## A. California Environmental Protection Agency



# AIR RESOURCES BOARD

STAFF REPORT: INITIAL STATEMENT OF REASONS

FOR THE PROPOSED RULEMAKING

AMENDMENTS TO THE REGULATIONS TO REDUCE

EMISSIONS FROM DIESEL ENGINES ON COMMERCIAL

HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS

AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

Stationary Source Division

Emissions Assessment Branch

May 2010i STAFF REPORT:

INITIAL STATEMENT OF REASONS

FOR THE PROPOSED RULEMAKING

Public Hearing to Consider

AMENDMENTS TO THE REGULATIONS TO REDUCE EMISSIONS

FROM DIESEL ENGINES ON

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS

AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

To be considered by the Air Resources Board on June 24, 2010 at:

California Environmental Protection Agency

Headquarters Building Byron Sher Auditorium

1001 I Street Sacramento, California

This report has been prepared by the staff of the A ir Resources Board. Publication does not signify that the contents reflect the view s and policies of the Air Resources Board, nor does mention of trade names or commercia l products constitute

endorsement or recommendation for use.ii 

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Contents Page

Executive Summary ..................................

................................................... ............. ES-1

1. Introduction....................................

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

A. Overview ......................................

................................................... ................ 1 B. Need for the Regulation .......................

................................................... ........ 1 C. Regulatory Authority ..........................

................................................... .......... 3

2. Emissions Inventory .............................

................................................... ............. 4 A. Updating the Crew and Supply Vessel and Engine Data ................................ 5 B. Updated Emissions from Crew and Supply Vessel Engines ........................... 7 C. Barge and Dredge Vessel Data ..................

................................................... . 8 D. Emissions from Barge and Dredge Vessel Engines ...................................... 10 E. Total Combined Emissions from Crew and Supply V essels and Barge and Dredge Vessels ...........................

................................................... ....... 10

3. Health Risk .....................................

................................................... ................. 11

A. Potential Cancer Risk.........................

................................................... ........ 11

B. Non-Cancer Risk...............................

................................................... ......... 11

4. Summary of the Proposed Amendments.............. .............................................. 12 A. Background Information on Emission Standards f or Marine Engines ........... 12 B. Background Information on Emission Standards f or Off-Road Engines........ 13 C. In-Use Requirements for Crew and Supply Vessel s, Barge, and Dredge

Vessels......................................

................................................... ................. 14 D. Other Proposed Amendments..................... .................................................. 1 7

5. Environmental and Health Impacts of Proposed A mendments .......................... 22

A. Emissions Reductions Statewide ................ .................................................. 2 2 B. Santa Barbara County APCD and Ventura County A PCD Crew and Supply Vessel Engine Emission Reductions ........... ................................................. 27 C. Health Impacts................................

................................................... ........... 29 D. Environmental Impact ..........................

................................................... ...... 29 E. Impact on Global Warming......................

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

6. Economic Impacts ................................

................................................... ........... 31 A. Regulatory and New Equipment Costs ............ ............................................. 31 B. Return on Owner’s Equity ......................

................................................... .... 31 C. Cost to Local, State, and Federal Agencies.... .............................................. 32

D. Cost-Effectiveness ............................

................................................... ......... 33

E. Alternatives Considered .......................

................................................... ...... 34iii 

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Contents Page

7. Public Outreach and Comments....................

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

A. Public Outreach...............................

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

B. Environmental Justice .........................

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

C. Public Comments...............................

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

8. Recommendation ..................................

................................................... .......... 43

References.........................................

................................................... ........................ 44iv 

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List of Tables Page

Table 1: Overview of Surveys, Reports, and Inven tories............................................. . 4 Table 2: Commercial Harbor Craft Vessels and Eng ines (2008).................................. 5 Table 3: Crew and Supply Vessels and Engines Inv entories ....................................... 5 Table 4: Annual Engine Hours of Operation for Cr ew and Supply Vessels.................. 6 Table 5: Hours of Operation by Distance From Sho re................................................. . 6 Table 6: 2008 Emissions from Crew and Supply Ves sels ............................................ 7 Table 7: Proportion of Emissions from Crew and S upply Vessel Engines by District .......................................

................................................... ............. 8 Table 8: Barge and Dredge Vessels and Engines 20 08 Inventory Overview ............... 9 Table 9: Annual Engine Hours of Operation for Ba rge and Dredge Vessels................ 9 Table 10: Percent of Barge and Dredge Vessel Engin e Operations by Distance

from Shore (2009 Survey)........................... ................................................. 10 Table 11: Barge and Dredge Vessel Engine Emissions ............................................... 10

Table 12: Combined Total Emissions from Crew and S upply Vessels and Barge and

Dredge Vessels – 2008 Inventory ................... ............................................ 10 Table 13: U.S. EPA Marine Engine Categories Used i n Commercial Harbor Craft ...... 12 Table 14: U.S. EPA Marine Engine Standards Effecti ve Dates and Emissions Limits for Category 1 and Category 2 Engines Used in Commercial

Harbor Craft......................................

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

Table 15: ARB and U.S. EPA Diesel PM and NOx Emiss ion Standards for New Off-Road Engines (300 – 600 hp)................... ............................................. 14 Table 16: Compliance Dates for Crew and Supply Ves sel Engines Statewide ............ 16 Table 17: Compliance Dates for Barge and Dredge Ve ssel Engines Statewide .......... 16 Table 18: Estimated Population of In-Use Crew and Supply and Barge and Dredge

Vessel Engines Subject to Amendments to CHC Regulat ion Emission

Limits .............................................

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

Table 19: ARB and U.S. EPA Diesel Fuel Standards.. ................................................. 19

Table 20: Total Statewide Diesel PM and NOx Emissi on Reductions Associated with the Proposed Regulatory Amendments........... ..................................... 27 Table 21: Affected Businesses with Change in ROE .. ................................................. 32 Table 22: Summary of Cost-Effectiveness of the Pro posed Amendments for the

Period 2011-2022 (2009 dollars) .................... ............................................. 34 Table 23: Diesel PM Cost-Effectiveness of the Prop osal and Other

Regulations/Measures (All Costs Attributed to Diese l PM Reduction)......... 34 Table 24: Alternative 1: Alternative Compliance T able to Accelerate Barge and Dredge Vessel Engine Compliance ............... ....................................... 35

Table 25: Alternative 1: Statewide Annual In-Use Engine Replacements.................36 Table 26: Alternative 2: Alternative Compliance T ables to Decelerate Compliance

for Crew and Supply Vessels and Barge and Dredge Ve ssels .................... 38

Table 27: Alternative 2: Statewide Annual In-Use Engine Replacements..................39 Table 28: Summary of Average Cost-Effectiveness of the Proposed Amendmnets and

Both Alternatives for the Period 2011-2022 ......... ........................................ 39v 

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List of Figures Page

Figure 1: Distribution of Crew and Supply Vessels by District........................................ 7 Figure 2: Projected Statewide Diesel PM Emissions for Crew and Supply Vessel

Diesel-Fueled Engines ..............................

................................................... . 23 Figure 3: Projected Statewide NOx Emissions for Cr ew and Supply Vessel DieselFueled Engines .....................................

................................................... ..... 24 Figure 4: Projected Statewide Diesel PM Emissions for Barge and Dredge Vessel

Diesel-Fueled Engines ..............................

................................................... . 25 Figure 5: Projected Statewide NOx Emissions for Ba rge and Dredge Vessel DieselFueled Engines .....................................

................................................... ..... 26 Figure 6: Projected Santa Barbara County and Ventu ra County APCD Diesel PM

Emissions for Crew and Supply Vessel Diesel-Fueled Engines.................... 28 Figure 7: Projected Santa Barbara County and Ventu ra County APCD NOx

Emissions for Crew and Supply Vessel Diesel-Fueled Engines.................... 28 Figure 8: Estimated Numbers of Commercial Harbor C raft Engines Replaced Annually Due to Implementation of the Current Com mercial Harbor Craft

Regulation and the Proposed Amended Regulation ..... ................................ 41

Appendices Page

Appendix A: Proposed Regulation Orders (section 22 99.5 and section 93118.5).......A-1 Appendix B: Summary of Survey Results.............

................................................... ....B-1 Appendix C: Emission Inventory Methodology ........

................................................... C-1 Appendix D: Methodology of Estimating Economic Imp acts ...................................... D-1(this page left intentionally blank)ES - 1 EXECUTIVE SUMMARY

Summary of Proposed Action

The California Air Resources Board (ARB or Board) s taff is proposing amendments to the regulations affecting commercial harbor craft. 1 These proposed amendments primarily affect the Commercial Harbor Craft Regula tion (CHC regulation) that the Board adopted on November 17, 2007. This regulation beca me effective on January 1, 2009. In addition, the staff is proposing minor conformin g amendments to a complimentary regulation, the Low Sulfur Fuel Requirement for Com mercial Harbor Craft, to align numbering changes due to the proposed amendments to the CHC regulation. A copy of the proposed amendments to both regulations is prov ided in Appendix A of this report. (ARB, 2007a) (ARB, 2007b) (ARB, 2007c)

The primary purpose of the proposed amendments is t o subject diesel-fueled engines on crew and supply, barge, and dredge vessels to in -use engine requirements of the CHC regulation. The staff is proposing to add crew and supply vessels because updated information shows that these vessels have s imilar or greater emissions than vessel categories currently controlled by the CHC r egulation. The addition of barge and dredge vessels will amend a situation where this cl ass of vessels are subject to two different statewide regulations. Approximately 175 crew and supply, barge, and dredge vessels operate in California, and are equipped wit h about 640 diesel-fueled engines. These engines emit about 66 tons per year of diesel particulate matter (PM) and 1,430 tons per year oxides of nitrogen (NO
x ). Other amendments are being proposed to clarify requirements and to address issues that hav e arisen during the implementation of the 2007 CHC regulation.

In developing the proposed amendments, ARB staff wo rked closely with stakeholders including vessel owner/operators, marine engine ind ustry representatives, and staff from air pollution control and air quality manageme nt air districts (districts). The early turnover of in-use, pre-Tier 1 and Tier 1 diesel-en gines on crew and supply, barge, and dredge vessels to lower emitting Tier 2 and Tier 3 marine or off-road engines would reduce diesel PM, NO
x , and other air pollutant emissions. These emissio n reductions will reduce exposures and health risks across Calif ornia, particularly along the shoreline and near ports. The proposed amendments are techno logically feasible, cost-effective, and necessary to carry out the Board’s responsibili ties and goals, including; 1) the goal

of the Diesel Risk Reduction Plan to reduce diesel PM emissions from all sources by 85 percent by 2020; and 2) the Emissions Reduction Plan for Ports and Goods Movement that the Board approved in April 2006. Fi nally, the emission reductions from

1 Title 17, CCR section 93118.5 is known as the Comme rcial Harbor Craft Regulation (CHC regulation) and establishes emission standards, reporting, reco rdkeeping, fuel, and monitoring requirements for certain categories of marine vessels. Title 13, CC R section 2299.5 is the corresponding Low Sulfur Fu el Regulation for Commercial Harbor Craft.ES - 2

the proposed amendments are necessary to help attai n and maintain ambient air quality standards for fine particulate matter (PM2.5) and o zone.

Proposed Amendments

The proposed amendments to the CHC regulation would :

• Establish in-use emission limits and compliance sc hedules for auxiliary and propulsion diesel-fueled engines on crew and su pply, barge, and dredge vessels that operate in Regulated California Waters. The compliance schedules are based on engine model year s and annual hours of operation, and are designed to remove the oldest , dirtiest engines first.

• Eliminate the current exemption for vessel engines registered in PERP or that were permitted by districts before January 1, 2009.

• Allow the use of certified off-road or nonroad eng ines as auxiliary engines.

• Allow CHC vessels that cannot obtain CARB diesel f uel outside of

California to use United States Environmental Prote ction Agency (U.S. EPA) on-road or nonroad diesel when travellin g from their nonCalifornia home port.

• Add a definition of “swing engine” and require the se engines to meet applicable in-use emission limits and recordkeeping provisions.

• Delete the definition of “multipurpose harbor craf t” and “low use exemption”, and reword the in-use engine section to clarify that vessels in categories with in-use emissions limits do not have to comply with those limits for engines if they operate less than 300 ho urs in any single regulated vessel category or combination of categor ies (or 80 hours for barge and dredge vessels).

• Add a deadline of February 28 for submitting the a nnual Alternative Control of Emission plans.

• Clarify that the initial reporting and compliance plan reporting requirements also apply to out-of-state vessels tha t operate in California.

• Allow owners/operators of vessels with multiple en gines to apply for an exemption from the new engine requirements if one e ngine has a catastrophic failure.

• Reword the new ferry vessels Best Available Contro l Technology section for clarity.

• Allow the use of an available engine to replace an older engine subject to in-use requirements until the original scheduled co mpliance date of the older engine.

• Make other changes to definitions and edits to reg ulatory language to improve clarity.

Staff is also proposing minor amendments to the Low Sulfur Fuel Regulation (section 2299.5, title 13, CCR) to align numbering with the amendments to the CHC regulation.ES - 3

Background

Commercial Harbor Craft Commercial harbor craft (CHC) include ferries, excu rsion vessels, tugboats, towboats, crew and supply vessels, work boats, commercial and charter fishing boats, and barge and dredge vessels. Staff estimates there are appr oximately 4,300 commercial harbor craft vessels with 8,700 diesel-fueled engines oper ating in California coastal waters.

2007 Commercial Harbor Craft Regulation In 2007, ARB adopted the CHC regulation, which requ ires engines on all new vessels to meet applicable U.S. EPA marine engine emission sta ndards at the time the vessel is acquired. The marine emission standards are divide d into four increasingly stringent levels (Tiers); the allowed emission level and effe ctive dates vary with horsepower. Replacement engines installed on any in-use harbor craft are required to meet the

Tier 2 or Tier 3 standards in effect at the time of purchase of the engine. Existing or inuse engines on ferries, excursion vessels, tugboats , towboats, and pushboats must meet U.S. EPA Tier 2 or Tier 3 standards based on p hased-in compliance schedule.

Authority ARB has authority under California law to adopt the proposed regulation. California Health and Safety Code (HSC) sections 43000, 43000. 5, 43013(b) and 43018 provide broad authority for ARB to adopt emission standards and other regulations to reduce

emissions from new and in-use vehicular and other m obile sources. Under HSC sections 43013(b) and 43018, ARB is authorized to adopt emission standards for off-road vehicular sources, as expeditiously as pos sible, to meet State ambient air quality standards. ARB is further mandated by HSC section 39666 to adopt airborne toxic control measures (ATCM) for new and in-use ve hicular sources, including Commercial Harbor Craft, for identified toxic air c ontaminants, such as diesel PM.

Public Outreach Staff has made a concerted effort to provide opport unities for public participation in this rulemaking action. Staff’s public outreach efforts included three public workshops at which draft regulatory concepts, language, and cost estimates were provided. In addition, the Commercial Harbor Craft website was u pdated with all workshop materials. Staff also held meetings with owner/operators of cr ew and supply, barge, and dredge vessels, districts, and other interested parties.

Basis for the Proposed Amendments

Crew and Supply Vessels Crew and supply vessels are primarily used to trans port equipment and personnel to and from offshore oil rigs and other offshore vesse ls. About 60 percent of the companies that own crew and supply vessels are cons idered small businesses, having less than 100 employees. When ARB adopted the CHC regulation in 2007, crew and supply vessels were subject to the new engine provi sions, but existing vessels were not required to meet in-use engine emission limits, bec ause information at that time showedES - 4

these vessels had limited hours of operation and em issions. We are now proposing to require existing crew and supply vessels to meet in -use engine emission standards because updated information shows their emissions a re similar in magnitude to the emissions from other vessels that are currently sub ject to the CHC regulation’s in-use requirements. Approximately 70 crew and supply ves sels with about 240 engines operate in California Regulated Waters. In 2008, t hese vessels emitted approximately

33 tons of diesel PM and 670 tons of NO
x .

Barge and Dredge Vessels Barges are marine vessels, usually moved by tugboat s or towboats, are used to transport fuel or equipment via water. Dredges are marine vessels used to remove bottom sediment from waterways. Approximately half of the businesses operating barges and dredges are considered small business. Historically, most barge and dredge vessel engines were either regulated under t he Portable Engine ATCM by being registered in the Portable Equipment Registration P rogram (PERP) or subject to district permits. Registration in PERP allows a piece of eq uipment to operate anywhere in the State, but subject to district authorization. The 2007 CHC regulation was designed to allow barge and dredge vessels that had been regist ered in PERP or subject to a district permit prior to January 1, 2009, to continue to be subject to the requirements of the Portable Engine ATCM or the district permit. Barge and dredge vessels that were not in PERP or permitted by a district by that date were s ubject to the requirements of the CHC regulation. However, in-use emission limits we re not established for these vessel engines. (ARB, 2007d) (ARB, 2009)

During 2009, it became clear that having some barge and dredges subject to the Portable Engine ATCM and others subject to the CHC regulation was creating compliance and enforcement issues and was confusing to the regulated industry. To address this issue, ARB staff proposed modifying th e PERP and the CHC regulation to allow permanently installed auxiliary engines on ba rges and dredges to register in PERP, and to make these engines subject to the CHC regulation instead of the Portable Engine ATCM. In January 2010, the PERP regulation was amended to allow certified marine engines to register in PERP. These amendmen ts will align the two regulations and allow auxiliary engines on harbor craft vessels to be registered in PERP, but subject only to the requirements of a single statew ide regulation - the CHC regulation. Approximately 100 barge and dredge vessels with abo ut 400 engines operate in California Regulated Waters. In 2008, these vessel s emitted approximately 33 tons of

diesel PM and 760 tons of NO
x .

Two separate compliance schedules are being propose d. One compliance schedule is for crew and supply vessels and one compliance sche dule is for barge and dredge vessels. Separate compliance schedules were develo ped in consideration of the profile of the engine fleets and to provide a transition pe riod for barge and dredge operators from planned compliance with the Portable Engine AT CM to the CHC regulation.ES - 5

Impacts of the Proposed Amendments

Anticipated Actions to Comply ARB staff anticipates that, in most cases, engine r eplacement will be the option used by most vessel owner/operators to meet the proposed em ission standards for vessel engines. However, other options such as retrofitti ng and rebuilding can be used to comply.

Emission Reductions The proposed amendments would reduce diesel PM and NO
x emissions in coastal areas of the State. The proposed amendments affect about 60 percent of the diesel engines in the crew and supply vessel fleet and 30 percent of the engines in the barge and dredge fleet. Many engines in these vessel fle ets are either already at Tier 2 or Tier 3, or exempt due to engine size, or annual hou rs of operation. Staff estimates about a 55 percent reduction in diesel PM emissions and a 25 percent reduction in NO
x emissions from crew and supply, barge, and dredge v essels due to the proposed amendments in 2025. Staff estimates that the propo sed in-use requirements will provide reductions of about 275 tons of diesel PM a nd 3,475 tons NO
x emissions

between 2011 and 2025.

The current impacts of the economy are not expected to significantly affect the estimated emission reductions because crew and supp ly vessels primarily service oil platforms which have continued production despite t he economic downturn. Many barge vessels are used to transport petroleum produ cts which also have not seen significant changes despite the economic downturn. Additionally, dredge operations related to the maintenance of waterways are essenti al in nature. A slight reduction in GHG emissions should occur due to the replacement o f older engines with more fuel efficient new engines.

Public Health Benefits The proposed amendments will reduce public health r isk from exposure to emissions of

diesel PM and NO
x . ARB listed Diesel PM as a toxic air contaminant in 1998. In addition, NO
x

is a precursor to the formation of ozone and contr ibutes to secondarily formed PM in the lower atmosphere.

Cost to Industry Staff estimates that the regulatory costs for compl ying with the proposed amendments would be approximately $15 million (2009 dollars), or about $1.3 million annually over the 2011 through 2022 compliance time period. Thes e regulatory costs are the incremental costs of compliance, and include those costs associated with the early replacement of engines (the residual value of the e ngine being replaced), the residual value of the most recent engine rebuild work, and t he time value of money associated with the early engine replacement. Staff also esti mated the new equipment or out-of-pocket cost to industry at approximately $46 million (2009 dollars) over the 2011 through 2022 time period. The new equipment c osts are ones that the vesselES - 6

owner would eventually pay, but the proposed amendm ents require this service to be performed earlier than normal.

Economic Impact to Industry Staff estimated the economic impact of complying wi th the in-use engine requirements on the crew and supply, barge, and dredge vessel bu sinesses by evaluating the impact of the regulatory cost on typical businesses’ “retu rn on owner’s equity” (ROE), and found that the overall change in ROE is a 0.95 perc ent decline for the average regulated business. A decrease in ROE within this range is n ot considered to represent a significant impact on profitability. These values are based on the regulatory cost of compliance.

Cost to Public Agencies Staff has determined that a few public agencies wou ld be impacted by the proposed amendments. One state agency, the California Depar tment of Parks and Recreation, owns two crew and supply vessels that are used to s ervice Angel Island in the San Francisco Bay and would be impacted by the in-u se engine requirements. Regulatory cost to this state agency would be about $60,000 over the life of the regulation. Barge and dredge vessels are owned and operated by two local agencies in Santa Cruz and Monterey and by the federal agency, the United States Army Corps of Engineers. The estimated regulatory costs range fr om approximately $1,900 to $46,000 over the life of the regulation for these agencies that operate barge and dredge vessels.

ARB staff will implement and enforce the proposed a mendments. An additional enforcement staff person may be needed to enforce t he proposed amendments.

Cost-Effectiveness The cost-effectiveness of the proposed amendments i s estimated, based on the regulatory costs, to be about $35 per pound (2009 d ollars) of diesel PM reduced if all

the cost is attributed to diesel PM reductions. Th e cost-effectiveness for this regulation is consistent with those of other diesel PM regulat ions adopted by the Board.

Incentive Funding Carl Moyer Program funding is a potential funding s ource for companies that comply early or achieve emission reductions beyond the ame ndments. However, Carl Moyer funds are only available to self-propelled marine v essels and most barge and dredge vessels would not be eligible. Proposition 1B fund s should also be available to specific commercial harbor craft operators. At the Board me eting held on March 25, 2010, the Proposed Update to the Proposition 1B Program Guide lines were approved, which included project options for the harbor craft categ ory. The total amount of funding available will depend upon bond sales.ES - 7

Environmental Justice

The proposed amendments are consistent with ARB env ironmental justice policies. The proposed amendments will reduce diesel PM and NO
x emissions in coastal areas and near ports where crew and supply, barge, and dredge vessels operate.

Public Comments

Comments have been made by barge and dredge owners regarding the implementation of the proposed amendments in relation to the PERP program. Pursuant to the PERP regulation, districts can establish additional requ irements beyond the statewide regulation for auxiliary engines on marine vessels that operate within three nautical miles of shore. The authority for districts to est ablish additional requirements is provided by the PERP regulation in order to allow t he districts to mitigate any potential local emissions impacts. Barge and dredge vessel o wner/operators have stated that the districts requirements can be burdensome and va ry greatly by district. Staff has begun discussions with some of the affected distric ts to identify ways to achieve greater consistency and develop an effective solution. Sta ff is committed to continue to meet with affected stakeholders to discuss options.

Recommendation

ARB staff recommends the Board approve the proposed amendments to the regulations as presented in Appendix A of the Staff Report.(this page left intentionally blank)1

1. INTRODUCTION

A. Overview

This Staff Report: Initial Statement of Reasons (St aff Report) provides the basis for the Air Resources Board (ARB or Board) staff’s proposal to amend the regulations affecting

commercial harbor craft. 2 The primary purpose of the proposed amendments is to require the diesel-fueled engines on crew and suppl y, barge, and dredge vessels to be subject to in-use engine requirements of the Commer cial Harbor Craft (CHC) regulation. Several other clarifying and/or editorial amendment s are also proposed to the CHC regulation. Staff is also proposing minor amendmen ts to the Low Sulfur Fuel Regulation to align numbering with the CHC regulation

. The proposed amendments would reduce diesel particulate matter (PM) and oxides of nitrog en (NO
x ) emissions from CHC in California. The proposed amendments are provided i n Appendix A of this Staff Report.

The staff is proposing to add crew and supply vesse ls because updated information shows that these vessels have similar or greater em issions than vessel categories currently controlled by the CHC regulation. The ad dition of barge and dredge vessels

will amend a situation where this class of vessels are subject to two different statewide regulations. Approximately 175 crew and supply, ba rge, and dredge vessels operate in California, and are equipped with about 640 diesel- fueled engines. These engines emit about 66 tons per year of diesel PM and 1,430 tons per year NO
x .

This report discusses California’s estimated popula tion of crew and supply, barge, and dredge vessels and associated emissions, the regula tory proposal to require these vessel categories to be subject to in-use engine re quirements of the original CHC regulation, other proposed amendments, regulatory a lternatives considered, and potential environmental and economic impacts. The basis of the original CHC regulation and background information can be found in the Staff Report: Initial Statement of Reasons for Regulations to Reduce Emis sions from Diesel Engines on Commercial Harbor Craft Operated Within California Waters and 24 Nautical Miles of

the California Baseline , September 2007, and the accompanying Technical Support

Document. For the remainder of this report, the 2007 report will be referred to as the September 2007 Staff Report.

B. Need for the Regulation

The ARB’s mission is to protect public health, welf are, and ecological resources through the effective and efficient reduction of air pollut ants, while recognizing and considering the effects on the economy of the State. The ARB’s vision is that all individuals in California, especially children and the elderly, ca n live, work, and play in a healthful environment – free from potential harmful exposure to air pollution. To help achieve

2 Title 17, CCR section 93118.5. is known as the Comm ercial Harbor Craft Regulation (CHC regulation) and establishes emission standards, reporting, reco rd keeping, fuel, and monitoring requirements for certain categories of marine vessels. Title 13, CC R section 2299.5 is the corresponding Low Sulfur Fu el Regulation for Commercial Harbor Craft.2

this, ARB has adopted numerous regulations to contr ol emissions from many different sources, including diesel-fueled engines. Diesel-f ueled engine exhaust is a significant

health concern because it is a source of unhealthfu l air pollutants including particulate matter, gaseous and particulate-phase toxic air con taminants (TACs), NO
x , carbon monoxide, and hydrocarbons.

In 1998, the Board identified diesel PM as a TAC wi th no specified threshold exposure level to which adverse health impacts would be expe cted, pursuant to Health and Safety Code (HSC) sections 39650 through 39675. A needs a ssessment for diesel PM was conducted between 1998 and 2000 pursuant to HSC sec tions 39658, 39665, and 39666. This resulted in ARB staff developing, and the Board approving, the Risk

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

and Vehicles

(Diesel RRP) in 2000. The Diesel RRP presented in formation on the available options for reducing diesel PM and recomm ended regulations to achieve these reductions. The Diesel RRP’s scope was broad , addressing all categories of mobile and stationary diesel engines. It included control measures for off-road diesel PM sources, such as those covered by the proposed a mendments to the CHC regulation. The ultimate goal of the Diesel RRP is to reduce, by 2020, California’s diesel PM emissions and associated potential cancer risks by 85 percent from the 2000

levels.

In January 2005, the Goods Movement Cabinet Workgro up – created by Governor Schwarzenegger and led by the California Environmen tal Protection Agency and the Business, Transportation and Housing Agency – estab lished a policy for goods movement and ports to improve and expand California ’s goods movement industry and infrastructure while improving air quality and prot ecting public health. The workgroup worked collaboratively with the logistics industry, local and regional governments, neighboring communities, business, labor, environme ntal groups, and other interested stakeholders to create a two-phased Goods Movement Action Plan (Action Plan), which outlines a comprehensive strategy to address the ec onomic and environmental issues associated with moving goods via the State’s highwa ys, railways, and ports. In April 2006, the Board approved the Emissions Reduction Plan for Ports and Goods

Movement in California as part of the Action Plan. The final phase of th e Action Plan was completed in January 2007 and includes a framew ork that identifies the key contributors to goods movement-related emissions. The Action Plan emission reduction goals for existing harbor craft engines are 25 perc ent reductions for both diesel PM and

NO
x compared to baseline 2001 levels by 2010, 30 perce nt reductions compared to 2001 baseline levels by 2015, and 40 percent reduct ion by 2020. (ARB, 2006)

The federal Clean Air Act (CAA) requires the United States Environmental Protection Agency (U.S. EPA) to establish National Ambient Air Quality Standards (standards) for pollutants considered harmful to public health, inc luding fine particulate matter (PM2.5) and ozone. The South Coast and San Joaquin Valley Air Basins are the two areas in

the State that exceed the annual PM2.5 standards. These air basins are required by federal law to develop State Implementation Plans ( SIPs) describing how they will attain the standards by 2015. The U.S. EPA further requir es that all necessary emission3

reductions be achieved one calendar year sooner – b y 2014 – in recognition of the annual average form of the standard. Reductions of NO
x emissions are needed

because NO
x

contributes to the formation in the atmosphere of both ozone and PM2.5;

diesel PM emission reductions are needed because di esel PM contributes to ambient

concentrations of PM2.5. The South Coast and San J oaquin Valley air basins are also

in non-attainment for the federal ozone standard. However, they have until 2023 to attain the federal ozone standard, by invoking the “bump-up” provision in the CAA.

While all sources of PM and NO
x emissions are important, marine vessels play an especially significant role in California’s efforts to reach attainment. About one third of the 2008 inventory of diesel PM and NO
x emissions from crew and supply, barge and dredge vessels are estimated to be in the South Coa st Air Basin. Emissions from marine vessels, which include CHC engines, collecti vely represent one of several key contributors to ambient PM2.5 levels. Successfully controlling these sources is essential in determining whether California is able to meet the 2014 deadline for PM2.5

attainment in the South Coast Air Basin.

C. Regulatory Authority

ARB has authority under California law to adopt the proposed regulation. California Health and Safety Code (HSC) sections 43013(b) and 43018 provide broad authority for ARB to adopt emission standards and other regulatio ns to reduce emissions from new

and in-use nonvehicular sources. Under HSC section s 43013(b) and 43018, ARB is directly authorized to adopt emission standards for marine vessels as expeditiously as possible to meet State ambient air quality standard s and to the extent permitted by federal law. The ARB is further mandated by Califo rnia law under HSC section 39666 to adopt airborne toxic control measures (ATCM) for new and in-use nonvehicular sources, including commercial harbor craft, for ide ntified toxic air contaminants such as

diesel PM.

Under federal and California law, ARB is the primar y agency in California responsible for ensuring that all regions of the State attain a nd maintain state and federal ambient air quality standards (HSC section 39606; CAA secti on 110). To achieve this, California must adopt all feasible measures to obtain the nece ssary emission reductions, including measures for mobile sources. (HSC sections 39602.5 and 43013(h)). The federal Clean Air Act section 209(e)(1) conclusively preemp ts states, including California, from adopting requirements for locomotive engines and ne w off-road engines less than 175 horsepower that are used in farm or constructio n equipment. However, the proposed regulation addresses off-road engines used in marine vessels, rather than

those used in locomotives or farm or construction e quipment.

Under CAA section 209(e)(2), California may adopt a nd enforce emission standards and other requirements for off-road engines and equ ipment not conclusively preempted by section 209(e)(1), if California applies for and receives authorization from the

Administrator of U.S. EPA.4

2. EMISSIONS INVENTORY

ARB staff used several sources to gather the most a ccurate information regarding CHC vessels. Staff conducted a 2008 survey that was us ed to evaluate the need for the proposed amendments for crew and supply vessels. S taff also developed the emissions inventories presented in this section wit h the most current information obtained from the 2009 “Initial Reports” (required by the 2007 CHC regulation), the PERP database, a survey of barge and dredge vessels , and information from districts. Table 1 below presents an overview of the various s urveys and reports used by staff to develop the corresponding emission inventories.

Table 1: Overview of Surveys, Reports, and Invento ries

Year Data

Submitted Data Source: Surveys

and Reports Inventory

Year Inventories Developed

2004 ARB CHC Survey 2004 CHC Emissions Inventory*

2008 ARB Crew and Supply

Vessel Survey 2007 Interim Crew and Supply Inventory Used in Evaluating Need for Proposed Amendments

2009 CHC Initial Reports 2008 Crew and Supply Vessels Emissions Inventory

2009 ARB Barge and

Dredge Survey,
PERP Database, and CHC Initial Reports 2008 Barge and Dredge Vessel Emissions Inventory

*As presented in the 2007 Staff Report

Approximately 8,700 marine engines currently operat e on about 4,300 CHC in California. These vessels are mostly located along the California coastline, with some on inland waterways. A summary of the estimated nu mber of vessels and engines in each category are provided in Table 2 below.5 Table 2: Commercial Harbor Craft Vessels and Engin es (2008)*

Vessel Category Number of Vessels Number of Engines

Commercial Fishing 2,727 4,308 Charter Fishing 563 1,419
Ferries/Excursion 416 1,348 Tug 128 450

Tow 35 115 Barge 88 318 Crew and Supply 70 236

Workboats 89 158 Dredge 18 83

Pilot 27 50

Other 136 214
Total 4,297 8,699

*Estimates are updated for crew and supply boats a nd barge and dredge vessels from the 2004 CHC Surve y

.

Detailed information on the updated emissions inven tory and methodology used to estimate emissions is included in Appendix C.

A. Updating the Crew and Supply Vessel and Engine Data

The September 2007 Staff Report inventory for crew and supply vessels and engines

was based on the 2004 Statewide Commercial Harbor C raft Survey (2004 Survey). The following overview compares the 2004 inventory from the September 2007 Staff Report and an updated inventory of the crew and supply ves sels which is derived primarily from the 2009 Initial Reports.

Table 3 shows that the total number of engines did not change significantly, but engine average horsepower (hp) was larger for both propuls ion and auxiliary engines than previously estimated.

Table 3: Crew and Supply Vessels and Engines Inven tories

2004 Inventory 2008

Updated Inventory

Total Number of Vessels 64 70

Total Number of Engines 230 236

Number of Propulsion Engines 160 163

Average Horsepower of Propulsion Engines 440 500

Number of Auxiliary Engines 70 73

Average Horsepower of Auxiliary Engines 90 1106

While the total number of crew and supply vessel en gines did not change dramatically from the estimates used in the September 2007 Staff Report, the total average annual hours of operation did significantly change for the propulsion engines, the most significant engines in this class of vessels. Tabl e 4 presents the updated average annual hours of operation.

Table 4: Annual Engine Hours of Operation for

Crew and Supply Vessels

2004 Inventory 2008

Updated Inventory

Propulsion Engine Average Annual Hours 800 1,800

Auxiliary Engine Average Annual Hours 3,000 2,300

The distance that crew and supply vessels operate f rom shore is also important to consider. These vessels typically operate in harbo rs and generally close to shore. Therefore, most of the related emissions impact com munities near ports. Information on the total hours of operation by distance from sh ore was gathered through the 2008 survey and Initial Reports. Table 5 shows the perc entage of time that crew and supply vessels operate by distance from shore.

Table 5: Hours of Operation by Distance from Shore

% Total Annual Hours (Distance from Shore) Vessel Type

0-3 nm 3-24 nm >24 nm

Crew 86% 5% 9%

Supply 33% 65% 2%

All of these vessels primarily operate within five APCD’s: South Coast Air Quality Management District (AQMD), Ventura County APCD, Sa nta Barbara County APCD, San Diego County APCD, and Bay Area AQMD. Figure 1 shows the distribution of crew and supply vessels by district.7 Figure 1. Distribution of Crew and Supply Vessels by District

Bay Area

AQMD

23%

Santa

Barbara/Ventura
County APCD

22% South Coast

AQMD

46% San Diego
County APCD

9%

B. Updated Emissions from Crew and Supply Vessel En gines

The emissions from crew and supply vessel engines w ere derived from several sources and show an increase in emissions compared to the e mission estimates reported in the September 2007 Staff Report. The updated crew and supply vessel emissions inventory was compiled from the “Initial Reports” a nd input from Santa Barbara County and Ventura County districts. Using this data, we estimate that the diesel PM emissions from crew and supply vessel engines are approximate ly 75 percent higher than estimated in the September 2007 Staff Report, and N O
x emissions are about 60 percent higher. In the September 2007 Staff Report, crew a nd supply vessel emissions were based on the average emission factors for all CHC. Diesel PM emissions from crew and supply vessels are now estimated to be 33 tons per year (tpy) and NO
x emissions are estimated to be 670 tpy as shown in Table 6 bel ow.

Table 6: 2008 Emissions from Crew and Supply Vesse ls

Original

2008 Inventory* Updated

2008 Inventory**

PM Emissions (tpy) 19 33

NOx Emissions (tpy) 420 670

* 2008 emissions estimates based on 2004 CHC Emissi ons Inventory ** Inventory based on 2009 Initial Reports and dat a from Santa Barbara and Ventura County districts

As shown in Figure 1, over 22 percent of crew and s upply vessels operate in the districts Santa Barbara County and Ventura County. In these two districts, crew and supply vessels make up a much higher portion of the total emissions from CHC. This8

distribution and proportional emissions impact from crew and supply boats in Santa Barbara County and Ventura County districts in comp arison to the other districts that have crew and supply vessels is shown in Table 7. ARB estimates that about 20 percent of the CHC emissions in the Santa Barbar a County and Ventura County districts are from diesel-fueled engines on crew an d supply vessels. Currently, permitted crew and supply vessels operating in Sant a Barbara County APCD are required to use turbo charging, enhanced inter-cool ing, and 4 degrees of timing retard on their engines to reduce the NO
x emissions. The impact of these changes on

emissions has been accounted for in the emissions i nventory.

Table 7: Proportion of Emissions from Crew and Sup ply

Vessel Engines by District

NOx (tpy) Diesel PM (tpy)

District Crew &

Supply

Vessels Total

Harbor

Craft %

Harbor

Craft Crew &

Supply

Vessels Total

Harbor

Craft %

Harbor

Craft

Santa

Barbara /

Ventura 280 1,650 17% 17 75 22%

South

Coast 340 6,350 5% 14 270 6%

Bay Area 40 8,950 < 1% 1.0 380 < 1%

San Diego 10 3,100 < 1% < 1 130 < 1%

Statewide

Total* 670* 20,000 3% 33 855 4%

* Rounded using conventional rounding practices.

C. Barge and Dredge Vessel Data

Barge and dredge vessels were included in the Septe mber 2007 Staff Report as “Other CHC Vessels.” The following section provides a det ailed look at the population of barge and dredge vessels and associated engines operating in Regulated California Waters. ARB staff compiled the information by using data fr om PERP, a barge and dredge survey conducted by ARB staff in August 2009, distr ict permits, and information from the “Initial Reports” required by the 2007 CHC regu lation. Staff combined these sources of information to develop a statewide inven tory of barge and dredge vessels, engines, and emissions.

Approximately 400 engines currently operate on barg e and dredge vessels in California. Auxiliary engines on barges and dredges are mainly off-road (nonroad) engines. These vessels are located mostly along the California coa stline, with some on inland waterways. Fuel barges are the most common barge u sed in California. The engines on fuel barges power pumps and generators. Constru ction barges are also common and the engines on these vessels typically power wi nches, generators, and hoists.9

Dredge vessels are used to excavate underwater mate rial for cleaning waterways, construction projects, restoration projects, and va rious other excavation activities. Table 8 provides an overview of the numbers of barg e and dredge vessels and engines and the average horsepower of those engines.

Table 8: Barge and Dredge Vessels and Engines 2008 Inventory Overview

Barge Dredge

Total Number of Vessels 88 18

Total Number of Engines 318 83

Number of Auxiliary Engines 314 77

Average Horsepower of Auxiliary Engines 346 812

Number of Propulsion Engines 4 6

Average Horsepower of Propulsion Engines 251 2,708

As shown in Table 8, only a few barge and dredge ve ssels have propulsion engines. Most of these vessels are towed or pushed by other vessels. The total average annual hours of operation for barges and dredges is shown in Table 9. Propulsion engines have much higher annual hours of operation compared to auxiliary engines. Auxiliary engines have lower average annual hours, but have a larger population. Because of the large population, auxiliary engines make up the majority of barge and dredge

emissions.

Table 9: Annual Engine Hours of Operation for Barge and Dredge Vessels

2008 Inventory

Propulsion Engine Average Annual Hours 1,510*

Auxiliary Engine Average Annual Hours 550

* Average annual hours for p ropulsion engines is from the 2009 barge and dredge survey based on

very few data points, given small number of engines

.

Table 10 shows the percentage of time that barge an d dredge vessels operate by distance from shore. Like crew and supply vessels, the distance that barge and dredge vessels operate from shore is important to consider . These vessels typically operate in harbor and generally close to shore. Therefore, mo st of the related emissions impact those communities near the ports.10

Table 10: Percent of Barge and Dredge Vessel Engin e Operations by Distance from Shore (2009 Survey)

% Total Annual Hours (Distance from Shore) Vessel Type

0-3 nm 3-24 nm >24 nm

Barge 83% 2% 15%

Dredge 100% 0% 0%

D. Emissions from Barge and Dredge Vessel Engines

Emissions from barge and dredge vessel engines are estimated to be 33 tpy of diesel PM and 760 tpy of NO
x as shown in Table 11 below.

Table 11: Barge and Dredge Vessel Engine Emissions

2008 Inventory

PM Emissions (tpy) 33

NOx Emissions (tpy) 760

E. Total Combined Emissions from Crew and Supply V essels and Barge and Dredge Vessels

Table 12 presents the total 2008 baseline emissions inventory for crew and supply, barge, and dredge vessels. Total combined emission s from both vessel categories are 66 tpy of diesel PM and 1,430 tpy of NO
x .

Table 12: Combined Total Emissions from Crew and S upply Vessels

and Barge and Dredge Vessels – 2008 Inventory

Crew and Supply Barges and

Dredges Total Combined

Emissions

PM Emissions (tpy) 33 33 66

NOx Emissions (tpy) 670 760 1,43011

3. HEALTH RISK

The Board listed Diesel PM as a toxic air contamina nt in 1998 based on its potential to cause cancer, premature death, and other health eff ects. NO
x is a precursor to the formation of ozone and contributes to secondarily f ormed PM in the lower atmosphere. Therefore, the reductions in diesel PM emissions an d NO
x emissions will benefit public health by reducing exposure to diesel PM and helpin g to attain ambient air quality standards. The estimated potential cancer and non- cancer risks from CHC that were presented in the September 2007 Staff Report are no t expected to change significantly as a result of the proposed amendments. Crew and s upply, barge, and dredge vessel emissions are a small percentage of the total overa ll CHC emissions statewide. In the September 2007 Staff Report, crew and supply vessel s accounted for about 2 percent

of the total statewide 2004 CHC diesel PM emissions . However, using the updated emission estimates for crew and supply, barge, and dredge vessels, the overall

increase contribution to the total 2004 CHC statewi de inventory less than 10 percent. This increase in the total statewide CHC inventory is not expected to significantly affect the results of the health risk analysis done for th e September 2007 Staff Report. A summary of the risks reported in the September 2007 Staff Report are provided below.

A. Potential Cancer Risk

In the September 2007 Staff Report, ARB staff estim ated potential cancer risks from CHC using the results from a risk assessment for th e Ports of Los Angeles and Long Beach (POLA/LB). The POLA/LB health risk assessmen t estimated that CHC are responsible for the third highest impact on cancer risk from port activities. That analysis showed that approximately 1.7 million people are ex posed to a 10 in a million risk from

all CHC emissions.

Estimates of potential cancer risks from harbor cra ft activity at these two ports would represent the upper range of cancer risks, given th e magnitude of CHC emissions in the area and the proximity of the emissions to highly u rbanized areas. Qualitative estimates of the relative impact of CHC emissions for other a reas can be made based on a comparison of the relative magnitude of emissions a nd the proximity of the emissions to

urbanized areas.

B. Non-Cancer Risk

In the September 2007 Staff Report, staff estimated that exposures to direct and secondary diesel PM emissions from all harbor craft can be associated with about 90 premature deaths per year. Approximately half o f these premature deaths are due to direct diesel PM and half from secondary diesel PM. A complete discussion of the methodology used to develop this estimate is found in the Technical Support Document of the September 2007 Staff Report. ARB staff is c urrently updating the methodology to

estimate non-cancer health risks from diesel PM. T he new methodology is anticipated to project somewhat fewer premature deaths than tho se reported in the September 2007 Staff Report and in this report.12

4. SUMMARY OF THE PROPOSED AMENDMENTS

Staff is proposing to amend the CHC Regulation 3 to require the vessel categories of crew and supply, barge, and dredge vessels to be su bject to in-use engine requirements. Staff anticipates that in most cases , engine replacement will be the option used by vessel owner/operators to meet the p roposed emission standards for vessel engines. The accelerated phase-in of newer engines will result in emission

reductions of diesel PM and NO
x . Additional clarifying amendments are also propos ed. The following sections provide background informati on on marine and nonroad engine standards and more details regarding the proposed a mendments.

A. Background Information on Emission Standards for Marine Engines

Under the staff’s proposal, the emission limits for PM and NO
x

from a regulated diesel-fueled marine engine would be identical to t hose specified by the U.S. EPA marine engine standards for new engines in effect a t the time compliance is required. The U.S. EPA marine engine emission standards have phased effective dates and emission levels dependent on the engine size.

The U.S. EPA classifies marine engines as either Ca tegory 1, 2, or 3, depending on engine size or cylinder displacement, with the engi ne size increasing with the higher category number. All of the marine engines used in California’s CHC are Category 1 or 2 engines, with about 90 percent of the engines bei ng Category 1 engines. The engine size and approximate maximum horsepower (hp) rating for Category 1 and 2 engines are provided in Table 13. Category 1 engines are r ated at less than 5.0 liters per cylinder and can range as high as 2,500 hp. Catego ry 2 engines range in size from 5.0 liters per cylinder to 30 liters per cylinder a nd from about 750 to 5,000 hp.

Table 13: U.S. EPA Marine Engine Categories Used i n Commercial Harbor Craft

Category Liters per Engine Cylinder Approximate Horsepower

Category 1 < 5.0 A 50 B to <~2500 hp

Category 2 5.0 to < 30 A > 750 to <5000 hp

A U.S. EPA Tier 3 and Tier 4 marine standards establ ished Category 1 to < 7.0 L/cyl. and Category 2 to 7.0 to 30 L/cyl.

B Category 1 Tier 3 standards include engines rated less than 50 hp.

The emission limits for Category 1 and 2 engines us ed in CHC are summarized in

Table 14.

3 Title 17, California Code of Regulations (CCR) sec tion 93118.5, and title 13, CCR section 2299.5.13

Table 14: U.S. EPA Marine Engine Standards Effecti ve Dates and Emissions Limits for Category 1 and Category 2 Engines Used i n Commercial Harbor Craft

Category Tier Level Adoption Date Effective

Date PM

(g/bhp-hr) NOx

(g/bhp-hr)

1 IMO 1997

U.S EPA 2003 2000

2004 N/A 7.3 – 12.7 B

2 U.S. EPA 1999 2004-2007 0.15-0.3 5.4-5.6 C

3 U.S. EPA 2007 2009-2014 0.08-0.3 3.5-5.6 C 1

4 A U.S. EPA 2007 2017 0.03 1.3

1 IMO 1997

U.S EPA 2003 2000

2004 N/A 7.3 – 12.7 B

2 U.S. EPA 1999 2007 0.2 5.8 C

3 U.S. EPA 2007 2013 0.1 4.6 C 2

4 A U.S. EPA 2007 2016-2017 0.03 1.3

(40 CFR Part 94) (40 CFR Part 1042)

A Applies only to engines with maximum horsepower r ating of 800 hp (600 kW) or more.

B Standard is a function of engine speed, revolutions per minute (rpm). Standard=12.7 for engines with engine speed ≥ 2000 rpm. Standard=7.3 for engines with engine sp eed ≤ 130 rpm. For engines between 130 and 2000 rpm, standard = 33.57 X rpm -0.2

. C NOx is NOx + total HC.

B. Background Information on Emission Standards for Off-Road Engines

Generally, barge and dredge vessels utilize off-roa d engines to power pumps, winches, and cranes. Since the mid-1980’s, new engine stand ards adopted by U.S. EPA and ARB have required new off-road engines to become pr ogressively cleaner. In developing the new engine standards, ARB staff work ed closely with U.S. EPA to develop a harmonized federal and State program to m ore effectively control emissions from off-road equipment. The emission standards ar e divided into four increasingly stringent levels (Tiers); the allowed emission leve l and effective dates vary with horsepower. Until the mid-1990’s, off-road diesel engines were not subject to any emission standards (commonly referred to as Tier 0 or “uncontrolled engines”). In 1996 through 2000, the Tier 1 standards took effect. By 2006, all engine sizes were subject to Tier 2 standards. Between 2006 and 2008, Tier 3 standards took effect for some horsepower groups. Tier 4 standards are divided in to two stages: interim Tier 4, which begins between 2008 and 2012 for most engines, and final Tier 4, which is effective for all off-road engines by 2015. The final Tier 4 sta ndards will require the use of advanced exhaust after-treatment technologies to control bot h PM and NO
x , and will result in diesel engines that will be over 90 percent cleaner than Tier 0 engines. Table 15 illustrates how these standards change over time fo r one horsepower group, 300 to14

600 horsepower engines. The numerical standards va ry by horsepower group, but the

downward trend in emissions is the same for all hor sepower groups.

Table 15: ARB and U.S. EPA Diesel PM and NOx Emiss ion Standards for

New Off-Road Engines (300 – 600 hp)

Off-Road Engines (600 hp) Marine Engines
(Category 1 600 hp) Engine

Tier PM

Standard* NOx+HC

Standard* Effective

Date PM Standard* NOx+HC

Standard* Effective

Date

Tier 0 NA NA NA NA

Tier 1 0.40 7.90 1996 NA 7.3 2004

Tier 2 0.15 4.80 2004 0.15 5.4 2007

Tier 3 0.15 3.00 2006 0.08 4.2 2013

Tier 4

interim 0.01 1.64 2011 NA NA NA

Tier 4 final 0.01 0.44 2014 0.03 1.3 2016-2017

*Emission rates expressed in grams per brake horsep ower-hour (g/bhp-hr)

C. In-Use Requirements for Crew and Supply Vessels, Barge, and Dredge Vessels

The proposed amendments would primarily establish i n-use emission limits for diesel-fueled engines on crew and supply, barge, an d dredge vessels that are consistent with the U.S. EPA marine or off-road eng ine standards, similar to that already required for excursion vessels, ferries, tugboats, and towboats. Two compliance schedules are being proposed; one for crew and supp ly vessel engines and another for barge and dredge vessel engines. Separate complian ce schedules were developed in consideration of the profile of the engine fleets a nd to provide a transition period for barge and dredge operators from planned compliance with the Portable Engine ATCM to the CHC regulation.

1. Crew and Supply, Barge, and Dredge Vessel Engine Compliance Options

Staff is proposing that in-use Tier 0 (pre-Tier 1) and Tier 1 engines on crew and supply, barge, dredge vessel engines meet emission limits e qual to or cleaner than current U.S. EPA marine engine standards. In auxiliary app lications, staff is proposing that in-use Tier 0 (pre-Tier 1) and Tier 1 engines meet emission limits equal to or cleaner than engines meeting Tier 2 or Tier 3 marine or off -road engine standards. Engine compliance options vary depending upon the proposed compliance schedule, horsepower, and liters/cylinder. The proposed amen dments do not require compliance with Tier 4 (after-treatment based) U.S. EPA standa rds for in-use engines due to issues with the additional engine weight and space require ments associated with applying after-treatment technologies to existing vessels.15

While the primary method for compliance with the pr oposed in-use engine requirements will likely be the replacement of in-use engines wi th new certified engines, the proposed amendments include other options for compliance. T hese options include:

• demonstrating that the existing engine meets the a pplicable U.S. EPA marine or off-road engine standards;

• demonstrating that the existing crew and supply ve ssel engine has not and will not operate 300 hours or more per calendar year; or

• demonstrating that the existing barge and dredge v essel engine has not and will not operate 80 hours or more per calendar year.

If the propulsion engine is replaced with a Tier 2 or 3 marine standard engine, or if an auxiliary engine is replaced with a Tier 2 or 3 off -road auxiliary engine, or can be shown to meet the applicable standards, all compliance re quirements for that engine will have

been met.

2. Crew and Supply Vessel and Barge and Dredge Engi ne

Compliance Schedules

The proposed compliance schedules are shown in Tabl e 16 and Table 17 for crew and supply and barge and dredge engines, respectively. Compliance dates are based on the model year of the engine and the annual hours of op eration. Table 18 shows the distribution of engines by compliance year that wou ld need to comply with the proposed

amendments.

The engine model year would be determined by one of three methods. In most cases, the engine’s actual model year of manufacture would be used to determine the required compliance date. However, the regulation provides two additional options using an “effective model year” different from the actual en gine model year. The first of those options is to implement an emission control strateg y that achieves at least a 25 percent

reduction in either PM or NO
x ; this would extend the engine model year by five y ears. This is referred to as the “Engine’s Model Year + 5 ” method. The date by which the engine must meet the U.S. EPA marine engine standar ds would be based on the actual engine model year plus five years. The second opti on is to demonstrate that the engine has been rebuilt to Tier 1 standards or cleaner pri or to January 1, 2008; this would allow the date of rebuild to be used as the engine’s mode l year for determining when the engine must meet the U.S. EPA marine engine standar ds. This is referred to as the “Engine’s Tier 1 Rebuild Model Year.”16

Table 16: Compliance Dates for Crew and Supply Ves sel Engines Statewide

Engine Model Year Total Annual Hours of Operation Compliance

Date

1985 and earlier >1500 12/31/2011

1985 and earlier > 300 – 1500 12/31/2012

1986 - 1995 >1500 12/31/2013

1986 - 1995 > 300 – 1500 12/31/2014

1996 - 2000 >1500 12/31/2015

1996 - 2000 > 300 – 1500 12/31/2016

2001 - 2002 >300 12/31/2017

2003 >300 12/31/2018

2004 >300 12/31/2019

2005 >300 12/31/2020

2006 >300 12/31/2021

2007 >300 12/31/2022

Table 17: Compliance Dates for Barge and Dredge Ve ssel Engines Statewide

Engine Model Year Total Annual Hours of Operation Compliance

Date

1975 and earlier >80 12/31/2011

1976 - 1980 >80 12/31/2012

1981 - 1985 >80 12/31/2013

1986 - 1990 >80 12/31/2014

1991 - 1995 >80 12/31/2015

1996 - 1999 >80 12/31/2016

2000 - 2001 >80 12/31/2017

2002 >80 12/31/2018

2003 >80 12/31/2019

2004 >80 12/31/2020

2005 >80 12/31/2021

2006 >80 12/31/202217 Table 18: Estimated Population of In-Use Crew and Supply and Barge and Dredge Vessel Engines Subject to Amendments to CHC Regulation Emission Li mits

Year Crew and

Supply Engines Barge and

Dredge Engines Total

2011 33 5 38

2012 6 3 9

2013 3 7 10

2014 3 6 9

2015 10 5 15

2016 3 43 46

2017 14 45 59

2018 12 6 18

2019 14 4 18

2020 19 3 22

2021 8 1 9

2022 25 2 27

Total 150 130 280

D. Other Proposed Amendments

Additional clarifying amendments are also being pro posed. The most substantive proposals are listed below that clarify requirement s and to address issues that have arisen during the implementation of the 2007 regula tion including additional definitions. All amendments are included in the proposed languag e shown in Appendix A.

1. Deleting Exemption for Vessels in PERP or Under District Permit Prior to January 1, 2009

Staff is proposing to remove the exemption (17 CCR section 93118.5 (c)(7)(C)) that excluded vessels registered in PERP or permitted by the districts before January 1, 2009 from the CHC regulation. This amen dment will provide consistency to CHC vessels. Marine vessel auxiliary engines that were registered in PERP were subject to the Portable Engine ATCM. During 2009, it became clear that having some barge and dredges subject to the Portable Engine AT CM and others subject to the CHC regulation was creating compliance and enforcement issues. In January 2010, PERP was amended to make engines used on marine vessels that were registered in that program subject to the requirements of the CHC regu lation. 4 The goal of the amendments to PERP and the proposed amendments to t he CHC regulation is to allow harbor craft vessels to be subject to a single regu lation, regardless if they are registered

in PERP or not.

4 Final PERP amendments pending completion of rulema king process.18

ARB staff also became aware that some districts did not permit barge and dredge vessels, leaving some in-use engines on these vesse ls uncontrolled. Since the current CHC regulation has no in-use requirements for barge and dredge vessel engines, staff proposes to amend this regulation for consistency, and to require all barge and dredge vessel engines, including those currently registere d in PERP or under district permits, to be subject to the CHC regulation.

2. Allowing Certified Off-Road or Nonroad Engines to be Used as Auxiliary Engines

The current CHC regulation requires vessel owner/op erators’ in-use engines to meet Tier 2 and Tier 3 marine engine standards. The pro posed amendments will allow vessel owner/operators more flexibility to comply w ith the current CHC regulation by allowing them to use currently available Tier 2 or higher certified off-road engines to meet the in-use requirements for auxiliary engines. Owner/operators can install a Tier 2 or Tier 3 (marine or off-road) engine on a vessel a s a replacement auxiliary engine even after Tier 4 marine, or interim Tier 4 and final Ti er 4 off-road standards are in effect. Tier 4 standards will require integration of exhaus t aftertreatment into the engine design. Generally, these design changes make these engines larger and heavier. These larger and heavier Tier 4 engines may not be practical for some CHC engine replacements due to space limitations in the engine compartments of those vessels. In addition, there may be situations where the harsh marine environmen t may have adverse affects on off-road engines. Vessel owner/operators must asse ss these factors when deciding to use an off-road engine.

3. Adding a Definition of “Swing Engine” and Requir ements for Their Inclusion in Recordkeeping

Swing engines are defined and requirements for thei r inclusion in reporting and recordkeeping are included in the proposed amendmen ts. One standard maintenance practice of CHC fleet owner/operators includes the use of swing engines. These engines match the engines currently on a vessel or fleet of vessels. The engines are standing by, ready to be installed on a vessel when the existing engine is not functioning properly, or during the normal maintena nce cycle, thereby preventing excessive vessel downtime. All swing engines used on a regulated vessel categories would be considered in-use engines and must meet th e applicable in-use engine compliance requirements.

4. Delete Multipurpose Harbor Craft Definition and Low Use Exemption

Staff is proposing to delete the “multipurpose harb or craft” term and the low use exemption in title 17, CCR section 93118.5(c)(12) f rom the CHC regulation which was often confusing and overly burdensome to some vesse l owners. This change will allow vessel owner/operators more flexibility to operate vessel engines for up to 300 hours19

per year in any one of the regulated vessel categor ies without having to comply with the in-use engine requirements. This allows vessel own er/operators to be exempt from the in-use engine compliance requirements as long as th e total engine hours of operation stays below 300 hours when operating as a regulated in-use vessel type. For example, an owner of a fishing vessel engines may operate un limited annual hours because fishing vessels are an unregulated in-use v essel type. The fishing vessel could also offer whale watching excursions on his v essel which is a regulated in-use vessel type. The fishing vessel engines would not be required to comply with the in-use compliance schedule unless the vessel engines are u sed for whale watching excursions for more than 300 hours per year.

Barge and dredge vessels are limited to operating l ess than 80 hours to be exempt from the in-use engine compliance requirements. This 80 hour limitation is necessary for barge and dredge vessels to remain consistent with Portable Engine ATCM requirements that many have been subject to by thei r registration in PERP.

5. Special Circumstances to Use Non-CARB Diesel Fue l

The current CHC regulation requires the use of CARB diesel fuel or specific alternative diesel fuel. The proposed amendments will allow ve ssel engines to operate using

U.S. EPA on-road fuel or U.S. EPA nonroad diesel fu el, in the event a vessel operator cannot obtain CARB diesel fuel prior to operating i n Regulated California Waters. Table 19 compares ARB and U.S. EPA on-road and nonr oad diesel fuel standards.

Table 19: ARB and U.S. EPA Diesel Fuel Standards

Fuel Type Implementation

Date Maximum

Sulfur Level (ppmv) Aromatics

Maximum (% by volume) Cetane Index

(Minimum)

CARB 2006 15 10 40

U.S. EPA On-road 2006 15 35 40

U.S. EPA Nonroad 2010 15 35 40

6. Deadline for Alternative Control of Emission Pla ns

The current CHC regulation does not state a date by which a vessel owner/operator that utilizes an Alternative Control of Emission (ACE) P lan must submit that plan. The proposed amendments would require the ACE plan to b e submitted prior to or before February 28 of the year the vessel engine complianc e is required.

7. In-Use Out-of-State Vessels Operating in Califor nia

The current CHC regulation requires all harbor craf t, including those from out-of state, to be subject to the in-use engine requirements and to provide an initial report and a compliance plan when operating in Regulated Califor nia Waters. There has been some confusion among out-of-state CHC vessels operators about the need to comply with the20

reporting requirements. The proposed amendments wo uld clarify that out-of-state CHC vessels are required to complete an initial report within 30 days of a vessel being brought into California to operate in Regulated Cal ifornia Waters and to submit a Compliance Plan within 90 days of being subject to an in-use engine requirement.

8. Replacement Engine Exemption

The current CHC regulation requires that if an engi ne is replaced, the replacement engine must meet the current U.S. EPA model year ma rine engine standards. There may be compliance situations when a vessel’s engine s are already complying with the CHC regulation with Tier 2 engines. A situation ma y arise when a vessel with multiple propulsion or auxiliary engines experiences a catas trophic failure of one of the engines. If Tier 3 engines are currently available, a Tier 3 engine may not be compatible with the other existing Tier 2 engines. The proposed amendm ent provides vessel owner/operators an exemption in specific cases allo wing a non-compliant engine to be installed on a vessel if there are no suitable engi ne replacements available, or if the new engine does not synchronize with the existing engin es. The proposed amendments include specific requirements that must be met in o rder to use a noncompliant engine. The proposed amendments allow replacement of an eng ine not meeting current standards if the vessel owner/operator can demonstr ate that a compliant engine, or one meeting required physical or performance characteri stics, is not available. To demonstrate this, the vessel owner/operator must ev aluate the current engine tier and each previous engine tier. Approval must be obtain ed from the ARB Executive Officer.

9. Allowing the Use of an Available Engine to Repla ce an Older Engine Subject to In-use Requirements

The proposed regulation would, in certain situation s, allow an engine that does not meet the Tier 2 or Tier 3 requirements to be used on a t emporary basis. The engine must be within the same fleet, and the original compliance date of the older, replaced engine must be kept.

10. Clarification of Requirements Applicable to Newly Acquired Vessels and Ferry Vessels

The proposed amendments have been reworded to clari fy existing requirements that owners/operators of new ferries having the capacity to transport 75 or more passengers are required to equip diesel propulsion engines tha t meet either Tier 2 or Tier 3 marine standards with Best Available Control Technology (B ACT). BACT is not required for diesel propulsion engines that are certified to Tie r 4 marine standards.

11. Compliance Extensions

The proposed amendments would expand the availabili ty of the current compliance extension of title 17, CCR section (e)(6)(E)4 to al low an owner to also request a compliance extension in situations where that owner has multiple vessels that are21

subject to compliance dates of 2011 or 2012 for cre w and supply, barge, and dredge vessels, similar to the current compliance extensio n allowed for ferries, excursion vessels, tugboats, towboats, and push boats.

12. Definitions Added

The proposed amendments revise section (d) of the e xisting regulation by adding several definitions and deleting one to clarify the proposed amended language. Definitions that were added include, “certified non road engine”, “dredge”, “family emission limit”, “permanently affixed to a harbor c raft”, “regulated in-use vessel”, “swing engine”, ”tier 2 off-road or nonroad emission stand ards”, ”tier 3 off-road or nonroad emission standards”, ”tier 4 final off-road or nonr oad emission standards”, ”tier 4 interim off-road or nonroad emission standards”, deleting t he definition of “multipurpose harbor craft”, clarifying “temporary emergency rescue/reco very vessel” definition.

13. Update Low Sulfur Fuel Regulation

Staff is also proposing minor amendments to the Low Sulfur Fuel Regulation (section 2299.5, title 13, CCR) to align definition numbers with section 93118.5, title 17, CCR

.22

5. ENVIRONMENTAL AND HEALTH IMPACTS OF PROPOSED AME NDMENTS

A. Emissions Reductions Statewide

ARB staff has estimated the emissions reductions of the proposed amendments for crew and supply, barge, and dredge vessel engines. As stated earlier, statewide emissions from these specific vessel categories are a small portion of the total harbor craft emissions. However, these emission reduction s are important in achieving the Board’s goals in the Diesel Risk Reduction Plan and Emission Reduction Plan for Ports and Goods, as well as attaining and maintaining amb ient air quality standards. Additionally, these emissions represent a significa nt portion of the total CHC emissions in Santa Barbara County and Ventura County district s. The emissions reductions for these two districts are presented in Section B of t his chapter.

1. Crew and Supply Boat Emission Reductions Statewi de

The projected statewide annual emissions for crew a nd supply vessels are presented in Figure 2. Statewide, the baseline uncontrolled die sel PM emissions from crew and supply vessels are estimated to be about 33 tpy in 2008, dropping to about 22 tpy in

2025. The reduction in uncontrolled emission over this period is due to the anticipated or planned replacement of older engines. With the proposed amendments in place accelerating engine turnover, diesel PM emissions w ould be reduced in 2025 from 22 tpy to less than 10 tpy. The proposed amendments a ffect about 150 of the 236 crew and supply vessel engines, as some engines are exem pt due to size or annual hours of operation or are already at Tier 2 or Tier 3. The total estimated diesel PM emission reductions from crew and supply vessels from 2011 t o 2015 would be about 187 tons.23

Figure 2: Projected Statewide Diesel PM Emissions for Crew and Supply Vessel Diesel-Fueled Engines

0 5 10 15 20 25 30 35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
2 0 24
2 0 25

YearTons/year

2008 Crew & Supply Baseline

2008 Crew & Supply Controlled24

Figure 3 shows that the projected statewide NO
x emissions from and supply vessels are estimated to be about 670 tpy in 2008, dropping to about 466 tpy in 2025 without the proposed amendments. With the proposed amendments in place, the NO
x emissions would be further reduced from 466 tpy to about 350 tpy in 2025. The total estimated

NO
x emission reductions from crew and supply vessels f rom 2011 to 2025 would be about 2,000 tons.

Figure 3: Projected Statewide NOx Emissions for Cr ew and Supply Vessel Diesel-Fueled Engines

0 100 200 300 400 500 600 700 800

2008
2 0 09 20 10 2011 2012 2013 2014 20 15 20 16 2017 2018 2019 2020 20 21 20 22 2023 2024 2025

YearTons/year

2008 Crew & Supply Baseline

2008 Crew & Supply Controlled25

2. Barge and Dredge Vessel Emission Reductions Stat ewide

Figure 4 illustrates the statewide barge and dredge vessel engine diesel PM emissions with and without the proposed amendments. Statewid e, the baseline uncontrolled diesel PM emissions from barges and dredges are est imated to be about 33 tpy in 2008, dropping to about 12 tpy in 2025. The reduct ion in uncontrolled emissions over this period is due to the anticipated or planned re placement of older engines. With the proposed amendments in place accelerating engine tu rnover, diesel PM emissions would be reduced in 2025 from 12 tpy to less than 7 tpy. The proposed amendments affect 129 of the 400 barge and dredge vessel engin es statewide, as some engines are exempt due to size or annual hours of operation or are already at Tier 2 or Tier 3. The

total estimated diesel PM emission reductions from barges and dredges from 2011 to

2025 would be about 90 tons.

Figure 4: Projected Statewide Diesel PM Emissions for Barge and Dredge Vessel Diesel-Fueled Engines

0 5 10 15 20 25 30 35 40

2008 2009 2010 2011 2012 2013
2 0 14 20 15 20 16 20 17 20 1 8 2019 2020 2021 2022 2023 2024 2025

YearTons/year

2008 Barge and Dredge Baseline

2008 Barge and Dredge Controlled26

Figure 5 shows that the projected statewide NO
x emissions from barge and dredge vessels are estimated to be about 760 tpy in 2008, dropping to about 340 tpy in 2025 without the proposed amendments. With the proposed amendments in place, the NO
x emissions would be further reduced from 340 tpy to about 255 tpy in 2025. The total

estimated NO
x

emission reductions from barges and dredges from 2 011 to 2025 would be about 1,475 tons.

Figure 5: Projected Statewide NOx Emissions for Ba rge and Dredge Vessel Diesel-Fueled Engines

0 100 200 300 400 500 600 700 800

2008 2009
2

0 10 2011 2012 2013 2014 2015 20 1 6 2017 2018 2019 2020
2

0 21 2022 2023 2024 2025

YearTons/year

2008 Barge and Dredge Baseline

2008 Barge and Dredge Controlled27

Total Statewide Combined Emission Reductions for Di esel PM and NOx from Crew and Supply Vessels and Barge and Dredge Vessel s

Table 20 below shows the total statewide diesel PM and NO
x emission reductions from crew and supply vessels and barge and dredge vessel s associated with the proposed CHC regulatory amendments. These reductions are th e cumulative reductions from

2011 to 2025. The total statewide emissions reduct ions of diesel PM from crew and supply vessels and barge and dredge vessels would b e 277 tons. The total statewide

emission reductions of NO
x from crew and supply vessels and barges and dredge vessels would be 3,475 tons.

Table 20: Total Statewide Diesel PM and NOx Emissi on Reductions Associated

with the Proposed Regulatory Amendments

Diesel PM Reductions (2011 – 2025) (tons) NOx Reductions (2011 – 2025) (tons)
Crew and Supply

Vessels 187 2,000

Barge and Dredge Vessels 90 1,475

Statewide Total 277 3,475

B. Santa Barbara County APCD and Ventura County APC D Crew and Supply Vessel Engine Emission Reductions

Crew and supply vessels are a small segment (less t hen 2 percent) of the California CHC fleets, but their engines contribute a signific ant portion of the CHC emissions in Santa Barbara County and Ventura County districts. Figures 6 and 7 present estimated

annual diesel PM and NO
x emissions from crew and supply vessels in Santa Ba rbara County and Ventura County districts. In 2025, afte r full implementation of the proposed amendments to the regulation, diesel PM emissions f rom crew and supply vessels in the Santa Barbara County and Ventura County distric t would be reduced from the 2008 baseline of 17 tpy to about 5 tpy and NO
x emissions would be reduced from about 280 tpy to about 170 tpy.

Over the period 2011 through 2025, 95 tons of diese l PM and 600 tons of NO
x would be reduced as a result of the proposed amendments. Th ese reductions are in addition to the reductions obtained from the 2007 CHC regulatio n and are of greater significance to Santa Barbara County and Ventura County districts. In Santa Barbara and Ventura County districts crew and supply vessel emissions m ake up about 20 percent of all CHC emissions. The proposed amended regulation will al so reduce emissions from barge and dredge vessel engines in these districts, even though barge and dredge engine emissions do not make up a significant portion of t he CHC emissions in the Santa

Barbara and Ventura area.28

Many of the owner/operators of crew and supply vess el engines servicing oil platforms were required by the Santa Barbara County APCD to u tilize NO
x emission reduction engine modifications, including turbo charging, enh anced inter-cooling, and retarding the engine timing by 4 degrees. These engine modif ications result in NO
x emission reductions, but may result in an increase in diesel PM emissions. The proposed amended regulation will require the vessel engines to meet performance standards for

both PM and NO
x

emissions.

Figure 6: Projected Santa Barbara County and Ventu ra County APCD Diesel PM Emissions for Crew and Supply Vessel Dies el-Fueled Engines

0 2 4 6 8 10 12 14 16 18

200 8 20 09
2 010 2011 201

2
2 013 2014 201

5 20 16 20 17
2 018 2019 202

0 20 21 2 022 202 3 20 24
2 025

YearTons per Year

2008 Crew & Supply Baseline

2008 Crew & Supply Controlled

Figure 7: Projected Santa Barbara County and Ventu ra County APCD NOx Emissions for Crew and Supply Vessel Diesel-Fue led Engines

0 50 100 150 200 250 300

2008
2 009 2010 2011 2012
2

013 201 4 2015 2016 2017 2018 2019 2020
2 021 2022 2023 2024 2025

YearTons per Year

2008 Crew & Supply Baseline

2008 Crew & Supply Controlled29

C. Health Impacts

The emission reductions associated with the propose d amendments would result in lower ambient PM levels and reductions in exposure to diesel PM and NO
x . These reductions would result in a corresponding reductio n in potential cancer risk and premature deaths.

Estimating the impact of the diesel PM reductions o n potential cancer risk are highly dependent on the specific location of the emission reduction. The diesel PM emission reductions due to the proposed amendments, about 27 5 tons between 2011 and 2025, are about 10 percent of the 2,400 tons diesel PM re ductions estimated under the 2007 rule. While it is not possible to identify the imp act of this 10 percent reduction on the number of persons exposed to various risk levels as staff did in the September 2007 Staff Report without extensive computer modeling, i t is reasonable to assume that there will be a small – up to 10 percent – reduction in r isk levels due to the proposed amendments. A similar reduction in premature death s would also be expected.

D. Environmental Impact

The ARB staff anticipates that, in most cases, engi ne replacement will be the option chosen by vessel owner/operators to meet the propos ed emission standards for vessel engines and that the accelerated phase-in of these newer engines will provide diesel

PM and NO
x

emissions reductions. In addition, the newer engi nes are typically more energy efficient and have emission reduction techno logies, thereby reducing criteria, toxic, and greenhouse gas (GHG) emissions. No sign ificant adverse environmental impacts are expected to occur from the adoption of, and compliance with, the proposed amendments for crew and supply, barge, and dredge v essel engines.

E. Impact on Global Warming

The accelerated replacement of older technology eng ines required by the proposed amendments should reduce GHG emissions. However, s ome actions required by the proposed amendments could result in slightly increa sed carbon dioxide (CO 2 ) for some applications. For example, an increase in CO 2 could occur if crew and supply vessel or barge and dredge vessel owner/operators choose to c omply with the regulation by using exhaust treatment technologies that use vessel powe r (e.g., scrubbers, selective catalytic reduction), increase the weight of the ve ssel, or require a larger engine to be installed on the vessel. While this potentially co uld occur, staff does not believe many crew and supply, barge, or dredge vessel operators are likely to select these as compliance options and will elect instead to instal l new engines. Newer marine engines are expected to have slightly improved fuel economy compared to unregulated engines, thereby reducing some GHG emissions.30

The proposed amendments would reduce emissions of P M and NO
x . The following section provides an overview of the current underst anding of the potential climate impacts of these pollutants.

Particulate Matter (PM): PM from marine diesel engine exhaust is composed of combustion particles consisting of elemental and or ganic carbon and sulfate, all of which can form aerosols. Atmospheric aerosols play an important role in the climate system through modifications of the global energy b udget: directly, by the scattering and absorption of radiation; indirectly, by the modific ation of cloud properties. Black carbon typically emitted as a fraction of PM from combusti on processes, is the main light-absorbing component of aerosols and thereby c auses global warming. In recent years, there has been increased attention to black carbon for its global warming potential through direct and semi-direct effects. D ue to the relatively short atmospheric residence time of black carbon, reductions in black carbon emissions represent a potential near term opportunity to postpone the eff ects of rising GHG levels on the global climate. The heightened interest in black ca rbon also builds on the long-known association of these emissions with localized air p ollution and associated negative health impacts. Therefore, reducing black carbon em issions promises significant cobenefits by improving the health of local people wh ile contributing to the global climate change effort.

Overall, the climate impact assessment of PM emitte d by shipping is rather complex: radiative forcing of black carbon is positive (clim ate warming impact), while radiative forcing of sulfate particles is negative (cooling i mpact). The particles emitted from marine diesel engines represent a variety of compos itions and sizes. The magnitude of the overall direct climate impact of black carbon e mitted from marine engines and information on emissions of ship-exhaust particles, such as detailed characterization of chemical composition, microphysical characteristics and the fate of the particles in the marine environment are not well known. (ARB, 2008) . A better characterization of marine diesel engine emissions are needed to improv e the understanding of the climate change benefits from emission reduction strategies

Nitrogen oxides (NO
x ): Through the production of tropospheric ozone, emi ssions of

NO
x have a climate warming impact. However, by affecti ng the concentration of hydroxyl radical (OH) they reduce the levels of met hane, providing a cooling effect. The net climate impact of changes in NO
x emissions will depend on whether ozone or methane production dominates. At this time, there is no consensus on which action is likely to dominate or on the overall magnitude of t he impact due to changes in NO
x emissions resulting from the regulation. (ARB, 200 8)

In summary, efforts to reduce marine diesel emissio ns will reduce both positive and negative climate forcing substances. Thus, staff ex pects the proposed regulation amendments to have an overall negligible effect on global warming, with some slight GHG reductions due to newer, more fuel efficient en gines.31

6. ECONOMIC IMPACTS

This chapter discusses the estimated costs and econ omic impacts associated with implementation of the proposed amendments to the CH C regulation. The expected capital and recurring costs for potential complianc e options, the cost and associated economic impacts on businesses, as well as an analy sis of the cost-effectiveness of proposed amendments to the regulation are presented . Estimates in this section are

based on the costs incurred and emissions reduced d uring the compliance years of 2011 to 2022. However, the proposed amendments wil l continue to have additional emission reductions after 2022, and the emission re ductions through 2025 are examined in the previous section of this report. G enerally, costs contained in this section are presented in 2009 dollars. The costs, adjusted for net present value (NPV), are included with an explanation of the methodology used in Appendix D.

A. Regulatory and New Equipment Costs

In assessing the costs associated with the proposed amendments to the CHC regulation, ARB staff developed two different estimates, one for re gulatory costs and another for new equipment costs. Regulatory costs are the estimated costs resulting from the proposed amendments taking into considerat ion the residual value of the in-use engine being replaced, the residual value of the most recent engine rebuild work, recordkeeping and reporting costs, and the time val ue of money associated with the early engine replacement. Staff estimates the life time regulatory cost for compliance with the proposed amendments to the regulation to b e approximately $15 million (2009 dollars or $10 million adjusted to NPV) from 2011 t hrough 2022.

New equipment costs are the estimated total out-of- pocket costs for purchasing and installing a new engine (engine replacement cost) i n crew and supply, barge, and dredge vessels. New equipment costs are estimated to be approximately $46 million (2009 dollars) over the compliance years of the pro posed amendments (2011 to 2022). New equipment costs are the total costs of complyin g with the regulation, not taking into consideration the remaining useful life of the engi ne being replaced. The cost of purchasing and installing a new engine are costs th at the vessel owner/operator would eventually incur, but the proposed amendments to th e CHC regulation requires this expenditure earlier than normal.

B. Return on Owner’s Equity

Staff evaluated the economic impacts of the propose d amended regulation by estimating the effect of the regulatory cost on typ ical businesses’ “return on owner’s equity” (ROE). The ROE is a measure of a businesse s’ profitability and is expressed as a percentage. As shown in Table 21, the average RO E of the businesses in the categories listed declined by about 0.95 percent. The decline in profitability was 1.44 percent for crew and supply vessels, and 0.45 percent for barge and dredge vessels. Generally, ARB considers a 10 percent cha nge in ROE to be the threshold at which businesses experience a significant adverse i mpact.32 Table 21: Affected Businesses with Change in ROE

Category ROE % Change

Crew and Supply -1.44%

Barge and Dredge -0.45%

Average -0.95%

These businesses, however, are unlikely to have to absorb the entire cost of the proposed amended regulation. To the extent that th ey are able to pass on the cost of the proposed amended regulation, the impact on thei r profitability should be less than estimated here. Thus, ARB staff expects most affec ted businesses to be able to absorb the cost of the proposed amended regulation with no significant adverse impact on their profitability. About 55 percent of the total numbe r of businesses impacted are considered small businesses; with about 60 percent of the crew and supply vessel businesses and about 50 percent of the barge and dr edge businesses being considered

small businesses.

These businesses may be able to reduce the impact o f the proposed amended regulation on their businesses by taking advantage of available incentive or grant funding. The cost impacts presented here do not ta ke into consideration the impact of incentive or grant funding. Carl Moyer Program fun ding is a potential funding source for companies that comply early or achieve emission red uctions beyond the amendments. California has one of the largest clean air incenti ve programs in the nation – the Carl Moyer Program – with up to $140 million available e ach year through State and local funds. In 2009, almost $3 million went to repoweri ng marine vessels. Proposition 1B funds will also be available to eligible commercial harbor craft operators for repowering engines, retrofitting vessels with hybrid systems, and replacing vessels with cleaner models. At the Board meeting held on March 25, 201 0, the Proposed Update to the Proposition 1B Program Guidelines were approved, which included project options that would fund up to 80% of the cost for non-regulated vessels and up to 50% for the early compliance of regulated vessels. The Board will aw ard the next Proposition 1B funding allocations to local agencies in June 2010 with add itional funding to be made available as bond monies are received by ARB. (ARB, 2008a)

C. Cost to Local, State, and Federal Agencies

One state agency would be impacted by the proposed amendments to the regulation. The California Department of Parks and Recreation o perates two crew and supply vessels used to service Angel Island in the San Fra ncisco Bay Area and would be impacted by the in-use engine requirements. The re gulatory cost to this state agency is estimated to be about $60,000. Barge and dredge ve ssels are owned and operated by two local agencies in Santa Cruz and Monterey and b y the federal agency, the United States Army Corps of Engineers. The estimated regu latory costs range from $1,900 to33

$46,000 over the life of the regulation for these a gencies that operate barge and dredge

vessels.

The proposed amendments to the regulation should no t add significant costs above those already required to implement and enforce the proposed amended regulation. One additional ARB enforcement staff may be needed, at a cost of $175,000 and $12,000 for yearly travel. The ARB’s administrativ e costs for outreach, educational efforts, and technical assistance would be absorbed within existing budgets and

resources.

D. Cost-Effectiveness

Cost-effectiveness is expressed in terms of costs i n dollars per unit of emissions reduced (pounds or tons). The cost-effectiveness f or the proposed amendments is determined by dividing the regulatory costs (cost s pecifically due to compliance with the proposed amended regulation) by the total pounds of diesel PM and tons of NO
x reduced during the years 2011 to 2022. The cost-ef fectiveness of the proposed amendments is estimated, based on the regulatory co sts, to be about $35 per pound of

diesel PM reduced if all the cost is attributed to diesel PM reductions (2009 dollars or $23 per pound adjusted to NPV). If the costs are s plit evenly between diesel PM and

NO
x , the cost effectiveness is estimated at about $17 per pound for diesel PM and $2,700 per ton of NO

x . If the costs are attributed to the combined tota l of diesel PM and

NO
x reductions, cost- effectiveness would be about $2. 50 per pound. The net present value (NPV) estimates “today’s dollars” of future n et cash are presented in Appendix D.

Table 22 shows the cost-effectiveness estimate for the proposed amended regulation expressed three ways. First, all costs assigned to PM, second, cost divided equally

between PM and NO
x , and third, PM and NO
x emissions are combined.34

Table 22: Summary of Cost-Effectiveness of the Pro posed Amendments for the Period 2011-2022 (2009 dollars)

Emissions Total Regulatory

Cost

2011 – 2022 Total Emissions

Reduced

2011 – 2022 Total CostEffectiveness

All Costs Assigned to PM

PM $15,000,000 435,000 lbs $35/lb

Divide Costs Equally Between PM and NOx

PM $7,500,000 435,000 lbs $17/lb

NOx $7,500,000 2,800 tons $2,700/ton

Combine PM and NOx Emissions

PM + NOx $15,000,000 6,000,000 lbs $2.50/lb

All values rounded

The cost-effectiveness values of the amended CHC re gulation are within the range of cost-effectiveness for other diesel-fueled engine r egulations adopted by the Board, as

shown in Table 23.

Table 23: Diesel PM Cost-Effectiveness of the Prop osal and Other Regulations/Measures (All Costs Attributed to Diese l PM Reduction)

Regulation or

Airborne Toxic Control Measure Diesel PM Cost-Effectiveness

Dollars/ Pound PM Stationary Diesel Engine ATCM $4 - $26 Transport Refrigeration Unit ATCM $10 - $20 Solid Waste Collection Vehicle Rule $28 Commercial Harbor Craft (2007) $29

Commercial Harbor Craft (2010 amendments) $35

Cargo Handling Equipment $41

E. Alternatives Considered

The ARB staff considered two alternatives to the pr oposed amended CHC regulation. Alternative 1 accelerates the barge and dredge vess el engine compliance timeline and retains the proposed crew and supply compliance tim eline. Alternative 2 slows down both the crew and supply vessel engine compliance t imeline and the barge and dredge vessel compliance timeline and allows more time to replace the older, dirtier engines.35

Alternative 1: Accelerate the Statewide Barge and Dredge Vessel Engine Compliance Timeline

For Alternative 1, barges and dredge vessels throug hout the State would be subject to a 2011 to 2020 compliance schedule as shown in Table 24. This alternative would speed up the engine replacements in the first five years and keep barge and dredge vessels more in sync with the Portable Engine ATCM 2020 fle et average. Crew and supply vessels would still be subject to the 2011 to 2022 compliance schedule. Table 25 presents the engine distribution by compliance year . More engines would be required to comply with the regulation under this Alternativ e due to the age and useful life of the engines in the fleets. The regulatory cost would b e $19 million or about $4 million more than the proposed amendments. The estimated new eq uipment cost of this alternative would be $52 million which is about $6 million high er than the proposed amendments’ new equipment compliance cost. The total PM emissi ons reduced with this alternative would be higher than with the proposed schedule by about 40 tons of diesel PM and

600 tons of NO
x

during the compliance schedule from 2011 to 2022. The resulting costeffectiveness for this alternative would be slightl y higher than the proposed amended regulation, $38 per pound of diesel PM reduced, as opposed to the $35 per pound of diesel PM for the proposed amendments. The resulti ng cost-effectiveness, dividing the cost equally between diesel PM and NO
x , would be $19 per pound of diesel PM reduced and $2,850 per ton of NO

x reduced.

Table 24: Alternative 1: Alternative Compliance T able to Accelerate Barge and Dredge Vessel Engine Compliance

Barge and Dredge

Engine Model

Year Total Annual

Hours of Operation Compliance Date

1995 and earlier >80 12/31/2011

1996 – 1997 >80 12/31/2012

1998 – 1999 >80 12/31/2013

2000 >80 12/31/2014

2001 >80 12/31/2015

2002 >80 12/31/2016

2003 >80 12/31/2017

2004 >80 12/31/2018

2005 >80 12/31/2019

2006 >80 12/31/202036 Table 25: Alternative 1: Statewide Annual In-Use

Engine Replacements

Year Engines

2011 69

2012 15

2013 65

2014 15

2015 45

2016 9

2017 19

2018 14

2019 15

2020 21

2021 8

2022 25

Total 320

Alternative 1 was not chosen because it is less cos t-effective than the proposed emissions reduction strategy. Accelerating the com pliance dates for barge and dredge vessels would keep their compliance timeframe more in sync with the 2020 fleet average requirements of the Portable Engine ATCM. However, implementing such a strategy would put barge and dredge vessel owner/op erators at an unfair economic disadvantage when compared with other CHC vessel ca tegories. Owners and operators of barge and dredge vessels need time to switch between the Portable Engine ATCM and the CHC regulation. In addition, s ome incentive funding opportunities, such as Carl Moyer funding, are not allowed if the marine vessel is not self-propelled.

Alternative 2: Decelerate the Statewide Compliance Timeline for Crew and Supply Vessels and Barge and Dredge Vessels

For Alternative 2, compliance requirements for both the crew and supply vessel engines and the barge and dredge vessel engines would be de celerated. This would result in many engines being replaced later than the proposed amended regulation, but would allow more time for businesses to obtain funding an d transition between the Portable Engine ATCM and the CHC regulation. For Alternativ e 2, crew and supply vessels and barge and dredge vessels throughout the State would still be subject to a 2011 to 2022 compliance schedule as shown in Table 26. Table 27 presents the engine distribution by compliance year. Fewer engines would be require d to comply with the regulation under this Alternative due to the age and useful li fe of the engines in the fleets. However, this alternative would slow down the engin e replacements for the older, dirtier37

engines. The regulatory cost would be $14 million, or about $1 million less than the proposed amendments. The estimated new equipment c ost of this alternative would be $44 million which is about $2 million lower than th e proposed amendments’ new equipment compliance cost. The total diesel PM emi ssions reduced with this alternative would be 53 tons less than with the proposed schedu le. As a result, the

cost-effectiveness for this alternative would be hi gher than the proposed amended regulation at $43 per pound of diesel PM reduced. The total NO
x reduction for this same time period would be 2,100 tons, which is abou t 670 tons less than the proposed amendments. The resulting cost-effectiveness, divi ding the cost equally between diesel

PM and NO
x , would be about $21 per pound of diesel PM reduced and $3,320 per ton

of NO
x reduced.38

Table 26: Alternative 2: Alternative Compliance T ables to Decelerate Compliance

for Crew and Supply Vessels and Barge and Dredge Ve ssels

Crew and Supply Vessels



### Engine Model

Year Total Annual

Hours of Operation Compliance Date

1975 and earlier >1500 12/31/2011

1975 and earlier >300 -- <1500 12/31/2012

1976 - 1985 >1500 12/31/2013

1976 - 1985 >300 -- <1500 12/31/2014

1986 - 1995 >1500 12/31/2015

1986 - 1995 >300 -- <1500 12/31/2016

1996 - 1999 >1500 12/31/2017

1996 - 1999 >300 -- <1500 12/31/2018

2000 - 2001 >300 12/31/2019

2002 - 2003 >300 12/31/2020

2004 - 2005 >300 12/31/2021

2006 - 2007 >300 12/31/2022

Barge and Dredge

Engine Model

Year Total Annual

Hours of
Operation Compliance Date

1975 and earlier >1500 12/31/2011

1975 and earlier >80 -- <1500 12/31/2012

1976 - 1985 >1500 12/31/2013

1976 - 1985 >80 -- <1500 12/31/2014

1986 - 1995 >1500 12/31/2015

1986 - 1995 >80 -- <1500 12/31/2016

1996 - 1999 >1500 12/31/2017

1996 - 1999 >80 -- <1500 12/31/2018

2000 - 2001 >80 12/31/2019

2002 - 2003 >80 12/31/2020

2004 - 2005 >80 12/31/2021

2006 >80 12/31/202239 Table 27: Alternative 2: Statewide Annual In-Use

Engine Replacements

Year Engines

2011 12

2012 7

2013 18

2014 9

2015 3

2016 9

2017 10

2018 37

2019 47

2020 32

2021 36

2022 35

Total 255

The primary reason that Alternative 2 was not chose n was because it is less cost-effective than the emissions reduction strateg y in the proposed amendments and would delay the health benefits associated with the reduction of emissions of diesel PM

and NO
x from crew and supply, barge, and dredge vessels. Staff has determined that the reduced cost-effectiveness and the delay in ach ieving emissions reductions associated with this alternative outweigh the reduc ed fiscal impacts on companies that own/operate crew and supply, barge, and dredge vess els.

Presented below in Table 28 is a comparison of the cost effectiveness of the proposed amendments with Alternatives 1 and 2 (2009 dollars)

.

Table 28: Summary of Average Cost-Effectiveness of Proposed Amendments and

Both Alternatives for the Period 2011- 2022

Emissions Proposed Amendment (2009 dollars) Alternative 1 Alternative 2

All costs assigned to PM

PM ($/lb) $35 + 9% + 23%

Divide Costs Equally Between PM and NOx

PM ($/lb) $17 + 12% + 24%

NOx ($/ton) $2,690 + 6% + 23%

Combined PM and NOx Emissions

PM + NOx ($/lb) $2.50 No Change + 20%40

7. PUBLIC OUTREACH AND COMMENTS

A. Public Outreach

Staff has provided opportunities for participation in the rulemaking process. Staff’s public outreach efforts included three public works hops at which draft regulatory concepts, language and cost estimates were provided . Staff’s public outreach efforts included meetings and teleconferences with stakehol ders, owner/operators of crew and supply vessels, districts, and other interested par ties. Staff also created a website and maintained an email address list to automatically u pdate interested parties about rulemaking developments. The website can be access ed at http://www.arb.ca.gov/ports/marinevess/harborcraft. htm

.

B. Environmental Justice

The proposed amendments will reduce diesel PM and N O
x emissions in all coastal areas and near ports where crew and supply, barge a nd dredge vessels operate. Communities near ports are often more heavily impac ted by the goods movement emission sources operating at these locations. On December 13, 2001, the Board approved “Policies and Actions for Environmental Ju stice,” which formally established a framework for integration of environmental justice into ARB’s programs, consistent with the directive of California state law. These polic ies apply to all communities in California; however, environmental justice issues h ave been raised specifically in the context of low-income areas and ethnically diverse communities. The proposed amendments are consistent with our environmental ju stice policy to reduce health risk in all communities, including those with low-income an d ethnically diverse populations.

C. Public Comments

1. Engine Repower Capacity

The ARB staff believes that engine replacement woul d be the primary compliance option chosen to meet the proposed in-use engine re quirements. During the development of the 2007 CHC regulation, the capacit y of the State’s boat yard/repair facilities to handle the number of engine replaceme nts was raised as a concern. Staff has determined that the number of engine replacemen ts that likely would occur due to the proposed amendments’ compliance schedule would be achievable with the State’s current capacity for engine replacements, but may p lace some strain on this capacity. Staff estimates that, under the proposed compliance schedule, an average of about 23 crew and supply, barge, and dredge engine replaceme nts of both auxiliary and propulsion engines per year will occur over the com pliance period. Because auxiliary engine replacements are less involved and do not ne cessarily require a dry dock facility, staff assume dry docking for the propulsion engine replacements would be the limiting factor for the State’s capacity.41

Staff conducted a phone survey in 2007 contacting o wner/operators of boat yards, boat building facilities, and boat repair facilities in California to determine the annual statewide capacity for CHC engine replacements. Ba sed on the survey, staff estimates that there is sufficient capacity even at the maxim um repower rate to still allow current facilities to conduct other repowering and non-repo wering activities. Additional facilities and capacity that may be built in response to this proposed amended regulation would

further ensure that the State will have sufficient capacity to conduct the expected number of repowers, though some years may be strain ed. Figure 8 illustrates the repowers assumed per year and the additional crew a nd supply, barge, and dredge vessel engine repowers that will be needed to compl y with the proposed amended regulation. ARB staff believes that California’s b oat yards, boat builders, and boat repairers currently have the capacity to absorb the numbers of engine replacements that would result from the implementation of the pr oposed amended regulation.

Figure 8: Estimated Numbers of Commercial Harbor C raft

Engines Replaced Annually Due to Implementation of the Current Commercial Harbor Craft Regulation and the Proposed Amended Regulation

0 50 100 150 200 250 300

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202 1 2022

Compliance YearNumber of Repowerd Engines Crew, Supply, Barge, and Dredge Engines

Currently Regulated Harbor Craft Engines

2. District Authority to Require Additional Reduct ions

Comments have been made by barge and dredge owners regarding the implementation of the proposed amendments in relation to the PERP program. Pursuant to the PERP regulation, districts can establish additional requ irements beyond the statewide regulation for auxiliary engines on marine vessels that operate within three nautical42

miles of shore. The authority for districts to est ablish additional requirements is provided by the PERP regulation in order to allow t he districts to mitigate any potential local emissions impacts. Barge and dredge vessel o wner/operators have stated they the districts requirements are overly burdensome an d can vary greatly by district. Staff has begun discussions with some of the affected dis tricts to identify ways to achieve greater consistency and develop an effective soluti on. Staff is committed to continue to meet with affected stakeholders to discuss options.43

8. RECOMMENDATION

In developing the proposed amendments, ARB staff wo rked closely with stakeholders including vessel owner/operators, marine engine ind ustry representatives, and districts. ARB staff recommends the Board approve the proposed amendments to the regulations, as presented in Appendix A, for the fo llowing reasons:

• the early turnover of in-use, pre-Tier 1 and Tier- 1 diesel-fueled engines on crew and supply, barge, and dredge vessels to lower emit ting Tier 2 and Tier 3 engines would reduce diesel PM, NO
x , and other air pollutant emissions, exposure, and potential health risk across Californ ia, particularly along the shoreline and California ports;

• the proposed amendments are technologically feasib le, cost-effective, and necessary to carry out the Board’s responsibilities ;

• the proposed amendments will help the ARB achieve the goal of the Diesel Risk

Reduction Plan to reduce diesel PM emissions from a ll sources by 85 percent by
2020;

• the proposed amendments will help achieve the emis sion reduction goals of the

Emissions Reduction Plan for Ports and Goods Moveme nt approved by the Board in April 2006; and

• the emission reductions from the proposed amendmen ts are necessary to help attain and maintain ambient air quality standards f or fine particulate matter (PM2.5) and ozone.44

REFERENCES:

(ARB, 2006) California Air Resources Board, Emission Reduction Plan for Ports and

Goods Movement in California ; March 2006.

(ARB, 2007a) Air Resources Board, Staff Report: Initial Statement of Reasons for Regulations to Reduce Emissions from Diesel Engines on Commercial Harbor Craft Operated Within California Waters and 24 Nautical M iles of the California Baseline

. September 2007.

(ARB, 2007b) Air Resources Board, Technical Support Document: Initial Statement of Reasons for Regulations to Reduce Emissions from Di esel Engines on Commercial Harbor Craft Operated Within California Waters and 24 Nautical Miles of the California

Baseline . September 2007.

(ARB, 2007c) Title 17, California Code of Regulati ons section 93118.5, Airborne Toxic Control Measure for Diesel Engines on Commercial Ha rbor Craft Operated Within

California Waters and 24 Nautical Miles of the Cali fornia Baseline. 2007.

(ARB, 2007d) Title 17, California Code of Regulati ons, section 93116.1-93116.3, Airborne Toxic Control Measure for Diesel Engine Pa rticulate Matter from Portable Engines Rated at 50 horsepower and Greater. 2007.

(ARB, 2008) Air Resources Board, Initial Statement of Reasons for Proposed Rulemaking: Fuel Sulfur and Other Operational Requ irements for Ocean-Going

Vessels Within California Waters and 24 Nautical Mi les of the California Baseline

. June 2008.

(ARB, 2008a) Air Resources Board, The Carl Moyer Program Guidelines , April 22,

2008.

(ARB, 2009) Air Resources Board, Staff Report: Initial Statement of Reasons for the Proposed Amendments to the Regulations Applicable t o Portable Diesel Engines and Diesel Engines Used in Off-Road and On-Road Vehicle s

. December 10, 2009

.

(40 CFR Part 94) U.S. Environmental Protection Agen cy, Control of Emissions from Marine Compression – Ignition Engines.

(40 CFR Part 1042) U.S. Environmental Protection Ag ency, Control of Emissions from from New and In-Use Marine Compression Ignition Eng ines and Vessels

### Appendix A

Proposed Regulation Orders

Title 13, CCR section 2299.5

and

Title 17, CCR section 93118.5(this page left intentionally blank)A – 1 APPENDIX A

PROPOSED REGULATION ORDER
THE EMISSION LIMITS AND REQUIREMENTS FOR DIESEL EN GINES ON

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS AND

24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

Amend section 2299.5, title 13, chapter 5.1, Califo rnia Code of Regulations (CCR). Proposed amendments are shown in underline to indicate additions and strikeout to

indicate deletions.

Section 2299.5. Low Sulfur Fuel Requirement, Emissi on Limits and Other Requirements for Commercial Harbor Craft.

Any person who sells, supplies, offers for sale, pu rchases, owns, operates, leases, charters, or rents any new or in-use diesel fueled Harbor Craft, as defined in section 93118.5(d)(36 9 ), title 17, California Code of Regulations (CCR), must comply with the low sulfur fuel use requirement in section 93118.5( e)(1) and other requirements in section 93118.5, title 17, CCR when operating the c raft within Regulated California Waters, as defined in section 93118.5(d)(65 8 ), title 17, CCR, except as in sections 93118.5(b), and (c), and (e)(1)(F), title 17, CCR. Notwithstanding the definition of Harborcraft in section 2299(b)(4), title 13, CCR, a nd in section 93117(b)(4), title 17, CCR, the low sulfur fuel requirement in section 931 18.5(e)(1), title 17, CCR applies to an ocean-going tugboat or towboat that has a “regis try” (foreign trade) endorsement on

its United States Coast Guard certificate of docume ntation or that is registered under the flag of a country other than the United States, except when on voyages comprised of “continuous and expeditious navigation” through Regulated California Waters, as provided in section 93118.5(c)(1), title 17, CCR. T his section shall not be construed as expanding or limiting either the application or req uirements of section 93118.5, title 17, CCR, but is intended to alert affected persons of t he Harbor Craft fuel use requirement and other provisions in that section.

NOTE: Authority cited: Sections 39600, 39601, 41511 , 43013, and 43018, Health and Safety Code. Reference: Sections 39000, 39001, 3951 5, 39516, 41510, 41511, 43013, 43016, and 43018, Health and Safety Code; and Western Oil and Gas Ass’n v. Orange County Air Pollution Control District , 14 Cal.3rd 411, 121 Cal.Rptr. 249 (1975).A – 2 (this page left intentionally blank)A – 3 PROPOSED REGULATION ORDER

AIRBORNE TOXIC CONTROL MEASURE

FOR DIESEL ENGINES ON COMMERCIAL HARBOR CRAFT OPERA TED WITHIN

CALIFORNIA WATERS AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

Amend section 93118.5, title 17, chapter 1, subchap ter 7.5, California Code of Regulations (CCR). Proposed amendments are shown i n underline to indicate

additions and strikeout to indicate deletions.

Section 93118.5. Airborne Toxic Control Measure fo r Commercial Harbor Craft.

(a) Purpose.

The purpose of this section is to reduce diesel par ticulate matter (PM), oxides of sulfur (SO
x ), and oxides of nitrogen (NO
x ) from diesel propulsion and auxiliary engines on harbor craft that operate in any of the waters subj ect to this section (“Regulated California Waters”). This section implements provi sions of the Goods Movement Emission Reduction Plan, adopted by the California Air Resources Board (ARB or CARB) in April 2006, to reduce emissions and health risk from ports and the movement of goods in California.

(b) Applicability.

(1) Except as provided in subsections (b) and (c), this section applies to any person who sells, supplies, offers for sale, purchases, ow ns, operates, leases, charters, or rents any new or in-use diesel fueled harbor cra ft that is operated in any of the Regulated California Waters.

(2) Engine Subject to Multiple ARB Regulations. The requirements of this section

shall control i I n the event an engine that is permanently affixed t o on a harbor craft is subject to the requirements of this sectio n, and either :

(A) of this section, and either (A)(B) the regulation for portable compression ignition ( CI) engines and equipment (sections 93116-93116.5, title 17, Califo rnia Code of Regulations (CCR)), or (B C ) the regulation for in-use off-road CI diesel vehicles engines and equipment (sections 2420-2427, title 13, CCR),

.

the requirements of this section shall supersede th e requirements of either of the regulations cited in 93118.5(b)(2)(A) or 93118.5(b) (2)(B) above. This provision shall apply only to each engine on the vessel that meets the above requirements

and is permanently affixed to the vessel (i.e., the eng ine, its fueling system, or its exhaust system is welded or otherwise physically co nnected to the vessel orA – 4

other vessel system in such a way that the engine c annot be easily removed for

use in a land

- based application without modifications).

(3) This section applies to towboats and tugboats e ngaged in or intending to engage in the service of pulling, pushing, or hauling alon gside tank vessels or tank barges.

(4) Notwithstanding the provisions of title 13, CCR , section 2299.1 and title 17, CCR, section 93118, this section shall apply to any ocea n-going tugboats and towboats and shall supersede the requirements of 13 CCR 2299 .1 and 17 CCR 93118 in their entirety for ocean-going tugboats and towboat s. For purposes of this paragraph, “ocean-going tugboats and towboats” shal l mean tugboats and towboats with a “registry” (foreign trade) endorsem ent on its United States (U.S.) Coast Guard certificate of documentation, or tugboa ts and towboats that are registered under the flag of a country other than t he United States.

(5) Nothing in this section shall be construed to a mend, repeal, modify, or change in any way any other applicable State, U.S. Coast Guar d, or other federal requirements. Any person subject to this section s hall be responsible for ensuring compliance with both U.S. Coast Guard regu lations and the requirements of this section and any other applicab le State and federal requirements, including but not limited to, obtaini ng any necessary approvals, exemptions, or orders from the U.S. Coast Guard.

(6) This section shall not apply to any engine and equipment that fall within the scope of the preemption of Section 209(e)(1)(A) of the Federal Clean Air Act (42 United States Code (U.S.C.) 7543(e)(1)(A)) and as defined by regulation of the U.S. Environmental Protection Agency (U.S. EPA)

.

(c) Exemptions.

All or portions of this section do not apply to the following, as provided below, but vessels that are partly or wholly exempt from this section may be subject to other State or federal regulations and requirements. A person subject to such other State or federal regulations and requirements is solely responsible for ensuring the vessel complies with those regulations and requirements. All other port ions of this section shall apply unless otherwise specified:

(1) The requirements of this section do not apply t o harbor craft voyages that are comprised of continuous and expeditious navigation through any of the Regulated California Waters for the purpose of trav ersing such bodies of water without entering California internal or estuarine w aters or calling at a port, roadstead, or terminal facility. “Continuous and e xpeditious navigation” includes stopping and anchoring only to the extent such stop ping and anchoring are required by the U.S. Coast Guard; rendered necessar y by force majeure or distress; or made for the purpose of rendering assi stance to persons, ships, or aircraft in danger or distress. This exemption doe s not apply to the passage of aA – 5

harbor craft that engages in any of the prejudicial activities specified in United Nations Convention on the Law of the Seas (U NCLOS) 1982, Article 19, subpart 2. Further, notwithstanding any U.S. Coast Guard mandated stops or stops due to force majeure or the rendering of assi stance, this exemption does not apply to a vessel that was otherwise scheduled or intended to enter California internal or estuarine waters or call at a port, roa dstead or terminal facility;

(2) Except as provided in Paragraph (3) below, a te mporary replacement vessel is exempt only from the requirements set forth in subs ection (e)(6) and only upon written approval by the ARB’s Executive Officer (E. O.). All other provisions in this section shall apply to a temporary replacement vessel subject to this paragraph. An owner or operator, who has or will h ave a vessel taken out of service, may apply in writing to the E.O. to operat e a temporary replacement vessel pursuant to the following:

(A) The E.O. shall approve or disapprove such a req uest within 15 days of receipt. The E.O. shall not unreasonably withhold approval of the request to operate the temporary replacement vessel; (B) If the approval is granted, the temporary repl acement vessel’s operating time will be specified in the approval by the E.O., along with any other terms, conditions, or requirements the E.O. deems n ecessary, but in no case shall the approved operating time in Regulated California Waters for a specific temporary replacement vessel exceed one ye ar total for any single vessel that is temporarily replaced; and (C) No temporary replacement vessel exemptions shal l be approved for a

vessel that is taken out of service more than 12 mo nths in any 24-month period or if the E.O. cannot determine the length o f time a vessel has been taken out of service within any 24-month period;

(3) A temporary replacement vessel used to replace a vessel that has its homeport in the South Coast Air Quality Management District (SCAQMD) is exempt only from the compliance dates set forth in Table 8 of s ubsection (e)(6) and only upon written approval from the E.O. All other provision s in this section, including but not limited to, the compliance dates specified in T able 7, Table 9, and Table 10 of subsection (e)(6), shall apply to a temporary repla cement vessel subject to this paragraph. An owner or operator, who has or will h ave a vessel taken out of service, may apply in writing to the E.O. to operat e a temporary replacement vessel pursuant to the following:

(A) The E.O. shall approve or disapprove such a re quest within 15 days of receipt. The E.O. shall not unreasonably withhold approval of the request to operate the temporary replacement vessel; (B) If the approval is granted, the temporary repla cement vessel’s operating time will be specified in the approval by the E.O., along with any other terms, conditions, or requirements the E.O. deems n ecessary, but in no case shall the approved operating time in Regulated California Waters for aA – 6 specific temporary replacement vessel exceed one ye ar total for any single vessel that is temporarily replaced; and (C) No temporary replacement vessel exemptions sha ll be approved for a

vessel that is taken out of service more than 12 mo nths in any 24-month period or if the E.O. cannot determine the length o f time a vessel has been taken out of service within any 24-month period;

(4) A temporary emergency rescue/recovery vessel is exempt from this section in its entirety;

(5) A recreational vessel is exempt from this secti on in its entirety;

(6) An ocean-going vessel, except for ocean-going t ugboats and towboats as provided in subsection (b)(4), is exempt from this section in its entirety;

(7) The following engines are exempt from this section in its entirety:

(A) Notwithstanding section (b)(2), a vessel engine, in cluding an engine on a barge, which is registered with ARB’s Portable Engi ne E quipment Registration Program (PERP) (sections 2450 through 2465, title 13, CCR) before January 1, 2009 ;

(B) A vessel engine that is registered with PERP on or after January 1, 2009

. and is not permanently affixed to the vessel (i.e., the engine, its fueling system, and its exhaust system are not welded or ot herwise physically connected to the vessel or other vessel system, whi ch permits the engine to be easily removed for use in a land

- based application without modifications); and (C) A vessel engine that is registered and permitted under local air di strict regulations before January 1, 2009;

(8 7) A registered historic vessel is exempt only from subsection (e)(6);

(9 8) A U.S. Coast Guard vessel is exempt from thi s section in its entirety;

(10 9) A military tactical support vessel is exempt f rom this section in its entirety;

(11 10) An engine rated less than 50 horsepower (hp) is exempt only from subsection (e)(6);

(12) An engine or vessel that is operated less than 300 hours per cale ndar year is exempt only from the requirements of subsection (e) (6); and

(13 1 ) Near-Retirement Vessels. A harbor craft is exempt from the requirements of subsection (e)(6)(C) and (e)(6)(D) if all of the f ollowing criteria have been met:A – 7

(A) the vessel is scheduled to be taken out of serv ice and retired permanently; (B) the vessel is actually taken out of service and retired on or before the retirement date scheduled under (A) above; and (C) the vessel has an engine with a compliance date , as set forth in subsection (e)(6)(D), that is within one year of th e vessel’s scheduled retirement date under (A) above.

Operation of a vessel subject to this provision aft er the scheduled retirement date or the engine’s compliance date, whichever occurs l ater, is a separate violation of this section for each and every engine and each and every day of operation during which an engine on the vessel does not meet the requirements of subsection (e)(6)(C) or other parts of this section

.

(d) Definitions.

For purposes of this section, the definitions of He alth and Safety Code (H&S) sections 39010 through 39060 shall apply except as otherwise specified in this section:

(1) “Air District” means one of the local air pollu tion control districts (APCDs) or air quality management districts (AQMDs) established un der H&S section 40000 et

seq.

(2) “Alternative Diesel Fuel” means any fuel used i n a diesel engine that is not commonly or commercially known, sold, or represente d by the supplier as diesel fuel No. 1-D or No. 2-D, pursuant to the specificat ions in American Society for Testing and Materials (ASTM) D975-81, “Standard Spe cification for Diesel Fuel Oils,” as modified in May 1982, which is incorporat ed herein by reference, and does not require engine or fuel system modification s for the engine to operate, although minor modifications (e.g., recalibration o f the engine fuel control) may enhance performance. Examples of alternative diese l fuels include, but are not limited to, biodiesel and biodiesel blends not meeting the definition of CARB diesel fuel; Fischer-Tropsch fuels; emulsions of wa ter in diesel fuel; and fuels with a fuel additive, unless:

(A) the additive is supplied to the engine fuel by an on-board dosing mechanism, or (B) the additive is directly mixed into the base fu el inside the fuel tank of the engine, or (C) the additive and base fuel are not mixed until engine fueling commences, and no more additive plus base fuel combination is mixed than required for a single fueling of a single engine.

(3) “Alternative Fuel” means natural gas, propane, ethanol, methanol, gasoline, hydrogen, electricity, or other technologies that d o not meet the definition of

CARB diesel or alternative diesel fuel. "Alternati ve fuel" also means any mixture that only contains these fuels.A – 8

(4) “Annual Hours of Operation” means the total num ber of hours, rounded to the nearest whole hour, a vessel engine is used for all commercial purposes in Regulated California Waters in the calendar year (J anuary 1 to December 31) immediately prior to the engine’s applicable compli ance date set forth in subsection (e)(6)(D). For example, if a vessel is used for commercial fishing and commercial non-fishing purposes, the total number o f hours combined for both uses shall be the total annual hours of operation f or that vessel.

(5) “Auxiliary Engine” means an engine designed pri marily to provide power for uses other than propulsion.

(6) “Averaging” means an exchange of excess reduced regulated emissions among engines on vessels in the same owner’s or operator’ s fleet.

(7) “Baseline” means the emissions level of a diese l engine using CARB diesel fuel as configured upon initial marine installation.

(8) “Barge” means a vessel having a flat-bottomed r ectangular hull with sloping ends and built with or without a propulsion engine.

(9) “California Air Resources Board (CARB) Diesel F uel” means any diesel fuel that meets the specifications of vehicular diesel fuel, as defined in title 13 CCR, sections 2281, 2282, 2284, 2299, and title 17 CCR s ection 93116.

(10) “California Baseline” means the mean lower low water line along the California coast, as shown on the following National Oceanic a nd Atmospheric Administration (NOAA) Nautical Charts as authored b y the NOAA Office of Coast Survey, which are incorporated herein by reference:

(A) Chart 18600, Trinidad Head to Cape Blanco (Jan uary 2002); (B) Chart 18620, Point Arena to Trinidad Head (Jun e 2002); (C) Chart 18640, San Francisco to Point Arena (Aug ust 2005); (D) Chart 18680, Point Sur to San Francisco (June 2005); (E) Chart 18700, Point Conception to Point Sur (Ju ly 2003); (F) Chart 18720, Point Dume to Purisima Point (Jan uary 2005); and (G) Chart 18740, San Diego to Santa Rosa Island (A pril 2005 March 2007 ).

(11) “CARB” means the California Air Resources Boar d. CARB may also be referred

to as “ARB.”

(12) “Carbon Monoxide (CO)” is a colorless, odorles s gas resulting from the incomplete combustion of hydrocarbon fuels.A – 9

(13) “Category 1 engine” means any marine engine wi th a displacement of less than 5.0 liters per cylinder and with a maximum horsepow er (hp) rating of 50 hp or
greater

.

(14) “Category 2 engine” means any marine engine wi th a displacement of 5.0 to less than 30 liters per cylinder.

(15) “Category 3 engine” means any marine engine wi th a displacement of greater than 30 liters per cylinder.

(16) “Certified marine engine” means an engine that is certified by U.S. E PA as meeting the requirements of title 40, Code of Feder al Regulations (CFR),

Part 94 or Part 1042

.

(17) “Certified nonroad engine” means an engine tha t is certified by U.S. EPA as meeting the requirements of title 40, Code of Feder al Regulations (CFR),

Part 89.

(17 8 ) “Coast Guard Vessel” means any vessel or boat own ed or operated by the U.S. Coast Guard, including, but not limited to, U.S. Co ast Guard cutters and patrol boats that are used for law enforcement, defense op erations, marine science, search and rescue missions, training missions, coas tal surveillance, servicing aids to navigation, and marine environmental respon se.

(18 9 ) “Compliance Date” means the date by which time a vessel engine must meet the requirements set forth in subsection (e)(6)(C). Th e “compliance date” for a vessel engine is set forth in either Table 7or

, Table 8, Table 9, or Table 10 in subsection (e)(6)(D), whichever is applicable.

(19 20 ) “Crew and Supply Vessel” means a self-propelled vessel used for carrying personnel and/or supplies to and from off-shore and in-harbor locations (including, but not limited to, off-shore work plat forms, construction sites, and other vessels).

(20 1 ) “Date of Acquisition” means, for a vessel or eng ine subject to this regulation, the date of purchase as defined by the date shown on th e front of the cashed check, the date of the financial transaction, or the date on the vessel or engine purchasing agreement, whichever is earliest of the three dates.

(21 2 ) “Diesel Engine” means an internal combustion, co mpression-ignition (CI) engine, or pilot ignition engine with operating characteris tics significantly similar to the theoretical diesel combustion cycle. The regulatio n of power by controlling fuel supply in lieu of a throttle is indicative of a com pression ignition engine.

(22 3 ) “Diesel Fuel” means any fuel that is commonly or commercially known, sold, or represented by the supplier as diesel fuel, includi ng any mixture of primarily liquidA – 10

hydrocarbons (HC) - organic compounds consisting ex clusively of the elements carbon and hydrogen - that is sold or represented b y the supplier as suitable for use in an internal combustion, compression-ignition engine.

(23 4 )“Diesel-Fueled” means a diesel engine fueled in wh ole or part by diesel fuel.

(24 5 ) “Diesel Oxidation Catalyst (DOC)” means an emissi on control technology that employs a catalyst to promote oxidation processes i n diesel exhaust gases, usually designed to reduce emissions of the organic fraction of diesel particulates, gas-phase HC, and CO.

(25 6 ) “Diesel Particulate Filter (DPF)” means an emissi on control technology that reduces diesel PM emissions in engine exhaust gases by trapping the particles in a flow filter substrate and periodically removes th e collected particles by either physical action or by oxidizing (burning off) the p articles in a process called regeneration.

(26 7 ) “Diesel Particulate Matter (Diesel PM)” means the particles found in the exhaust of diesel engines, which may agglomerate and adsorb other species to form structures of complex physical and chemical propert ies.

(27 8 ) “Direct Control” means owning, operating, having a contract, lease, or other arrangement to operate a harbor craft.

(29) “Dredge” means a vessel designed to remove ear th from the bottom of waterways, by means of including, but not limited t o, a scoop, a series of buckets, or a suction pipe. Dredges include, but a re not limited to, hopper dredges, clamshell dredges, or pipeline dredges.

( 28 30 ) “Emission Control Strategy” means any device, sys tem, or strategy employed to reduce emissions from an engine, including, but not limited to, diesel oxidation catalysts, selective catalytic reduction systems, d iesel particulate filters, alternative diesel fuels, water emulsified fuels, a nd any combination of the above.

( 29 31 ) “Estuarine Waters” means an arm of the sea or oce an that extends inland to

meet the mouth of a river.

(30 2 ) “Excursion Vessel” means a self-propelled vessel that transports passengers for purposes including, but not limited to, dinner crui ses; harbor, lake, or river tours; scuba diving expeditions; and whale watching tours. “Excursion Vessel” does not include crew and supply vessels, ferries, and r ecreational vessels.

(31 3 ) “Executive Officer” means the Executive Officer ( E.O.) of the California Air Resources Board or his/her designee.A – 11

(34) “Family Emission Limit (FEL)" means an emissio n level that is declared by the

manufacturer to serve in lieu of an emission standa rd for certification purposes and for the averaging, banking, and trading program , as defined in title 13, California Code of Regulations, section 2423 or 40 CFR Part 89.112(d), or 40 CFR Part 1039.101, as they existed on April 27, 201 0.

(32 5 ) “Ferry” means a harbor craft having provisions on ly for deck passengers or vehicles, operating on a short run, on a frequent s chedule between two points over the most direct water route, and offering a pu blic service of a type normally attributed to a bridge or tunnel.

(33 6 ) “Fishing Vessel” means a self-propelled vessel th at is either:

(A) a commercial vessel dedicated to the search fo r, and collection of, fish for the purpose of sale at market or directly to a purc haser(s), or (B) a charter vessel used for hire by the general public and dedicated to the search for and collection of, fish for the purpose of general consumption.

(34 7 ) “Fleet” means the total number of harbor craft ow ned, rented, or leased by an owner or operator in an air district or distinct lo cale within Regulated California Waters or the statewide population of a specific ve ssel type.

(35 8 ) “Fuel Additive” means any substance designed to b e added to fuel or fuel systems or other engine-related engine systems such that it is present in-cylinder during combustion.

(36 9 ) “Harbor Craft” (also called “Commercial Harbor Cr aft”) means any private, commercial, government, or military marine vessel i ncluding, but not limited to, passenger ferries, excursion vessels, tugboats, oce an-going tugboats, towboats, push-boats, crew and supply vessels, work boats, pi lot vessels, supply boats, fishing vessels, research vessels, U.S. Coast Guard vessels, hovercraft, emergency response harbor craft, and barge vessels that do not otherwise meet the definition of ocean-going vessels or recreation al vessels.

(37 40 ) “Homeport” means the port in which a vessel is re gistered or permanently based.

(38 41 ) “In-Use Harbor Craft” means a harbor craft that i s not a new harbor craft.

(39 42 ) “In-Use Marine Engine” means a marine engine that is not a new marine engine.

(40 3 ) “Lease” means a contract by which the owner (less or) of a property, such as a vessel or engine, grants the right to use or occupy the property to another person (lessee) for a specified term and for a specified r ent.

(41 4 ) “Level” means, unless the context requires otherw ise, one of three categories of ARB-verified diesel emission control strategies as set forth in title 13, CCR,A – 12

section 2700 et seq.: Level 1 means the strategy re duces engine diesel PM emissions by between 25 and 49 percent; Level 2 mea ns the strategy reduces engine diesel PM emissions by between 50 and 84 per cent; and Level 3 means the strategy reduces engine diesel PM emissions by 85 percent or greater, or reduces engine diesel PM emissions to less than or equal to 0.01 grams per brake horsepower-hour (g/bhp-hr).

(42 5 ) “Low-Use” means the operation of any compression- ignition engine associated

with a harbor craft vessel for less than 300 the total annual hours of operation in Regulated California Waters, based on the immediate ly preceding calendar year, that deems it subject to the in-use engine re quirements

.

(43 6 ) “Military Tactical Support” means a vessel that m eets military specifications, is owned by the U.S. Department of Defense, the U.S. C oast Guard, the U.S. Military services or its allies, and is used in com bat, combat support, combat services support, tactical or relief operations or training for such operations.

(44 7 ) “Model Year” means the diesel engine manufacturer ’s annual production period, which includes January 1st of a calendar year, or i f the manufacturer has no annual production period, the calendar year.

(45) “Multipurpose Harbor Craft” means a harbor craft that serves as a ferry, excursion vessel, tugboat, or towboat but is also u sed as a work, crew and supply, pilot, fishing, supply, or other vessel.

(46 8 ) “New Harbor Craft” means a harbor craft for which both of the following criteria

are true:

(A) it is built, or its keel is laid, on or after J anuary 1, 2009, and (B) the equitable or legal title to the harbor craf t has never been transferred to an ultimate purchaser.

Where the equitable or legal title to the harbor cr aft is not transferred to an ultimate purchaser prior to the harbor craft being placed into service, the harbor craft ceases to be new when it is placed into servi ce. A harbor craft is placed into service when it is used for its functional pur poses.

(47 9 ) “New Marine Engine” means a marine engine for wh ich both of the following

criteria are true:

(A) it is manufactured or imported on or after Janu ary 1, 2009, and (B) the equitable or legal title to the engine has never been transferred to an ultimate purchaser.

Where the equitable or legal title to the engine is not transferred to an ultimate purchaser prior to the engine being placed into ser vice, the engine ceases to beA – 13

new when it is placed into service. An engine is p laced into service when it is used for its functional purposes.

(48 50 ) “Nitrogen Oxides or Oxides of Nitrogen (NO
x )” means compounds of nitric oxide (NO), nitrogen dioxide (NO 2 ), and other oxides of nitrogen, which are typicall y created during combustion processes and are major c ontributors to smog formation and acid deposition.

(49 51 ) “Non-Methane Hydrocarbons (NMHC)” means the sum of all hydrocarbon (HC) air pollutants except methane.

(50 2 ) “Ocean-going Vessel” means a commercial, governme nt, or military vessel meeting any one of the following criteria:

(A) a vessel greater than or equal to 400 feet in l ength overall (LOA) as defined in 50 CFR § 679.2, as adopted June 19, 1996;

(B) a vessel greater than or equal to 10,000 gross tons (GT ITC) per the convention measurement (international system) as de fined in 46 CFR 69.51-.61, as adopted September 12, 1989; or (C) a vessel propelled by a marine compression-igni tion engine with a percylinder displacement of greater than or equal to 3 0 liters.

(51 3 ) “Operate” means steering or otherwise running the vessel or its functions while the vessel is underway, moored, anchored, or at do ck.

(52 4 ) “Own” means having all the incidents of ownership , including the legal title, whether or not that person lends, rents, or pledge s the vessel; having or being entitled to the possession of a vessel as the purc haser under a conditional sale contract; or being the mortgagor of a vessel.

(53 5 ) “Particulate Matter (PM)” means any airborne fine ly divided material, except uncombined water, which exists as a liquid or soli d at standard conditions (e.g., dust, smoke, mist fumes, or smog).

(56) “Permanently affixed to a harbor craft” means the engine, its fueling system, or its exhaust system is welded or otherwise physicall y connected to the vessel or other vessel system in such a way that the engine c annot be easily removed for use in a land-based application without modificatio ns.

(54 7 ) “Person” includes all of the following:

(A) any person, firm, association, organization, pa rtnership, business trust, corporation, limited liability company, or company; (B) any state or local governmental agency or publi c district, or any officer or employee thereof; andA – 14

(C) the United States or its agencies, to the exten t permitted by federal law.

(58 ) “Pilot Vessel” means a vessel designed for, but n ot limited to, the transfer and transport of maritime pilots to and from ocean-goi ng vessels while such vessels are underway.

(56 9 ) “Port” means any facility used for water-borne co mmerce. “Port” includes, but is not limited to, facilities also known as “marine t erminals” and “roadsteads.”

(5 7 60 ) “Portable CI Engine” means a compression-ignition (CI) engine designed and capable of being carried or moved from one locatio n to another. Indicators of portability include, but are not limited to, wheel s, skids, carrying handles, dolly, trailer, or platform. Portable engines are not se lf-propelled.

(5 8 61 ) “Portable Engine Equipment Registration Program (PERP)” means the statewide program designed to promote the use of clean portab le engines in California, as provided for in title 13, CCR, sections 2450 throug h 2465. Once registered in the program, engines and equipment units can operate th roughout the State without being required to obtain individual permits from ea ch air pollution control or air quality management district in which they operate.

(59 62 ) “Pre-Tier 1 Engine” means an engine that was buil t before the effective date of U.S. EPA’s Tier 1 marine engine emission standards (Tier 1 marine standards),

as set forth in 40 CFR 94.

(60 3 ) “Propulsion Engine” means an engine that provides power to move a vessel through the water or directs the movement of a ves sel.

(61 4 ) “Purchase Date” means the date shown on the front of the cashed check; the date of the financial transaction; or the date on the engine or harbor craft purchase, rental, or lease agreement, whichever is earliest.

(62 5 ) “Push Boat” means any self-propelled vessel engag ed in or intending to engage in the service of pulling, pushing, or hauling alo ng side barges or other vessels, or any combination of pulling, pushing, or hauling along side barges or other vessels. “Push boats” is interchangeable with “to wboats.”

(63 6 ) “Recreational Vessel” means a vessel that is inte nded by the vessel manufacturer to be operated primarily for pleasure or leased, rented, or chartered to another for the latter’s pleasure, excluding the following vessels: (1) vessels of less than 100 gross tons that carry more than 6 pas sengers, (2) vessels of 100 gross tons or more that carry one or more passe ngers, and (3) vessels used solely for competition.A – 15

(64 7 ) “Registered Historic Vessel” means a vessel liste d in the National Register of Historic Places pursuant to the National Historic Preservation Act of 1966 (16 U.S.C. 470).

(65 8 ) “Regulated California Waters” means all of the fo llowing:

(A) all California internal waters; (B) all California estuarine waters; (C) all California ports, roadsteads, and terminal facilities (collectively “ports”); (D) all waters within 3 nautical miles of the Calif ornia baseline, starting at the California-Oregon border and ending at the Californ ia-Mexico border at the Pacific Ocean, inclusive; (E) all waters within 12 nautical miles of the Cali fornia baseline, starting at the California-Oregon border and ending at the Californ ia-Mexico border at the Pacific Ocean, inclusive; (F) all waters within 24 nautical miles of the Cali fornia baseline, starting at the California-Oregon border to 34.43 degrees North, 12 1.12 degrees West; inclusive; and (G) all waters within the area, not including any i slands, between the California baseline and a line starting at 34.43 degrees North , 121.12 degrees West; thence to 33.50 degrees North, 118.58 degrees West; thence to 32.65 degrees North, 117.81 degrees West; and ending at t he California-Mexico border at the Pacific Ocean, inclusive.

(69) “Regulated In-Use Vessel” means a vessel that operates as one of the vessel categories subject to in-use engine standards in su bsection (e)(6).

(66 70 ) “Rent” means payment for the use of harbor craft or diesel engine for a specified

term.

(67 71 ) “Retirement” means the act of taking an engine or harbor craft out of service (i.e., to “retire”) so that it subsequently never again o perates in any of the Regulated

California Waters. “Retirement” does not include an engine or harbor craft that is sold for use outside California then subsequently operated in any of the Regulated California Waters.

(6 8 72 ) “SCAQMD” means the South Coast Air Quality Manage ment District, as defined in Health and Safety Code section 40410 et seq. an d described in section 60104, title 17, California Code of Regulations, and shal l include all waters subject to the jurisdiction of the SCAQMD.

(6 9 73 ) “Supply Vessel” means a self-propelled vessel use d for carrying supplies to and from off-shore and in-harbor locations including, but not limited to, off-shore work platforms, construction sites, and other vessels.A – 16

(74 ) “Swing Engine” means an engine maintained at a d ockside location for use in a

vessel or fleet of vessels which can be installed a s a replacement for an engine that has been removed from a vessel for repair or r outine maintenance. The removed engine may then become the swing engine onc e repair or maintenance has been completed.

(70 5 ) “Take Out of Service” means the act of dry-dockin g, mooring, anchoring, or otherwise tying up a harbor craft at dock to condu ct maintenance, repairs, replacements, or upgrades such that the vessel can not be operated in Regulated

California Waters while such acts are conducted on the vessel.

(71 6 ) “Tank Barge” means a non-self-propelled vessel co nstructed or adapted primarily to carry, or that carries, oil or hazardous materi al in bulk as cargo or cargo

residue.

(72 7 ) “Tank Vessel” or “Tanker” means a self-propelled vessel constructed or adapted primarily to carry, or that carries, oil or hazard ous material in bulk as cargo or cargo residue.

(73 8 ) “Temporary emergency rescue/recovery vessel” mean s a self-propelled vessel that performs duties including, but not limited to, policing harbor areas, fire fighting, rescue operations, oil spill prevention, and on-water oil removal whose homeport is not within California and is brought in to California for the immediate use of emergency rescue or recovery and returns to its homeport outside of California at the conclusion of its emergency rescu e/recovery mission.

(74 9 ) “Temporary replacement vessel” means a self-prope lled vessel that is brought into service to temporarily replace a California ve ssel that has been temporarily taken out of service. For purposes of this section , “temporary replacement vessel” includes only the following:

(A) vessels that are used in the SCAQMD but have a homeport in California outside of the SCAQMD; and (B) vessels that are used anywhere in California, i ncluding the SCAQMD, but have a homeport outside of California.

(75 80 ) “Tier 1 Marine Engine Emission Standards (Tier 1 marine standards)” means the U.S. EPA marine engine Tier 1 emission standards, a s promulgated by U.S. EPA

and set forth in “Control of Emissions of Air Pollu tion from New Marine Compression-Ignition Engines at or Above 37 kW” (64 Federal Register (FR) 73299-73373, December 29, 1999)(40 CFR Part 94), bo th of which are incorporated herein by reference. The standards fr om 40 CFR Part 94 are

summarized in Table 1. In the event of a conflict between a Tier 1 marine standard in this section and its corresponding stan dard in 40 CFR Part 94, the

standard in 40 CFR Part 94 controls.A – 17 Table 1: U.S. EPA Tier 1 Marine Engine Emission St andards

Category Power (kilowatt

(kW)) & Displacement (liters/cylinder (l/cyl)) Engine Speed

(Revolutions per minute (rpm)) Tier 1

Model

Year PM

(g/bhphr) NO

x +HC

(g/bhp-hr)* CO

(g/bhphr)

rpm ≥ 2000 2004 - 7.3 -

130 ≤ rpm <2000 2004 - 33.57 x rpm -0.2

- 1, 2, 3, including

Recreational ≥ 37 kW & ≥ 2.5

l/cyl rpm <130 2004 - 12.7 - (40 CFR Part 94) *converted emission standards from 40 CFR 94, which are expressed in grams per kilowatt–hour (g/kW-hr) to g/hp-hr by the following: g/kW-hr * ( 0.746) = g/hp-hr.

(76 81 ) “Tier 2 Marine Engine Emission Standards (Tier 2 marine standards)” means the U.S. EPA marine engine Tier 2 emission standards, a s promulgated by U.S. EPA

and set forth in “Control of Emissions of Air Pollu tion from New Marine Compression-Ignition Engines at or Above 37 kW” (64 FR 73299-73373, December 29, 1999)(40 CFR Part 94), both of which a re incorporated herein by

reference. In the event of a conflict between a Ti er 2 marine standard in this section and its corresponding standard in 40 CFR Pa rt 94, the standard in 40

CFR Part 94 controls.

Table 2: U.S. EPA Tier 2 Marine Engine Emission St andards for

NO
x + HC, PM, and CO

Category Displacement (Disp.)

(liters/cylinder) Date NO

x +HC (g/bhp-hr)* PM

(g/bhp-hr)* CO

(g/bhp-hr)* Disp.< 0.9 and power ≥ 50 hp* 2005 5.6 0.30 3.7

0.9 ≤ Disp. < 1.2 2004 5.4 0.22 3.7

1.2 ≤ Disp. < 2.5 2004 5.4 0.15 3.7 1

2.5 ≤ Disp. < 5.0 2007 5.4 0.15 3.7

5.0 ≤ Disp. < 15 2007 5.8 0.20 3.7

15 ≤ Disp. < 20 (power < 4424 hp*) 2007 6.5 0.37 3.7

15 ≤ Disp. < 20 (power ≥ 4424 hp*) 2007 7.3 0.37 3.7

20 ≤ Disp. < 25 2007 7.3 0.37 3.7 2

25 ≤ Disp. < 30 2007 8.2 0.37 3.7 (40 CFR Part 94) *converted emission standards and maximum power rat ing from 40 CFR 94, which are expressed in g/kW-hr and kW to g/hp-hr and hp, respectively, by the following: g/kW-hr (0.746) = g/hp-hr or kW (1.34) = hp

(77 82 ) “Tier 3 Marine Engine Emission Standards (Tier 3 marine standards)” means the U.S. EPA marine engine Tier 3 emission standards, a s promulgated by U.S. EPA

and set forth in “Final Rule: Control of Emissions of Air Pollution from Locomotive and Marine Compression-Ignition Engines Less Than 3 0 Liters Per Cylinder” (73 FR 25245 et seq., May 6, 2008) (40 CFR Part 1042), both of which are incorporated herein by reference. The standards f rom 40 CFR Part 1042 are summarized in Table 3, Table 4, and Table 5. In th e event of a conflict betweenA – 18

a Tier 3 marine standard in this section and its co rresponding standard in 40 CFR Part 1042, the standard in 40 CFR Part 1042 con trols. [Note: No Tier 3

marine standards apply for commercial Category 1 engines at or above 3700 kW. See “Tier 4 Marine Engine Emission Standards” for t he standards that apply to these engines.]

Table 3: U.S. EPA Tier 3 Marine Standards for Marine Diesel Category 1 Commercial Standard Power Density Engine s below 3700 kW

Rated kW L/Cylinder PM g/bhp-hr e NOx + HC d

g/bhp- hr e Model Year

0.22 5.6 2009 19 to < 75 kW <0.9 a 0.22 b 3.5 b 2014

<0.9 0.10 4.0 2012

0.9 - <1.2 0.09 4.0 2013

1.2 - <2.5 0.08 c 4.2 2014

2.5 - <3.5 0.08 c 4.2 2013 75 to <3700 kW

3.5 - <7.0 0.08 c 4.3 2012
(a) <75 kW engines at or above 0.9 L/cylinder are s ubject to the corresponding

75-3700 kW standards. (b) Option: 0.15 g/bhp-hr PM / 4.3 g/bhp-hr NOx+HC in 2014. (c) This standard level drops to 0.07 g/bhp-hr in 2 018 for <600 kW engines. (d) Tier 3 NOx+HC standards do not apply to 2000-37 00 kW engines. (e) Converted emission standards from 40 CFR part 1 042, which are expressed in g/kW-hr to g/hp-hr by the following: g/kW-hr (0.746) = g/hp-hr

.

Table 4: U.S. EPA Tier 3 Marine Standards for Marine Diesel Category 1 Recreational and Commercial High Power D ensity

Engines below 3700 kW

Rated kW L/Cylinder PM g/bhp- hr c NOx + HC

g/bhp- hr c Model Year

0.22 5.6 2009 19 to <75 kW <0.9 a 0.22 b 3.5 b 2014

<0.9 0.11 4.3 2012

0.9 - <1.2 0.10 4.3 2013

1.2 - <2.5 0.09 4.3 2014

2.5 - <3.5 0.09 4.3 2013 75 to < 3700 kW

3.5 - <7.0 0.08 4.3 2012

(a) <75 kW engines at or above 0.9 L/cylinder are subject to the corresponding

75-3700 kW standards. (b) Option: 0.15 g/bhp-hr PM / 4.3 g/bhp-hr NOx+HC in 2014. (c) Converted emission standards from 40 CFR part 1042, which are expressed in g/kW-hr to g/bhp-hr by the following: g/kW-hr (0.746) = g/bhp -hr.

Table 5: U.S. EPA Tier 3 Marine Standards forA – 19 Marine Diesel Category 2 Engines below 3700 kW a,b

L/Cylinder Rated kW PM g/bhp- hr c NOx+HC

g/bhp- hr c Model

Year

<2000 0.10 4.6 2013 7 - <15 ≥ 2000 0.10 5.8 2013

15 - <20 a <2000 0.25 5.2 2014

20 - <25 a <2000 0.20 7.3 2014

25 - <30 a <2000 0.20 8.2 2014
(a) No Tier 3 marine standards apply for Category 2 engines with per-cyl inder displacement above 15.0 liters if maximum engine power is at or above 2000 kW. See “Tier 4 Marine Engine Emission Standards” for the standards that a pply for these engines. (b) For Category 2 engines at or above 1400 kW, opt ional Tier 3 and Tier 4 standards are available with some manufacturer restrictions, PM / NOx+HC at 0.10 / 5.8 g/bhp-hr in 2012,

with Tier 4 standards in 2015. (c) Converted emission standards from 40 CFR part 1 042, which are expressed in g/kW-hr to g/bhp-hr by the following: g/kW-hr * (0.746) = g/b hp-hr.

(78 83 ) “Tier 4 Marine Engine Emission Standards (Tier 4 marine standards)” means the U.S. EPA marine engine Tier 4 emission standards, a s promulgated by U.S. EPA

and set forth in “Final Rule: Control of Emissions of Air Pollution from Locomotive and Marine Compression-Ignition Engines Less Than 3 0 Liters Per Cylinder” (73 FR 25245 et seq., May 6, 2008) (40 CFR Part 104 2), both of which are incorporated herein by reference. Table 6 summariz es the Tier 4

marine standards from 40 CFR Part 1042. In the event of a conflict between a

Tier 4 marine standard in this section and its corr esponding standard in 40 CFR Part 1042, the marine standard in 40 CFR Part 1042 controls.A – 20 Table 6: U.S. EPA Tier 4 Marine Standards for Marine Diesel Category 1 and Category 2 Engines above 600 kW

(a) Converted emission standards from 40 CFR part 1 042, which are expressed in g/kW-hr to g/bhp-hr by the following: g/KW-hr (0.746) = g/bhp -hr (b) Optional compliance start dates may be used wit hin these model years; see 40 CFR part

1042. (c) For Category 2 engines at or above 1400 kW, opt ional Tier 3 and Tier 4 marine standards are available with some manufacturer restrictions, PM / NOx+HC at 0.10 / 5.8 g/bhp-hr in 2012,

with Tier 4 marine standards in 2015. (d) The Tier 3 PM standards continue to apply for Category 1 and Category 2 engines with percylinder displacements below 15.0 liters in model y ears 2014 and 2015 only. For Category 2 engines with per-cylinder displacement at or above 15.0 liters, the PM standard is 0.25 g/bhphr for engines at or above 2000 kW and below 3300 k W, and 0.20 g/bhp-hr for engines at or above 3300 kW and below 3700 kW, in model years 201 4 and 2015 only.

(84 ) “ Tier 2 Off-Road or Nonroad Emission Standards (Tier 2 off-road standards)” means an engine subject to the Tier 2 new engine em ission standards in title 13, CCR, Section 2423(b)(1)(A) or Title 40, CFR, Part 8 9.112(a) as they existed on April 27, 2010, both of which are incorporated here in by reference. This also includes engines certified under the averaging, ban king, and trading program with respect to the Tier 2 FEL listed in Title 13, CCR, 2423(b)(2)(A) or Title 40, CFR, Part 89.112(d), as they existed on April 27, 2 010, both of which are incorporated herein by reference.

(85) “Tier 3 Off-Road or Nonroad Emission Standards (Ti er 3 off-road standards)” means an engine subject to the Tier 3 new engine em ission standards in title 13, CCR, Section 2423(b)(1)(A) or Title 40, CFR, Part 8 9.112(a), as they existed on April 27, 2010, both of which are incorporated here in by reference. This also includes engines certified under the averaging, ban king, and trading program with respect to the Tier 3 FEL listed in Title 13, CCR, 2423(b)(2)(A) or Title 40, CFR, Part 89.112(d), as they existed on April 27, 2010, both of which a re incorporated herein by reference. Rated kW L/Cylinder PM g/bhp- hr a NOx

g/bhp- hr a HC

g/bhp- hr a Model Year

<15.0 0.09 1.3 0.14 2014 b

15.0 to

<30.0 0.19 1.3 0.14 2014 b At or above 3700 kW

all 0.04 1.3 0.14 2016 b

2000 to <3700 kW all 0.03 d 1.3 0.14 2016 4 b,c,d

1400 to <2000 kW all 0.03 1.3 0.14 2016 b,c

600 to <1400 kW all 0.03 1.3 0.14 2017A – 21

(86 ) “Tier 4 Off-Road or Nonroad Emission Standards (f inal Tier 4 off-road standards)” means an engine subject to the final af ter-treatment-based Tier 4 emission standards in title 13, CCR, Section 2423(b )(1)(B) or Title 40, CFR, Part 1039.101, as they existed on April 27, 2010, both o f which are incorporated herein by reference. This also includes engines ce rtified under the averaging, banking, and trading program with respect to the Ti er 4 FEL listed in Title 13, CCR, 2423(b)(2)(B) or Title 40, CFR, Part 1039.101, as they existed on April 27, 2010, both of which are incorporated herein by refe rence.

(87 ) “Tier 4 Off-Road or Nonroad Emission Standards ( interim Tier 4 off-road standards)” means an engine subject to the interim Tier 4 emission standards (also known as transitional) in title 13, CCR, Sect ion 2423(b)(1)(B) and/or Title 40, CFR, Part 1039.101, as they existed on April 27 , 2010, both of which are incorporated herein by reference. This also includ es engines certified under the averaging, banking, and trading program with respec t to the Tier 4 FEL listed in Title 13, CCR, 2423(b)(2)(B) or Title 40, CFR, Part 1039.101, as they existed on April 27, 2010, both of which are incorporated here in by reference.

(79 88 ) “Total Hydrocarbons (THC)” or “Hydrocarbons (HC)” means the total mass of open chain and cyclic hydrocarbon molecules.

(80 9 ) “Towboat” means any self-propelled vessel engaged in or intending to engage in the service of pulling, pushing, or hauling along side barges or other vessels, or any combination of pulling, pushing, or hauling al ong side barges or other

vessels.

(8 1 90 ) “Tugboat” means any self-propelled vessel engaged in, or intending to engage in, the service of pulling, pushing, maneuvering, bert hing, or hauling along side other vessels, or any combination of pulling, push ing, maneuvering, berthing or hauling along side such vessels in harbors, over t he open seas, or through rivers and canals. Tugboats generally can be divided int o three groups: harbor or short-haul tugboats, ocean-going or long-haul tugb oats, and barge tugboats. “Tugboat” is interchangeable with “towboat” and “p ush boat” when the vessel is used in conjunction with barges.

(8 2 91 ) “Verification Procedure, Warranty and In-Use Comp liance Requirements for In-Use Strategies to Control Emissions from Diesel Engines (Verification Procedure)” means the ARB regulatory procedure cod ified in title 13, CCR, commencing with section 2700

, which is incorporated herein by reference, that engine manufacturers, sellers, owners, or operator s may use to verify the

reductions of diesel PM or NO
x from in-use diesel engines through the use of a particular diesel emission control strategy.

(83 92 ) “Verified Diesel Emission Control Strategy (VDECS )” means an emission control strategy, designed primarily for the reduction of diesel PM emissions, which has been verified pursuant to the “Verification Proced ure for In-Use Strategies toA – 22

Control Emissions from Diesel Engines” in title 13 , CCR, commencing with

section 2700. VDECS can be verified to achieve Le vel 1 diesel PM reductions (25-49 percent), Level 2 diesel PM reductions (50- 84 percent), or Level 3 diesel PM reductions (85 percent or greater). VDECS may also be verified to achieve

NOx reductions.

(84 93 ) “Vessel” or “Marine Vessel” means any tugboat, ta nker, freighter, passenger ship, barge, or other boat, ship, or watercraft, e xcept those used primarily for

recreation.

(85 94 )”Work Boat” means a self-propelled vessel that is used to perform duties such as fire/rescue, law enforcement, hydrographic surveys , spill/response, research, training, and construction (including dr illing).

e) Fuel Use and Engine Emission Requirements.

[Note: The plain English narrative in this overvie w is intended as a convenient guide for the reader and in no way adds, deletes, m odifies, or otherwise affects the legal requirements and substantive provisions s pecified in subsection (e) or any other part of this section. Subsection (e) set s forth the various fuel and emission requirements for harbor craft subject to t his regulation, and can be

broken down as follows:

• Subsection (e)(1) specifies low sulfur fuel use re quirements that apply to all harbor craft, new and in-use.

• Subsection (e)(2) specifies the requirement for in stalling hour-meters on all harbor craft, new and in-use.

• Subsection (e)(3) establishes requirements that ap ply to transactions involving new engines to be installed on in-use ves sels, including a limited 6-month “sell-through” provision for non-complying engines, and engine replacement in cases where a compliant engine meeti ng the required physical or performance characteristics is not avai lable

.

• Subsection (e)(4) sets forth requirements that app ly to newly acquired new harbor craft, including ferries.

• Subsection (e)(5) sets forth requirements that app ly only to newly acquired new ferries, above and beyond those established in subsection (e)(4). These provisions include requirements for applying Best Available Control Technology (BACT) to new ferries and their engines.

• Subsection (e)(6) is the key provision of this reg ulation, as it achieves emission reductions by requiring the eventual repla cement or cleanup of engines in the fleet of in-use ferries, excursion v essels, tugboats, towboats, push boats, crew and supply vessels, and multipurpose harbor

craft , barge and dredge vessels . This subsection requires that owners and operators eventually replace or otherwise bring into compliance with the specified engine standards all of their pre-Tie r 1 and Tier 1-certified engines in their in-use vessels by the dates shown in the specifiedA – 23 compliance schedules. The compliance dates are des igned to clean up the fleet’s oldest and dirtiest engines first, whil e giving more time for relatively newer, Tier 1 engines to be upgraded or replaced. Vessels (ferries, excursion vessels, tugboats, and towboats ) with their homeport in the SCAQMD have an accelerated compliance schedule to reflect that district’s greater need for expedited emission redu ctions. The compliance schedules are grouped by vessel type, location of t he vessel’s homeport, the engine’s model year, and the engine’s annual ho urs of operation.

• Subsection (e)(6)(E) provides for a limited set of circumstances under which the E.O. may grant short extensions to the co mpliance dates if warranted.]

(1) All Harbor Craft – Low Sulfur Fuel Use Requirement.

Beginning January 1, 2009, a person subject to this section may only fuel a diesel engine on a harbor craft with one of the fol lowing:

(A) CARB diesel fuel; or (B) an alternative diesel fuel as defined in subsec tion (d)(2); or (C) any alternative diesel fuel that does not meet subsection (e)(1)(B) above but is certified by CARB as meeting the requirements of the Verification Procedure; or (D) CARB diesel fuel used with fuel additives that meet the requirements of the Verification Procedure; or (E) any combination of subsection (e)(1)(A) through (D) above. ; or (F) if a harbor craft subject to this section is traveling from a port located outside of California, and that port does not have any fuels listed in subsections (e)(1)(A) through (E), that vessel’s diesel engines can be fueled with either: U.S. EPA on-road diesel fuel meeting the specifications contained in 40 CFR §§ 80.500 et seq. or U.S. EPA nonroad diesel fuel (com mencing June 1, 2010) meeting the specifications contained in 40 CFR 80.2 9 and 66 FR 5002 (January 18, 2001). The vessel owner or operator must retai n records documenting the fuel purchase, the location and the name of the non -California port, and its lack of availability of fuels listed in subsections (e)( 1)(A) through (E) on-board the vessel for a minimum of one year after the purchase of the fuel, and must make such records available upon the request of the Exec utive Officer.

(2) All Harbor Craft – Installation and Use of Non- Resettable Hour Meters.

Beginning January 1, 2009, a person subject to this section may not operate a harbor craft without an installed and properly oper ating, non-resettable hour meter, which accurately measures the number of hour s an engine operates. The hour meter must be installed on each diesel engine on the vessel in a manner that allows reasonable personnel access to the hour meter without impediment.A – 24

(3) All In-Use Harbor Craft – Requirements for Newl y Acquired Engines.

Beginning January 1, 2009, a person subject to this section may not sell, purchase, offer for sale, lease, rent, import, or o therwise acquire a new or in-use diesel engine for an in-use harbor craft, which is intended to operate or actually operates in any of the Regulated California Waters, unless that engine on the date of acquisition:

(A) is certified to meet the Tier 2 or Tier 3 marin e standards in effect on that date for a new engine of the same power rating and displacement. The newly acquired engine is not required to meet the T ier 4 marine standards unless it is replacing an engine on the in-use vess el that was certified as meeting Tier 4 marine standards. Engines certified to meet the Tier 2, Tier 3, or interim Tier 4 off-road standards in effect o n the date of acquisition for a new engine of the same power rating and displacem ent may only be acquired for use as an auxiliary engine on harbor c raft if the engine or vessel manufacturer has complied with 40 CFR § 104 2.605 (Marinized land-based engines already certified to other stand ards for nonroad or heavy-duty highway engines for marine use ), as it existed on April 27, 2010 ;

or

(B) is newly acquired within the allowable 6 month “sell-through” period, as set forth in this paragraph. For purposes of this para graph only, the allowable sell-through period runs through 6 months after the date the Tier 2, Tier 3, or

Tier 4 marine standards or Tier 3, interim Tier 4, or final Tier 4 off-road

standards have come into effect for a new engine of the same power rating and displacement as the engine being replaced on th e in-use vessel. Engines that are subsequently sold, supplied, offer ed for sale, or otherwise newly acquired after the 6 month sell-through perio d are subject to the requirements specified in paragraph (A) of this sub section, even if the engine was previously newly acquired within the 6 m onth sell-through period. ; or

(C) is replacing an engine that is non-functioning due to equipment failure, and the E.O. has determined, pursuant to the provisions of 40 CFR § 1042.615 engine replacement exemption, as it existed on Apri l 27, 2010, that no engine certified to the current standards is produc ed by any manufacturer with the appropriate physical or performance charac teristics to repower the vessel. In such event, an alternate engine may be acquired for the replacement. Pursuant to 40 CFR § 1042.615, a sep arate determination, addressing each tier of emission standards that is more stringent than the emission standards for the engine being replaced mu st be made. For example, if the engine being replaced was built bef ore the Tier 2 standards applied, and engines of that size are currently sub ject to Tier 3 standards, a person must consider whether any Tier 2 or Tier 3 e ngines have the appropriate physical and performance characteristic s for replacing the oldA – 25 engine. If a Tier 2 engine is determined to have th e appropriate physical and performance characteristics, it may be selected as the replacement engine. Documentation of these determinations must be suppl ied to the E.O. and

the E.O.’s determination must be obtained before an engine replacement is made pursuant to this provision.

(4) All New Harbor Craft (Including All New Ferries ) – Requirements for Newly Acquired Vessels.

Beginning January 1, 2009, a person subject to this section may not sell, purchase, offer for sale, lease, rent, import, or otherwise a cquire a new harbor craft for use in any of the Regulated California Waters unless each of t he diesel propulsion engines on the vessel meets the applicable Tier 2, Tier 3, or Tier 4 marine standards in effect on the date of vessel acquisition. Auxiliary engines meet ing the applicable Tier 2, Tier 3, interim Tier 4, or Final Tier 4 off-road standards in effect on the date of vessel acquisition may be sold, purchased, offered for sal e, leased, rented, imported, or otherwise acquired for use if the engine or vessel manufacturer has complied with 40 CFR 1042.605 ( Marinized land-based engines already certified to o ther standards for nonroad or heavy-duty highway engines for marine us e ), as it existed on April 27, 2010. Diesel propulsion engines in new ferries with a cap acity to transport more than 75 passengers in Regulated California Waters must also meet the requirements specified in subsection (e)(5) below . The person must also meet the additional requir ements set forth in subsection (e)(5) below for diesel propuls ion engines in ne wly acquired new

ferries.

(5) Selected New Ferries Only – Additional Require ments for All Newly Acquired Propulsion Engines.

(A) Beginning January 1, 2009, any person subject to this section may not sell, purchase, offer for sale, import, or otherwise acq uire a new ferry with the capacity to transport 75 or more passengers for use in any of the Regulated California Waters unless each propulsion diesel eng ine on the vessel: who owns or operates a new ferry with the capacity to t ransport 75 or more passengers and that is used in any of the Regulated California Waters must demonstrate that each diesel propulsion engine that is certified to either the Tier 2 or Tier 3 marine standards will be operated in conjunction with the use of Best Available Control Technology (BACT) as determined and preapproved by the E.O. pursuant to this provision.

1. meets either the Tier 2 or Tier 3 standards that are in effect on the date of vessel acquisition; and

2. will be operated only in conjunction with the use o f Best Availabl e Control Technology ( BACT), as determined and pre

- approved by the E.O. pursuant to this provision.A – 26

(B) In lieu of installing or using BACT pursuant to par agraph (A)2 above, the person may comply with paragraph (A)2 by installing on the new ferry a propul sion engine(s) that is certified to the Tier 4 stan dards if a Tier 4

- certified engine is available at the time that the new ferry is delivered. If no

Tier 4

- certified engines are available at the time of ferr y delivery, the person must meet the provisions of paragraphs (A)1 and (A)2.

(C) (B)For purposes of this section, “BACT” is the dies el emission control strategy (DECS), whether verified or unverified pursuant to 13 CCR section 2700 et seq., that is determined by the E.O. as meeting all of the following criteria:

1. it provides or is expected to continuously provi de the greatest reduction

feasible of NOx or diesel PM when used with the fer ry’s propulsion diesel engine;

2. the use of BACT does not result in an increase o f 10 percent or more of any air pollutant, including NOx and diesel PM, rel ative to the engine’s emissions of that air pollutant without the use of BACT; and

3. either the DECS manufacturer or an authorized de aler of the DECS determines or otherwise agrees with the E.O. that u se of the DECS on or with the new ferry’s propulsion engine(s) would not invalidate or otherwise adversely affect the propulsion engine’s original warranty.

For purposes of this section, DECS may include, but is not be limited to,

exhaust treatment controls and the use of alternati ve fuels or fuel additives.

(D) (C) The E.O. shall determine the appropriate level of BACT and specify such BACT in an Executive Order granting such approval. Applications to comply with the requirements of paragraph (A)2 by using BA CT must follow the application and review procedure set forth below:

1. Application Process.

For all new ferries for which the keel is laid on or after January 1, 2009, the application for BACT approval must be submitted in writing to the

E.O. for evaluation before the keel is laid. The B ACT application must contain, at a minimum, the following information:

a. the applicant company’s name, address, and conta ct information;

b. information specific to the harbor craft and eng ine(s) on which BACT will be used, including the vessel name and identif ication number(s); engine make, model, and serial numbers; and all oth er information that uniquely identify the engine;A – 27 c. certification documentation, engineering calcula tions, emissions test data, or other information that establishes the die sel PM and NO
x emissions of the engine in combination with the pro posed BACT.

Emissions and emission reduction estimates must inc lude both diesel

PM and NO
x

emissions and be expressed in grams per brake horsepower-hour (g/bhp-hr) unless otherwise specifi ed by the E.O. Information submitted pursuant to this provision wi ll be used as

follows:

i. The E.O. shall use the information to compare th e emissions resulting from the proposed use of BACT with the em issions quantified in BACT determinations previously approv ed by the E.O.; ii. If there are no previous BACT determinations av ailable for comparison, the E.O. shall use ARB staff’s best eng ineering judgment to determine if the proposed BACT provides the greatest feasible reduction of diesel PM or NOx; an d iii. The E.O. may require the applicant to submit a dditional emissions data for other air pollutants if the E.O. believes that the proposed use of BACT may increase any air pollutant by 10 pe rcent or more relative to the engine emissions without the p roposed BACT; and

d. the proposed recordkeeping, reporting, monitorin g, and testing procedures that the applicant plans to use to demon strate continued

effectiveness of the BACT.

2. E.O. Review and Final Decision-Making Process.

a. Within 15 days after receiving a BACT applicati on, the E.O. shall notify the applicant whether the application is dee med sufficiently complete to proceed with further evaluation. If th e application is deemed incomplete, the notification must identify t he application’s

deficiencies. The E.O. shall have an additional 15 -day period for reviewing each set of documents or information subm itted in response to an incomplete determination. Nothing i n this subsection prohibits the E.O. from requesting additional infor mation from the applicant, during any part of the BACT application process, which the E.O. determines is necessary to evaluate the applic ation.

b. Within 30 days of deeming an application comple te, the E.O. shall take final action to either approve or deny a BACT application, and the E.O. shall notify the applicant accordingly. I f the application is denied or modified, the E.O. shall state the reason s for the denial or

modification in the notification. The E.O. shall s pecify all terms, conditions, and requirements the E.O. believes are necessary for theA – 28 ferry engine and BACT to operate properly and reduc e emissions of air pollutants consistent with this section. The r eporting and recordkeeping requirements specific to the use of B ACT must include, at a minimum:

i. hours of operation for the engine and BACT and f uel usage; ii. usage of any alternative fuels, additives, ag ents, flow rates, and

emission test results; iii. maintenance procedures for the engine(s) and its BACT; and iv. any other measurements or recordings specifie d by the E.O.

The E.O. shall make the approval/disapproval noti fication to the applicant and identification of the approved/disapp roved BACT available to the public on ARB’s internet site.

3. Post-Approval Vessel, Engine, and BACT Operation

.

A person subject to this provision who owns or operates a new ferry with the capacity to transport 75 or more passengers and that is used in Regulated California Waters must maintain operating records and other information in the manner and form specified by the E.O. in the BACT approval. The person and must submit to ARB upon request all records and reports created pursuant to this provision, whi ch must be maintained and retained for ARB inspection a minimum of three years after the records or reports were created.

(6) In-Use Engines and Vessels – Schedules for Meeting Tier 2 or Tier 3 Standards.

(A) For Pre-Tier 1 and Tier-1 Certified Engines on Ferr ies, Excursion Vessels, Tugboats, Towboats, Push Boats, and Multipurpose Ha rbor Craft Crew and Supply Vessels, Barge and Dredge Vessels Only.

1. Applicability

.

This subsection (e)(6) applies to any person who ow ns, operates, sells, purchases, offers for sale, leases, rents, imports, or otherwise acquires an in-use ferry, excursion vessel, tugboat, towboat , push boat, or multipurpose harbor craft crew and supply vessel, or barge and dredge vessel (in-use regulated category vessel) with a pre-Tier 1 or Tier-1

certified marine or off-road engine for use operating in any one of the above regulated in-use vessel categories for: a. a total of 300 hours per calendar year or more if operating in either ferry, excursion vessel, tugboat, towboat, pushboat , or crew and supply vessel categories, or b. a total of 80 hours per calendar year if operat ing in either barge or dredge vessel categoriesA – 29 in any of the Regulated California Waters. This subsection appli es to all such engines on all such vessels.

2. General Requirement.

a. After January 1, 2009, a person subject to this pro vision who owns, operates, sells, purchases, offers for sale, leases , rents, imports, or otherwise acquires an in-use ferry, excursion vesse l, tugboat, towboat, or push boat with a pre-Tier 1 or Tier-1 certified engine and that oper ates in any of the above regulated in-use vessel categor ies may not own, operate, sell, purchase, offer for sale, lease, ren t, import, or otherwise acquire an in-use engine, or a vessel with an in-us e engine, unless that engine complies with at least one of the compliance methods set forth in subsection (e)(6)(C) by the applicable compliance d ate. The compliance methods set forth in subsection (e)(6)(C) involve e ither replacement of the in-use engine with a cleaner engine or demonstr ating that the in-use engine already meets specified standards, as set fo rth below.

b. After July 1, 2011, a person who owns, operates , sells, purchases, offers for sale, leases, rents, imports, or otherwi se acquires an in-use crew and supply vessel, or barge and dredge vessel with a pre-Tier 1 or Tier-1 certified engine and that operates in any of the above regulated in-use vessel categories may not own, operate, sell , purchase, offer for sale, lease, rent, import, or otherwise acquire an in-use engine, or a vessel with an in-use engine, unless that engine co mplies with at least one of the compliance methods set forth in subsecti on (e)(6)(C) by the applicable compliance date. The compliance methods set forth in subsection (e)(6)(C) involve either replacement of the in-use engine with a cleaner engine or demonstrating that the in-use e ngine already meets specified standards, as set forth below.

For purposes of this subsection, “applicable compli ance date” is either the compliance date, as set forth in subsection (e) (6)(D) for the in-use engine, or the compliance date from subsection (e)( 6)(D) for the in-use engine, as extended pursuant to subsection (e)(6)(E ), whichever applies

and occurs later.

(B) [Reserved for Future Use]A – 30

(C) Compliance Methods.

1. Method C1 – Replacement of the in-use engine with a U.S. EPA certified Tier 2 engine or one with a higher certification le vel (e.g., Tier 3- certified).

A person may comply under this method by replacing the in-use engine with an engine certified to Tier 2- or Tier 3-certified marine engine

standards as set forth in this paragraph. The replacement en gine must

meet the U.S. EPA Tier 2 or Tier 3 marine standards that would apply to a new engine, of the same size and configuration as the in-use engine, at the time of the applicable compliance date set f orth in subsection (e)(6)(D). If the in-use engine is an auxiliary en gine, the replacement engine must meet the provisions of sections 93118.5 (e)(3) and (e)(4).

[Note: For example, if the applicable compliance da te is January 1, 2010, and the Tier 2 marine standards would be in effect at that time for a new engine of the same size and configuration as the in-use engine, the replacement would need to meet Tier 2 marine standards. However, if the applicable compliance date is instead Januar y 1, 2013, and the

Tier 3 marine standards would be in effect for a new engine of th e same size and configuration as the in-use engine, the re placement engine

would need to meet Tier 3 marine standards.]

Once the in-use engine has been replaced with an en gine that is U.S.

EPA-certified to meet Tier 2 or Tier 3 marine or of f-road standards, as set forth above, the engine is deemed to be in comp liance with this subsection (e)(6) and no further replacements of th is engine are required

under this subsection. Tier 3-certified marine or off-road engines may be used as the replacement engine to comply with this paragraph, even if

Tier 4-certified marine or off-road emission engines become available by the applicable compliance date;

2. Method C2 – Demonstrate to the E.O.’s written satis faction that the inuse engine already meets the Tier 2 marine standards or Tier 2 off-road standards for auxiliary engines greater than 50 hp or less than 75 hp, or greater than 750 hp that apply or would apply to new engines on the

date the Tier 2 marine or off-road standards became effective.

a. A person may comply under this method by demonst rating to the

E.O.’s written satisfaction that:

i. the in-use engine already meets the Tier 2 ma rine standards or Tier 2 off-road standards on greater than 50 hp or less than 75 hp, or greater than 750 hp auxiliary engines

,A – 31 ii. which apply to new engines of the same power rating and displacement as the in-use engine.

b. This compliance method is available only if the person makes the required demonstration before the date Tier 3 marin e standards become effective for new engines of the same size a nd configuration as the in-use engine. The person may rebuild the i n-use engine to a cleaner standard or implement a diesel emission con trol strategy to aid in meeting these standards. [Note: For example , if the Tier 3

marine standards would have become effective on January 1, 2015 for a new engine of the same size and configuration as the in-use engine, the person would need to provide the Tier 2 -compliance demonstration to the E.O.’s written satisfaction by January 1, 2015.]

c. For purposes of the demonstration, the person ma y, upon approval by the E.O., rely on any source of reliable and cre dible information, including but not limited to, any of the following:

i. the results from using the test method specified in section (j) or an alternative method approved by the E.O.; ii. the in-use engine manufacturer’s certification test data or other emissions test data for that in-use engine;

iii. emissions test data derived from another in-us e engine that is configured and used in a substantially similar way to the in-use engine; iv. emissions test data used to meet the regulatory requirements of

ARB’s Verification Procedure for the non-verified e mission control strategy implemented; or v. emissions test data used to meet the requirement s for U.S. EPA certification for systems providing remanufacture t o a cleaner

standard.

The E.O. may, in his/her sole discretion and based on good engineering judgment, exclude any information he/sh e determines is

not reliable or credible.

3. Method C3 – Demonstrate to the E.O.’s written satis faction that the inuse engine already meets the Tier 2 or Tier 3 marin e standards or Tier 2 or Tier 3 off-road standards for auxiliary engines in effect or would be in effect for new engines at the time of the applicabl e compliance date.

a. A person may comply under this method by demonst rating to the

E.O.’s written satisfaction that:A – 32 i. the in-use engine already meets the Tier 2 or Ti er 3 marine

standards or Tier 2 or Tier 3 off-road standards on auxiliary engines

, ii. which apply to new engines of the same power ra ting and displacement as the in-use engine, iii. at the time of the applicable compliance date for the in-use engine.

b. To comply with this method, the person may demon strate that the inuse engine meets the Tier 3 marine or off-road standards, even if

Tier 4 marine or off-road standards come into effect by the applicable compliance date. The person may rebuild the in-use engine to a cleaner standard or implement a diesel emission con trol strategy to aid in meeting these standards.

c. For purposes of the demonstration, the person ma y, upon E.O. approval, rely on any source of reliable and credib le information, including but not limited to, any of the following:

i. the results from using the test method specified in section (j) or an alternative method approved by the E.O.; ii. the in-use engine manufacturer’s certification test data or other emissions test data for that in-use engine;

iii. emissions test data derived from another in-us e engine that is configured and used in a substantially similar way to the in-use engine; iv. emissions test data used to meet the regulatory requirements of

ARB’s Verification Procedure for the non-verified e mission control strategy implemented; or v. emissions test data used to meet the requirement s for U.S. EPA certification for systems providing remanufacture t o a cleaner

standard.

The E.O. may, in his/her sole discretion and based on good engineering judgment, exclude any information he/sh e determines is

not reliable or credible.

4. Method C4 – Demonstrate to the E.O’s written satisfaction that the inuse engine has not and will not operate 300 or more hours per calendar year in any of the regulated in-use vessel categori es or 80 or more hours per calendar year in the barge or dredge vessel cat egories

.

A person may comply under this method by demonstrat ing to the E.O.’s written satisfaction that the engine is a low-use e ngine. This compliance method requires the person to provide records to th e E.O. of the engine’s total annual hours of operation while oper ating in any of theA – 33 regulated in-use vessel categories for the calendar year immediately preceding the demonstration. The person must also provide documentation sufficient for the E.O. to project fu ture annual hours of operation for the engine. The person will be deeme d in compliance with this method only if such records and documentation demonstrate to the E.O.’s written satisfaction that the in-use engine has not and will not operate 300 or more hours per calendar year operati ng in any of the regulated in-use vessel categories with the excepti on of the dredge or barge categories, or 80 or more hours per calendar year in either the dredge or barge categories

.

(D) Compliance Dates.

Table 7, and Table 8, Table 9, and Table 10 below set forth the compliance dates by which a person must meet the requirements of subsection (e)(6)(A). Table 7 applies only to vessels engines on ferries, excursion vessels, tugboats, towboats, and push boats with a homeport outside of the SCAQMD; Table 8 applies only to vessels engines on ferries, excursion vessels, tugboats, towboats, and push boats with a homeport within the
SCAQMD. ; Table 9 applies only to engines on crew and suppl y vessels, and Table 10 applies to engines on barge and dredge ves sels. The compliance dates are set forth by engine model year and total annual hours of operation (for all uses in any regulated in-use vessel category ) of the vessel in Regulated California Waters. For Table 7, Table 9, and Table 10 , Method D1, D2, or D3 below may be used for determining the actual or effective engine model year. For Table 8, only Method D1 or D3 may be used for determining the actual or effective engine model ye ar.

1. Method D1 – the engine’s actual model year of manuf acture.

A person may determine an engine’s compliance date under this method by using the engine’s actual model year of manufact ure, as documented by the sales contract, invoice, purchase order, or other legitimate proof of purchase for the engine. The actual model year of manufacture may also be shown on a label permanently affixed to the engine by the

manufacturer. In the event of a conflict between t he proof of purchase and the permanent label, the date of manufacture sh own on the permanent label controls.

2. Method D2 – the engine’s effective model year based on the “Engine’s

Model Year + 5” method.

A person may determine an engine’s compliance date under this method by calculating the engine’s effective model year as the actual model year, using Method D1 above, and adding to that num ber 5 more years.A – 34 To use this method, the person must use a diesel em issions control strategy (DECS) with the engine, as set forth below :

a. Relative to the emissions without the use of the DECS, the engine

with the DECS must be demonstrated to the E.O.’s wr itten satisfaction as emitting at least 25 percent less d iesel PM or NOx, and neither of those pollutants are increased by mo re than 10 percent. This requirement is met automatically if the DECS is a verified DECS (VDECS);

b. If the DECS is not a VDECS, the person must demo nstrate compliance with this paragraph by submitting to the E.O. emissions

data that demonstrate the non-verified emission con trol technology

achieves a diesel PM or NOx emission reduction of 2 5 percent or better, using the test methods specified in subsect ion (j). Upon approval of the E.O., the person may submit data de rived from the

use of other test methods to demonstrate to the E.O .’s written satisfaction the required 25 percent minimum emissi on reductions,

such as:

i. marine engine certification test data for the ha rbor craft propulsion or auxiliary engine, or engine manufacturer emissio ns test data; ii. emissions test data derived from another engine that is configured and used in a substantially similar way to the in-u se engine on which the emission control strategy is to be used; or iii. emissions test data used to meet the regulator y requirements of

the ARB Verification Procedure for the non-verified emission control strategy implemented.

The E.O. may, in his/her sole discretion and based on good engineering judgment, exclude any data derived from the test methods under paragraph b above that he/she determi nes are not

reliable or credible.

A person’s use of a DECS or VDECS, which meets the requirements of this provision, extends the engine’s compliance date to the compliance date for a similar engine that is five m odel years newer (i.e., the actual model year for the engine with th e emissions control strategy + 5).

[Note: For example, the owner of a 1995 model year engine on a tugboat, which has a homeport outside of SCAQMD and operates in Regulated California Waters for 750 hours in 2013, would normally be required to meet a December 31, 2014 compliance date, as set forth in Table 7. However, if a DECS that meets th e requirements of this provision is implemented with this engine prio r to the 2014A – 35 nominal compliance date, the engine’s actual compli ance date would be extended to the compliance date for a 2000 model year engine (i.e., the effective model year = the 1995 model ye ar + 5). Accordingly, in that scenario, the engine’s effecti ve model year would extend the compliance date to December 31, 2016];

3. Method D3 – the engine’s effective model year based on the “Engine’s

Tier 1 Rebuild Model Year” method.

A person may determine an engine’s compliance date by demonstrating, to the E.O.’s written satisfaction, that the engine is an existing pre-2004 model year engine that was rebuilt to conform with U.S. EPA Tier 1

marine standards prior to January 1, 2008. If the E.O. is thus satisfied, the effective model year of the Tier 1 rebuilt engi ne, for purposes of determining the compliance date in Table 7 or

, Table 8, Table 9, or Table 10, is the actual year in which the Tier 1 rebuild occu rred.A – 36

Table 7: Compliance Dates for Engines on Ferries, Excursion Vessels, Tugboats, Towboats, and Push Boats Vessels with Homeports Outside SCAQMD

[Note: For example, if a 1982-model year diesel eng ine on a tugboat operating in Regulated California Waters is used for 750 hours in 2011, the owner or operator must bring the engine into compliance wit h the requirements of subsection (e)(6)(C) by Decemb er 31, 2012.]. Engine Model Year Total Annual Hours of Operation Compliance

Date

1975 and earlier ≥ 1500 12/31/2009

1975 and earlier ≥ 300 and < 1500 12/31/2010

1976 - 1985 ≥ 1500 12/31/2011

1976 - 1985 ≥ 300 and < 1500 12/31/2012

1986 - 1995 ≥ 1500 12/31/2013

1986 - 1995 ≥ 300 and < 1500 12/31/2014

Ferries Only

1996 - 1999 ≥ 300 12/31/2014

Vessels Other Than

Ferries

1996 - 1999 ≥ 1500 12/31/2015

Vessels Other Than

Ferries

1996 - 1999 ≥ 300 and < 1500 12/31/2016

2000 ≥ 1500 12/31/2015

2000 ≥ 300 and < 1500 12/31/2016

2001 - 2002 ≥ 300 12/31/2017

2003 ≥ 300 12/31/2018

2004 ≥ 300 12/31/2019

2005 ≥ 300 12/31/2020

2006 ≥ 300 12/31/2021

2007 ≥ 300 12/31/2022A – 37

Table 8: Compliance Dates for Engines on Ferries, Excursion Vessels, Tugboats,

Towboats, and Push Boats Vessels with Homeports in SCAQMD

[Note: For example, if a 1982-model year diesel eng ine on a tugboat operating in Regulated California Waters is used for 300 or more hours in 2009, the o wner or operator must bring the engine into compliance with the requirements of subsection (e)( 6)(C) by December 31, 2010.].

Table 9: Compliance Dates for Engines on Crew and Supply Vessels Statewide Engine Model Year Total Annual Hours of Operation Compliance Date

1979 and earlier > 300 12/31/2009

1980 – 1985 > 300 12/31/2010

1986 – 1990 > 300 12/31/2011

1991 – 1995 > 300 12/31/2012

1996 – 2000 > 300 12/31/2013

2001 > 300 13 12 /31/2014

2002 > 300 12/31/2015

2003 > 300 12/31/2016

2004 > 300 12/31/2017

2005 > 300 12/31/2018

2006 > 300 12/31/2019

2007 > 300 12/31/2020

Engine Model Year Total Annual Hours of Operation Compliance Date

1985 and earlier

> 1500 12/31/2011

1985 and earlier

> 300 and < 1500 12/31/2012

1986 – 1995 > 1500 12/31/2013

1986 – 1995 > 300 and < 1500 12/31/2014

1996 – 2000 > 1500 12/31/2015

1996 – 2000 > 300 and < 1500 12/31/2016

2001 – 2002 > 300 12/31/2017

2003 > 300 12/31/2018

2004 > 300 12/31/2019

2005 > 300 12/31/2020

2006 > 300 12/31/2021

2007 > 300 12/31/2022A – 38 Table 10: Compliance Dates for pre-Tier 1 and Tier 1 Engines on

Dredge and Barge Vessels Statewide

Engine Model Year Total Annual

Hours of Operation Compliance

Date

1975 and earlier

>80 12/31/2011

1976 -1980 >80 12/31/2012

1981 - 1985 >80 12/31/2013

1986-1990 >80 12/31/2014

1991-1995 >80 12/31/2015

1996-1999 >80 12/31/2016

2000 -2001 >80 12/31/2017

2002 >80 12/31/2018

2003 >80 12/31/2019

2004 >80 12/31/2020

2005 >80 12/31/2021

2006 >80 12/312022

(E) Compliance Extensions.

Pursuant to this subsection (e)(6)(E), a person s ubject to the requirements of subsection (e)(6)(C) may request in writing to the E.O. an extension to a compliance date set forth in subsection (e)(6)(D) ( i.e., extension to the “nominal” compliance date). The E.O. may grant the person an extension to the nominal compliance date for any one of the reasons set fort h below. A person granted such an extension is deemed to be in compliance wit h the requirements of subsection (e)(6)(C) during the extension period, b ut only upon written authorization from the E.O. made pursuant to this p rovision and only until the end of the extension period. During the extension, the person must meet all other requirements of this section. Immediately upon the end of the extension period, the person must meet all the applicable requirement s of this section, including but not limited to, subsection (e)(6)(C).

Except as provided in paragraph (e)(6)(E)3 below, the E.O. may not combine compliance extensions granted pursuant to this prov ision with any other compliance date extensions, including those set for th in this provision and in subsection (e)(6)(D)2 and (D)3. And except as prov ided in paragraphs (e)(6)(E)2 and (e)(6)(E)3 below, under no circumstances may th e E.O. grant more than one compliance extension for any individual engine, set of engines, or harbor craft.

1. Change in Annual Hours of Operation

.

The E.O. may grant a one-time, maximum one year ext ension to the nominal compliance date set forth in subsection (e) (6)(D), provided theA – 39 person demonstrates to the E.O.’s written satisfact ion that the all of the following have occurred:

a. The person reasonably determined the vessel engi ne’s nominal compliance date based on the engine’s hours of oper ation two years before the nominal compliance date; and

b. In the year immediately prior to the nominal com pliance date, the engine’s annual hours of operation increased signif icantly from the prior year such that the engine’s nominal complianc e date would have been accelerated from one compliance date to a n earlier compliance date.

[Note: For example, suppose an operator has a 1982 -model year engine on a tugboat, which has a homeport outside o f SCAQMD and operates for 750 hours in Regulated California Wate rs in 2010. If it is reasonable for the operator to assume the annual ho urs of operation in 2011 will be similar to 2010, the operator would pr oject from Table 7 that the engine’s compliance date is December 31, 2012, and would plan his operations accordingly. However, if the vessel eng ine’s operation increased substantially to 1600 hours in 2011, the engine normally would then have its compliance date accelerated to Decemb er 31, 2011, according to Table 7. The one-year extension would , therefore, extend the engine’s actual compliance date back to what it would have been without the change in hours of operation (i.e., bac k to December 31, 2012).].

2. No Suitable Engine Replacement for Harbor Craft

.

The E.O. may grant to a person a one year extension , which can be renewed annually, only if the person demonstrates t o the E.O.’s written

satisfaction that there is no suitable Tier 2-certi fied or Tier 3-marine certified replacement engine available anywhere tha t can be used in the person’s specific vessel, and the pe rson cannot otherwise meet the requirements of subsection (e)(6)(C).

The E.O., in his/her sole discretion, may use any i nformation available to the E.O. to rebut the person’s demonstration. For purposes of this paragraph, the E.O. may deem an engine as suitable to replace an existing engine if the replacement engine is simila r in horsepower to the existing engine, the replacement engine can fit wit hin the vessel’s engine compartment, and installation of the replacement en gine would not

cause the vessel to violate U.S. Coast Guard or oth er applicable safety regulations. The E.O. may not consider the cost of the replacement engine, by itself or including installation and dow ntime costs, in determining its suitability as a replacement.A – 40 The application for and issuance of an initial exte nsion and subsequent extensions pursuant to this paragraph are subject t o the following requirements:

a. For an initial extension and all subsequent annu al extensions to be granted pursuant to this paragraph, the E.O. shall follow the same procedures for applying, determining completeness, allowing public review and considering public comments, taking fina l action, and publishing E.O. decisions that are set forth in sub section (f) for Alternative Control of Emissions (ACE) applications ;

b. The E.O. shall consider all information submitte d by the public, including but not limited to, information related t o the availability of replacement engines suitable for the person’s vesse l;

c. Except for the engine(s) for which the extension is sought, the person must demonstrate that all other engines subject to the person’s direct control meet the requirements of subsection (e)(6);

d. The person must submit the application for an ex tension so that it is received by the E.O. no later than 6 months before the nominal compliance date of the engine for which the extensi on is requested;

e. The person must identify in the application each engine for which the extension is requested;

f. For each engine identified in paragraph 2 above, the person must provide in the application a detailed description o f the reasons and

factors that serve as the basis for the claim that no suitable replacement engine is available. This description must include, at a minimum, detailed engineering diagrams, calculation s, and citations to applicable U.S. Coast Guard regulations that sup port the person’s claim that there are no suitable replacement engine s available.

g. After the initial extension, the E.O. may grant additional one year extensions, provided the following requirements are met:

i. All procedures specified in paragraph (e)(6)(E )2.a and (e)(6)(E)2.b above are followed; ii. The application for an additional extension dem onstrates the engines identified in paragraph (e)(6)(E)2.c remain in compliance with this section; iii. The application is received by the E.O. no soo ner than 6 months but no later than 2 months before the expiration of the previous extension;A – 41 iv. The application identifies the engine(s) for wh ich the additional extension is requested; v. For each engine identified in paragraph (e)(6)(E )2.g.iv above, the person must provide in the application a detailed d escription of

the reasons and factors that serve as the basis for the claim that suitable replacement engines remain unavailable. T his description must include, at a minimum, detailed en gineering diagrams, calculations, and citations to applicable U.S. Coast Guard regulations that support the person’s claim t hat there are still no suitable replacement engines available.

3. Equipment Manufacturer Delays or Installation Diffi culties

.

Upon written request, the E.O. may grant to a perso n a 6-month extension to the nominal compliance date set forth in subsection (e)(6)(D), provided all the following criteria are met:

a. the person ordered the new replacement engine or other equipment necessary to comply with the requirements of subsection (e)(6)(C) prior to the nominal complianc e date set forth in subsection (e)(6)(D);

b. the purchase order identified in paragraph a abo ve was placed

with the manufacturer no later than 6 months before the engine’s nominal compliance date;

c. the new engine or equipment has not been receive d or installed since it was ordered due to manufacturing delays or excessive difficulties encountered by the engine or equipment installer; and

d. the applicant for the extension provides documen tation to the

E.O.’s satisfaction that demonstrates the criteria in subparts a. through c. above have been met. The E.O. may, in h is/her sole discretion, use any information available to rebut any of the documentation submitted pursuant to subparts a thro ugh c above.

4. Multiple Engines on Multiple Vessels Within Same Fl eet and With Same Compliance Dates.

This provision applies only to fleets of 2 or more vessels that are owned by the same person. Upon written request, th e E.O. may grant to the person an extension to the nominal com pliance date(s) for engines on vessels within such fleets, as set f orth below;

a. For each set of engines on two or more vessels or for each single engine in three or more vessels with compliance dates of 2009 orA – 42 2010 for ferries, excursion vessels, tugboats, towb oats, and push boats and 2011 or 2012 for crew and supply vessels and barge and dredge vessels (a “set” means 2 or more engines), the E.O. may grant a one-time extension of the compliance da te to December 31, 2013 for ferries, excursion vessels, t ugboats, towboats, and push boats and to December 31, 2015 f or crew and supply boats and barge and dredge vessels , provided the E.O. receives and approves a compliance schedule fr om the person that meets the requirements set forth below:

i. The compliance schedule is received by the E.O. no later than December 31, 2009 for ferries, excursion vessels, t ugboats, towboats, and push boats and prior to December 31, 2011 for crew, supply, barge, and dredge vessels ;

ii. For each year, up to and including 2013 for fer ries, excursion vessels, tugboats, towboats, and push boats and 201 5 for crew and supply vessels and barge and dredge vessel s , that the extension will be in effect, the compliance sch edule must identify, at a minimum, the engines on specified ve ssels in the fleet that will meet the requirements of subsection (e)(6)(C) within any given year;

iii. The compliance schedule must show that all eng ines with compliance dates of 2009 or 2010 for ferries, excur sion vessels, tugboats, towboats, and push boats and 201 1 or 2012 for crew and supply vessels and barge and dred ge vessels on the specified vessels in the fleet will be in compliance with subsection (e)(6)(C) by December 31 , 2013 for ferries, excursion vessels, tugboats, towboats, and push boats and December 31, 2015 for crew and supply ves sels and barge and dredge vessels . [Note: For example, an approvable plan may show that 25% of these engines on the specified vessels in a fleet will be in compliance in 2010, 50% in 2011, 75% in 2012, and 100% by December 31, 2013 .]; and

iv. The compliance schedule must include all other information the E.O. deems necessary and appropriate for implem enting this provision.

b. For each set of engines on two or more vessels or each single engine on three or more vessels with a compliance date of 2011 or later for ferries, excursion vessels, tugboats, towboats, and push boats and 2013 or later for crew and supply ve ssels and barge and dredge vessels (a “set” means 2 or more engines), the E.O. may grant to a person a one-time, maximum one- yearA – 43 extension of the nominal compliance date. To recei ve an extension under this provision, the person must sub mit a written request to the E.O. that meets the following requir ements:

i. The request must be received by the E.O. no late r than December 31st of the year immediately preceding the nominal compliance date for the set of engines; and

ii. The request identifies the engines in each set of engines and the vessels in the person’s fleet that are subject to the requested extension.

For all engines within a person’s fleet that have n ot been granted an extension pursuant to paragraphs a or b above, t he compliance dates for such engines remain as set for th in subsection (e)(6)(D).

(F) Special Provisions Applicable to the Use of a Diese l Emission Control Strategy (DECS), including Verified Diesel Emission Control Strategies (VDECS).

The following requirements apply to any person’s us e of a DECS pursuant to subsections (e)(5) or (e)(6) and are in addition to any other applicable requirements:

1. Once the DECS is installed or otherwise employ ed on a person’s vessel, the person must continue to operate and maintain th e DECS, in accordance with the manufacturer’s directions, to a chieve the original

level of emission reductions that the DECS was desi gned and intended to achieve;

2. In the event a DECS fails, breaks down, or is ot herwise damaged (collectively referred to hereinafter as “fail” or “failure”), the vessel owner or operator must, within 90 days of the DECS failur e, do at least one of the following:

a. repair the DECS to good working order;

b. replace the failed DECS with another working DEC S, if it cannot be repaired; or

c. employ another method that meets the requirement s of subsection (e)(6)(C) and other applicable provisions of this s ection, if the DECS cannot be repaired.A – 44 3. The determination in subpart 2.b and 2.c above o f whether a DECS cannot be repaired may only be made by either the D ECS manufacturer

or an authorized dealer.

4. For each replacement DECS installed under subpar t 2.b above, the person must provide to the E.O. the same documentat ion for the replacement DECS that was required for the DECS tha t failed, and the person must obtain the same E.O. approvals that wer e required with the

failed DECS.

(f) Alternative Control of Emissions (ACE).

(1) Requirements

.

(A) The purpose of this subsection is to allow a pe rson (“person” or “applicant”) the option of complying with the requirements of th is subsection in lieu of the requirements of subsection (e). As set forth i n this subsection, a person may be deemed in compliance with subsection (e) by implementing an alternative emission control strategy(ies) (AECS) a pproved by the E.O. In no case may the E.O. approve an AECS that results i n or has the potential to result in any increase of diesel PM and NOx emis sions or any increase in emissions greater than 10 percent for any other pol lutant, relative to the emissions of diesel PM, NOx, and other pollutants t hat would have occurred under compliance with subsection (e).

(B) An applicant wishing to participate in an ACE m ay include one or more harbor craft in the ACE, but the applicant may only include harbor craft that the person owns or operates under the person’s dire ct control.

(C) No harbor craft may be included in more than one ACE plan.

(D) Harbor craft included in an ACE must continue to be included in and operated pursuant to the approved ACE for the durat ion of the ACE.

(E) AECS may include, but are not limited to, any c ombination of the following:

1. engine modifications; 2. exhaust treatment control; 3. engine repower; 4. use of alternative fuels or fuel additives; 5. shore-side power; 6. fleet averaging; and 7. any other measures that sufficiently reduce emis sions.A – 45

(F) A person complying under this provision must ob tain E.O. approval of an ACE application that demonstrates compliance with t his subsection and contains, at a minimum, the following information:

1. the company name, address, and contact informati on; 2. the harbor craft and engine(s) subject to the AC E, including the vessel name and identification number(s), engine make, mod el, and serial numbers, and other information that uniquely identi fy the engine; 3. documentation, calculations, emissions test data , or other information

that establishes the diesel PM and NO
x reductions, expressed in pounds, are equal to or greater than the emission r eductions that would have been achieved upon compliance with subsection (e), including but not limited to the requirements specified in subsec tion (e)(6)(C) and (e)(6)(D); and 4. the proposed recordkeeping, reporting, monitorin g, and testing procedures that the applicant will use to demonstra te continued compliance with the ACE.

(G) For each ACE, the emission reduction calculatio ns demonstrating equivalence with the requirements of subsection (e) may include only those

diesel PM and NO
x

emissions from harbor craft with its homeport with in a single specified California air district, or anothe r defined geographic area approved by the E.O.

(H) A person subject to an approved ACE must mainta in operating records in the manner and form as specified by the E.O as an e lement of any approved ACE. Required records must include, at a minimum:

1. all the reporting and recordkeeping requirements specified in subsections (g) and (h); 2. maintenance procedures; and

3. emissions test results.

A person subject to an approved ACE must retain rec ords and reports on each vessel or at an office at the vessel’s homepor t for the lifetime of each engine and must submit these records and reports to the E.O. in the manner specified in the approved ACE or upon request by th e E.O.

(I) Emission reductions included in an ACE may not include reductions that are otherwise required by any local, State, or federal rule, regulation, or statute, or that are achieved or estimated from equipment no t located in the region to which the ACE applies.

(J) A person subject to an approved ACE may not op erate any harbor craft under the ACE unless the person has first been noti fied in writing by the E.O. of the ACE’s approval. Prior to such approval , the applicant mustA – 46 comply with the provisions of this section, includi ng the requirements in subsection (e)(6)(C) and (e)(6)(D).

(2) Application Process.

(A) Applications for an ACE must be submitted in wr iting to the Executive Officer for evaluation by February 28 of the first year that vessel engine compliance is required

.

(B) The E.O. shall establish an internet site (“ACE internet site”) in which all documents pertaining to an ACE application shall be made available for public review. The E.O. shall also provide a copy of all such documents to each person who has requested copies of the documen ts; these persons shall be treated as interested parties. The E.O. s hall provide two separate public comment periods during the ACE application p rocess, as specified in subsection (f)(2)(D) and (f)(2)(E).

(C) Completeness Determination.

Within 15 days after receiving an ACE application, the E.O. shall notify an applicant whether the application is deemed suffici ently complete to proceed with further evaluation. If the application is dee med incomplete, the notification shall identify the application’s defic iencies. The E.O. shall have an additional 15-day period for reviewing each set of documents or information submitted in response to an incomplete determination. Nothing in this subsection prohibits the E.O. from requesti ng additional information from the applicant, during any part of the ACE appl ication process, which the E.O. determines is necessary to evaluate the ap plication.

(D) Notice of Completeness and 30-Day First Public Comment Period.

After an ACE application has been deemed complete, the E.O. shall provide a 30-day public comment period to receive comments on any element of the ACE application and whether the E.O. should approve or disapprove the ACE application based on the contents and merits of the application. The E.O. shall notify all interested parties of the fol lowing:

1. the applicant(s); 2. the start and end dates for the 30-day first com ment period; and

3. the address of the ACE internet site where the a pplication is posted.

The E.O. shall also make this notification availabl e for public review on the

ACE internet site.A – 47

(E) Proposed Action and 15-Day Second Public Commen t Period.

Within 30 days after the first public comment peri od ends, the E.O. shall notify the applicant and all interested parties of ARB’s proposed approval or disapproval. This notification shall propose to ap prove the application as submitted, disapprove the application, or approve t he ACE application with modifications as deemed necessary by the E.O. The notification shall identify the start and end dates for the 15-day sec ond public comment period.

During the second public comment period, any perso n may comment on the E.O.’s proposed approval or disapproval of the ACE application and any element of the application. The E.O. shall also ma ke this notification available for public review on the ACE internet sit e.

(F) Final Action.

Within 15 days after the second public comment peri od ends, the E.O. shall take final action to either approve or deny an ACE application and shall notify the applicant accordingly. If the applicati on is denied or modified, the

E.O. shall state the reasons for the denial or modi fication in the notification. The notification to the applicant and approved ACE plan, if applicable, shall be made available to the public on the ACE internet site. In addition, the

E.O. shall consider and address all comments receiv ed during the first and second public comment periods, and provide response s to each comment

on the ACE internet site.

(G) Renewal of an Approved ACE.

An applicant may apply for renewal of an approved A CE by forwarding the E.O. updated information for all elements of the ap proved ACE for review and re-approval. The applicant must submit the ren ewal application so that the E.O. receives the application no later than 30 days prior to the end of the ACE compliance period.

(H) Notification to the E.O. of Changes to an Appro ved ACE.

A person with an approved ACE must notify the E.O. in writing within 30 days upon learning of any information that would alter the emissions estimates submitted during any part of the ACE appl ication process. If the E.O. has reason to believe that an approved ACE has been granted to a person that no longer meets the criteria for an ACE , the E.O. may, pursuant to subsection (f)(3) below, modify or revoke the AC E as necessary to assure that the applicant and subject vessel(s) meet the e mission reduction requirements in this section.A – 48

(3) Revocation or Modification of Approved ACEs.

With 30 days of notice of violation to the ACE hol der, the E.O. may revoke or modify, as needed, an approved ACE if any of the fo llowing apply:

(A) there have been multiple violations of the ACE provisions or the requirements of the approved ACE plan;

(B) the E.O. has reason to believe that an approved ACE has been granted that no longer meets the criteria or requirements for an ACE; or

(C) the person can no longer comply with the requir ements of the approved

ACE in its current form.

Public notification of a revocation or modification of an approved ACE shall be

made available on the ACE internet site.

(g) Recordkeeping Requirements.

Beginning January 1, 2009, the owner or operator of a harbor craft must maintain the records specified in this subsection on the vessel or at the vessel’s homeport for the life of each engine subject to this section, including f leet swing engines and marinized landbased engines . The owner or operator must provide such records for inspection to an agent or employee of ARB upon request for all harbo r craft subject to this section. Records may be provided as a hard copy, electronic, or any alternative reporting strategy approved by the E.O. Records provided by the person under this provision must include, at a minimum, the following:

(1) Owner or Operator Contact Information: (A) Company name; (B) Contact name, phone and fax number, address, e- mail address; (C) Address where vessel is registered; and (D) Reporting year.

(2) Vessel information: (A) Harbor craft name; (B) Specify vessel use(s) (ferry, excursion vessel, tugboat, ocean-going tugboat, towboat, push boat, work boat, commercial fishing vessel, charter fishing vessel, crew and supply vessel, pilot vesse l, or other if none of the preceding apply); (C) Vessel homeport; (D) Vessel build year; (E) U.S. Coast Guard documentation number; (F) California Fish and Game license number; (G) International Maritime Organization (IMO) numbe r; (H) Call Sign number; andA – 49

(I) Maritime Mobile Service identity number. (3) Engine Information (for each diesel engine on t he vessel, including swing engines ): (A) Current hour meter reading; (B) Make of engine; (C) Model of engine; (D) Engine family (if applicable); (E) Engine serial number; (F) Year of manufacture of engine (if unable to det ermine, provide its approximate age); (G) Rated brake horsepower; (H) Total engine displacement; and (I) Number of cylinders.

(4) Operational Information: (A) Describe the general use of engine (propulsion or auxiliary engine); (B) Total annual hours of operation, based upon rea dings of the non-resettable hour meters for previous calendar year per engine ( for engines without an hour meter before 2009, provide an estimate); (C) Total hours of operation per calendar year in e ach of the regulated in-use vessel categories, based upon readings of the non-r esettable hour meters for previous calendar year per engine; (C D )Estimated annual fuel usage per engine; and (D E )Estimated percent operating time as a function of distance from shore at

the distances below:

1. 0-3 nautical miles; and 2. >3-24 nautical miles; and

3. >24 nautical miles from shore.

(5) Control Equipment (if applicable): (A) Type of diesel emission control strategy; (B) Manufacturer of installed diesel emission contr ol strategy; (C) Model of installed diesel emission control stra tegy; (D) Level of control – air pollutants controlled an d percent reductions; (E) Emission control serial number; and (F) Date control equipment installed.

(6) Maintenance records for each installed engine a nd diesel emission control strategy: (A) Hour meter reading at last top end rebuild (i.e ., less than full rebuild); (B) Hour meter reading at last full engine rebuild; and (C) Number of times full engine rebuild completed.

(7) The retirement date for each near-retirement ve ssel for which an owner or operator is claiming an exemption pursuant to subse ction (c)(13).A – 50

(8) For each engine for which the model year is det ermined using the “Engine’s Model Year + 5” method pursuant to subsection (e)(6 )(D)2:

(A) the name and contact information (representativ e, address, and phone number) for the manufacturer of the emission contro l strategy; (B) the name and type of emission control strategy; (C) the installation date of the emission control s trategy; and, (D) if a VDECS is not being used for this purpose, the test plan, and the data demonstrating the emission reductions achieved due to the emission control strategy.

(9) For each engine for which an owner or operator is claiming an extension pursuant to subsection (e)(6)(E)3, the purchase ord er or signed contract between the owner or operator and seller of the new engine or equipment that has been purchased to comply with subsection (e)(6)(C) and ( e)(6)(D).

(10) For each engine an owner or operator claims to have replaced, for purposes of compliance with the requirements of (e)6, written documentation that the engine has been: dismantled, or destroyed, or sold out of state. Alternately, the engine may be used to replace an older engine if: (A) The older engine is subject to the in-use engine r equirements, and (B) the original compliance date of the older engine i s retained for the newer engine

.

(11) Records for each engine must be retained by th e owner or operator for the entire engine life.

(12) All records specific to an E.O. approved ACE p lan.

(13) All records specific to a BACT approved by the E.O. pursuant to subsection (e)(5).

(h) Initial and Compliance Plan Reporting Requirements.

(1) Initial Reporting of California Harbor Craft Fl eet. By February 28, 2009, a person subject to this section must submit the information specified in subsections (g)(1) through (g)(6) for all harbor craft vessels in his/ her California fleet. For purposes of this paragraph, “California fleet” means the tot al population of harbor craft under the person’s direct control as of January 1, 2009.

(2) Compliance Plan

. By February 28 of the year vessel engine complian ce is required, a person subject to the requirements of s ubsection (e)(6)(C) and (e)(6)(D) must submit a Compliance Plan to the E.O. that describes in detail the engine replacements, rebuilds, upgrades, use of DEC S, and any other measures the person plans to use to meet the requirements of subsection (e)(6)(C) andA – 51

(e)(6)(D) for each of the person’s engines and harb or craft. The person may revise the Compliance Plan, as needed, but the pers on must notify the E.O. within 10 business days of any changes to the Compl iance Plan after the initial Compliance Plan is submitted. The Compliance Plan is for the E.O.’s informational and planning use only, and the substa ntive contents of the plan are not binding on either the E.O. or the person who su bmitted the Compliance Plan. The E.O.’s receipt and acceptance of a submitted Co mpliance Plan shall not constitute or be interpreted as evidence of complia nce with the requirements of subsection (e)(6)(C) or (e)(6)(D).

(3) Demonstration of Compliance. By no later than the applicable compliance date specified in subsection (e)(6)(D), a person subject to the requirements of subsection (e) must provide the following informati on to the E.O.:

(A) All information specified in subsections (g)(1) through (g)(6), and

(B) The implementation date and the emission contro l strategy implemented for each engine in accordance with the requirements of subsection (e)(6)(D) and (e)(6)(C), respectively, for purposes of demons trating compliance.

(4) Reporting for Change of Annual Hours of Operati on, Vessel Category/Use, Transfers of Vessels, or a Change of Ownership of Vessel or Engine, or Vessel Operation in Regulated California Waters

.

(A) A person subject to this section must submit to the E.O. the information specified in subsection (g)(1) through (g)(6) withi n 30 days of a significant change of annual hours of operation (i.e., enough t o change the engine’s compliance date), vessel category/use, purchase, le ase, rental, or change of ownership of the vessel or engine. In the case of a purchase, lease, rental, or change in ownership, the party in contro l or possession of the engine or vessel after the transaction is responsib le for meeting the requirements of this paragraph;

(B) A person subject to this section must submit to the E.O. the information specified in subsection (g)(1) through (g)(6) withi n 30 days of the initial operation of a vessel brought into Regulated Califo rnia Waters;

(B C )Within 90 days of a significant change of annual h ours of operation, vessel category/use, purchase, lease, rental, or change of ownership, or initial operation of a vessel brought Regulated California Waters, or by the earliest applicable compliance date specified in subsection (e)(6)(D), whichever is later, a person subject to subsection (e)(6) shall submit a new Compliance Plan with the updated information pursuant to the C ompliance Plan requirements specified in paragraph 2 above.A – 52

(i) Violations.

(1) A person who is subject to this section and com mits a violation of any provision, standard, criteria, or requirement in th is section is subject to the penalties, injunctive relief, and other remedies sp ecified in H&S section 42400 et seq.; H&S section 42402 et seq.; other applicable s ections in the Health and Safety Code; and other applicable provisions as pro vided under California law for each violation. Nothing in this section shall be c onstrued to limit or otherwise affect any applicable penalties or other remedies a vailable under federal law.

(2) Any failure to meet any provision, standard, cr iteria, or requirement in this section, including but not limited to the applicabl e emission limits; recordkeeping requirements; and ACE provision, incl uding the requirements of any approved ACE plans, shall constitute a single, separate violation of this section for each hour that a person operates a vess el within the Regulated California Waters until such provision, standard, c riteria, or requirement has been

met.

(3) A person who is subject to this section is liab le for meeting the requirements of this section, notwithstanding any contractual ar rangement that person may have with any third-parties.

(j) Methods to Demonstrate Compliance with Engine and F uel Standards.

(1) Diesel PM, NO
x , NO, CO, HC, NMHC, and CO 2 testing must be done in accordance with the applicable method specified in the following procedures: International Organization for Standardization (ISO ) 8178-2: 1996(E) (“ISO 8178 Part 2”); (2) ISO 8178-4: 1996(E) (“ISO 8178 Part 4 ”); and applicable methods and procedures specified in 40 CFR Part 94 (as amen ded in 2007), all of which are incorporated herein by reference, or 40 CFR Par t 1042 for marine engines or in 40 CFR Part 89 or 40 CFR Part 1039 for nonroad ( off-road) engines, as those Parts existed on April 27, 2010 . Each of the procedures specified in this subsection is incorporated by reference herein

.

(2) The E.O. may approve in writing any alternative test methods not specified in paragraph (1) above that the method’s proponent has demonstrated to the E.O.’s satisfaction provides equivalent or better results to the methods in paragraph (1).

(k) Right of Entry.

An agent or employee of the ARB has the right of e ntry to board any harbor craft for the purpose of inspecting propulsion and auxili ary engines, emission control strategies, fuel systems, and fuel storage; collect ing fuel sample(s) not to exceed one liter per fuel tank; and acquiring and inspecti ng records required pursuant to

this section.A – 53

(l) Severability

.

If any subsection, paragraph, subparagraph, senten ce, clause, phrase, or portion of this regulation is, for any reason, held invalid , unconstitutional, or unenforceable by any court of competent jurisdictio n, such portion shall be deemed as a separate, distinct, and independent pro vision, and such holding shall not affect the validity of the remaining port ions of the regulation.

(m) Submittal of Documents.

(1) All documents required under this regulation mu st be submitted to the Executive

Officer as follows:

California Air Resources Board Stationary Source Division

Emissions Assessment Branch Control Strategies Section, Harbor Craft

P.O. Box 2815 Sacramento, California 95812-2815

(2) Electronic submittals of information associated with compliance with this section may be approved by the E.O. upon request, provided such electronic submittals use digital signatures that meet the requirements s pecified in Government Code section 16.5. The E.O. may request the submittal o f a hard copy of any

electronic submittal.

NOTE: Authority cited: Sections 39600, 39601, 39650, 39658, 39659, 39666, and 41511, 43013, and 43018, Health and Safety Code. Reference: Sections 39650, 39658, 39659, 39666, 41510, and 41511, 43013, and 43018, Health and Safety Code.(this page left intentionally blank)

### Appendix B

Summary of Survey Results(this page left intentionally blank)B – 1 

### Appendix B

Statewide Barge and Dredge Vessel Survey Summary

I. Introduction and Background

In November 2007, the Air Resources Board (ARB or B oard) approved the commercial harbor craft regulation (CHC regulation) to signifi cantly reduce diesel PM (PM) and oxides of nitrogen (NO
x ) from diesel-fueled engines on commercial harbor c raft (CHC) vessels. The regulation is significantly reducing PM and NO
x emissions from CHC engines.

One of the basic requirements of the adopted CHC re gulation is that in-use engines on ferries, tugboats, and towboats operating in regula ted California waters must meet the most current U.S. Environmental Protection Agency ( U.S. EPA) marine engine emissions standards through a compliance schedule b ased on the age and annual use of the engine.

Barge and dredge vessel engines were not included i n the in-use engine requirements of the CHC regulation because information at the ti me indicated that barge and dredge vessel engines were regulated under the Portable En gine Airborne Toxic Control Measure (Portable Engine ATCM) by being registered in the Portable Equipment Registration Program (PERP) or by local air distric t permitting. The adopted CHC regulation requires those engines registered in PER P or permitted by a local district prior to January 1, 2009 to be exempt from the CHC regulation. In order to simplify regulatory obligations and provide consistency for barge and dredge vessel owner/operators to be subject to a single statewide regulation, the ARB staff began evaluating the barge and dredge vessel category and conducted a survey of those engines in 2009.

In January 2010, the PERP registration program was amended to make CHC registered in that program subject to the requirements of the CHC regulation. Since the CHC regulation currently has no in-use requirements for barges and dredge vessels, it is necessary to amend this regulation and to require a ll barge and dredge vessel engines, including those registered in PERP or under local d istrict permits, to be subject to the CHC regulation. The primary reason for taking this action is to provide consistency for barge and dredge vessel owner/operators and bring t hese in-use engines under the requirements of a single regulation.B – 2

The barge and dredge vessel survey was conducted on a statewide basis and requested the submittal of the following vessel and engine information for (see attached survey):

• Company Name

• Vessel Name

• U.S. Coast Guard Documentation Number • Vessel Use/Type • Annual Fuel Usage • Percent of Hours Operated Various Distances Off C alifornia Coast • Auxiliary or Propulsion Engine • Engine Make (manufacturer) • Engine Model

• Model Year • Engine Horsepower (Maximum Rated) • Total Engine Displacement • Number of Cylinders • Annual Hours of Operation

• Home Port • IMO (international Maritime Organization) Identif ication Number • MSSI (Maritime Mobile Service Identities) Number

• Year Vessel Built • Vessel Length

• Vessel Width • Owner, or Operator, or Owner/Operator and Contact Information • Barge or Dredge Type • Engine Position • PERP Registration Number • Barge/Dredge Activity (increase, decrease, no cha nge) • Operation in port or county and percent operation time • Engine Type (off-road or marine) • Engine Use (generator, pump, etc.) • Engine Family

The survey was distributed to every potential owner /operator the ARB could identify using internal and public sources. The majority of the contacts were located in California with a small percentage being out-of-sta te. Some information about potential barge and dredge owner/operators was obtained from the PERP records and on-line

searches.

The barge and dredge vessel survey provided data fo r approximately 100 barge and dredge vessels and approximately 400 engines. In t he following sections, the results for the survey is presented including the types of vess els in use, engine specifications (i.e., make, model, horsepower) and annual activity by ves sel type.B – 3

II. Vessel Information Survey Results

The survey respondents were requested to provide in formation on the vessels that they owned or operated including the home port of each v essel, the primary use for the vessel, the annual fuel usage, locations their vess els operated, and the percent of time the vessel is operated at various distances off Cal ifornia's coast. An example the survey is located at the end of this Appendix.

Table 1 provides a summary of the vessels home port s reported in the survey. The home port is defined on the survey as the principal place normally used for the overnight berthing of the vessel and aggregated by local air pollution control district (district).

Information for approximately 100 vessels was colle cted in the barge and dredge vessel survey. Not all surveys had data for every data fi eld. Blank data fields were not included in average or population numbers in the su rvey summaries.

In this section the vessel information described is summarized.

Table 1: Vessel Quantity and Associated Air Distri ct Home Port

Barge and Dredge Operating

Locations* Number of Vessels Reported**

Bay Area AQMD 37

South Coast AQMD 10

Other 6 San Diego County APCD 4

North Coast Unified AQMD 2 Imperial County APCD 1 Sacramento Metropolitan AQMD 1
San Joaquin Valley Unified APCD 1
Ventura County APCD 1

Yolo/Solano AQMD 1

Total 64
* - Includes overlap between districts of individual ba rge and dredge vessels operations during the year. ** - Information about the location of all barge an d dredge vessel operations was not provided in the survey submittalB – 4

A. Vessel Use

The survey requested information on the primary use for each vessel. The following vessel types were specified on the survey:

Barge : A vessel having a flat-bottomed rectangular hull with sloping ends and built with or without a propulsion engine.

Dredge: A vessel designed to remove earth from the bottom of waterways, by means of including, but not limited to, a scoop, a series of buckets, or a suction pipe. Dredges include, but are not limited to, hopper dredges, cl amshell dredges, or pipeline dredges

B. Annual Fuel Use

The barge and dredge vessel survey requested vessel owner/operators to report annual

fuel use for 2008. Table 2 lists the annual fuel u sed (in gallons).

Table 2: Annual Fuel Usage (gallons/year)

Vessel Type Auxiliary Engines Propulsion

Engines

Barges (2008) 2,021,788 No info

Dredges (2008) 505,629 No info

Total 2,527,417

C. Percent of Hours Operated at Various Distances o ff the California

Coast

The survey requested vessel owner/operators provide the percent of hours operated at various distances off the California coast. The op tions were 0-3 miles, 3-24 miles, and greater than 24 miles. The survey results are pres ented in Figure 1. Overall, most barge and dredge vessels operate within 3 miles of the California coast.B – 5

Figure 1: Percent of Barge and Dredge Engine Hours Operated at Varying

Distances from Shore

III. Auxiliary/Propulsion Engine Survey Results

For each vessel, the survey requested information o n the number, type, and annual activity of auxiliary and propulsion engines. Data for 350 auxiliary engines and 6 propulsion engines was submitted. This section s ummarizes the information received about vessel engines.

A. Auxiliary Engines

Auxiliary engines on barges and dredges are used to power a variety of on-board equipment such as pumps, and electrical lights. As shown in Table 3, the horsepower range for auxiliary engines ranged from 5 to 2,934 horsepower with an overall average of about 346 horsepower. 20 percent of barges and dredges have one auxiliary engine, 20 percent have two auxiliary engines, 20 percent h ave three auxiliary engines, and 40 percent have four or more auxiliary engines. Data provided on auxiliary engines include make and model, model year, horsepower data, annual hours of operation and annual fuel usage. 0 .0 10 .0 20 .0 30 .0 40 .0 50 .0 60 .0 70 .0 80 .0 90 .0

B ar g e an d D re dg e

V es se l Typ e a nd D ista nc e F rom S ho re% Time from Shore 0 to 3

3 to 24

> 24B – 6

Table 3: Quantity of Auxiliary Engines and Average Horsepower

Horsepower Vessel Category # Auxiliary Engines Range Average
Barge 304 5 – 2,934 346 Dredge 81 99 – 2,600 800

B. Propulsion Engines

Few barge and dredge vessels have propulsion engine s. Table 4 lists the reported propulsion engines horsepower ranges and averages.

Table 4: Quantity of Propulsion Engines and Average Horsepower

Horsepower Vessel Category # Propulsion Engines Range Average
Barge 2 NA NA Dredge 4 1,125 – 4,640 2,880B – 7

C. Horsepower and Model Year

Table 6 shows the barge and dredge vessel survey re sponse population with model year and horsepower ranges for auxiliary engines. The barge and dredge vessel survey data shows that about 3 percent of the auxiliary en gines were 1969 and older model year, 97 percent were model years 1970 and newer, a nd about 60 percent of the engines were 2000 or newer models.

Table 6: Barge and Dredge Vessel Auxiliary and Pro pulsion Model Years and Horsepower Ranges 5



### Auxiliary Engines

Horsepower Range
Model Year No HP Data < 50 51 - 75 76 - 100 101 - 175 176 - 250 251 - 500 501 - 750 > 751 Total

No Age Data 1 4 5 9 11 30

1905 - 1939

1940 - 1949 1 1

1950 - 1959 2 2

1960 - 1969 1 1 4 1 1 8

1970 – 1979 1 6 8 11 4 30

1980 – 1989 1 7 15 4 3 30

1990 – 1999 2 2 3 3 8 15 12 5 6 56

2000 – 2007 2 6 11 10 17 22 88 16 20 192

Total 4 12 18 24 43 70 122 26 30 349

Propulsion Engines

Horsepower Range

Model Year No HP Data < 50 51 - 75 76 - 100 101 - 175 176 - 250 251 - 500 501 - 750 > 751 Total

No Age Data

1905 – 1939

1940 – 1949

1950 – 1959

1960 – 1969

1970 – 1979 2 2

1980 – 1989

1990 – 1999

2000 – 2008 2 2

Total 4 4

5 The totals in this table do not match the total num ber of engines reported in the survey since there w ere engines that did not have the age or horsepower rep orted.B – 8

D. Hours of Operation

Figure 2 provides information on the average number of hours of operation per year for auxiliary and propulsion engines by vessel type. B arge and dredge vessels averaged 550 and 1,510 hours, respectively, annually.

Figure 2: Average Engine Hours of Operation Per Yea r

Figure 3 provides information on the total number o f hours of operation per year for auxiliary and propulsion engines by vessel type. B arge and dredge vessels totaled 139,130 and 12,100 hours, respectively, annually.

Figure 3: Total Engine Hours of Operation Per Year

Auxiliary Propulsion

0 50,000 100,000 150,000 200,000 250,000

Crew and Supply Vessels

Vessel TypesHours Auxiliary Propulsion

0 200 400 600 800 1,000 1,200 1,400 1,600

Barge and Dredge Vessels

Vessel TypeHoursB – 9 

### Attachment I

Barge and Dredge Vessel Survey

Sample FormsB – 10 

### SURVEY INSTRUCTIONS

Before filling out the survey form, please read the following instructions carefully. A sample form is included for your assistance.

Explanations for each survey data field are provide d below. If you operate more than one vessel, please complete one survey form for each vessel you operate.



# Survey Data Fields

CONTACT / OWNER / OPERATOR INFORMATION

Contact, Owner, and Operator Information: Complete box(es) with appropriate information.

Contact Name (and Title): Enter the name and title of the person to be contac ted by the ARB in case we have questions about the information pro vided.

Operator Information: If the vessel operator is different from the cont act , please enter the name, title, and company information of the person or company which currently operates the

vessel.

Owner Information: If the vessel owner is different from the operato r, enter the name, title, and company information of the person or company having all the incidents of ownership, including the legal title, or is the mortgagor of the vessel.

Company Name: Enter the name of the company that corresponds with the contact, operator,

or owner.

Mailing Address/City/State/ZIP Code: Mailing address, City, State, and ZIP code of the
contact person, owner, or operator.

Date: Enter the date the survey form was completed.

Email: Enter the email address of the contact person.

Phone: Enter the phone number of the contact, operator, or owner.

Fax: Enter the fax number of the contact, operator, or owner.



### VESSEL INFORMATION

Vessel Name: Enter the name of the vessel being reported (one vessel per sheet).

Year Build: Enter the year the vessel was built.B – 11

Length and Width: Enter the length and width of the vessel.

Home Port: Enter the vessel’s home port. A vessel’s home po rt is the principal place for embarkation or debarkation, or the loading or unloa ding of supplies, and is normally used for the overnight berthing of the vessel.

U.S. Coast Guard Number: Please enter the U.S. Coast Guard documentation num ber assigned to the vessel. If the vessel is not docum ented with the U.S. Coast Guard, please provide the International Maritime Organization Ide ntification (IMO ID) and/or the Maritime Mobile Service Identities (MSSI) number (preferably the latter).



### VESSEL INFORMATION (continued)

Vessel Type: Please check the box(s) best describing the vesse l, either dredge, barge, or other. If other, please describe other on the line below. If the vessel is used for more than one type of operation, check all boxes that apply.

Type of Dredge or Barge: Provide a descriptive name for the dredge or barg e which describes the primary function. i.e. hopper dredge, derrick barge, construction barge, tank barge, etc.

Dredge / Barge Activity Level: Please estimate the rate of increase or decrease i n this vessel's activity in percent per year. This helps us estimate growth rates of this industry for our emission inventory model.


### 2008 OPERATING AREA INFORMATION

Port or County: Please list the areas where this vessel operated i n 2008, either the California county or port and the percent of time spent in eac h area.



### PERP ENGINE INFORMATION

Portable Engine Registration Program (PERP) Engines : Engines in your fleet we have been able to identify as registered in PERP are listed o n the sheet with the tab labeled "PERP". The engine information available from the registration data is included. If this information is current, you may cut and paste this block of engine informat ion to the vessel engine information sheet for the appropriate vessel.



### VESSEL ENGINE INFORMATION

Propulsion/Auxiliary Engines: Please enter the following information about your v essel’s propulsion and auxiliary engines in the appropriate space provided (one line per engine). If information is not applicable, please mark "N/A". If the information is not available, please make your best estimate.B – 12

Propulsion Engine

Engine Position: Enter the position of the propulsion engine on the vessel (i.e. port, starboard, bow thruster etc.)

Engine Type: Enter the engine type either marine, off-road (nonr oad) or on-road engine.

Auxiliary Engine
PERP Registered: Please enter the PERP (Portable Engine Registrati on Program) registration number if the engine is currently registered with P ERP.

Engine Type: Enter the engine type either marine, off-road (nonr oad) or on-road engine.

Engine Use Description: Please describe what function the engine provides p ower for on the vessel, such as electric generator, deck winch, suc tion pump, etc.

Manufacturer: Enter the name of the manufacturer of each engine.

Engine Family: Enter the engine family of each engine on the ves sel, or enter NA if there is no applicable family.

Model: Please provide the model number of each engine.

Model Year: Please provide the model year of each engine.

Number of Cylinders: Please provide the number of cylinders for each e ngine.

Total Engine Displacement: Please provide the total displacement of each eng ine in liters.

Maximum Rated Horsepower: Please provide the maximum rated horsepower of ea ch engine.

Annual Fuel Consumed: Please provide your best estimate of the annual fue l use for each engine for 2008. If you are unable to allocate the fuel use by engine, please provide total fuel consumption per vessel at the bottom . ARB will then use an alternative method to estim ate the “per engine” fuel use.

2008 Annual Operating Hours: Please enter the total annual operating hours for e ach engine and an estimate of the approximate distribution of where these hours were spent:

(1) within 3 miles of shore (including in-port activiti es); (2) beyond 3 miles out to 24 miles from shore; (3) beyond 24 miles from shore.B – 13B – 14

### Appendix C

Emission Inventory Methodology(this page left intentionally blank)C – 1 

### Appendix C

Updates on the Emissions Inventory for Commercial H arbor Craft Operating in California

1. INTRODUCTION

This section provides background on ARB’s commercia l harbor craft (CHC) emissions inventory, the purposes and goals in updating the e missions inventory, and a general overview of the updates made to the emissions inven tory.

In 2007, ARB staff developed an updated CHC emissio ns inventory (2007 emissions inventory) using a consistent statewide methodology . This emissions inventory was used to support the regulatory analysis of the Regulations to Reduce Emissions from Diesel Engines on Commercial Harbor Craft Operated Within California Waters and 24

Nautical Miles of the California Baseline (harbor craft regulation), which was adopted on November 15, 2007 by the Air Resources Board. CHC are grouped into nine vessel types, including ferry and excursion vessels, tow b oats, tug boats, pilot vessels, work boats, crew and supply vessels, commercial fishing vessels, charter fishing vessels, and other types of vessels that do not fit into the abo ve eight categories.

The 2007 emissions inventory was based on the best information and best methodology available to ARB staff at the time the inventory wa s developed. Since there was no single data set that covered all CHC operating in C alifornia, vessel population data were collected from various sources, including the U.S. Coast Guard documentation data, the California Department of Fish and Game registration data, the ARB Harbor Craft Survey, and information from recent emission invent ory estimates generated for the Port of Los Angeles. Staff estimated that there wer e about 4,200 CHC vessels operating in California in year 2004. Vessel and engine profi les, including vessel and engine type, age, size, annual hours of operation, annual fuel u se etc., were developed based on ARB’s survey that collected information for about 8 50 vessels, about 20 percent of the statewide CHC population. Future year emissions wer e forecasted based on estimated vessel/engine activity growth and estimated future engine age profiles. Emissions

factors accounted for fuel sulfur content and incre asing emission rates with engine age

and use.

The proposed amendments to ARB’s CHC regulation foc us on crew and supply vessels; and barge and dredge vessels operating in Californi a. To support the regulatory analysis of the amendments, staff updated the crew and supply vessel emissions inventory using 2009 initial reporting data and dev eloped the barge and dredge vessel emissions inventory using 2009 survey information.C – 2

Vessel and engine data were reported to ARB in 2009 in compliance with ARB’s 2007 CHC regulation. Many more engines and much more in formation were included in the reporting database than the information collected i n the 2004 ARB survey. The reporting database virtually covers all crew and supply vesse ls operated in California. This offers ARB staff an opportunity to update crew and supply vessel emissions inventory with better and more complete data. The updated invento ry has been used to support the regulatory analysis of the amendments to the ARB’s CHC regulation. While the fundamental emissions estimation methodology is lar gely unchanged from the methodology used for the 2007 emissions inventory, the reporting data were used to update vessel and engine population, activity, engi ne useful life, and engine load.

Currently, barge and dredge vessels are not regulat ed under the ARB’s CHC regulation. In 2009, ARB staff conducted a survey to collect in formation on barges and dredges operated in California. A preliminary emissions in ventory was developed to support the inclusion of barge and dredge vessels in the CHC re gulation.

2. METHODOLGY

The fundamental methodology remains unchanged from the methodology used for the 2007 emissions inventory except for the changes des cribed in this section. The methodology documentation for the 2007 emissions in ventory can be downloaded at: http://www.arb.ca.gov/regact/2007/chc07/appb.pdf

.

The basic equation for the estimating PM and NOx em issions from a commercial harbor craft engine is:

Hr LF HP UL A D F EF E × × × × + × × = )

1( 0

Where:

E is the amount of emissions of a pollutant (PM and NOx) emitted during one period;

EF 0 is the model year, horsepower and engine use (prop ulsion or auxiliary) specific zero hour emission factor (when engine is new);

F is the fuel correction factor which accounts for e mission reduction benefits from burning cleaner fuel;

D is the horsepower and pollutant specific engine de terioration factor, which is the percentage increase of emission factors at the end of the useful life of the engine;

A is the age of the engine when the emissions are es timated;

UL is the vessel type and engine use specific engine u seful life;

HP is rated horsepower of the engine;

LF is the vessel type and engine use specific engine load factor;

Hr is the number of annual operating hours of the eng ine.

Total emissions from the California statewide comme rcial harbor craft fleet can be estimated by summing up the emissions from individu al engines or by multiplying the emissions rates, average emissions per engine per y ear, with the engine population.C – 3

DATA SOURCE OVERVIEW

Statewide, about 21 vessel owner/operators reported information for about 70 crew and supply vessels with 163 propulsion engines and 73 a uxiliary engines. Staff believes nearly 100 percent of crew and supply vessels opera ting in California waters are included in the reporting data set. Reporting data were generally consistent with estimates derived from the 2004 survey.

ARB’s reporting data set includes vessel and engine information like vessel name, vessel owner, operator, home port, vessel use, engi ne model year, engine use, engine model, engine horsepower, engine annual fuel use, e ngine annual hours of operation. The information is complete for most vessels and en gines. Staff believes that ARB’s CHC reporting data set is the best currently availa ble single data source for estimating emissions from crew and supply vessels operating in California. Staff decided to use the reporting data set to update ARB’s crew and sup ply vessel emissions inventory. ARB staff made follow-up phone calls to clarify inf ormation not in the reporting data.

Staff also obtained additional information on where vessels operate.

Staff also conducted a survey in 2009 to collect in formation on barge and dredge vessels operating in California waters. Informatio n for about 400 auxiliary engines, and less than 10 propulsion engines was collected, repr esenting nearly 100 percent of the statewide population of the equipment. Most barge and dredge vessels are not self-propelled and most of the engines are off-road engines for auxiliary purposes such as generating electricity, powering pumps, winches, cranes, etc. Information collected in the barge and dredge vessel survey is similar to the crew and supply vessel information reported to ARB, such as vessel name, v essel use, engine model year, engine horse power, engine annual hours of operatio n, and engine annual fuel use, etc. Staff developed a statewide barge and dredge vessel emissions inventory based on the information collected from the survey.

CREW AND SUPPLY VESSEL EMISSIONS ESTIMATION

Crew and Supply Vessel Population

There are about 70 crew and supply vessels with 163 propulsion engines and 73 auxiliary engines in the reporting data set with va lid data. Based on the information ARB staff had, it was assumed 100 percent of crew and s upply vessels operated in California in 2008 reported to ARB in compliance with the ARB’ s CHC regulation.

Because the reporting data are complete, staff was able to estimate emissions for each individual engine and each individual vessel operat ing in California and to aggregate the emissions to generate a statewide emissions invento ry.C – 4

Crew and Supply Vessel Engine Hours of Operation an d Engine Load

Analysis of the reporting data indicates that crew and supply vessel engines operate at a lower load with longer hours for propulsion engin e than previously estimated. Table 1 and Table 2 compare average hours of operation and engine load for the ARB 2004 survey and 2009 reporting data set.

Table1: Crew and Supply Vessel Engine Hours of Oper ation

2004 Survey Data 2009 Reporting

Data % Changed

Propulsion Engine 752 1,796 139%

Auxiliary Engine 3,321 2,265 -32%

Table 2: Crew and Supply Vessel Engine Load

2004 Survey Data 2009 Reporting

Data % Changed

Propulsion Engine 0.45 0.38 -15%

Auxiliary Engine 0.43 0.32 -27%

The 2009 reporting data load factors are estimated as the average engine load weighted by engine horsepower and annual hours of o peration. Large engines operating longer hours have more weight on the load factor. The new load factors are about15 percent and 27 percent lower than the load factors derived from the 2004 survey data for propulsion and auxiliary engines, r espectively.

Crew and Supply Vessel Useful Life

Staff defines engine useful life as the age when 50 percent of engines retire from the fleet and 100 percent of engines are assumed to ret ire at the age of two useful lives. Based on comments from vessel owner/operators that marine engines are maintained very well because of the high capital costs, ARB st aff assumed a 28 year of useful life for crew and supply vessel engines. Extending usefu l life from 22 as previously assumed to 28 years has a minor impact on emissions estimates.

Adjusting Crew and Supply Vessel Emission Rates Usi ng Source Testing Data

The Santa Barbara County Air Pollution Control Dist rict (APCD) maintains a permitting program to reduce emissions from crew and supply ve ssels visiting offshore oil platforms in Santa Barbara County. Based on the req uirements in the sample permits provided by the Santa Barbara County APCD, crew and supply vessels serving the oil platforms are required to achieve a NOx emissions r ate of 8.4 g/bhp-hr for main engines using a combination of turbo-charging, enhanced int er-cooling, and 4 degrees timing retard and to achieve 5.99 g/bhp-hr for other vesse ls with newer engines. Most vesselsC – 5

serving oil platforms in Santa Barbara County, incl uding those vessels transiting in Ventura County APCD, have some degree of NOx contro l for main engines to achieve the target emission rates required by the permits.

Under the permits, at least one crew and one supply vessel must be tested per year per platform. The tests are performed at cruise load. M ost of the crew and supply vessels that operate in Santa Barbara County waters have be en tested at some time. Emission source testing data were used by the districts to e stimate emissions from crew and supply vessels.

Staff obtained source test data from Santa Barbara County APCD. The average NOx emission rates of the 287 valid engine testing reco rds is about 239 lb/1000 gallon fuel or about 6.3 grams/hp-hr. Staff used this number to a djust emission rates of engines that have emission control technology information in ARB ’s reporting data set and the emission rates of engines operating in Santa Barbar a County APCD.

PM is not tested in the source tests. Therefore, b ased on engineering judgement, staff estimated a 10 percent PM emissions disbenefit due to NOx reduction strategies.

Crew and Supply Vessel Emissions Spatial Allocation

Based on phone conversations with vessel owner/oper ators, staff understands most vessels operate close to where their home ports are while several vessels operate in areas away from their home ports. For example, some vessels home-ported in Huntington Beach operate most of their time in Sant a Barbara County or Ventura County. Supply vessels serving oil platforms in San ta Barbara County are too big to be home-ported in Santa Barbara County and these vesse ls have to transit from Port Hueneme in Ventura County to oil platforms in Santa Barbara County. Staff developed spatial allocation factors for each engine based on vessel home port and the percentage of time spent in each air district.

BARGE AND DREDGE EMISSIONS ESTIMATION

ARB staff collected information for about 400 auxil iary engines and less than ten propulsion engines used on barge and dredge vessels operating in California waters. Information collected in the barge and dredge vesse l survey includes vessel name, vessel use, engine model year, engine horse power, engine annual hours of operation, and engine annual fuel use, etc. In cases when dat a fields in the survey are missing, staff filled missing information using average of a vailable information by engine use.

Since most barges and dredges are non-self-propelle d and most of the engines are offroad engines for auxiliary purposes such as generat ing electricity, powering pumps, winches, cranes, etc, staff used emission factors f rom OFFROAD model as the zerohour emission factors and used OFFROAD fuel consump tion rate to estimate barge and dredge fuel use. The OFFROAD is a model used to gen erate emissions inventory data for off-road mobile sources. The major categories o f engines and vehicles included inC – 6

OFFROAD2007 are agricultural, construction, lawn an d garden and off-road recreation, and equipment from hedge trimmers to cranes. More information about the OFFORAD

model can be found at http://www.arb.ca.gov/msei/offroad/offroad.htm

.

Staff estimated barge and dredge vessel engine load factors using engine horsepower, engine annual fuel use and annual hours of operatio n for each engine use category. Staff defined engine useful life as half of the age of the oldest engine by engine use.

When the information is not available or there are too few data points to perform a valid analysis for certain engine use categories, staff u sed engine load or useful life of the same engine use in the OFFROAD model. Table 3 shows barge and dredge vessel engine load, useful life and data sources for this inventory.

Table 3: Barge and Dredge Vessel Engine Load, Usefu l Life

Engine Use Engine Load Data Source Engine Useful

Life Data Source Compressor 0.54 Survey 19.5 Survey Crane 0.42 Survey 9.0 OFFROAD

Deck door engine 0.89 Survey 16.0 OFFROAD Dredger 0.51 OFFROAD 16.0 OFFROAD Generator 0.75 Survey 22.5 Survey Hoist swing winch 0.31 Survey 27.0 Survey Other 0.80 Survey 16.0 OFFROAD Pump 0.71 Survey 21.0 Survey propulsion 0.45 Survey 17.0 Survey

EMISSION FORECASTING

Based on discussions with vessel owner/operators, s taff believes that both crew and supply vessel activity; and barge and dredge vessel activity will remain relatively constant in the future. As a result, staff assumed no growth for crew and supply vessel or barge and dredge vessel activity through 2025.

ESTIMATION OF BENEFITS OF THE PROPOSED AMENDMENTS

The proposed amendments of ARB’s harbor craft regul ation require existing engines onboard crew and supply vessels; and barges and dre dges to be repowered with the current model year engines if the engines meet the model year and hours of operation criteria prescribed in Table 16 and Table 17 of the Staff report of the amendments. Staff assumed that new engines used to replace the existing engines have the same horsepower and the same operation pattern, i.e. hou rs of operation and location, as the existing engines. The new engines are cleaner than the old engines being replaced because of the more stringent emissions standards a nd less engine deterioration which increases as engines age.C – 7

Staff estimated emissions from these new engines us ing the same methodology

described above. Staff estimated the emissions redu ction benefits by subtracting the new model year emissions from the engines being rep laced. Staff noticed there are more emission reductions in some years than others. The amount of emission reduction at a given calendar year is a function of the age d istribution, horsepower, hours of operation of the fleet, and the compliance schedule

.

2. EMISSION ESTIMATES

This section summarizes the updated crew and supply vessel emission estimates, barge and dredge vessel emissions estimates. This s ection also provides a summary of the comparison with previous crew and supply vessel emissions inventory and the comparison with independent emissions estimates by the Santa Barbara County APCD, the Ventura County APCD, and the Port of Los Angele s and the Port of Long Beach.

CREW AND SUPPLY VESSEL EMISSIONS

Crew and Supply Vessel Emission Estimates and Compa rison with Previous Emissions Inventory

Figure 1 and Figure 2 compare the updated crew and supply vessel NOx and PM emissions estimates for years 2008 through 2025 usi ng ARB’s reporting data and the previous 2007 emissions inventory based on ARB’s 20 04 survey. The comparison shows that the 2010 crew and supply vessel emission s inventory (2008 as base year) are significantly higher than the 2007 emissions in ventory (2004 as base year).

Figure 1: NOx Emissions from Crew and Supply Vessel s in California

NOx Emissions from Crew & Supply Vessels in Califor nia

0 100 200 300 400 500 600 700 800

200 8 20 09
2 010 2011 2012 2013

2014 201 5 201 6
2 017
2 018 2019 2020 2021 2022 20

23 20 24 2025Tons per year

2010 Emissions Inventory

2007 Emissions InventoryC – 8

Figure 2: Diesel PM Emissions from Crew and Supply Vessels in California

PM Emissions from Crew & Supply Vessels in Californ ia

0 5 10 15 20 25 30 35

20 08 2009 2010 2011 2012
2 013 2014 2015 2016 2017
2 018 2019 2020 2021 2022
2 023 2024 2025Tons per year

2010 Emissions Inventory

2007 Emissions Inventory

Crew and Supply Vessel Emission Estimates by the Di stricts

Table 4 summarizes crew and supply vessels emission s estimates by the districts. More than 90 percent of statewide crew and supply v essel emissions occurred in the South Coast AQMD, Santa Barbara County, and Ventura County districts in 2008 where most of the oil platforms are. Vessels in Santa Ba rbara County account for a larger percentage of PM emissions than NOx emissions becau se NOx emission control required by the permits.

Table 4: Crew and Supply Vessel Emission Estimates by Air Districts for Year 2008 (tons/year)

Air District NOx Percent of Total PM Percent of

Total

BA 42.0 6% 1.4 4%

SB 138.2 21% 10.2 31%

SC 336.9 50% 14.4 44%

SD 11.3 2% 0.4 1%

VEN 140.8 21% 6.5 20%

Total 669.3 100% 33.0 100%

Crew and Supply Vessel Emission Reduction

The projected statewide annual emission reduction f or crew and supply vessels is presented in Figures 3 and 4. Figure 3 shows that the projected statewide NOx emissions from and supply vessels are estimated to be about 670 tpy in 2008, dropping to about 466 tpy in 2025 without the proposed amend ments. The reduction in uncontrolled emissions over this period is due to t he anticipated or planned replacementC – 9

of older engines. With the proposed amendments in place, the NOx emissions would be further reduced from 466 tpy to about 350 tpy in 2025.

Figure 3: Projected Crew and Supply Vessel NOx Emis sion Reduction

Projected Crew and Supply Vessel NOx Emission Reduc tion

0 100 200 300 400 500 600 700 800

2 0 08 20 0 9 20 1 0
2 0 1 1 20 1 2 2013
2 0 1 4
2 0 1 5 2016 2017
2 0 1 8 20 1 9
2 0 20
2 0 2 1 20 2 2
2 0 23
2 0 24 20 2 5

Calendar YearTons/year of NOx

Baseline

Controlled

Statewide, the baseline uncontrolled diesel PM emis sions from crew and supply vessels are estimated to be about 33 tpy in 2008, dropping to about 22 tpy in 2025. With the proposed amendments in place accelerating engine tu rnover, would reduce diesel PM emissions in 2025 from 22 tpy to less than 10 tpy.

Figure 4: Projected Crew and Cupply Vessel PM Emiss ion Reduction

Projected Crew and Supply Vessel PM Emission Reduct ion

0 5 10 15 20 25 30 35

2 0 08 2009 201

0 2011 201

2 2013 201

4
2 01 5 201 6
2 01 7 201 8
2 01 9
2 0 20
2 02 1 2 0 22
2 02 3
2 0 24 2025

Calendar YearTons/year of PM

Baseline

ControlledC – 10

BARGE AND DREDGE VESSEL EMISSIONS

Figure 5 shows that the projected statewide NOx emi ssions from barge and dredge

vessels in California are estimated to be about 760 tpy in 2008, dropping to about 340 tpy in 2025 without the proposed amendments. The re duction in uncontrolled emissions over this period is due to the anticipated or plann ed replacement of older engines. With the proposed amendments in place, the NOx emissions would be further reduced from 340 tpy to about 255 tpy in 2025.

Figure 5: Projected Barges and Dredges NOx emission reduction

Projected Barge and Dredge NOx Emission Reduction

0 100 200 300 400 500 600 700 800

2 008 2009 2010
2 011 2012 2013
2 014
2 015 2016 2017
2 018
2 019 2020 20 21 20 22 2023 2024 20 25

Calendar YearTons/year of NOx

Baseline

ControlledC – 11

Figure 6 illustrates the statewide barge and dredge vessel engine diesel PM emissions with and without the proposed amendments. Statewid e, the baseline uncontrolled diesel PM emissions from barges and dredges are est imated to be about 33 tpy in 2008, dropping to about 12 tpy in 2025. With the p roposed amendments in place accelerating engine turnover, diesel PM emissions w ould be reduced in 2025 from 12 tpy to less than 7 tpy.

Figure 6: Projected Barges and Dredges PM emission reduction

Projected Barge and Dredge PM Emission Reduction

0 5 10 15 20 25 30 35 40

2 0 08 2009 201

0 2011 201

2 2013 201

4
2 01 5 201 6
2 01 7 201 8
2 01 9
2 0 20
2 02 1 2 0 22
2 02 3
2 0 24 2025

Calendar YearTons/year of PM

Baseline

Controlled

Table 5 shows emissions from barge and dredge vesse ls by air district. The Bay Area AQMD and the San Diego County APCD account for more than 50 percent of the statewide emissions from barge and dredge vessels.

Table 5: Barge and Dredge Emission Estimates by Air Districts for Year 2008 (tons/year)

Air District NOx % of Total PM % of Total

BA 206.5 27% 9.2 27%

IMP 6.8 1% 0.3 1%

MBU 28.8 4% 1.3 4%

NCU 62.9 8% 2.8 8%

SAC 10.3 1% 0.5 1%

SB 10.3 1% 0.5 1%

SC 129.9 17% 5.8 17%

SD 180.2 24% 8.0 24%

SJU 23.2 3% 1.0 3%

VEN 92.9 12% 4.1 12%

YS 7.7 1% 0.3 1%

Total 759.6 100% 33.4 100%(this page left intentionally blank)

### Appendix D

Methodology of Estimating Economic Impacts(this page left intentionally blank)D – 1 

### Appendix D

ECONOMIC IMPACTS METHODOLOGY

This chapter discusses the estimated costs and econ omic impacts associated with implementation of the proposed amendments to the Co mmercial Harbor Craft Regulation (CHC Regulation). The expected capital and recurring costs for potential compliance options, the cost and associated economi c impacts on businesses, as well as an analysis of the cost-effectiveness of propose d CHC amendments to the regulation are presented. ARB staff calculated the economic i mpacts associated with the proposed amended CHC regulation using the same meth odology as was done for the 2007 CHC regulation. Generally, costs discussed in this section are presented in 2009 dollars, but the tables also contain the values adj usted for net present value (NPV) to estimate “today’s dollars” of future net cash. The equations and calculation method can be found in the Air Resources Board, Technical Supp ort Document: Proposed Regulation for Commercial Harbor Craft, September 2 007.

A. Summary of the Economic Impacts

In assessing the costs associated with the proposed amendments to the CHC Regulation, ARB staff developed two different estimates, one for “r egulatory costs” and another for “new equipment costs.” Regulatory cost s are the estimated costs resulting from the proposed amendments taking into considerat ion the residual value of the in-use engine being replaced, the residual value of the most recent engine rebuild work, recordkeeping and reporting costs, and the time val ue of money associated with the early engine replacement. New equipment costs are the estimated total out-of-pocket costs for purchasing and installing a new engine (e ngine replacement cost) in crew and supply, barge, and dredge vessels. The new equipme nt costs for purchasing and installing a new engine are costs that the vessel o wner would eventually pay, but the proposed amendments to the CHC regulation requires this service to be performed

earlier than normal.

Staff estimates the lifetime regulatory cost for co mpliance with the proposed amendments to the regulation to be approximately $1 5 million (2009 dollars or adjusted to $9.9 million NPV) from 2011 through 2022. New e quipment costs are estimated at approximately $46 million dollars (2009 dollars or adjusted to $31 million NPV) over the lifetime of the proposed amendments (2011 to 2022).

Staff evaluated the economic impacts the proposed a mendments had on crew and supply, barge and dredge businesses by estimating t he effect of the regulatory cost on typical business’s “return on owner’s equity” (ROE) . The ROE approach, found that the overall change in ROE would range from a negligible decline of about 0.45 percent for a typical barge and dredge company, to a decline of 1 .44 percent for a crew and supply company. Overall, most affected businesses will be able to absorb the costs of the proposed amendments to the CHC regulation with no s ignificant adverse impacts onD – 2

their profitability. Generally, the ARB considers a 10 percent change in ROE to be the threshold at which businesses experience a signific ant adverse impact.

A few federal, State, and local agencies will be im pacted by the proposed amendments to the CHC regulation. One federal agency, U.S. Ar my Corps of Engineers, one state agency, State of California – the Department of Par ks and Recreation, and two local agencies (Monterey Regional Water Pollution Control Agency (RWPCA) and Santa Cruz Port District) would be impacted by the in-use engine requirements. Estimated regulatory costs to all of these agencies range fro m $1,900 to $60,000. Additional details are presented in Table D-13.

Cost-effectiveness is expressed in terms of costs i n dollars per unit of emissions reduced (pounds or tons). Low cost-effectiveness r esults from efficient regulation reductions. The cost-effectiveness for the propose d amendments to the CHC regulation is determined by dividing the regulatory costs by t he total pounds of diesel PM reduced during the years 2011 to 2022. Costs are presented in 2009 equivalent expenditure dollars and also shown adjusted for net present val ue. Table D-1 shows the cost-effectiveness estimate for the proposed amendm ents expressed three ways. First, all costs assigned to PM, second, cost divided equa lly between PM and NOx, and third,

PM and NOx emissions are combined. The cost-effect iveness values are within the range of cost effectiveness for other diesel engine regulations adopted by the ARB. See Table D-19 for other ARB regulation cost-effect iveness totals.

Table D-1: Summary of Average Amended Proposed Reg ulation

Cost-Effectiveness for the Period 2011-2022

Total Regulatory Cost Total

Emissions Total Cost

Effectiveness

Emissions 2009 Dollars

($ millions) NPV

($ millions) Total

Emissions

Reduced 2009

Dollars NPV

All costs assigned to PM

PM $15 $9.9 435,000 lbs $35/lb $23/lb

Divide Costs Equally Between PM and NOx

PM $7.5 $5.0 435,000 lbs $17/lb $11/lb

NOx $7.5 $5.0 2,800 tons $2,690/ton $1,780/ton

Combine PM and NOx Emissions

PM + NOx $15 $9.9 6,030,000 lbs $2.50/lb $1.65/lb

All values roundedD – 3

B. Legal Requirements

In this section we explain the legal requirements t hat must be satisfied in analyzing the economic impacts of the proposed amendments to the CHC regulation.

Section 11346.3 of the Government Code requires Sta te agencies assess the potential for adverse economic impacts on California business enterprises and individuals when proposing to adopt or amend any administrative regu lation. The assessment shall include a consideration of the impact of the propos ed amended regulation on California jobs, business expansion, elimination or creation, and the ability of California business to compete with businesses in other states. Also, California state agencies are required to estimate the cost or savings to any State or loc al agency in accordance with instructions adopted by the Department of Finance ( DOF). The estimate shall include any non-discretionary cost or savings to local agen cies and the cost or savings in federal funding to the State.

In addition, Health and Safety Code section 57005 r equires the ARB to perform an economic impact analysis of submitted alternatives to a proposed regulation before adopting any major regulation. A major regulation is defined as a regulation that will have a potential cost to California business enterp rises in an amount exceeding ten million dollars in any single year. Because the es timated cost of the amendments to the CHC Regulation does not exceed 10 million dollars i n any single year, the proposed amendments to the CHC Regulation do not constitute a major regulation. However, two

alternatives were considered.

The following is a description of the methodology u sed to estimate costs as well as ARB staff’s analysis of the economic impacts on Califor nia businesses, as well as, federal, State, and local agencies.

C. Methodology for Estimating Costs Associated wi th Proposed Regulation

In this section, the estimated costs associated wit h the proposed amendments are

discussed.

Briefly, the methodology entailed:

• Two different estimates of costs were developed, r egulatory costs and new equipment costs. - The regulatory costs are the estimated costs resu lting from the proposed amendments taking into consideration the residual v alue of the in-use engine being replaced, the residual value of the mo st recent engine rebuild work, recordkeeping and reporting costs, an d the time value of money associated with the early engine replacement. - New equipment costs are the estimated total out-o f-pocket costs for purchasing and installing a new engine (engine repl acement cost), and recordkeeping and reporting costs. The portion of new equipment out-of-pocket costs for purchasing and installing a new engine are costsD – 4 that the vessel owner would eventually pay, but the proposed amendments require this service to be performed ear lier than normal.

• Engine replacement (repowering) was the assumed in -use engine compliance option.

• Operating and maintenance costs for replacement en gines were assumed to be the same as for an existing engine.

• No new reporting costs are involved. No additiona l reporting costs included pertaining to the amended proposed CHC regulation. The owners of the effected vessel engines are currently required to report to the CHC regulation, the PERP,

or districts.

• Costs were estimated in 2009 dollars and also adju sted to NPV using a 5 percent

discount rate.

1. Costs

a. Engine Replacement (Repower) Costs:

The estimated costs for purchasing and installing a new diesel-fueled engine in an inuse vessel were determined using actual cost data f rom the Port of Los Angeles Community Advisory Committee China Shipping Settlem ent Funding submittals and cost information provided by industry and vessel ow ners. Staff’s estimate of the average costs per engine horsepower for purchase an d installation of a new main and auxiliary diesel-fueled engine are shown in Table D -2. The marine auxiliary engines are typically smaller horsepower than the propulsion en gines, but the prices of some marine auxiliary engines are more expensive on a per horse power comparison. In addition, repowering auxiliary engines in crew and supply ves sels may be more difficult, requiring more installation time and costs compared to most b arge and dredge vessels. Thus, the average cost for crew and supply auxiliary engi ne is higher than propulsion engines and barge and dredge auxiliary engines.

Table D-2: Estimated Vessel Engine Replacement Cos ts

Average Cost ($/hp) A Engine Category Crew and Supply Barge and Dredge

Propulsion Engine $ 214 $ 270

Auxiliary Engine $ 508 $285

A Includes engine, labor, and ancillary equipment cos ts.D – 5

b. Early Replacement Costs

(i) Residual Value of Engine

Staff anticipates that most operators of crew and s upply, barge, and dredge vessels will comply with the proposed amendments by replacing ex isting engines with new engines. There will be situations where engines have to be r eplaced before the end of the engine’s useful service life. In these situations, the costs associated with the loss of the residual or remaining value of the engine being rep laced is assigned to this regulatory action. In situations where the engine is being re placed after the end of the useful service life, costs associated with the engine repl acement are not assigned to the regulation. (The equations and calculation method can be found in the Air Resources Board, Technical Support Document: Proposed Regulat ion for Commercial Harbor Craft, September 2007.) Table D-3 presents ARB estimates of the useful serv ice life and total life for main and auxiliary engine on crew and supply, barge, and dre dge vessels. (See Appendix C)

Table D-3: Estimated Useful Service and Total Life of Selected Vessel Engines

Vessel Engine Type Useful Service Life Total Life

Crew and Supply Main 28 56

Crew and Supply Auxiliary 28 56

Barge and Dredge Main 17 34

Barge and Dredge Auxiliary Varies depends on the ty pe Varies

(ii) Residual Value of Engine Rebuild Work

As with the previous section and discussion of the residual value of the engine, there is also a residual value to the most recent engine reb uilds or overhauls. The engine overhauls are categorized as either a “major” or “t op end” overhaul. The frequency of these overhauls can depend on the engine applicatio n and the amount of annual use. Engines used under high loads and long hours may ne ed to be overhauled more often. (See Air Resources Board, Technical Support Documen t: Proposed Regulation for Commercial Harbor Craft, September 2007 as referenc e for more details.)

c. Operation and Maintenance Costs – Replacement E ngines

Based on discussion with engine manufacturers, we d o not anticipate that there will be any change in the operating and maintenance costs f or new engines compared to the engines that are being replaced.D – 6

d. Monitoring, Recordkeeping, and Reporting Costs

The proposed amendments to the CHC regulation requi re no additional monitoring, reporting, and recordkeeping costs. Monitoring and reporting costs for crew and supply vessels were included in the 2007 CHC Regulation. Barge and dredge vessel owner/operators previously reported and kept record s as a requirement of the 2007 CHC regulation, the PERP, or local air district per mit requirements. Additional annual reporting is not required, however there are occasi ons specified in the proposed amendments when reporting would be required. These occasions include the purchase of a new engine or vessel, a change in engine or ve ssel ownership, a change in engine operating hours, submitting a compliance plan for e ngines subject to replacing the engine, and compliance demonstration.

2. Future Year Equipment Populations Subject to th e Proposed Amendments

Staff estimated the engine inventory for future yea rs to determine the number of in-use engines required to come into compliance in each ye ar. Staff used the vessel and engine inventory and emissions model to calculate e quipment growth, annual use, age distribution, and attrition for the vessel categori es. Future year equipment populations for each compliance year were evaluated by the inve ntory model to determine the number of engines to be replaced for each complianc e year.

Table D-4 presents the expected number of in-use cr ew and supply vessel engines per year required to comply with the requirements of th e amendments. The total estimated number of crew and supply vessel engines replaced i s expected to be 150 over the compliance years 2011 to 2022.

Table D-4: Estimated Population of In-Use Crew and Supply Vessel Engines Subject to Amendments to CHC Regulation Emission Li mits

Year Main Auxiliary Total

2011 21 12 33

2012 5 1 6

2013 3 0 3

2014 3 0 3

2015 6 4 10

2016 2 1 3

2017 14 0 14

2018 8 4 12

2019 9 5 14

2020 8 11 19

2021 3 5 8

2022 22 3 25

Total 104 46 150D – 7

Table D-5 presents the expected number of in-use ba rge and dredge vessel engines per year required to comply with the requirements o f the amendments. The estimated number of engines replaced is expected to be 129 ov er the compliance years 2011 to

2022.

Table D-5: Estimated Population on In-Use Barge and Dredge Vessel Engines

Subject to Amendments to CHC Regulation

Year Main Auxiliary Total

2011 0 5 5

2012 0 3 3

2013 0 7 7

2014 0 6 6

2015 0 5 5

2016 0 43 43

2017 1 44 45

2018 0 6 6

2019 0 4 4

2020 0 3 3

2021 0 1 1

2022 0 2 2

Total 1 128 129

D. Total Regulatory and New Equipment Costs

Table D-6 and Table D-7 provide the regulatory cost s attributed to the in-use engine requirements of the proposed amendments. The in-us e engine regulatory costs are derived from the residual value of the replaced eng ine, the residual value of the most recent overhaul, the time value of money for the ea rlier than anticipated repower cost, and the reporting cost. Reporting costs include th e cost of updating the initial information as engines are replaced. The in-use cr ew and supply vessel total regulatory costs for the amendments over the years 2011 to 202 2 are estimated to be about $9.5 million (2009 dollars). The in-use barge and dredge vessel total regulatory costs are estimated to be about $5.6 million (2009 dollar s). Values adjusted to NPV are also

shown in the Tables.D – 8

Table D-6: Estimated Regulatory Costs for Crew and Supply Vessel In-Use Engine Replacement

Regulatory Cost

Year Main

(2009 $) Main

(NPV) Auxiliary

(2009 $) Auxiliary

(NPV) Total

(2009 $) Total

(NPV)

2011 $671,000 $611,000 $179,000 $164,000 $850,000 $775,000

2012 $102,000 $89,000 $6,000 $6,000 $108,000 $95,000

2013 $246,000 $200,000 $0 $0 $246,000 $200,000

2014 $83,000 $65,000 $0 $0 $83,000 $65,000

2015 $922,000 $682,000 $159,000 $118,000 $1,081,000 $800,000

2016 $129,000 $91,000 $99,000 $69,000 $228,000 $160,000

2017 $858,000 $576,000 $0 $0 $858,000 $576,000

2018 $676,000 $432,000 $85,000 $55,000 $761,000 $487,000

2019 $1,258,000 $764,000 $238,000 $145,000 $1,496,000 $909,000

2020 $695,000 $403,000 $386,000 $224,000 $1,081,000 $627,000

2021 $278,000 $153,000 $194,000 $108,000 $472,000 $261,000

2022 $2,126,000 $1,117,000 $63,000 $33,000 $2,189,000 $1,150,000

Total $8,044,000 $5,183,000 $1,409,000 $922,000 $9,453,000 $6,105,000

All values rounded

Table D-7: Estimated Regulatory Costs for Barge an d Dredge Vessel In-Use Engine Replacement

Regulatory Cost

Year Main

(2009 $) Main

(NPV) Auxiliary

(2009 $) Auxiliary

(NPV) Total

(2009 $) Total

(NPV)

2011 $0 $0 $82,000 $75,000 $82,000 $75,000

2012 $6,000 $6,000 $64,000 $55,000 $70,000 $61,000

2013 $0 $0 $137,000 $113,000 $137,000 $113,000

2014 $0 $0 $344,000 $269,000 $344,000 $269,000

2015 $0 $0 $150,000 $112,000 $150,000 $112,000

2016 $0 $0 $1,958,000 $1,382,000 $1,958,000 $1,382,000

2017 $0 $0 $1,825,000 $1,224,000 $1,825,000 $1,224,000

2018 $0 $0 $173,000 $111,000 $173,000 $111,000

2019 $0 $0 $26,000 $16,000 $26,000 $16,000

2020 $0 $0 $304,000 $176,000 $304,000 $176,000

2021 $0 $0 $252,000 $138,000 $252,000 $138,000

2022 $0 $0 $283,000 $148,000 $283,000 $148,000

Total $6,000 $6,000 $5,598,000 $3,819,000 $5,604,000 $3,825,000

All values roundedD – 9

Table D-8 and Table D-9 provide summaries of the ne w equipment compliance costs for the replacement of in-use engines with new engines. The in-use engine new equipment costs are derived from the capital and installation repowers costs and the reporting cost. The new equipment costs for repowering an in-use en gine are costs that the vessel owner would eventually pay, but the proposed amendm ents requires this service to be performed earlier than normal. The initial reporti ng costs were not included in this analysis because those requirements are already in the CHC Regulation and not part of the proposed amendments. Subsequent year reporting costs include the cost of updating the initial information as engines are rep laced. The total in-use engine replacement new equipment costs associated with the amendments over the years 2011 to 2022 are estimated to be about $20 million for crew and supply vessel engines and $27 million for barge and dredge vessel engines

.

Table D-8: Estimated New Equipment Costs for In-Us e Crew and Supply Vessel Engine Replacement

New Equipment Costs

Year Main

(2009 $) Main

(NPV) Auxiliary

(2009 $) Auxiliary

(NPV) Total

(2009 $) Total

(NPV)

2011 $2,486,000 $2,213,000 $754,000 $671,000 $3,240,000 $2,884,000

2012 $367,000 $311,000 $61,000 $52,000 $428,000 $363,000

2013 $856,000 $691,000 $0 $0 $856,000 $691,000

2014 $201,000 $155,000 $0 $0 $201,000 $155,000

2015 $1,656,000 $1,212,000 $353,000 $259,000 $2,009,000 $1,471,000

2016 $202,000 $141,000 $393,000 $274,000 $595,000 $415,000

2017 $1,407,000 $935,000 $0 $0 $1,407,000 $935,000

2018 $1,218,000 $770,000 $83,000 $53,000 $1,301,000 $823,000

2019 $2,483,000 $1,496,000 $424,000 $256,000 $2,907,000 $1,752,000

2020 $1,281,000 $735,000 $614,000 $353,000 $1,895,000 $1,088,000

2021 $535,000 $292,000 $314,000 $172,000 $849,000 $464,000

2022 $4,051,000 $2,108,000 $64,000 $34,000 $4,115,000 $2,142,000

Total $16,743,000 $11,059,000 $3,060,000 $2,124,000 $19,803,000 $13,183,000D – 10

Table D-9: Estimated New Equipment Costs for In-Us e Barge and Dredge Vessel Engine Replacement

New Equipment Costs

Year Main

(2009 $) Main

(NPV) Auxiliary

(2009 $) Auxiliary

(NPV) Total

(2009 $) Total

(NPV)

2011 $0 $0 $418,000 $372,000 $418,000 $372,000

2012 $41,000 $35,000 $266,000 $226,000 $307,000 $261,000

2013 $0 $0 $926,000 $748,000 $926,000 $748,000

2014 $0 $0 $1,181,000 $908,000 $1,181,000 $908,000

2015 $0 $0 $603,000 $442,000 $603,000 $442,000

2016 $0 $0 $10,881,000 $7,586,000 $10,881,000 $7,586,000

2017 $55,000 $37,000 $7,892,000 $5,241,000 $7,947,000 $5,278,000

2018 $0 $0 $452,000 $286,000 $452,000 $286,000

2019 $0 $0 $104,000 $63,000 $104,000 $63,000

2020 $0 $0 $1,419,000 $813,000 $1,419,000 $813,000

2021 $0 $0 $999,000 $546,000 $999,000 $546,000

2022 $0 $0 $1,395,000 $726,000 $1,395,000 $726,000

Total $96,000 $72,000 $26,536,000 $17,957,000 $26,632,000 $18,029,000

E. Estimated Costs to Businesses

The costs and economic impacts on businesses are pr esented in this section. The overall impact on business competitiveness, employm ent, and other impacts on business are also presented.

1. Potential Business Impacts Based on Change to R eturn on Owners' Equity (ROE)

In this section, we analyze the estimated cost and potential impacts created by the proposed amendments to CHC Regulation on businesses in California. This analysis is based on a comparison of the ROE for affected busin esses before and after the inclusion of the regulatory costs. The analysis us ed publicly available information to assess the impacts on competitiveness, jobs, and bu siness expansion, elimination, or

creation. From the limited financial data staff ob tained on crew and supply, barge, and dredge owner/operators, approximately 56 percent of these companies would be

considered a small business.

Based on 2009 CHC Regulation initial reporting data , staff estimates that there are about 20 crew and supply vessel businesses. Based on the 2007 CHC regulation initi al reporting, air district permits, the PERP database, and the 2009 barge and dredge vessel survey about 25 barge and dredge vessel busi nesses that will be affected by the

amendments.D – 11

The ROE approach used in evaluating the potential e conomic impact of the proposed

amendments on California businesses is as follows:

(1) Affected businesses were identified from respon ses to the 2007 CHC Regulation initial reporting requirements, air district permit s, the PERP database, and 2009 barge and dredge vessel survey.

(2) The cost for compliance was estimated and avera ged over the years a particular company was affected.

(3) The total annual cost for each business was adj usted for both federal and state

taxes.

(4) These adjusted costs were subtracted from net p rofit data, either actual net profit from Dun and Bradstreet or industry averages applie d to the number of employees, and the results used to calculate the Re turn on Owners' Equity (ROE). The resulting ROE was then compared with th e ROE before the subtraction of the adjusted costs to determine the impact on the profitability of the

businesses.

Using Dun and Bradstreet financial data when data w ere available, staff calculated the ROEs, both before and after the subtraction of the adjusted annual costs, for the typical businesses from each industry category. These calc ulations were based on the following assumptions.

• All affected businesses are subject to federal and state tax rates of 35 percent and 9.3 percent, respectively.

• Affected businesses are neither able to increase t he prices of their services nor lower their costs of doing business through cost-cu tting measures.

These assumptions, though reasonable, might not be applicable to all affected

businesses.

As shown in Table D-10, the average ROE of the busi nesses in the categories listed changed by about 0.95 percent. The decline in prof itability was 1.44 percent for crew and supply vessels, and 0.45 percent for barge and dredge vessels. Generally, the ARB considers a 10 percent change in ROE to be the threshold at which businesses experience a significant adverse impact. These bus inesses, however, are unlikely to have to absorb the entire cost of this proposed ame nded regulation. To the extent that they are able to pass on the cost of the regulation , the impact on their profitability would be less than estimated here. Thus, staff expects m ost affected businesses to be able to absorb the cost of the regulation with no significa nt impact on their profitability.D – 12 Table D-10: Affected Businesses with Change in ROE

Category ROE % Change

Crew and Supply -1.44%

Barge and Dredge -0.45%

Average -0.95%

These businesses may be able to reduce the impact o f the proposed amendments on their businesses by taking advantage of available p ublic funding. The costs impacts presented here do not take into consideration the i mpact of incentive or grant funding. The Carl Moyer Program funding is a potential fundi ng source for companies that comply early or achieve emission reductions beyond the amendments. However, most barges and dredges are not self-propelled and would not be eligible for Moyer funding.

2. Potential Impact on Employment, Business Creati on, Elimination or Expansion

a. Potential Impact on Employment

The proposed amendments are not expected to cause a measurable change in California employment and payroll. The staff’s pro fitability analysis shows that the impact on business profitability is minor. The pro posed amendments, however, are likely to result in a small increase in employment in businesses that make, sell, install, maintain, and retrofit marine engines. Staff belie ves jobs will not be eliminated as a result of the amendments, but it may lead to the au gmentation or alteration of job duties, leading to a net expansion of boat building, repair , and yard businesses, resulting in an increase in the number of jobs.

b. Potential Impact on Business Creation, Eliminat ion or Expansion

The proposed amendments would have no measurable im pact on the status of California businesses. This is because the regulat ion costs are not expected to impose a significant impact on the profitability of busine sses in California. However, some small businesses with little or no margin of profitabilit y may lack the financial resources to comply in a timely manner. These businesses may be able to take advantage of available public funding such as the Carl Moyer pro gram or Proposition 1B funds to lessen the economic impact of the proposed amendmen ts.

While some individual businesses may be affected ad versely, the proposed amendments may provide some business opportunities for existing California

businesses or result in the creation of new busines ses or expansion of current businesses. California businesses that make, insta ll, retrofit, and maintain marine engines may benefit from increased crew and supply, barge, and dredge businesses spending on compliance.D – 13

c. Potential Impact on Business Competitiveness

The proposed amendments would have no significant i mpact on the ability of California businesses to compete with businesses in other stat es. Non-California vessels operating in California will be required to meet th e same regulatory requirements as

California-based vessels.

3. Estimated Regulatory Cost for Small and Typical Business

About 60 percent of the companies that own crew and supply vessels are considered small businesses, having less than 100 employees. Approximately 50 percent of the companies operating barge and dredge vessels are co nsidered to be typical businesses, having more than 100 employees. The es timated regulatory cost for small and typical business is presented in Table D-11 and Table D-12. The estimated regulatory cost for a small business ranges from $1 8,000 to $629,000 for crew and supply business and from $14,000 to $84,000 for bar ge and dredge business. The estimated regulatory cost for a typical business ra nges from $5,000 to $537,000 for crew and supply business and from $27,000 to $584,0 00 for barge and dredge

business. Table D- 11: Estimated Regulatory Cost for Crew and Supply Small and Typical Business (adjusted to 2009 NPV)

All values rounded Cost to Small Business Cost to Typical Business

Year Total Cost No. of Small

Business Average

Cost Total Cost No. of Typical

Business Average Cost

2011 $629,000 1 $629,000 $142,000 3 $47,000

2012 $84,000 2 $42,000 $10,000 2 $5,000

2013 $40,000 1 $40,000 $160,000 1 $160,000

2014 $18,000 1 $18,000 $0 0 $0

2015 $30,000 1 $30,000 $768,000 2 $384,000

2016 $91,000 1 $91,000 $69,000 1 $69,000

2017 $338,000 3 $113,000 $236,000 1 $236,000

2018 $485,000 2 $243,000 $0 0 $0

2019 $370,000 4 $93,000 $537,000 1 $537,000

2020 $625,000 3 $208,000 $0 0 $0

2021 $260,000 3 $87,000 $0 0 $0

2022 $1,136,000 4 $284,000 $11,000 1 $11,000D – 14

Table D-12: Estimated Regulatory Cost for Barge and Dredge Small and Typical Business (adjusted to 2009 NPV)

Cost to Small Business Cost to Typical Business

Year Total Cost No. of Small

Business Average

Cost Total Cost No. of Typical

Business Average Cost

2011 $15,000 1 $15,000 $59,000 1 $59,000

2012 $0 0 $0 $55,000 2 $28,000

2013 $0 0 $0 $108,000 4 $27,000

2014 $169,000 2 $84,000 $100,000 2 $50,000

2015 $0 0 $0 $112,000 4 $28,000

2016 $269,000 10 $27,000 $1,049,000 8 $131,000

2017 $42,000 3 $14,000 $1,167,000 2 $584,000

2018 $70,000 1 $70,000 $40,000 1 $40,000

2019 $16,000 1 $16,000 $0 0 $0

2020 $0 0 $0 $176,000 1 $176,000

2021 $0 0 $0 $138,000 1 $138,000

2022 $0 0 $0 $148,000 1 $148,000

All values rounded

F. Potential Costs to Local, State, and Federal Age ncies

The proposed amendments directly affect a few local , State and Federal agencies. Those public agencies will have an insignificant co st impact to comply with the proposed amendments. The calculated costs are show n in Table D-13. The estimated regulatory costs range from $1,900 to $60,000 (2009 dollars). The estimated new equipment costs range from $24,700 to $393,000 (200 9 dollars). These costs will be incurred between 2014 and 2016, because the owners and operators of these engines would not have to comply in the first compliance ye ars because of the original engine model year. Staff estimated the amendments would h ave no significant impact on these public agencies.

Table D-13: Costs to Local, State, and Federal Age ncies

Area Agency Compliance

Year Regulatory

Costs Regulatory

Costs (2009 NPV) New

Equipment

Costs New

Equipment

Costs (2009 NPV)
Monterey RWPCA 2016 $1,900 $1,300 $24,700 $17,000

Santa Cruz Port District 2016 $44,800 $31,600 $393,000 $274,000 Local

Total $46,700 $32,900 $417,700 $291,000

Federal U.S. Army Corps of

Engineers 2012 & 2013 $9,100 $7,800 $302,000 $246,000

State State of California - Parks 2014 $60,000 $47,000 $143,000 $110,000

All values roundedD – 15

G. Cost-Effectiveness

In this section, the cost-effectiveness of the prop osed amendments to the CHC regulation is estimated. Cost-effectiveness is exp ressed in terms of control costs (dollars) per unit of air emissions reduced (tons o r pounds). As described below, for example, the cost-effectiveness for the proposed am endments is determined by dividing the total cost of the proposed amendments by the to tal pounds of diesel PM emissions reduced during the years 2011 to 2022. All costs a re in 2009 equivalent expenditure dollars. The net present value estimates “today’s dollars” of future net cash are also presented.

1. Expected Emission Reductions

Staff estimated the projected total emission reduct ions under the proposed amendments using the statewide harbor craft invento ry. The following Table D-14 and Table D-15 provide a summary of the annual statewid e diesel PM and NOx reductions

that will result from the amendments. The amendmen ts are expected to reduce almost 293,000 pounds of diesel PM and 1,622 tons of NOx b y 2022 for crew and supply vessels, 142,000 pounds of diesel PM and 1,175 tons of NOx for barge and dredge

vessels.

Table D-14: Statewide Diesel PM and NOx Annual Emi ssion Reductions from

2011 to 2022 for Crew and Supply Vessels

PM Reduction (pounds/year) NOx Reduction (tons/year)

Year Main Aux Total Main Aux Total

2011 15,999 1,471 17,470 119 13 132

2012 15,370 1,381 16,751 114 12 126

2013 18,657 1,284 19,941 115 11 126

2014 17,433 1,198 18,631 106 11 117

2015 23,207 1,485 24,692 122 13 135

2016 22,247 1,515 23,762 113 13 126

2017 22,852 1,426 24,278 114 12 126

2018 24,010 1,369 25,379 119 12 131

2019 28,502 1,395 29,897 143 11 154

2020 29,036 1,440 30,476 141 11 152

2021 29,161 1,455 30,616 137 10 147

2022 29,429 1,388 30,817 140 10 150

Total 275,903 16,807 292,710 1,483 139 1,622

Values are rounded.D – 16

Table D-15: Statewide Diesel PM and NOx Annual Emi ssion Reductions from

2011 to 2022 for Barge and Dredge Vessels

PM Reduction (pounds/year) NOx Reduction (tons/year)

Year Main Aux Total Main Aux Total

2011 0 336 336 0 3 3

2012 132 430 562 1 4 5

2013 0 2,753 2,753 0 23 23

2014 0 1,771 1,771 0 15 15

2015 0 2,454 2,454 0 21 21

2016 0 18,217 18,217 0 149 149

2017 85 22,246 22,331 1 184 185

2018 47 20,760 20,807 0 171 171

2019 39 19,573 19,612 0 160 160

2020 34 20,865 20,899 0 169 169

2021 31 17,123 17,154 0 141 141

2022 29 15,437 15,466 0 133 133

Total 397 141,965 142,362 2 1,173 1,175

Values are rounded.

2. Cost-Effectiveness

To determine the cost-effectiveness of the amendmen ts, we divided the sum of the annual regulatory costs (2011 to 2022) for the amen dments by the diesel PM emission reductions over the same time period attributable t o the amendments. The regulatory costs include the remaining value of the engine bei ng replaced (engine, supporting equipment, and installation labor), the residual va lue of the most recent maintenance, and recordkeeping and reporting costs. The estimat ed overall cost-effectiveness (total PM reduced divided by total regulatory costs) is $3 2 per pound of diesel PM reduced for crew and supply vessels and $39 per pound of diesel PM reduced for barge and dredge vessels, if all the costs of compliance are allocat ed to diesel PM reduction, or $35 per pound of diesel PM reduced for both vessel categori es.

Since the amendments will also result in reductions in oxides of nitrogen (NOx) emissions, staff conducted a second cost-effectiven ess analysis in which half of the cost of compliance was allocated to PM benefits and half the cost was allocated to NOx

benefits. This results in cost-effectiveness value s of $16/lb for diesel PM and $2,915/ton for NOx for crew and supply vessels, $20 /lb for diesel PM and $2,384/ton for NOx for barges and dredges, or $17.30 for diesel PM and $2,600/ton for NOx both vessel categories

A third method to express cost effectiveness is to use the sum of the combined PM and NOx reductions (approximately 3.5 million pounds fo r crew and supply vessels, 2.5 million pounds for barge and dredge vessels). Usin g this approach, the resulting cost effectiveness for the proposed amendments is about $2.70 per pound of PM and NOx reduced for crew and supply vessels, $2.25 per poun d of PM and NOx reduced forD – 17

barge and dredge vessels, or $2.50 per pound of PM and NOx for both vessel categories (2009 dollars). These cost-effectivenes s values are presented in 2009 expenditure dollars and adjusted for NPV in Table D -16, Table D-17, and Table D-18

below.

Table D-16: Summary of Average Cost Effectiveness for Crew and Supply

Vessels for the period 2011 to 2022

Emissions Total

Emissions

Reduced

2011-2022 Total

Regulatory

Cost 2011-2022 Total CostEffectiveness Total

Regulatory

Cost 2011-2022 (2009 NPV) Total CostEffectiveness (2009 NPV)

All costs assigned to PM

PM 293,000 lbs $9,453,000 $32/lb $6,105,000 $21/lb
Divide Costs Equally Between PM and NOx

PM 293,000 lbs $4,726,000 $16/lb $3,053,000 $10/lb

NOx 1,600 tons $4,726,000 $2,915/ton $3,053,000 $1,88 2/ton

Combine PM and NOx Emissions

PM + NOx 3,536,000 lbs $9,453,000 $2.70/lb $6,105,000 $1.7 0/lb

All values rounded

Table D-17: Summary of the Average Cost Effectiven ess for Barge and Dredge

Vessels for the Period 2011 – 2022

Emissions Total

Emissions

Reduced

2011-2022 Total

Regulatory

Cost 2011-2022 Total CostEffectiveness Total

Regulatory

Cost 2011-2022 (2009 NPV) Total CostEffectiveness (2009 NPV)

All costs assigned to PM

PM 142,000 lbs $5,604,000 $39/lb $3,825,000 $27/lb
Divide Costs Equally Between PM and NOx

PM 142,000 lbs $2,802,000 $20/lb $1,913,000 $13/lb

NOx 1,200 tons $2,802,000 $2,384/ton $1,913,000 $1,62 8/ton

Combine PM and NOx Emissions

PM + NOx 2,493,000 lbs $5,604,000 $2.25/lb $3,825,000 $1.5 0/lb

All values roundedD – 18

Table D-18: Summary of Average Amended Proposed Re gulation

Cost-Effectiveness for the Period 2011-2022

Total Regulatory Cost Total

Emissions Total Cost

Effectiveness

Emissions 2009 Dollars

($ millions) NPV

($ millions) Total

Emissions

Reduced 2009

Dollars NPV

All costs assigned to PM

PM $15 $9.9 435,000 lbs $35/lb $23/lb

Divide Costs Equally Between PM and NOx

PM $7.5 $5.0 435,000 lbs $17/lb $11/lb

NOx $7.5 $5.0 2,800 tons $2,690/ton $1,780/ton

Combine PM and NOx Emissions

PM + NOx $15 $9.9 6,030,000 lbs $2.50/lb $1.65/lb

All values rounded

As shown Table D-19, the cost-effectiveness of the proposed amendments is in the range of other regulations recently adopted by the ARB. For example, the diesel PM

cost-effectiveness of the solid waste collection ve hicle rule was estimated at $28 per pound, excluding the benefits of NOx and hydrocarbo n reductions (ARB, 2003a). The cost-effectiveness of the stationary diesel engine airborne toxic control measure (ATCM) was estimated to range from $4 to $26 per po und of diesel PM reduced (ARB,2003b). Finally, the transport refrigeration unit ATCM was estimated to have a cost-effectiveness of $10 to $20 per pound of diese l PM reduced (ARB, 2003c).

Table D-19: Diesel PM Cost Effectiveness of the Pr oposal and Other Regulations/Measures (Attributes All Costs to Each Pollutant Individually)

Diesel PM Cost- Effectiveness Regulation or

Airborne Toxic Control Measure Dollars/ Pound PM

Commercial Harbor Craft (2007) $29
Commercial Harbor Craft (2010 amendments) $35*

In-Use Off-Road Diesel Vehicles $40
Cargo Handling Equipment Proposal $41

Solid Waste Collection Vehicle Rule $28
Stationary Diesel Engine ATCM $4 - $26
Transport Refrigeration Unit ATCM $10 - $20

*$23 for Net Present ValueD – 19

H. Availability of Incentive Funding

Incentive programs have the ability to achieve emis sions reductions early or beyond those required by regulations. California has one of the largest clean air incentive programs in the nation – the Carl Moyer Program – w ith up to $140 million available each year through State and local funds. This leve l of funding is far from sufficient to pay for all the reductions needed to provide clean air. Incentive programs, such as the Carl Moyer Program, fund the incremental cost of cl eaner-than-required engines, equipment, and other sources of pollution providing early or extra emission reductions. Carl Moyer Program emission reductions are credited in California’s State Implementation Plan and must be real, surplus to re gulatory requirements, quantifiable, and enforceable. To be eligible for Carl Moyer fun ds, marine vessels must be selfpropelled. Most barges and dredges would not be el igible because few have propulsion engines.

The Carl Moyer Program is implemented as a partners hip between ARB and the districts. ARB provides program oversight and mini mum program requirements and the districts select and fund projects. Statewide, the Carl Moyer Program has been oversubscribed every year, and this continues to be the case today. Eligible marine vessel projects compete with on-road, off-road, agr icultural pump, locomotive, and other projects for funding.

In November 2006, California voters approved $1 bil lion in incentive funding to reduce emissions from goods movement activities. Proposit ion 1B funds will also be available to eligible commercial harbor craft operators for r epowering engines, retrofitting vessels with hybrid systems, and replacing vessels with cle aner models. At the Board meeting held on March 25, 2010, the Proposed Update to the Proposition 1B Program

Guidelines

were approved, which included project options that would fund up to 80% of the cost for non-regulated vessels and up to 50% fo r the early compliance of regulated vessels. The Board will award the next Proposition 1B funding allocations to local agencies in June 2010 with additional funding to be made available as bond monies are received by ARB.

I. Analysis of Alternatives

In this section, the cost-effectiveness of the prop osed amendments is compared to two alternative control options. The first alternative would accelerate the barge and dredge compliance schedule but the crew and supply vessels would follow the proposed compliance schedule. The other alternative is to s low down the compliance timeline for both crew and supply vessels and barge dredge vesse ls. The first alternative would achieve greater emission reductions, but with highe r regulatory cost. The second alternative analyzed results in lower regulatory co st, but emissions are reduced less.

Alternative 1: Accelerate Barge and Dredge Vessels Compliance Schedule and Require the Crew and Supply Vessels to Follow the P roposed Compliance ScheduleD – 20

For Alternative 1, barge and dredge vessels through out the State would be subject to a 2011 to 2020 accelerated compliance schedule. Crew and supply vessels would still be subject to the 2011 to 2022 regular compliance sche dule. This alternative would speed up the engine replacements in the first five years. The engine replacement comparison

for both alternatives is shown in Table 20. The es timated new equipment cost of this alternative is $52 million which is about $6 millio n higher than the proposed amendments new equipment compliance cost, as shown in Table D-21, and the regulatory cost is $19 million which is about $4 mi llion higher than the proposed amendments regulatory cost, shown in Table D-22. T he total diesel PM emissions reduced with this alternative would be greater than with the proposed schedule, 82,000 pounds during the 12 years from 2011 to 2022 as sho wn in Table D-23. The total NOx reduction of this same time period would be 3,400 t ons which is about 600 tons greater than the proposed schedule. The resulting cost-eff ectiveness for this alternative is higher than the proposed schedule, $37 per pound of diesel PM reduced. The resulting cost effectiveness, dividing the cost equally betwe en diesel PM and NOx, would be $19 per pound of diesel PM reduced and $2,850 per ton o f NOx reduced. The cost effectiveness comparison is shown in Table D-24. T his alternative has greater emission reductions benefits but with higher regulatory cost

.

This alternative further increases the number of ve ssels complying early and restricts the amount of time and money from funding sources. Also, the additional early expenses for businesses reduce their ability to spr ead the compliance cost over the proposed time. Based on these reasons, staff does not recommend this alternative.

Table D-20: Statewide Annual In-Use Engine Replace ments

Number of Propulsion Engines Number of Auxiliary Engines

Year Reg Alt 1 Alt 2 Reg Alt 1 Alt 2

2011 21 22 10 17 47 2

2012 5 5 2 4 10 5

2013 3 3 10 7 62 8

2014 3 4 2 6 11 7

2015 6 6 2 8 39 1

2016 2 2 2 44 7 7

2017 15 14 7 44 5 3

2018 8 8 0 10 6 37

2019 9 9 4 10 6 43

2020 8 8 20 13 13 12

2021 3 3 17 6 5 19

2022 22 22 25 4 3 10

Total 105 106 101 173 214 154D – 21

Table D-21: Statewide Annual New Equipment Complia nce Costs for Crew and Supply Vessels and Barge and Dredge Vessel s

New Equipment Compliance Costs New Equipment Compliance Costs (2009 NPV)

Year Reg Alt 1 Alt 2 Reg Alt 1 Alt 2

2011 $3,657,000 $7,427,000 $1,152,000 $3,256,000 $6,612,000 $1,026,000

2012 $735,000 $951,000 $611,000 $624,000 $807,000 $518,000

2013 $1,782,000 $15,909,000 $2,229,000 $1,439,000 $12,839,000 $1,801,000

2014 $1,382,000 $2,989,000 $1,046,000 $1,063,000 $2,298,000 $804,000

2015 $2,612,000 $7,501,000 $929,000 $1,913,000 $5,492,000 $680,000

2016 $11,476,000 $1,058,000 $1,392,000 $8,001,000 $738,000 $971,000

2017 $9,354,000 $1,521,000 $2,409,000 $6,213,000 $1,011,000 $1,600,000

2018 $1,753,000 $2,721,000 $10,064,000 $1,109,000 $1,720,000 $6,364,000

2019 $3,011,000 $3,908,000 $7,792,000 $1,815,000 $2,355,000 $4,694,000

2020 $3,314,000 $3,291,000 $3,062,000 $1,901,000 $1,888,000 $1,758,000

2021 $1,848,000 $849,000 $7,250,000 $1,010,000 $464,000 $3,962,000

2022 $5,510,000 $4,115,000 $6,362,000 $2,868,000 $2,142,000 $3,312,000

Total $46,437,000 $52,240,000 $44,298,000 $31,212,000 $38,366,000 $27,490,000

Values are rounded

Table D-22: Statewide Annual Regulatory Costs for Crew and Supply Vessels and Barge and Dredge Vessel s

Regulatory Cost Regulatory Cost (2009 NPV)

Year Reg Alt 1 Alt 2 Reg Alt 1 Alt 2

2011 $932,000 $1,852,000 $410,000 $850,000 $1,684,000 $373,000

2012 $178,000 $466,000 $65,000 $156,000 $403,000 $56,000

2013 $383,000 $4,621,000 $446,000 $313,000 $3,776,000 $368,000

2014 $427,000 $1,331,000 $210,000 $334,000 $1,031,000 $166,000

2015 $1,231,000 $2,790,000 $236,000 $912,000 $2,066,000 $174,000

2016 $2,186,000 $388,000 $262,000 $1,542,000 $273,000 $188,000

2017 $2,683,000 $964,000 $648,000 $1,800,000 $648,000 $432,000

2018 $934,000 $1,136,000 $2,132,000 $598,000 $726,000 $1,369,000

2019 $1,521,000 $1,749,000 $2,113,000 $925,000 $1,063,000 $1,291,000

2020 $1,385,000 $1,441,000 $1,330,000 $803,000 $835,000 $772,000

2021 $725,000 $473,000 $3,316,000 $399,000 $261,000 $1,833,000

2022 $2,472,000 $2,189,000 $2,973,000 $1,298,000 $1,150,000 $1,561,000

Total $15,057,000 $19,400,000 $14,141,000 $9,930,000 $13,916,000 $8,583,000

Values are roundedD – 22

Table D-23: Statewide Annual Diesel PM and NOx Emis sion Reductions

PM Reductions (pounds) NOx Reductions (tons)

Year Reg Alt 1 Alt 2 Reg Alt 1 Alt 2

2011 17,806 25,552 7,517 135 202 56

2012 17,314 23,051 7,689 132 182 58

2013 22,694 46,574 17,238 149 337 130

2014 20,401 43,420 16,734 131 309 126

2015 27,145 51,578 19,771 156 348 126

2016 41,978 46,068 19,242 275 302 123

2017 46,609 44,695 25,831 311 285 144

2018 46,186 46,781 38,354 301 297 242

2019 49,509 50,293 40,934 314 315 264

2020 51,375 49,714 42,544 321 309 267

2021 47,771 45,730 48,103 288 269 297

2022 46,282 43,544 47,957 282 252 295

Total 435,071 516,999 331,913 2,796 3,409 2,128

Table D-24: Summary of Average Cost-Effectiveness f or the Period 2011- 2022

Proposed Regulation Regulation Alternative 1 Regulation Alternative 2

Emissions Cost in 2009

Dollars Cost in

NPV Cost in 2009

Dollars Cost in

NPV Cost in 2009

Dollars Cost in

NPV
All costs assigned to PM PM ($/lb) 35 23 38 27 43 26 Divide Costs Equally Between PM and NOx PM ($/lb) 17 11 19 14 21 13 NOx ($/ton) 2,690 1,780 2,850 2,040 3,320 2,020

Combine PM and NOx Emissions PM + NOx ($/lb) 2.50 1.65 2.65 1.90 3.00 1.90

Values are rounded

Alternative 2: Decelerate the compliance schedule for both crew and supply vessels and barge and dredge vessels

For Alternative 2, the compliance schedule for both crew supply vessels and barge dredge vessels would be decelerated. This would re sult in many engines being replaced later than the proposed amendments complia nce schedule. Both the estimated new equipment cost and regulatory cost of this alternative are lower than the proposed amendments. As shown in Table D-21, the e stimated new equipment compliance cost for this alternative is $44 million which is about $2 million lower than the proposed amendments compliance schedule. As sh own in Table D-22, the estimated regulatory cost for this alternative is $ 14 million which is about $1 million lower than the proposed amendments compliance sched ule. The diesel PM and NOx reductions associated with this alternative, as sho wn in Table D-23, would be about 332,000 pounds PM and 2,128 tons of NOx. This alte rnative has significantly lessD – 23

emission reductions benefit with a slightly less re gulatory cost compared to the proposed amendments compliance schedule. The cost- effectiveness for this alternative is a significantly higher than the proposed amendme nts at $43 per pound of diesel PM
reduced, as shown above in Table D-24.

This alternative would slow down engine replacement s resulting in higher diesel PM and NOx emissions. The engine replacement comparison f or both alternatives is shown in

Table D-20. This alternative was not selected as it is not as cost-effective nor beneficial for air quality and public health as the proposed amendments.D – 24

REFERENCES:

(ARB, 2003a) Air Resources Board, Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Proposed Diesel Particulate Ma tter Control Measure for OnRoad Heavy-Duty Residential and Commercial Solid Wa ste Collection Vehicles , June,

2003.

(ARB, 2003b) Air Resources Board, Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Airborne Toxic Control Measurefor Stationary CompressionIgnition Engines , September, 2003.

(ARB, 2003c) Air Resources Board, Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Airborne Toxic Control Measure for In-Use Diesel-Fueled Transport Refrigeration Units (TRU) and TRU Generat or Sets, and Facilities Where TRUs Operate , October, 2003.