From: "Koshoua Thao" <koshoua.thao@valleyair.org>

To: Rynda Kay/R9/USEPA/US@EPA

Cc: Andrew Steckel/R9/USEPA/US@EPA, Charlotte Withey/R9/USEPA/US@EPA, "Samir

Sheikh" <Samir.Sheikh@valleyair.org>, "Errol Villegas" <errol.villegas@valleyair.org>,

"Jessi Fierro" <Jessica.Fierro@valleyair.org>

Date: Thursday, September 22, 2011 09:50AM

Subject: FW: Open Burning Rule 4103: Request for additional information

History: This message has been replied to and forwarded.

Hi Rynda,

We have included our responses below for your review. Please let me know if you have any

questions. 

Regards,

Koshoua

1) I understand that the district used the “percent of profits” test for assessing

economic feasibility under State law. Does the district believe this analysis also shows

that no other additional control measures are “reasonably available” under Section

172(c)(1) of the Clean Air Act? Were other economic indicators also considered?

My understanding is that you calculated per-acre-cost for alternative / per-acre net

profit for each crop category. If this was more than 10%, then an alternative was

considered not feasible. It sounds like this is pretty standard for district rules now. Is

that right? Appendix G has some cost/ton of pollutant but this analysis was not used as

a determining factor. Was any other analysis considered as well?

The District conducted extensive research on technologically available alternatives to open

burning of several crop categories in the Valley, which can be found in Chapter 4. District staff

further conducted the economic feasibility analysis for crop categories that were determined to

have technologically feasible alternatives to open burning. As part of the District’s standard

method for analyzing the economic impact of proposed rule projects, District staff used the ten

percent change in Return on Sales to determine the significance level. As mentioned on page

1-5, the ten percent threshold was based on the parameters of accepted methodologies discussed

in a 1995 California Air Resources Board report. Although District staff presented the

cost-effectiveness analysis as part of the report, it is a separate standard analysis for a rule

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project that was not required as one of the determining criteria under State Law to extend the

burn prohibition schedule of specific crop categories.

2) Earthjustice noted that “the District calculated the cost of compliance ‘after tax’

without accounting for tax implications of increased control costs” and asserted that

“[t]his failure to adjust the cost estimates precludes any meaningful analysis of costs.”

Do you have any thoughts on this criticism?

In evaluating cost impacts associated with regulatory projects, District staff utilizes EPA and ARB

established methodologies. For this project, the primary costs associated with potential

alternatives to open burning result from service costs, such as through the hiring of chipping and

hauling services. The District does not expect tax implications associated with these non-capital

expenditures, if any, to impact the cost analyses associated with this project.

3) Earthjustice commented that, “the District uses a 10-year cost amortization schedule

without providing a rational basis for this term of years.” Earthjustice argued that this

assumption underestimates the lifespan of the vineyards and orchards and therefore

produces artificially high annual cost figures.

From our conversation, 10 years is a typical crop perspective. Some crops have a few

years in the beginning and decline at the end of their lifetime where they are not

profitable, so this 10 year profit lifetime is typical. Can you cite to a specific

record/analysis for this ?

New crops typically do not bear fruits in the first few years. For some crop categories, especially

orchards, it also takes a few additional years for the crops to reach full production. Productivity

also decline toward the end of the life of the crops. Appendix H provides discussions of when each

of the crops becomes productive. The study for oranges in Appendix H, for example, also states

that historical data shows that the trees begin to crowd at eight to nine years with tree removal

consideration warranted. Based on discussions with some growers, orchards are pulled out every

few years to keep the farm productive (see page 1-5). 

District staff presented the following information at the Senate Hearing on July 28, 2010

regarding the use of 10 years in the economic analysis:

1. This analysis does not assign a 10-year life span to any crop.

10-year analysis is used to standardize comparisons across various source categories

(Example: 10-year analysis is also used for boilers, engines, and other source categories

with real life spans in excess of 20-30 years).

2.

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3. The established 10% profit impact threshold is based on a standard 10-year period.

Standard 10-year analysis is used by Air Resources Board and California air districts for

evaluating air pollution control economics.

4.

SBX2 3 (Florez, 2009) prescribes use of 10-yr minimum project life for agricultural grant

projects.

5.

Farms can change owners and change crops fairly frequently: For farms, periods longer

than 10-years are speculative since farm viability is subject to global market forces,

weather, water availability, etc.

6.

Using longer periods for analysis introduces a large degree of inaccuracy and speculation. 

Especially true with global nature of agricultural economics.

7.

4) According to District staff, “the root removal process is independent from the

chipping and biomass operations.” Staff Report Appendix D at D-42. The District has

also noted that citrus is often grown in clay-like soil, which is difficult to separate from

the trees’ extensive root structures. Staff Report § 3.2.3.

From our conversation, root-systems have to be removed from above-soil components

as biomass operators often won’t take the root systems that are contaminated with soil.

These often have to be disposed of in landfill. Is this still the case? Can you cite to a

specific record/analysis for this?

Yes, the disposal of the roots to landfills is still the case because biomass power plant operators

will not accept any organic material with dirt or other unburnable contaminants. Composting was

used as the alternative method for the disposal of the roots, since this was the lowest, most

conservative cost estimate. The cost used for the analysis can be found in Appendix H for citrus. 

To further explain, when citrus orchards are scheduled to be removed, the process is generally

completed in two phases. As noted on page 3-10 of the report, citrus is often grown in clay-like

soil that adheres to its roots. The first process involves the pushing-over or removing of the tree

and allowing the trees to dry out (generally longer than the typical 6-8 weeks for other orchards)

before being processed/ground. The more common practice of pushing the trees over was faster,

but didn’t completely remove the dirt, rocks, and debris within the root system. Thus, the

historical reluctance for the biomass facilities to accept citrus material due to high contamination

of soil. According to growers, some chipping/grinding operators would not process the downed

trees because of the damage that could be caused by all the rocks/debris. Chipping/grinding

operators also mentioned that citrus material makes a different product when burned for fuel use

because it is stringy and ball up or doesn’t flow through the auger as easily at the biomass power

plants. As noted on page 7-37, citrus material is typically less desirable and if accepted, the

material would need to be mixed with other materials at the biomass power plants. 

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A newer, more costly and time intensive practice is to remove each tree individually to alleviate

the concerns regarding the debris within the root system. Once the citrus orchard was allowed to

dry long enough, the chipping/grinding process could begin and the material could then be sent to

the biomass facilities. However, the second phase (regardless of how the trees were removed)

would require workers/contractors to remove the dirty or contaminated roots and stumps from

the trees. The roots and stumps would then be delivered to a composting facility or landfill. If

this material would be sent to the biomass facilities, the roots would be required to dry (for

another few weeks), and then the contractor would have to bring back the chipper/grinder

equipment to grind the material. All of this additional processing would add costs to the project,

making it even more non-cost effective.

There is a large citrus grower in the Southern region that is able to take chipped materials to a

local biomass power plant by contracting the job out to one chipping/grinding operator. As a

result, the District’s burn permit program will no longer allow open burning of citrus orchard

removals when case-by-case analysis indicates sufficient biomass plant capacity and the

availability of economically feasible chipping services.

5) Earthjustice argued that the burn allowance for smaller walnut, almond, and pecan

growers “disregards any economic feasibility analysis.”

Our understanding is that the District found that the cost of shredding up to 20 acres at

once was not economically feasible and that shredding 20-plus acres was feasible only

when a custom shredder was available. As a result, the District adopted an automatic 20

acre allowance plus a discretionary allowance depending on contractor availability. Is

that right? Can you cite to a specific record/analysis for this?

The District’s analyses begin on page 3-32 of the report. Custom shredders charge a two hour

minimum fee to shred the tree nut prunings, which is equivalent to about 20 acres. The

minimum charge includes transporting the equipment to the farm, regardless of the amount of

material being chipped at the site. The District also conducted an economic analysis for this

category, which is presented on page 3-29 of the report.

From: Hudman.Rynda@epamail.epa.gov [mailto:Hudman.Rynda@epamail.epa.gov]

Sent: Wednesday, September 07, 2011 7:09 AM

To: Koshoua Thao

Cc: Steckel.Andrew@epamail.epa.gov; Withey.Charlotte@epamail.epa.gov

Subject: Open Burning Rule 4103: Request for additional information

Hi Koshoua,

Thanks so much for talking with me today. I am hoping to get some additional

information/clarification to help analyze comments on our proposed action on SJV’s open burning

https://r9mail1.r09.epa.gov/mail/rhudman.nsf/d381257093f29b5f882...

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rule 4103 (Earth Justice comment letter, received August 10, 2011, attached). We may add this

email correspondence to the administrative record for this action. 

1) I understand that the district used the “percent of profits” test for assessing economic

feasibility under State law. Does the district believe this analysis also shows that no other

additional control measures are “reasonably available” under Section 172(c)(1) of the Clean Air

Act? Were other economic indicators also considered?

My understanding is that you calculated per-acre-cost for alternative / per-acre net profit for each

crop category. If this was more than 10%, then an alternative was considered not feasible. It

sounds like this is pretty standard for district rules now. Is that right? Appendix G has some

cost/ton of pollutant but this analysis was not used as a determining factor. Was any other

analysis considered as well?

2) Earthjustice noted that “the District calculated the cost of compliance ‘after tax’ without

accounting for tax implications of increased control costs” and asserted that “[t]his failure to

adjust the cost estimates precludes any meaningful analysis of costs.”

Do you have any thoughts on this criticism?

3) Earthjustice commented that, “the District uses a 10-year cost amortization schedule without

providing a rational basis for this term of years.” Earthjustice argued that this assumption

underestimates the lifespan of the vineyards and orchards and therefore produces artificially high

annual cost figures.

From our conversation, 10 years is a typical crop perspective. Some crops have a few years in the

beginning and decline at the end of their lifetime where they are not profitable, so this 10 year

profit lifetime is typical. Can you cite to a specific record/analysis for this ?

4) According to District staff, “the root removal process is independent from the chipping and

biomass operations.” Staff Report Appendix D at D-42. The District has also noted that citrus is

often grown in clay-like soil, which is difficult to separate from the trees’ extensive root

structures. Staff Report § 3.2.3.

From our conversation, root-systems have to removed from above-soil components as biomass

operators often won’t take the root systems that are contaminated with soil. These often have to

be disposed of in landfill. Is this still the case? Can you cite to a specific record/analysis for this?

5) Earthjustice argued that the burn allowance for smaller walnut, almond, and pecan growers

“disregards any economic feasibility analysis.”

Our understanding is that the District found that the cost of shredding up to 20 acres at once was

not economically feasible and that shredding 20-plus acres was feasible only when a custom

shredder was available. As a result, the District adopted an automatic 20 acre allowance plus a

discretionary allowance depending on contractor availability. Is that right? Can you cite to a

specific record/analysis for this?

It was nice meeting you today, thanks again for your help!

Rynda

_____________________

Rynda Hudman Kay, Ph.D.

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Air Division, US EPA

75 Hawthorne St.

San Francisco, CA 94105

P: 415.947.4118 | F: 415.947.3579

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