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BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD

JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY BYRON SHER AUDIfiORIUM, SECOND FLOOR

1001 I STREET SACRAMENTO, CALIFORNIA

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THURSDAY, JULY 24, 2008 9:00 A.M. 

# ORIGINAL . .
TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345APPEARANCES

BOARD MEMBERS „ Ms. Mary 

### D. Nichols, Chairperson Dr. John 

### R. Balmes Ms. Sandra Berg Ms. Lydia Kennard Mr. Jerry Hill Mrs. Barbara Riordan Mr. Daniel Sperling Mr: John Telles

STAFF Mr. James Goldstene, Executive Officer Mr. Tom Cackette, Chief Deputy Executive Officer Ms. Ellen Peter, Chief Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Quetin, Ombudsman Ms. Susan Fischer, Ph.:D., Research Planning and Climate Change Outreach Section, Research Division, RD Ms. Susan Gilbreath, Ph.D., Health and Exposure Assessment Branch, Research Division Mr. Margret Kim, Senior Advisor for International Climate Chan.ge, Chair's Office Mr. Iain Morrow, on loan from UK government, RD

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345Mr. Chuck Shulock, Assistant Executive Officer,, OCC

Ms. Linda Smith, Ph.D., Chief, Health and Exposure Assessment Branch, RD Ms. Bonnie Soriano, Staff Air Pollution Specialist, Technical Analysis Section, Stationary Source Divisiori Ms. Monica Vejar; Board Clerk Mr. Sam Wade; Air Pollution Specialist, Program Evaluation Branch, Office of Climate Change ALSO PRESENT Mr. Joe Angelo, Intertanko Ms. Diane Bailey, NRDC Mr. Rasto Brazney, MECA Mr. Tim Carmichael, Coalition for Clean'Air. Mr: Randal Fr,iedman, US Navy Mr. T.L. Garrett, Pacific Merchant Shipping Association Mr. Henry Hogo, South Coast AQMD Mr. John . Kaltenstein, Friends of the Earth Ms. Candice Kim, Coalition for Clean Air Mr. John McKnight, National Marine Manufacturings Association Ms. Patrick Moran, Aaron Read & Associates, LLC Mr. Dan Ostrosky, Yamaha. -Mr. Don Owen, DTSC Mr. Christopher Patton, Port of Los Angeles Mr. Paul Ray, Ilmor Marine Engineering, Inc. Mr. Mark Riechers, Mercury Marine Ms. Heather Tomley, Port of Long Beach

PETERS SHORTHAND REPORT,ING CORPORATION (916) 362-2345PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345

### INDEX PAGE

Item 08-7-1 Chairperson Nichols Executive Officer GoTdstene Staff Presentation Q&A
Item 08-7-3 Chairperson Nichols Executive Officer Goldstene Staff Presentation Q &A Motion Vote Item 08-7-4 Chairperson Nichols Executive Officer Goldstene Staff Presentation Q&A Ombudsman Quetin Q&A Ms. Tomley Mr. Garrett Mr. Kaltenstein Ms. Kim Ms. Bailey Mr. Patton Mr. Angelo Mr. Friedman Mr. Hogo Motion Ex Partes Vote Item.08-7-5 Chairperson Nichols Executive Officer Goldstene Staff P.resentation Ombudsman Quetin Mr. Moran Mr. Brezny Mr. McKnight Mr. Ray 4 5 6 12

21 22 23 35 36 36
37 37 40 63 65 66 73 76 78

, 82 84 86 88 91 , 98 101 105 107
107 107 110 124 126 127 129 132

PETERS SH.ORTHAND REPORTING CORPORATION (916) 362-2345INDEX CONTINUED PAGE

Mr. Whelan 134 Mr. Riechers - 135 Mr. Ostrosky 137 Mr. Carm_ichael 139 Motion 141 Vote 141
Item 08-7-8 Executive Officer Goldstene 141 Staff Presentation 143 Q&A 153 Ms. Kim 158 Chairperson Nichols 166
Item 8-7-9 Chairperson Nichols 167 Executive Officer Goldstene 168 Staff Presentation 169 Q&A 181 Item 8-7-10 Chairperson Nichols 188 Executive Officer Goldstene 189 Staff Presentation 190 Q&A 201 Public-Comment 205 Adjournment 208 Reporter's Certificate 209

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23451 

## _ l PROCEEDINGS 2 CHAIRPERSON NICHOLS: Good morning, ladies and 3 gentlemeh. Welcome to the July 24
. th public meeting of the 4 air resources Board. The meeting wi11 come to order. 5 We"begin the meeting with the Pledge of 6 Allegiance. I'll ask you all to please 

### rise. 7 (Thereupon the Pledge of Allegiance was 8 Recited in unison.) 9 . CHAIRPERSON NICHOLS: Thank you. 10 The Clerk will please call the roll. 

### 1 1

. SECRETARY VEJARc Dr. Balmes? 12 BOARD MEMBER BALMES: Here. 13 SECRETARY VEJAR: Ms. D'Adamo? 14 BOARD MEMBER D'ADAMO: Here. 15 SECRETARY VEJAR: Supervisor Hill? 16 Ms. Kennard? 17 BOARD MEMBER KENNARD: Here. 18 SECRETARY VEJAR: Mayor Loveridge? 19 BOARD MEMBER LOVERIDGE: Here. 20 SECRETARY VEJAR: Ms: Riordan? 21 BOARD MEMBER RIORDANt Here. 22 SECRETARY VEJAR: Supervisor Roberts? 23 BOARD MEMBER ROBERTS: Here. 24 SECRETARY VEJAR: Professor Sperling? 25 BOARD MEMBER SPERLING: Here.

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1 SECRETARY VEJAR; Dr. Telles? 2 BOARD MEMBER TELLES: Here. 3 SECRETARY VEJAR: Chairman Nichols? 4 CHAIRPERSON NICHOLS: Here. - 5 I believe Supervisor Hill is on his way, 

### but'is a 6 little bit d'elayed this morning. 7 We have on the agenda, if there's anybody who's 8 planning their day,' a time set aside for a standing 

### 9 meeting, 

### a closed session, to receive reports on the_cases 10 

## in which we'rs litigants. 

### We are not having a closed' 11 session.today,. That has been canceled.
_ 12 We will take a lunch break: And the Board is 13 going to be hosting a visiting delegation of Eusopeans,:who 14 are here studying climate change,who are all active in 15 this field 

## in Europe. S.o that should be interesting. 16 We will be imposing a three-minute time limit on 17 all speakers on all items, unless we have so many speakers 18 on any item that we have to shorten it. But I hope that 19 won't happen. 20 And I'm also supposed to advise you that there 21 are emergency exists at the rear of the room. And that 

## in 22 the event that an alarm goes off, we have to evacuate the 23 room, go downstairs and go outside the building until we 24 get the all-clear signal. I think that's it for 25 logistical comments.

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1 BOARD MEMBER D'ADAMO: No ex partes. 2 BOARD MEMBER BALMES: None. 3 CHAIRPERSON NICHOLS: In that case,'we have a 4 motioh and a second. All in favor please say aye. 5 (A ye s) 6 CHAIRPERSON NICHOLS: Any opposed? 7 Good. Thank you very much. 8 We have another major regulatory action on the 9 agenda item. But I think it woul'd be good to give 10 ourselves a ten-minute break. 11 (Thereupon a recess was taken.) 12 CHAIRPERSON NICHOL'S: Let's get started with ther 13 staff presentation. Those who. aren't at the'table are in 14 the back room where there is audio from this room. 15 So let's begin then with Item 08-7-5, public 16 hearing to consider proposed amendments to the current

~ 17 spark-ignition marine engines and boat regulations.

18 Mr. Goldstene. 19 EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 20 Nichols. 21 Today staff is proposing to amend California's 22 existing spark-ignition marine regulations to provide'an 23 alternative path to compliance for small volume I , 24 manufacturers of high performance engines with maximum 25 power greater than 373 kilowatts; which approximately is

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about 500 horsepower.

The existing regulations- require a11 high performance engines to comply with the five:grams per ' kilowatt hour tailpipe standard for combined hydrocarbons 

## and oxides,of nitrogen beginning in 2009. Compliance will reguire use of an automotive type catalytic converter. Unfortunately, these engines routinely operate at'near full power'and these conditions have prevented smal'1 volume engine manufacturers from finding a converter that would be effective 

### and durable.



## As a result, staff 

### is proposing to relax the exhaust:standard for small volume manufacturers of high performance engines to 16 grains per kilowatt hour,,an emission level that can be met without a.catalyst.

To partially offset the higher,tailpipe emissioris, small volume engine manufacturers wo.uld be
, required to incorporate canister-based evaporative control systems on all boats in which high performance engines are installed beginning in 2009.

Staff.proposes that large volume manufacturers of high performance engines that also produce standard performance engines continue to be required to comply with the five grams per kilowatt hour taiIpipe standard beginning in 2009.

Although compliance with the five gram standard

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Ie 1 for higher performance engines remains out of reach, the

2 larger manufacturers can average the higher emissions of 3 the performance boats engines by slightly lowering 4 emissions of some of the standard engines below the,five 5 gram level. 6 Like the small manufacturers,,they would also be 7 required to equip high performance engines with 8. evaporative controls. These requirements will result in 9 

### no lose of emission reductions of hydrocarbons and.NOx 10, compared to the existing regulatlon. 11 The-proposal would also adapt carbon monoxide 12 standards and not-to-exceed tailpipe requirements 13 currently being considesed 

### for adoption by the United States Environmental Protection Agency. These. 15 requirements will help protectiboaters from carbon 16 monoxide poisoning and help ensure that engines continue 17 to run clean throughout their useful lives. 18 In addition, staff 

### is proposing to establish 

### a 19 voluntary standard with appropriate labeling.that is 20 50 percent more stringent than the cleanest required 21 standard currently available. 22. I'11 now turn the presentation over to Jeff Lowry 23 of
. the Off-Road Control Section who will provide you with 24 the detailed description of the staff's proposal. 25 Mr. Lowry.

PETERS SHORTHAND REPORTING (916) 362-2345110 (Thereupon an overhead presentation was p : resented as follows.) STAFF AIR POLLUTION SPECIALIST LOWRY: Thank vou, Mr. Goldstene. .

Good morning, Madam Chair and.members of the .'Board. Today's presentation will summarize the staff's proposal to amend California's existing regulations for new spark-ignition marine engines and boats.: Although my presentation will concentrate heavily on'the requirements for high performance sterndrive and in-board_en.gines, as. timing is most critical'for these applications, there are component's of the proposa,l that apply -to -outboard engines and personal watercraft as well. The rulemaking is specific to gasoline-fueled vessels, however, and does not apply to diesel-fueled commercial marine applications. --000-- STAFF AIR POLLUTION SPECIALIST LOWRY: This slide illustrates an historical perspective of the various components.'of the spark-ignition marine regulations that have been adopted and modified by the Board over the years. Most noteworthy regarding staff's proposal is the 2009 commencement date for high perforrnance engines to begin complying with the catalyst-based standard. Little 1 2 3 4
5 6 7 8 9

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20 21 22 23 24 25 time remains before these engines go 

### irito production,for the 2009 model year.
--000--'

STAFF AIR POLLUTION SPECIALIST LOWRYc The primary objective of staff"s proposal is to provide relief to the small volume manufacturers bf high performance engines 

## in California by relaxirig the existing exhaust standard for combined hydrocarbons and oxides of nitrogen from,five grams per kilowatt hour to 16 grams per kilowatt hours on most engines.

.Without relief., the::small volume manufacturers... will be unable to 

### comply with the existing catalyst-b.ased requireme.nts scheduled 

### to begin in 2009, because.durable catalysts for these high performance engines have not.be .en successfully developed. However, as I'll explain late.r, the proposal will include new requirements to ensure that the relief will not be adversely affected from the existing regulation.

Staff is also proposing to adopt carbon monoxide standard for outboard engines, personal watercraft, sterndrive engines, and inboard engines to reduce the risk of poisoning and death from direct exposure. While these" standards are numerically identical to those proposed by the United States Environmental Protection Agency fo.r adoption nationally, the proposed California standards do

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### not allow ave.raging outboard and personal watercraft emission levels in order to ensure that 

### no individual boat poses a risk of carbon monoxide poisoning to its users. Neither California, nor US EPA currently regulates carbon monoxide'emissions for gasoline-fueled marine engines.

Finally, staff is proposing to streamline the regulations by harmonizing requirements with U.S. EPA''s proposed requirements whenever possible.

With this brief introduction, ,I'11 now focus on the specific elements of.the proposal. First up, high performance. engines.
--000--

STAFF AIR POLLUTION SPECIALIST L'OWRY: Boats with sterndrive or inboard engines are primarily used f.or recreational activities. And the engines that propel them are most commonly derived from V-8 or V-6 gasoline truck engines. High performance engines are defined as sterndrive or inboard engines with a maximum power rating greater than 373 kilowatts. Whereas, standard performance engines are designed to operate for at least ten years, high performance engines typically require rebuilding or a major overhaul every one to three years.

The boat shown in this slide measures 41 feet in length and is powered by two 700 horsepower high

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14 15 16 17 18 19 20 21 22 23 24 25 , 113 performance engines:

--000-- ,

STAFF AIR POLLUTION SPECIALIST LOWRY: Staff- L estimates that approximately 150 to 250 high performance engines are sold 

## in California each 

## year and that small, volume manufacturers comprise about 30 percent of the high performance market. Furthermore, it should be recognized that approximately 40 percent_of these manufacturers, are small California businesses.

While relatively few in number, high performance engin,es represent a signifioant source of emissions due..to :. their large 

## power cap,acities and high load operating characteristics.

The uncontrolled emissions inventory for these engines would be 4.22 tons.per day of hydrocarbon and NOx in 2020. The combined hydrocarbon and oxides of nitrogen emissions from high performance engiries are expected to be reduced by two tons per day in 2020 under the existing regulation, which would require these engines to comply with_the catalyst-based five gram per kilowatt hour hydrocarbon plus NOx exhaust standard.

While.this may seem like a small and insignificant amount of reduction, staff generally looks for measures that reduce emissions by as little as one ton . per day to achieve attainment with ambient air quality

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1 standards and California's goals for air.quality. 2 --000-- 3 STAFF AIR POLLUTION SPECIALIST LOWRY: As noted, 4 the use.of catalytic converters on these engines was the 5 expected means 

## of reducing emissions. However, catalytic 6 converters-for high performance engines not have developed 7 as had been expected in part due to the extremely 1ow 8 production volumes irivolved, but also in part due to the 9 challenges resulting from the extreme operating 10 chara.cteristics of these engines. 11 

## By design, high performance engi.nes operate at 12 wide open or full throttle for extended periods. Catalyst 13 technology as its exists today has been shown to be: 14 incompatible with this type of sustained operation. 15 Because catalysts are not available for these engines, 16 staff is proposing to relax the hydrocarbon plus NOx 17 exhaust standards for small volume manufacturers from five 18 grams per kilowatt hour to 16 grams per kilowatt hour dn 19 most engines, a level that would no longer require the use 20 of catalytic converters. 21 Large volume manufacturers with a preponderance 22 of standard performance engines.'for which catalysts are 23 readily available would still be subject to the existing 24 five grams per kilowatt hour standard, but could meet it 25 through averaging higher emitting high performance engines

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23 24 25 115 with standard performance engines that emit less than the standard. There's currently only one manufacturer in the California market that produces both standard and high performance engines in sufficient quantities to average' successfully. That-manufacture is Mercury Marine:
--000-- STAFF AIR POLLUTION SPECIALIST LOWRY: Shown here are the revised exhaust standards proposed for manufacturers 

### of high performance sterndive and inboar'd engines. .,2009 will'mark the.first year that.high performance engines must be certified.

Small volume manufacturers of high perf.ormance engines that produce a combined total of 75 or fewer high performance and standard performance engines would be required to comply with a relaxed exhaust standard.of 16 grams per kilowatt hour or 25 grams per kilowatt hour, depending on engine size in 2009:

Although not catalyst forcing, compliance with this standard is expected to require manufacturers still using carburation to transition to electronic fuel injection. Any manufacturer that produces a combination of between 75 and 500 standard performance engines and high performance engines at a ratio of 12-to-1 or greater would be required to.comply with the five grams per

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14 15 16 17 18 19 20 21 22 23 24 25 kilowatt hour st.andard using averaging or through other alternative means.

The large volume manufacturers would still.be required to certify their engines to the existing.five grams per kilowatt hour standard 

### also through averaging or other means. --oOo- -

STAFF AIR POLLUTION SPECIALIST LOWRY: In order to fully offset the loss 

### in emission reductions resulting from relaximg the exhaust standard for small volume, high performance engines, a11'high p.er .formance engine .., manufacturers, large, intermediate, and small,wo.uld be required to equip their high performance engines with an advanced evaporative control system consisting of carbon canisters, low permeation hoses, and non-permeable fuel tanks. ,

Although this proposal means a large volume manufacturer would have the evaporative requirement in addition to the existing exhaust requirement, staff believes this is necessary to fully recover the emission benefits lost by relaxing the tailpipe standard for the small volume manufacturers.

The greater resources available to the large volume manufacturers and the relatively minor costs of complying with the evaporative control requirement on less

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than 200 boats annually makes this a cost effective and emission,neutral means of providing relief to small volume manufacturers that only produce high performance engines.

The carbon canister shown here.is an actual prototype suitable 'for use in'marine applications: --000-- STAFF AIR POLLUTION SPECIALIST LOWRY: Shown here

~ - is how staff's proposal would achieve an emissi.ons neutral solution. By not relaxing the five grams per kilowatt per hour exhaust standard for large volume manufacturers,:the existin.g requirement would continue t.o reduce.emissions..b..y an incremental benefit of 1.42 tons per day_

The proposed relaxed exhaust standard for small, volume.manufacturers only still provides two-tenths of a ton per day reduction over uncontrolled levels.

Lastly, imposing evaporative controls or botli small and large volume manufacturers high performance engines balances the remaining ledger by providing_another .41 tons per day for a completely emissions neutral solution in 2020. --000--

STAFF AIR POLLUTION SPECIALIST LOWRY: Staff's proposal also provides an alternative means for, complying for large volume manufacturers that do not want to average. In lieu of certifying high performance engines

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1 to the five grams per kilowatt 

### hour standard, large volume 2 manufacturers`may instead comply with the same exhaust 3 standards as small volume manufacturers, but must make 

### up 4 the emissions 

### in other equi.valent ways. 5 One way.to achieve this would be by equipping 6 some of their boats,that use their standard performance 7 engines with carbon canisters, 

### low permeation hoses, and 8 non-permeable fuel tanks. 

### 9 The staff!s proposal would also get manufacturers 10 to use other manufactures specific alternatives not 11 s.p.e.ci .fically autlined in the regulations. ..These woul.d be 12 evaluated by the Executive Officer to ensure emissions ° 13 neutrality. 14 This wraps up my discussion of the high 15 performance engines. I'11 now turn to the issues 16 surrounding staff's proposed carbon monoxide standards. 17 --000-- 18 STAFF AIR'POLLUTION SPECIALIST LOWRYc Carbon 19 monoxide emissions ar'e an issue,of concern not only for 20 sterndrive and inboard engines, but for outboard engines 21 and personal watercraft as well. 22 In recent years, the dangers of carbon monoxide 23 in the boating environment have become well known. The 24 tragic deaths listed as statistics on this slide have 25 mostly occurred as a result of direct exposure to exhaust

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1 emissions from auxiliary power engines used on house 2 boats. 3 However, deaths have also occurred on sterndrive 4 and inboard ski boats primarily from activities.known as 

### 5 teak'susfing and wa'ke boarding. 6 To a lesser extent but nonetheless just as 

### 7 deadly; deaths have also'occurred on boats equipped with 8 outboard engines. 9 California Assembly Bill 2222 requires that 10 carbon monoxide warning stickers be placed 

### on the transom 11 and helm of a.la 

### new and used motorized vessels sol.d 

### in.: 12 California to alert boaters of
. the dangers of ca:rbon 13 monoxide. However, „ neither California, nor U.S.- E.PA: 14 currently requires boat engines to meet carbon mo_noxide 15 standards. 16 --000-- 17 STAFF AIR POLLUTION SPECIALIST LOWRY: Staff is 18 proposing to harmonize with U.S. EPA's proposal regarding 19 the numeric values.of the carbon monoxide standards for 20 outboard engines, personal watercraft, sterndrive engines, 21 and inboard engines as shown in the table. However, while 22 U.S. EPA has proposed to allow averaging for the outboard 23 and personal watercraft engines, staff is proposing that 24 the carbon monoxide standards for all engine types be met 25 without averaging. We do not believe that an average

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19 20 21 22 23 24 25 120 carbon monoxide standard protects boaters from the risks of direct exposure. Some engines may be certified to emission levels higher than others which potentially puts boaters using those engines at gr.eater risk. --00o=- STAFF AIR POLLUTION SPECIALIST LOWRY: The final element of staf£'s proposal concerns jet: boats. Jet boats such as the 23 foot model pictured here are medium-sized vessels typically equipped with one or more personal watercraft engines which have a combined power ranging from 220..to 380 horsepower.; ._ --000-- STAFF AIR POLLUTION SPECIALIST LOWRY: Although_ the means of propulsion for jet boats is different-from that of more traditional sterndrive propeller-driven.- engines, the activities for which both jet boats and vessels with sterndrive engines are similar.

Jet boats typically have transoms like sterndrive vessels and pose the same risks fsom carbon monoxi,de'
~ poisoning.

Currently, only two manufacturers are known.to certify jet boats in California. And the numbers of engines sold are relatively few compared to sterndrive and inboard sales. Unlike sterndrive engines, however, jet boats engines are currently.certified to the less

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17 18 19 20 21 22 23 24 25 _ 121 stringent exhaust standard for personal watercraft such as for jet skis.

U.S. EPA is in the process of finalizing a, rulemaking re-defining sterndrive and,inboard engines to include ,jet boat 'engihes and to a'ccordingly require jet': boats to comply with more stringent catalyst-based standards. --000--

STAFF AIR POLLUTION SPECIALIBT LOWRY: Staff proposes to.align with the proposed U.S : . EPA definition for inboard sterndrive engines.

Under the revised definition, jet boats would be treated th.e same as sterndrive inboard boats in.that their engines would need to comply with the catalyst-based five gram per kilowatt hour standard for combined hydrocarbons and oxides of nitrogen, instead of the cnrrent 16 gram p.er kilowatt hour standard. They would also be subject to the catalyst based 75 gram per kilowatt hour carbon monoxide standard. Staff is proposing that.the more stringent exhaust standard for`jet boats go into effect with the 2012 models in order to provide time to develop and certify these engines.

Staff is also proposing to allow.replacement engines to meet the personal watercraft standard prior to

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1 2012. This lead time is consistent with U.S. EPA's 2 proposed action and should help provide a smooth 3 transition for industry. 4 --000-- 

### 5 STAFF AIR POLLUTION SPEC'IALIST LOWRY: To ' 

### 6 incentivize the introduction of even cleaner engines in 7 California, staff proposes the issuance of a new five star 8 emissions rating to engine families that certify engines 9 to emission levels even cleaner'than 

### the most stringent 10 four star certification standard required by the 11 regulations. 12 Compliance with the new five star level would` 13 entail meeting the levels:shown here throughout the 14. engine's useful life. These levels represent a reduction 15 of 50 percent from current standards based on catalytic 16 converters. 17 --000-- 18 STAFF AIR POLLUTION SPECIALIST LOWRY: Staff is 19 also proposing additional modifications to address 20 comments from sta.keholders, to align with U.S. EPA, and to 21 improve the regulations overall. These remaining 22 components of the proposal are explained in greater detail 23 in our staff report. 24 --00o-- 25 STAFF AIR POLLUTION SPECIALI.ST LOWRY: Recent

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2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 123 discussions,with the marine industry have raised the need ~ to clarify or modify several of st;aff's proposed amendments, so several aspects of today's presentation differ with the.initial 45 day proposal. These proposed changes were incorporated in the applicable sections of' the presentation, and the regulatory text is available outside. If the Board approves staff's proposal, a detailed description of all changes and the rationale inspiring them will be made available for a 15-day comment period. --000--

STAFF AIR POLLUTION SPECIALIST LOWRY: In summary, the.lack of the effective catalyst for .. high performance marine engines necessitates a relaxation of the five gram tailpipe standard for small volume -manufacturers of high performance engines scheduled to go into effect in January.

To recoup the lost emission benefits, large volume manufacturers would still be requir.ed to comply with the existing tailpipe standard, most likely by averaging higher emissions of high performance engines with standard engines that , emit at lower levels.

In addition, both large and small volume manufacturers will be required to equip their high

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2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 . 18 19 20 21 22 23 24 25 12 4 performance boats with evaporative controls. These new xequirements will provide the two tons,,per day emission reduction that would otherwise be lost from relaxing.the-= tailpipe standard'for high performance engines.

=Staff's proposal also'reduces the risk of carbo'n monoxide poisoning by limiting the amount of carbon monoxide that can be emitted from outboard engines, personal watercraft, sterndrive, and inboard engines.

This concludes staff's presentation: Staff is ready to'answer any questions the Board might have.

CHAIRPERSON NICHOLS: This is a complicated series of changes yo,u're proposing to make here.

Are there questions you before we hear from.the public? If not, let's hear from the public testimony.

EXECUTIVE OFFICER GOLDSTENE: Madam Chair, I think the Ombudsm-an has a quick report.
~ CHAIRPERSON NICHOLS: I'm sorry. i keep forgetting because we haven't always done this.

OMBUDSMAN QUETIN: Chaisman Nichols and members . of the Board, this proposed regulation has been developed for input from National Marine Manufacturers Association, the Man.ufactures of Emission Control Association, Southern 'California Marine Association, Delphi Powertrain systems, Attwood Marine, the California Department of Boating and Waterways, and U.S. EPA.

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1 S,taff began their efforts to develop this rule on 2 November 15th, 2005. Between January 16th; 2007, and 3April 22nd, 2008, they met individually and collectively' 4 with representatives:f.rom the majority of the 5 spark-ignition marine engine manufacturers in California. 6 On March 14th, 200.7, December 17th and 18, 2007,
_ 7 .and again 

### on July 9th, 2008,. staff inet'with the Marine 8 Manufacturers Association and again several individual 9 marine engine and boat manufacturers. 10 Staff also'held a public/video workshop on March 11 18th., 200-8, and a certification_outreach meetin.g 

### on Apr,i1 12 22nd, 2008. 13 The-staff report-was-.released along with the 14 proposed regulatory amendments on June 6th, 2008. The 15 public notice'was physically mailed to stakeholders which 16 occurred on May 28th,, 2008. Th.e staff report was.made 17 available as a web document only, and the required number' 18 of hard,copies were made available to both El Monte and 19 Sacramento offices. It was 'also sent to the 2,900 people 20 on the mobile sonrce and recreational marine list.serves. 21 Thank you.. '22 CHAIRPERSON NICHOLS: Thank you. 23 I see from the list we don't have any witnesses 24 from the environmental community. Did they participate in 25 the rulemaking at all? I didn't hear 

### you say it.

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1 OMBUDSMAN QUETIN: Staff would-have 

## to respond to. 2 that. This is the information I

. received from them. . 3 CHAIRPERSON NICHOLS; I-see. 4 EMISSION RESEARCH AND REGULATORY DEVELOPMENT 5 BRANCH"CHIEF CARTER: Madam Chair, no, there was 

### no direct 6; corre-spondence -- 7 CHAIRPERSON NICHOLS: I assumes that means they 8 are satisfied.. But interesting. Okay. 9 Then we'll go to our public testimony. Beginning 10 with Patrick Moran followed by Rasto Brezny. 11 _ MR. MORAN: Thank you, Madam Chair and members..' 12 My name is Patrick Moran with,Aaron Read and Associates .13 r.epresenting Southern California-Marine Association. 14 We're the largest regional marine trade association in the 15 country with over 600 member companies. 16 First, we've submitted a written statement for 17 your reflection, so I' S 11 try to summarize and be brief. 18 First, SCMA wanted to thank the staff for all the hard 19 work they put in on 

### this issue and trying to resolve the 20. differences and concerns we had with the proposed 21 regulations. 22 SCMA has been actively involved in the process of 23 helping to create new standards of exhaust emissions for 24 recreational marine engines. And to summarize our 25 concerns, the consistent standard for all concept that was

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1 discussed at,the March 18th, 2008, meeting in E1 Monte now 2 appears to have been abandoned for 

# a more complicated 3 multi-level approach segregating coinpanies into different 4 categories based on the number of engines produced and the 5 horsepower mix o'f their product lines.' '6 That's not the direction or the impression we had7 that we'd-be,going 

### in, but that's wYiere 

### we are today. And 8 those are our concerns with the proposed regulations. And9 we would just ask the.Board members carefully consider and10 evaluate the impact of the new emissions standards and" .:11 what they might have on the alrea,dy very fragile economy. 12 in California. Thank-you for your time. 13 CHASRPERSON NICHOLS: Thank you.' Ap.preciate:your ' 14 involvement in this. 15 Rasto Brezny and John McKnight. 16 MR. BREZNY: Thank you, Chairman Nichols and 17 members of the Board. Thank you for giving me this 18 opportunity to speak today in support of this proposal. 19 My.name is Dr. Rasto Brezny. S'm the Deputy 20 Director for the Manufacturers of Emission Controls 21 Association. We're the nonprofit association made up of 22 the world's leading manufactures of emission control 23 technologies 

### for motor vehicles. Our members have over 35 24 years of experience in developing and manufacturing 25 emission control technology, both evaporative and catalyst

PETERS SHORTHAND REPORTING (916) 362-2345128 

# I

1 control technologies, for on-road and off-road vehicles of 2 all shapes and sizes, including supplying three-way 3 catalysts for some of the spark-ignited *_narine engines 4 that are sold in California< 

## S We agree with staff"s assessment that the high 6 performance category of engines poses'specific challenges 7 for the appl,ication of catalysts for emission coiitrol, 8 primarily because of the way these engines are operated 9 today: 10 We also agree with the appr'oach of using ` 11 ev.ap.orative controls as 

### a means to make"up some of'the' 12 lose in exhaust controls: 13 Evap.orative controls have been used on 14 automobiles for over 30 years and they've been.appl.ied to. 15 a wide variety of on-road and off-road spark-ignite 16 vehicles as 

### well as. 17 I g.uess we've submitt,ed written testimony, so I'd 18 like to focus my oral comments on some additional measures 19 that could be taken looking beyond'today's proposed 20 amendments. We believe that a number of important 21 opportunities still remain in order to apply proven 22 a.utomotive emission control technologies t.o marine engines 23 in order to achieve further reductions in the future. 24 The Passive purge evaporative control 25 technologies that would be used on these vessels as

PETERS SHORTHAND REPORTING (916) 362-2345i 1 ~ , 2

3 4 5 6 7 8 .9 10 11 12 13

~ 14

15 16 17 18 19 20 21 22 23 24 25 129 outlined in the proposal are a good first step to capture on the order of 50 to 60 percent of evaporative emissions that are coming from these types of engines. However; we would ) suggest that in:the.future, future amendments look at,the possibility of applying active purge-'control' technologies that are on the order of 90 percent effective in capturing evaporative emissions and have been ,successfully used on automobiles for over 25 years.

Furthermore, we encourage staff to continue to explore the possibility'of applying evaporative as`well as exha.ust controls to the outboard and personal wate.r:cra.ft engines as well'. These technologies have been successfully applied on both two stroke and four.stroke. engines in.both on-road and off-road applications..

.And finally, wish to thank ARB staff for its hard work'in putting forth this proposal. And our
. industry'is committed to work with all stakeholders in order to ensure that the technologies are.available to achieve the emissions that are outlined in the proposal. Thank you

CHAIRPERSON NICHOLS: Thank you very much. John McKnight and then Pau1 Ray. MR. MC KNIGHT: Thank you. And that clock is right, good afternoon. My name is John McKnight, Director of Environmental Safety Compliance for National Marine Manufacturers Association.

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2 3 4 5 6 7 8

, 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 130

First,. to begin with, I really would'like to thank the CARB staff for working with marine engine manufacturess to identity the amendments that are really necessary to improve the existing California ru.le and, bring it into align 'with many of the changes'"that have happened and will be happening on a federal level. :

NMA urges the Board to consider 

## and approve the staff recommended amendments 

## to the spark-ignition marine engine and boat regulations with the following exception or revisions I'd like to talk about.

But. b.e.fore I start talking about that,.the Board . is going to hear the testimony of Mark Riechers from 

## Mercury Marine,-Sean Whelan from Att'wood Corporation, from Dan Ostrosky from Yamaha, and Paul Ray from I1mor. We'.ve... all burnt a lot of jet fuel to get over here today. We appreciate the opportunity and appeal to the Board to consider these amendments which us and the staff have worked really hard on.

The staff .has recommended that the Board approve a-limit for carbon monoxide emissions from outboard and personal watercraft engine, rather than allow averaging these emissions as the EPA plans to finalize. I want to talk a little bit about that. Because we do support the plan to reduce CO emissions. There's no doubt about that it. When it comes to sterndrive inboards where we have

PETERS SHORTHAND REPORTING (916) 362-2345131

1 seen accidents and fatalities, we'certainly approve that. .2 When it comes to outboards and personal'watercraft, 

### we 

## 3 definitely support the,2010 implementation date: But we 4 think for these engines, we need to see it harmonizes with 5 the EPA`plan which allows for the averaging o,f CO 6 emissions. 7 And I'11 tell 

## you the reason why. And it is that 8 the California -- only reason they need the regulate C0 9 emissions 

## is because they need to protect human health and 10 safety. And there's been enormous'amount of study in this 11 area on the effects of C0 poisoning from boats and NIOSH 12 and the EPA and the U5 Coast Guard and industry have 

### all 13 worked together to seview the accident fatality data from 14 CO poisoning and recreational boats. And NIOSH has 15 'conducted numerous studies looking at emissions that come 16 from different vessels and the way.to resolve it with our 17 existing fleet and with new marine engines. 18 Pretty much what 

### we see is that the Coast Guard 19 statistics when you look at them for fatalities and 2•0 accidents, they do not support the need to have a limit 21 for CO when it comes to outboards and PWCs. What the EPA 22 is allowing'is a numerical value with an average. 23 And when we talked to staff, what you're going to 24 hear is we want to err on the side of safety. But from 25 our perspective, we'd like to harmonize with the EPA

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_ 11 12 

### 13 14 15 16 17 18 19 20 21 22 23 24 25 132 standard. There's been an enormous amount of study 

### on this. And for 

### us to have to meet a California-only xegulation that 

### we don't 

### see has any real health and safety benefit to it 

### is just going to incur an economic , cost and 

### economic burden on'the citizens of California. `

Be real quick with the second 

### issue. And 

### this isone we fully support. This has to do 

### with the request that the Execut.ive Officer have the'discretion to make technical changes to the regulation. It just says this in my testimony: With the latest EPA rule; there will be virtually no difference between the ARB ma.rine regulations and the EPA marine regulations. The EPA regulation has not been finalized yet: We're-hoping it wo'uld be' finalized by now. It looks like Yt might go into August. When that does get finalized, there may be some minor changes that need to be made to harmonize. A11 that will do is really allow 

### to rule to be a lot less burdensome to the manufacturers.

So again NMA appreciates the opportunity to testify on this and appreciate the work that staff has done. And thank you.

CHAIRPERSON NICHOLS; I'm tempted to average your. time with Mr. Ray, but I'm not going to do that.

MR. RAY: Good morning. My name is Paul Ray., And I promise I'11 be brief to make up for John.

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l I'm the President of Ilmor Engineering and also 2 the general manager of Ilmor Marine Engines, And Ilmor 3 Engineering is fairly new to the marine business. We've 4 been a leader in auto racing engine manufacturing over the 5 

## years, the past 25 years, but only in the marine 

### industry' 6 since 2002. 

## Our product line consists,purely of high 7 performance engines. 8 Our reason for testifying today is to be,fully in 9 support of ARB staff's recommendations'. Essentially the 10 recommendations would:allow a small businesses 1.ike ours, 11 partieularly°one like ours..that's brand-new,ta t,his 12 market, to grow with some flexibility. 13 The challenge for 

### us is actually growing to 

## a 14 reasonable size before we are burdened with severe 15 emissions- restrictions which are incredibly expensive to 16 .implement. 17 We didn't exist back -- as 

## a marine company, we 18 dida't exist back when the rules were first written in 19 2001. And although we're late comers to this.program, 20 we've been fast learners and have spent a great deal of 21 time with staff to understand and work the rules into our 22 systems so we can implement them efficiently. And we are 23 an engineering company.at heart and we're fu11y committed 24 to providing durable emissions efficient engines into the 25 California market or in fact nationwide.

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1 Since entering this rulemaking process, we've 

### 2 attended many meetings with staff, and we've had a lot of 3 opportunity -- myself personally, a lot of opportunity to 4 discuss.the regulatory rules and regulations that work for 5 small business. And'their willingness"to work with us to 6 allow our business to grow while still meeting our burden 7 of responsibility when it comes to emissions we think has 8 been very good. 9 Again I just want to thank'everyone, particularly 10 the staff here, for allowing us to work so closely with 11 them_and-appreciate the time.
~12~ CHAIRPERSON NICHOLSt Thank you. 13'. A11 right. Sean Whelan arid then Mark Riechers. 14 MR. WHELAN: Good afternoon, Chairman Nichols and 15 Air Resources Board and staff. My name is Sean Whelan. 16 I'm representing Attwood Marine. 17 We are fully in support of the staff's proposal 18, here and would like to say Attwood is a major marine parts 19 and accessory supplier to the industry and have been for 20 over 100 years., 21 Attwood and our manufacturing partner have 22 developed, tested, and validated carbon canisters for the 23 marine industry. We're fully committed to being ready for 24 this low volume early introduction of canisters, including 25 working with the builders through any technical

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1 installation issues_ 2 We look at this as an opportiinity to further 3 develop the guidelines and pYocedures such that the final 4 roll out'of the U.S. EPA carbon'canister systems'can be' 5 accomplished with greater reliability and emissions 6 control performance.: 7: Thank yo'u for your time and opportunity to 8 present our comments. 9 CHAIRPERSON NICHOLS: Thank 

### you for your.time and 10 appreciate. your support. 11 Mark RiecheYs 

### and then Dan Ostrosky. 12 MR. RIECHERS: Hello. My name is"Mark.Riechers. 13 I'm the Regulatory Development Manager for:Mercury Marine. 14 And I've been working with staff here for the.last couple 15 of years on these changes. And while you have a written 16 

### copy of my comments, I'm going to skip a big part of this 17 because it's already been explained and I don't we need to 18 go over it again. 19 The one place that we got'somewhat surprised on 20 this was when the proposed rule changes came out, we were 21 expecting to see a rule that applied the same to all the 22 high performance engine manufacturers. And in fact, 23 suddenly there was this,completely different large volume 24 dual category manufacturer of which there 

### is one, us. And 25 we are being required to meet a much more stringent

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1 standard. ~ 2 And in fact, what it really comes down to is that 3 we are being ask_ed to make up t.he lost emissions benefits 4 for our competit'ors: And we find that to be just 5 basically unfair. 6 However, we also do understand staff's 7 requirements that they needed to make this.whole change 8 emissions neutral. And we've had subsequent meetings and 9 discussions with staff, and they have put into the 15-day 10 notice some additional offsets that we can use to reduce 11 the effect of us having to average iri. 12 And while I still fundamentally disagree with 13 being treated different than everyone els.e; it's something 14 w,e can w.ork with. And therefore, as long as.the Board . 15 approvss both the original plan changes and the items in 16 the 15-day notice, we will support the rule change. 17 As I said, I don't like it. But in the interest. 18 of preserving this segment of the market -- it's a very 19 small segment. It's less than 200 engines a year in 20 California. And we've run the numbers. We can make it 21 work. 22 One thing that I would like .to say is that this 23 rule has -- the emission reductions that you a.re getting 24 right now are considerably greater than this rule actually 25 creates. And the reason for that is that boat sales in

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, 1 California at the retail level are,down 40 percent. 2 Builders and.dealers are struggling to stay 

### in business. 3 And in fact, the largest west coast dealership chain, 4 'wliicti is Olympic Bo'at Centers, with 19 locations filed 

# 5 Chapter 11 bankruptcy last week. Sea Ray and Brunswick 6 boat companies have laid off 1700 employees. Brunswick is . 7 in the process of going from 29.boat plants t'o lb boat 8 plants. So 

### it's a really tough time 

### for us, and we 9 appreciate getting through,this issue. And we look for 10 

### you to support'the changes in the rule plus what's in the 11 15-day 

### notice. 12 CHAIRPERSON-NICHOLS: Thanks, Mr. Rieche.rs. 13 I think 

### you know; but I'11 

### say it anyway." We - 14 never like to reduce emissions by reducing the econ.omy. 15 We are hopeful that these rules will work with an up 16 economy and you'll.sell lots of boats.. 17 I've also been reading about people not using 18 boats that they already own because cf the high price of 19 fuel at the moment. So it is a tough time and hope we can 20 all get through it: 21 Mr. Ostrosky followed by Tim'Carmichael. 22 MR. OSTROSKY: I know you haven't heard this, but 23 good afternoon, Madam Chairman and Board and staff. Thank 24. you for giving me the opportunity to speak today. 25 First off, I have -- maybe it's a little out of

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1 step. But in re'ading some of the amendments', we found 2 possibly an oversight or an error. And I don't know how 3' to proceed it until it's clarified. 4 On the table for C0 start date, it has one start 5 date and 

### in the text it has another date. And 

### we prefer ' 6 to have obviously the date that's in the table. If we say? 7 we approve this or .except it, what gets p'rint-or changed? 8 STAFF AIR POLLUTION SPECIALIST LOWRY: The date 9 we're proposing is 2010. 10 MR. OSTROSKY: :So there's two different dates. 11 So it's probably just a typo. So I 

### can go over with 

### y.ou 12 and show you where it's at later.. 13 Anyways; I work for Yamaha Motor Corporation. I. 14 work in.:Gover-nment Relations Division and Certific.ation 15 Department and also represent about 68 dealers and 2,000 16 employees at those dealerships that will be effected by 17 the reclassification of jet boats as SDI in these 18 amendments. 19 Going forward with that, Yamaha accepts and 20 approves the,amendments and hope the Board does the .same. 21 But on a more personal note, this is my first go 22 round doing this. And I want to thank the El Monte staff 23 for my incessant phone calls and putting up with me. I 24 greatly appreciate it. They were very professional and 25 did return phone calls. I greatly appreciate it. i PETERS SHORTHAND REPORTING (916) 362-23451

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17 18 19 20 21 22 23 24 25 139
.

And we 

### hope the Board accepts and approves the amendments presented here today. Thank you:

CHAIRPERSON NICHOLS: Thank 

### you. Tim Carmichael: MR. CARMICHAEL: Tim Carmichael, Coalition 

### for Clean Air.

First to the Chairman's comment about the lack 

### of environmental participation, it's 

### not a lack of interest. There's a lot of other things going on 

### in the air world.

I want to touch on 

### a couple things. We support the evap p.ortion. We support the CO portion: :They.mak.e-a , lot of sense.

The one thing that caught my eye in the staff ._ presentation.and struck me as unusual -- and ma.ybe I
_ 

# I misunderstood.or it wasn't fully explained -- is the Air Board and several other examples .I can think of has delayed implementation and relax the implementation of the standard on the front end. And that is understandable for all the reasons that have been sited today.

But in the table they showed about the longer term implementation, it says 2011 and beyond. And that is unusual I think for it appears to be no sunset to this relaxed version of the regulation. I grant that we're talking about a relatively small number of engines and we're talking about small or medium size businesses, But

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# I 25 140

I would encourage, you know, at a minimum there be some technical review not too far after 2010 to review whether that open,ended relaxation 

### is really warranted.

This also gives me.an opportunity t
. 

## o raise the 

## bigger picture for pleasure craft. A number 

## of environmental clean air applicants met with your staff in June-and flagged this.issue among a short list of 

### sources that are really surprisingly big contributors to pollution in the state of California and expected 

## to sti11 be big sources in 2020.

And if.:we are look:ing at strategies to eliminate the black box and the SIP and close the gap between.where we are and clean air, this is a categosy that we need to -- let me clarify.. The broader category, pleasure. craft, is the category that we need to keep working on. And we raised with staff, and the.conversation is going to continue, about the potential need for use.limitations and restrictions depending on the emissions coming from some of the older craft and where we are with pollution levels in the future.

That's it: Thank you very much for your attention.

CHAIRPERSON NICHOLS: Thank you. I wasn't really being critical. I thought it was just interesting that I think the staff worked really hard to do something that

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5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 141 ends up making a rule more flexible than 

### it was to begin with, and yet at the same time getting more emissions reductions out of it. I think it was a heroic effort, and I really appreciate the cooperation of the industry in getting,us to 

### that result.'

Are there any questions that Board members have about this item?

If not, could I have a motion? .Do 

### we have any ex partes? Do 

# you have a.ny:closing comments, Mr. Goldstene?

EXECUTIVE..OFFICER'GOLDSTENEc No. :Hope the Board approves the rule.

CHAIRPERSON NICHOLS: Okay. BOARD MEMBER LOVERIDGE: So moved. BOARD MEMBER RIORDAN: I'11 second the motion. A11 CHAIRPERSON NICHOLS: All 

# in favor please say Aye. (A yeS )

CHAIRPERSON NICHOLS: Thank you. We will adjourn for our lunch break and we'11 try to returri at 1:45 is realistic. Thanks.

(Thereupon a recess was taken.) BOARD MEMBER RIORDAN: The Chair has asked us to start. We have the next item which is the update on the

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