TITLES 13/17. CALIFORNIA AIR RESOURCES BOARD

NOTICE OF PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE 

REGULATIONS FOR FUEL SULFUR AND OTHER OPERATIONAL REQUIREMENTS

FOR OCEAN-GOING VESSELS WITHIN CALIFORNIA WATERS AND 24 NAUTICAL 

MILES OF THE CALIFORNIA BASELINE

The Air Resources Board (ARB or Board) will conduct a public hearing at the time and 

place noted below to consider adoption of amendments to the Regulations for Fuel 

Sulfur and Other Operational Requirements for Ocean-Going Vessels Within California 

Waters and 24 Nautical Miles of the California Baseline (section 2299.2, title 13, 

California Code of Regulations (CCR) and section 93118.2, title 17, CCR).

DATE: June 23, 2011

TIME: 9:00 a.m.

PLACE: California Environmental Protection Agency

Air Resources Board

Byron Sher Auditorium

1001 I Street

Sacramento, California 95814

This item may be considered at a two-day meeting of the Board, which will commence 

at 9:00 a.m., June 23, 2011, and may continue at 8:30 a.m., on June 24, 2011. This 

item may not be considered until June 24, 2011. Please consult the agenda for the 

hearing, which will be available at least 10 days before June 23, 2011, to determine the 

day on which this item will be considered.

INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT 

OVERVIEW

Sections Affected: Proposed amendments to section 2299.2, title 13, CCR and

title 17, CCR section 93118.2, the Regulations for Fuel Sulfur and Other Operational 

Requirements for Ocean-Going Vessels Within California Waters and 24 Nautical Miles 

of the California Baseline (OGV Clean Fuel Regulation or regulation). The following 

documents would be incorporated in the regulations by reference: (1) International 

Standard ISO 8217, “Specification of Marine Fuels Requirements for Marine Residual 

Fuels,” (as revised June 15, 2010); and (2) the National Oceanic and Atmospheric 

Administration (NOAA) Chart 18740, San Diego to Santa Rosa Island (March 2007).

Background:

The ARB adopted the OGV Clean Fuel Regulation in 2008. This regulation is one of 

many steps being taken to reduce emissions from goods movement activities. It also 

fulfills a key measure in meeting the goals of California’s State Implementation Plan.
2

The OGV Clean Fuel Regulation requires operators of ocean-going vessels (OGVs) to 

use less polluting marine distillate fuels instead of heavy fuel oil in their diesel engines 

and auxiliary boilers while operating within approximately 24 nautical miles (nm) of the 

California coastline (Regulated California Waters). The fuel requirements are 

implemented in two phases. The Phase 1 fuel requirements, which began 

implementation on July 1, 2009, require the use of either marine gas oil (MGO) or 

marine diesel oil (MDO). Under the Phase 1 requirements, the MGO has a maximum 

sulfur limit of 1.5 percent (%), and the MDO has a maximum sulfur limit of 0.5%. The 

Phase 2 requirements, which are scheduled to begin on January 1, 2012, specify the 

use of either MGO or MDO at 0.1% sulfur. 

The use of the marine distillate fuels instead of the heavy fuel oil typically used by OGV 

significantly reduces emissions of diesel particulate matter (PM), PM, sulfur oxides 

(SOx), oxides of nitrogen (NOx), and “secondarily” formed PM (PM formed in the 

atmosphere from NOx and SOx). 

Prior to the implementation of the OGV Clean Fuel Regulation, the majority of OGVs 

going into and out of the Ports of Los Angeles and Long Beach traveled along the 

California coastline through the Santa Barbara Channel. In the Santa Barbara Channel, 

there is a traffic separation scheme established by the Commandant of the United 

States Coast Guard under the Ports and Waterways Safety Act and in accordance with 

international agreements. However, soon after the effective date of the OGV Clean 

Fuel Regulation, a large number of OGV operators chose to move from the traditional 

route through the Santa Barbara Channel, which lies within the zone covered by the 

OGV Clean Fuel Regulation, to a route on the Southern side of the Channel Islands, an 

area outside of the regulated zone. Because vessels on the Southern side of the 

Channel Islands do not have to use the cleaner marine distillate fuels required by the 

OGV Fuel Regulation, this change in routes has reduced the expected emissions 

reductions from the regulation. In addition, because this route on the Southern side of 

the Channel Islands goes through the United States Navy’s (U.S. Navy) Point Mugu 

Sea Range, the U.S. Navy has raised concerns regarding the increased potential for 

vessels to interfere with military operations in the Point Mugu Sea Range. 

ARB staff is proposing amendments to the OGV Clean Fuel Regulation. The purpose of 

the amendments is to adjust the offshore regulatory boundary in Southern California to 

lessen the potential for vessels to interfere with operations at the U.S Navy’s Point 

Mugu Sea Range and to recapture lost emission reductions. In addition, amendments 

are proposed to help facilitate a successful transition to very low sulfur fuels by aligning 

implementation dates more closely with recently approved federal requirements. ARB 

staff is also taking this opportunity to propose other minor amendments. The proposed 

amendments are summarized below.
3

DESCRIPTION OF THE PROPOSED REGULATORY ACTION

ARB staff is proposing the following amendments to the OGV Clean Fuel Regulation. A 

more detailed description can be found in the Initial Statement of Reasons for 

Rulemaking at http://www.arb.ca.gov/ports/marinevess/ogv.htm.

Regulated California Waters: ARB staff is proposing to amend the regulatory boundary, 

by extending it further off shore by aligning it more closely in Southern California with 

the “Contiguous Zone,” which is 24 nm from the California Baseline (shoreline), which 

includes offshore islands. In addition, we are proposing to exempt vessels from the 

Clean Fuel requirements when transiting a small “window” within the 24 nm boundary

off Point Conception. This exemption window is being provided to encourage vessels to 

travel in the established shipping lanes in the Santa Barbara Channel when headed to 

or from the Ports of Los Angeles and Long Beach. These proposed changes in the 

boundary will lessen the economic incentive for OGVs to transit through the Point Mugu 

Sea Range instead of the Santa Barbara Channel and will help recapture lost emission 

reductions. No changes are being proposed to the Regulated California Waters in 

Northern California. 

Phase 2 Implementation Date: The original regulation requires the use of Phase 2

0.1% sulfur distillate fuel beginning January 1, 2012. We are proposing to extend the 

deadline to use the Phase 2 fuel by two years to January 1, 2014. ARB staff believes 

this two-year delay will help facilitate a more successful transition to the 0.1% sulfur 

distillate fuels by more closely aligning California requirements with recently adopted 

federal requirements and providing OGV operators with more flexibility to acquire 

compliant fuels. 

Noncompliance Fee Provision: ARB staff is proposing minor modifications to the 

“Noncompliance Fee Provision,” which in certain specified situations allows the payment 

of fees in lieu of direct compliance with the rule through the use of cleaner fuels. This 

provision has been used five times since the OGV Clean Fuel Regulation began 

implementation. The proposed amendments are based on experience gained through 

implementation of the regulation to date, and focus primarily on the way fees are 

assessed. The proposed amendments include adjusting the fee schedule specified in 

the regulation, reducing the fees by half for vessel operators that purchase and use 

complying fuels after making a noncompliant port visit, and proposing that offshore 

anchorages made in conjunction with a port visit not be counted as a “port visit. We 

believe these changes will help to incentivize the use of the cleaner fuels as quickly as 

possible. 

Other Proposed Amendments: ARB staff is proposing to amend the regulation to 

include a March 2007 update to the National Oceanic and Atmospheric Administration 

(NOAA) nautical chart 18740 covering California’s coastline from San Diego to Santa 

Rosa Island. These charts are used to help define California Regulated Waters. In 

addition, ARB staff is proposing to amend the definitions of the fuels required under the 
4

OGV Clean Fuel Regulation to reflect recent changes in how these fuels are specified 

under international standards. 

COMPARABLE FEDERAL REGULATIONS

On March 26, 2010, the International Maritime Organization designated waters off North 

American coasts as an Emission Control Area (ECA), referred to as the North American 

ECA. The proposal for an ECA was introduced by the United States and Canada. In 

addition to establishing stringent engine exhaust standards that begin in 2016, the North 

American ECA requires the use of fuels with progressively lower sulfur levels. Under 

the approved North American ECA, which will be enforced by the federal government, 

OGVs traveling within a 200 nm zone off the North American coasts are required to use 

fuels with sulfur levels of 1% or less beginning in August 2012 and 0.1% sulfur in 2015. 

Until 2015, the ARB OGV Clean Fuel Regulation is more stringent than the North 

American ECA and is necessary to protect air quality and public health in California. 

However, the OGV Clean Fuel Regulation does include a “sunset” provision under 

which the requirements would cease to apply if it is determined by the Executive Officer 

that the United States Environmental Protection Agency adopts and enforces 

regulations that will achieve equivalent or greater emission reductions. This is expected 

to occur in 2015. 

AVAILABILITY OF DOCUMENTS AND AGENCY CONTACT PERSONS

ARB staff has prepared a Staff Report: Initial Statement of Reasons (ISOR) for the 

proposed regulatory action, which includes a summary of the economic and 

environmental impacts of the proposal. The report is entitled: Proposed Amendments 

To The Regulation For Fuel Sulfur And Other Operational Requirements For OceanGoing Vessels Within California Waters And 24 Nautical Miles Of The California 

Baseline.

Copies of the ISOR and the full text of the proposed regulatory language, in underline 

and strikeout format to allow for comparison with the existing regulations, may be 

accessed on ARB’s website listed below, or may be obtained from the Public 

Information Office, Air Resources Board, 1001 I Street, Visitors and Environmental 

Services Center, First Floor, Sacramento, California, 95814, (916) 322-2990, on 

Thursday, May 5, 2011.

Upon its completion, the Final Statement of Reasons (FSOR) will be available and 

copies may be requested from the agency contact persons in this notice, or may be 

accessed on ARB’s website listed below.

Inquiries concerning the substance of the proposed regulation may be directed to the 

designated agency contact persons, Peggy Taricco, Manager of the Technical Analysis 

Section, at (916) 323-4882, or Bonnie Soriano, Air Resources Engineer, at 

(916) 327-6888. 
5

Further, the agency representative and designated back-up contact persons, to whom

nonsubstantive inquiries concerning the proposed administrative action may be 

directed, are Ms. Lori Andreoni, Manager, Board Administration and Regulatory 

Coordination Unit, (916) 322-4011, or Ms. Amy Whiting, Regulations Coordinator, 

(916) 322-6533. The Board has compiled a record for this rulemaking action, which 

includes all the information upon which the proposal is based. This material is available 

for inspection upon request to the contact persons.

This notice, the ISOR and all subsequent regulatory documents, including the FSOR, 

when completed, are available on ARB’s website for this rulemaking at 

www.arb.ca.gov/regact/2011/ogv2011/ogv2011.htm.

COSTS TO PUBLIC AGENCIES AND TO BUSINESSES AND PERSONS AFFECTED

The determinations of the Board's Executive Officer concerning the costs or savings 

necessarily incurred by public agencies and private persons and businesses in 

reasonable compliance with the proposed amendments are presented below.

Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive 

Officer has determined that the proposed regulatory action will not create costs or 

savings to any State agency or in federal funding to the State, costs or mandate to any 

local agency or school district whether or not reimbursable by the State pursuant to 

part 7 (commencing with section 17500), division 4, title 2 of the Government Code, 

except as discussed below, or other nondiscretionary savings to State or local agencies.

The estimated total costs associated with the proposed amendments are approximately 

$10 million annually in the years 2012 and 2013, and $47 million in 2014. These 

estimated annual costs represent the additional costs associated with the proposed 

amendments over and above compliance with the current regulation wherein the 

majority of vessels that historically transited through the Santa Barbara Channel are 

now transiting outside the regulatory zone. In other words, vessel operators will now 

incur the costs associated with using the more expensive cleaner marine distillate fuels 

that were originally attributed to the OGV Clean Fuel Regulation and that were avoided 

by transiting outside the existing regulatory zone in Southern California. In addition, the 

costs also reflect cost savings associated with the two-year delay of the Phase 2 

requirements. 

We estimate the overall total 2011 present value cost of the proposed amendments to 

be approximately $59 million dollars for the years 2012-2014, assuming the total annual 

costs mentioned above. The added cost to a typical ship operator is estimated to be 

about $20,000 in years 2012 and 2013, and about $90,000 in 2014. We expect these 

added costs can be absorbed by typical affected businesses without a significant 

adverse impact. The cost-effectiveness of the proposed amendments is estimated to 

be about $32,000 per ton or $16 per pound of diesel PM reduced (attributing all 

regulatory costs to diesel PM reductions). This compares favorably to other diesel PM 

regulations the Board has adopted previously, as well as to the original regulation.
6

The Executive Officer has determined that, because the added costs of the proposed 

regulatory actions are a small percentage of the overall operating costs, no significant 

impact on ship operators, businesses that import or export goods, California port 

competitiveness, or on individuals purchasing such goods is expected, even if all these 

costs were passed on to the consumer. 

The Executive Officer has made an initial determination that the proposed regulatory 

action will not have a significant statewide adverse economic impact directly affecting 

businesses, including the ability of California businesses to compete with businesses in 

other states, or on representative private persons. A number of businesses are 

integrally linked to the goods that travel through California ports. However, we do not 

believe that the added costs of the proposed regulatory action will result in vessel 

operators choosing alternative ports outside California. 

In accordance with Government Code section 11346.3, the Executive Officer has 

determined that the proposed amendments will not affect the creation or elimination of 

jobs within the State of California, the creation of new businesses or elimination of 

existing businesses within the State of California, or the expansion of businesses 

currently doing business within the State of California. A detailed assessment of the 

economic impacts of the proposed regulatory action can be found in the ISOR.

The Executive Officer has also determined that, pursuant to title 1, CCR, section 4, the 

proposed regulatory action will have no impact on small businesses because we do not 

believe that the ship operators subject to this proposal would qualify as small 

businesses due to the large capital and operating costs associated with vessel 

operation.

In accordance with Government Code sections 11346.3(c) and 11346.5(a)(11), the 

proposed regulatory action will have no impact with regard to reporting requirements 

since no changes are proposed to the existing reporting provisions of the regulation.

In accordance with H&SC sections 43013(a) and (b), the Executive Officer has 

determined that the standards and other requirements in the proposed amendments are 

necessary, cost-effective, and technologically feasible for auxiliary diesel and dieselelectric engines main engines, and auxiliary boilers operated on ocean-going vessels 

within the regulated California waters.

Before taking final action on the proposed regulatory action, the Board must determine 

that no reasonable alternative considered by the agency or that has otherwise been 

identified and brought to the attention of the agency would be more effective in carrying 

out the purpose for which the action is proposed or would be as effective and less 

burdensome to affected private persons than the proposed action.
7

SUBMITTAL OF COMMENTS

Interested members of the public may also present comments orally or in writing at the 

meeting, and comments may be submitted by postal mail or by electronic submittal 

before the meeting. The public comment period for this regulatory action will begin on 

May 9, 2011. To be considered by the Board, written comments, not physically 

submitted at the meeting, must be submitted on or after May 9, 2011 and received no 

later than 12:00 noon on June 22, 2011, and must be addressed to the following: 

Postal mail: Clerk of the Board, Air Resources Board

1001 I Street, Sacramento, California 95814

Electronic submittal: http://www.arb.ca.gov/lispub/comm/bclist.php 

*New Feature*

You can now sign up online in advance to speak at the Board meeting when you 

submit an electronic board item comment. For more information go to: 

http://www.arb.ca.gov/board/online-signup.htm

Please note that under the California Public Records Act (Gov. Code, § 6250 et seq.), 

your written and oral comments, attachments, and associated contact information (e.g., 

your address, phone, email, etc.) become part of the public record and can be released 

to the public upon request. Additionally, this information may become available via 

Google, Yahoo, and any other search engines.

ARB requests that written and email statements on this item be filed at least 10 days 

prior to the hearing so that ARB staff and Board members have additional time to 

consider each comment. The Board encourages members of the public to bring to the 

attention of staff in advance of the hearing any suggestions for modification of the 

proposed regulatory action.

Additionally, the Board requests but does not require that persons who submit written

comments to the Board reference the title of the proposal in their comments to facilitate

review.

STATUTORY AUTHORITY AND REFERENCES

This regulatory action is proposed under the authority granted in Health and Safety 

Code sections 39600, 39601, 41510, 41511, 43013, and 43018; and Western Oil and 

Gas Ass’n v. Orange County Air Pollution Control District, 14 Cal.3rd 411, 121 Cal.Rptr. 

249 (1975). This action is proposed to implement, interpret, and make specific sections 

39000, 39001, 39002, 39003, 39500, 39515, 39516, 41510, 41511, 43013, 43016, and 

43018; and Western Oil and Gas Ass’n v. Orange County Air Pollution Control District, 

14 Cal.3rd 411, 121 Cal.Rptr. 249 (1975).
8

HEARING PROCEDURES

The public hearing will be conducted in accordance with the California Administrative 

Procedure Act, Government Code, title 2, division 3, part 1, chapter 3.5 (commencing 

with section 11340).

Following the public hearing, the Board may adopt the regulatory language as originally 

proposed, or with non-substantial or grammatical modifications. The Board may also 

adopt the proposed regulatory language with other modifications if the text as modified 

is sufficiently related to the originally proposed text that the public was adequately 

placed on notice and that the regulatory language as modified could result from the 

proposed regulatory action; in such event, the full regulatory text, with the modifications 

clearly indicated, will be made available to the public, for written comment, at least 

15-days before it is adopted. 

The public may request a copy of the modified regulatory text from ARB’s Public 

Information Office, Air Resources Board, 1001 I Street, Visitors and Environmental 

Services Center, First Floor, Sacramento, California, 95814, (916) 322-2990.

SPECIAL ACCOMMODATION REQUEST

Special accommodation or language needs can be provided for any of the following:

• An interpreter to be available at the hearing;

• Documents made available in an alternate format (i.e., Braille, large print, etc.) or 

another language;

• A disability-related reasonable accommodation.

To request these special accommodations or language needs, please contact the Clerk 

of the Board at (916) 322-5594 or by facsimile at 916) 322-3928 as soon as possible, 

but no later than 10 business days before the scheduled Board hearing. 

TTY/TDD/Speech to Speech users may dial 711 for the California Relay Service.

Comodidad especial o necesidad de otro idioma puede ser proveído para alguna de las 

siguientes:

• Un intérprete que esté disponible en la audiencia 

• Documentos disponibles en un formato alterno (por decir, sistema Braille, o en 

impresión grande) u otro idioma. 

• Una acomodación razonable relacionados con una incapacidad. 
9

Para solicitar estas comodidades especiales o necesidades de otro idioma, por favor 

llame a la oficina del Consejo al (916) 322-5594 o envíe un fax a (916) 322-3928 lo más 

pronto posible, pero no menos de 10 días de trabajo antes del día programado para la 

audiencia del Consejo. TTY/TDD/Personas que necesiten este servicio pueden marcar 

el 711 para el Servicio de Retransmisión de Mensajes de California.

CALIFORNIA AIR RESOURCES BOARD

/s/

_________________________________

James N. Goldstene

Executive Officer

Date: April 26, 2011

The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy 

consumption. For a list of simple ways you can reduce demand and cut your energy costs, see our website at 

www.arb.ca.gov.