Clarifications Regarding the 2004 Extreme Ozone Attainment Demonstration Plan July 21, 2008

Background On October 8, 2004 the Governing Board of the San Joaquin Valley Unified Air Pollution Control Distric t (District) adopted the 2004 Extreme Ozone Attainment Demonstration Plan ( EOADP ), which fulfilled the District’s plan commitment for the federal 1-hr ozone standard as outlined by the U.S. Environmental Protection Agency (EPA) in their final rule approvi ng the state of California’s request to classify the San Joaquin Valley Air Basin as extreme nonattainment for the federal 1-hr ozone standard (69 FR 20551). Submittal of this plan to EPA also fulfilled one of three options for fulf illing 1-hr ozone planning requirements as outlined by EPA in their Phase I Implement ation Rule for the federal 8-hr ozone standard [40 CFR 51.905(a)(1)]. On Oc tober 28, 2004, the California Air Resources Board (ARB) approved this plan and forwarded it to EPA by the November 15, 2004 deadline established by EPA (69 FR 20551). EPA found the transportation conformity budgets in the plan to be adequate on February 15, 2005 (70 FR 7734). The 2004 EOADP became complete by operation of law on May 15, 2005 (Section 110(k)(b) of the federal Clean Air Act).

On June 15, 2005, EPA’s revocation of the federal 1-hr ozone ambient air quality standard became effective (40 CFR 50.9( b)), as described in the Phase I Implementation Rule for 8-hr ozone (69 FR 23951). On December 22, 2006 the U.S. Court of Appeals for the District of Columbia Circuit vacated the entire Phase I Implementation Rule for 8-hr ozone, but later (June 8, 2007) let stand EPA’s revocation of the federal 1-hr ozone standard. In part because of uncertainties associated wit h litigation on the Phase I Implementation Rule for 8- hr ozone, and in part because of a collect ive focus on challenges associated with developing state implement ation plans (SIPs) for 8-hr ozone and PM2.5, EPA delayed its approval action on the 2004 EOADP . In early 2008, EPA resumed their review of the plan, which was intensified due to a lawsuit filed by the Association of Irritated Residents and the Natural Resources Defense Council [No. CV 08-0227-SC (N. D. Cal.)]. Th is lawsuit seeks to compel the EPA administrator to take action on three SIP revisions submitted to EPA by the State of California, one of which is the 2004 EOADP (73 FR 39288). EPA developed a proposed consent decree with the plaintiffs and agreed to fulfill its obligations under Section 110(k) of the f ederal Clean Air Act to act on the three California SIPs by mutually agreed upon deadlines. EPA has agreed to sign Federal Register notices for the proposed approval ac tions by October 15, 2008, and to sign Federal Register notices of final actions by January 15, 2009.

1After conducting a thorough review of the 2004 EOADP , EPA requested specific information, which if provided by ARB and the District, would facilitate their approval action on the 2004 EOADP . A June 6, 2008 letter from Deborah Jordan (Director of the Air Division for EPA’s Regi on 9) to Seyed Sadredin (Air Pollution Control Officer for the San Joaquin Valley Air Pollution Control District), outlines these information needs. Because many of the items requested by EPA are for recent and updated information not av ailable at the time the 2004 EOADP was developed, or reflect post-2004 changes in law, regulation or policy, ARB and the District largely view them as clarifications to the original plan, and do not consider them as SIP revisions. However, to accommodate EPA’s requests as outlined in the June 6, 2008 letter, the District is requesting that ARB transmit the clarifications to EPA, if accepted by the District Governing Board, for incorporation as par t of the SIP.

The clarifications consist of the following principal components:

• Withdrawal of the Reasonably Ava ilable Control Technology (RACT) portion of the plan (Section 4.2.5), which will be fulfilled when the District addresses the RACT requirements by enhancing the 8-hr ozone RACT SIP (40 CFR 51.912);

• Updated control measure calculati ons demonstrating actual emission reductions from adopted rules, which provide a surplus of emissions reductions that is more than suffici ent to fulfill the long-term measure commitment in the 2004 EOADP , thus eliminating the need for contingency measures to backstop the long-term measure commitment;

• Updated ROP calculations reflecting recent EPA policy decisions regarding emission reductions associated with pre-1990 motor vehicle emission standards; and

• Updated contingency measure discu ssion that reflects the excess reductions not needed to demonstrate ROP and excess reductions from the state’s motor vehicle emission c ontrol program. Additional reductions are also available from new control measures developed for the 2007 Ozone Plan (addressing the federal 8- hr ozone standard) and the 2008 PM2.5 Plan , that can be used for contingency measures for the 2004 EOADP ; upon adoption, these measures would provide reductions that were not used in ROP or attainment demonstration for 1-hr ozone and that would go into effect without further action by the District, ARB or EPA, therefore meeting the definit ion of contingency measures. In addition to the above items, EPA in July 2008 identified one additional clarification item requiring updating:

• Motor vehicle emission data showing downward trends for all years in the planning horizon covered by the 2004 EOADP , not just the ROP and attainment years.

The following paragraphs discuss each of these in more detail.

2Reasonably Available Control Technology (RACT)

The 2004 EOADP was intended to meet the RACT requirements as outlined in EPA’s final rule approving California’s request to reclassify the San Joaquin Valley Air Basin to extreme nonattainm ent for the federal 1-hr ozone standard (70 FR 20551-20552), as well as prior Federal Register rulemakings regarding severe nonattainment (67 FR 61784). In developing it s Phase 2 Implementation Rule for the federal 8-hr ozone standar d (published November 29, 2005 and effective January 30, 2006), EPA articulated new and more robust interpretations of RACT requirements first presented in the 1990 amendment s to the federal Clean Air Act. These interpretations in cluded development of a RACT SIP to be submitted to EPA by September 15, 2006. The District developed its RACT SIP in 2006 and the District Governing B oard adopted it on August 17, 2006 and transmitted it promptly to ARB for submittal to EPA. ARB submitted the adopted RACT SIP to EPA on January 31, 2007 as par t of a package of five California RACT SIPs. This RACT SIP reflected a major source cutoff of 25 tpy, which was the major source cutoff in effect for the SJVAB under state law (California Health and Safety Code 42504) at the time of RACT SIP development. The 2007 Ozone Plan prepared subsequent to the RACT SIP identified a need for future emission reductions to come from adv anced technology, thereby necessitating the reclassification of the SJVAB to ex treme nonattainment for 8-hr ozone, which has a major source cutoff of 10 tpy. Consequently, upon EPA issuance of a final rule approving the request to reclassify the SJVAB to extreme nonattainment for the federal 8-hr ozone standard, the District is required to revise the RACT SIP to reflect a major source cutoff of 10 tpy. In anticipation of this action, the District began work on revising the RACT SIP in the fall of 2007. In December 2007, the District issued a revised Draft RACT SIP reflecting the lower major source cutoff and also incorporating new Control Techni ques Guidelines (CTGs) issued by EPA. The District is now working with EPA to finalize this RACT SIP that will reflect extreme nonattainment for the f ederal 8-hr ozone st andard and will fulfill applicable CTG requirements.

Because EPA has stated that t he RACT discussion in the 2004 EOADP is not approvable under EPA’s post-2004 RACT impl ementation, the District is hereby formally withdrawing the RACT portion of the 2004 EOADP (Section 4.2.5) and will fill the resulting 1-hr ozone RACT gap with the revised 8-hr ozone RACT SIP now under development. EPA and the District agree that this approach is the best use of agency resources in fulfilling federal Clean Air Act requirements.

Rate of Progress (ROP) and Updated Emission Reductions The District has prepared and submitted to EPA all required federal 1-hr ozone Rate of Progress (ROP) documentati on. The District has adopted and implemented the control meas ure commitments in the 2004 EOADP (Table 4-1 of the 2004 EOADP ). Analysis of actual emi ssion reductions obtained during the rule development process shows that t he District was able to secure emission reductions greatly exceeding those predicted in the 2004 EOADP , even after

34 accounting for the different emission inventories used in plan development vs rule development. Table 1 shows the anal ysis of predicted vs. actual reductions for volatile organic compounds (VOC) and nitrogen oxides (NOx) emissions for each of the District cont rol measures in the 2004 EOADP . Results indicate that the rule development process

• Met the plan’s commitment for VOC reductions and obtained over 6 tpd of excess reductions above and beyond those predicted.

• Met the plan’s commitment for NO x reductions and obtained over 16 tpd of excess reductions above and beyond those predicted.Control Measure ID Pollutant Rule # Description Commitment (2010 - tpd) Achieved Emission Reductions (2010 - tpd) Local Adoption

C NOx 9310 Fleet rule - School buses 0.1 1.6 21-Sep-2006

D NOx 9510, 3180 Indirect Source Mitigation * 4.0 4.0 15-Dec-2005

E NOx 4307 Small Boilers (2 -5 MMBTU ) 1.0 5.1 20-Apr-2006

G NOx 4352 Solid fuel boilers 0.0 0.0 18-May-2006 H NOx 4702 Stat. IC engines 8.0 16.8 18-Jan-2007 I NOx 4309 Commercial Dryers 1.0 0.7 15-Dec-2005 N NOx New Water Heaters 0.075

- 0.2 0.8 20-Oct-2005 Q NOx 4103 Open Burnin g 1.1 1.7 17-Ma y -2007 S NOx 4703 Sta. Gas Turbines 0.6 1.9 17-Au g -2006 NOx totals 16.0 32.6

Control Measure ID Pollutant Rule # Description Commitment (2010 - tpd) Achieved Emission Reductions (2010 - tpd) Local Adoption

A VOC 4409 Oil & Gas Fu g . 4.7 5.1 20-Apr-2005 B VOC 4455 Ref. & Chem Fu g . 0.2 0.3 20-Apr-2005 F VOC 4694 Wineries 0.7 0.8 15-Dec-2005 J VOC 4565 Composting/Biosolids 0.1 0.3 15-Mar-2007
4602 Automotive Coating 21-Sep-2006

New 4612 (note: rule is also listed in M below for solvents only) 20-Sep-2007

L VOC 4570 CAFO Rule 15.8 17.7 15-Jun-2006

4662 Org. Solvent De g reasin g 4663 Org. Sol. Cleaning 4603 Metal Parts/Products
4604 Can and Coil Coating
4605 Aerospace Coatin g
4606 Wood Products Coatin g 4607 Graphic Arts 4612 Automotive Coatin g 4653 Adhesives

4684 Polyester Resin Operation

O VOC 4401 Steam-Enhanced Oilwell 1.4 0.3 14-Dec-2006

P VOC 4651 Soil Decontamination <0.05 0.0 20-Sep-2007
Q VOC 4103 Open Burning 2.9 3.9 17-May-2007
R VOC 4682 Polymeric Foam Mfg. 0.1 0.1 20-Sep-2007

T VOC 4621 & 4624 Gasoline storage + Trans. 0.9 1.9 20-Dec-2007

U VOC New Aviation Fuel Transf <0.05 V OC totals 28.2 34.5 Table 1

Status of Implementation: San Joaquin Valley Air Pollution Control District 2004 Extreme Ozone Attainment Plan "New Measure" Commitments

NOx Control Measures

VOC Control Measures

20-Sep-2007 1.0

M VOC 1.3 3.1 * The District staff tracks r eductions from ISR and reports them to the Governing Board on an annual basis. The 2007-2008 ISR annual report shows 5.7 tpd of NOx reductions for the year, which already exceeds the plan commitment of 4 tpd in 2010. District staff believes that it is on track to meet its 2010 reduction commitment. However, to be conservative, District staff estimates achievement of the 2010 commitment without additio nal surplus reductions from this rule.

K VOC 0.1

5ROP and Updated Pre-1990 Motor Vehicle Standards In Table 2, the District is providing an additio nal ROP analysis using U.S. EPA’s now-preferred methodology (related to pre-1990 adjus tments) that demonstr ates sufficient emissi on reductions to satisfy the ROP requirement, rely ing only on the emission control pr ogram as it existed when the Valley’s 2004 SIP was submitted, with at minimum three percent su rplus reductions to satisfy the contingency measure requirement. This additional ana lysis successfully demon strates that ROP is achieved and that sufficient surplus emission r eductions occur to satisfy the contingency measure requirements of the Act.

Table 2 San Joaquin Valley Rate of Progress (ROP) With California Pre-1990 Motor Vehicle Control Program Adjustments Using adopted measures only

(Summer Planning tons per day) 1990 2008 2010
Baseline ROG 633.2 369.4 362.7 California Pre-1990 Adjustment 0.0 120.1 123.8

RACT Corrections 0.0 0.0 0.0 Adjusted 1990 Baseline ROG in milestone year 633.2 513.1 509.4 ROP commitment for ROG reductions from new measures 0 0 0 Required % change since previous milestone year (ROG or NOx) compared to 1990 51% 6%
Required % change since 1990 (ROG or NOx) 51% 57% Target ROG levels 251.4 219.0 Apparent shortfall in ROG 118.0 143.7 Apparent shortfall in ROG, % 23.0% 28.2% ROG shortfall previously provided by NOx substitution, % 0 23.0%
Actual ROG shortfall, % 23.0% 5.2%

Baseline NOx 805.1 411.0 384.5 California Pre-1990 Adjustment 0.0 114.0 116.6 Adjusted 1990 Baseline NOx in milestone year 805.1 691.1 688.5 ROP commitment for NOx reductions from new measures 0 0 0 Change in NOx since 1990 280.1 304.0 Change in NOx since 1990, % 40.5% 44.2% NOx reductions since 1990 already used for ROP substitution and contingency through last milestone year, % 0.0% 26.0% NOx reductions since 1990 available for ROP substitution and contingency in this milestone year, % 40.5% 18.2%

Change in NOx since 1990 used for ROG substitution in this milestone year, % 23.0% 5.2%
Change in NOx since 1990 available for contingency in this milestone year, % 3.0% 3.0% Change in NOx since 1990 surplus after meeting substitution and contingency needs in this milestone year, % 14.5% 12.9%

ROP shortfall, if any 0.0% 0.0%

ROP Met? YES YES Contingency Met? YES YES

6Section 182(g) of the federal Clean Air Act requires nonatta inment areas to determine if they have achieved the emission reductions identified during previous three-year ROP intervals as being needed to meet the ROP milestones for the intervals in question. The District has complied with this requirement. Of princi pal interest to the 2004 EOADP are the ROP milestone years of 2002, 2005, 2008 and the attainment year of 2010. The District’s Section 182( g) report for the 2002 milestone year is presented in Se ction 7.6.2 of the 2004 EOADP , which shows that reductions achieved their targets. For the 2005 RO P milestone year, the District sent to EPA, through ARB, a milestone compliance demonstration report s howing that the District met it s 2005 ROP emission reduction targets. 1 The next required Section 182(g) milestone compliance demonstration report is for calendar year 2008 and is due to EPA by March 31, 2009.

Contingency Measures As noted above, contingency meas ure requirements refer to t hose needed for ROP and attainment milestones [Sections 127(c)(9) and 182(c)(9)] as well as the need for long-term measure contingencies [Section 182(e)(5)]. The ROP analysis submitted with this Clarification Package and discussed above shows that excess emission reduction s were available from adopted measures at the time of plan development to meet the ROP and attainment conti ngency requirements. In addition, the state’s motor vehicle emission control program provides excess reductions that can be used for attainment year contingencies (see next section).

The 2007 Ozone Plan and the 2008 PM2.5 Plan all contain control measur es that the District is committed to adopting and that were not used in dem onstrating ROP or attainment in the 2004 EOADP . For these reasons, the reductions from the post-2004 plans meet the definition for contingency measures, prov ided the timing of the 2007 Ozone Plan and 2008 PM2.5 Plan reductions is helpful for 1-hr ozone milestone s (i.e., the reductions occur in time to help me et 1-hr ozone milestones for ROP or attainment ). Inspection of Table 6-1 in the 2007 Ozone Plan shows that District control measures will ac hieve about 2.3 tpd of NOx reductions in 2008, and 4.4 tpd in 2011 (expressed as summer emissions). The 2008 reductions would represent contingency reductions for the 2008 ROP milestone, and later reductions thr ough 2011 would represent contingency reductions for attainment. Inspection of Table 6-3a in the 2008 PM2.5 Plan shows annual NOx reductions of about 2.4 tpd in 2009, 3.2 tpd in 2010, and 4.3 tpd in 2011. Because these PM2.5 Plan reductions are from the same control measures as those used from the 2007 Ozone Plan , the reductions are not cumulative. For the purposes of th is Clarification documentation, the PM2.5 Plan reductions will be used since they reflect a more up to date inventory. Thus the 2008 PM2.5 Plan provides attainment year contingency reductions of about 4.3 tpd of NOx. In regards to the need for contingency measures for long-term or advanced technology measures, District rulemakings reduce emissions to a sufficient level to fulfill the advanced technology or longterm contingency measure requirement. In other words, the District’ s adopted rules from the control measures in the 2004 EOADP exceed predictions of reductions by over 16 tpd of NOx and over 6 tpd of VOC; this excess more than covers the long-te rm measure reductions of 5 tpd of NOx and 5 tpd of VOC. Because these rules have been adopted locally and submitted by the State to U.S. EPA for inclusion into the SIP as required by section 182(e)(5), there is no need for additional contingency measures to satisfy the 182(e)(5) requirements. The specific requ irement for contingency measures

1 Letter from Scott Nester, Director of Planning to Catheri ne Witherspoon, Executive Officer, California Air Resources Board, March 30, 2006.

7to backstop the long-term measure co mmitments under Section 182(e)(5) of the federal Clean Air Act has been met because of the District adoption of rules that completely fulfill the long-term measure commitment.

Motor Vehicle Emission Trends Section 182(d)(1)(A) of t he federal Clean Air Act requi res nonattainment areas classified as severe or above to adopt and submit transportation control meas ures sufficient to offset any growth in emissions from growth in vehicle miles traveled or number of vehicle trips and to provide for ROP. EPA's interpretation of this provision allows areas to satisfy the requirement if they demonstrate that emissions from motor vehicles decline each y ear through the attainment year--see EPA's General Preamble for the Implementation of Title I of t he Clean Air Act Amendments of 1990, April 16, 1992 (57 FR 13522). While the 2004 EOADP shows a decline in motor vehi cle emissions from the base year through the attainment year (T able 3-1), it only does so for ROP years and the attainment year. Table 3 below presents data for the intervening y ears and further illustrates the downward trend in emissions. In addition, the table shows that exis ting motor vehicle emi ssions standards and normal fleet turnover combine to produce a significant surplus in emission reductions in 2011 beyond the levels assumed in the attainm ent demonstration (an additional 10 tpd of NOx and 5 tpd of VOC (ROG) from 2010 to 2011, as shown belo w in Table 3). As stated above, this reduction helps to fulfill the requirement for contingency meas ures for the attainment year.

Table 3

Baseline Motor Vehicle Emissions, 1 2000-2010 (San Joaquin Valley, Summer Pl anning, in tons per day)

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ROG 115 107 100 93 88 82 77 72 67 63 59 54 NOx 223 218 211 201 192 184 176 166 157 148 137 127

1 Emissions shown here are from the CCOS emission inventory, v2.11_RF932PEI. Table 3-1 in the 2004 EOADP presents output from that inventory for the year 2000 a nd the milestone years of 2008 and 2010. Emissions shown in this enclosure do not include reductions from new measure commitments in the 2004 EOADP

. Conclusions Much of the updated information gathered and developed for this Clarification package reflects the difficult work accomplished by the District and AR B in aggressively reducin g emissions of ozone precursors in the ti me frame since the 2004 EOADP was developed and adopted. Virtually all of the updates confirm the approvability of the various components of the plan. Emission reductions exceed predictions, federal ROP milest ones have been met, and all of t he plan commitments, including sufficient emission reductions fo r contingency measures, have been met. The one exception is the RACT section, which was intend ed to meet RACT requirements s pecified by EPA at the time but does not meet EPA’s new and enhanced interpretation of RACT requirements in the federal Clean Air Act. Consequently, the District is formally withdrawing the RACT element of the 2004 EOADP , thus creating a federal 1-hr ozone RACT gap that will be filled by submi tting to EPA a revised 8-hr ozone RACT SIP.

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