# San Joaquin Valley AIR POLLUTION CONTROL DISTRICT 

# awa HEALTHY AIR 

# LIVINGm

GOVERNING BOARD
Tony Barba, Chair Supervisor, Kings County J. StevenWorthley, Vice Chair 

### DATE: September 16, 2010 Supervisor, TulareCounty DavidG. Ayers 

### TO: SJVUAPCD Governing Boar Councilmember, City of Hanford Judith G. Case 

### FROM: Seyed Sadredin, Executive Supervisor, Fresno County 

### Project Coordinator: George Heinen
Ronn Dominici Supervisor, Madera County Henry Jay Forman, Ph.D. Appointed by Governor Ann Johnston Mayor, City of Stockton
Mike Lane Councilmember. City of Visalia Randy Miller Councilmember, City of Taft
Michael G. Nelson Supervisor, MercedCounty William O'Brien Supervisor, StanislausCounty Leroy Ornellas Supervisor, San Joaquin County John G. Telles, M.D. Appointedby Governor
Chris Vierra Councilmember, City of Ceres RaymondA. Watson Supervisor, Kern County

Seyed.Sadredin Executive Director Air Pollution Control Officer

Northern RegionOffice 4800 EnterpriseWay Modesto, CA 95356.8718 (209)557.6400 FAX 1209)557.6475 

### RE: ADOPT PROPOSEDAMENDMENTS TO RULE 4354 

### (GLASS MELTING FURNACES)

RECOMMENDATION: 1. Adopt Proposed Amendments to Rule 4354 (Glass Melting Furnaces). 2. Approve and authorize the Chair to sign the Negative Declaration for Rule 4354 (Glass Melting Furnaces) finding there is no substantial evidence that adoption of Rule 4354 amendments will have a significant adverse effect on the environment.
3. Authorize .theChair to sign the attached Resolution.

BACKGROUND: The District Governing Board adopted amendmentsto Rule 4354 at the October 2008 Public Hearing that established more stringent emissions limitationsfor glass melting furnaces. During that hearing, there was significant discussion regarding concerns raised by affected sources about the information used by the Districtto evaluatethe potential cost impacts and cost-effectivenessof the proposed rule amendments. As a result, the Governing Board provided additional direction to staff to re-evaluate the impact of the rule amendments and report back to the Board within 18 months of adoption to accommodate additional cost information provided by affected businesses.

Central RegionOffice 1990 East Gettysburg Avenue 

### Based on staffs re-evaluationof the adopted rule amendments and Fresno, CA 93726.0244 

### recommendations made at the April 15, 2010 Public Hearing, the [559)230-6000 FAX 1559)230-6061 

### Board directed staff to develop and proposefuture rule amendments Southern RegionOffice 34946 FlyoverCourt Bakersfield, CA93308-9725 (661) 392-5500 FAX(661) 392-5585

www.valleyair. orgSJVUA PCD Governing Board ADOPT PROPOSED AMENDMENTS TO RULE 4354 (GLASS MELTING FURNACES) SEPTEMBER 16,2010

to Rule 4354 incorporating short-term emission limitation flexibility for flat glass manufacturing facilities committed to achieving more stringent long-term emissions limitations earlier than would otherwise be required by the rule. This direction was based on new information subniitted by Pilkington North America with regardto meeting the interim Tier 3 oxides of nitrogen (NOx) emission limitsfor flat glass manufacturers by the January 2011 compliance date in the rule.
The Tier 3 and the Tier 4 NOx emission limits will require installation of advanced and expensive emission control systems and would necessitate major changes to existing furnaces. District staff agrees with the glass manufacturers that the most appropriate time to make changes to the furnace in order to install emission control equipment is when the furnace is down for periodic repairsto the furnace's insulatirrg refractory. This periodic maintenance is commonly known in the industry as "cold repair" or "rebuild". Flat glass furnaces can operate for 15years or more between rebuilds and operate continuously between rebuilds. Therefore, the window of opportunity for cost-effective installation of emission control equipment isvery narrow. Installing emission control systems prior to the scheduled furnace rebuild would incur additional significant costs due to lost revenue because the furnace is not producing any glass products during the installation of the required controls and subsequent start-up periods which nornially take several months.
As an additional factor for consideration, no one could have anticipated the depth or the length of the current economic recession. Generally,the two main consumers of flat glass are the building trades (windows for homes and buildings) and the automotive market (windows and windshields for cars and trucks). Both of these market sectors have been particularly hard-hit by the recession and the slowdown in these markets has affected their suppliers, including flat glass manufacturers. Since October 2008 when the last amendments were adopted for the rule, Pilkington has experienced a significant economic downturn that forced a delay in their planned furnace rebuild and the associated installation of emission controls. As a result, Pilkington's current facility carmot meet the Tier 3 NOx limit by the 201 1 deadline without installation of additional emission control equipment in conjunction with a furnace rebuild. The Tier 3 NOx limit provides no real transition period because there is no intermediate technology that will allow Pilkington's furnace to achieve the Tier 3 NOx limit, other than the technology required to achievethe lower Tier 4 limit.
To address this concern, the District proposesto incorporate short-term emission limitation flexibility for flat glass manufacturing facilities committed to achieving more stringent long-term err~issions lirnitations earlier than would otherwise be required by the rule. This "Tier 4 early enhanced" option would achieve additional early reductions by complying with "Tier 4 enhanced" emissions limitations four years earlier than would otherwise be required by the rule in return for flexibility in meeting the interim Tier 3 emissions limitation.SJVUAPCD Governing Board ADOPT PROPOSED AMENDMENTS TO RULE 4354 (GLASS MELTING FURNACES) SEPTEMBER 16, 2010

There are three flat glass manufacturers in the Valley. Besides Pilkington, the other two facilities are currently meeting the Tier 3 NOx emission limit and have permit conditions that would preventthem from increasingtheir NOx emissions above the Tier 3 limit if it were to be removed from the October 2008 version of the rule.
As detailed inthe Final Draft Staff Report, staff finds that removing the Tier 3 limit and requiringthe lowest NOx limit four years earlier for a singleflat glass furnace will not affect the District's attainment date. In order to be considered in attainment of an air quality standard, the District must have no violations of the standard at its official monitoring site for three years. In the Tier 4 early enhanced option, the lower emissions from this facility come just ahead of the PM2.5 attainmentyear of 2014 rather than afterwards, as would be expected if Pilkington opted for the Tier 4 enhanced option. By implementing the Tier 4 early enhanced option at Pilkington, Valley residents would reap the benefits of nearly 33 tons per year of additional NOx reductions beginning in 2014, rather than in 2018, and the err~ission reductions would continue for the length of the furnace campaign.

DISCUSSION: Since the proposed amendments only affect the emission limits and requirements for flat glass furnaces, staff will not discussthe existing Rule 4354 requirements for container glass furnaces and fiberglass furnaces. Current Rule 4354 Requirements Under the current rule, flat glass furnaces are requiredto meet an interim Tier 3 NOx limit as well as stringent sulfur oxides (SOX)and particulate matter (PM) lirr~its by January 2011. The Tier 4 NOx limit for flat glass furnaces has a compliancedate as soon as January 2014 for the standard option and as late as January 2018 for the enhanced option. Table 1 summarizes the NOx limits and compliance dates for flat glass manufacturersas currently required by the rule. Table 1

### - Flat Glass NOx Limits of Current Rule 4354SJVUAPCD GoverningBoard ADOPT PROPOSEDAMENDMENTS TO RULE 4354 (GLASS MELTING FURNACES) SEPTEMBER 16,2010


### Summary of Proposed Amendments to Rule 4354 

### The main objective of this rule project is to allow flat glass manufacturersto eliminate the Tier 

### 3 NOx emission limits provided they meet the Tier 4 enhanced option emission limits four years earlier than otherwise required, namely by January 2014 ratherthan by January 2018. The current rule also requires that the flat glass manufacturers meet low SOXand PMIO limits by January 2011. Forflat glass manufacturersthat choose the Tier 4 early enhanced option, compliance with the SOXand PM limits would be deferred until January 2014, which is the same date as the Tier 4 early enhanced compliance date. Revisionswere made throughout the ruleto accorr~niodate the inclusion of the flat glass early enhanced compliance option. These changes include language modifications inthe monitoring and recordkeeping sectionsto match the Tier 4 early enhanced option compliancedate. Table 2 summarizes Pilkington's proposal for the Tier 4 early enhanced option. Table 2 

### - Proposed NOx Limitsfor Flat Glass Early Enhanced Option

Emission Reduction Analysis

Tier 2 limit 

### - now Tier 

### 3 limit 

### - not available Tier 4 earlv enhanced o~tion bv Jan 2014

Although the rule was amended in 2008, as directed by the District's Governing Board, the rulewas not submitted to EPAfor inclusion into the California State Implementation Plan (SIP). Since the amended rulewas not submitted intothe SIP, the reductions associated with the 2008 rule project have not been claimed for attainment demonstration purposes. If adopted, this version of the rulewill be submitted to EPA and the Districtwill claim the reductions from the 2008 rule amendments as part of this rule project. Table 

### 3 below summarizes the estimated emissions and the estimated emission reductionsassociated with ,the2008 rule project. Details of the emission calculations are included inAppendix B of the Final Draft Staff Report. NOx limit Lblton glass produced 7.0



### -- 2.9SJVUA PCD Governing Board ADOPT PROPOSED AMENDMENTS TO RULE 4354 (GLASS MELTING FURNACES) SEPTEMBER 16, 2010

Table 3 

## - Estimated Emissions and Emission Reductions from 2008 Final Staff Report 

### r Pollutant

NOx Container Fiberglass Flat Glass Additional reductions Tier 4 early enhanced Total NOx 

### sox Container Fiberglass Flat Glass

Impactof Proposed Changes on Other Flat Glass Manufacturers Claimed 2008 Baseline Emissions, tpd

2.66 0.53 4.80 Not applicable 7.99

Total SOX PMIO Container Fiberglass Flat Glass Total PMIO

District staff considered the impact of the proposed amendments on flat glass manufacturers other than Pilkington, including any potential competitive disadvantqge caused by the proposed amendments. There are two flat glass manufacturers besides Pilkington located in the District. One facility already meets the Tier 4 NOx, SOXand PMIO limits because of a rebuild in 2008. The second facility is already meeting the Tier 3 NOx and the 2011 SOXand PMIO limits. Additionally, both of these facilities have made investments in emission control technologies as part of prior rebuilds that included facility expansions, and are not expected to be at a competitive disadvantage as a result of the proposed amendments. For these reasons, the other flat glass manufacturers are not expected to be affected by the proposed amendnients to Rule 4354. Claimed Errrission Reduction, tpd

1.16 0.01 2.1 1
0.09 3.37

1.54 0.02 1.57

Cost EffectivenessAnalysis - -- 0.38 0.00 0.74 3.13

0.38 0.007

0.59 0.98

The California Health and Safety Code 40920.6(a) requires District staff to conduct a cost effectiveness analysis of available emission control options prior to adopting each BestAvailable Retrofit Control Technology (BARCT) rule. Since the proposed rule 1.12

0.02 0.002

0.08 0.11SJVUAPCD Governing Board ADOPT PROPOSED AMENDMENTS TO RULE 4354 (GLASSMELTING FURNACES) SEPTEMBER 16,2010
modifies certain compliance dates and does not change existing emission limits,the requirementto perform a cost effectivenessanalysis does not apply. Socioeconomic Analysis Pursuant to California Health and Safety Code Section40728.5, "whenever a district intendsto propose the adoption, amendment, or repealof a rule or regulation that will significantly affect air quality or emissions limitations, that agency shall, to the extent data is available, perform an assessment of the socioeconomic impacts of the adoption amendment, or repeal of the rule or regulation." Since the proposed rule does not change an existing err~issior~ limitation,the requirement to perform a socioeconomic impact analysis does not apply. Rule Consistency Analysis
Prior to adopting, amending, or repealinga rule or regulation, California Health and Safety Code Section 40727.2 requires a written analysis that identifiesand compares requirements of the proposed rule with corresponding, existing and proposed District rules and corresponding United States Environmental Protection Agency (EPA) rules, regulations,and guidelines. Based on the analysis, District staff concludes that the proposed amendments to Rule4354 are consistentwith other District rules and are not in conflict with these rules. Further, the proposed rule amendments are consistent with EPA rules, regulations, and guidelinesthat apply to the same source category. The analysis is presented in Appendix C of the Final Draft Staff Report. Environmental Impacts
Pursuantto the California Environmental QualityAct (CEQA), staff investigated the possible environmental impacts of the proposed amendmentsto Rule4354. A proposed negative declaration has been issued by the District and made available for public review. The public review period ended onAugust 13, 2010. Upon approval of this project, a Notice of Determination for a Negative Declaration will befiled.
Rule Development Process District staff conducted a public workshop in June 2010 in order to present and receive comments on draft amendmentsto.Rule4354. Comments received from affected source operators, consultants, vendors and manufacturersof controltechnologies, the California Air Resources Board (ARB) and the United States Environmental Protection Agency (EPA) have been evaluated and, if appropriate, incorporated into proposed rule provisions.
The proposed rule and final draft staff report was published and mailed to affected sources and interested parties prior to the public hearing to consider the adoption of proposed amendmentsto Rule 4354 by the District Governing Board.SJVUAPCD Governing Board ADOPT PROPOSED AMENDMENTS TO RULE4354 (GLASS MELTING FURNACES) SEPTEMBER 16,2010



### FISCAL IMPACTS: 

### District staff expects no fiscal impactto the Districtto result from this action.

Attachments: Initial Studyand Negative Declaration for ProposedAmendments to Rule 4354 (22 pages) Proposed Rule 4354

### - (28 pages) Resolution for ProposedAmendments to Rule 4354 (5pages) Final Draff Staff Report with Appendices for Proposed Rule 4354

### - (42pages)