generally driven by small inter nal combustion engines which operate between 10 and 35 hours per year, on average.

Staff is proposing to add wind machines to ru le language in order to explicitly exempt them from Air District permitting requirements as follows:

3.18 Wind Machine: a machine consisting of a large fan mounted on a tower and powered by an internal combustion engine, used exclusively to provide frost protection to agricultural crops by affe cting a heat transfer by moving warmer atmospheric air downward and mixing it wit h the colder air surrounding a crop.

6.1.6 Wind Machines.

No wind machines have thus far been required to obtain permits in the San Joaquin Valley, as their total emissions have remai ned below permitting thresholds due to their very low emissions and yearly operating hours. Other Air Districts, most notably the South Coast Air Quality Management Distr ict (SCAQMD), have also exempted wind machines from permitting requirements. It should be noted that the SCAQMD limits the exemption to machines operating less than 30 hours per year, but staff believe this limitation to be impractical and unnecessary. Staff finds the applicability limit of 30 hours of use in SCAQMD’s wind machine pe rmit exemption to be impractical and would not achieve emissions reductions. First, wind machines operate an average of 10-35 hours per year, so many wind machines’ average usage would be slightly over this limit. In addition, if a wind machine operates over 30 hours in some given year, perhaps due to an extraordinarily cold winter, and was requi red to obtain a permit, it would be subject to the burdens associated with permitting, but would still not be subject to any emissions limitations or rule requirements.

In addition, the District has previously analyzed the effectiveness and reasonableness of requiring emissions reductions from wi nd machine engines. Based on this analysis, Rule 4702 (Internal Combustion Engines – Phase 2) exempts engines used exclusively to power wind machines used for crop protection from all provisions of Rule 4702. This exemption was in response to industry’s comments and is based on information provided by industry that demonstrated the ve ry limited operation of wind machines and the limited potential impact at t he time of year that wind machines are operated. In exempting the engines from the requirements of Rule 4702, the District consideredSAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

6 Final Staff Report for Proposed Amendments to Rule 2020 existing emission controls and determined that no cost-effective controls were available to effectively reduce emissions from such an extremely low-use function.

C. Define Major Source

A definition would be added to rule language for the term Major Source to improve rule clarity. Major Source would be defined as follows:

3.9 Major Source: as defined in Rule 2201 (New and Modified Stationary Source Review Rule).

III. ANALYSES

A. Emission Reduction

These amendments are intended to improve under standing of the requirements, and to relieve a less than significant source from an unnecessary regulatory burden without impacting air quality. No emission reductions are anticipated from this rule-amending project due to the administrative nature of the draft amendments.

B. Cost Effectiveness

Pursuant to CH&SC Section 40920.6(a), the Dis trict is required to analyze the cost

effectiveness of new rules or rule amendments that implement Best Available Retrofit Control Technology (BARCT) or all feas ible measure. The proposed amendments do not implement BARCT or all feasible measures, and no new emission control requirements are proposed. As such, this ru le-amending project is not subject to the

cost effectiveness mandate.

C. Socioeconomic Impact

Additionally, state law requires the District to analyze the socioeconomic impacts of any proposed rule amendment that significantly affects air quality or strengthens an emission limitation. The proposed amendm ents will have neither effect, and are therefore not subject to the socioeconomic analysis mandate.

D. Environmental Assessment

Pursuant to §15061 of the Guidelines fo r Implementation of the California Environmental Quality Act (CEQA), District staff investigated the likely environmental impacts of the proposed amendments to Rule 2020. The purpose of this rule-amending project is to update Section 6.20 as cited by EPA, and to clarify existing District policy. Proposed amendments are based on federal r equirements do not change the meaning of current rule language. As such, Distric t staff concludes that it can be seen withSAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

7 Final Staff Report for Proposed Amendments to Rule 2020 certainty that the proposed am endments to the rule will not have any significant adverse

effect on the environment. Staff recommends filing a Notice of Exemption under the provisions of California C ode of Regulations §15061(b)(3).

E. Rule Consistency Analysis

According to CH&SC § 40727.2 (g), a rule cons istency analysis of the draft rule is not required because the proposed amendments do not strengthen emission limits or impose more stringent monitoring, reporti ng, or recordkeeping requirements.

F. RACT Analysis

CAA §182(b)(2) requires ozone non-attainment areas to implement RACT for sources that are subject to Control Techniques Guidelines (CTG) documents issued by EPA and for “major sources” of volatile organic com pounds (VOCs) and oxides of nitrogen (NOx), which are ozone precursors. This is not a pr ohibitory rule, therefore a RACT analysis is not required for this rule-amending project.

VII. REFERENCES

California Health and Safety Code. Section 42301.16.

Federal Register/Vol.75, No. 90/Tues day, May 11, 2010/Rules and Regulations

Senate Bill 288. Air quality: Pr otect California Act of 2003.

SCAQMD. Rule 219 (Equipment Not Requiring a Written Permit Pursuant to Regulation II). Adopted January 9, 1976, Last Amended June 1, 2007.

SJVUAPCD. District Rule 2520 (Federally Mandated Operating Permits). Adopted
June 15, 1995, Amended June 21, 2001.SAN JOAQUIN VALLEY AIR POLLU TION CONTROL DISTRICT

Final Staff Report: Rule 2020 August 18, 2011

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