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

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 ii

 APPEARANCES

 BOARD MEMBERS

 Ms. Mary D. Nichols, Chairperson

 Dr. John R. Balms

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 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

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 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

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 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

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 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

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 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

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 INDEX CONTINUED

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 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

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 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

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 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?

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 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?

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 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

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 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

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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 --

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 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

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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

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 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

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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

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 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

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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

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 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

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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

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 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.

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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.

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 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

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25 go along so it doesn't have a contradictory kind of

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 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.

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 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

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 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

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 1 same enzyme genes -- antioxidant enzyme genes picked the

 2 data -- picked those genes because there was evidences

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 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

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 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

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 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.

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 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.

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 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

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 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

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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

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 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

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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

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 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

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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

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 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

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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

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 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,

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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

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 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

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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.

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 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

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 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

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 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.

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 1 So, staff, do you want to add anything additional

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 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.

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 1 Hertz-Picciotto serves on the editorial boards of

 2 Epidemiology, American Journal of Epidemiology, and

 3 Environmental Health Perspective. She has mentored over

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 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

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 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

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 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

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 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

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 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

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 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

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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

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 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.

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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.

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 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,

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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

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 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

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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

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 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

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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.

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 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

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24 greenhouse gases. The cities and counties were asking for

25 help.

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 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

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 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

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 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

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 1 collaboratively through what's called the Joint Policy

 2 Committee. And the main focus of the JPC has been smart

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 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

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 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

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 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

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 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

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 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

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 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

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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.

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 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

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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

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 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

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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

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 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.

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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

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 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

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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.

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 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.

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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

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 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

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25 focus on.

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 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

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 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

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 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

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 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

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 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?

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 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?

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 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

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 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.

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 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.

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 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

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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

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 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

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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.

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 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

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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,

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 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

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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.

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 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

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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

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 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

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24 coal-fired electricity, the 2020 reference case would be

25 substantially higher.

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 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,

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 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

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 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

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 1 customers.

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 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

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 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

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 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

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 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

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 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.

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 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

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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

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 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

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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

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 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.

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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

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 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

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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.

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 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

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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

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 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

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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

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 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

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25 commissions recommended -- in terms of allowance

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 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

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 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

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 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

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 1 demand, and the regulatory approaches you adopt will seek

 2 to provide the greatest environmental benefit and public

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 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

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 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--

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 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

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 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,

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 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.

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 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

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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

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 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.

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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

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 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

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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

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 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

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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.

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 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.

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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

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 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,

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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.

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 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

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 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.

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 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

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 1 there that you didn't know about. So sort of by

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 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

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 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

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 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

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 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

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 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

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 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.

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 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

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 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

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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

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 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

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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

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 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

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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.

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 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

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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

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 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

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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

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 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

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24 this item shows, Oakland is also a city with a huge public

25 health problem; problems where the technology frankly to

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 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

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 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

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 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 --

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 1 you know, it's unclear how and why that thinking takes

 2 place. But those with the gold make the rules.

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 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

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 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

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 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.

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 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

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 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,

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 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

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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

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 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

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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.

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 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

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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

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 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

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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,

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 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

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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.

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 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.

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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

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 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--

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25 TECHNICAL ANALYSIS SECTION MANAGER TARICCO: This

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 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.

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 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

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 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

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 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

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 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

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 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.

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 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

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 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

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 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

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 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

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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,

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 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?

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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

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 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.

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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

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 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

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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

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 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

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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

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 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

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24 the Port itself has some ideas on how to reduce emissions

25 further. And that local impact -- or that local control

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 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

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 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

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 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.

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 1 I also want to say something about collaboration.

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 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

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 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

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 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

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 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

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 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

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 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

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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

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 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

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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

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 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

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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

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 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

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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

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 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.

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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

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 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

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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

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 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.

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25 This is our third update on implementation of

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 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

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 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.

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 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

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 1 around the southern California ports at the top of this

 2 list, down to expansion of the emission reduction

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 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

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 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,

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 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

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 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

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 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

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 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.

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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

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 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

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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.

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 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

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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

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 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

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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

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 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

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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

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 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

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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.

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 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.

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 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--

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 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

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 1 impacts in the process of evaluating projects.

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 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

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 1 trucks. These funds, combined with anticipated

 2 Proposition 1B monies and other port dollars, would cover

 3 80 percent of the truck cost.

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 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

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 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

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 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

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 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

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 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

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 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

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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

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 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

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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

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 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.

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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

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 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

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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

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 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

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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.

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 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

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24 matter, drops it into the bottom. It's filtered, becomes

25 diesel mud, which is sent to -- disposed of. At the

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 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

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 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

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 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

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 1 civics education program that works with students from

 2 high schools in Oakland and other East Bay cities. And

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 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

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 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.

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 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:

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 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

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 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.

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 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

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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

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 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

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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.

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 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

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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

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 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

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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

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 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

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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

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 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

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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

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 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

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25 representatives are implementing a pilot program to

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 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--

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 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.

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 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

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 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

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 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

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 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.

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 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

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 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

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 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

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 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.

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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

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 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

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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

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 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.

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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

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 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.

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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 --

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 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:

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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 --

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 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

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24 short haul.

25 Are you all the group that's dealing with this?

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 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

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 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

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 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

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 1 were done, as your staff's noted, that work would begin on

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 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

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 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

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 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.

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 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

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 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;

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 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.

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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

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 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

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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

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 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

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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

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 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

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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

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 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

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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

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 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 --

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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

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 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

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25 work. And the fact that this was a voluntary but legally

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 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

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 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

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 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

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 1 substantially down. Exports are up. Basically right now

 2 in southern California I think you'll see it's about flat.

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 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

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 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

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 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

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 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

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 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

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 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

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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

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 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.

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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

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 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

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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,

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 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

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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,

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 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

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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 --

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 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

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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.

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 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

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 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

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 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

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 1 those bar charts that went up are not things that are

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 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

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 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

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 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

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 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.

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 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.

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 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,

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 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

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 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

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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.

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 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.

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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--

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 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

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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,

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 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

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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

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 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

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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

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 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

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24 preferred by U.S. EPA.

25 SCAG has demonstrated that its RTP can meet

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 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

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 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

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 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.

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 1 CHAIRPERSON NICHOLS: So we should be able to

 2 manage somehow, I guess.

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 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

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 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

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 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

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 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

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 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

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 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

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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.

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 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

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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

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 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

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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.

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 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.

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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

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 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.

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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

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 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

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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

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 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

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25 California. And I thank you.

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 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.)

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 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

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21

22

23 TIFFANY C. KRAFT, CSR, RPR

24 Certified Shorthand Reporter

25 License No. 12277

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