CARB Board transcript SC rev MVEBs 042408

BOARD MEETING
STATE OF CALIFORNIA
AIR RESOURCES BOARD

CALIFORNIA DEPARTMENT OF TRANSPORTATION
111 GRAND AVENUE 1ST FLOOR, AUDITORIUM OAKLAND, CALIFORNIA

THURSDAY, APRIL 24, 2008
9:10 A.M.

TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

ii APPEARANCES

BOARD MEMBERS Ms. Mary D. Nichols, Chairperson Dr. John R. Balms Page 1CARB Board transcript SC rev MVEBs 042408

Ms. Sandra Berg Ms. Dorene D'Adamo Mr. Jerry Hill Mr. Ronald O. Loveridge Mrs. Barbara Riordan Dr. Daniel Sperling Mr. John Telles

STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Bob Jenne, Acting Chief Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Quetin, Ombudsman Ms. Lori Andreoni, Board Secretary Ms. Nargis Ahmed, Health and Exposure Assessment Branch, Research Division Mr. Pingkuan Di, Staff Air Pollution Specialist Ms. Julie Fitch, Director of Strategic Planning, Public Utilities Commission

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

iii APPEARANCES CONTINUED
STAFF Mr. Glenn Gallagher, Air Pollution Specialist, Research Division Ms. Pam Gupta, Air Resources Supervisor, Research Division Mr. Michael Jaczola, Staff, Engineering Evaluation Section, SSD Ms. Lucille Van Ommering, Program Evaluation Branch, Office of Climate Change Ms. Jean Roggenkamp, Deputy Air Pollution Control Officer for the Bay Area Air Quality Management District
Page 2CARB Board transcript SC rev MVEBs 042408

Ms. Peggy Taricco, Manager, Technical Analysis Section, Stationary Source Division Mr. Dennis Wade, Air Pollution Specialist, Air Quality and Transportation Planning Branch, PTSD

ALSO PRESENT Ms. Diane Bailey, NRDC Mr. Mike Barr, Association of American Railroads Mr. Len Conley Mr. Johann Curry, Oakland Technical High School Mr. Michael Fitts, Endangered Habitats League & NRDC Mr. John Hummer, Business, Transportation & Housing Agency Mr. Andy Katz, Breathe California Mr. Randy Kidd Ms. Ellen Johnnck, Bay Planning Coalition Mr. Angelo Logan, East Yard Communities for Environmental Justice

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

iv APPEARANCES CONTINUED
ALSO PRESENT Ms. Rachel Lopez, Center for Community Action and Environmental Justice Mr. Kirk Marckwald, Association of American Railroads Mr. Steve Mathieu, APG Video
Senator Don Perata Ms. Jill Ratner, Rose Foundation Mr. Mark Ross, BAAQMD Mr. Lanny Schmid, Union Pacific Railroad Mr. Dave Seep, BNSF Railway Mr. Richard Sinkoff, Port of Oakland Mr. Matt Stewart, Advanced Clean Up Technoloiges, Inc. Mr. Barry Wallerstein, SCAQMD Page 3CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

v INDEX PAGE

Item 08-4-1 Chairperson Nichols 3 Chief Deputy Executive Officer Cackette 4 Staff Presentation 5 Q&A 10

Item 08-4-2 Chairperson Nichols 16 Chief Deputy Executive Officer Cackette 16 Staff Presentation 17 Motion 23 Vote 23

Item 08-4-3 Chairperson Nichols 23 Staff Presentation 25 Motion 27 Vote 27

Item 08-4-4 Chairperson Nichols 28 Chief Deputy Executive Officer Cackette 28 Staff Presentation 28 Q&A 40 Mr. Conley 52

Item 08-4-5 Chairperson Nichols 53 Chief Deputy Executive Officer Cackette 54 Staff Presentation 55 Q&A 79

Item 08-4-6 Chairperson Nichols 93 Chief Deputy Executive Officer Cackette 94 Staff Presentation 95 Senator Don Perata 97 Staff Presentation (continued) 104 Mr. Ross 123

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

vi INDEX CONTINUED Page 4CARB Board transcript SC rev MVEBs 042408

PAGE

Mr. Sinkoff 124 Mr. Curry 127 Mr. Katz 127 Mr. Kidd 129

Item 08-04-7 Chairperson Nichols 135 Chief Deputy Executive Officer Cackette 135 Staff Presentation 135 Mr. Hummer 154 Ms. Bailey 158 Mr. Stewart 160 Ms. Ratner 165 Ms. Johnnck 167
Item 08-04-10 Chairperson Nichols 168 Chief Deputy Executive Officer Cackette 169 Staff Presentation 171 Mr. Wallerstein 188 Mr. Logan 189 Ms. Lopez 191 Ms. Bailey 192 Mr. Seep 193 Mr. Schmid 195 Mr. Barr 198 Mr. Marckwald 200 Q&A 203 Item 08-04-08 and Item 08-04-09 Chairperson Nichols 216 Chief Deputy Executive Officer Cackette 216 Staff Presentation 216 Mr. Wallerstein 227 Mr. Fitts 229 Motion 234 Vote 234 Public Comment Mr. Mathieu 234

Adjournment 237 Reporter's Certificate 238

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

1
1 PROCEEDINGS 2 CHAIRPERSON NICHOLS: Good morning, everybody. 3 The logistics are a little complicated this morning. It's 4 a building that many of us are not familiar with. So Page 5CARB Board transcript SC rev MVEBs 042408

5 excuse the confusion and the slight delay in getting 6 started. 7 I'm told that a flag is going to appear on the 8 screen off there. And there it is. So we can actually do 9 the Pledge of Allegiance. 10 So will you all please rise. 11 (Thereupon the Pledge of Allegiance was 12 Recited in unison.) 13 CHAIRPERSON NICHOLS: Will the clerk please call 14 the roll? 15 SECRETARY ANDREONI: Dr. Balmes?
16 BOARD MEMBER BALMES: Here. 17 SECRETARY ANDREONI: Ms. D'Adamo?
18 BOARD MEMBER D'ADAMO: Here. 19 SECRETARY ANDREONI: Ms. Berg?
20 BOARD MEMBER BERG: Here. 21 SECRETARY ANDREONI: Supervisor Hill?
22 BOARD MEMBER HILL: Here. 23 SECRETARY ANDREONI: Ms. Kennard?
24 BOARD MEMBER KENNARD: Here. 25 SECRETARY ANDREONI: Mayor Loveridge? PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

2
1 BOARD MEMBER LOVERIDGE: Here. 2 SECRETARY ANDREONI: Mrs. Riordan?
3 BOARD MEMBER RIORDAN: Here. 4 SECRETARY ANDREONI: Supervisor Roberts?
5 BOARD MEMBER ROBERTS: Here. 6 SECRETARY ANDREONI: Professor Sperling?
Page 6CARB Board transcript SC rev MVEBs 042408

7 BOARD MEMBER SPERLING: Here. 8 CHAIRPERSON NICHOLS: Chairman Nichols?
9 CHAIRPERSON NICHOLS: Here. 10 SECRETARY ANDREONI: Madam Chair, we have a 11 quorum. 12 CHAIRPERSON NICHOLS: Thank you. 13 I am expecting that we are going to be joined a 14 little bit later by our newest Board member, just 15 appointed, who will be sworn in and join us for the 16 meeting today. But we'll pause when that happens. 17 So I think what we should do now is just move 18 forward. I will mention that although there is a 19 scheduled time in the meeting for a closed session for the 20 Board to receive information about litigation, we will not 21 in fact be taking a closed session here today. 22 Now, just to give you the logistical information, 23 which is a little bit different in terms of locations of 24 things here today, anybody who wants to testify should 25 sign up with the people sitting at the tables -- the staff PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

3 1 people at the tables outside this boardroom. And if you 2 wish to testify, you have the option of including your 3 name on the speaker card. 4 Also, speakers should be aware that the Board 5 will impose a three-minute time limit. And we appreciate 6 it if you put your testimony into your own words rather 7 than reading your prepared testimony, because we will 8 enter the written testimony into the record. But it's 9 easier for us to receive the information if you just speak Page 7CARB Board transcript SC rev MVEBs 042408

10 normally. 11 Also, for safety reasons there are emergency 12 exits marked with green lights at the back of the room. 13 And in the event of a fire alarm, we're required to 14 evacuate the room immediately and exit the building until 15 the "all-clear" sign is given. 16 I think that's it as far as announcements are 17 concerned to begin the meeting with. 18 So without further ado, I'll ask the staff to -- 19 oh, I should report that our Executive Officer, James 20 Goldstene is not with us this morning. He is recovering 21 from relatively minor surgery. But he was required to 22 stay home for the week. And I spoke with him yesterday. 23 He's doing quite well. Although if you ever speak to him 24 in the next few days, don't tell him any jokes because it 25 hurts when he laughs -- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

4 1 (Laughter.) 2 CHAIRPERSON NICHOLS: -- as I found out. But 3 he's doing well. 4 And so we have our once and always available 5 trusty senior staff to fill in for us today led by Tom 6 Cackette. 7 So, Tom, do you want to kick off the meeting, 8 please. 9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Thank 10 you. The first item's the research item. 11 The relationship between particulate matter
Page 8CARB Board transcript SC rev MVEBs 042408

12 pollution and adverse health effects is well established. 13 In addition, the literature indicates that there is a 14 considerable variability in sensitivity between 15 individuals, but little is known about the cause of this 16 variability. One important area of research is the 17 possible genetic contributions to PM sensitivity. This 18 morning staff will present the results of a recent paper 19 that investigated genetic variation in elderly men and how 20 these genetic variations influenced the function of the 21 heart in response to PM. 22 And Nargis Ahmed from our Health and Exposure and 23 Assessment Branch will make the staff presentation. 24 Nargis. 25 (Thereupon an overhead presentation was PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

5 1 presented as follows.) 2 MS. AHMED: Thank you, Tom Cackette. 3 Good morning, Chairman Nichols and members of the 4 Board. 5 In today's health update we will be presenting a 6 paper that exams changes in heart function with exposure 7 to fine particulate matter. Specifically, the 8 investigators studied how genes involved in iron 9 metabolism may affect the toxicity of fine PM.
10 --o0o-- 11 MS. AHMED: Exposure to particulate matter has 12 been associated with a number of adverse health effects 13 including hospitalizations and premature death. However, 14 there is considerable evidence that some people are Page 9CARB Board transcript SC rev MVEBs 042408

15 affected by particulate air pollution more than others, 16 although little is known about the basis of this 17 variability. Factors such as asthma, diabetes, and heart 18 disease, as well as age, occupation, and access to health 19 care may contribute to this difference among individuals. 20 One important area of research is to determine if 21 genetic differences make individuals more vulnerable to 22 air pollution impacts. A recent study from Mexico City 23 indicated that asthmatic children with a certain gene 24 mutation appear to be more susceptible to developing 25 respiratory symptoms related to ozone exposure. The same PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

6 1 gene mutation was studied in the Normative Aging Study, 2 which is the original study group of today's highlighted 3 publication. That study found an association between 4 exposure to PM and reduced heart function in elderly men 5 that was related to the genetic make-up of the 6 individuals.
7 --o0o-- 8 MS. AHMED: How PM causes these serious adverse 9 health effects is an active area of research. Numerous 10 studies have provided evidence for many different possible 11 pathways by which particles can affect human health. 12 This slide describes only one of these possible 13 mechanisms and includes a role for iron, which is abundant 14 in fine particles, PM2.5. It is proposed that when iron 15 reacts with oxygen in the body, it can cause oxidative 16 stress, which damages cells of the lungs. This in turn
Page 10CARB Board transcript SC rev MVEBs 042408

17 leads to inflammation and eventually causes changes in the 18 way the heart functions. The study for this health update 19 examined the role of genes in this disease pathway.
20 --o0o-- 21 MS. AHMED: The study we are presenting today 22 involved 518 older men, with an average age of 73 years 23 from the Normative Aging Study in the Boston area. These 24 men were tested for the variant and the common form of an 25 iron metabolism gene, HFE, and were followed from the year PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

7 1 2000 to 2004. Ambient PM2.5, black carbon, sulfate, and 2 ozone were measured. 3 Heart rate variability was the only health 4 outcome assessed and is defined as a measure of the 5 variations in the beat-to-beat intervals of heart rate. 6 The heart needs to be able to respond to stresses on the 7 cardiovascular system. So heart rate variability can be 8 an important indicator reflecting the individual's 9 capacity to adapt effectively to environmental demands. 10 Decreased heart rate variability is the inability 11 of the heart to respond to stresses. Typically reductions 12 in heart rate variability have been reported to be linked 13 to cardiovascular disease.
14 --o0o-- 15 MS. AHMED: The study found that men with this 16 variant ain't form of the HFE gene showed no change in the 17 heart rate variability when exposed to PM2.5. The 18 investigators speculate that individuals having the 19 variant form store more iron in the body and may tend to Page 11CARB Board transcript SC rev MVEBs 042408

20 take up less iron from fine PM, and so were protected from 21 PM induced heart function changes. 22 On the other hand, men with the common form of 23 the HFE gene have normal iron stores in their body and had 24 about a 32 percent decrease in heart rate variability with 25 a ten microgram per cubic meter increase in PM2.5. The PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

8 1 authors indicated that this was a statistically 2 significant effect.
3 --o0o-- 4 MS. AHMED: These results provide additional 5 evidence for the role of genetics in modulating the 6 response to PM exposure and suggest that some populations 7 are more sensitive to PM exposure than others. 8 One goal of the ARB is to investigate the impact 9 of air pollution on sensitive populations. The Board is 10 currently funding two research projects focused on the 11 role of genetics on individual responses to air pollution. 12 One of these studies is a controlled human exposure study 13 investigating the influence of genetic mutations on 14 ozone-induced responses in adult asthmatics. Another 15 controlled human exposure study will investigate the role 16 of genetics in short-term respiratory effects of PM 17 exposure on asthmatics. 18 The results from the current study and from 19 previous studies suggest that we need to consider multiple 20 factors including the genetic make-up of individuals when 21 we assess how people respond when exposed to PM.
Page 12CARB Board transcript SC rev MVEBs 042408

22 Also, the results suggest that the presence of 23 iron in PM may increase its toxicity in some populations, 24 and point to the need for additional research to determine 25 the relative toxicity of the various components of PM. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

9 1 Thank you for your attention. We will be pleased 2 to answer any questions you may have. 3 CHAIRPERSON NICHOLS: Are there any questions 4 from the Board about the studies? 5 I think this kind of work is inherently -- always 6 makes you a little bit nervous when you focus on genetic 7 issues relating to an environmental stress. And I have 8 asked -- so I asked a lot of questions about these studies 9 when it was first presented to me. 10 I just wanted to maybe make a comment that, you 11 know, one of the issues we face in regulating air quality 12 especially at the state level where we don't have -- where 13 our standards are -- they're goals, but they don't have 14 mandates attached to them, is, well, aren't there certain 15 people out there that are just ultrasensitive and there's 16 really nothing you can do about them. And I think one of 17 the important sort of policy implications of this kind of 18 work is that if you can't identity groups of people that 19 are more likely to be susceptible to certain kinds of 20 pollution, you can in fact take extra steps to make sure 21 that they're protected either at work or in their 22 communities. And so it has a really positive aspect to 23 it. But I think it's also one of those things that we 24 want to make sure we're communicating our goals here as we Page 13CARB Board transcript SC rev MVEBs 042408

25 go along so it doesn't have a contradictory kind of PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

10 1 appearance. 2 And Dr. Balmes is nodding as though he's familiar 3 with this issue. 4 BOARD MEMBER BALMES: Well, yeah, I asked the 5 same -- I had the same comment after my briefing. And I 6 really appreciate that you understand that it's tricky 7 with regard to gene environment interactions. And I think 8 overall it will help us provide more health protective air 9 quality standards. Because if you think about the usual 10 epidemiology study where we don't have genetic 11 information, we're studying the entire population or as 12 much of the entire population as possible. So when the 13 effect is primarily in individuals with a genetic variant 14 that only represent a fraction of the total population, 15 you're actually diluting the effect potentially of a 16 pollutant when you're studying the entire population. So 17 being aware that populations with a genetic variation are 18 at increased risk and putting that in context of the 19 epidemiologic studies being of the entire population, it 20 means we need to have a margin of safety, which with 21 California air quality standards we try to provide. 22 That's not always the case at the federal level, as we 23 recently witnessed with the ozone federal standard. 24 CHAIRPERSON NICHOLS: All right. Thank you. 25 Thank you for that. PETERS SHORTHAND REPORTING (916) 362-2345
Page 14CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

11
1 Yes. 2 BOARD MEMBER D'ADAMO: A question of staff and 3 then maybe even Dr. Balmes. 4 I find this fascinating. But just as a lay 5 person, generally speaking when we hear of the role of 6 genetics, typically we hear about a cancer gene, for 7 example, or the search for an Alzheimer's gene. I'm just 8 curious what leads researchers down this path. Is there a 9 search going on for genes that are specifically related to 10 asthma and other pulmonary diseases? And how is the 11 research community able to hone in in particular on the 12 effects? 13 MS. AHMED: We have two research studies that we 14 are currently funded. And both of these studies are 15 looking at the genes -- the antioxidant genes that might 16 be causing sensitivity to asthmatic people. So in our 17 research division we potentially will look to -- continue 18 to look to other genetic studies and identity potential 19 sensitive populations, so that we can have idea who are 20 the people most sensitive and how our ambient air quality 21 standard can predict these sensitive populations. 22 BOARD MEMBER BALMES: So I would just add that 23 asthma is a disease that one gene doesn't determine the 24 multiple genes that are involved. And then air pollution 25 is thought to affect the airways of asthmatics and then PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

12 Page 15CARB Board transcript SC rev MVEBs 042408

1 individuals with heart disease -- or, rather, lung 2 diseases as well through an oxidative stress pathway. 3 Without going into a lot of detail about 4 oxidative stress, we are in an oxygen environment. 5 There's about 21 percent oxygen in our environment. So 6 we're evolved to be able to handle oxidation, which is the 7 donation of electrons to the molecules in our airways 8 and -- so some people have variance of the enzymes that 9 deal with this oxidative stress. 10 And so early on people -- researchers focused on 11 oxidative stress pathways. And the genes that are 12 involved in dealing with oxidative stress is potential 13 risk factors for effects of air pollution. 14 And so in the interest of full disclosure, I 15 should say that it's my lab that's doing the research with 16 genetic variance in antioxidant enzymes and the responsive 17 asthmatics to ozone. Research Division has been very 18 patient with us, because we're way behind because we had 19 to renovate our chamber. But we're on target. The 20 chamber is renovated and we're actually exposing 21 individuals. 22 But we picked that set of genes to look at based 23 on some epidemiologic data that was already out there from 24 Mexico City, for example. And the other research group 25 from southern California that was looking at PM and the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

13 1 same enzyme genes -- antioxidant enzyme genes picked the 2 data -- picked those genes because there was evidences
Page 16CARB Board transcript SC rev MVEBs 042408

3 that diesel exhaust particles -- their effects are 4 regulated by these genes to some extent. 5 So, generally speaking, there are clues out there 6 about what genes to look at. 7 But my final comment is that it's -- looking at 8 just a few genes, it's not the state of the art anymore. 9 The current state of the art is to look at as much of the 10 genome -- human genome as possible in response to drugs 11 or -- and that's where future research that will come 12 before this Board will probably be looking at the whole 13 suite of human genes, not just a few at a time. 14 BOARD MEMBER D'ADAMO: And then just one more 15 question on the role of iron. I wasn't aware that there 16 was a role of iron related to PM. Is it certain types of 17 PM? And if so, what are the sources? 18 RESEARCH DIVISION CHIEF CROES: The main sources 19 are combustion. 20 BOARD MEMBER BALMES: And, again, iron plays an 21 important role in the response to oxidative stress because 22 it's a metal that -- you both -- you inhale some iron, but 23 you also have a lot of iron in your body. And both the 24 inhaled iron and the iron that's circulated have a role in 25 how much oxidative stress there is in the body. So it PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

14 1 made perfect sense for the researchers to look at this 2 particular gene. 3 CHAIRPERSON NICHOLS: Well, if I might also just 4 add one more thing in terms of particular matter. Ever 5 since EPA and the state, I think the state actually Page 17CARB Board transcript SC rev MVEBs 042408

6 started this, first started regulating particulate matter 7 just based on the size of the particles, many people have 8 criticized that as being way too crude and suggested that 9 we could just focus on one or another type of chemical, it 10 would be much more useful and potentially our strategies 11 would be much more effective. And so one aspect of this 12 research I think is that it could help actually pinpoint 13 if there are particular particles that we should be really 14 spending our time and energy on. 15 So, anyways, this is very helpful. Thank you for 16 the report. 17 MS. AHMED: Thank you. 18 CHAIRPERSON NICHOLS: It's now my great pleasure 19 before we move on to our next agendad item to introduce 20 our newest Board member. 21 It's really a joy to have a full Board. It gives 22 us extra heft and extra brain power. And the Governor has 23 appointed Dr. John Telles as our Board member representing 24 the San Joaquin Valley. So he'll also be serving on the 25 San Joaquin Valley Air District Board as well. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

15 1 Dr. Telles grew up on a farm in the San Joaquin 2 Valley. He's now in active medical practice. He's been a 3 cardiologist at the Heart Group Cardiovascular Associates, 4 Incorporated, since 1979, where he also serves as a 5 managing partner. He brings broad practical knowledge of 6 both the health impacts of air pollution and the 7 importance of the agricultural economy to the Board.
Page 18CARB Board transcript SC rev MVEBs 042408

8 I have enjoyed my opportunity to get to know him 9 a little bit, and I've been impressed by his independence 10 of mind and spirit and his commitment to public service. 11 Welcome, Dr. Telles. Would you like to say a few 12 words before I administer the oath of office to you?
13 BOARD MEMBER TELLES: No. 14 CHAIRPERSON NICHOLS: Very good. Wise man. 15 All right. Oh, I have to swear you in to both of 16 your jobs at one time. 17 All right, we can do this. I guess we should 18 stand up and do this formerly. And then you can actually 19 sign the document. 20 (Thereupon John Telles was sworn into office.) 21 (Applause.) 22 BOARD MEMBER BALMES: Madam Chair, may I say 23 something? 24 CHAIRPERSON NICHOLS: Yes, please. 25 BOARD MEMBER BALMES: So, John, welcome from the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

16 1 other physician on the Board. And I guess we can now get 2 a second opinion very easily, right? 3 (Laughter.) 4 BOARD MEMBER BALMES: I won't talk about my 5 general stereotype of cardiologists. 6 (Laughter.) 7 CHAIRPERSON NICHOLS: This is going to get way 8 too in-groupy. 9 All right. Well, we'll just plunge ahead here. 10 We're on our next item, which is going to be a Page 19CARB Board transcript SC rev MVEBs 042408

11 research proposal. 12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Thank 13 you. 14 Since the passage of AB 32, it's become apparent 15 to ARB staff that significant reductions in high global 16 warming potential greenhouse gas emissions are possible in 17 California, particularly if ozone-depleting substances are 18 considered. 19 The research proposal before you today is 20 designed to support regulatory and non-regulatory programs 21 associated with several early action measures and will 22 complement an ongoing research focused on inventory 23 development of high global warming potential gases. The 24 objective of the project is to perform a lifecycle 25 analysis that will identity and help to develop PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

17 1 cost-effective, practical approaches for management of 2 gases. 3 Glenn Gallagher of the Research Division will 4 make the staff presentation. 5 (Thereupon an overhead presentation was 6 presented as follows.) 7 AIR POLLUTION SPECIALIST GALLAGHER: Thank you, 8 Mr. Cackette. 9 Good morning, Chairman Nichols and members of the 10 Board. 11 We have one research proposal for you to consider 12 this morning: The recovery and destruction of high global
Page 20CARB Board transcript SC rev MVEBs 042408

13 warming potential greenhouse gases. The proposal will be 14 for a lifecycle analysis on the cost, benefit, and 15 feasibility of recovering high global warming potential 16 greenhouse gases, which in turn will help us develop 17 programs to reduce greenhouse gases from several sources. 18 The proposal was developed from the research plan 19 approved in May 2007. 20 A pre-proposal invitation was first offered to 21 state agencies, state colleges and University, and UCs, 22 which resulted in only one response which was deemed 23 insufficient in terms of qualifications, so an RFP was 24 offered at this time. 25 Five excellent proposals were submitted, and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

18 1 staff recommended the ICF International response as the 2 best, which was approved by the Research Screening 3 Committee in March.
4 --o0o-- 5 AIR POLLUTION SPECIALIST GALLAGHER: The research 6 proposal will provide cost data and feasibility analysis 7 of managing high global warming potential greenhouse gases 8 in order to reduce their emissions. Although the proposal 9 title only specifies destruction as a management method, 10 the study will include recycling and reuse options as 11 well. 12 ICF International, a nationally-recognized firm 13 in the area of greenhouse gas emission studies, will 14 conduct the research. 15 The findings will be used to develop the most Page 21CARB Board transcript SC rev MVEBs 042408

16 cost-effective recovery programs to reduce emissions from 17 these sources.
18 --o0o-- 19 AIR POLLUTION SPECIALIST GALLAGHER: This study 20 will research end-of-life recovery of high global warming 21 potential greenhouse gases from their main sources. 22 Discarded appliances and building demolition debris 23 contains insulation foam, which is the source of 65 24 percent of the high global warming potential greenhouse 25 gases. Decommissioned equipment and stockpiled PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

19 1 refrigerants used in air conditioning and refrigeration 2 contains 32 percent and chemicals used in fire 3 suppressants represent 3 percent. 4 The proposal will also develop a complete full 5 lifecycle analysis of the emission reductions and cost 6 benefit of each identified recovery or reuse option, 7 including business-as-usual scenarios. 8 The proposal will cover important elements, but 9 not all, for feasible greenhouse gas emission control 10 strategies from these sources, as indicated by the smaller 11 check marks. Some remaining research remains to be 12 conducted, if chosen, such as identifying low global 13 warming alternatives.
14 --o0o-- 15 AIR POLLUTION SPECIALIST GALLAGHER: The proposal 16 will support several AB 32 Climate Change Early Action 17 measures that will come before the Board in the next three
Page 22CARB Board transcript SC rev MVEBs 042408

18 years. This proposal will complement existing greenhouse 19 gas inventory research projects in several areas. 20 In the area of refrigerant management, it will 21 support motor vehicle air conditioning; tracking, 22 reporting, and leak repair; and new commercial 23 refrigeration systems. 24 In the area of end-of-life recovery, it will 25 support appliance recycling and recovery and destruction PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

20 1 of high global warming potential greenhouse gases. 2 It will also support emission management of fire 3 suppressants.
4 --o0o-- 5 AIR POLLUTION SPECIALIST GALLAGHER: And now a 6 little more background on why the research proposal is 7 important in our efforts to reduce greenhouse gas 8 emissions. High global warming potential greenhouse gases 9 are gases with global warming potentials many times 10 greater than carbon dioxide, some of them with global 11 warming potential thousands of times higher than CO2. 12 These gases include ozone-depleting substances, or ODS, 13 and hydrofluorocarbons, HFCs. 14 The Montreal Protocol of 1987 banned the 15 production of ozone-depleting substances due to the 16 concerns of the hole in the ozone layer from stratospheric 17 ozone depletion. While this production ban was good for 18 the ozone layer, no attempt was made to control emissions 19 from existing ODS that will eventually be emitted. This 20 is an important gap in the effort to reduce ODS emissions, Page 23CARB Board transcript SC rev MVEBs 042408

21 one that AB 32 can address with this proposal. 22 Existing ODS are also called banks, which are the 23 total amount of substances not yet released to the 24 atmosphere that are contained in existing equipment such 25 as refrigeration and air conditioning; in fire suppressant PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

21 1 systems, chemical stockpiles, insulating foams, and other 2 products. These banks of potential emissions represent a 3 very significant source of greenhouse gas emissions in 4 California. 5 Another significant source of greenhouse gas 6 emissions are from the hydrofluorocarbons, which were the 7 preferred replacement of ozone-depleting substances. 8 Ironically, some of these hydrofluorocarbon replacements 9 have a greater global warming potential than the 10 substances they replaced.
11 --o0o-- 12 AIR POLLUTION SPECIALIST GALLAGHER: The high 13 global warming potential greenhouse gases are a 14 significant source of greenhouse gas emissions. The HFC, 15 or hydrofluorocarbon, emissions are expected to increase 16 four times by 2020 under business-as-usual practices. 17 This slide shows the greenhouse gas emissions for 2004 as 18 well as 2020 assuming a business-as-usual approach 19 expressed in carbon dioxide equivalents. You can see 20 under business as usual, emissions of HFC increase. 21 But the real significance of high global warming 22 potential greenhouse gases is in their total future
Page 24CARB Board transcript SC rev MVEBs 042408

23 emissions from their stored amounts, which are the banks 24 of gases in insulating foam, in existing refrigeration and 25 air conditioning equipment, and in fire suppressants. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

22 1 The two bar charts on the right are the 2 aggregated amount of stored banks of high global warming 3 potential greenhouse gases. These stored banks are not 4 emitted each year, but are gradually emitted as the banks 5 of stored gases are depleted, as you can see by the 6 difference between the 2004 banks and the 2020 estimated 7 banks. The banks have been reduced because 325 million 8 metric tons of carbon dioxide equivalents would be emitted 9 by 2020 under business as usual. 10 The remaining 450 million metric tons of carbon 11 dioxide equivalents in the banks would continue to be 12 emitted over several years until they are depleted, unless 13 they are recovered and managed properly
14 --o0o--
15 AIR POLLUTION SPECIALIST GALLAGHER: 16 Approximately 65 percent of the high global 17 warming potential banks are ozone-depleting substances in 18 insulation foam in older buildings and appliances that 19 exist today.
20 --o0o-- 21 AIR POLLUTION SPECIALIST GALLAGHER: Other 22 significant sources include mobile and stationary air 23 condition, commercial refrigeration, and fire suppression.
24 --o0o-- 25 AIR POLLUTION SPECIALIST GALLAGHER: This Page 25CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

23 1 concludes the presentation. We recommend you approve 2 Resolution 08-25. 3 We'll be happy to answer any questions at this 4 time. Thank you. 5 CHAIRPERSON NICHOLS: Are there questions before 6 we move this item? 7 If not, may I have a motion and a second. 8 BOARD MEMBER D'ADAMO: I move adoption of 9 Resolution 08-42. 10 BOARD MEMBER BALMES: I'll second. 11 BOARD MEMBER RIORDAN: Second the motion. 12 CHAIRPERSON NICHOLS: All right. Moved and 13 seconded. 14 All in favor please say aye. 15 (Ayes.) 16 CHAIRPERSON NICHOLS: Any opposition? 17 Motion carries. Thank you. 18 CHAIRPERSON NICHOLS: My. Cackette, shall we move
19 on.
20 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Our 21 next item is the -- 22 CHAIRPERSON NICHOLS: Oh, sorry. I should say a 23 little word about this. Sorry. I get to do an opening to 24 this. I forgot. 25 This item here is the appointment of a PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 Page 26CARB Board transcript SC rev MVEBs 042408

24 1 replacement for a member of the Research Screening 2 Committee who resigned. Dr. John Balmes resigned in order 3 to join the Air Resources Board as a member. And we think 4 that was a good decision on his part. We're very happy 5 that he's now a member of the Board. And we very much 6 appreciate the contributions he made as a member of the 7 Research Screening Committee before he decided to continue 8 his service to the State of California as a Board member. 9 However, we do have a vacancy and we need to fill 10 it. The staff is proposing to add Dr. Irva 11 Hertz-Picciotto of UC Davis to the Research Screening
12 Committee. 13 Dr. Hertz-Picciotto is going to guide the 14 screening committee on health effects research. Her 15 expertise includes research in environmental exposures, 16 pregnancy outcomes, and epidemiological methods. 17 We also need to fill another vacancy that was 18 created by the resignation of Dr. Barbara Finlayson-Pitts. 19 And the staff is proposing Dr. Suzanne Paulson from UCLA 20 as an adjunct member of the committee to strengthen the 21 Research Screening Committee's expertise in the area of 22 atmospheric chemistry and measurement of aerosols. Dr. 23 Paulson is a former colleague of mine at UCLA. But I 24 don't think I have to disqualify myself from voting. 25 She's absolutely terrific and we're lucky to have her. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

25 1 So, staff, do you want to add anything additional Page 27CARB Board transcript SC rev MVEBs 042408

2 about the credentials of these two proposed Screening 3 Committee members. 4 MS. GUPTA: Actually, I have a description I'll 5 just go over fast. 6 Good morning, Chairman Nichols and members of the 7 Board. We're recommending two individuals today, one 8 permanent member and the other an adjunct advisor to the 9 Committee. The proposal is Dr. Irva Hertz-Piccioto. 10 Dr. Hertz-Piccioto founded the Center on 11 Environmental Health and Susceptibility at the University 12 of North Carolina and currently is Deputy Director of the 13 UC Davis Center for Children's Environmental Health. 14 She has serve as president of the International 15 Society for Environmental Epidemiology, Chaired the 16 Institute of Medicine/National Academia of Sciences 2000 17 and 2002 Committees to Review Health Effects in Vietnam 18 Veterans of Exposure to Herbicides; and served as a member 19 of numerous state and federal advisory boards, including 20 the U.S. EPA Scientific Advisory Board, the Board of 21 Scientific Counselors at the National Toxicology Program, 22 and the California Governor's Proposition 65 Scientific 23 Advisory Panel. She's currently the President of the 24 Society for Epidemiologic Research, the primary 25 professional society for her field in the U.S. Dr. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

26 1 Hertz-Picciotto serves on the editorial boards of 2 Epidemiology, American Journal of Epidemiology, and 3 Environmental Health Perspective. She has mentored over
Page 28CARB Board transcript SC rev MVEBs 042408

4 50 doctoral students and has taught courses on advanced 5 methods in epidemiology in Brazil, Uzbekistan, France, 6 Chile, and throughout the United States. 7 Dr. Hertz-Picciotto's research concerns the 8 impact on health and environmental exposures, including 9 metals, pesticides, air pollutants, and persistent 10 organics such as polychlorinated biphenyls. Her focus is 11 on reproductive and early childhood effects, but also 12 includes cancer and cardiovascular conditions. She has 13 developed methodology for assessing risks from 14 occupational and environmental exposures and for the 15 design and statistical analysis of studies of pregnancy
16 outcomes. 17 We're recommending Dr. Suzanne Paulson as an 18 adjunct advisor to the RSC. Dr. Suzanne Paulson is a 19 professor at UCLA's Department of Atmospheric and Oceanic 20 Sciences and the Institute of the Environment. She has 21 published more than 35 peer-reviewed articles and book 22 chapters and received several awards including UC Regents 23 Faculty award and "Who's who in American Women in
24 Science". 25 Dr. Paulson's specific research in atmospheric PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

27 1 chemistry and aerosol measurement concerns developing 2 methods to measure black carbon and organic carbon 3 aerosols as well as characterizing their optical 4 properties, which determine how these particles affect 5 earth's climate, understanding the chemistry and sources 6 of aerosol-based oxidants such as hydrogen peroxide, which Page 29CARB Board transcript SC rev MVEBs 042408

7 may play a roll in the human health effects of particular 8 inhalation; and clarifying the emissions and chemistry of 9 organic acids which play a role in secondary organic 10 aerosol formation and have both anthropogenic and 11 plant-base sources. 12 We recommend that you approve Dr. Hertz-Piccioto 13 and Dr. Paulson to the RSC. And we would be happy to 14 answer any questions. 15 CHAIRPERSON NICHOLS: Are there -- 16 BOARD MEMBER TELLES: So moved. 17 CHAIRPERSON NICHOLS: Moved and seconded. 18 I trust there's no objection. 19 All in favor, aye. 20 (Ayes.)
21 CHAIRPERSON NICHOLS: Great. 22 Yes, we are very privileged to have people of 23 this caliber who are willing to take on the task of 24 advising us about our research program. And only wish we 25 had more money in the program so they could influence even PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

28 1 more of it. But we're working on that. 2 Okay. Our next item is a presentation on the Bay 3 Area Air Quality Management District's climate protection 4 program. And I'm assuming you're going to kick the 5 discussion off. But it's -- this is obviously appropriate 6 since we are in the district here. And thank you, 7 Supervisor Hill, for your efforts to get this program up 8 and running. I think it's just a terrific example of the
Page 30CARB Board transcript SC rev MVEBs 042408

9 kind of partnership that we're going to need to have if 10 we're going to succeed in making a real difference in 11 reducing the greenhouse gas emissions in California.
12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: In 13 2005, the Bay Area District established a Climate 14 Protection Program which acknowledges the link between 15 climate protection and other programs to reduce air 16 pollution in the Bay Area. And since that time the Bay 17 Area District has distinguished itself as a leading 18 organization in implementing climate protection
19 activities. 20 Today Ms. Jean Roggenkamp from the district will 21 be talking about the Bay Area District's climate 22 protection efforts. Jean is a deputy air pollution 23 control officer for the Bay Area Air Quality Management 24 District, and her responsibilities include overseeing the 25 planning policy and public outreach functions of the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

29 1 agency.
2 Jean. 3 CHAIRPERSON NICHOLS: Welcome. 4 (Thereupon an overhead presentation was 5 presented as follows.) 6 MS. ROGGENKAMP: Thank you, Mr. Cackette. 7 Good morning, Chairman Nichols and members of the 8 Board. 9 I'm honored to have this opportunity to talk with 10 you this month about the Bay Area Air Quality Management 11 District's Climate Protection Program. It's truly an Page 31CARB Board transcript SC rev MVEBs 042408

12 amazing time to be working in the air quality field. We 13 have this opportunity to integrate climate protection into 14 our air quality work. And it's very critical and it's 15 also very rewarding. We get to be leaders of the state, 16 clearly, at the regional level and at the local level. 17 And we have the opportunity to show the things that can be 18 done. And I think that gives us all a lot of hope. 19 This morning I'm going to briefly touch on the 20 Bay Area Air District, who we are, what motivated the 21 district to create a climate protection program, a few of 22 the program highlights, and also a bit more about how 23 we're integrating climate protection into our air quality 24 programs, how we're collaborating and in partnership with 25 others, what we're doing to educate and assist the public PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

30 1 and also cities and counties, fundamentally catalyzing 2 action to address this program.
3 Next.
4 --o0o-- 5 MS. ROGGENKAMP: So the Bay Area Air District, 6 created by state law in 1955, the first regional air 7 pollution control agency in the state. So we cover the 8 nine countries around San Francisco Bay. And that also 9 includes 101 cities. Our board of directors is made up of 10 22 locally elected officials, including folks like 11 Supervisor Hill from San Mateo County. We have 7 million 12 people in the Bay Area, and we drive about 170 million 13 miles per day.
Page 32CARB Board transcript SC rev MVEBs 042408

14 Next.
15 --o0o-- 16 MS. ROGGENKAMP: So why did the air district 17 create a climate protection program in 2005? Essentially 18 for three reasons: 19 Recognition certainly that climate protection is 20 a critical environmental issue. And also the cities and 21 counties in the region were already working to address 22 this problem, moving forward thinking about what they 23 could do, and looking to air district for information and 24 support. So it seemed clear that regional leadership on 25 this issue would help. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

31 1 And, secondly, as we sort of all get now, but at 2 that time it was sort of novel to think that air quality 3 and climate protection were very closely linked. As 4 temperatures rise, ozone precursor emissions rise, and 5 ozone formation rates rise, leading to higher summertime 6 ozone levels. So as the temperature rises, we're going to 7 be faced with eroding the air quality improvements and 8 public health improvements that we've all worked so hard 9 to achieve. 10 And then there's the co-benefits. As we work to 11 reduce criteria pollutants and toxic air contaminants, we 12 also have the opportunity to reduce greenhouse gases.
13 So next.
14 --o0o-- 15 MS. ROGGENKAMP: So this is a chart that shows 16 the current number of extreme heat days in the Bay Area, Page 33CARB Board transcript SC rev MVEBs 042408

17 and then projected numbers of extreme heat days in the 18 San Francisco Bay Area later in the 21st Century based on 19 different warming scenarios. 20 So in recent decades -- this is shown by the 21 green bar -- the Bay Area has experienced about 12 extreme 22 heat days per year on average. If we look at projections 23 for the future for a low warming scenario, it rises to 24 about 40 per year. Under a moderate warming scenario, 25 about 80 per year. And under a higher warming scenario PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

32 1 where we have lots and lots of increase in temperature, 2 the number of extreme heat days could rise to 120 per 3 year. With more extreme heat days, we get higher ozone 4 levels, more unhealthy days. So it just shows that the 5 sooner we can take action and the more action we can take, 6 the better off we're going to be.
7 Next.
8 --o0o-- 9 MS. ROGGENKAMP: So this next graph shows the 10 relationship between maximum temperatures in the Bay Area 11 and ozone levels over time. The red line shows the number 12 of days in each year that had temperatures of 99 degrees 13 Fahrenheit or above. And the blue line shows the number 14 of days at or above the national 8-hour ozone standard. 15 Now, this is the older standard of 80 parts per million, 16 not the newest one. 17 But as you can see, as we have high temperatures, 18 we have high levels of ozone. So it's clear. The past
Page 34CARB Board transcript SC rev MVEBs 042408

19 demonstrates that when we have higher temperatures, we're 20 going to have more unhealthy days.
21 Next.
22 --o0o-- 23 MS. ROGGENKAMP: And in the Bay Area air quality 24 is really not the only motivating factor for addressing 25 climate protection. As others in the state, there's PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

33 1 certainly concerns about decreased snowpack and increased 2 wild fires. 3 This map shows something about sea level rise. 4 This is a map generated by the Bay Conservation and 5 Development Commission, which governs land use along the 6 shore of the San Francisco Bay, along with the cities and
7 counties. 8 So the current reach of San Francisco Bay is 9 shown in the dark blue. And then the area that's shown in 10 light blue is the area that would be under water given a 11 one meter sea level rise. And the areas that would be 12 under water include the San Francisco Airport; Oakland 13 Airport; many freeways; waste water treatment plants; 14 other public facilities; residential, commercial, and 15 industrial facilities. So clearly in the Bay Area there's 16 a strong motivating factor about the shoreline as well as 17 air quality to address climate protection.
18 Next.
19 --o0o-- 20 MS. ROGGENKAMP: So here's a few of the 21 highlights of the Bay Area Air District's Climate Page 35CARB Board transcript SC rev MVEBs 042408

22 Protection Program. As I mentioned, it was started in 23 June of 2005. The board of directors decided to create an 24 ad hoc committee of the board to help the agency focus on 25 its climate protection program. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

34 1 We hosted a major climate protection summit in 2 the Bay Area where we brought together leaders from the 3 public agencies, private industry, nonprofit groups to 4 talk about the issue and also to talk about what was 5 already being done to address, and to show leadership on 6 the issue. And Al Gore was the keynote speaker and was 7 very inspiring. 8 We also published a regional inventory at the 9 same time for the Bay Area of greenhouse gas emissions. 10 And something that's worthy of note, in the Bay Area 11 transportation emissions are about half of the greenhouse 12 gas emissions; as compared to the state, it's somewhere in 13 the range of 40 percent. 14 The board decided that it was such an important 15 issue to create a standing Committee of the board on 16 climate protection. We've done some studies about what 17 opportunities there are for stationary sources in the 18 region to address greenhouse gas mitigation. In May of 19 2007 the district decided to go carbon neutral and to 20 offset the emissions from its own operations of greenhouse 21 gases. 22 In 2007, we also started working with local 23 governments on having workshops on inventory for
Page 36CARB Board transcript SC rev MVEBs 042408

24 greenhouse gases. The cities and counties were asking for 25 help. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

35 1 We also launched the preparation and development 2 of a curriculum for 4th and 5th graders on climate 3 protection. And in December of last year awarded three 4 million dollars in climate protection grants. 5 January of this year, the CAPCOA issued a white 6 paper on greenhouse gases and CEQA. And the Bay Area 7 staff led that effort. 8 And just earlier this month, U.S. EPA Region 9 9 awarded an environmental award to the district for its 10 climate protection program.
11 Next.
12 --o0o-- 13 MS. ROGGENKAMP: So I'd just like to take a few 14 more minutes and describe a few of these efforts in more 15 detail in terms of how we're integrating climate 16 protection into our existing programs, how we're 17 collaborating with other organizations, and what we're 18 doing to educate and catalyze local action, and how we're 19 acting to provide a call to action and what folks can do 20 about climate change.
21 Next.
22 --o0o-- 23 MS. ROGGENKAMP: So I mentioned we created an 24 inventory of greenhouse gases in the Bay Area. Our 2002 25 inventory was about 85.4 million metric tons of greenhouse PETERS SHORTHAND REPORTING (916) 362-2345 Page 37CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

36 1 gases. And as I mentioned, about 50 percent are from 2 transportation sources. We're currently in the process of 3 updating this inventory to a 2005 inventory. 4 We've conducted studies to identity opportunities 5 to reduce greenhouse gases at stationary sources permitted 6 in the Bay Area. Phase I is complete, and we've shared 7 that information with ARB staff. Phase 2 is about to be 8 completed, and we'll share that information as well with 9 ARB. And that will be posted on our website. 10 And as we amend our rules and regulations for 11 stationary sources in the region to reduce criteria 12 pollutants and air toxics, we've begun thinking about 13 opportunities to also reduce greenhouse gases. What are 14 the opportunities for co-benefits here? For instance, we 15 currently are working on amendments to our boiler rule to 16 reduce nitrogen oxide emissions. And we're looking at 17 ways that we can reduce greenhouse gas as well through 18 energy efficiency measures through that rule. And we'll 19 continue to do this effort to look for these co-benefits 20 as we update our rules and regulations.
21 Next.
22 --o0o-- 23 MS. ROGGENKAMP: We're also working to integrate 24 consideration of climate change in our CEQA work. As I 25 mentioned, CAPCOA put together a white paper, a resource PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

Page 38CARB Board transcript SC rev MVEBs 042408

37 1 document on greenhouse gases and CEQA, and we're using 2 that as a starting point to consider these issues in the 3 Bay Area so we can provide assistance to the lead agencies 4 throughout the region.
5 Next.
6 --o0o-- 7 MS. ROGGENKAMP: And now on collaboration. I 8 think anyone who's working on collaborations know that 9 none of us can do this alone. And the ramifications are 10 so broad and so encompassing, that we need to collaborate. 11 So we're certainly participating on ARB's technical work 12 groups for various types of sources and conferring about 13 how we might work together to implement the mandatory 14 reporting rule with an integrated reporting tool. 15 We're working with ARB and ICLEI and the 16 California Climate Action Registry and others to develop 17 an emissions protocol for local governments, just to name 18 a few things. And we're also certainly coordinating 19 through CAPCOA with the other air districts throughout the 20 state. And at the Bay Area regional level there are four 21 regional agencies. Including the Bay Area Air District, 22 there's also the Metropolitan Transportation Commission; 23 there's the Association of Bay Area Governments; and as I 24 mentioned earlier, there's the Bay Conservation and 25 Development Commission. And these agencies are working PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

38 1 collaboratively through what's called the Joint Policy 2 Committee. And the main focus of the JPC has been smart Page 39CARB Board transcript SC rev MVEBs 042408

3 growth, so the linkages between land use and 4 transportation and air quality, and how we can do a better 5 job of integrating those issues. 6 The climate protection has been added to the list 7 as well. And the JPC has developed a Bay Area Regional 8 Agencies Climate Protection Program to help the agencies 9 coordinate our efforts in the region.
10 Next.
11 --o0o-- 12 MS. ROGGENKAMP: In the area of educating and 13 catalyzing action, we have a grant program that we are 14 administering. We had $3 million to award to grants in 15 the region to 53 cities, counties, and nonprofits. And 16 these grants are for climate action plans, for general 17 plan updates to incorporate climate protection 18 considerations, for seed money for energy offices to help 19 cities and counties improve their energy efficiency, and 20 for youth outreach on climate protection ideas. 21 These grants were focused on projects that would 22 be innovative, that could replicate best practices 23 throughout the region, and provide seed funding to get new 24 and innovative actions started. 25 We've also been working with local governments on PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

39 1 technical assistance. So we hold workshops for local 2 governments on emissions inventory work, and have been 3 coordinating with PG&E and MTC and ICLEI to help cities 4 and counties get the data that they need for their local
Page 40CARB Board transcript SC rev MVEBs 042408

5 inventories and to work on their climate action plans. 6 One other item is working with the Institute for 7 Local Government to put together a best practices Internet 8 portal for cities and counties and others. And we hope to 9 launch that in early 2009.
10 Next.
11 --o0o-- 12 MS. ROGGENKAMP: In terms of school education, I 13 mentioned that we're developing a curriculum for 4th and 14 5th graders on climate protection. This school year it's 15 being piloted in 13 classrooms. And then next school year 16 we hope that it will be expanded to 40 classrooms. And 17 it's tailored for the 4th and 5th grade because that's the 18 right time in kids' schooling to cover this topic. And 19 we're making sure that it will help the schools meet the 20 statewide standards for science for 4th and 5th graders. 21 And in terms of public education, we have been 22 incorporating climate protection messages into our 23 successful Spare the Air Program. We started that last 24 summer. And we'll be elaborating on that this coming 25 summer. And we're exploring other partnerships we might PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

40 1 have with the other regional agencies and other partners 2 to expand this climate protection outreach effort, and a 3 call to action to the public to help them know what they 4 can do to help spare the air every day. 5 So that concludes my remarks. I thank you again 6 for the opportunity. I'd be happy to answer any 7 questions. But perhaps Supervisor Hill would like to add Page 41CARB Board transcript SC rev MVEBs 042408

8 to my comments. 9 BOARD MEMBER HILL: Thank you. 10 CHAIRPERSON NICHOLS: Please. 11 BOARD MEMBER HILL: Thank, Madam Chair. 12 And I would like Jean to make a couple of other 13 comments regarding the -- how we're planning to fund this 14 Climate Protection Program in the future and how that will 15 integrate with the Air Resources Board as we move forward. 16 But, you know, it was last -- when we were in 17 Fresno last year the discussion came up, and I made the 18 comment that we have, you know, in the Bay Area this 19 hunger and thirst for climate change. And Director 20 D'Adamo pointed out that that hunger and thirst isn't 21 necessarily shared by everyone in the state. And I think 22 that we probably find that. 23 But you can see by the report that the Bay Area 24 District is excited about this and has been looking at it 25 as an opportunity to move forward and make some definite PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

41 1 changes to see how we deal with climate change in the 2 future. 3 What we did have as part of the program, and I 4 would like Jean to kind of discuss briefly, is how this 5 is -- the funding source for the future. And how we were 6 looking at this and the Board discussed it in that our 7 May -- I think at the May 20th Board meeting we will be 8 adopting a fee to go along with the program based on the 9 metric tons of emissions -- of carbon emissions by those
Page 42CARB Board transcript SC rev MVEBs 042408

10 entities in the district. And I just wanted to point out 11 that the purpose of that is to really fund the program 12 that we think has been successful so far; but also to look 13 at it as a measure that is -- I don't want to say 14 temporary in nature, but something that would be 15 integrated completely into an Air Resources Board program 16 in the future when one is adopted. And that funding can 17 then be singular in nature rather than having what I could 18 consider and see a patchwork of funding throughout the 19 state with different sources having to pay here, there and 20 regarding different districts with different funding 21 sources. And I don't think that would be a successful 22 model for us to follow. So this is more of a stop gap 23 initial stage to move forward. 24 So, Jean, perhaps you could explain the program 25 in a little detail. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

42 1 MS. ROGGENKAMP: So as Supervisor Hill said, we 2 have a proposal on the table that's being considered as 3 part of our fee schedule to include greenhouse gases in 4 our fees for stationary sources. This is not a control 5 measure. It is a way to help fund part of our program, 6 part of our program that's related to stationary sources. 7 So we have looked at the inventory of our stationary 8 sources and the greenhouse gases that are emitted. And we 9 have looked at our staff resources and other expenses that 10 are associated with our work on greenhouse gases in the 11 region associated with stationary sources. And we've come 12 out with a cents-per-ton estimate of what it costs. And Page 43CARB Board transcript SC rev MVEBs 042408

13 those cents per ton, 4.4 cents per ton -- metric ton, will 14 be applied to those industries that have greenhouse gas 15 emissions. And basically a pretty small fee will be added 16 to their existing fees if this proposal is approved by the 17 Board. 18 And, again, it's a way to cover our costs for our 19 work on climate protection related to stationary sources. 20 It's not a control measure in and of itself. The fees 21 will range from less than a dollar for some facilities 22 that would be added to their fees. And the refineries 23 would pay probably the significant bulk of it. And their 24 fees would be less than $200,000 for our greenhouse gases. 25 BOARD MEMBER HILL: With a total budget of about PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

43 1 $1.2 million. 2 CHAIRPERSON NICHOLS: Well, thank you. It's an 3 impressive program and I think it shows great initiative 4 and in many areas in which clearly the districts are able 5 to amplify, expand, extend, create things ahead of where 6 the state can. And I think it's really much appreciated, 7 the work that you've been doing here. 8 There's also obviously a great need for us to 9 coordinate between the state and local districts as the 10 state begins to develop the full panoply of programs and 11 regulations that we're required to do under AB 32, one of 12 which is for the state to have a fee. We are required to 13 create a fee to administer AB 32. And so our staff is 14 working on that fee. There has been controversy, as you
Page 44CARB Board transcript SC rev MVEBs 042408

15 can imagine, particularly coming from the oil industry, 16 about whether the district can or should impose a fee. 17 ARB doesn't have a role in this. We're not required to 18 approve district fees and we're not taking any action with 19 respect to the district's fee whatsoever. 20 There will, as indicated by the district, at some 21 point have to be an accounting of what we're charging 22 people for greenhouse gas emissions, because we're going 23 to be looking at all kinds of market-based programs as 24 well as operational fees. And presumably at some point we 25 will -- you know, we'll all sit down and take a look at PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

44 1 that. 2 But I appreciate your bringing it up, because 3 none of this stuff just in terms of the implementation of 4 programs is completely free. 5 So thank you. 6 Yes, Mayor Loveridge. 7 BOARD MEMBER LOVERIDGE: Thank you for your 8 leadership. 9 But three questions, they're sort of related, and 10 you can -- what is a local government protocol? And 11 what's the objective of that second measure? Due to the 12 inventory of greenhouse gases, are you doing it for the 13 region, for the counties, for cities? I mean where does 14 your inventory go. And then sort of related to that, are 15 you talking or considering goals for the region, for the 16 counties, for cities? 17 MS. ROGGENKAMP: Thank you. Good question. Page 45CARB Board transcript SC rev MVEBs 042408

18 The local protocol that we're working with others 19 including ARB and ICLEI and CCAR on is intended to be a 20 way -- a methodology for cities to initially look at their 21 own operations and see what the emissions of greenhouse 22 gases are, and have a consistent way to calculate that. 23 And then at some future point down the road, a little bit 24 further away, for cities to use a methodology for looking 25 at the city-wide emissions or community-wide emissions of PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

45 1 greenhouse gases. And I believe that that first protocol 2 for the cities' own operations we're hoping jointly to 3 have that available later this year, like maybe September. 4 In terms of the Bay Area Air District's own 5 inventory, we look at it similarly to our inventory for 6 criteria pollutants, sort of facility by facility, and 7 then aggregate it at the regional level. We can certainly 8 dis-aggregate it to some extent to the cities and the 9 counties. But what we have done is a region-wide 10 inventory of all the sources, not just those that are 11 stationary sources, but also mobile sources and other 12 kinds of sources as well for the region as a whole. 13 And currently we do not have a goal for the 14 region. Many of the cities and counties within the Bay 15 Area have their own local goals that they're striving to 16 reach. Many of them stem from the statewide goals that 17 are set for greenhouse gases. But at this point there is 18 not a goal for the region per se. There's certainly some 19 discussions about what that might be. And we'll
Page 46CARB Board transcript SC rev MVEBs 042408

20 participate in those discussions. 21 CHAIRPERSON NICHOLS: And you have been active in 22 the Land-Use Subcommittee of the Climate Action Team, I 23 believe.
24 MS. ROGGENKAMP: Correct. 25 Yes, Ms. D'Adamo. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

46 1 BOARD MEMBER D'ADAMO: Speaking of land use, that 2 was going to be my question. I think that many of us have 3 expressed a desire to be more active in this area. And it 4 seems that you may have a couple of mechanisms to 5 incentivize smart growth planning in the cities. So just 6 if you could elaborate a little bit more on that and, in 7 particular, on the grant awards on the cities that have 8 been awarded those grants relative to general plan 9 updates. I'm assuming that that's the connection. 10 MS. ROGGENKAMP: Yes, precisely. These grants 11 are just getting underway. We don't have results yet. 12 But, for instance, a number of the grants are for cities 13 and counties to incorporate consideration of climate 14 change in their general plan and to integrate those things 15 that the city can do into its local policy. So it might 16 be about smart growth and the linkage between land use and 17 transportation. It can also be about energy efficiency 18 and buildings -- the cities own buildings, but also 19 consideration of what they might require in their local 20 ordinances. 21 So in terms of the grants and smart growth, I 22 think that that's probably the closest linkage. Page 47CARB Board transcript SC rev MVEBs 042408

23 In terms of the Joint Policy Committee, the -- 24 this is a collaboration among the regional agencies in 25 their region -- there is a strong emphasis on smart growth PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

47 1 and thinking of ways to house more of our workers 2 basically. And there's a program called priority 3 development areas that the regional agencies are working 4 on together to help cities identify where they would 5 welcome increased development that could mean more folks 6 are housed in the Bay Area. And I think that has many 7 benefits, from air quality benefits to congestion benefits 8 to climate benefits as well. 9 BOARD MEMBER D'ADAMO: And I'm curious if you've 10 had any discussions with the San Joaquin Valley in 11 particular along the lines of the job housing imbalance, 12 and also if you could comment on the discussions that 13 you've had within CAPCOA. I'm a little bit jealous that 14 the Bay Area is so far ahead. And I think that it's 15 terrific that you've taken this big step. And I'm just 16 wondering what can be done to spread this to other areas 17 of the state. 18 MS. ROGGENKAMP: Certainly. Through CAPCOA, 19 CAPCOA created a climate protection committee because of 20 the interest among the air districts in focusing on this 21 issue and integrating into air quality programs. And, 22 you're right, there's sort of a range of level of 23 activity. But we certainly share with each other what's 24 going on in terms of our districts and what we're able to
Page 48CARB Board transcript SC rev MVEBs 042408

25 focus on. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

48 1 Certainly in the Bay Area we have, as Supervisor 2 Hill said, a public that is very, very interested in this 3 topic and very willing to talk about what we might do to 4 address the issue. And I think that helps a lot. So we 5 certainly work together with the other air districts, 6 including the San Joaquin Valley, through CAPCOA. 7 CHAIRPERSON NICHOLS: Thank you. 8 BOARD MEMBER HILL: Madam Chair -- 9 CHAIRPERSON NICHOLS: Yes, please. 10 BOARD MEMBER HILL: -- if I could just wrap up 11 briefly on this. That it's exciting what we've done. But 12 I think the key word that you've heard and the Board has 13 heard is integration today. And we're trying to integrate 14 the leadership that the ARB and the state has taken 15 through the Legislature and the Governor and then 16 filtering that through the ARB, and then taking kind of a 17 local regional role for that at this point and integrating 18 that again with ARB's leadership as it moves forward and 19 as the programs develop in the future. 20 So we're excited about it. And we think that 21 it's something that's on the cutting edge and hopefully 22 other air districts will emulate, and that we can be that 23 tool and that conduit to local government where -- that's 24 where a lot of the land-use decisions and some of the 25 changes will need to be made to meet the goals that we're PETERS SHORTHAND REPORTING (916) 362-2345

Page 49CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

49 1 looking forward to in the future. 2 So, Jean, thank you. 3 MS. ROGGENKAMP: Thank you. 4 CHAIRPERSON NICHOLS: Thank you very much for the 5 presentation. 6 Just kind of one more comment before we take 7 public comment. I know we have one at least public 8 commenter. And, that is, to say that in addition to the 9 need to integrate in terms of regulatory activities and 10 the work that we're doing so we don't, you know, waste any 11 effort, it's also I think going to turn out to be 12 important in the future to try to pool resources in ways 13 that can make our communications more effective, all of 14 us. Because as I think we're beginning to see, the public 15 is confused about this issue. There's a high level of 16 awareness of the problem. But when you ask people what 17 it's actually composed of and what can be done about it 18 and, you know, anything that pushes it further into the 19 direction of actually asking people to do anything about 20 it, it becomes a much murkier picture. And so given the 21 bombardment of messages that people get all the time about 22 all kinds of topics, I think this is one area where we 23 could all really benefit from having an opportunity to do 24 some serious public outreach and education. 25 Anyway, we -- please do. I'm looking only to the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

50
Page 50CARB Board transcript SC rev MVEBs 042408

1 left. I need to look to the right. 2 BOARD MEMBER TELLES: I've heard the San Joaquin 3 Valley mentioned a few times. And maybe we don't have a 4 burning thirst for global climate change. But we already 5 have over 150 days of extreme temperature. And we have a 6 tremendously serious air pollution problem. And whatever 7 you do in the Bay Area will help us. I mean I think it's 8 been estimated that 20 percent of our air pollution 9 problem emanates from the Bay Area and blows in. And so I 10 would encourage you to progress with whatever you're 11 doing. 12 And I would also encourage you to look at the San 13 Joaquin Valley indirect source rule as a way of maybe 14 containing your growth and making -- make it a smart 15 growth. 16 Thank you. 17 CHAIRPERSON NICHOLS: It's all about sharing best 18 practices. 19 Yes, Dr. Balmes. 20 BOARD MEMBER BALMES: I'd just like to say that 21 as a physician who works in San Francisco General 22 Hospital, where we'll see individuals with heat stress as 23 we have more days in the future with high temperatures, 24 it's important to recognize that while the San Joaquin 25 Valley has more of those hot days now, we also have more PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

51 1 air conditioning. And it's a real issue for less -- well, 2 less affluent communities in neighborhoods in 3 San Francisco. There's still a few. And those Page 51CARB Board transcript SC rev MVEBs 042408

4 individuals typically don't have air conditioning. So 5 it's a real problem. And so I hope that some of the local 6 efforts are to potentially mitigate those effects. 7 It's been shown to be effective in Chicago. 8 After the big heat waves they had in the late nineties, 9 there were efforts to have community cooling centers and 10 programs to bring older, less affluent individuals to 11 these cooling centers. So we're going to need to think 12 about that in San Francisco as well. 13 CHAIRPERSON NICHOLS: And in southern California 14 as well, where we have evidence of heat-related deaths and 15 serious stress. And it's one of those amazing things 16 that -- you know, people think about natural disasters as 17 fires and floods. But they tend to assume that heat waves 18 are just something that happens. And we have to make sure 19 we're dealing with those as well. 20 All right. We have one blue card. And we do 21 take public comment even though this is not an action
22 item. 23 So for three minutes we will recognize Len Conley 24 from Friends of Bus Rapid Transit. 25 And where is he to speak from? PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

52 1 Awe, here at the podium. 2 Welcome. 3 MR. CONLEY: I like this microphone. It's easy 4 to adjust. 5 Can you hear me?
Page 52CARB Board transcript SC rev MVEBs 042408

6 Thank you. 7 My name is Len Conley. I live at 1252 Gilman 8 Street in Berkeley California. And I'm a Sierra Club 9 appointee to the Citizens Watch Dog Committee for ACTIA. 10 That's the Alameda County Transportation Improvement 11 Authority. And I'm sure you know we need a lot of 12 improvement in our transportation when it comes to 13 greenhouse gas emissions. 14 But when Ms. Roggenkamp was speaking and she 15 mentioned grants of $3 million to help out with air 16 quality in the Bay Area, it occurred to me that we're 17 having -- we need help in Berkeley. Berkeley passed 18 Measure G, a greenhouse gas initiative calling for a 20 19 percent reduction in the next 20 years and -- by 2020. 20 Now, 50 percent reduction, 80 percent reduction, it's off 21 the top by the year 2050. 22 Nevertheless, AC Transit, our local transit 23 authority, has just come up with a $250 million project to 24 install a first class transit system called Bus Rapid 25 Transit, which is a 17-mile route running from San Leandro PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

53 1 down International Boulevard to downtown Oakland, and then 2 to downtown Berkeley to the campus. 3 We are finding an incredible amount of resistance 4 to this in Berkeley, I'm embarrassed to say. It requires 5 taking out two dedicated lanes of traffic, which of course 6 is controversial, it's very radical. But we've got to 7 move forward to improving our transit system if we're 8 going to provide people an alternative for the automobile. Page 53CARB Board transcript SC rev MVEBs 042408

9 So I'm here to ask you for some help. We need 10 some kind of -- there's a silent majority in Berkeley who 11 when they hear about this will support the project. The 12 problem is that people are about as interested in transit 13 as watching paint dry. I think we all know that. And we 14 need to look at buses particularly. A person on a bus 15 produces half the CO2 as somebody in a private automobile. 16 And our streets are loaded with single occupancy vehicles. 17 And, anyhow, if you would talk to me afterwards, 18 I'd really appreciate it. 19 Thank you very much. 20 CHAIRPERSON NICHOLS: Thank you for your comment. 21 Seeing no other cards on this item, I think we 22 need to move on to the next issue, which is also climate 23 related. 24 And thank you, Ms. Roggenkamp, and thanks to the 25 district for all your good work. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

54 1 Our next item is an update on one important 2 aspect of our implementation of AB 32. And that's our 3 work in the electricity and natural gas sectors. After 4 transportation, this sector is the second largest 5 contributor of greenhouse gases statewide. 6 In March of this year, the California Public 7 Utilities Commission and the California Energy Commission 8 approved preliminary recommendations to the Air Resources 9 Board for addressing greenhouse gas reductions in these 10 sectors. These recommendations focus on a mix of direct
Page 54CARB Board transcript SC rev MVEBs 042408

11 regulatory requirements and a cap-and-trade system. And 12 these recommendations are now under review by the Air 13 Resources Board staff, who were working on the draft 14 scoping plan. But this is an item which is going to be -- 15 already has gotten quite a bit of public attention as well 16 as legislative interest, and we expect considerably more. 17 So we are happy to have an opportunity to begin the 18 discussion with the Board members today. 19 And, Mr. Cackette, if you'll introduce our 20 guests. 21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Thank 22 you, Chairman Nichols. 23 This is the second in a series of updates to the 24 Board on major sectors and issues that we must address as 25 part of AB32. We want to keep the Board updated as we PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

55 1 think through the elements of the scoping plan. In 2 February, you heard about strategies that staff is 3 evaluating on the transportation sector. 4 Today we'll be briefing you on potential 5 strategies concerning the electricity and natural gas 6 sectors. As part of this discussion we are pleased to 7 welcome Julie Fitch, Director of Strategic Planning for 8 the California PUC; and Pat Perez of the California Energy 9 Commission. Both our colleagues will participate in 10 today's update. Together we will provide you with a brief 11 overview of electricity and natural gas strategies and 12 policies already in place. We will also summarize the 13 recommendations the two commissions have provided to you Page 55CARB Board transcript SC rev MVEBs 042408

14 on a number of policies and requirements for 15 cost-effective greenhouse gas reductions from these 16 sectors. These strategies are designed not only to meet 17 the 2020 goal, but to put California on a path to meet our 18 2050 target. 19 Ms. Lucille Van Ommering from our Office of 20 Climate Change will begin the staff presentation. 21 (Thereupon an overhead presentation was 22 presented as follows.) 23 MS. VAN OMMERING: Thank you, Mr. Cackette. 24 Good morning, Chairman Nichols and members of the 25 Board. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

56 1 Today I'm going to provide an overview of the 2 electricity and natural gas sectors in California in the 3 context of AB 32. 4 I'll discuss how existing policies are affecting 5 the energy mix and how the scoping plan can enhance these 6 policies and reduce greenhouse gas emissions toward the 7 2020 target. 8 I'll also touch upon energy sector-related issues 9 that staff is fleshing out within the Scoping Plan 10 development process, and finish out with some key events 11 on the Scoping Plan schedule that relate to electricity 12 and natural gas strategy development.
13 --o0o-- 14 MS. VAN OMMERING: The electricity sector 15 consists of in-state electricity generation as well as
Page 56CARB Board transcript SC rev MVEBs 042408

16 electricity imported from power plants in other western 17 states. In addition to fossil-fired power plants, 18 California's electricity mix includes cogeneration, or 19 combined heat and power units; renewable resources such as 20 small hydro, wind, solar, biomass, and geothermal; large 21 hydro from such sources as Shasta and Bonneville Dams; and 22 nuclear. 23 The natural gas sector consists of local 24 distributing companies such as Sempra Energy and PG&E. 25 These utilities pipe natural gas to industrial, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

57 1 commercial, and residential customers. Industrial sources 2 in California, including power plants themselves, use 3 natural gas to run industrial boilers and heaters and gas 4 turbines. Staff will discuss the industrial sector at a 5 future AB 32 update. Today's presentation is limited to 6 natural gas uses by commercial and residential sources for 7 water heating, space heating, and cooking.
8 --o0o-- 9 MS. VAN OMMERING: This chart shows California's 10 diverse electricity generation mix in 2006. Over time, 11 the renewables portion of the pie will continue to grow, 12 eating into some of the coal portion of the pie, but also 13 some natural gas.
14 --o0o-- 15 MS. VAN OMMERING: Energy efficiency is the 16 cornerstone of California's energy strategy. While the 17 United States increased per-person electricity consumption 18 by nearly 50 percent over the past 30 years, California's Page 57CARB Board transcript SC rev MVEBs 042408

19 electricity use per person remained virtually flat. In 20 large part, this is due to a variety of cutting-edge 21 energy efficiency programs and cost-effective building and 22 appliance efficiency standards. The story on natural gas 23 consumption shows a similar picture on a per-capita basis 24 as building and appliance codes reduce the amount of 25 natural gas needed to heat water and homes. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

58
1 --o0o-- 2 MS. VAN OMMERING: But as you can see from this 3 slide, more needs to be done. Between now and 2020, the 4 state's population will grow to 44 million, or about 1.4 5 percent annually. 6 More importantly for energy demand, the 7 Southlands Inland Empire and the Sacramento and San 8 Joaquin Valleys are experiencing the highest rate of 9 growth. The warmer and longer summers in these areas 10 translates into higher air conditioning use, along with 11 increased peak demand during the hottest times of the day.
12 --o0o-- 13 MS. VAN OMMERING: Even though power plant 14 commissions in California are strictly regulated, what 15 remains still contributes to smog and particulate matter, 16 which are serious public health concerns in our urban
17 non-attainment areas. 18 State Implementation Plan control measures will 19 continue to reduce power plant related emissions for 20 criteria pollutants and air toxic. AB 32 Scoping Plan
Page 58CARB Board transcript SC rev MVEBs 042408

21 strategies will further contribute to these reductions by 22 shifting more of the energy mix to renewables.
23 --o0o-- 24 MS. VAN OMMERING: Taken together, electricity 25 and natural gas is the second largest contributor to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

59 1 California's greenhouse gas inventory, from both in-state 2 and imported power. And that was about 25 percent of the 3 total inventory in 2004. Of that, in-state electricity 4 generation represented about 12 percent and imports, 13 5 percent. A somewhat smaller percentage of CO2 emissions 6 from the natural gas sector is embedded in the residential 7 and commercial sources portion of the pie.
8 --o0o-- 9 MS. VAN OMMERING: Here in the next bar chart you 10 can see what happens to greenhouse gas emissions as 11 increased population, shifting employment and residential 12 patterns, and continued economic growth affects energy 13 use. Between 2004 and 2020, if no additional strategies 14 are adopted, greenhouse gas emissions from the electricity 15 and natural gas sectors will grow about 20 percent. This 16 is what we call "the reference case" or "business as 17 usual." 18 The biggest greenhouse gas emissions increase 19 will occur from in-state electricity generation. This is 20 because out-of-state coal-fired generation contracts are 21 due to expire, and existing policies will require 22 California utilities to find lower carbon-intensive 23 sources of electricity. Without this shift away from Page 59CARB Board transcript SC rev MVEBs 042408

24 coal-fired electricity, the 2020 reference case would be 25 substantially higher. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

60
1 --o0o-- 2 MS. VAN OMMERING: These two pie charts give you 3 a flavor of the impact coal-fired electricity has on 4 greenhouse gas emissions. 5 The left pie chart shows megawatts of electricity 6 purchased in California both from in-state generators and 7 from imports. As you can see, over three-quarters of our 8 power came from California generators. However, the 9 remainder of the power we purchased from imports 10 represents over half of our total CO2 emissions from 11 electricity, primarily from coal-fired power plants. 12 Most coal-fired electricity serves southern 13 California customers. To a much lesser extent, Northwest 14 coal-fired generation is also transmitted into the state 15 to serve northern California customers, particularly 16 during dry years when hydro is limited.
17 --o0o-- 18 MS. VAN OMMERING: About 75 entities provide 19 electricity to California customers. These include 20 investor and publicly owned utilities, independent energy 21 providers, irrigation and water districts, rural 22 cooperatives, native American utilities, and the State 23 Department of Water Resources. This particular chart 24 looks at the carbon footprint of California's five largest 25 utilities. Both PG&E and SMUD have a large hydro base,
Page 60CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

61 1 some natural gas-fired plants, as well as a healthy 2 renewable energy portfolio. San Diego Gas & Electric 3 relies on natural gas-fired plants as well as nuclear. 4 Both Southern California Edison and L.A. DWP serve the 5 bulk of southern California customers. Because these 6 southern California utilities are unable to serve the 7 total native load with in-state generation, they rely upon 8 imports, largely coal-fired generation in Nevada and Utah. 9 It's interesting to note, however, that while 10 L.A. DWP has the highest per gigawatt CO2 intensity, 11 Edison actually has higher aggregate CO2 emissions because 12 they serve more customers. With the phase-out of 13 long-term contracts or divestiture of coal-fired 14 electricity generation and cleaner generation coming 15 on-line, Edison and DWP's emissions will decline.
16 --o0o-- 17 MS. VAN OMMERING: I'll now turn to potential 18 scoping plan measures for electricity and natural gas. 19 We anticipate the starting points for greenhouse 20 gas reductions will come from several overarching 21 strategies: 22 Energy efficiency that reduces electricity use; 23 Expanded use of renewable resources; and 24 The gradual phase-out of coal-fired electricity 25 imports with generation that emits the same as or less PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345
Page 61CARB Board transcript SC rev MVEBs 042408

62 1 than today's gas-fired power plant.
2 --o0o-- 3 MS. VAN OMMERING: Direct regulations and 4 policies will continue to be the cornerstone for CO2 5 reductions for electricity and natural gas.
6 --o0o-- 7 MS. VAN OMMERING: Although public utilities 8 offer a wide variety of programs to encourage energy 9 efficiency by its customers, we will need to go even 10 further to meet greenhouse gas emission targets by 2020. 11 New strategies could include updating appliance 12 standards to take advantage of the latest technologies 13 being introduced into the market, as well as new standards 14 for both existing and new construction. 15 Water treatment and pumping accounts for almost 16 20 percent of electricity usage in California. Water 17 conservation and more energy efficient water pumps can 18 reduce electricity demand, and the Department of Water 19 Resources and the Energy Commission are looking into these 20 possibilities. 21 We're also looking at action to significantly 22 increase the penetration of energy efficient products and 23 uses in the commercial, industrial, and residential 24 sectors. These strategies are very cost effective, 25 reducing emissions at a total cost savings for utility PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

63
1 customers.
Page 62CARB Board transcript SC rev MVEBs 042408

2 Local governments can also play an important role 3 in adopting smart growth initiatives to further reduce 4 electricity and natural gas consumption.
5 --o0o-- 6 MS. VAN OMMERING: We're also investigating 7 measures from the electricity generation side, including: 8 Increasing the percentage of renewable resources 9 to serve increased energy demand; 10 Setting targets and incentives for residential 11 and commercial solar energy systems; and 12 Ensuring that the next generation of power plants 13 meet the most stringent emission standards. 14 Combined heat and power, including full cells, 15 can also provide efficient use of waste heat in the 16 manufacturing process. The enactment of AB 1613, the 17 Waste Heat and Carbon Emissions Reduction Act, will 18 encourage the installation of more of these units and 19 reduce demand on central power plants.
20 --o0o-- 21 MS. VAN OMMERING: Research, development, and 22 deployment of new technologies can contribute to meeting 23 the 2020 target, and more importantly, help to sustain and 24 make further inroads into GHG reductions beyond 2020. 25 Although California will shift away from new PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

64 1 coal-fired generation, existing coal-fired plants will 2 continue to exist well beyond the 2020 timeframe. For 3 this reason, the Energy Commission is looking into pilot 4 programs for carbon capture and storage at coal-fired Page 63CARB Board transcript SC rev MVEBs 042408

5 power plants. Other opportunities will stem from new 6 investments in green and renewable generation technologies 7 and renewable energy transmission lines, implementation of 8 a bio-energy plant to increase biomass in fuels by 2010 9 and 2020, and taking the recommendations from the Economic 10 and Technology Advancement Advisory Committee to the next 11 step. 12 We're also looking at the emissions reduction 13 potential from the next generation of performance 14 standards for buildings, appliances, construction 15 materials, and engines, as well as smart grid 16 technologies. These emerging technologies can be used to 17 meet increasing demand with fewer emissions.
18 --o0o-- 19 MS. VAN OMMERING: In order to achieve the 20 greatest environmental benefit for the least cost, we're 21 also looking at market-based mechanisms to complement or 22 supplement potential strategies in the scoping plan.
23 --o0o-- 24 MS. VAN OMMERING: Some measures, particularly 25 those that encourage energy efficiency, can be achieved in PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

65 1 a net savings over time. However, in order to increase 2 public and business participation in these programs, we 3 are looking at market measures, including economic 4 incentives to reduce the upfront costs of such
5 investments. 6 Examples include rebates for energy efficient
Page 64CARB Board transcript SC rev MVEBs 042408

7 appliance purchases and what is called on-bill financing, 8 in which the costs of purchases can be spread out 9 over time and contained in monthly utilities bills. 10 Another alternative approach to reduced 11 greenhouse gas emissions is through a cap and trade 12 program. The concept involves setting a cap over CO2 13 emission sources, such as electricity and large stationary 14 sources, which declines over time. Allowances, equal to 15 the emissions in the cap, would either be auctioned or 16 distributed to sources within the system. The allowance 17 price would be set by market participants. Market 18 participants could either reduce their CO2 emissions or 19 purchase allowances for what they emit.
20 -o0o-- 21 MS. VAN OMMERING: The Electricity Sector plays a 22 prominent role in two greenhouse gas cap & trade programs: 23 The European Union's Emissions Trading Scheme, and the 24 recently implemented Regional Greenhouse Gas Initiative in 25 the Northeastern U.S. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

66 1 The Electricity Sector has also been regulated 2 under cap & trade program for criteria pollutants, 3 including the federal SO2 Acid Rain Program and the 4 RECLAIM program in southern California. 5 I'll now turn over the mike to Julie Fitch, who's 6 the Director of Planning at the CPUC. She will summarize 7 the PUC and the Energy Commission's joint recommendations 8 regarding AB 32 requirements and the energy sectors. 9 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: Good Page 65CARB Board transcript SC rev MVEBs 042408

10 morning. Happy to be here with you today. Thanks for the 11 opportunity. 12 I should mention that I'm speaking on behalf of 13 both commissions. Pat Perez is here. And he'll be able 14 to answer any questions afterwards also. But I'm just 15 going to cover it for both of us. 16 When AB 32 was first signed into law, you 17 probably know, and as Lucille has summarized, there have 18 been a lot of clean energy policies going on in the state 19 for quite sometime. And we were in the process at the PUC 20 and also at the Energy Commission of investigating what we 21 could do to reduce greenhouse gas emissions further. So 22 at the time that AB 32 came into being, we just sort of 23 got together with the ARB staff and recognized that there 24 was a lot of work to be done here and that we might be 25 able to help with the massive task that had just been PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

67 1 handed to the Air Resources Board. And so we agreed that 2 the two commissions would institute a joint rulemaking to 3 try and provide as many recommendations as we could with 4 our energy backgrounds to help with the AB 32 5 implementation process. 6 So that process started about a year ago. And 7 we -- both commissions recognized that the ultimate 8 authority for AB 32 rests with you all. We just thought 9 that it would be helpful if we could provide some 10 recommendations. So we've just gotten to the point where 11 we've made our first recommendations in March. And we
Page 66CARB Board transcript SC rev MVEBs 042408

12 also -- those. But we should also acknowledge that this 13 is not -- we didn't do all of the analysis that may be 14 required by Air Resources Board in order to adopt these 15 recommendations under the scoping plan. We're providing 16 these recommendations, but there's still a lot more work. 17 And we recognize that there's certain tests of AB 32 that 18 need to be met prior to adoption of the cap and trade 19 program, for example. And we didn't do all that analysis. 20 We provide our recommendations, but then we continue to 21 work with the ARB staff to make sure that all those tests 22 and requirements are met. 23 Next slide.
24 --o0o-- 25 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: So PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

68 1 the first thing that was recommended in March really 2 builds on this sort of 20-plus years of clean energy 3 policy in California. We recommended direct regulatory 4 approaches as the primary means to achieve the AB 32 goals 5 in the electricity and natural gas sectors. And the two 6 main ones are energy efficiency and renewable policy. 7 In the case of energy efficiency, we recommended 8 that all cost-effective energy efficiency that's possible 9 be sort of the target. And the Public Utilities 10 Commission has jurisdiction in governance over the 11 investor-owned utilities investment in energy efficiency. 12 An equivalent doesn't really exist for the publicly-owned 13 utilities. They're required to set goals and work with 14 the Energy Commission on those goals. Page 67CARB Board transcript SC rev MVEBs 042408

15 But as sort of a basic policy recommendation, 16 both commissions felt that it would make sense to require 17 a certain standard of energy efficiency programs from all 18 folks who provide electricity to -- and natural gas to 19 consumers in California. So that there's sort of a level 20 requirement from everyone who provides power and gas. And 21 so there may be a need for some uniformity or some, you 22 know, other regulatory treatment from ARB in order to 23 accomplish that. 24 Same thing is true -- we felt that the renewables 25 policy was really a foundation for the climate change PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

69 1 policy for the state as well. And currently there's a 2 mixture of requirements there too. The investor-owned 3 utilities have a statute that says they must deliver 20 4 percent of their electricity from renewable by 2010. 5 Publicly-owned utilities are required to set a goal, but 6 it's much more flexible what the goal should be and by 7 when. 8 And currently the requirement for 20 percent from 9 the investor-owned utilities is actually a cap at 20 10 percent. So as the regulatory authority, the Public 11 Utilities Commission can't actually require that the 12 utilities invest more than that. So there's some area in 13 there where we thought there should be again sort of 14 uniformity of treatment. For everyone who provides power 15 should have a certain similar requirement. It may be that 16 since some are at a different starting point, that it
Page 68CARB Board transcript SC rev MVEBs 042408

17 might take a little longer to get there. But we thought 18 as a general policy there should be standard treatment. 19 So those are the regulatory measures that we 20 recommend. And we're pretty clear -- although we haven't 21 finished all of the analysis, but we're pretty sure that 22 most of the emission reduction options or opportunities in 23 the electricity and natural gas sectors will come from 24 those mandatory measures that we're already undertaking 25 and have been for sometime. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

70 1 And I should mention that under energy 2 efficiency, building codes and appliance centers are a big 3 portion of that as well. And that's in the Energy 4 Commission's purview. So we're pretty sure that those are 5 the major ways we're going to get near-term reductions 6 from these sectors. But beyond that -- I think this is on 7 the next slide -- we also recommended that it would be 8 worthwhile to look at a cap and trade option for the 9 energy sectors. And we looked at both energy -- 10 electricity and natural gas. 11 Natural gas, as Lucille mentioned earlier, we're 12 just really talking about natural gas usage in the 13 residential and commercial sectors, because our assumption 14 is that natural gas used for power plants would be an 15 electricity emission; natural gas used for industrial 16 purposes would probably be regulated separately under the 17 industrial sectors. So it's really just the residential 18 and commercial that we're talking about here. And we felt 19 that the major way that you can get emission reductions Page 69CARB Board transcript SC rev MVEBs 042408

20 from that sector really has to do with energy efficiency 21 at the current time. And so we didn't think that was 22 necessarily a good place to start with cap and trade 23 option. So we didn't recommend inclusion of that if 24 there's a cap and trade. 25 For electricity, however, we thought that it did PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

71 1 make sense to include an electricity sector cap and trade 2 option. And here we recognize that the ultimate decision 3 about whether there should be a cap and trade program 4 rests with you. But both commissions I think felt that if 5 there is a cap and trade program, it makes sense to 6 include electricity in it. Even though we may think that 7 there may not be a ton of emissions -- no pun intended -- 8 that it would be associated with the cap and trade in the 9 near term, that it's worth doing for both learning 10 purposes and because we expect that there will probably be 11 a national system at some point, and we'd like to sort of 12 get in and get experience with such a mechanism. So I 13 think that's a lot of the motivation that was behind it. 14 And so if there's a cap and trade program and if 15 electricity is in it, we went a little bit further and 16 recommended who should be regulated under that scheme. 17 And this is a big issue because of what Lucille mentioned 18 earlier related to our imported power and the greenhouse 19 gas emissions associated with it. As you probably know, 20 we don't actually have the ability to regulate 21 out-of-state power production. And so -- but we recognize
Page 70CARB Board transcript SC rev MVEBs 042408

22 that in order to influence the footprint of California's 23 electricity sector, we really need to address that issue. 24 And so it became a rather complicated question, how to 25 regulate electricity in a cap and trade system with that PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

72 1 basic issue in mind. 2 So what we recommended was a very long, drawn out 3 process to come to this conclusion. But that the 4 deliverer -- whoever delivers electricity to the 5 California grid is the entity that should be responsible 6 for the emissions associated with that power. And so what 7 that means is essentially it's an attempt to deal with the 8 problem of needing to treat everyone equally from a 9 constitutional commerce clause standpoint, whether they're 10 in state or out of state. So if you're the person who 11 delivers, if you're an importer, then you deliver to the 12 California grid; when your power crosses the border, 13 you're the person responsible. If you're an in-state 14 generator, it's the generator, because they're the person 15 who puts the power on to the grid in-state. 16 So either way it's uniform treatment, whether you're out 17 of state or in state. And so it was a fairly carefully 18 crafted suggestion to try and address the imports in a way 19 that is fair and not discriminatory. So that's what we 20 recommended. 21 So, as I said, this is if there's cap and trade, 22 if electricity is in, then that's how we recommend that 23 the regulation be adopted. 24 And then we went a little bit further. The two Page 71CARB Board transcript SC rev MVEBs 042408

25 commissions recommended -- in terms of allowance PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

73 1 allocation, that's the subject of some further proceedings 2 that we're working on now. But we made two basic 3 principle recommendations. The first is that there should 4 be some auctioning if there's cap and trade. And the 5 second is that if there's that auctioning, that the 6 revenues associated with that should be recycled within 7 the electricity sector. And the reason for that is we 8 feel like electricity's a little bit different in some 9 ways. We have captive customers who have to buy 10 electricity. It's a vital commodity. And we would like 11 to be able to use revenues associated with auctioning off 12 allowances to actually help reduce further the emissions 13 in the sector. 14 And so we thought that auction revenues could be 15 used for such things as energy efficiency programs, more 16 investment and renewables. Potentially also just straight 17 bill relief for customers who will end up potentially 18 paying more under the system, they could return some of 19 the funds to them. 20 Next slide.
21 --o0o--
22 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: 23 Generally speaking, this recommendation was 24 pretty well received from the parties in our proceeding. 25 And this is a public proceeding just like rule making is PETERS SHORTHAND REPORTING (916) 362-2345
Page 72CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

74 1 at the ARB. It's, you know, open to public comment. 2 Many, many people commented over the course of almost a 3 year. 4 There were some concerns raised, as most of you 5 probably heard. The first was around the issue of just 6 cap and trade at all, is that an appropriate 7 recommendation? And, you know, did we in fact meet all 8 the requirements in AB 32 in order to get there? And as 9 I've acknowledged, we didn't completely do that. But 10 we're going to continue to work with you. 11 The other objection or concern was coming from 12 some of the southern California municipal utilities, who I 13 think would prefer not to be required to be part of a cap 14 and trade program, if there is one, and would prefer to be 15 able to sort of chart their own course and make the 16 investments that they think are reasonable and not 17 necessarily be part of a larger market system. 18 And, you know, this is something that I'm sure 19 we'll get ongoing discussion. But we felt like it made 20 sense to have sort of uniform treatment of everyone, and 21 that we could deal with some of the equity considerations 22 and some of the historical issues through the allowance 23 allocation discussion to, you know, figure out the best 24 way to deal with those issues. 25 And so, as I said, we're continuing to work on PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

75 Page 73CARB Board transcript SC rev MVEBs 042408

1 that issue. We made this very basic, general, principled 2 recommendations. But we're continuing to do analysis and 3 work with everybody, all the utilities in the state and 4 all the stakeholders, to come up with a further 5 recommendation by August. And I'm going to turn it back 6 over to Lucille, who's going to conclude. 7 MS. VAN OMMERING: Okay. Now, what does this 8 mean for the Board? 9 Over the next several months, staffs of the three 10 agencies will exam a wide array of potential strategies 11 and implementation tools. Clearly, there are no silver 12 bullets and each approach has advantages and 13 disadvantages. 14 There's general agreement, however, that emission 15 reductions in electricity and natural gas will be achieved 16 largely through regulations and energy policies. We also 17 know that a cap and trade approach can achieve greater 18 reductions at less cost than under direct regulations 19 only, and this will enter into our analysis. 20 The strategies and emission reduction trajectory 21 that the Board adopts to achieve the 2020 target will 22 affect the choices and costs of electricity and natural 23 gas for California consumers and businesses. Existing and 24 new regulations and policies will define what power is 25 produced, energy efficiency programs will help shape PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

76 1 demand, and the regulatory approaches you adopt will seek 2 to provide the greatest environmental benefit and public
Page 74CARB Board transcript SC rev MVEBs 042408

3 health benefits for the least cost.
4 --o0o-- 5 MS. VAN OMMERING: What's on the calendar over 6 the next several months? 7 The next formal scope plan workshop will be held 8 in Sacramento in May and will be webcast. The workshop 9 will review the preliminary results of the economic 10 modeling analysis in the context of different scoping plan 11 scenarios. Again, direct regulation, cap and trade, and 12 emissions fee. 13 We're also scheduling a half-day workshop for the 14 Board in May to provide a more in-depth briefing of the 15 program design elements being evaluated for the scoping 16 plan. Clearly, the electricity and natural gas sectors 17 will play a prominent role in that discussion. 18 In late June, staff will release the draft 19 scoping plan for public review and comment. 20 In July, we will hold workshops in different 21 parts of the state to get further input and to respond to 22 questions. 23 In August, the two commissions will be providing 24 you with a comprehensive set of final policy 25 recommendations for electricity and natural gas. These PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

77 1 should be released by August. 2 All this will then be wrapped up into a final 3 draft scoping plan which we will present to you at the 4 November Board meeting.
5 --o0o--Page 75CARB Board transcript SC rev MVEBs 042408

6 MS. VAN OMMERING: We're also engaged in other 7 continuing efforts as part of the plan development 8 process. 9 To ensure consistency and harmonization among the 10 various agency mandates in electricity and natural gas, 11 ARB staff meets regularly with the two commissions as well 12 as Cal/EPA and the California Independent System Operator 13 to review potential electricity and natural gas 14 strategies. These meetings will continue through the 15 scoping plan development process as well as through the 16 implementation process. 17 ARB staff is also continuing to participate along 18 with the Governor's office and Cal/EPA and the two 19 commissions in the regional Western Climate initiative. 20 As you know, California is a member of the WCI, a 21 partnership of seven western states and now three Canadian 22 provinces with a regional focus on reducing greenhouse gas 23 emissions. The WCI will present final recommendations to 24 the partners in August. Any decision California may make 25 will be in the context applicable AB 32 requirements and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

78 1 adopted state policies. 2 Staff is also tracking legislative proposals that 3 Congress is considering. Recently, there's been 4 significant activity but no final bill is expected to be 5 signed into law until 2009 at the earliest. Cap and trade 6 proposals are contained within several bills. 7 ARB staff is evaluating the economic,
Page 76CARB Board transcript SC rev MVEBs 042408

8 environmental, and public health consequences of different 9 regulatory approaches, including direct regulations, cap 10 and trade, and carbon fees. The recommendations of the 11 two commissions are being folded into these analyses. 12 We're also seeking public input on evaluation tools to 13 assess potential environmental and health impacts 14 associated with the various alternatives under discussion. 15 Staff is also conducting extensive outreach with 16 different stakeholder groups. These include the electric 17 and natural gas utilities and energy producers, the 18 Environmental Justice Advisory Committee, and other 19 environmental groups. Our stakeholder groups meet monthly 20 and touch upon different program components of the 21 economic model as well as program design. 22 That concludes our presentation. Thank you for 23 your attention. 24 Mr. Cackette. 25 CHAIRPERSON NICHOLS: Thank you. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

79 1 As you can see, this is a very brief overview of 2 a huge amount of work that's going on. But given the 3 importance of the issues, it seemed like a good 4 opportunity to give the Board a snapshot of what's going 5 on and encourage you if there are specific questions or 6 issues that come up along the way, because undoubtedly you 7 will all be hearing from stakeholders in your communities 8 to ask those questions.
9 Yes. 10 BOARD MEMBER LOVERIDGE: I don't want to close Page 77CARB Board transcript SC rev MVEBs 042408

11 your comments. But as a stakeholder -- 12 CHAIRPERSON NICHOLS: Go ahead. 13 BOARD MEMBER LOVERIDGE: -- I wanted to raise -- 14 CHAIRPERSON NICHOLS: No, no. This is an 15 opportunity for Board members to ask questions. 16 BOARD MEMBER LOVERIDGE: All right. This is 17 really directed toward the PUC and the Energy Commission. 18 And your comment -- what was the language? -- that most 19 parties in joint proceedings were pleased with the 20 recommendations. I should by full disclosure say I'm 21 representing some parts of southern California and SCAPA. 22 Our own city has some municipal utility. We saw this as 23 a -- one of the most extraordinary transfers of wealth, $1 24 billion going from southern California elsewhere, with 25 damage to the economy, no return to heightened or improved PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

80 1 economic efficiency and reduce greenhouse gas emissions. 2 And, you know, you deal with words like being fair and 3 equitable and reasonable and a level playing field. But 4 from our perspective, this is none of that, and I would 5 ask you to comment on. Because what it means for rate 6 payers in our city would be a 20 percent -- we estimate 7 20, 30 percent rate increase for L.A., and this is 8 every -- an $83 million cost every year for L.A. that -- 9 if the mayor cited three quarters of a billion dollars 10 would be coming north based on your proposal. It just 11 seems to me it doesn't pursue these questions of fair and 12 equitable and reasonable.
Page 78CARB Board transcript SC rev MVEBs 042408

13 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: Okay. 14 I can try to address that. 15 Basically I think some of the objections that 16 have been coming from southern California are assuming 17 worst-case scenarios that haven't been determined yet. 18 The recommendation right now is just to say we 19 think there should be a cap and trade program. That in 20 and of itself does not imply any wealth transfer from 21 anyone to anyone. 22 The question of how we allocate allowances within 23 that cap and trade program is a big question in terms of 24 equity and does involve questions of wealth transfer among 25 entities who are regulated. But I should also be clear PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

81 1 that we're talking about regulating power suppliers and 2 not -- and those are the folks who would be responsible 3 for the emissions. And in the case of L.A., for example, 4 they are that power supplier. In the case of some of the 5 larger investor-owned utilities, they don't all own their 6 own power. They own some of it. 7 So it's a very mixed and very diverse sector that 8 we're dealing with. And so what we're trying to come up 9 with is options that are equitable to everybody. And so 10 we haven't made any recommendations yet about -- other 11 than saying that there should be a little bit of 12 auctioning. We didn't say how much. But in and of 13 itself, that's not a recommendation for a wealth transfer 14 at all. 15 BOARD MEMBER LOVERIDGE: Where do those numbers Page 79CARB Board transcript SC rev MVEBs 042408

16 come from?
17 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: I 18 don't know, because we haven't produced any numbers yet. 19 Actually this week we presented preliminary numbers and 20 folks from SCAPA and L.A. were in our workshop Monday and 21 Tuesday of this week. But we haven't come to any 22 determination. And even if we do, it's simply a 23 recommendation, and ARB is still going to continue to 24 analyze that and ultimately make the determination. 25 So, you know, we're really trying very hard to be PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

82 1 equitable and fair in our analysis. And It's a little bit 2 regrettable and it sort of got painted as, you know, the 3 PUC attempting to, you know, screw with the nonregulated 4 utilities. But that's not the intent. And we're being 5 very careful to try and do a fair analysis. And we 6 haven't made that recommendation yet. 7 BOARD MEMBER LOVERIDGE: So that recommendation 8 is not one of the PUC and the Energy Commission? 9 CHAIRPERSON NICHOLS: Ms. Kennard? 10 Oh, excuse me. Go ahead. 11 Q Mr. percent yeah, That is correct. This is a joint 12 decision. In fact, much of the comments you saw regarding 13 the wealth transfer stem from an earlier draft and not the 14 March decision. There was significant changes made 15 between the draft and the final set of recommendations in 16 the March decision and came out. And I think a lot of 17 that adverse reaction stemmed from a preliminary draft
Page 80CARB Board transcript SC rev MVEBs 042408

18 that was released back in February. 19 But as Julie said, we are engaged with the 20 stakeholders, investor-owned utilities, and municipal 21 utilities to craft a system that will be fair. 22 The final recommendations and what I would 23 consider the final modeling results will be the subject of 24 a May 6th joint workshop where we'll be able to get more 25 feedback and have some real numbers to respond to. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

83 1 CHAIRPERSON NICHOLS: Thank you. Ms. Kennard and 2 then Professor Sperling. 3 BOARD MEMBER KENNARD: Thank you. 4 I have a question actually regarding definition. 5 I'm sure that you're going to or have done an extensive 6 cost benefit analysis. But could you give us a picture of 7 what is the term "cost effectiveness" and what is the 8 level of tolerance in terms of that? 9 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: That 10 sounds like a simple question. It's probably a fairly 11 complicated question. 12 But I guess in terms of cost effectiveness, 13 there's a couple of different ways to look at it. From 14 the perspective of AB 32, I think there's a specific cost 15 effectiveness requirement in there that I assume relates 16 to costs associated with reducing tons of greenhouse gas
17 emissions. 18 For the Public Utilities Commission and Energy 19 Commission, we often evaluate cost effectiveness based on 20 the cost of electricity or natural gas that's avoided. Page 81CARB Board transcript SC rev MVEBs 042408

21 So, for example, for energy efficiency programs energy 22 efficiency's considered cost effective if it costs less 23 than buying additional electricity supply. 24 So there are various definitions. And depending 25 on where we were in this presentation, we may have been PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

84 1 different ones. 2 Does that help? 3 BOARD MEMBER KENNARD: I think so. But as we go 4 through this process, you're going to continue to educate 5 us and the public on what is the cost benefit analysis of 6 these?
7 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: Yes. 8 BOARD MEMBER KENNARD: Thank you. 9 CHAIRPERSON NICHOLS: An important question. 10 Professor Sperling and then Ms. D'Adamo. 11 BOARD MEMBER SPERLING: You know, my first 12 observation is i'm very pleased to see all of this 13 coordination between the different commissions and ARB. I 14 think that bodes well and is a good sign, because we're 15 going to need a lot more of this. 16 Another observation, just responding to this 17 discussion here, is that, you know, we do have an AB 32 18 law that says we need to reduce the greenhouse gas 19 emissions. And it's very easy to criticize proposals. 20 But I think one of the things that we need to do is think 21 about, you know, what -- you know, there are different 22 interests that are going to be affected in different ways,
Page 82CARB Board transcript SC rev MVEBs 042408

23 and to be thinking about what are the different 24 alternatives to get those reductions instead of just 25 saying what's wrong with all of them. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

85 1 But along that line, you know, one idea that I -- 2 one proposal that I didn't hear discussed -- and I never 3 read the report, so I'm not sure if it's in there -- but 4 this idea of carbon taxes. I know it's the T word. But, 5 you know, you talk to almost anyone and they say, "Well, 6 carbon taxes seems like the best way to do it, but we 7 can't do it." I guess I would at least like to see it 8 stay on the table as one of the options. It is in many 9 ways an attractive way to do it. Is that -- 10 MS. VAN OMMERING: Well, it's kind of a dual 11 response there. Number one, we are looking at an option 12 of -- some people call it a carbon tax, some people call 13 it a carbon fee. I think that -- but from a 14 legislative -- and we're doing it for purposes of looking 15 at the variety of things that can get the emission 16 reductions, that's the primary goal of AB 32, at the least 17 cost to the society and to the economy per se. So 18 therefore, that's one option we're looking at. 19 But one of the things that we also understand 20 from a carbon tax or a financial type of a scenario is 21 that whereas you know what the cost will be, you're not 22 necessarily sure or certain of whether or not that will 23 induce the kinds of behaviors that you want. Versus on 24 the other side of the spectrum, the direct regulation, 25 where you certainly know what you're going to get in terms Page 83CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

86 1 of emission reductions but perhaps at an unacceptable 2 cost. So we're weighing all those different options to 3 see which is the most effective. 4 But the other thing as well that we may have to 5 come to grips with is that if in fact it is a so called 6 tax, that the Legislature would then have to get involved 7 in that. 8 CHAIRPERSON NICHOLS: And speaking of the 9 Legislature, I'd like to take a pause in our discussions 10 here to note that we've been joined by Senator Perata. 11 And, Senator Perata, did you wish to say a few 12 words to the Board on this or any other topic? We'd be 13 happy to call you out of order. 14 You want to talk about the Oakland situation. 15 Are you willing to wait then while we get into that? Able 16 to wait, I should say. 17 Well, how many more comments do we have on this 18 particular item? A couple, I take it. 19 One more from you, one -- two more. And then 20 we'll move on into the -- I'll say a couple words. 21 All right. Thank you very much. Appreciate it. 22 BOARD MEMBER SPERLING: So my last question is -- 23 one of you mentioned -- made the assertion that most of 24 the reductions could be or would likely be achieved -- I'm 25 not sure of the exact word -- by mandatory approaches. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 Page 84CARB Board transcript SC rev MVEBs 042408

87 1 And if I understand that correctly, that would be 2 energy -- that would be efficiency standards and the RPS, 3 is that right?
4 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: 5 That's correct. 6 BOARD MEMBER SPERLING: And has there been some 7 kind of analysis that's been done, you know, how much 8 reduction is expected? 9 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: Yes, 10 there has. And, in fact, we're working on finalizing that 11 analysis. But basically because there are already 12 mandatory energy efficiency and renewables targets, we 13 know we're going to get those, and we know how much they 14 cost. And so those are sort of, in a sense, in the 15 baseline. And then there could be additional on top of 16 that depending on the question of cost effectiveness and 17 other analysis. But, yes. 18 BOARD MEMBER SPERLING: So that means if there's 19 a cap-and-trade-type program applied in addition, the role 20 of that is relatively small for the 2020 requirements?
21 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: 22 That's what we think. And that's based on -- the 23 analysis that we've done is based on current technology. 24 And obviously one of the benefits potentially of a cap and 25 trade is that you find that there are cheaper things out PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

88 1 there that you didn't know about. So sort of by Page 85CARB Board transcript SC rev MVEBs 042408

2 definition, we can't do analysis that's going to help us 3 determine if there's going to be cost reductions or if 4 there are going to be new technologies that come in. But 5 using current technology, it looks like a lot of the 6 additional reductions in the sector are going to be 7 relatively expensive. And so that a cap and trade might 8 not produce much in the short term. But obviously we 9 would continue with the efficiency and renewables targets 10 as well to try and get the reductions. 11 CHAIRPERSON NICHOLS: Thank you. 12 Let's just go down the line here then. 13 BOARD MEMBER D'ADAMO: Well, actually in 14 follow-up to that. I guess I'm at a point where I'm just 15 trying to better understand the point of regulation. And 16 I think I understand a little bit more about why the focus 17 would be on the deliverer in terms of a regulatory 18 approach. But I'm just a little I guess having heartburn 19 here on the conservation side, because it seems to me if 20 the point of regulation is at the retail point, that there 21 might be additional opportunities on the conservation 22 side. And with the approach that you're recommending that 23 it be at the point that the power comes into the grid, 24 especially if we have a cap and trade program that may not 25 produce much, then where's the incentive, where's this pot PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

89 1 of money that we could put into more energy efficiency 2 programs beyond just the building standards? That I'm 3 looking for opportunities for us to actually drive
Page 86CARB Board transcript SC rev MVEBs 042408

4 behavioral change in terms of reduced use.
5 CPUC DIRECTOR OF STRATEGIC PLANNING FITCH: 6 You've just encapsulated approximately the first 7 year of debate in our proceeding. So it was a very good
8 statement. 9 You may know, we actually started at the Public 10 Utilities Commission more than a year ago -- maybe two, 11 two and a half years ago now -- proposing to have the 12 regulated entity be the utility for that very reason, 13 because we saw it that made the most sense in terms of the 14 incentives for additional energy efficiency and 15 renewables, but primarily efficiency, where those 16 incentives don't naturally exist. So it sort of made 17 sense to us from a regulatory standpoint. And that was 18 before AB 32. So we were not thinking in the context of 19 multi-sector the way we are now. 20 But that recommendation and that starting point 21 caused a lot of consternation among market players. There 22 was a particular concern about, if we were to regulate at 23 the utility point, that that could cause interference with 24 basically the functioning of the electricity market. And 25 we got a lot of objection to that. So we crafted this PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

90 1 alternative approach, which is really on the supply side 2 rather than on the demand side, for regulation. But what 3 it means is additional energy efficiency is not going to 4 be automatically incentivized by that approach. Instead, 5 really the need to continue to have mandatory goals and 6 requirements on the utilities in order to get those Page 87CARB Board transcript SC rev MVEBs 042408

7 reductions. 8 BOARD MEMBER D'ADAMO: I just think as we move 9 forward we need to figure out a way to bring this home to 10 consumers, because there does -- as we move forward, the 11 biggest reductions are going to be where the power is 12 produced. But we need to somehow get this to the point 13 that the average citizen can participate. Whether that be 14 by way of incentives or some other program, I don't know 15 what the answer is. 16 Q Mr. percent I just wanted to announce that yesterday 17 the Energy Commission adopted the 2008 building standards, 18 which will give us long-term benefits down the road and 19 also assist in achieving our greenhouse gas reduction 20 goals. And we're very excited about that. And those will 21 be implemented in 2009. 22 CHAIRPERSON NICHOLS: Great. Thank you. 23 Dr. Balmes. 24 BOARD MEMBER BALMES: So I wanted to second 25 Professor Sperling's comment about the integration across PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

91 1 agencies. But I also wanted to point out one other area 2 integration. Slide six of the CARB presentation is a nice 3 slide. It has emissions, health, and climate change. And 4 the point was made that strategies to reduce greenhouse 5 gas emissions can also have health impacts by reducing 6 criteria and actually toxic pollutants. 7 And then the last slide had a bullet about 8 socioeconomic assessments and modeling being in there.
Page 88CARB Board transcript SC rev MVEBs 042408

9 But I don't see necessarily health in there. And I think 10 that AB 32 does provide us an historic opportunity to 11 integrate our air quality control efforts with greenhouse 12 gas emissions efforts. And so I just encourage that 13 always be -- that health be part of the discussion. And 14 in particular, I'm worried about it in a cap and trade 15 system. Heavy polluters, you know, old coal-fired power 16 plants, might elect to trade as opposed to control their 17 emissions. And that would impact communities often of a 18 lesser socioeconomic status. 19 So I think the co-benefits have to be -- the 20 health co-benefits have to always be considered especially 21 in communities around emitters. 22 MS. VAN OMMERING: Dr. Balmes, we completely 23 agree with you. And, in fact, the AB 32 requirements 24 require us not to avoid the kinds of progress we're 25 making. In fact, this has to contribute to it. There has PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

92 1 to be co-benefits. And with regard to that, we are 2 working very closely with the environmental justice 3 communities and their leaders to try and figure out a way 4 of providing -- or ensuring that there continues to be a 5 level of protection around some of these sources. And 6 that if there is a cap and trade program, that that is not 7 used as a way to avoid the requirements. 8 BOARD MEMBER BALMES: I'm glad to hear that. 9 Thank you. 10 CHAIRPERSON NICHOLS: I'd like to draw this 11 discussion for the moment to conclusion. But I encourage Page 89CARB Board transcript SC rev MVEBs 042408

12 Board members who are going to be dealing with these 13 issues again in June and December to continue to ask 14 questions and follow the discussion. 15 I just want to re-emphasize that it is this 16 Board's responsibility to make the final judgments. And 17 we much appreciate the input of the energy agencies. But, 18 frankly, I think part of our problem in terms of the 19 response to date has been that, proceeding in a 20 business-as-usual fashion and doing their job as they 21 normally do, the energy agencies have tread into an area 22 that has a lot more public interest and many more 23 stakeholders than normally participate in your 24 proceedings. And, you know, now that the horse is out of 25 the barn, we have to find a way to bring it back in and do PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

93 1 some more discussion. And part of that is really avoiding 2 using jargon, terms, or economic language that maybe means 3 something to the experts but really does not mean much to 4 regular people, including, frequently I've discovered, the 5 people who are involved most directly. Just even terms 6 like "cap and trade," it sounds like people are required 7 to go out there and trade something. And that's one of 8 the issues I think that the public definitely has concerns 9 about. 10 So I think we will -- this is going to continue 11 to be worked on now in many forms. But at least we've got 12 a good start. And I really do want to express my 13 appreciation for the amount of effort that was put in by
Page 90CARB Board transcript SC rev MVEBs 042408

14 the CEC and PUC. I know this has been above and beyond 15 what you normally do as well. So we want to thank you for 16 that, and appreciate your continued involvement. 17 And I don't believe any public comment on this, 18 which is great. So let's close this item and move to the
19 next. 20 We love public comment, but sometimes we're 21 interested in speed. 22 All right. The next item that we're now shifting 23 into is an informational report on the results of a health 24 risk assessment that was done for the West Oakland 25 community. This community experiences elevated exposure PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

94 1 to diesel particulate matter emissions from many nearby 2 goods movement activities. A study was done to define the 3 level of health impacts from the vehicle emissions on the 4 community. And it fulfills a commitment that was made by 5 the Board during the development of the Goods Movement 6 Emissions Reduction Plan. 7 So it's an important step forward I think both in 8 terms of demonstrating the methodology and also of testing 9 our ability to communicate with the public about the 10 effects. 11 So, Mr. Cackette, would you introduce the item? 12 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Thank 13 you, Chairman Nichols. 14 Over the past year and a half ARB staff has 15 collected -- or collaborated with the Bay Area Air Quality 16 Management District, Port of Oakland, and the Union Page 91CARB Board transcript SC rev MVEBs 042408

17 Pacific Railroad to conduct a health risk assessment. The 18 study defines the emission impacts and health risk from 19 exposures to diesel particulate matter due mainly to 20 activities at the Port of Oakland and local freeways and 21 other roads in and near the West Oakland community. West 22 Oakland community is bounded by the Port of Oakland, the 23 UP rail yard, and several freeways. The community covers 24 about 1800 acres and has a population of about 22,000 25 people. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

95 1 This health risk assessment is the third in a 2 series of comprehensive community studies that have been 3 done to exam the health impacts of goods movement related 4 activities. Back in 2004 we evaluated the impacts of 5 diesel PM from the Union Pacific rail yard in Roseville. 6 The following year we evaluated the impacts from the ports 7 of Los Angeles and Long Beach. In addition, we are 8 currently conducting health risk assessments for 16 rail 9 yards. 10 This study is the most detailed and comprehensive 11 health risk assessment for a community in California. 12 Last month the staff presented the preliminary results to 13 the community. Today the staff will summarize for the 14 Board the key findings of the study. 15 I'll now ask Ms. Peggy Taricco, Manager of the 16 Technical Analysis Section, to give the staff 17 presentation. 18 (Thereupon an overhead presentation was
Page 92CARB Board transcript SC rev MVEBs 042408

19 presented as follows.)
20 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 21 Thank you, Mr. Cackette. Chairman Nichols and 22 members of the Board. It's a pleasure to be here today. 23 As Mr. Cackette said, I'm going to present the 24 preliminary results from the risk assessment that we did 25 for the West Oakland community. These are preliminary PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

96 1 results because, while we have completed the data 2 analysis, we haven't completed the written documentation 3 for the entire study. But we thought it was important to 4 get the findings from the study out into the public domain 5 for several reasons: 6 The Prop 1B application period is open. We have 7 ARB staff efforts on two upcoming very important rules 8 that are underway - the private fleet rule and the 9 oceangoing ship rule. The Port of Oakland and the Bay 10 Area are both working on mitigation strategies. And last, 11 but clearly not least, the West Oakland community has been 12 waiting patiently for these results, and we wanted to 13 share them with them. 14 Before I get into the presentation, I'd like to 15 let you know that in March of this year we did share these 16 results with the community. Supervisor Hill was there. 17 The results that we're going to provide you today are the 18 same. The take-away message is the same. But they have 19 been packaged different. So particularly if there are 20 community members in the audience, we don't want them to 21 be surprised and think we're talking about something Page 93CARB Board transcript SC rev MVEBs 042408

22 different if they don't see the same slides. 23 CHAIRPERSON NICHOLS: Ms. Tarrico, before you go 24 further into your presentation. I misunderstood the 25 earlier conversation that we had back and forth with PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

97 1 Senator Perata. And I would like to actually ask him to 2 come up and just do an introduction before we get into the 3 staff presentation. 4 Thank you. Appreciate your flexibility. 5 Thank you, sir. 6 SENATOR PERATA: Thank you, Chairwoman. I 7 appreciate it. 8 I have seen the report. So as much as I'd love 9 to stay and listen to it, I'll need to talk and run. 10 First of all, I come here today to praise, not 11 bury you. So I know there's been some doubts about that 12 in the past. 13 I also -- I hope that one of the doctors here 14 who's in pulmonary work -- I'm an asthmatic, and I'm 15 having a particularly bad time talking, much to the 16 chagrin obviously of my staff. They hate the fact that I 17 can't talk much. 18 I also want to thank you for meeting in Oakland. 19 This is my home and the constituencies that I've 20 represented for all of 22 years, either on the Board of 21 Supervisors or in the Legislature. 22 Oakland is very proud of its maritime history and 23 the jobs and revenues that the port generates. But as
Page 94CARB Board transcript SC rev MVEBs 042408

24 this item shows, Oakland is also a city with a huge public 25 health problem; problems where the technology frankly to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

98 1 cure the problems outdistances the public policymakers' 2 will to do it. 3 These items both show the challenges and the 4 opportunities in logistics and goods movement that are 5 centered at the Port of Oakland. And, Ms. Nichols, you 6 mentioned a few moments ago on the previous item that we 7 have to be careful that we don't slip into jargon that 8 real human beings don't understand. And happens a lot. 9 And I had a professor once that said that language is the 10 vehicle of oppression. And I just would modify it, saying 11 it's the vehicle of obfuscation. So we have entered the 12 lexicon era where logistics has a different meaning today 13 than it did years ago. The same way, when I was growing 14 up, you were told somebody was transparent, it wasn't a 15 compliment. You know, you were a bubble head. And now 16 we're striving for transparency. So we've got to be 17 careful in the use of the language. 18 But I don't think there's any doubt that the 19 problems that we have right now being discussed with this 20 assessment are clear evidences that the residence here -- 21 we now have some data that supports what residents have 22 known all along; and that if you live near the port, it's 23 unhealthy, it makes people sick, it shortens your 24 lifespan. And the incidences of cancer are much higher 25 than they are in comparable communities away from the PETERS SHORTHAND REPORTING (916) 362-2345 Page 95CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

99 1 activity of the port. And that you have 300 percent more 2 exposure to diesel pollution or particulate matter living 3 in this area. And the 22,000 is a number that's very 4 staggering. Most people don't think we're talking about 5 nearly, you know, as many people. They believe we're 6 talking about a few census tracks. There's a lot of 7 people. And this is on the lower socioeconomic scale. 8 But this can all not be a coincidence. And if it 9 is a scientific coincidence, that should be studied by 10 academics. But for us politicians and quasi-politicians, 11 what we need to do is take immediate action. 12 I don't think the choice here has to be between 13 having a vibrant port or clean air. Rather you can have a 14 clean port, free of particulate matter in its operations. 15 When I was the lead negotiator for Proposition 16 1B, which was the $20 billion transportation bond, I made 17 sure that we put a sizable amount of money in the bond for 18 air pollution or air pollution remediation. And 19 particularly, the money goes to those sources of pollution 20 generated by goods movement, i.e., the ports. 21 We intended the immediate use of these fund, not 22 the long-range use. And I was both surprised and a little 23 bit put off by discussions that I heard at the various 24 ports talking about the value of new trucks versus 25 retrofitting, because the fact is that you can probably PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

Page 96CARB Board transcript SC rev MVEBs 042408

100 1 get five or six trucks retrofitted for the cost of the new 2 truck, forgetting how do you finance this whole people 3 with people that are barely making a living. 4 To me, what you want to use that billion dollars 5 for is to get to the goal line as fast as you can. And so 6 I would urge you in all of your deliberations and in your 7 directives that receiving the money should be contingent 8 upon taking measures that have immediate results. We 9 could sit here and talk about the benefits of 10 biodegradable material driven vehicles or clean air 11 vehicles, natural gas, you name it. But while we're 12 sitting there philosophizing, wouldn't it be wonderful -- 13 kids have asthma. People are dying. And it's no more 14 complicated than that. 15 What's important to remember is that if we 16 delay -- I won't even say unnecessarily; to me, a delay is 17 a delay -- that folks are not going to be -- to stand for 18 it. But as they say, past performance is the best 19 indicator of future performance. And why would anybody 20 give us any more money to invest in California if we're 21 not doing with it what we are in an efficient manner? 22 Now, the average person does not understand why anybody 23 would buy a new truck if they can make the old one work. 24 By the way, those old trucks are going to end up somewhere 25 else polluting somewhere else. I mean so that's just a -- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

101 1 you know, it's unclear how and why that thinking takes 2 place. But those with the gold make the rules. Page 97CARB Board transcript SC rev MVEBs 042408

3 What I would hope that we would do is recognize 4 that people in West Oakland have -- if action is not taken 5 forthrightly, have two choices. They either have to go 6 the legal route and then we decry how we're holding up 7 prosperity and progress, or they have to go into guerilla 8 politics, which means that they have to effectively start 9 to wage war against the port in order to get a result that 10 they believe that they are entitled to. And, remember, 11 these people are talking about their families. This is 12 nothing that's -- you know, this is not Democrats versus 13 Republicans, progressives versus conservatives. This is 14 very simple, a life and death matter about individuals' 15 families. 16 I think we can have it both ways. I think we can 17 have a vibrant port whose commerce and economy sustains 18 the entire region, and we can still protect the public 19 from the impact that has befallen those who live in the 20 area. So I would again, in summary, just ask you to look 21 at this problem as one that has an immediate solution. 22 Take the money -- and you've done a marvelous job making 23 some very difficult decisions in the distribution of 24 funds. But there's money there. It was put there for 25 this purpose. Between that money and the Moyer funds and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

102 1 other things that may be generated, the money's there. I 2 would just urge you to tell folks that, you know, you're 3 going to get the money when and if you are able to do it 4 as efficiently and as effectively as possible the greatest
Page 98CARB Board transcript SC rev MVEBs 042408

5 stretch for that dollar. And we know the technology's 6 here. Now we need the leadership. And, you know, it's 7 far better coming from you than from us, you know. We 8 will sit around in a dither. I can't tell you how 9 difficult it was to put a billion dollars into a bond for 10 air quality. You know, it was really, really difficult. 11 But now having done it, I would sure like to make good on 12 all those people that were a little skeptical, in order 13 to -- and, you know, that again, the skeptics were on both 14 sides. 15 So that's why I'm here today. I want to thank 16 you for what you do, you know, sitting here and listening 17 to what you're listening to and what you have to put up 18 with. I don't know why you do it, but thank God you do. 19 And I would just hope that if there is anything I can do, 20 call me. Mary will be up next week or next month or 21 whatever it is -- this coming -- you know, come and visit. 22 I'd be happy to -- I'll be there. And if there's 23 something that's not getting done that you think we can 24 do, I'll be there to swing a bat with you. 25 So thanks so much for the opportunity. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

103 1 CHAIRPERSON NICHOLS: Well, thank you very much 2 for coming. You know, we really appreciate what you did 3 with Proposition 1B, because without those funds we would 4 be in a much, much more difficult position trying to 5 implement our roles. And I very much appreciate your 6 comment about needing to get the most health risk 7 reduction that we possibly can out of those funds as Page 99CARB Board transcript SC rev MVEBs 042408

8 quickly as possible. I think we're all on the same wave 9 length as far as that's concerned. 10 It is sometimes hard to resist the desires of 11 people who want to, you know, put these funds into our 12 broader goals in terms of retransformation and new fuels, 13 as you said. And we know that's coming and we have to be 14 headed in that direction as well. But this money is 15 supposed to be to protect the health of people who live in 16 these communities, and we understand -- 17 SENATOR PERATA: It's really -- a billion is 18 not -- in the overall scheme of things, not very much 19 money. It really isn't. 20 CHAIRPERSON NICHOLS: Yes, unfortunately. 21 SENATOR PERATA: But if it is well spent, I think 22 it's a great calling card for the next round. And there 23 must be additional rounds. 24 CHAIRPERSON NICHOLS: I appreciate that. 25 Mayor Loveridge, did you have a question? Oh, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

104 1 okay. 2 All right. Well, thank you so much. Thanks for 3 coming. 4 SENATOR PERATA: Thank you very much. I 5 appreciate it. 6 CHAIRPERSON NICHOLS: All right, then, a good
7 intro.
8 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Yes. 9 Well, then I'll continue. My presentation is going to be
Page 100CARB Board transcript SC rev MVEBs 042408

10 brief, and I'll try to abbreviate even more. It's been a 11 long morning, I know, for everyone. 12 I'll give a real brief overview and then we're 13 going to focus mainly on the results and our 14 recommendations with respect to future action. 15 As you heard earlier, West Oakland's a small 16 community of about 22,000 people. It covers about three 17 square miles. And it's a very diverse neighborhood. It's 18 not uncommon to find a residence, a light industrial area, 19 and a commercial facility all on the same block.
20 --o0o-- 21 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: This 22 gives you kind of an aerial overview of the community. As 23 you can see here, it's surrounded by three freeways, the 24 I-880, 580 and the 980; it's located adjacent to the Port 25 of Oakland, which is the fourth busiest container port in PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

105 1 the nation; and the UP and BNSF intermodal rail yards. 2 In light of the growth in the goods movement 3 activities in the area, many residents have voiced 4 concerns about exposures to diesel PM.
5 --o0o-- 6 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: This 7 was probably the most comprehensive risk assessment that 8 we've undertaken to date, and we appreciated having the 9 opportunity to collaborate on the effort with the Bay Area 10 Air Quality Management staff, staff from the Maritime Port 11 of Oakland and the Union Pacific Railroad. In particular 12 they provided valuable assistance in preparing the Page 101CARB Board transcript SC rev MVEBs 042408

13 emissions inventory. 14 The purpose of the study was to help us better 15 understand the impacts of diesel PM on the West Oakland 16 community and to provide tools that would allow us to 17 evaluate the impacts from different emission sources and 18 inform the development of mitigation strategies. 19 The timing was such that it's allowing us to 20 complement the recently released draft HRA for the UP rail 21 yard. 22 And, last, the study has provided very useful 23 information for two major regulation that you're going to 24 be considering this year - the private fleet rule and the 25 oceangoing ship main engine fuel rule. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

106
1 --o0o--
2 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: As 3 most of you know, health risk assessments are useful tools 4 for comparing the potential health impacts of various 5 sources of air pollution. Just to very briefly recap, 6 there are three key elements in a risk assessment: 7 There's development of an emissions inventory. 8 In this case we're looking at diesel PM. 9 Air dispersion modeling to predict the ambient 10 concentrations of diesel PM. 11 And then estimation of the potential health 12 impacts from exposures to those predicted concentrations. 13 For this study, we developed a very detailed and 14 comprehensive diesel PM emissions inventory for all the
Page 102CARB Board transcript SC rev MVEBs 042408

15 activities surrounding the West Oakland community. We 16 used the CALPUFF model to estimate the ambient levels of 17 diesel PM. This is a very sophisticated model. This is 18 the first time that we've used it in a risk assessment. 19 And can handle highly varying wind fields, complex 20 terrain, and the effects of meteorological conditions on 21 pollutant transport, transformation, and removal. 22 In the study, we evaluated cancer impacts on the 23 local community and non-cancer impacts on the region using 24 methodologies that we have used previously. We followed 25 the OEHHA guidelines for preparation of health risk PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

107 1 assessments. And for non-cancer we used the same 2 methodology that we did with the development of the Goods 3 Movement Emission Reduction Plan.
4 --o0o--
5 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: On 6 this slide we show you the various emission sources of 7 diesel PM that we inventoried. We covered all the 8 vehicles and equipment that are used in the movements of 9 goods at the ports and at the rail yard - the ships, the 10 trains, the harbor craft, cargo handling equipment, the 11 on-road trucks. We also inventoried construction projects 12 in the area, the off-road equipment that's used there, 13 distribution centers, and the Amtrak facility. 14 So as you can see, we inventoried both land-based 15 emission sources that occurred in and near the community 16 as well as those emissions that occurred over water in the 17 bay, those emissions from harbor craft and oceangoing Page 103CARB Board transcript SC rev MVEBs 042408

18 vessels.
19 --o0o--
20 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: We 21 had two domains for our modeling. We had a very large 22 regional modeling domain to ensure we studied all the 23 diesel PM emissions that could potentially impact the West 24 Oakland community. As you can see here, the larger 25 regional modeling domain was about 100 by 100 kilometers, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

108 1 which covered about 3800 square miles.
2 --o0o--
3 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: We 4 also had a smaller domain with a finer resolution covering 5 the community to provide a more detailed estimate of the 6 localized impacts on the community.
7 --o0o--
8 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: One 9 advantage of the CALPUFF model is that it's very adept at 10 handling ground level and upper air meteorology that can 11 impact the concentrations of diesel PM. And for this 12 study we were able to take advantage of data from 34 13 meteorological stations in the Bay Area. And this is 14 particularly important in the Bay Area where we have 15 emission sources that are occurring over a very wide area 16 and over different terrains. We have the vessels on the 17 water. We have land-based emissions. And of course, as 18 you know, there's flat areas in the Bay Area and hilly 19 areas. All that can have big impacts on the wind flows in
Page 104CARB Board transcript SC rev MVEBs 042408

20 the area.
21 --o0o-- 22 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Now, 23 for our results. I'm going to present the results of our 24 analysis of the potential cancer risks on the local 25 community. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

109 1 I'm also going to provide estimates for the 2 regional non-cancer health impacts due to diesel PM 3 emissions from the ships and on-road trucks operating in 4 the Bay Area. 5 And the last element will be -- we're going to 6 talk about how we expect these health impacts to change in 7 the future.
8 --o0o--
9 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 10 First, the localized cancer risk.
11 --o0o-- 12 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: For 13 the West Oakland community, we evaluated the diesel PM 14 impacts from all the land-based localized sources of 15 diesel PM as well as emissions from ships and harbor craft 16 that travel in and around the bay. 17 What we found was that the West Oakland community 18 has elevated ambient diesel PM levels, about three times 19 the background levels that we see in the Bay Area. And 20 these elevated levels result in an estimated lifetime 21 potential cancer risk of about 1200 excess potential 22 cancer cases per million people. Page 105CARB Board transcript SC rev MVEBs 042408

23 And as you'll see a little bit later, the 24 different emission sources - the ships, the locomotives, 25 the cargo handling equipment - all had different PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

110 1 contributions to the risk levels that we were seeing in 2 the community.
3 --o0o-- 4 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: This 5 slide provides you with the risk isopleths from all the 6 diesel PM sources impacting the West Oakland Community. 7 Many of you have probably seen these before. Isopleths 8 provide a visual depiction of how the risk levels may vary 9 in a region. 10 The risk level is indicated on the red line. And 11 within the boundaries of that red line are the areas 12 impacted by the risk levels. The bigger the isopleth -- 13 or sometimes we call it the footprint -- the greater the 14 area impacted by a given source. The brown -- I guess 15 it's not showing up real good on here. The brown dashed 16 line on the figure represents the boundary for the West 17 Oakland community. 18 And as you can see here, within the West Oakland 19 communities there are areas with risk levels greater than 20 a thousand and some areas with levels even higher, over 21 1500 in a million. The 1200 in a million risk level that 22 I mentioned earlier is the population-weighted or the 23 overall average risk for the West Oakland community.
24 --o0o--
Page 106CARB Board transcript SC rev MVEBs 042408

25 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: This PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

111 1 next chart provides a little more detail on the impacts 2 from the various sources on the West Oakland community. 3 If you look at the individual source categories, 4 you can see that, by and far, on-road trucks come out on 5 top, being responsible for about 70 percent of the overall 6 risk that we're seeing in the West Oakland community, 7 followed by ships, harbor craft, and locomotives.
8 --o0o--
9 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: As 10 part of the study, we also evaluated six non-cancer health 11 impacts in the broader Bay Area due to directly emitted 12 diesel PM emissions from ships and trucks. 13 The methodology, as I mentioned earlier, is 14 similar to what we used -- or it's consistent with how we 15 estimated the non-cancer health impacts when we developed 16 the Goods Movement Emission Reduction Plan. 17 During the development of that plan, we estimated 18 that in the Bay Area directly emitted diesel PM from goods 19 movement activities in the Bay Area were responsible for 20 about 160 premature deaths per year. 21 Based on the results from our analysis in this 22 study, we found that emissions from ships and trucks are 23 responsible for about 130 premature deaths or about 80 24 percent of the regional non-cancer health impacts due to 25 directly emitted diesel PM from goods movement activities. PETERS SHORTHAND REPORTING (916) 362-2345

Page 107CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

112
1 --o0o-- 2 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: The 3 non-cancer health impacts we evaluated are shown on this 4 slide. And as you can see, emissions from ships are 5 responsible for about 35 premature deaths or 20 percent of 6 the estimated 160 premature deaths in the Bay Area.
7 --o0o-- 8 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: And 9 for trucks we found about 95 premature deaths or 60 -- 10 there are percent of the estimate 160 premature deaths due 11 to directly emitted diesel PM from the goods movement
12 activities. 13 Both of these estimates for trucks and ships were 14 derived from our modeling results and the goods movement 15 emission inventory for these categories. And I'd like to 16 mention that both of these inventories are currently under 17 improvement as we work on our two rules. And so that when 18 those rules are brought to you later this year, the 19 estimates may be somewhat refined from what we're sharing 20 with you today.
21 --o0o--
22 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: As 23 part of this study, we also wanted to see how the impacts 24 from diesel PM are going to change in the future. And to 25 do this, we projected emissions taking into account the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

113
Page 108CARB Board transcript SC rev MVEBs 042408

1 expected growth in activities and the decline in emissions 2 that we're counting on due to ARB regulatory efforts.
3 --o0o--
4 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: In 5 our projections we took into consideration the many 6 actions that you have taken to date, which are shown here 7 on this slide. We also incorporated the projected 8 benefits from the private fleet rule and the ship main 9 engine rule that you're going to consider later this year.
10 --o0o--
11 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: As 12 you can see, the adopted measures -- and that's the dashed 13 middle line -- are going to reduce emissions by about 30 14 percent in 2020 relative to levels in 2005; and adding in 15 the two planned measures is going to increase the overall 16 reduction in emissions to about 70 percent.
17 --o0o--
18 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 19 These reductions in emissions are going to result 20 in a decrease in cancer risks expected in the West Oakland 21 community. 22 As you can see on this slide, we predict that the 23 potential cancer risks are going to be reduced by 80 24 percent in 2015. About 40 percent of that reduction is 25 due to the two pending rules that are under development PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

114 1 right now. 2 And then in 2020 we see a slight increase in the 3 overall risk relative to 2015 as growth begins to offset Page 109CARB Board transcript SC rev MVEBs 042408

4 our emission reduction programs.
5 --o0o--
6 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: For 7 the broader Bay Area region, we see a similar trend in the 8 non-cancer health impacts from ships and on-road 9 heavy-duty trucks. 10 And as you can see, the last few slides 11 underscore the benefits of your work to date and the 12 importance of the upcoming rules that you're going to see 13 later this year.
14 --o0o-- 15 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Now, 16 for the findings and recommendations. 17 To quickly recap, what we found was that the West 18 Oakland community is exposed to elevated ambient diesel PM 19 levels about three times the background levels in the Bay 20 Area. And these elevated levels result in an estimated 21 lifetime potential cancer risk of about 1200 excess 22 cancers per million. 23 And about 85 percent of the risk is due to the 24 land-based emission sources near the community, and about 25 15 percent are due to the overwater emissions from ships PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

115 1 and harbor craft.
2 --o0o--
3 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 4 Trucks, by and far, have the greatest impact on 5 the local community, followed by ships and harbor craft.
Page 110CARB Board transcript SC rev MVEBs 042408

6 --o0o--
7 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 8 And, fortunately, because of your actions, we 9 predict that the risks in the West Oakland community will 10 decline by about 80 percent by 2015. And with respect to 11 regional health impacts, we're expecting to see similar 12 trends. And that is the good news. 13 However, the not so good news is that the 14 remaining risk in West Oakland is still relatively high, 15 about 200 in a million. And it's important that we 16 identity ways to bring that down.
17 --o0o--
18 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: So 19 based on our results, we have identified several 20 recommendations.
21 --o0o--
22 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 23 First, it's clear that we need to do more. We 24 need to take steps to bring down the risks more quickly in 25 the near term and we need to identity what more needs to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

116 1 be done to make sure that over the long term emissions 2 continue to decline. This is really important in light of 3 the expected growth in trade. 4 This isn't something that can be done by any one 5 agency. It's going to take a cooperative effort, one 6 where the ARB, the Bay Area, the Port, its tenants, the 7 railroads, and the community all work together to 8 identity, prioritize, and implement additional measures Page 111CARB Board transcript SC rev MVEBs 042408

9 beyond those that are already identified in the Goods 10 Movement Emission Reduction Plan. 11 Second, there is money available through Prop 1B 12 and the Carl Moyer program. And we need to take advantage 13 of that and leverage these funds to help ease the 14 transition to clean technologies and to foster particular 15 early reductions. 16 It's also critical that we have successful -- or 17 I should say continue to have successful regulatory 18 efforts at the state level. In particular, the two 19 regulations, the private fleet rule and the OGV main 20 engine rule, that you're going to consider this year are 21 going to be very important to driving down the risks in 22 the West Oakland community and the broader region. And 23 these are not going to be easy regulations. It's 24 important that all the stakeholders work together to 25 ensure a successful outcome for these two rules. And we PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

117 1 need to continue to work together to implement the rules 2 that are already on the books, in particular the port 3 drayage rule and the shore side power rules that are just 4 getting -- where implementation is just getting underway. 5 And last, as with our previous assessments, we're 6 able to answer some questions, and we always seem to 7 generate some new ones. In this case, as we worked 8 through the HRA, we identified that more work is needed to 9 help us better understand how trucks travel in and through 10 the West Oakland community. And we are recommending that
Page 112CARB Board transcript SC rev MVEBs 042408

11 the Port and the Bay Area District work together to better 12 understand the truck activities in and around the 13 neighborhood. And I'm pleased to say that that effort is 14 already underway. 15 So with that, that concludes our presentation 16 today. And if you have any questions, we'd be happy to 17 answer them. 18 CHAIRPERSON NICHOLS: Thank you for an excellent 19 presentation. It really sets the stage for our report 20 that we're going to be hearing a little bit later about 21 how we're doing on the goods movement plan and also for 22 the rulemakings that are going to be coming forward. 23 This is a relatively light agenda in terms of 24 regulatory activity. Since we don't have rulemakings in 25 front of us today, it's kind of a peaceful, quiet time, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

118 1 hopefully to assess where we need to be going. And your 2 report I think makes it very clear what one of our top 3 agenda items is going to have to be. 4 Are there questions at this point for the staff? 5 Okay. And then we'll turn to the public. 6 BOARD MEMBER SPERLING: Just a simple -- just to 7 understand better. On those freeways there's a lot of 8 trucks. I didn't hear anything that indicated what 9 percentage of those trucks are connected with the Port 10 activities and which ones are just, you know, going 11 through. And that would have a big effect on the kinds of 12 actions we take. 13 Do you know the answer to that? Page 113CARB Board transcript SC rev MVEBs 042408

14 MS. LINLEY: Hi. My name is Nicole Linley. I 15 work in the Regulatory Support Section. 16 Our preliminary estimates say that it's around 15 17 percent of the heavy heavies. But we're still working on 18 refining that estimate. 19 BOARD MEMBER SPERLING: 15 percent are through --
20 MS. LINLEY: -- Port 21 BOARD MEMBER SPERLING: -- are from the Port? 22 MS. LINLEY: Yeah. 23 BOARD MEMBER SPERLING: And the rest are not?
24 MS. LINLEY: Correct. 25 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: This PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

119 1 is Dan Donohoue. 2 As Peggy indicated, that is one of the areas that 3 we need to look at more clearly. But we did, with the 4 data that was available, the best we could to separate out 5 what of those port trucks had their origin and destination 6 to the port and leaving there, and then what was operating 7 basically on the 880, 980, and 580. And right now it was 8 a little bit surprising that the percentage of the trucks, 9 you know, the heavy heavies coming through there that are 10 going to other destinations and have no direct connection 11 with the Port. 12 CHAIRPERSON NICHOLS: All right. 13 Yes, Mr. Balmes. 14 BOARD MEMBER BALMES: Just a follow-up question 15 to that.
Page 114CARB Board transcript SC rev MVEBs 042408

16 You said that you presented the findings of the 17 report to the community. I know being a local area 18 resident how concerned the community is about health risks 19 of where they live related to environmental exposures. 20 And did the community clearly understand that a lot of the 21 risk -- their health risk is related to through traffic, 22 as Professor Sperling just mentioned, as opposed to the
23 Port?
24 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Yes. 25 And that was a topic of discussion on meetings even before PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

120 1 that. I mean we had I think two or three meetings with 2 the community groups when we were just developing the 3 inventory to talk about that. And I think they understood 4 where the inventory was strong and where we needed more 5 information. I think at the meeting overall the results 6 validated their concerns that the emissions were coming 7 from trucks. I think there was some question in their 8 mind that -- you know, the percentage seems small but, you 9 know, there is going to be work underway to kind of help 10 improve our estimates. 11 BOARD MEMBER BALMES: I guess the private fleet 12 rule that we'll be considering later better be a good one 13 to deal with this problem. Because most of the 14 community's problem is not the port, it's the through 15 trip.
16 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Dan 17 Donohoue again. 18 Certainly there is legitimate concern about how Page 115CARB Board transcript SC rev MVEBs 042408

19 well we have captured and are able to call out what are 20 port-related and the others. And we recognize we did the 21 best we could. We think there are additional things to 22 do. From ARB's standpoint, with the drayage truck rule 23 and with an on-road truck rule we will capture. It's not 24 as important as to where they came from, because with both 25 of those rules we'll capture. The advantage of the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

121 1 drayage truck rule is that it is going to provide 2 reductions more quickly. And the same thing with respect 3 to the oceangoing vessel main engine. That and some of 4 the early introductions on the on-road are going to be 5 critical to doing what Senator Perata talked about, is 6 getting those reductions in the initial years. And the 7 main engine rule is a big one, you know, both for reducing 8 those impacts in that local community and more so the 9 region too.
10 CHAIRPERSON NICHOLS: Yes. 11 BOARD MEMBER BERG: Thank you, Madam Chair. 12 I'm struck by the fact that when we look at slide 13 25 and 26, that the rules that are strong rules that are 14 coming up -- both that are in place and coming up that 15 we'll be doing a great job through 2015, but when we start 16 looking into 2020 and beyond we're looking at some pretty 17 significant increases again. 18 And so do you have some thoughts as to what we'll 19 be looking at additional fleet modernization? The cost 20 that we're currently considering is tremendous. And if
Page 116CARB Board transcript SC rev MVEBs 042408

21 we're thinking that this isn't going to get us much 22 benefit past 2020, that's a little frightening.
23 EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: 24 There's a couple things happening here. Right 25 now, on average the growth projections that we're using to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

122 1 look out in the future is about a 4 percent -- 3 to 4 2 percent growth overall in the amount of goods being moved 3 through the Port of Oakland. So that growth projection is 4 something that we're going to continue to have to look at. 5 The areas where that increase occurs are -- you 6 know, we're going to continue to see the reductions from 7 the on-road fleet rule and those type of things. But some 8 of the other categories, the harbor craft category and the 9 engines that will go into oceangoing vessels are areas 10 that we do not have direct regulatory authority over. The 11 U.S. EPA has adopted new standards. And that's the 12 category -- or that's an area where we think that as we 13 move forward on looking at greenhouse gases, there may be 14 some opportunities to get co-benefits with NOx and PM 15 reductions. So we do think that from our side -- ARB's 16 side, from your side that those measures that we're 17 developing -- because we're looking at some near-term 18 types of things that we could do in the whole goods 19 movement sector for CO2 reductions and get co-benefits. 20 And then we're going to have to look at the much broader 21 picture about how you change the transportation way it's 22 being done. 23 In addition to that, certainly the Bay Area and Page 117CARB Board transcript SC rev MVEBs 042408

24 the Port itself has some ideas on how to reduce emissions 25 further. And that local impact -- or that local control PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

123 1 and taking actions there we think can have a significant 2 impact on addressing that issue. 3 BOARD MEMBER BERG: Thank you very much. 4 CHAIRPERSON NICHOLS: All right. We can now turn 5 to the public then. 6 We have Mark Ross, followed by Richard Sinkoff 7 and Johann Curry. 8 MR. ROSS: Thank you Madam Chair and the Board. 9 And I am Mark Ross, a director on the Bay Area Air Quality 10 Management District, proudly serving under Chairperson 11 Hill. 12 I want to thank first our staff in the earlier 13 presentation on climate change and the work that they're 14 doing with the ARB. We really appreciate that and the 15 collaboration that is generated from that. 16 And it's great to look 20 years down the road. 17 I'm really happy that we're looking 20 blocks down the 18 street as to what is happening here in West Oakland. And 19 I want to thank you for giving us the task -- giving us 20 the compelling task that we have in front of us and the 21 tools that we're going to be able to use to help efficate 22 a good strategy to help the people of West Oakland and 23 other Bay Area port cities in addressing this problem. 24 And I want to also thank -- I'm going to be 25 brief, because I know it's lunchtime. But I also want to
Page 118CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

124 1 thank you for the 14 percent and retaining that with the I 2 Bond money. We're going to look very efficaciously at -- 3 directing that under Chairman Hill's direction, doing that 4 efficaciously and looking at the dollars per ton but 5 understanding that this is really lungs per ton and how 6 many lungs can we help with the money. 7 Thank you again for your report and underscoring 8 this important task. 9 CHAIRPERSON NICHOLS: Well, thank you for your
10 service. 11 Richard Sinkoff and then Johann Curry. 12 MR. SINKOFF: Well, I was going to say good 13 morning, but I guess it's almost good afternoon. Welcome 14 to Oakland. My name is Richard Sinkoff. I'm the Port 15 Environmental Manager from the Port of Oakland. And on 16 behalf of the Board of Port Commissioners and our 17 Executive Director, I appreciate this opportunity to speak 18 to you about the health risk assessment. 19 I want to emphasize first that the Port of 20 Oakland takes the issue of health risk in West Oakland 21 very, very seriously. And we've been working on this 22 problem for quite some time with CARB staff and with the 23 staff of the Bay Area Air Quality Management District, 24 both on the 2005 emissions inventory and also through I 25 think a very important collaborative multi-stakeholder PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345
Page 119CARB Board transcript SC rev MVEBs 042408

125 1 process that many of you have heard about. It's the 2 Maritime Air Quality Improvement Plan. It's a plan that 3 we've been developing for about a year. 4 Significantly, our board -- the day before the 5 preliminary results were released to the West Oakland 6 community, the Board of Port Commissioners adopted its 7 maritime air quality policy statement. The policy 8 statement sets forth a goal of reducing health risk from 9 port sources due to diesel particulate matter by 85 10 percent by the year 2020. We believe it's a very 11 important indication of the board's commitment to reducing 12 health risk from port source. 13 I'm also pleased that some of the questions were 14 raised by the Board members regarding the Port's 15 contribution to this problem. We acknowledge that 16 contribution certainly and we're working very, very 17 aggressively and diligently through the Maritime Air 18 Quality Improvement Plan to address health risks from port
19 sources. 20 We also recognize that non-port sources are a 21 major contributor to the problem. And in that regard we 22 support the proposed rulemaking, the private fleet rule, 23 and also the main engine rule, because we believe that 24 those two rules are important in closing the gap that 25 you've identified today. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

126 1 I also want to say something about collaboration.
Page 120CARB Board transcript SC rev MVEBs 042408

2 We know that alone the Port of Oakland cannot solve all of 3 these problems. I'm very, very pleased to report that an 4 interagency group has been working through the MAQIP 5 process to find new means of interagency collaboration. I 6 think it's a unique model. I want to commend again the 7 staff of the Air Resources Board and the staff of the Air 8 Quality Management District on participation on that 9 effort. 10 So, in conclusion, thank you again for this 11 opportunity. And I really do want to commend Air 12 Resources board staff for their hard work on this 13 important study. 14 CHAIRPERSON NICHOLS: Thank you very much. And 15 congratulations on the forward movement on the plan. 16 Mr. Curry, followed by Andy Katz, followed by Ray 17 Kidd. 18 MR. CURRY: Hey, Chairman Nichols and the Board. 19 I'm Johann Curry, and I'm an attendant at Oakland 20 Technical High School. 21 And even more important than where I attend 22 school is my environment where I do homework and stuff and 23 where I study. And I'm a resident of the West Oakland 24 neighborhood. And so, you know, hearing that we're being 25 affected by the Port of Oakland and the trucks that go and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

127 1 transport goods there and the diesel particulate matter in 2 the area and how it's causing asthma and possibly even 3 cancer, that's very, you know, hard to hear. I mean, you 4 know, that's affecting the kids and the citizens of my Page 121CARB Board transcript SC rev MVEBs 042408

5 neighborhood. 6 And so, you know, West Oakland's a small part in 7 Oakland with about 22,000 people. That being -- a lot of 8 people are being affected by this. So I just think that 9 something needs to be implemented. Like we need to come 10 up with some sort of solution to -- like the truck rule so 11 that the trucks can find a way to get to the Port of 12 Oakland without, you know, intervening in everybody's 13 life. You know, asthma is a very serious thing. It can 14 potentially cause death. Cancer is a very also important 15 thing and it can also potentially cause death. 16 And so all I ask for is to come up with a simple 17 rule that can allow the trucks to go to their place 18 without any problem or anything. 19 Thanks. 20 CHAIRPERSON NICHOLS: Thank you for your 21 testimony and for taking the time to come. 22 Andy Katz and then Ray Kidd. 23 MR. KATZ: Good morning. Good morning, Chairman 24 Nichols and ARB. And I would like to -- I'm Andy Katz 25 from Breathe California. And I'd like to really thank the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

128 1 Board and especially the staff for working with the 2 community. There were multiple community workshops in 3 part of preparing this study. And really the Board was 4 very considerate and thoughtful in including some of the 5 non-cancer health risks and the asthma impacts and the 6 health risks that are very important in considering the
Page 122CARB Board transcript SC rev MVEBs 042408

7 health impacts that are occurring in West Oakland and the 8 greater Bay Area. 9 What's really good about this study is that it's 10 a move towards looking at cumulative pollution and 11 geography, and it's not just about sources. That's a 12 serious flaw in the Hot Spots law. It's a serious flaw in 13 the way we're doing air quality policymaking right now, is 14 that cumulative pollution is killing people. Cumulative 15 pollution is giving people asthma and heart attacks and 16 health impacts. And what's important is to look at how 17 all the cumulative pollution is impacting people. And 18 what this study shows is that for the community of West 19 Oakland, West Oakland is suffering four times the cancer 20 impacts and significantly higher asthma impacts. And it's 21 important that the Board take this seriously, that the 22 Board react and help control some of these health impacts 23 and reduce these health impacts. 24 So what I want to encourage is that -- from 25 taking this study, really encourage the Board and the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

129 1 staff to prepare a strong truck rule that sticks to early 2 deadlines and early compliance, get the best available 3 technology and encourage even better technology for trucks 4 especially. If you look at this, the trucks are 70 5 percent of the cancer risk in West Oakland. We have to 6 get those early reductions. We really can't afford to 7 wait for public health. 8 So I want to encourage the Board to do that as 9 well as push for more incentive funding. Prop 1B is a Page 123CARB Board transcript SC rev MVEBs 042408

10 drop in the bucket, and Carl Moyer is not enough to ensure 11 these early health reductions. So I want to encourage the 12 Board to ask the Legislature and to investigate your own 13 authority to look at other sources of funds, consider a 14 container fee, consider other incentive funds to encourage 15 quick health reductions. 16 Thank you. 17 CHAIRPERSON NICHOLS: Thank you. 18 Mr. Kidd. 19 MR. KIDD: Well, good noon. My name is Ray Kidd. 20 I've lived in West Oakland since 1973. I've also been 21 involved in the Port's Maritime Air Quality Management 22 Plan. 23 So I just wanted to make one suggestion. One 24 term that I've learned in being involved in this process 25 is the term "cascade," which refers to -- I'm sure you're PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

130 1 probably familiar with it -- to the trucks that are bought 2 new and used on the fleet level and then work their way 3 down the chain, until where they usually end up is in our 4 area at the Port where there's the least demand on them. 5 They can do short haulages on drayage work. And the most 6 pollution comes from these trucks. 7 And the Port has had a truck replacement program 8 for the past few years, where they've been buying up older 9 trucks from the eighties and early nineties and replacing 10 them with 2,000, 2001 and newer trucks. And that's been a 11 good program. It's replaced maybe 75, 80 trucks out of
Page 124CARB Board transcript SC rev MVEBs 042408

12 about 1500 trucks that use the Port. So it's good but 13 it's limited. 14 And, by the way, I should say that that fund -- 15 the funding for this program came from a lawsuit that was 16 initiated in the community. And that were the mitigation 17 funds from that program have funded this program -- from 18 that lawsuit's funded this program. 19 What I want to recommend. About a year and a 20 half ago I took my old '67 Chevy pickup down to a site 21 that was designated by the air district and sold it for -- 22 they gave me $650 for it, so it was a good deal. And what 23 happened to that pickup was that they took it someplace 24 and smashed it up. It's never being used again. And I 25 thought, well, that's pretty neat. I think it would be PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

131 1 good if this Board or somebody, you guys could take some 2 of the funds that Senator Perata was talking about -- it 3 wouldn't need a lot, maybe tens or hundreds of thousands 4 of dollars -- to create a fund to buy back old diesel 5 trucks, to just get them off the road right now. 6 One of the things that the Port is considering is 7 a new model for their truckers. And it may well replace a 8 whole lot of the independent owner-operator truckers that 9 are now the main stay of the port trucking. And these 10 guys -- many of them may not be able to continue or desire 11 to continue doing their work as truckers. And if these 12 people -- but they need a way out. And they don't need a 13 replacement truck. They may want to get another -- they 14 just may want to go on to something else. But they need Page 125CARB Board transcript SC rev MVEBs 042408

15 to get rid of this old truck. This will give them a way 16 out, for a few hundred, a few thousand dollars, whatever. 17 Get the truck off the road immediately. I think this 18 could be implemented very quickly. And it would be 19 something that could be done very, very quickly and do 20 some good work. 21 And I think if you do something like that, you 22 really need to get the truckers involved. I mean these 23 guys, they're not organized for the most part. And 24 they're very -- you know, but they have been involved in 25 some of the community and meetings and so forth. So I PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

132 1 think I would -- that's my suggestion. 2 Thank you. 3 CHAIRPERSON NICHOLS: Mr. Kidd, thank you for 4 coming. Before you leave -- I appreciate your comments. 5 I just want to say that this is the first time we've had 6 this kind of a discussion in Oakland. But the Board has 7 met in L.A., and we have had conversations in this context 8 about the truckers and about the scrappage idea that 9 you're discussing. So we very much agree with you, that 10 should be one of the things we use money for, is to 11 actually find ways to get the old trucks away completely 12 and to help people who want to make that transition. 13 But I have a question for you, which is -- and I 14 probably should have asked this to somebody else as well. 15 But in the context of what you're looking at, are you 16 looking at all at shifting from trucks to other forms of
Page 126CARB Board transcript SC rev MVEBs 042408

17 transportation, like trains, for example, electric
18 trains -- 19 MR. KIDD: Well, certainly that's part of the 20 Port's, you know, projection right now. But they've got a 21 several hundred million dollar project to do an intermodal 22 facility on the old army base, which will put a whole lot 23 more emphasis on the trains. But even then though there 24 will need to be trucks or something to get the containers 25 from the ships to the intermodal facility. So the trucks PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

133 1 will always be a major part of the picture. 2 CHAIRPERSON NICHOLS: I think I was really 3 responding to the earlier question that came from Ms. Berg 4 about the gross going back up again, you know, in the 2020 5 timeframe, whether we should be looking not just at more 6 trucks but at whether there was something else that could 7 help offset that increase in throughput that we're talking 8 about. 9 MR. KIDD: No, that -- I mean another -- and, 10 again, another of the big projects is to increase the 11 number of rail lines coming out of Oakland. But, you 12 know, I'm sorry, I'm not sure I have the technical -- or 13 expertise to do that. 14 But I really appreciate you guys being here in 15 Oakland. I've never been to an ARB meeting before. And I 16 hadn't expected to speak here today. But I just wanted to 17 put that out. 18 CHAIRPERSON NICHOLS: Well, thank you. 19 Appreciate your doing it. Page 127CARB Board transcript SC rev MVEBs 042408

20 That is the last person who's signed up on my 21 list. 22 So if there are no other public comments, I think 23 this is a good time for us to take our lunch break. And 24 we'll come back in an hour, so at 1:00, and take up again. 25 Well, we should finish this item now, yes, before PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

134 1 we break. Just a few final words perhaps. 2 BOARD MEMBER HILL: I just wanted to kind of -- 3 to say and concur with the public comments, and I 4 appreciate Board members being here today, and Senator 5 Perata, who shared his thoughts as well. 6 Yeah, I think the cooperation between the air 7 district and the ARB staff in creation of this assessment 8 was outstanding. But the numbers are extraordinary. And 9 I want to make the commitment, and I know the air district 10 has the commitment, and for Senator Perata's benefit, that 11 it is a priority and will be a priority with our I Bond 12 and the Carl Moyer funding in the future, that we will 13 make considerable improvements as quickly as possible in 14 that area, because no one should have to live under those 15 conditions. Those 22,000 people are suffering and 16 struggling. And we need to do everything we can as 17 quickly as possible to relieve them of that, and we will. 18 CHAIRPERSON NICHOLS: Thank you for those 19 comments. I appreciate it. 20 And if no other Board members have any concluding 21 words, we will wind up this item and come back and talk
Page 128CARB Board transcript SC rev MVEBs 042408

22 about goods movement after lunch. 23 Thank you. One o'clock. 24 (Thereupon a lunch recess was taken.) 25 CHAIRPERSON NICHOLS: We're going to reconvene PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

135 1 the Board meeting and begin with a presentation update on 2 implementation of the Emission Reduction Plan for Ports 3 and Goods Movement. 4 There's a nice logical flow to today's 5 proceedings. 6 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Thank 7 you. 8 We are continuing to develop the Board's 9 regulatory agenda, mobilize incentive funding, support 10 local port and air district actions, and push for the 11 necessary national and international actions to cut 12 freight-related emissions. 13 The staff presentation today will highlight 14 significant actions over the past year, discuss how they 15 contribute to our overall progress, and describe the key 16 challenges over the coming year. 17 And Catherine Cardozo is going to be making the 18 presentation from the Planning and Technical Support
19 Division. 20 Catherine. 21 (Thereupon an overhead presentation was 22 presented as follows.) 23 AIR POLLUTION SPECIALIST CARDOZO: Good 24 afternoon, Chairman Nichols and members of the Board. Page 129CARB Board transcript SC rev MVEBs 042408

25 This is our third update on implementation of PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

136 1 ARB's 2006 Emission Reduction Plan for Ports and Goods 2 Movement. The Board directed staff to report back 3 annually on California's progress towards the goals of the 4 plan and to outline the challenges ahead. 5 This report is from the statewide perspective. 6 You'll notice that the overall conclusions are very 7 similar to the local findings in the West Oakland study. 8 In late 2005, Governor Schwarzenegger asked ARB 9 to develop and adopt a plan to show how California would 10 dramatically cut the air pollution from freight operations 11 while both international and domestic trade continued to 12 grow.
13 --o0o-- 14 AIR POLLUTION SPECIALIST CARDOZO: I'll begin 15 this update with a brief recap of the basis for the 16 Board's action to adopt the Emission Reduction Plan at an 17 April 2006 hearing in Long Beach.
18 --o0o-- 19 AIR POLLUTION SPECIALIST CARDOZO: The diesel 20 engines used in trucks, locomotives, ships, harbor craft, 21 and cargo equipment to move goods into and throughout 22 California are major contributors of the state's biggest 23 pollution challenges. 24 These sources account for more than two-thirds of 25 the diesel particulate matter statewide, with the highest PETERS SHORTHAND REPORTING (916) 362-2345
Page 130CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

137 1 levels in communities near ports, rail yards, freeways, 2 and other freight facilities. 3 They also produce about one-third of the nitrogen 4 oxides and sulfur oxides that form regional ozone or fine 5 particulate.
6 --o0o-- 7 AIR POLLUTION SPECIALIST CARDOZO: In the 8 comprehensive health impacts assessment done for the 9 Emission Reduction Plan, staff estimated that emissions 10 from goods movement contributed to about 2400 premature 11 deaths statewide in 2005. Trucks dominate the impacts 12 because of their high aggregate emissions and their 13 operations in close proximity to people. 14 As we look into the future, the relative impacts 15 from trucks will decrease as the fleet slowly gets 16 cleaner. But the impacts from ships will increase in 17 response to trade growth and the lack of effective 18 controls. 19 ARB's early health risk assessments for the 20 Roseville rail yard and the Ports of Los Angeles and Long 21 Beach showed that people living closest to those 22 facilities were exposed to elevated cancer risks. The new 23 assessment for West Oakland and communities near other 24 major rail yards confirm that health risks are elevated 25 around many freight facilities throughout the state. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

138 Page 131CARB Board transcript SC rev MVEBs 042408

1 The localized cancer risk, the significant 2 statewide health impacts, and the contribution of the 3 goods movement sector to California's ozone and PM2.5 4 challenges demanded an aggressive response to protect 5 public health.
6 --o0o-- 7 AIR POLLUTION SPECIALIST CARDOZO: When the Board 8 adopted the Emission Reduction Plan, it established goals 9 for the goods movement industry and identified 30 new 10 strategies. 11 The most prominent goal is to rapidly reduce the 12 risk from diesel PM, both locally and statewide, with a 13 specific target to cut the statewide health risk 85 14 percent by 2020. 15 The plan described needed actions by ARB, U.S. 16 EPA and international bodies, ports, and other local 17 agencies to meet these goals.
18 --o0o-- 19 AIR POLLUTION SPECIALIST CARDOZO: So where are 20 we now two years later?
21 --o0o-- 22 AIR POLLUTION SPECIALIST CARDOZO: ARB's program 23 to understand and reduce the impacts of diesel emissions 24 from freight movement has expanded beyond the core 25 regulatory focus - from special air monitoring studies PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

139 1 around the southern California ports at the top of this 2 list, down to expansion of the emission reduction
Page 132CARB Board transcript SC rev MVEBs 042408

3 strategies to include greenhouse gases. 4 Over the last two years, the major seaports have 5 also created or greatly expanded their air quality role in 6 response to pressure from concerned residents, air 7 agencies, and political leaders. 8 To quantify how all of these programs translate 9 into progress, we looked at their impact on projected 10 emissions of diesel PM from ports and goods movement.
11 --o0o-- 12 AIR POLLUTION SPECIALIST CARDOZO: This chart 13 shows the projected changes in statewide diesel PM 14 emissions from all of the goods movement sources, starting 15 with 2001 and continuing through the year 2020. The top 16 line, above the orange, shows the emissions under the 17 baseline, meaning the program that existed prior to 18 implementation of the new strategies. The disease you see 19 is from the natural turnover to cleaner trucks and 20 equipment that meet ARB and U.S. EPA standards. 21 The orange segment represents the additional 22 emission reductions achieved from new rules that the Board 23 has already adopted. 24 The yellow segment shows the very significant 25 emission reductions that could be achieved with adoption PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

140 1 of two major ARB rules in progress, specifically the 2 statewide truck and bus rule, also shown as the Private 3 Fleets Rule, and the fuel rule for ship main engines and 4 boilers. 5 From the 2001 starting point of 57 tons per day, Page 133CARB Board transcript SC rev MVEBs 042408

6 the combination of these rules and the adopted program 7 could reduce diesel PM down to 30 tons per day by 2010 and 8 to below 14 tons per day by 2015. This is a 75 percent 9 reduction between 2001 and 2020, despite a projected 10 tripling of international trade over the same timeframe.
11 --o0o-- 12 AIR POLLUTION SPECIALIST CARDOZO: Because the 13 Board's extensive controls on trucks account for the 14 majority of the emissions reductions, the diesel PM health 15 risk diseases faster than the total emissions from all 16 goods movement sources. 17 The adopted program today provides a 74 percent 18 reduction in the statewide health risk from 19 freight-related diesel PM, compared to the Plan goal of 85 20 percent. The two major ARB rules in progress offer the 21 opportunity to achieve a total reduction of 82 percent.
22 --o0o-- 23 AIR POLLUTION SPECIALIST CARDOZO: We'll need a 24 series of actions by ARB and other agencies to get the 25 full 85 percent risk reduction statewide, and to go beyond PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

141 1 that to meet the complementary goals for localized risk 2 reduction, and attainment of federal standards in the most 3 challenging regions of the state. 4 Besides expanded enforcement of the existing 5 program and the two new rules, other critical actions 6 include accelerated production of cleaner locomotives and 7 ships, with those cleaner models preferentially
Page 134CARB Board transcript SC rev MVEBs 042408

8 concentrated in California, as called for in the State 9 Implementation Plan; greenhouse gas measures that cut fuel 10 consumption and other techniques to reduce multiple 11 pollutants; and rapid deployment of all incentive funds 12 dedicated, or potentially available, for this sector.
13 --o0o-- 14 AIR POLLUTION SPECIALIST CARDOZO: In the next 15 segment of the presentation, we'll briefly look at the 16 emission reduction strategies for each sector. The slides 17 will summarize the accomplishments, while I highlight some 18 of the key challenges ahead.
19 --o0o-- 20 AIR POLLUTION SPECIALIST CARDOZO: We'll begin 21 with trucks. 22 For the top three adopted rules, the emphasis is 23 on enforcement. 24 For the drayage truck rule, we are focused on 25 getting the word out to all truck operators on both the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

142 1 impending requirements and the opportunities for funding
2 assistance. 3 For ARB's adopted rules that affect existing 4 truck fleets, we rely on our inspection teams, in the 5 field and in the office, to increase compliance levels.
6 --o0o-- 7 AIR POLLUTION SPECIALIST CARDOZO: The Board's 8 field enforcement staff inspected over 20,000 heavy-duty 9 vehicles across California, with nearly half of the 10 inspections performed in environmental justice areas. Page 135CARB Board transcript SC rev MVEBs 042408

11 Staff also observed more than 1400 idling trucks, 12 and cited 125 of them for violating the Board's 13 five-minute limit on unnecessary idling. Truck idling 14 continues to be the most common complaint from community 15 residents near freight facilities. In response, we focus 16 the enforcement effort on areas where the public reports 17 frequent idling, especially around ports and distribution
18 centers. 19 In 2007, ARB increased its enforcement presence 20 in the border region, inspecting over 3400 commercial 21 vehicles, a 70 percent increase from the prior year.
22 --o0o-- 23 AIR POLLUTION SPECIALIST CARDOZO: Staff is 24 currently developing a comprehensive statewide truck and 25 bus rule that would apply to nearly all existing heavy PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

143 1 commercial diesel vehicles operating in California. This 2 includes over 400,000 vehicles based in California, and 3 even more registered in other states or other countries. 4 The rule must be designed to meet California's 5 State Implementation Plan needs in the South Coast and San 6 Joaquin Valley. Staff's draft proposal called for rapid 7 installation of diesel PM filters on existing trucks to 8 cut the health risk, followed by two rounds of fleet 9 turnovers to transition to cleaner trucks. 10 In five rounds of public workshops and meetings 11 spanning the state, staff has repeatedly heard the same 12 key issues. First is concern about the two rounds of
Page 136CARB Board transcript SC rev MVEBs 042408

13 truck turnovers. Second is the cost of the entire 14 proposal and the ability of individual fleets to bear 15 those costs. The third top issue is the need for 16 government funding to aid the transition to cleaner 17 trucks, both direct grants and access to affordable 18 financing. 19 In response, we're now restructuring the proposal 20 to require the early PM retrofits and only one turnover of 21 the fleet. We also started a field study last month to 22 gather data on truck characteristics and travel, both in 23 the San Joaquin Valley and across the state. The results 24 will help us maximize the benefits of the revised 25 proposal. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

144 1 Like the analysis for last year's off-road rule, 2 we're using surveys and meetings to understand how 3 individual fleets would be impacted by the rule. Part of 4 this effort is working closely with the agricultural 5 industry to understand their truck operations, including 6 the use of old trucks on a seasonal basis. In addition to 7 the incentives offered under the Moyer and Proposition 1B 8 programs, staff is working with the State Treasurer's 9 Office to establish a loan program to help individual 10 owners and fleets manage the capital investment for 11 cleaner trucks. Staff is scheduled to present the 12 regulation for your consideration at the October Board 13 meeting.
14 --o0o-- 15 AIR POLLUTION SPECIALIST CARDOZO: Starting in Page 137CARB Board transcript SC rev MVEBs 042408

16 January 2007, the Board's regulation to require ships to 17 switch their auxiliary engines to lower sulfur fuel was 18 effectively reducing pollution. Unfortunately, the 19 shipping industry prevailed in its lawsuit to stop the 20 regulation earlier this week. The Ninth Circuit Court of 21 Appeals denied our request for a rehearing before the full 22 Court. That action effectively upheld a lower court 23 ruling that the rule constitutes an emission standard for 24 ships and requires a waiver from the U.S. EPA. This 25 finding stems from the rule's flexibility in allowing PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

145 1 shippers to use alternative compliance options, like 2 cleaner ships, that achieve the same benefits as lower 3 sulfur fuel. The prior injunction against ARB's 4 enforcement of the rule will be reinstated. Staff is 5 assessing a number of options to restore the emission 6 benefits achieved by this rule. 7 Other future ARB actions include a second phase 8 of the "at dock" or shore power requirements, and a longer 9 term effort to bring green ships to California. The 10 concept is dramatically cleaner engines powering more 11 aerodynamic, more efficient ships to cut traditional 12 pollutants and greenhouse gases.
13 --o0o-- 14 AIR POLLUTION SPECIALIST CARDOZO: The draft 15 proposal for fuel used in ship main engines and boilers 16 calls for two phases of lower sulfur levels starting next 17 year. This is the single most important control measure
Page 138CARB Board transcript SC rev MVEBs 042408

18 for sulfur oxides to help cut PM2.5 levels, especially in 19 the South Coast. 20 Based on lessens learned from the auxiliary 21 engine rule, staff has identified potential operational 22 challenges to successful implementation. 23 However, we are convinced that all of these can 24 be overcome and are working with the shippers to do so. 25 This rule is scheduled for Board consideration this PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

146
1 summer.
2 --o0o-- 3 AIR POLLUTION SPECIALIST CARDOZO: When we 4 provided this update to the Board last year, the U.S. EPA 5 had just presented a proposal to the International 6 Maritime Organization for cleaner ships and ship fuels. 7 Earlier this month, the IMO's technical body on pollution 8 issues met to discuss the U.S. proposal and two other 9 options for reducing ship pollution. The committee 10 supported a more aggressive proposal, summarized on this 11 slide. This proposal would accelerate the use of lower 12 sulfur fuel and cleaner ships in regions designated as SOx 13 emission control areas or SECAS. If the full IMO supports 14 this proposal at its November meeting, establishing a 15 North American SECA becomes a high priority. 16 ARB staff has been working with U.S. EPA and 17 others to develop a proposal for a North American SECA 18 covering the U.S., Canada, and Mexico. 19 At the federal level, the U.S. still hasn't 20 ratified the last IMO treaty for the existing ship Page 139CARB Board transcript SC rev MVEBs 042408

21 standards. As we understand it, the U.S. cannot vote on 22 the new IMO proposal in November unless Congress fully 23 ratifies the existing MARPOL Annex VI treaty. For ship 24 main engines, U.S. EPA plans to finalize new national 25 emission standards by December 2009 after the IMO decision PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

147 1 is clear. Bills in both the House and Senate would direct 2 U.S. EPA to move faster. 3 When it comes to ships that travel 4 internationally, tough international emission standards 5 are the optimal solution. Once again, there are 6 encouraging steps underway, but the timeframes remain too 7 long to meet California's air quality needs and attainment 8 deadlines.
9 --o0o-- 10 AIR POLLUTION SPECIALIST CARDOZO: Switching to 11 locomotives, you'll be hearing a detailed briefing 12 following this item today. We just note here that with 13 U.S. EPA's new advanced technology standards for 14 locomotives phasing in over the next decade, the key to 15 meeting our air quality goals will be accelerated 16 production and introduction of those models in California.
17 --o0o-- 18 AIR POLLUTION SPECIALIST CARDOZO: Staff is 19 evaluating whether to recommend expanding the Board's 20 recent rule for existing harbor craft to cover other types 21 of craft including, fishing vessels. 22 Earlier this year, U.S. EPA finalized tighter
Page 140CARB Board transcript SC rev MVEBs 042408

23 national standards for the engines used in most harbor 24 craft that will require advanced control technologies 25 starting in the 2014 to 2017 timeframe. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

148
1 --o0o-- 2 AIR POLLUTION SPECIALIST CARDOZO: Cargo handling 3 equipment is the last sector. We are well into 4 implementation of the Board's rules for both diesel and 5 gas equipment that effectively cut emissions from these 6 operations. 7 In addition to this familiar list of strategies 8 for freight sources that I've just covered, ARB staff 9 recently launched a new effort on greenhouse gases as 10 well.
11 --o0o-- 12 AIR POLLUTION SPECIALIST CARDOZO: This slide 13 lists some of the concepts that ARB staff discussed in the 14 first workshop earlier this month to develop the goods 15 movement element of the AB 32 scoping plan. These are 16 very preliminary ideas focused on reducing fuel 17 consumption in the early action category, followed by 18 approaches to motivate greater efficiency in the whole 19 freight transportation system.
20 --o0o-- 21 AIR POLLUTION SPECIALIST CARDOZO: With that 22 review of the regulatory strategies, let's change gears to 23 look at progress on the funding side, and then conclude 24 with a quick update on regional activities to cut 25 emissions from goods movement. Page 141CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

149
1 --o0o-- 2 AIR POLLUTION SPECIALIST CARDOZO: I'll highlight 3 the actions taken or underway to allocate Proposition 1B 4 funds for air quality and infrastructure.
5 --o0o--
6 AIR POLLUTION SPECIALIST CARDOZO: ARB's 7 implementation of the billion dollar Goods Movement 8 Emission Reduction Program remains on a fast track 9 following the Board's February adoption of the program 10 guidelines. 11 The next funding decisions come in May when the 12 Board will award 221 million to local agencies to complete 13 the first funding cycle. We anticipate the second 14 installment of 250 million as part of the next state 15 budget.
16 --o0o-- 17 AIR POLLUTION SPECIALIST CARDOZO: Nine local 18 agencies submitted applications for 19 projects. Of the 19 732 million in requested funding, over 690 million is for 20 truck projects. Summary tables and the full applications 21 are available on ARB's program website. We are evaluating 22 those proposals and ranking them where there is 23 composition between projects in the same corridor and 24 funding category.
25 --o0o-- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 Page 142CARB Board transcript SC rev MVEBs 042408

150 1 AIR POLLUTION SPECIALIST CARDOZO: Because there 2 are viable proposals in each trade corridor, we will 3 recommend that the Board apply the overall corridor 4 funding targets adopted in February as a starting point. 5 The table here shows the actual dollars that would go to 6 projects administered by agencies in each corridor under 7 this approach. 8 We have five workshops scheduled next week to 9 discuss which projects should be funded in each corridor, 10 and at what levels. We'll then release a formal set of 11 funding recommendations for your consideration at the May 12 22nd hearing in Fresno.
13 --o0o-- 14 AIR POLLUTION SPECIALIST CARDOZO: This slide 15 highlights the types of projects approved by the 16 California Transportation Commission earlier this month. 17 Although Proposition 1B provides two billion in dedicated 18 funding for freight infrastructure, the Commission 19 approved three billion worth of future projects. To 20 provide the additional one billion, the Commission is 21 relying on half coming from the State Highway Account and 22 the other half from anticipated new federal funds, user 23 fees, and tolls. At the urging of ARB, local air 24 districts, and environmental representatives, the 25 Commission strengthened its consideration of air quality PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

151 1 impacts in the process of evaluating projects. Page 143CARB Board transcript SC rev MVEBs 042408

2 The Commission approved 824 million in funding 3 for northern California projects, including truck, rail, 4 and ship infrastructure improvements. 5 In southern California, more than two billion 6 will go for bridge replacement, on-dock rail projects, 7 improved truck access to the border crossings, over 30 8 railroad crossing grade separations, and other projects. 9 The Commission will allocate another 250 million 10 in Prop 1B funds from the Highway-Rail Crossing Safety 11 Account later this spring. 12 To wrap up this report on implementation of the 13 Emission Reduction Plan, I'd like to quickly highlight 14 some of the more noteworthy port initiatives.
15 --o0o-- 16 AIR POLLUTION SPECIALIST CARDOZO: Starting with 17 the Ports of L.A. and Long Beach, they've each adopted 18 three sets of port tariffs as part of the Clean Trucks 19 Program. 20 The first tariffs require that all trucks serving 21 the ports be replaced or upgraded to 2007 models by the 22 end of 2011, two years ahead of the deadline in ARB's 23 drayage truck rule. 24 The second tariffs established a gate fee for 25 loaded trucks to subsidize the conversion to cleaner PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

152 1 trucks. These funds, combined with anticipated 2 Proposition 1B monies and other port dollars, would cover 3 80 percent of the truck cost.
Page 144CARB Board transcript SC rev MVEBs 042408

4 The third set of tariffs are attracting all the 5 controversy. Both parts are requiring that motor carriers 6 obtain a concession license to serve the ports in the 7 future. The Port of Los Angeles added the requirement 8 that concessionaires must use employee drivers, phasing 9 out the use of independent contractors who dominate the 10 industry today. Long Beach allows the motor carriers to 11 use a mixture of business models for their trucking 12 operations. While the teamsters are pressing the Port of 13 Long Beach to fall in line with L.A. on employee drivers, 14 major industry associations have pledged to sue the Port 15 of L.A. and are seeking other avenues to stop the employee 16 driver provisions. 17 In March, the Ports approved a temporary 18 incentive program to pay ship operators the incremental 19 cost of switching from bunker fuel to lower sulfur 20 distillate fuel when they approach the ports. The Ports 21 view this as a bridge to motivate the fuel switch now and 22 assume ARB's rule in development for ship main engines 23 will require the cleaner fuel starting next year.
24 --o0o-- 25 AIR POLLUTION SPECIALIST CARDOZO: Richard PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

153 1 Sinkoff from the Port already highlighted these recent 2 actions by the Board of Port Commissioners. We want to 3 emphasize the importance of the second element. 4 The Commission directed staff to propose a 5 proposal for port truck or containers fees, or other 6 means, to raise over $500 million in funding to match Prop Page 145CARB Board transcript SC rev MVEBs 042408

7 1B air quality and infrastructure bond monies. This 8 action is critical to raise the funds to support port 9 truck upgrades prior to the deadlines in ARB's rule. 10 These are positive steps. ARB staff will 11 continue to support and press the Port to follow through 12 on these commitments.
13 --o0o-- 14 AIR POLLUTION SPECIALIST CARDOZO: To conclude, 15 actions taken by the Board and local agencies are making 16 significant progress in reducing freight pollution to meet 17 the goals of the Emission Reduction Plan. 18 The rules in development for statewide trucks and 19 ship fuels are the next major steps, along with approaches 20 to bring the cleanest locomotives and ships to California. 21 If the International Maritime Organization moves 22 forward with the current ship proposal, we will need a 23 SECA for north America, or even just the U.S., to take 24 advantage of the earlier timelines for action. 25 The greenhouse gas and efficiency concepts for PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

154 1 the freight sector can also help meet the goals of ARB's 2 existing Emission Reduction Plan for ports and goods 3 movement, as well as the new AB 32 Scoping Plan. 4 This completes our update. Thank you for your
5 attention. 6 CHAIRPERSON NICHOLS: Thank you very much. That 7 covers a lot ground, so to speak. 8 Any additional comments or questions from Board
Page 146CARB Board transcript SC rev MVEBs 042408

9 members before we go to our public commenters? 10 If not, let's just go straight to the comments. 11 And our first is from John Hummer, who's with the 12 Business Transportation & Housing Agency, and is in charge 13 of goods movement for the agency. 14 MR. HUMMER: Good afternoon, Madam Chairwoman and 15 Board. I'm very pleased to be here and to convey to you 16 greetings on behalf of Dale Bonner, the Secretary of BT&H. 17 And just to give you a brief little update about 18 the work that we've been doing at BT&H and also with 19 Caltrans and with the CTC. As you just heard in this 20 presentation, the CTC has voted a $3.1 billion set of 21 projects, to be matched 50-50. And actually the total 22 dollar value of those projects is now looking to be about 23 $8.4 billion of infrastructure investment here in 24 California. 25 It's a huge opening and a huge initiative on the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

155 1 part of the people of California, the voters who voted for 2 the bonds, to move forward on goods movement issues and to 3 move forward in conjunction with the Goods Movement Action 4 Plan, which called for a policy of simultaneous and 5 continuous improvement in both infrastructure and in 6 addressing and mitigating impacts due to the goods 7 movement system in California. 8 Simultaneous and continuous improvement is going 9 to be the paradigm for goods movement infrastructure 10 projects nationally. California is the paradigm for that. 11 And the work that you've done here on this Board in terms Page 147CARB Board transcript SC rev MVEBs 042408

12 of bringing forward the one billion dollar air quality 13 portion of the bond to address these air quality impacts 14 from the goods movement industry are absolutely cutting 15 edge. 16 I was just in New York a couple week ago. And I 17 told all my friends back there, "Look to California, 18 because California is going to be setting the table that 19 you will all be working off of yourselves," because they 20 have very similar issues in terms of impacts and 21 communities and air quality and big ports and lots of 22 railroads, all that stuff. 23 One of the main things that we've been trying to 24 focus in on is moving in support of the ports, moving in 25 support of the goods movement infrastructure. We know in PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

156 1 the Inland Empire area of southern California creates 2 probably 500,000 jobs in the warehousing and distribution 3 and value-added services sector of the Inland Empire. 4 Needless to say, around the state there's many, many more 5 jobs tied to this. I would venture to say that it's 6 probably -- in terms of entry level working class jobs 7 probably the strongest job sector in the State of 8 California. And the good news is it's projected to grow. 9 Now, the projections are that it will double and 10 maybe even triple over the next 20 do 30 years. Who 11 knows. Crystal ball gazing is difficult. A lot of 12 changes with the economy, a lot of -- Panama Canal opens 13 up and they go all the water to the East Coast, they may
Page 148CARB Board transcript SC rev MVEBs 042408

14 not be coming -- their ships may not come as heavily here 15 to the West Coast as they have been. But the upshot of it 16 is is we can probably expect a doubling of traffic in the 17 next 10 to 15 to 20 years for sure. And so, just simply, 18 the infrastructure cannot support that. 19 One of our key strategies is to try to move goods 20 multi-modally, intermodally. That is, if we can get the 21 trucks off the highway and move them by rail on 22 double-stacked container trains to market or find other 23 ways to move goods even short distances within regional 24 market, like southern California and northern California, 25 those are the kinds of projects we're going to want to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

157 1 support. 2 And one of the good things in this program the 3 CTC's adopting are the great separation projects and three 4 major railroad projects that the CTC is putting forward 5 under the sponsorship of Caltrans. 6 I think that's it. I can take any questions, if 7 you have. Or otherwise I just want to again thank you for 8 your work and convey our best greetings to you all. 9 CHAIRPERSON NICHOLS: Well, thank you for taking 10 the time to come over and join us. 11 I do want to note that we've had really excellent 12 I think collaboration between our agencies, both on the 13 development of the plan and now on implementing it. And I 14 know many years ago when we first started doing this kind 15 of work people just assumed that the Air Board and your 16 department would be fundamentally at odds with each other. Page 149CARB Board transcript SC rev MVEBs 042408

17 And it's obviously not turned out that way. 18 MR. HUMMER: I don't think either the Governor 19 wants it that way and certainly not Secretary Bonner and I 20 know yourself, and have had an excellent working 21 relationship, as you said. So we'd like to continue that 22 forward. Keeping in mind that we're both trying to 23 address the impacts of this industry, but also to protect 24 a goose that is laying lots of golden eggs for our 25 economy. And that's important, especially in times like PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

158 1 these. So thank you very much for that. 2 CHAIRPERSON NICHOLS: I agree. There's been a 3 key recognition I think that community concerns could 4 really block this whole effort if we didn't address the 5 air issues. And that's been a -- it's been great to see 6 the industry and the ports really stepping up too. 7 MR. HUMMER: And as you know, Secretary Bonner is 8 absolutely committed to that proactive approach with 9 communities and with environmental groups, et cetera. 10 CHAIRPERSON NICHOLS: Yeah, that's terrific. 11 All right. Well, thank you. 12 Let's hear then from Diane Bailey from NRDC, 13 followed by Matt Stewart. 14 MS. BAILEY: Good afternoon, Chairman Nichols and 15 members of the Board and staff. And thanks for this 16 opportunity to comment. My name is Diane Bailey. I'm 17 with the Natural Resources Defense Council. 18 And I really want to applaud you all on your
Page 150CARB Board transcript SC rev MVEBs 042408

19 efforts to rein in the staggering levels of pollution that 20 are coming from the freight transport industries. And I 21 think that we've really come a long way. It's impressive. 22 And particularly noteworthy are the shore power 23 and port trucking rules that were adopted last year. 24 These will no doubt bring major improvements to public 25 health in the impacted communities in California. And I PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

159 1 also want to mention the harbor craft rule was also 2 important. 3 But as you've heard from some of the 4 presentations already today, we also have a long way to 5 go. There are significant remaining risks. I think a 200 6 in a million cancer risk was mentioned for West Oakland 7 when all of the risk is done. And so I think that we 8 really need to work together to come up with more measures 9 and work a little harder to reduce the remaining pollution 10 coming from these sources. 11 But I really want to talk to you today about the 12 carbon footprints of goods movement facilities and in 13 trying to work together to reduce traditional air 14 pollutants along with greenhouse gases or global warming 15 pollutants from the ports and rail yards and the trucking 16 industry. And on this then we've submitted a scoping plan 17 proposal to reduce carbon from freight transport. And 18 we've also followed it up with a letter outlining many 19 measures that could be utilized to reduce the carbon 20 footprint from all of these sources. And I just want to 21 urge you to get freight transport into the scoping plan Page 151CARB Board transcript SC rev MVEBs 042408

22 and take a serious look at how you can maximize reductions 23 from both criteria air pollutants and global warming 24 pollutants. And I think if we work together we can 25 maximize both and find significant co-benefits. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

160 1 Thank you so much. 2 CHAIRPERSON NICHOLS: Thank you. 3 Matt Stewart, followed by Jill Ratner. 4 MR. STEWART: My name is Matthew Stewart with 5 Advanced Cleanup Technologies. 6 If you look over here on the picture there you 7 see a bonnet. And this is new technology we're just about 8 to implement that takes the exhaust gas from ships and 9 reduces the NOx, SOx, and PM. It also does it for 10 locomotives.
11 --o0o-- 12 MR. STEWART: Different ships -- we're looking 13 primarily at the auxiliary engines while at berth. And if 14 obviously these small pipes that you see in the stacks are 15 different sizes, different shapes, the big ones, we've got 16 to consider that for different kind of fuels.
17 --o0o-- 18 MR. STEWART: This is a treatment system that we 19 use. And this is taken in Roseville at Union Pacific's 20 rail yard. And basically this is the -- this is a tower 21 here where the gas goes up and down as water and caustic 22 soda. These are clog chamber scrubbers where the water 23 droppers are charged. That reacts with the particulate
Page 152CARB Board transcript SC rev MVEBs 042408

24 matter, drops it into the bottom. It's filtered, becomes 25 diesel mud, which is sent to -- disposed of. At the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

161 1 bottom there's an SCR. And we put ammonia, and that 2 reacts with that. And that forms nitrogen and water.
3 --o0o-- 4 MR. STEWART: Here's how the railway system was 5 worked. You see the process unit on the right-hand side. 6 And in practice what we'd do, we'd have multiple overhead 7 manifolds and parallel tracks.
8 --o0o-- 9 MR. STEWART: This is a dock-based system. This 10 is the one that we're just about to start up in Long 11 Beach. Not only can this handle one ship; but if you put 12 a long duct under the dock, we can handle two, three or 13 even four ships at the one time.
14 --o0o-- 15 MR. STEWART: This is a unit which is on the dock 16 right now. You see the crane here.
17 --o0o-- 18 MR. STEWART: And this is a better picture. You 19 see the vessel in the back. So it's right on the edge of 20 the dock. I'm going to start that up in the middle of 21 May.
22 --o0o-- 23 MR. STEWART: We can also put this on a barge. 24 This would be particularly suitable for container ships 25 where there's a lot of activity on the dock side. And PETERS SHORTHAND REPORTING (916) 362-2345 Page 153CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

162 1 it's essentially the same unit, self-contained on the 2 barge. And the bonnet also goes over the stack.
3 --o0o-- 4 MR. STEWART: This is an example of where you 5 would put the barge.
6 --o0o-- 7 MR. STEWART: We have the bonnet that you can see 8 it in the middle here. And we're about to lift it up with 9 these two cranes. This was a demonstration to test the 10 bonnet on a crane and see could that bonnet go up, go over 11 the stack of the ship, and be secure to the stack and take 12 the gas out.
13 --o0o-- 14 MR. STEWART: And you can see we succeeded. And 15 on the right-hand side there's a full bonnet extended. 16 And it was secured to the stack with a couple of cinch 17 straps, and it worked very well.
18 --o0o-- 19 MR. STEWART: The gas coming out of the top of 20 the stack when you just look from the bottom, you don't 21 see it very much. But when putting this bonnet over there 22 with a flexible duct, you can see it's pretty potent 23 material.
24 --o0o-- 25 MR. STEWART: Here, if you can look at this PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

Page 154CARB Board transcript SC rev MVEBs 042408

163 1 picture, there's the bonnet right in the middle of Long 2 Beach there and this is the ship. 3 CHAIRPERSON NICHOLS: Sorry, your time is up. If 4 you want to just conclude with your last couple of words, 5 that would be helpful. We'll read the material that 6 you've submitted to us.
7 --o0o-- 8 MR. STEWART: We get great results when we tested 9 here, over 95 percent. 10 One of the things that we want to do in the last 11 item, we would like CARB to approve or attest that this 12 process works and the performance is there. And we're 13 asking CARB to do that after the tests in the middle of 14 the month. And this goes through a lot of different 15 financial ways to get it done. 16 Thank you very much. 17 CHAIRPERSON NICHOLS: Thank you. We appreciate 18 hearing about this. 19 All right. Jill Ratner, followed by Ellen 20 Johnnck. 21 MS. RATNER: Hi. My name is Jill Ratner and I'm 22 the President of the Rose Foundation for Communities and 23 the environment and the Director of our New Voices are 24 Rising project. 25 New Voices are Rising is an environmental and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

164 1 civics education program that works with students from 2 high schools in Oakland and other East Bay cities. And Page 155CARB Board transcript SC rev MVEBs 042408

3 one of the students who we've been working with, Johann, 4 spoke earlier today. 5 Unfortunately, there were a bunch of other 6 students who would have liked to have been here but who 7 couldn't come. And so I submitted some postcards from 8 those students. Unfortunately, I didn't make enough 9 copies. So you'll get them eventually. And I hope that 10 you will read them. 11 Many of the postcards comment on the truck and 12 bus rule -- the statewide truck and bus rule that's 13 currently being developed by your staff. 14 And just as an aside, I should probably tell you 15 that the students are a little bit skeptical about their 16 postcards ever being read. But I assured them in fact 17 they will be. And I know they will. 18 As part of their work, the students have reviewed 19 the studies that show that children who live within 20 approximately 75 meters of busy roads have significantly 21 higher rates of asthma than young people who live more 22 than 300 meters away from the same kinds of roads. And 23 because these same studies also suggested that diesel 24 particulate pollution is one of the causes of the 25 variation in asthma rates, we worked with the students and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

165 1 traced truck route maps on a map. And what we saw was 2 that, in fact, little, if any, of the West Oakland area is 3 further than 300 meters from a major road or even from a 4 truck route -- a designated truck route.
Page 156CARB Board transcript SC rev MVEBs 042408

5 Taking into account the need for local deliveries 6 and pickups, especially given the mixed use nature of West 7 Oakland, the impacts of truck-related diesel pollution in 8 West Oakland are nearly impossible to avoid. 9 The asthma issue is really not just an academic 10 one for New Voices students. They understand that asthma 11 rates in Alameda County far exceed state and national 12 averages, and they see that many ZIP codes in Oakland and 13 other East Bay cities, often the ZIP codes where their 14 schools are located or where they live, have rates of 15 asthma hospitalizations that are two or three times the 16 county averages. 17 Asthma and air pollution also have very personal 18 impacts for many of the students. For example, Lisa Ma of 19 Oakland High School writes: 20 "My little brother has asthma. So whenever a 21 diesel truck passes by, it's harder for him to breathe." 22 Another Oakland High student named Farm writes: 23 "Both of my brothers have asthma and it is very 24 hard for them to go outside." 25 Lepria Tucker writes: PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

166 1 "My little cousin has very bad asthma and I'm 2 scared that he might die one day due to him living in West 3 Oakland. I wouldn't know how to take it if he or anyone 4 else has to suffer from trying to breathe." 5 I'm going to just finish up with one comment from 6 Elaine Lee of Oakland High School. 7 "It is important for there to be a rule to reduce Page 157CARB Board transcript SC rev MVEBs 042408

8 diesel pollution. People who live near ports are affected 9 by having asthma. It's upsetting because there is 10 something that can be done. The longer we wait, the more 11 people will suffer from this." 12 Thank you. 13 CHAIRPERSON NICHOLS: Thank you very much for 14 that very eloquent testimony. 15 A comment or a question?
16 Yes. 17 BOARD MEMBER KENNARD: Ms. Ratner, thank you so 18 much. I want to give my personal thanks to you and the 19 young student who came here. I know it's very formidable 20 for someone his age to come in front of an audience of 21 this size and speak. 22 And please convey to your students that we do 23 appreciate this kind of work and that knowledge spurs 24 activism and activism spawns change, and that's a 25 wonderful thing. And thank you very much. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

167 1 MS. RATNER: Thank you. Thanks.
2 CHAIRPERSON NICHOLS: Hear! Hear! 3 All right. Final witness is Ellen Johnnck from 4 the Bay Planning Coalition. 5 MS. JOHNNCK: Good afternoon, Chairman Nichols, 6 members of the Board. I'm Ellen Johnnck, Founding 7 Executive Director of the Bay Planning Coalition in 1983. 8 The Coalition represents a consortium of about 175 public 9 and private entities, primarily engaged in the maritime
Page 158CARB Board transcript SC rev MVEBs 042408

10 industry in the bay and dedicated to the wise and 11 intelligent use of the bay in conjunction with supporting 12 our environmental goals. 13 Two years ago I appeared before you supporting a 14 goods movement action plan, and I'm delighted to see the 15 progress since then. I took this goods movement action 16 plan very much to heart. And I went to Jack Broadbent -- 17 and there's two members of the staff of the air district 18 here today -- and said, "Jack, what can we do of the 19 maritime industry here in the Bay Area to support both the 20 state effort and your local effort to reduce health risk 21 and also to ensure we work collaboratively to keep the 22 goods moving in the bay?" 23 Two things happened as a result of that. The 24 maritime air quality planning process at the Port of 25 Oakland, I'm a member of that, and I am very pleased to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

168 1 see the progress that's happened there. 2 The second thing that's happened -- I said, "We 3 need to get a handle on getting a better definition of 4 what is the source of the problem. Let's do a count of 5 regional emissions at the other ports." Oakland had 6 already just about completed its inventory. And I said, 7 "Let's look at the other ports and work collaboratively to 8 do an inventory together." We just completed a memorandum 9 of agreement signed by the five Bay Area port authorities 10 in the air district where we're 50-50 supporting an 11 inventory of emissions, and hopefully this will load to 12 identifying a pool of sources that we can better improve Page 159CARB Board transcript SC rev MVEBs 042408

13 and do some better planning. And I'm very pleased to 14 hopefully have that report done in another month. And 15 we'll hopefully make some progress on a regional level. 16 And thank you for your good work. I'm so glad 17 you're here and letting us bring you that update today. 18 CHAIRPERSON NICHOLS: Thank you. 19 If there are no other witnesses, which it appears 20 there are not, we can wrap this up. 21 Are there any final comments from Board members? 22 Anybody wish to add anything to the discussion? 23 Good work. Thank you. 24 All right. Now, we move on to another goods 25 movement related issue. This time the railroads. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

169 1 We've been joined by Bob Fletcher. 2 This is one of a series of periodic updates on 3 implementation of the 2005 statewide rail yard agreement. 4 The last one was in July of 2007. It was one of the first 5 items when I arrived on this Board. So I feel I've 6 reached a milestone. This is the fifth update. That 7 staff report will discuss some of the key elements of the 8 agreement that either are fully compliant or near full 9 compliance. 10 And, Mr. Cackette, I'll turn it over to you. 11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Okay. 12 Thank you. 13 Per the Board's direction, we are presenting 14 periodic updates on the 2005 Statewide Railroad Pollution
Page 160CARB Board transcript SC rev MVEBs 042408

15 Reduction Agreement between the Air Resources BOARD, the 16 UP Railroad, and the BNSF Railway. As mentioned, the last 17 update was in July. Since that time, the staff and the 18 railroads have continued to implement the agreement, with 19 most of the elements fully implemented on schedule and two 20 elements near full implementation. 21 Both railroads are on schedule to meet the 22 requirement to install idle reduction devices on 99 23 percent of intrastate locomotives by this June. Both 24 continue to exceed the required 80 percent use of 25 ultra-low sulfur diesel fuel. With regards to idle PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

170 1 reduction efforts, the railroads have instituted the 2 required policies and conducted extensive staff training. 3 ARB has exercised enforcement oversight. And staff have 4 now inspected over 3,000 locomotives and determined that 5 97 percent of the units we inspected were in compliance 6 with idling restrictions. 7 The major new workload under the agreement over 8 the last nine months has been to complete health risk 9 assessments for the ten rail yards in 2007. Also, work 10 began last summer to prepare the second set of seven rail 11 yard risk assessments, as we discussed earlier. These 12 draft assessments were recently released. 13 The assessments show that diesel particulate 14 matter emissions from activities at the rail yards result 15 in significantly higher pollution risk in nearby 16 communities. Our next step is to work with the railroads, 17 community members, and other stakeholders to further Page 161CARB Board transcript SC rev MVEBs 042408

18 evaluate and implement mitigation measures. 19 And we mentioned earlier about the U.S. EPA's 20 recent rulemaking to clean up the new locomotives. 21 As part of the effort to meet our SIP obligations 22 and to reduce the risk around large rail facilities, staff 23 will need to further engage BNSF and Union Pacific to 24 accelerate the pace of emission reductions far above that 25 expected from the U.S. EPA rulemaking alone. This effort PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

171 1 will need to develop strategies to speed the introduction 2 of the cleanest locomotives on California rail routes so 3 that the full benefits of the Tier 4 locomotive standards 4 are realized as soon as possible. 5 I'll now ask Mr. Mike Jaczola of the Stationary 6 Source Division to provide the staff presentation. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 MR. JACZOLA: Thank you, Mr. Cackette. Good 10 afternoon, Ms. Nichols, members of the Board. 11 Staff is here today in response to the Board's 12 direction to provide the fifth update on the 13 implementation of the ARB/Railroad Statewide Agreement.
14 --o0o-- 15 MR. JACZOLA: The agreement between the ARB and 16 the railroads was signed in June 2005 and was developed 17 with the primary objective of reducing diesel particulate 18 matter emissions in and around rail yards by approximately 19 20 percent. Today's progress report will cover compliance
Page 162CARB Board transcript SC rev MVEBs 042408

20 with the agreement program elements, which includes key 21 elements such as installation of idle reduction devices on 22 locomotives, the use of ultra-low sulfur diesel fuel, rail 23 yard inspections, and rail yard health risk assessments.
24 --o0o-- 25 MR. JACZOLA: Essentially, the agreement requires PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

172 1 UP and BNSF to install idle reduction devices on all of 2 their California-based fleet by June 30th, 2008. 3 Currently, UP and BNSF operate about 413 intrastate or 4 California-based locomotives. 5 As of April 2008, the new cumulative installation 6 total was 402, or 97 percent of the intrastate fleet. 7 Both railroads are currently on schedule to meet their 8 remaining idle reduction device install requirements by 9 June 30th, 2008. 10 UP has already achieved a 98 percent compliance 11 rate and recently directed its remaining four intrastate 12 locomotives to the maintenance shop for idle reduction 13 device installations - achieving a hundred percent in a 14 couple weeks.
15 --o0o-- 16 MR. JACZOLA: Because of the agreement, the rate 17 of idle reduction device installations in California is 18 more than twice the level of the rest of the country.
19 --o0o-- 20 MR. JACZOLA: With respect to locomotive diesel 21 fuel requirements, both railroads are continuing to comply 22 with the ARB regulation which mandates the use of CARB Page 163CARB Board transcript SC rev MVEBs 042408

23 diesel fuel for intrastate locomotives. 24 As required under the agreement, both railroads 25 continue to meet the requirement to dispense a minimum of PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

173 1 80 percent low sulfur diesel fuel, either U.S. EPA on-road 2 or CARB diesel, to intestate locomotives fueled in 3 California.
4 --o0o-- 5 MR. JACZOLA: As mentioned in previous updates, 6 the railroads established employee training for idling and 7 visible emission reduction programs. 8 The railroads combined have trained over 14,000 9 employees on both the idle reduction and visible emission 10 program requirements.
11 --o0o-- 12 MR. JACZOLA: As specified in the agreement, UP 13 and BNSF are required to perform inspections to identity 14 and repair smoking locomotives. During the last 15 six months of 2007, the railroads conducted over 21,000 16 visible emission inspections with an overall 99 percent 17 compliance rate. Since 2005, the railroads conducted over 18 64,000 visible emission inspections with an overall 99 19 percent compliance rate.
20 --o0o-- 21 MR. JACZOLA: As required under Assembly Bill 22 1222, and as referenced in the agreement, ARB staff, the 23 railroads, South Coast and Sacramento Air Quality 24 Management Districts, and several community
Page 164CARB Board transcript SC rev MVEBs 042408

25 representatives are implementing a pilot program to PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

174 1 evaluate the feasibility of using remote sensing devices 2 to identity high emitting locomotives. Phase 1 testing 3 identified a number of technical challenges which resulted 4 in a number of scheduled delays, but was completed in 5 March 2007. 6 Staff will work with the Advisory Group to 7 prepare and submit a report to the Legislature on the 8 feasibility and cost effectiveness of the locomotive 9 remote sensing by mid 2008.
10 --o0o-- 11 MR. JACZOLA: Under the agreement, ARB and the 12 railroads agreed to hold technical evaluation meetings 13 with the public every six months. These are being held, 14 and the U.S. EPA, locomotive engine manufacturers, the 15 railroads, community members, local air districts, and 16 other interested parties have attended and offered their 17 perspectives at these meetings. 18 There are also a number of efforts underway to 19 evaluate locomotive emission reduction technologies. 20 These include the use of diesel oxidation catalysts on 21 older freight line haul locomotives, retrofits of diesel 22 particulate filters on two older switch locomotives, and 23 recent locomotive engine testing of a compact selective 24 catalytic reduction by Southwest Research Institute.
25 --o0o-- PETERS SHORTHAND REPORTING (916) 362-2345

Page 165CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

175 1 MR. JACZOLA: There have been a number of other 2 activities that have occurred to reduce locomotive 3 emissions and to support the implementation of the 4 agreement.
5 --o0o-- 6 MR. JACZOLA: One significant change is the 7 replacement of many of California's 30-plus year old yard 8 or switchers with new low emitting switch locomotives. 9 About one-third of California's switch locomotives have 10 been upgraded. The goal is full replacement of the 11 California switch locomotive fleet by 2010. This will 12 likely require the use of incentive funds like bonds and 13 other funding sources like the Carl Moyer program. UP and 14 BNSF currently have over 400 intrastate or 15 California-based locomotives.
16 --o0o-- 17 MR. JACZOLA: Since your last update in July, the 18 ARB Enforcement Division staff completed its fourth round 19 of rail yard visits. These inspections involved all 31 20 designated and covered rail yards and resulted in an 21 inspection of over a thousand locomotives. Staff issued 22 30 notices of violations for improper idling or visible 23 emission or smoking locomotives which were identified 24 during the inspections, for a compliance rate of 97 25 percent. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

176
Page 166CARB Board transcript SC rev MVEBs 042408

1 ARB enforcement staff will conducted future 2 inspections at designated and covered rail yards about 3 ever six months. 4 In summary, since the rail yards inspections 5 began in early 2006, over 3300 locomotives have been 6 inspected and inspectors issued 101 Notices of Violations, 7 for a 97 compliance rate for the last two years.
8 --o0o-- 9 MR. JACZOLA: The railroads have continued to 10 implement and improve the community complaint process, and 11 continue to work with ARB staff and the public to improve 12 the responsiveness of the system.
13 --o0o-- 14 MR. JACZOLA: Under the agreement, ARB staff and 15 the railroads committed to prepare health risk assessments 16 for 16 designated large rail yards. This was done to 17 quantify pollution risk levels near rail yards, identity 18 specific emission sources, and to provide a blueprint to 19 identity and implement effective mitigation measures to 20 reduce health risks associated with rail yard diesel PM 21 emissions. These assessments were to be completed in two 22 phases, with nine designated rail yards in the first phase 23 and seven designated rail yards in the second phase.
24 --o0o-- 25 MR. JACZOLA: The first nine designated rail yard PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

177 1 draft health risk assessments were released in May 2007 2 and finalized in November 2007. The second group of seven 3 designated rail yard draft health risk assessments were Page 167CARB Board transcript SC rev MVEBs 042408

4 released in early 2008.
5 --o0o-- 6 MR. JACZOLA: The health risk assessment results 7 showed that the estimated excess cancer risks at the 8 locations close to the rail yards are higher than other 9 surrounding areas.
10 --o0o-- 11 MR. JACZOLA: For the second set of seven 12 designated rail yard health risk assessments, four UP rail 13 yard draft HRAs were released for public comment in 14 February of 2008. Public meetings were held to discuss 15 the UP draft HRAs in mid-March. The four UP rail yard 16 HRAs will be finalized in April 2008. 17 The last group of draft HRAs for released for 18 three BNSF rail yards in mid-April. Public meetings are 19 scheduled for early May to discuss these draft HRAs. 20 Staff plans to finalize these final three rail yard HRAs 21 by mid-June.
22 --o0o-- 23 MR. JACZOLA: Staff continues to work with the 24 local air districts and community members to discuss 25 additional mitigation measures for the nine designated PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

178 1 rail yard HRAs that were finalized last November. Public 2 meetings will continue to be held to identify and evaluate 3 potential additional mitigation measures that are needed 4 to reduce diesel PM emissions and thus the cancer and 5 non-cancer risks at each individual rail yard.
Page 168CARB Board transcript SC rev MVEBs 042408

6 Also, staff is working with the ARB Research 7 Division and the Office of Environmental Health Hazard 8 Assessment to use an interim methodology to quantify the 9 non-cancer health impacts around the rail yards.
10 --o0o-- 11 MR. JACZOLA: U.S. EPA recently released the 12 federal locomotive and marine rulemaking on March 14th, 13 2008. In California, it's estimated that about 90 percent 14 of the statewide locomotive NOx and PM emissions are 15 generated by line haul locomotives. 16 In the next two tables, I will explain the 2008 17 EPA line haul locomotive emission standards.
18 --o0o-- 19 MR. JACZOLA: As you can see from this table, the 20 recent EPA line haul locomotive NOx emission standards for 21 older uncontrolled and Tier 0 locomotives when they are 22 remanufactured - about every seven to ten years - were 23 reduced by about 20 to 40 percent. There were no changes 24 in NOx levels for Tier 1, Tier 2, and Tier 3 line haul 25 locomotives. The new Tier 4 NOx levels, beginning in PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

179 1 2015, are 76 percent in comparison with the current 2 cleanest Tier 2 locomotive NOx levels. 3 For PM, the standards for uncontrolled, Tier 0, 4 tier 1, tier 2 line haul locomotives when they are 5 remanufactured, again about ever seven to ten years, were 6 reduced by about 50 percent on average from the original 7 standards. The PM levels for new Tier 3 line haul 8 locomotives in 2012 comply with new Tier 2 remanufacturing Page 169CARB Board transcript SC rev MVEBs 042408

9 PM standards, or about 50 percent below the original Tier 10 2 PM standard. The new Tier 4 PM levels, beginning in 11 2015, are 85 percent in comparison with the cleanest Tier 12 2 locomotive PM levels.
13 --o0o-- 14 MR. JACZOLA: In summary, the agreement 15 implementation continues to be on schedule and achieving 16 the anticipated emission reductions. 17 Thirteen health risk assessments have been 18 finalized and the final three rail yard draft health risk 19 assessments were released this month. 20 Mitigation efforts have begun and development of 21 rail-yard specific measures is underway. 22 UP and BNSF have nearly replaced one-third, about 23 92, of their estimated 300 captive switch locomotives with 24 ultra-low emitting switch locomotives. 25 The railroads continue to comply with the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

180 1 agreement at a very high level. 2 This concludes the presentation, and I'll be glad 3 to answer any questions. 4 CHAIRPERSON NICHOLS: I think the report does a 5 fine job of summarizing where we are under the existing 6 agreement. But clearly -- I'm sure we're going to hear 7 more about this when we hear from the public -- there's a 8 desire to see us move on beyond this. And, you know, we 9 need to under all the scenarios that we've been talking 10 about.
Page 170CARB Board transcript SC rev MVEBs 042408

11 Can anybody give us an update on what's in the 12 works?
13 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 14 Chairman Nichols, this is Harold Holmes, Manager 15 of the Engineering Evaluation Section. 16 One of the -- there's a number of other measures. 17 The most important measure for railroads and, in 18 particular, locomotives is the 1998 Fleet Average 19 Agreement for the South Coast Air Basin. That single 20 measure alone is estimated to reduce oxides of nitrogen by 21 about 65 percent and particulate matter emissions by about 22 50 percent. And it will also have a spillover benefit to 23 the rest of the state of about 15 percent. That measure 24 is to be implemented in 2010. 25 One of the reasons we wanted to introduce the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

181 1 U.S. EPA locomotive rulemaking that was just recently 2 released for the federal standards was to give us sort of 3 an idea of what that rulemaking would provide us with 4 reductions. And staff is underway right now and 5 evaluating what those potential emission reductions will 6 be, not only in the near term, but possibly out in the 7 next 20 to 30 years and, in particular, focusing on Tier 4 8 line haul locomotives that we ultimately believe is the 9 goal that should be for California at some point in the 10 future. 11 Once we have that analysis completed, then we can 12 identity what additional strategies need to be implemented 13 to provide the reductions that we would like to see in the Page 171CARB Board transcript SC rev MVEBs 042408

14 future. 15 STATIONARY SOURCE DIVISION CHIEF FLETCHER: This 16 is Bob Fletcher. I'd add just a few things to that. 17 The rail yards are more than just locomotives. 18 As you know, we have cargo handling equipment. There's 19 other equipment in the yards that we have measures in 20 place for. But in my view, the key right now is to look 21 at the mitigation plans that are sort of under development 22 for each rail yard. With this blueprint that we have 23 through the health risk assessments, it allows us to go in 24 and look at what are the sources within each rail yard 25 that are contributing the most to the residual risk. And PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

182 1 by looking at the individual plans, then we can sort of 2 tailor mitigation measures to the specific rail yards. 3 And then we can kind of look from that information what 4 surfaces as sort of a statewide issue. 5 We do have commitments under the last State 6 Implementation Plan to look at a 2008 sort of agreement. 7 Whether we're able to do that in 2008 or not is -- I'm not 8 certain because it's somewhat dependant upon EPA's 9 publishing their rule making. Right now they've released 10 it. But it has not been published in the federal 11 register. We need to see what sort of -- any sort of 12 legal action may be taken on that, whether anybody chooses 13 to challenge that in the courts, which would make it more 14 difficult for us I think to proceed with trying to reach 15 an agreement on that basis.
Page 172CARB Board transcript SC rev MVEBs 042408

16 But we are working with the communities through 17 this HRA process, and I think that's going to be really an 18 important step -- next step. 19 CHAIRPERSON NICHOLS: Thanks. 20 Mike. 21 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I just wanted 22 to add that part of the yards with the biggest impacts are 23 those that are intermodal facilities. And so those are 24 benefiting greatly by the rules that the Board has 25 adopted. The cargo handling rule is getting emission PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

183 1 reduction. The truck rule -- drayage truck rule affects 2 those yards just as it affects the port. So the prospects 3 for emission reductions around those facilities occurring 4 in the next few years is very, very good. 5 And so the area we have to work on are the 6 locomotives and how do we get the cleanest locomotives 7 into California service as fast as possible. And then are 8 there some additional things that can be done in specific 9 yard locations that will pay benefits? 10 So we're working on that just as hard as we are 11 on the ports. 12 CHAIRPERSON NICHOLS: Thank you. That's helpful. 13 Mayor. 14 BOARD MEMBER LOVERIDGE: Just a question of 15 curiosity -- Dana's not here -- is in terms of railroad 16 traffic or volume or VMT or how we measure train traffic. 17 Is it level? Is it increasing? Is it about the same? 18 That's one question. Page 173CARB Board transcript SC rev MVEBs 042408

19 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 20 It's a very good question. And usually the 21 metric that's used is containers. Unfortunately, for 22 locomotives it gets really complicated, because one of the 23 things that's happened in the industry is the dynamic of 24 increasing the horsepower of the locomotives and yet they 25 became more fuel efficient. So the set of numbers that -- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

184 1 one metric that we've been able to track both nationally 2 and within the state is fuel consumption. And we've seen 3 a gradual increase from 2003 to 2007. And nationally it's 4 been about one percent annual fuel consumption increase. 5 The statewide numbers that we do have -- we don't have 6 them to, say, a port level -- has been 1 percent as well. 7 So my guess is based on the fuel times, it's 8 either some -- you know, some yards are going to be less 9 than a percent and some are going to be higher. And part 10 of the things that we're going to do in the mitigation 11 plans is do get the specifics on the particular rate of 12 growth by individual rail yard. 13 CHAIRPERSON NICHOLS: But there is growth?
14 ENGINEERING EVALUATION SECTION MANAGER HOLMES:
15 Yes. 16 CHAIRPERSON NICHOLS: Supervisor Roberts. 17 BOARD MEMBER ROBERTS: Could you share with me 18 the three reports that are scheduled to be released or 19 have just been released maybe?
20 ENGINEERING EVALUATION SECTION MANAGER HOLMES:
Page 174CARB Board transcript SC rev MVEBs 042408

21 There are three BNSF yards in the last set. One 22 will be for BNSF San Diego, the second will be for BNSF 23 Barstow, and the last one will be for BNSF San Bernardino. 24 BOARD MEMBER ROBERTS: Where are the public 25 meetings scheduled for -- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

185
1 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 2 Where are they scheduled? 3 Yes, there is a public notice that we have sent 4 out. There is a community center in San Diego, Doris 5 Magdaleno. And then in Barstow it's in the city council 6 chambers. And then San Bernardino is also in the city 7 council chambers. 8 CHAIRPERSON NICHOLS: Would you forward that 9 directly to --
10 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 11 Well, we have sent information to all the -- yes, 12 we will forward information. 13 BOARD MEMBER RIORDAN: And I do want to thank 14 you, because I did receive that information -- thank you 15 very much -- to attend.
16 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 17 Oh, thank you. 18 CHAIRPERSON NICHOLS: Other comments?
19 Yes. 20 BOARD MEMBER SPERLING: Taking this to the next 21 level, which means that to get really large reductions -- 22 you know, there's been discussion about electrifying some 23 routes and even mag lev and ideas like that for at least Page 175CARB Board transcript SC rev MVEBs 042408

24 short haul. 25 Are you all the group that's dealing with this? PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

186 1 Or how does this discussion relate to those other more 2 long-term or perhaps not so long-term discussions? 3 You know, Senator Lowenthal was bending my ear 4 the other day on this.
5 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 6 Those are discussions that come up frequently, 7 especially as it relates to port activity. There's a 8 number of strategies being looked at. One is near dock. 9 We have two proposals for rail yard modernization or 10 actually a brand new yard four miles from the dock. And 11 there's is a lot of discussions right now about how to 12 move containers from the port directly to those rail yards 13 so we can get the trucks off the road and then get the 14 trains to get out of the basin as quickly as possible. 15 And there are a number of technologies that are being 16 evaluated. 17 Two key aspects to look at. One of course is 18 cost. That's an obvious question -- or issue. The second 19 is going to be how do you mesh that with a national 20 system. And so at some point the electricity stops, or 21 the mag lev technology, and then at some point you've got 22 to meet with the national system. 23 And the concern at least from the railroad's 24 perspective is when you stop the system moving for six to 25 eight hours to change out locomotives, it's going to
Page 176CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

187 1 affect transportation of goods. And so it's one of those 2 key issues that needs to be addressed, is how do we merge 3 different kinds of technology so that we can still keep 4 the system moving and moving efficiently. 5 But the cost I think is going to be the other key 6 aspect. 7 STATIONARY SOURCE DIVISION CHIEF FLETCHER: And, 8 you know, to your question: Quite frankly, we have not 9 looked much at mag lev from our perspective. We've been 10 pretty much wrapped up in trying to implement the 11 provisions of this. 12 I do think when we look at longer timeframe -- I 13 mean our objective has been to reduce the risk as 14 expeditiously as we can. And mag lev is not going to play 15 in that, you know, arena immediately. 16 There are some new locomotive technologies beyond 17 simply diesel locomotives that people are doing research 18 on right now. And when we finish up this sort of round, 19 we do want to start looking at the next generation of 20 locomotives that may transition between, you know, the 21 diesel locomotive and mag lev. So -- 22 CHAIRPERSON NICHOLS: Not plug-ins?
23 STATIONARY SOURCE DIVISION CHIEF FLETCHER: 24 Actually, they are hybrids. They're not quite 25 plug-in. The extension cords don't run that long. But PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345
Page 177CARB Board transcript SC rev MVEBs 042408

188 1 there is work that's being looked at for hybrid and fuel 2 cell technology also. 3 CHAIRPERSON NICHOLS: Okay. Do you have anything
4 more? 5 If not, we'll go to Barry Wallerstein from the 6 South Coast, followed by Angelo Logan and Rachel Lopez. 7 MR. WALLERSTEIN: Good afternoon, Chairman 8 Nichols and members of the Board. I'm pleased to be here 9 today, possibly for the next item on your agenda. But I 10 did want to say a few words about this item because it is 11 very important. 12 Earlier this week, on Monday, I did a town hall 13 meeting concerning a cement plant because of the 14 community's concern about risks that have recently been 15 elucidated about that plant. What I want to share with 16 you is that I had 500 people turn out for that event and 17 probably about five or six television camera crews. The 18 risks that your staff has identified for these rail yards 19 are roughly the same as for that cement plant. So they're 20 really quite substantial, and they're quite substantial 21 when you compare them to the presentation you saw for West 22 Oakland and the total impact of the Port plus the rail 23 yards. 24 And so this MOU that's being reviewed today did 25 contain a provision that said once those risk assessments PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

189 1 were done, as your staff's noted, that work would begin on
Page 178CARB Board transcript SC rev MVEBs 042408

2 risk reduction. And I was pleased to hear the staff say 3 that they've started that work in response to the Chair's 4 question. But I think that that work really needs to 5 become more public and it really needs to be expedited. 6 For that cement plant, we've already initiated 7 rule making. Obviously we have different authorities on 8 stationary sources than dealing with locomotives or 9 potentially some of the other aspects of rail yards. But 10 the risks are really very substantial when we compare them 11 to virtually any other facility, other than we talk about 12 ports as a whole. So we would just encourage you to 13 expedite that work and, again, start a public process to 14 better involve the community and interested parties. 15 Thank you. 16 CHAIRPERSON NICHOLS: Thank you. 17 Mr. Logan and then Ms. Lopez. 18 MR. LOGAN: Thank you, Chairman Nichols and 19 members of the Board. My name an Angelo Logan. I'm with 20 East Yard Communities for Environmental Justice, a 21 community-based environmental justice organization. 22 I'm here today to say basically the same thing 23 I've been saying for the last five years. And, that is, 24 that rail yard communities are in a state of crisis. The 25 pollution in these locations are extremely high. And in PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

190 1 light of the health risk assessments that were recently 2 released, I would expect ARB to act as if it is in a state 3 of emergency. The cancer risk at these rail yards are 4 unacceptable and must be addressed in a real and urgent Page 179CARB Board transcript SC rev MVEBs 042408

5 manner. 6 We recognize and appreciate the effort of ARB in 7 addressing diesel exhaust such as your Emission Reduction 8 Plan on ports and goods movement. But some of these 9 strategies have a long way to go. 10 Specifically regarding the railroads, we believe 11 that the 2005 MOU does not do enough to really protect the 12 public's health. We believe that ARB has the legal 13 authority to implement enforceable rules that can reduce 14 rail yard emissions far more than an MOU. And we have 15 illustrated this in our case that you will hear in closed 16 session today. 17 I would like to urge the Board to exercise their 18 legal authority in addressing the unacceptable levels of 19 cancer risk at the rail yards and protect the public's 20 health. We are here to help in that effort, and would ask 21 you and your staff to sit down with us to discuss the 22 suggested rules that will be presented to you today. 23 Thank you. 24 CHAIRPERSON NICHOLS: Thank you. 25 Rachel Lopez, followed by Diane Bailey. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

191 1 MS. LOPEZ: Good afternoon, Board members and 2 Madam Chairman. My name is Rachel Lopez and I am a 3 resident of Mita Loma in the unincorporated Riverside 4 County. I also work with the Center for Community Action 5 and Environmental Justice. 6 And I'm here today on behalf of the Center for
Page 180CARB Board transcript SC rev MVEBs 042408

7 Community Action and Environmental Justice, with support 8 from community groups impacted by railroad pollution. We 9 have submitted a petition for rule making to the Board 10 today to establish regulations to further control criteria 11 and toxic emissions from railroad sources. 12 Recent analysis from the health risk assessments 13 conducted by CARB in 2007 and 2008 demonstrate the 14 outrageous impact from railroads on our communities. 15 Calculations from the health risk assessment for 16 residential cancer risk at the San Bernardino Burlington 17 Northern/Santa Fe rail yard are outrageously high, at 18 2,030 in 1 million. The cancer risk at the point of 19 maximum endpoint is 3,330 in 1 million. Totally 20 outrageous and unacceptable to our communities and to our 21 families. 22 The top five polluting railroads for diesel PM 23 pollution in tons per million are Burlington 24 Northern/Santa Fe Barstow at 27.9; Roseville at 25.1, BNSF 25 Hobart, City of Commerce, 23.9; UP ICTF Delores at 23.7; PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

192 1 and Burlington Northern/Santa Fe San Bernardino at 22.0. 2 While ARB continues to release numbers and 3 communities have participated in many, many community 4 meetings, no significant mitigation has been proposed to 5 us. ARB clearly has the authority. They must demonstrate 6 a commitment to enforcing their regulatory duty under the 7 Health and Safety Code that says every reasonable action 8 is taken to achieve the state ambient quality standards at 9 the earliest practicable date. Page 181CARB Board transcript SC rev MVEBs 042408

10 CCHA and other impacted community organizations 11 feel that a petition is necessary to prompt ARB to 12 institute rule making similar to the rules adopted by 13 South Coast Air Quality Management District. Our 14 communities have waited year after year for relief from 15 the toxic blanket of railroad diesel fumes. We demand 16 stronger action now. It is truly a matter of life and 17 death. 18 Thank you. 19 CHAIRPERSON NICHOLS: Thank you very much. 20 Ms. Bailey and then Dave Seep. 21 MS. BAILEY: Good afternoon, Chairman Nichols, 22 members of the Board and staff. This is Diane Bailey with 23 the Natural Resources Defense Council. 24 I want to echo the comments that you just heard. 25 I strongly support the comments from Barry Wallerstein as PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

193 1 well as Angelo Logan and Rachel Lopez. And you've often 2 heard from us major concerns with the rail MOU. And we 3 still have those concerns. However, we do want to move 4 forward and work with you to see what can be done, how we 5 can expedite the cleanup of these tremendously polluting 6 facilities. 7 And as you've heard from others, the rail yards 8 in California are leading to tremendous health risks in 9 surrounding communities and it's really unacceptable. And 10 this issue is urgent. We want to see action now. 11 There's a long list of measures that can be done
Page 182CARB Board transcript SC rev MVEBs 042408

12 to rein in this pollution. These are standard things, 13 like replacing engines with state-of-the-art technology; 14 retrofitting the locomotives; electrifying lines, as 15 you've heard; and also improving efficiency. These are 16 all technologically feasible and urgently needed. And 17 what we really need to see is a solid commitment to making 18 these measures happen, and we'd like to work with you to 19 do that. 20 Thank you. 21 CHAIRPERSON NICHOLS: Thank you. 22 Dave Seep, followed by Lanny Schmid. 23 MR. SEEP: Chair Nichols and Board members. My 24 name is David Seep. And thank you very much for the 25 opportunity to present here. I'm currently the Director PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

194 1 of Environmental Engineering and Program Development for 2 BNSF Railway. 3 As the ARB staff has pointed out in previous 4 updates, the railroad MOU is working as intended and in 5 some areas exceeding expectation. It's creating 6 incentives for the railroads to make emissions reductions 7 happen that would not have otherwise happened. 8 Second, I believe the HRA process is continuing 9 to work as envisioned by the railroads, because they've 10 already started discussions on mitigation and look forward 11 to future discussions with the CARB staff, communities, 12 air districts, and other stakeholders. 13 This HRA process by CARB and the railroad staff 14 has created an unprecedented numerical message for how to Page 183CARB Board transcript SC rev MVEBs 042408

15 best reduce emissions around rail yards. 16 Just for perspective -- and each of you has a 17 packet of information -- Chart 1 in the packet. When we 18 looked at the combined on-site rail yard emissions in 19 South Coast's region, about half of the rail yard 20 emissions were from the locomotives. And as Mr. Fletcher 21 mentioned, there are other sources such as on-road trucks, 22 cargo handling equipment, and other sources. 23 Of course, not all rail yards are alike and rail 24 yard emissions vary depending on location and type of 25 yard. As Chart 2 in your packet shows, the locomotive PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

195 1 emissions range from about 30 percent at the Commerce 2 yards, which are primarily intermodal type facilities, to 3 over 90 percent at Watson and Colton, which are primarily 4 rail classification yards. 5 To put all this in perspective, there is a Chart 6 3 in your handout. When you include the rail yard 7 emissions in context with surrounding off-site sources, 8 sources that are within about one or two miles from the 9 rail yards, the rail yard emissions are about 40 percent 10 of the total diesel particulate emissions of the off-site 11 sources, which are about 60 percent. 12 In summary, we agree that the MOU is working as 13 intended. As mentioned by ARB staff, CARB has already 14 passed regulations on cargo handling equipment, on drayage 15 trucks and off-road equipment, which will further reduce 16 emissions from railroad operations. These reductions in
Page 184CARB Board transcript SC rev MVEBs 042408

17 emissions, combined with a successful MOU effort, will 18 continue to reduce the impacts on the surrounding areas. 19 Thank you very much. And if you have any 20 questions, please let me know. 21 CHAIRPERSON NICHOLS: Thank you. 22 Lanny Schmid, followed by Mike Barr and Kirk 23 Marckwald. 24 MR. SCHMID: Good afternoon, Chair Nichols, 25 members of the ARB Board. My name's Lanny Schmid, and I PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

196 1 serve as the Director of Environmental Field Operations 2 for Union Pacific. 3 I'm here in front of you this afternoon to 4 provide an update on our MOU activities, many of which 5 have been touched on already by staff. But I'll focus a 6 little bit on our HRA activities. 7 As you know, we've worked hard over the actually 8 a little bit more than a decade now to freshen 9 comprehensive emission reductions programs including MOUs 10 and rule makings. 11 Part of the Emissions Reduction Program with ARB 12 was to cooperate in preparing health risk assessments at 13 16 rail yards. Since our last update nine months ago, 14 we've co-convened with ARB four meetings at UP facilities 15 to discuss the second set of draft HRAs. The remaining 16 three BNSF meetings are scheduled the first week of May. 17 The next step thereafter in the HRA process is to 18 discuss mitigation measures, as has been mentioned. We 19 will hold another set of community meetings with ARB once Page 185CARB Board transcript SC rev MVEBs 042408

20 those HRAs are finalized, and use those results to guide 21 future actions. 22 Two common things that we've learned from the HRA 23 process so far: The risk from rail yard emissions is very 24 similar to what you'd find near freeways and other major 25 transportation facilities. And the diesel emissions from PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

197 1 rail yards have been reduced by 5 to 50 percent since 2 2000. Recall that the baseline year for these HRAs was 3 2005. But in many cases when we've had our meetings then 4 that are forward-looking to 2007, 10, 15, and 20, we've 5 seen significant reductions since 2005 just to the current 6 timeframe. 7 We've included two slides in the packet that you 8 now have showing how we're approaching specific mitigation 9 activities at designated yards. During those discussions, 10 we used photo slides, like number four, to identity 11 activities by location in the yard and the nature of those
12 activities. 13 Then we also created back in early 2006 as part 14 of our early mitigation activities an opportunity 15 evaluation matrix. As part of that matrix you see we have 16 to have aspects or issues that are safe, technically 17 feasible, legal, operationally practical, and economically 18 viable to be implemented. Once those activities are 19 identified, we can summarize the known facts and data and 20 drive the reductions that we're projecting. 21 Around the time of your next Board meeting --
Page 186CARB Board transcript SC rev MVEBs 042408

22 this is the fun part. Around the time of your next Board 23 meeting, UP will be introducing a six-axle gen set 24 locomotive that does specialized service at the 25 facilities. The ones we've previously introduced are the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

198 1 four axles that do the predominance of the switching, 2 which are -- I think there's around 70 of those currently 3 in California. The four axles will be in special service 4 in the yards sorting locomotives. They have more 5 attractive effort and special features. That event will 6 be on May 21st in Sacramento -- or 22nd, and hopefully in 7 Fresno where your next Board meeting will take place. 8 CHAIRPERSON NICHOLS: Mr. Schmid, your time is 9 up. Please conclude. 10 MR. SCHMID: We're committed to reducing and 11 continuing to work with communities in reducing emissions. 12 I'd be happy to take any questions. 13 CHAIRPERSON NICHOLS: Thank you. 14 Okay. Mr. Barr and Mr. Marckwald. 15 MR. BARR: Michael Barr for the railroads. 16 Chairman Nichols and members of the Board, welcome back to 17 the Bay Area. We're very glad to see you here. And 18 really it is an exciting time in the implementation of all 19 of the public-private partnership between the railroads 20 and the Air Resources Board and participating districts 21 and the EPA as well. 22 As the latest ARB staff report shows -- this is 23 the fifth one -- the ARB certainly has the expertise and 24 the experience and the resources to make these agreements Page 187CARB Board transcript SC rev MVEBs 042408

25 work. And the fact that this was a voluntary but legally PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

199 1 binding agreement has produced reductions and 2 accomplishments very, very quickly and very, very 3 effectively. Far more quickly and far more effectively 4 than regulation could have done. 5 And at the same time let's not forget the 1998 6 MOU that established the innovative and unique South Coast 7 Fleet Average Agreement and all the provisions involved 8 there. This is the tenth anniversary of that agreement. 9 It's still in effect. It's fully in effect. It's being 10 fully implemented by the railroads, with the assistance 11 and guidance of the Air Resources Board and its 12 professional staff. It's got two decades to go. And it's 13 providing huge benefits as far as the plan goes. 14 And Chairman Nichols when she served at EPA was 15 an essential partner and made sure that EPA was an 16 essential partner in that agreement, and provided that it 17 would be locked into place and the reductions would be 18 locked into place in the SIP, where they still are. And 19 they still get benefits for the State of California. 20 The 1998 MOU also provided a lot of the 21 incentives to develop the advanced locomotive technology 22 like the Tier 2 locomotive technology. And now of course 23 in the 2005 MOU we've got the anti-idling devices and the 24 gen set locomotives. But it also provides the flexibility 25 for the development of a variety of new equipment that is PETERS SHORTHAND REPORTING (916) 362-2345
Page 188CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

200 1 essential for California to be employed as goods movement 2 evolves. 3 And, again, no other agency, local, regional or 4 federal, could do the job in a way that makes sense 5 environmentally or economically. Only ARB could do the 6 job. 7 And here's a big, big bonus that nobody knew 8 about 10 years ago or 13 years ago. Moving goods by rail 9 produces two-thirds less greenhouse gases than moving 10 goods by truck. And that will also be reflected of course 11 in your plans for achieving the goals under AB 32. 12 Well, congratulations and happy tenth anniversary 13 to a unique and a valuable and innovative partnership that 14 continues to provide benefits for California and industry 15 and all of us everyday. 16 Thank you. 17 CHAIRPERSON NICHOLS: Thank you. 18 MR. MARCKWALD: Good afternoon, Madam Chair and 19 Board members. My name is Kirk Marckwald. I'm here today 20 for the California rail industry. 21 Just three quick points. In the packet we 22 provided there's a chart on page 6 that basically tracks 23 in a slightly different way the evolution of improvements 24 in railroad -- in locomotive emissions particularly on 25 line haul locomotives. And what's important, as you can PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

201 Page 189CARB Board transcript SC rev MVEBs 042408

1 see from the chart, is in 2015 the overall reduction from 2 uncontrolled levels is both -- is 90 percent for NOx and 3 91 percent for particulate matter. So one of the things 4 that had been suggested from a long time is that actually 5 locomotives were not like other combustion sources like 6 heavy-duty trucks, like cars that were not really getting 7 to 90 percent. Well, line haul locomotives on a daily -- 8 will get to 90 percent reduction from uncontrolled levels. 9 The staff said earlier, well, how do we get them 10 here quicker and the like? And that's part of an ongoing 11 discussion that we'll have with yourselves and members of 12 the community and your staff. But I think it's very 13 important to note that in fact they do get to 90 percent. 14 And the railroads are clearly committed to ongoing 15 cooperative discussions to find innovative ways that we 16 can find the improvements such as the gen set locomotives 17 that have been talked about earlier. They didn't -- no 18 one even knew about them ten years ago. Now they're 19 providing relief, over 80 of them in southern California, 20 and providing relief adjacent to rail yards, exactly where 21 the people who live closest to the rail yards benefit the 22 most. So these are the kinds of things that have happened 23 and will continue to happen. 24 Secondly, to the question of growth, Mayor 25 Loveridge's question. I think that container imports are PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

202 1 substantially down. Exports are up. Basically right now 2 in southern California I think you'll see it's about flat.
Page 190CARB Board transcript SC rev MVEBs 042408

3 So maybe it's the one percent increase in fuel. Maybe it 4 will continue to be -- maybe it will be flat. Maybe this 5 year it will even go down a little bit. 6 And to Member Sperling's question. All of these 7 innovative ideas, mag lev, linear induction and the like, 8 really need to be looked at a systems standpoint. And 9 just like your goods movement plan began to look at the 10 system -- the goods movement system, if we're going to 11 have meaningful discussion about technologies, it's going 12 to have to be looked at from the system - the containers 13 getting off the ships to the distribution centers on to 14 the trucks on to the rail. This entity is the right 15 entity to lead that effort. It is complex, it is 16 expensive, and it is somewhat over the horizon. Doesn't 17 mean we shouldn't start talking about it. But in some 18 ways the benefits have been over-assumed and 19 under-analyzed in our opinion. 20 But, finally, as was noted today, we have the 21 2005 MOU, the '98 MOU, the new EPA rulemaking, and the 22 technology symposia, all that are happening under the 23 ARB's aegis. And I think it's perhaps time to broaden the 24 conversation and maybe have an annual rather than a 25 semiannual meeting, but talk about some substantial PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

203 1 programmatic discussions rather than the element by 2 element by element. I think we're doing a great job. 3 We've worked hard. Your staff has beaten this if we 4 haven't done a good job. But I think we really ought to 5 talk about the programmatic stuff rather than the Page 191CARB Board transcript SC rev MVEBs 042408

6 case-by-case stuff or offer that for your consideration. 7 CHAIRPERSON NICHOLS: Well, thank you very much. 8 I appreciate that comment. I think you probably picked up 9 on the fact that, that was why I was asking the question 10 after the staff presentation, was to try to put this whole 11 discussion into a larger frame, because in some respects 12 this conversation over the last few minutes almost 13 illustrates the alternative universes in which these 14 discussions seem to take place. 15 On the one hand, there's no question that we have 16 achieved really impressive results under the MOU process. 17 And that technologies and operating procedures have come 18 into place and partnerships have been created which have 19 moved the whole emissions footprint, to use that overused 20 word, way beyond what it would have been without it, and 21 that we've made great progress. And I think we should be 22 proud of it. We should be celebrating that 23 accomplishment. 24 But at the same time, when you look at those 25 health risk assessment numbers, you can't say that that's PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

204 1 acceptable or that we could just go along with the kind of 2 usual pace of regulatory development that we would 3 normally do in a situation where we're just kind of 4 sticking to the usual -- under the Clean Air Act, because 5 in fact I think for significant numbers of people the 6 exposures are just beyond what we would have thought 7 possible. It's perhaps the -- that's the danger of
Page 192CARB Board transcript SC rev MVEBs 042408

8 information. When you have that kind of information, it 9 becomes compelling and you have to do something about it. 10 So I very much want to see us convening a process 11 sooner rather than later where we put all of these 12 potential rule makings and other actions on the table, and 13 in a public way, as we have to, start to figure out what 14 we're going to do next. And there should be a mix in the 15 short term, because that's where the risks are right now, 16 and the longer term, kind of transformative technologies 17 that Professor Sperling was talking about, because you 18 certainly don't want the best to be the enemy of the good. 19 But at the same time, if there are promising ideas out 20 there that really do make sense from a system perspective, 21 we don't want to be doing anything that would slow those 22 down or prevent them from happening either. So just a 23 couple of thoughts about where we ought to go next. 24 And I see two other Board members here who have 25 hands on their mikes. We'll start with you, Mayor PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

205 1 Loveridge. 2 BOARD MEMBER LOVERIDGE: This is really a 3 follow-up to your lead. But how do you have a goods 4 movement system conversation? I mean what do we need to 5 do that we're not doing now? What's your invitation? 6 Where do we go with it? 7 MR. MARCKWALD: Well, I mean I think, first of 8 all, everyone needs to be at the table. And the Governor 9 tried to set the table via the Cal/EPA and the Business 10 and Transportation Agency, and it got bogged down I think Page 193CARB Board transcript SC rev MVEBs 042408

11 in large part because not enough people on all sides put 12 their oar in the water and said, "We're going to be here, 13 we're in the room, we're going to be candid with each 14 other, and we're going to try to find solutions." And, 15 you know, rather than point fingers about who wasn't there 16 or not, it's important that the beneficial owners of the 17 cargo, the people who move the cargo, the people who have 18 distribution centers, the people who live in the 19 communities, and the governmental entities at all levels 20 need to be at the table. And some were missing the last
21 time. 22 And it needs to be I think undertaken with the 23 idea that we all need to move forward together and it's 24 going to be a mix of actions. They're all not going to be 25 regulatory, because they're either -- there's too many PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

206 1 different entities have authority to do different things 2 to different entities, or we'll end up fighting about it 3 should be this way or that way. So some creative way to 4 move through that impasse to get to results. And there 5 could be, you know, a basket of things not unlike what 6 this agency is looking at in AB 32. Any one tool is not 7 going to get us there. 8 So I think it's all the people at the table and 9 it's being open to a variety of tools that can work 10 together to lower both criteria emissions and as well as 11 carbon. 12 CHAIRPERSON NICHOLS: Ms. Riordan.
Page 194CARB Board transcript SC rev MVEBs 042408

13 BOARD MEMBER RIORDAN: Yes, question to the 14 staff. 15 One of the speakers got me to thinking about the 16 location of some of the railroad yards and the health risk 17 assessment. You will see that I have not read your packet 18 that you sent me. But I just need to ask you: Have we 19 been able to separate out those rail yard emissions versus 20 the immediate surrounding area? And I'm thinking two very 21 specific ones. 22 One is the Colton Railroad Yard and the Santa Fe 23 in San Bernardino, because you have the I-10 literally on 24 the Colton facility and the 215 two blocks away, which is 25 right in the neighborhood. So are we able to separate PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

207 1 those out? And it may be -- and I apologize for asking 2 the question, because it's probably in the report that I 3 haven't read yet.
4 ENGINEERING EVALUATION SECTION MANAGER HOLMES: 5 Well, we of course looked at those two yards in 6 particular. And it was interesting -- you've got an 7 interesting contrast between those two yards. 8 First of all, the methodology was such to look at 9 the rail yard emissions first and to look at each of the 10 source sectors that generated those emissions. Then for 11 all of the yards we looked at off-site emissions within a 12 mile. And those were overwhelmingly dominated by truck 13 emissions, heavy-duty diesels. And when you have I-10 14 right next to Colton, that was a significant off-site 15 source. In most cases the off-site emissions were two to Page 195CARB Board transcript SC rev MVEBs 042408

16 three time higher than the rail yard emissions. 17 One of the concerns that was raised during the 18 public workshops is our inability -- because of the way we 19 developed the guidelines in the process for focusing on 20 rail yard emissions, did not look at truck distribution 21 centers, for example, that were in outlying areas or that 22 might have affected the source. What we did try to do was 23 to incorporate all of the trucks that were on the freeways 24 and major arterials. So we probably got elements of those 25 trucks but maybe not the idling at a warehouse facility, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

208 1 for example. 2 So we think we've done a pretty good job of 3 putting things into perspective, especially as it relates 4 to off-site emissions. 5 There was one exception. There was four yards in 6 Commerce where you had two yards at one end of town and 7 two yards at the other end. We actually looked at two 8 miles outside of the rail yards. And in that particular 9 case is the off-site emissions were nearly three times the 10 rail yard emissions. And the Commerce yards combined were 11 the largest rail yard emission sources in the state at 40 12 tons per year. 13 BOARD MEMBER RIORDAN: Thank you very much. 14 MR. Marckwald: Member Riordan, showing this, you 15 never quite include the right charts. We actually have 16 that chart, which I will give you, that showed you that -- 17 I think on number three it shows generally all of the rail
Page 196CARB Board transcript SC rev MVEBs 042408

18 yards together, that the off-site sources do overwhelm the 19 on-site sources. And that we -- the chart we didn't put 20 in there, which I'll provide to the clerk and we'll get to 21 you, I'll show that for each individual yard how that 22 changes, the buff colored being the off-site emissions and 23 the other colors being the on-site omissions. 24 BOARD MEMBER RIORDAN: I appreciate that. And 25 that would be helpful in working with the communities, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

209 1 because you just can't ignore those major transportation 2 corridors. And it's just ironic -- I can't speak to 3 Commerce because I don't know the exact, you know, 4 location. But the two yards in my area are just -- 5 they're neighbors of major transportation corridors. 6 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, that's 7 going to be true wherever there's an intermodal yard, 8 because they're going to be located next to high volume 9 freeways that service trucks. But if you're in the 10 community, you're getting hit with the pollution from both 11 of them. So it just -- we have to operate on several 12 different fronts at once in order to get levels down to 13 something that's not even tolerable but at least well 14 below the today's level. 15 BOARD MEMBER RIORDAN: But when you are talking 16 to the community, you need -- because of the emphasis of 17 the particular workshop or public hearing, you need to 18 talk about what is existing. And what we're talking about 19 right now are the rail facilities. But we can't ignore 20 the other. And they need to be taken into consideration Page 197CARB Board transcript SC rev MVEBs 042408

21 and somehow -- you know, to make the presentation very 22 logical and encompassing, and yet recognizing the 23 railroads aren't going to be able to mitigate what's on 24 that interstate next door to them. I mean that's another 25 something that we have to do, not what the railroad -- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

210 1 CHAIRPERSON NICHOLS: It's cumulative impact, but 2 the solutions will be different. 3 Professor Sperling. 4 BOARD MEMBER SPERLING: Yes. Bringing you back 5 to Mayor Loveridge's big picture thoughts. 6 An observation and just a quick question is that 7 you talk about what -- you know, the challenge is to get 8 the -- the need is to get the stakeholders at the table. 9 I wonder if it's not a more profound problem in that we 10 really don't understand what the options are, what the 11 costs are when we start because we are, as you said, 12 thinking about looking at a very complex system that's 13 interwoven into the economy and so on. And that causes 14 me -- and I serve on a couple national committees -- 15 National Academy committees where we're looking at energy 16 efficiency and transportation. And yet we can't find 17 anyone hardly that is very knowledgeable on these issues. 18 And so it raises the question in my mind that: Is your 19 organization or is the railroad industry making some sort 20 of a commitment to helping generate these kinds of -- this 21 kind of knowledge and insights? I mean, you know, you 22 look at the passenger side -- passenger transportation
Page 198CARB Board transcript SC rev MVEBs 042408

23 side and, you know, there's experts, you know, everywhere. 24 CHAIRPERSON NICHOLS: Well, people are generating 25 scenarios for 2050 and all of that. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

211 1 MR. MARCKWALD: Well, I think that there -- there 2 was a national commission that the Chairman of the BNSF 3 Railway sat on. And it was very outspoken about the need 4 for in this case looking at the rail side. But rail was 5 driven -- I mean trucking and rail and ships, we take 6 things that other people give us. We really all work for 7 Target and Walmart. And so we can only look at it from 8 our lens about what may come to us. And then once it 9 comes to us, what's the most efficient way to move it? 10 And that's what this national commission had looked at. 11 And I'll make sure to get you the summary, because it was 12 really an effort to look over where is the investment 13 needed to ensure the most efficient rail system possible. 14 But no one has yet from a California perspective 15 joined the pieces together, particularly in southern 16 California. Oakland is obviously incredibly important and 17 the third most important. But the complexes down there, 18 particularly their focus on containers and how the 19 different pieces of the system work together, we don't 20 know anybody who's done it. We're certainly willing to be 21 full partners in assessing that and looking for those 22 solutions, because they make good sense for the 23 communities, they make good sense for the environment, and 24 they make good sense for the economy. So we would 25 definitely be happy to be there. We have kibitzed amongst Page 199CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

212 1 ourselves for that very question: Who could be doing this 2 and why haven't they done it? Why haven't the foundations 3 stepped into this? Why hasn't the Academy stepped into 4 this: Why haven't the regulatory agencies stepped into
5 it? 6 But you're right, I don't think it exists. And 7 if it does, we don't know about it. 8 CHAIRPERSON NICHOLS: Well, there's an 9 opportunity. 10 MR. MARCKWALD: Once you've finished with AB 32, 11 you can get into -- 12 CHAIRPERSON NICHOLS: Well, it is central 13 actually to everything. I mean given our economy, this 14 state as an importing/exporting state, where 15 transportation is at the top of our areas where we emit 16 CO2 and other greenhouse gases, we have to be dealing with 17 the issue. 18 I think it calls for some further thought 19 obviously. And I want to ask the staff to help us with 20 this, to elevate the level of this discussion in terms of 21 bringing together the regulators, the planners, the 22 climate change people and so forth to come up with a 23 proposal of how we might at least move forward on this 24 issue in a more comprehensive fashion. And we probably 25 will need to -- and I'm sure we'll need the help and PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 Page 200CARB Board transcript SC rev MVEBs 042408

213 1 support of other parts of state government, in particular 2 the Business and Transportation Agency. But maybe 3 starting with the goods movements plan, which I -- you 4 know, was done before my time. But I know a substantial 5 investment was made. Even if it's not perfect, it has a 6 great deal of information and works that went into it. 7 And so we need to use that as our starting point. 8 But I would ask -- I think I can speak for the 9 rest of the Board here, that we would like to see the 10 staff come back to us with a proposal in a reasonable 11 period of time -- I don't know how long you think it would 12 take -- but in a couple of months, at least -- not with 13 the answer -- but with at least a suggestion of how you're 14 thinking a process might be put together. What do you 15 think is feasible? 16 September. All right. Sold. September it is. 17 And if that doesn't work, you know, you can have 18 an extension of time. But let's try to aim for that. 19 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And we're 20 looking at this sector as part of the goods movement and 21 global warming and really what the goods -- the Emission 22 Reduction Plan is a midterm plan. We're trying to get 23 things in a couple of years to immediate reduction and 24 then get us to about 2015. And we know that that's not 25 the long-term solution, that the plan doesn't -- obviously PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

214 1 those bar charts that went up are not things that are Page 201CARB Board transcript SC rev MVEBs 042408

2 acceptable. That's something that has to go down, again 3 significantly. So we'll at least give it a shot and come 4 back with a report of where we're at or what our thinking
5 is. 6 CHAIRPERSON NICHOLS: Well, and it seems to me 7 that although we do all want to think comprehensively and 8 system-wide again to bring together the kind of disjointed 9 pieces of this discussion, in addition to the health 10 impacts and the economic impacts of the health effects of 11 living close to one of these facilities, there's a direct 12 economic impact on those communities as well. And we now 13 can see that because, you know, property values in those 14 areas are going to be affected by this kind of 15 information. So I think that lends a sense of urgency to 16 looking at what the short-term measures are as well as the 17 longer term measures. 18 So I think that's all we can do at the moment. 19 But I want to thank everybody for the very substantive and 20 helpful presentations. And this will be continued. 21 BOARD MEMBER BERG: Madam Chair?
22 CHAIRPERSON NICHOLS: Yes. 23 BOARD MEMBER BERG: May I just make also just a 24 quick comment. And that was following up that maybe this 25 would be an appropriate time also for staff to look at PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

215 1 this every six-month reporting. And how we go forward on 2 that has been an enormous help for the Board. And I 3 appreciated every update to make sure that we were on
Page 202CARB Board transcript SC rev MVEBs 042408

4 track with the MOU. For that I congratulate you 5 tremendously and all the work. But maybe with your plan 6 they could come back with how we might go forward -- since 7 we did take Board action for that, was part of the Board 8 action on the reporting, we might need something to move 9 forward. 10 CHAIRPERSON NICHOLS: A reporting period and a 11 form of reporting. Thank you. I think that's a very good 12 amendment to my suggestion. Thank you. 13 All right. I'd like to do a time check here 14 before we move on. 15 We've got two items that I believe kind of go 16 together, is that -- they're combined. 17 Okay. And what's your estimate in terms of 18 the... 19 The staff presentation is no more than ten
20 minutes. 21 And we probably have people -- I know Mr. 22 Wallerstein said he was here to speak on that item, and I 23 assume there are others. 24 There was some talk about a break. And I'm just 25 wondering whether people would rather plow through and try PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

216 1 to get finished or take a 15-minute break at this time for 2 stretching or whatever. 3 Can I see a show of hands for a break? 4 Zero. Okay. 5 All right. I got it. 6 This group gives work ethic a new meaning. Page 203CARB Board transcript SC rev MVEBs 042408

7 All right. The first of these two items is 8 consideration of revisions to the Transportation 9 Conformity Budgets for the South Coast Air Basin. This 10 item is being considered at the request of the South Coast 11 District and Southern California Association of
12 Governments. 13 And the second item is an update on the status of 14 revisions to the State Implementation Plan for Ventura, 15 Western Mojave Desert, and Sacramento Metropolitan Ozone
16 Non-attainment Areas. 17 Mr. Cackette, do you want to introduce this item?
18 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Dennis 19 Wade will make the presentation. 20 (Thereupon an overhead presentation was 21 presented as follows.) 22 AIR POLLUTION SPECIALIST WADE: Thank you, Mr. 23 Cackette. 24 Good afternoon Chairman Nichols and members of 25 the Board. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

217 1 As Mr. Cackette noted, I'll be covering two 2 topics this afternoon, starting with an update on the 3 adoption of federal ozone and PM2.5 plans.
4 --o0o-- 5 AIR POLLUTION SPECIALIST WADE: In 2004 and 2005, 6 U.S. EPA published regulations which implemented the 7 federal 8-hour ozone standard it revised in 1997. Plans 8 to meet the standard were due to U.S. EPA on June 15th,
Page 204CARB Board transcript SC rev MVEBs 042408

9 2007. 10 Finishing up after last year's state strategy 11 adoption, today I'd like to update you on the status of 12 nonattainment area plans for the 8-hour ozone and PM2.5 13 State Implementation Plan.
14 --o0o-- 15 AIR POLLUTION SPECIALIST WADE: Starting with 16 southern California. 17 The Western Mojave Desert Nonattainment Area 18 consists of the Antelope Valley Air Quality Management 19 District in northern Los Angeles County and a large 20 portion of the Mojave Desert Air Quality Management 21 District in San Bernardino County. 22 The Antelope Valley and Mojave districts have 23 requested reclassification of the Western Mojave 24 Non-attainment Area to Severe-17. Air quality modeling 25 shows that emission reduction commitments made in the 2007 PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

218 1 SIP for the South Coast Air Basin will allow the Western 2 Mojave Desert to attain the standard by 2020. 3 The local districts have completed the reasonable 4 further progress and attainment demonstration plans, and 5 they have been released for public review. The districts 6 are expected to adopt the plans in May and June. 7 Ventura County has requested a reclassification 8 to serious. Modeling performed by the South Coast 9 District also shows Ventura County will attain the 10 standard by 2012 with implementation of the 2007 SIP. 11 Ventura County has completed the reasonable further Page 205CARB Board transcript SC rev MVEBs 042408

12 progress and attainment demonstration plans and has 13 released them for public review. Ventura expects to adopt 14 the plans in May. 15 U.S. EPA published new ozone and PM10 Clean Air 16 Plan requirements for Imperial County in January and March 17 of this year. Work is underway and Imperial County 18 expects to adopt these plans by their due date in December
19 2008. 20 AIR POLLUTION SPECIALIST WADE: Moving on into 21 northern California. 22 In the San Joaquin Valley, you approved the ozone 23 attainment plan last year and it has been submitted to 24 U.S. EPA. The valley district will consider its PM 2.5 25 attainment plan on April 30th. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

219 1 Each of the five districts that make up the 2 Sacramento non-attainment area have requested that the 3 area be reclassified to Severe-15, which means that the 4 plan will have to demonstrate attainment by 2018. The 5 five air districts are in the process of adopting a 6 reasonable further progress plan, and we expect to submit 7 the plan to U.S. EPA soon after we receive it. 8 The attainment planning process has been 9 coordinated with the regional blueprint project being 10 conducted by the Sacramento Area Council of Governments. 11 This regional blueprint was recently adopted by SACOG and 12 will now allow the SIP to reflect the most up-to-date 13 transportation and land-use visions available.
Page 206CARB Board transcript SC rev MVEBs 042408

14 Due to tight planning schedules, we will bring 15 these plans to the Board within one to two months of local 16 adoption.
17 --o0o-- 18 AIR POLLUTION SPECIALIST WADE: This concludes 19 the SIP update presentation. 20 CHAIRPERSON NICHOLS: Thank you. 21 AIR POLLUTION SPECIALIST WADE: Next I'd like to 22 talk to you about the modifications that staff is 23 proposing to the transportation conformity budgets for the 24 South Coast Air Basin.
25 --o0o-- PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

220 1 AIR POLLUTION SPECIALIST WADE: When Congress 2 last amended the Federal Clean Air Act, it included the 3 conformity requirement which is intended to ensure that 4 federal activities would be consistent with state 5 implementation plans. 6 Transportation conformity applies to federal 7 activities such as approving transportation plans, or 8 providing highway project funding. Under the Clean Air 9 Act's conformity requirements, the U.S. Department of 10 Transportation may not release funds for transportation 11 projects unless transportation plans and projects conform 12 with the locally adopted SIP. 13 The State Implementation Plan must include 14 transportation conformity budgets for each non-attainment 15 area. These budgets identity the emission levels from 16 on-road motor vehicles that are consistent with progress Page 207CARB Board transcript SC rev MVEBs 042408

17 toward attainment of the standards, and therefore with the 18 attainment demonstration. As part of the conformity 19 analysis, transportation agencies compare the level of 20 emissions from their proposed action to the levels 21 identified in the emissions budgets. 22 Since emission budgets are part of the SIP, they 23 must be available for public comment for at least 30 days 24 prior to adoption. 25 Last September, Board approved plans that, PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

221 1 together with the state strategy, demonstrate attainment 2 of both 8-hour ozone and PM2.5 standards in the South 3 Coast Air Basin. In adopting these plans, the Board 4 determined that the plans meet all federal requirements 5 for non-attainment area plans, including reasonable 6 further progress, demonstrating attainment, and 7 consultation. 8 Transportation conformity emissions budgets for 9 the South Coast Air Basin were adopted by the Board last 10 November. The budgets reflect the new commitments in the 11 2007 SIP, including new local controls and the state 12 strategy. 13 However, before transportation agencies can make 14 a conformity finding, EPA must find the budgets adequate.
15 --o0o-- 16 AIR POLLUTION SPECIALIST WADE: Budget adequacy 17 is a process that enables transportation agencies to use 18 conformity budgets. This process comes before plan
Page 208CARB Board transcript SC rev MVEBs 042408

19 approval and allows transportation agencies to make 20 conformity findings before EPA takes final action on the 21 plan. EPA uses several criteria to evaluate a plan 22 submission in the adequacy process. 23 Two of these criteria, set in regulation, are 24 that the budgets must be consistent with both reasonable 25 further progress and attainment requirements, and that the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

222 1 budgets must be consistent with the emission inventory and 2 control measures in the plan. The plans the Board adopted 3 for attaining the ozone and PM2.5 standards in the South 4 Coast Air Basin contain budgets that are consistent with 5 the plans' demonstrations of progress and attainment, and 6 with the control strategy.
7 --o0o-- 8 AIR POLLUTION SPECIALIST WADE: This slide gives 9 you a graphical idea of the SIP and budget process and the 10 relationship of the major steps involved in the conformity 11 emission budgets. The South Coast plan was adopted in 12 September 2007 and has been submitted to U.S. EPA. The 13 budget adequacy process happens typically in the first 90 14 days after submittal. The plan approval process comes 15 next. The focus of this meeting is to address budget 16 adequacy issues raised by U.S. EPA.
17 --o0o-- 18 AIR POLLUTION SPECIALIST WADE: U.S. EPA staff 19 recently indicated that U.S. EPA will likely depart from 20 past practice and not approve budgets with SIP 21 commitments. U.S. EPA is taking this position even Page 209CARB Board transcript SC rev MVEBs 042408

22 through this would result in higher budgets that provide 23 more room for growth in emissions from the on-road sector, 24 and are therefore less health protective. 25 EPA's concerns create a timing problem for the PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

223 1 Southern California Association of Government's 2 transportation planning process. When SCAG adopts its 3 Regional Transportation Plan, or RTP, in May, it has to 4 make a finding that the RTP conforms to the SIP. If EPA 5 has not found the budgets adequate, SCAG will not be able 6 to adopt its RTP. This can leads to delays in project 7 delivery and a possible loss of transportation funding. 8 The South Coast District and SCAG requested 9 today's Board action because their board meeting schedules 10 did not allow for a 30-day review period and adoption 11 prior to SCAG's May 8th's consideration of the RTP. 12 We have worked together with staff from the South 13 Coast District and SCAG to develop two options for U.S.
14 EPA. 15 One set of budgets reflects state and local 16 emission reduction commitments made in the 2007 SIP. 17 Staff believes that these SIP-based budgets meet U.S. EPA 18 requirements and are approvable. It is the more 19 health-protective set. 20 The second set of budgets reflect only 21 regulations adopted as of October 2006, the baseline used 22 to develop the 2007 SIP. Because these baseline budgets 23 do not include commitments for new measures, these are
Page 210CARB Board transcript SC rev MVEBs 042408

24 preferred by U.S. EPA. 25 SCAG has demonstrated that its RTP can meet PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

224 1 either of these sets of budgets. Submitting two sets of 2 approvable budgets to U.S. EPA, with the assumption that 3 EPA will incorporate one of them into the SIP, will allow 4 SCAG to adopt its RTP in time to avert a lapse in 5 conformity. 6 Regardless of which option EPA ultimately 7 approves, our intention is to meet the SIP-based budgets 8 and to ask EPA to approve the more health protective 9 budgets.
10 --o0o-- 11 AIR POLLUTION SPECIALIST WADE: Staff recommends 12 that you approve both sets of budgets for the South Coast 13 Air Basin, and direct staff to forward both sets to U.S.
14 EPA. 15 That concludes the staff presentation. 16 CHAIRPERSON NICHOLS: Thank you. If this report 17 leaves you puzzled, perhaps feeling like you're in an 18 Alice in Wonderland situation or even in need of a shot of 19 something stronger than coffee, you are not alone, just so 20 you know. 21 This is a really very peculiar situation that we 22 find ourselves in. And I have tried to figure out -- I've 23 cross-examined staff about this. And they have not really 24 been able to satisfy me as to what the reason is for the 25 peculiar decision on the part of EPA on this matter. But PETERS SHORTHAND REPORTING (916) 362-2345 Page 211CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

225 1 perhaps EPA is here. I don't know if there's anybody 2 who's here from EPA to explain their position, unless they 3 were -- you are. Okay, good. 4 There you are. So, sorry I didn't see you there. 5 Can we call on you before we hear from the 6 audience to explain what this change in position is, if 7 you're able to do so? And if you don't want to speak, you 8 don't have to. But -- 9 DEPUTY EXECUTIVE OFFICER TERRY: And, Chairman 10 Nichols, actually yesterday I met with Deborah Jordan and 11 conformity staff from both Washington and Ann Arbor. And 12 so Amy got the short straw today. She has to be the 13 responsible person. 14 But the short story is apparently California, not 15 surprisingly, is the only state where there is an issue of 16 whether or not SIP commitments should be included in this 17 process. Because every other state relies entirely on the 18 federal Motor Vehicle Control Program. And so that is why 19 they are puzzled by how to deal with this. And they would 20 prefer that that issue be shifted into SIP approvability 21 and not be dealt with. So that's why they're asking us, 22 set it aside and make it a SIP approval issue. 23 CHAIRPERSON NICHOLS: Okay. Thank you. 24 Hi, Ms. Zimpher. 25 MS. ZIMPHER: Hi. My name is Amy Zimpher. I'm PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

Page 212CARB Board transcript SC rev MVEBs 042408

226 1 an Associate Director of the Air Division here in the 2 Region 9 office in San Francisco. And Lynn did a very 3 succinct good job of explaining where our headquarters is 4 on approval of these budgets. And they feel very strongly 5 that a budget include actions that have been adopted not 6 including commitments because of some -- 7 CHAIRPERSON NICHOLS: -- because it hasn't been 8 adopted by the rest of the country's -- 9 MS. ZIMPHER: Exactly. And we really, really 10 appreciate how your staff have worked to try to find a way 11 to navigate through this issue, allow us the time to work 12 through the more complete and complex issues we are going 13 to need to work through with the 2007 plan. The South 14 Coast Air Quality Management District and SCAG staff have 15 also been very good to work with this. So that it will 16 allow us to move forward with the adequacy finding so that 17 the regional transportation plan can go forward as 18 planned. 19 So it is a complex situation. I think all of us 20 even -- I shouldn't say all -- but most of us within EPA 21 find conformity and the adequacy process so complicated 22 and there's been so much litigation over the years. 23 CHAIRPERSON NICHOLS: Right. Well, I'm 24 personally quite familiar with living with dual budgets. 25 MS. ZIMPHER: Well, very good. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

227 1 CHAIRPERSON NICHOLS: So we should be able to 2 manage somehow, I guess. Page 213CARB Board transcript SC rev MVEBs 042408

3 MS. ZIMPHER: I would be happy to answer other 4 specific questions. 5 CHAIRPERSON NICHOLS: Are there questions about 6 this? 7 All right. Thank you. 8 MS. ZIMPHER: Thank you. 9 CHAIRPERSON NICHOLS: Very much appreciate your 10 being here. There may be questions later. 11 But we'll hear from our witnesses. We have Barry 12 Wallerstein and then Michael Fitts. 13 MR. WALLERSTEIN: Thank you, Chairman Nichols. 14 And as you've just heard from your staff, this is 15 a truly critical measure before you. Absent your action 16 today, we will probably lose federal transportation 17 funding for all of southern California. And potentially 18 the precedent could roll over to other areas of the state. 19 I want to first start by thanking your staff, 20 including your Executive Officer James Goldstene, who 21 isn't here today, but took time from a vacation, 22 interrupted his vacation to help precipitate resolution of 23 this issue. 24 I'd like to try and answer your question from my 25 personal perspective, because I think it's a little PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

228 1 different than Amy's. And it's 25 years plus in this 2 business, as I think you would hear from your staff, we've 3 never encountered this before. And what was so puzzling 4 at the outset to us, besides never having this before, was
Page 214CARB Board transcript SC rev MVEBs 042408

5 what the federal government actually proposed back to us 6 was to ignore your existing rules and regulations and the 7 emission reductions that would occur from the rules that 8 are on the books today that will get us emission 9 reductions with fleet turnover. So all of a sudden we 10 were being told today's emissions is what we should assume 11 out to the year 2030 or 2035. 12 And so one has to ask, what precipitated this? 13 And it isn't, in our view, our colleagues here in 14 San Francisco in Region 9. Amy mentioned headquarters. 15 So what could we have all done to cause a change after 25 16 years? Could it be that the latest SIP submitted asks 17 U.S. EPA to do its fair share and regulate ships and 18 trains? Could it be that you all have done Pavley, you've 19 done auxiliary engine rules for ships? Could it possibly 20 be the South Coast is running legislation federally, 21 S1499, which would cause low sulfur fuel in ships? 22 So we're a little suspicious here that we hit 23 somebody, and they're a little bigger than us, and so they 24 wanted to make sure we get the message back that we could 25 lose hundreds of millions of dollars or billions of PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

229 1 dollars if we don't work these things out. And of course 2 we all want to work these things out because it's really 3 about providing clean air and improved public health. But 4 at the end of the day we do need their assistance in 5 regulating the sources in their jurisdiction to the degree 6 feasible. 7 So the measure before you today simply will give Page 215CARB Board transcript SC rev MVEBs 042408

8 them the choice of turning down more health protective 9 emissions caps for transportation reflective of the AQMP, 10 which we all know they will do. And then we'll revert to 11 a set of caps that reflects your existing rules and 12 regulations. 13 And, lastly, when they turned down your existing 14 rules and regulations and weren't giving us any credit for 15 that, of course the federal regs largely mirror your regs 16 at this point, so it made absolutely no sense. 17 So we have a different hypothesis as to why this 18 all happened. 19 Thank you. 20 CHAIRPERSON NICHOLS: Thank you for that. It 21 just enriches the entire story here. 22 All right. Mr. Fitts. 23 MR. FITTS: Good afternoon. My name is Michael 24 Fitts. I'm staff attorney with Endangered Habitats 25 League. I'm also representing the Natural Resources PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

230 1 Defense Council before you here today. 2 Thank you very much, Chairman Nichols and the 3 Board, for allowing me to testify. 4 I hate to add another level of complexity to 5 what's already a complex issue before you. But we've 6 heard much today about the unique impact of fine 7 particulates on the public health. We've heard about the 8 disproportionate contribution to fine particulates from 9 trucks and other on-road sources, and of course
Page 216CARB Board transcript SC rev MVEBs 042408

10 consequently the disproportionate risk of living and 11 working directly adjacent to highways in the SCAG region 12 as well as the rest of California. I'm here to address 13 the extent to which the 2007 AQMP, the transportation 14 conformity process, and the pair of emissions budgets that 15 you have before you, how well they address those 16 particular problems. 17 As you know, millions of southern Californians 18 live and work directly adjacent to freeways and other 19 major highways. These are major generators of primary 20 particulates. And, in particular, in the SCAG region of 21 the 710 corridor it's probably one of the most intense 22 generators of primary particulates in the United States. 23 And certainly the presentation you saw about West Oakland 24 earlier, I'm sure could be -- much of the same facts could 25 be said about the 710 corridor. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

231 1 So the question is -- and based on an extensive 2 amount of empirical research, which I don't have time to 3 address now -- it's in my written comments to you. I'm 4 sorry, I didn't get them into the noon packet yesterday. 5 So what extent does the AQMP and particularly these 6 emissions budgets address this unique problem? And the 7 answer is they don't. And the reason they don't is 8 because the monitors selected to determine the design 9 value for the attainment demonstrations and, therefore, 10 for the RFP budgets and these draft budgets are based -- 11 are not near highway locations. The monitors are located 12 in areas where you're not going to catch these uniquely Page 217CARB Board transcript SC rev MVEBs 042408

13 high PM2.5 concentrations. 14 Moreover, the modeling analysis to demonstrate 15 attainment of PM2.5 covers a very large area. To compare, 16 the max attainment demonstration uses nine grids of 25 17 square kilometers versus 250-meter grid for the West 18 Oakland study that you saw today. So you're not going to 19 catch these uniquely high concentrations of particulates. 20 And so what's going to happen is, even if you reach 21 attainment, even if you successfully implement every 22 measure here, you're still going to have large portions of 23 the SCAG reaching out of compliance with the max because 24 you're not measuring it there. 25 So I would ask that you defer adoption of these PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

232 1 budgets until the SIP and these budgets are amended to 2 address the impact of high concentrations of particulates 3 near highways. 4 Thank you. 5 CHAIRPERSON NICHOLS: Thank you. 6 I've had a chance to glance at your letter about 7 the comments from Bob Yunky. And I think they're worthy 8 of a serious response, because it's really an attack on 9 the entire air monitoring system and the demonstrations of 10 attainment and all the rest of it. And it's a legitimate 11 issue to raise, but I don't think it's exactly on point 12 with what we're proposing to do today. 13 I would like though to ask staff to produce a 14 response to it. But I would not think it would be
Page 218CARB Board transcript SC rev MVEBs 042408

15 appropriate to -- personally to use that as a basis not to 16 make a finding today when the alternative is to -- or to 17 move the resolution today when the alternative is a lapse 18 in conformity that would result in a complete inability to 19 have any federal highway funds coming to the area of 20 southern California. 21 MR. FITTS: We understand the stakes. We just 22 would like to -- we're really interested in getting the 23 air quality process right. 24 CHAIRPERSON NICHOLS: I understand what you want 25 to do. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

233 1 MR. FITTS: Okay. Thank you very much. 2 CHAIRPERSON NICHOLS: I appreciate your 3 involvement. Thank you for participating.
4 Yes. 5 BOARD MEMBER BALMES: May I just make one brief 6 comment about this? 7 I'm on the Clean Air Scientific Advisory 8 Committee for NOx and SOx for the U.S. EPA. And we -- the 9 members of that committee actually asked EPA staff -- 10 federal staff to address this issue direct at NOx, because 11 again there's highway emissions of NOx. And the air 12 monitoring system doesn't -- as currently, that doesn't 13 adequately address highway emissions. So it is an 14 important point. I just wanted to say that. 15 CHAIRPERSON NICHOLS: I think you're right. 16 MR. FITTS: But it doesn't belong in this 17 discussion. Page 219CARB Board transcript SC rev MVEBs 042408

18 CHAIRPERSON NICHOLS: Well, there's a philosophy 19 behind the current air monitoring network which was based 20 on the idea that you were capturing the broadest regional 21 impacts. And now we're beginning to look more in a 22 focused way at specific areas. It's a whole different 23 approach, I think. 24 No, I appreciate that comment. 25 All right. Do I have a motion to approve PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

234 1 Resolution No. 08-27? 2 BOARD MEMBER RIORDAN: So moved. 3 SUPERVISOR HILL: Second. 4 CHAIRPERSON NICHOLS: Moved and seconded. Thank 5 you. 6 Any further discussion? 7 If not, all in favor please say aye. 8 (Ayes.) 9 CHAIRPERSON NICHOLS: Any opposed. 10 And it carries. Thank you. 11 We have now time for public comment, which is 12 always the last thing we do. 13 And we do have one person who has indicated a 14 desire to comment. And that's Steve Mathieu from AGP 15 Video, which is the agency that does our webcasting for 16 our Board meetings and many workshops. 17 And he's submitted a letter. I don't know if all 18 the Board members received copies of the letter. We can 19 hand it out.
Page 220CARB Board transcript SC rev MVEBs 042408

20 Thank you. 21 MR. MATHIEU: Thank you. I had no idea I'd be 22 the only one speaking. 23 My name is Steve Mathieu. I'm here with three 24 different hats on. One as your AB contractor for all of 25 your field shoots for the past year and a half. And I do PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

235 1 thank you for that opportunity and for having the 2 foresight to be one of the leading agencies that does live 3 web stream. 4 When we -- my second hat is as a founding 5 director for Calspan dot ORG, which is where we live web 6 stream these meetings through, as well as your own 7 website. Calspan dot ORG was created by myself and others 8 to create carriage and archiving for all California State 9 Government meetings that are being live web-streamed. 10 When we put in our RFP to do this job, we did it 11 offering our full gamut of services and assuming that the 12 Board wanted to be archived for on-demand replay and as a 13 research and retrieval tool for both staff and the general 14 public, a general outreach program. 15 However, about six months into live web-streaming 16 we were contacted by the agency and requested not to have 17 these archived, which is -- you are the stand-alone board 18 in the State of California that is live web-streaming that 19 is not being archived. 20 We have as a good contractor removed all links to 21 archives. However, we wonder if this is an old rule that 22 legal counsel had on the books and should possibly be Page 221CARB Board transcript SC rev MVEBs 042408

23 revisited. We submitted a letter to you, the Chair, and 24 requested that maybe this be taken a look at by legal 25 counsel and maybe reappraised with regards to whether or PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

236 1 not we want to make those archives available. 2 One of the other reasons for doing it is that -- 3 if you notice, we've got these new lower thirds that give 4 identification of each agenda item. That is actually a 5 key link, and all of this is hyperlinked through your 6 agenda on the website. And if you go to the website and 7 pull up a meeting on demand, you can go directly to any 8 agenda item, A 17, and not have to weed through the entire 9 program. And that will also hyperlink you to all 10 documentation with regards to that agenda item. It is a 11 very valuable tool. And we're offering it at no charge. 12 And it's a neat thing. We would just like the right to do 13 that. 14 CHAIRPERSON NICHOLS: I understand. This is a 15 really interesting issue. Because of the way it comes up 16 here, we can't resolve it here today. But we would very 17 much like to get it addressed. I'd be very interested to 18 hear what the reason is for not allowing the archiving of 19 the meetings. 20 So I'm going to ask that this get referred to 21 legal counsel and Information Services both, I guess, and 22 that a response be prepared and the Board get to look at 23 it at the next Board meeting. Is that okay? 24 MR. MATHIEU: My third hat is as a citizen of
Page 222CARB Board transcript SC rev MVEBs 042408

25 California. And I thank you. PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

237 1 CHAIRPERSON NICHOLS: Thank you. Well, we 2 appreciate your services very much. So this has been a 3 wonderful service. And it is much used and appreciated, I 4 know, by the public. So thanks very much. 5 MR. MATHIEU: Thank you. 6 CHAIRPERSON NICHOLS: All right. I believe that 7 concludes the business of the day. 8 And with that, I'm going to declare that we are 9 adjourned. 10 Thanks everybody. 11 (Thereupon the California Air Resources Board 12 adjourned at 3:29 p.m.)
13
14
15
16
17
18
19
20
21
22
23
24
25 PETERS SHORTHAND REPORTING (916) 362-2345

Page 223CARB Board transcript SC rev MVEBs 042408

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

238
1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 7th day of May, 2008.
15
16
17
18
19
20
21
22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter
25 License No. 12277 PETERS SHORTHAND REPORTING (916) 362-2345

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 

Page 224