Final Staff Report for Rule 4702 SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

FINAL STAFF REPORT
Revised Proposed Amendments to Rule 4702 (Internal Combustion Engines – Phase 2)

June 16, 2005

Prepared by: Saul Gamez, Air Quality Engineer Sandra Lowe-Leseth, Ai r Quality Engineer
Reviewed by: George Heinen, Supe rvising Air Quality Engineer Joven R. Nazareno, Senior Air Quality Engineer Mike Oldershaw, Senior Air Quality Inspector Kevin McCaffery, Air Quality Specialist Kamaljit Sran, Senior Air Quality Engineer

I. REASONS FOR RULE DEVELO PMENT AND IMPLEMENTATION
The San Joaquin Valley Air Basin (SJVAB) is classified as an extreme ozone nonattainment area and a serious Particulate Matter less than or equal to 10 microns (PM10) nonattainment area for the health-bas ed air quality standards established by the federal Clean Air Act. The SJVAB is also classified as severe nonattainment for the California ozone standard and nonattainm ent for the California PM10 standard.
This rulemaking project is part of the District’s ozone and particulate matter attainment strategies. As such, this project is subject to the following state and federal requirements:

• Ozone and PM10 attainment plans need to implement control measures as expeditiously as practicable, and prov ide for attainment. Clean Air Act (CAA) Section 172(c)(1)

• Ozone attainment plans need to assure t hat reasonably available control technology (RACT) for volatile organic compounds (V OC) and nitrogen oxides (NOx) is in use at major sources and on source categories subj ect to control technology guidelines. CAA Sections 182(b)(2), 182(f)

• PM10 attainment plans for serious PM10 nonattainment areas need to assure that the best available control measures ( BACM) for the control of PM10 shall beSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 2 implemented no later than 4 years after the date the area is classified (or reclassified) as a serious area. CAA Section 189(b)(1)(B)

• BACM provisions in attainment plans shou ld include the applicatio n of best available control technology (BACT) to existing ma jor stationary sources. (Federal Register 8/16/94)

• The control requirements for major stat ionary sources of PM10 also apply to PM10 precursors (precursors for PM10 in the SJ V are oxides of sulfur (SOx) VOC, and NOx). CAA Section 189(e)

• Ozone attainment plans should provide for best available retrofit control technology (BARCT) for existing permitt ed sources. California Heal th & Safety Code (CH&SC) Section 40919(a)(3)

• Ozone attainment plans should include “a ll feasible control measures.” CH&SC Section 40914(a)(2)

To satisfy the attainment goals of the oz one and PM10 plans, this rulemaking project will seek to obtain as much emission reducti on from each applicable source category as is expeditiously practicable, technological ly feasible, and economic ally reasonable, as determined by the District’s Governing Board. The rulemaking project is also intended to satisfy the state and federal requirements identified abov e. The rulemaking project would also implement the requirements for internal combustion engines used in agricultural operations pursuant to Secti on 40724 of the California Health and Safety Code.

II. OVERVIEW
On September 22, 2003, the Governor signed Senate Bill 700 (SB 700), which added or amended several sections of the California He alth and Safety Code. Due to those new mandates of the California Health and Safety Code, District staff is proposing to amend Rule 4702 and remove the existing exemption for engines used in agricultural operations. Rule 4702 would be expanded to include all engines over 50 horsepower used in agricultural operations, except in cases where such engines qualify for an exemption that is already in the rule or in cases where such engines qualify for a new, appropriate, and justifiable, limit ed exemption. The implement ation of federal and state clean air standards by reducing emissions from agricultural engines would be included in Rule 4702. Pursuant to California Health and Safety Code Section 39011.5(a)(2), the proposed amendments would make Rule 4702 a pplicable to internal combustion engines used in agricultural operations, “ including, but not limited to, engines subject to Article 1.5 (commencing with Section 41750) of Chapter 3 of Part 4 except engines that are used to propel implements of husbandry, as that term is defined in Section 36000 of the Vehicle Code, as that se ction existed on January 1, 2003 .”SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 3 In addition, this project will also make compression-ignited engines used in either agricultural operations (AO) or non-agricul tural operations (non-AO) subject to Rule 4702. The proposed amendments to Rule 4702 are discussed in Section V of this final staff report.
District staff intends to submit the proposed amendments of Rule 4702 to the District Governing Board in the second quarter of 2005 to ensure that the Governing Board has sufficient time to review and approve the am ended rule before the July 1, 2005 deadline specified in Section 40724(a)(2) of the California Health and Safety Code.

III. RULE DEVELOPMENT PROCESS
As part of the rule development process, District sta ff conducted publicscoping meetings in Bakersfield, Fres no, and Modesto in April 2004. The purpose of the scoping meetings was to present the objectives of the propos ed rulemaking project and collect information that would be useful in developing proposed ame ndments to Rule 4702 . District staff solicited comments from intere sted parties, affected industry operators, and stakeholders. A draft version of Rule 4702 was not available at the time of the scopi ng meetings. At the scoping meetings, affected so urce operators, cons ultants, vendors and manufacturers of control technologies, and trade a ssociations were requested toprovide technical feasibility and compliance cost informat ion which would be useful in developing proposed amendments to the rule. The information obtained from the sc oping meetings was used by District staff, as appropriate, to develop proposed amendm ents to the rule and the final staff report.

District staff conducte d public workshops in Bakersfield, Fresno, and Modesto in August and September 2004, in January 2005, and April 2005, to pres ent and discuss the proposed amendments to Rule 4702. The co mments received from the public, affected sources, and ARB during the publ ic workshop process were in corporated into draft Rule 4702 as appropriate.
Pursuant to state law, District staff is requi red to perform a socioe conomic impact analysis prior to the adoption, amendment, or repeal of a rule that has significant air quality benefits or that will strengthen emission limitation s. As part of the Distri ct socioeconomic analysis process, District staff sought a limited number of representa tives from inte rested groups to participate as members of a Focus Group. The Focus Group assisted District staff in determining the a ppropriate method of gathering in formation on regul atory compliance costs and business impa cts resulting from comp liance with the rule.

The results of the socioeconomi c analysis were publ ished in a report that was presented to the public and intere sted parties during t he final workshops for Ru le 4702, in April 2005.SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 4 IV. BACKGROUND
Internal combustion eng ines (ICE) are used by a large va riety of private businesses and public agencies throughout th e SJVAB. Examples of bu sinesses that use internal combustion engines that could be affected by this project include sc hools and universities, dairies, agricultural production, refiners, food processing, public water districts, and manufacturing. Many of the permitted compression-ignited engines are used as emergency engines. Such em ergency engines are used toprovide backup power when electric service is interrupted.

The United States Environmental Protec tion Agency (EPA) published a final ruling on May 18, 2004, approving amended Rule 4701 and adopted Rule 4702 into the State Implementation Plan (SIP). EPA recommended in the Technical Support Document for the Notice of Proposed Ru lemaking that the District make the following improvements in the next revision of Rule 4701.

1. In subsection 5.2 of amended Rule 4701, the low-use exemption should be revised to ensure that appropriate RACT limits apply to compression-ignited (diesel) low-use ICE at major NOx sour ces throughout the valley including those on the Westside.
District response to EPA’s recommendation 1: As the engines referenced will be subject to Rule 4702, the recommendation wi ll be considered in Rule 4702. District staff identified two low-use engines (rest ricted to operate no more than 1000 hours in a calendar year) with Permits-to-Operate that are subject to Section 5.2 of Rule 4701. With the exception of engines thatare exempt, the proposed provisions of Rule 4702 would require engines that operate more than 200 hours per calendar year to comply with the limits or standards of Table 1 or Table 2 of Rule 4702. The two low-use engines identified by District staff would need to comply with the more stringent proposed limits of Rule 4702 if theycontinue to operate at 1000 hours per year. The proposed provisions of Secti on 7.5 and Section 7.6 of Rule 4702 would specify that engines that are subject to Rule 4701 would no longer be subject to Rule 4701 effective when such engines are required to be in compliance with Rule 4702.
2. In subsection 5.1.3 of amended Rule 4701, the District should review the existing NOx emission limit for diesel ICE at pub lic water districts and either establish a more stringent limit or provide support for retention of the exis ting limit consistent with the requirement to implement BAC T for significant source categories.
District response to EPA’s recommendation 2: As the engines referenced will be subject to Rule 4702, the recommendation will be considered in Rule 4702. Diesel engines at public water districts will need to comply with the proposed requirements of Rule 4702. The proposed provisions of Section 7.5 and Section 7.6 of Rule 4702 would specify that engines t hat are subject to Rule 4701 would no longer be subjectSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 5 to Rule 4701 effective when such engines are required to be in compliance with Rule 4702. Proposed Rule 4702 would require dies el engines at public water districts, except engines that are exempt, to complywith the limits or standards of Table 2. Emissions from diesel engines at publicwater districts would be reduced as the proposed limits and standards of Table 2 are more stringent than the existing NOx emission limit of Rule 4701 for such engines.
A. Existing Rule 4701 Requirements
Rule 4701 was adopted on May 21, 1992, and last amended on August 21, 2003. The purpose of Rule 4701 is to limit Carbon M onoxide (CO), NOx, and VOC emissions from internal combustion engines. The rule appl ies to engines rated greater than 50 brake horsepower (bhp) that require a Permit-to-O perate. Engines us ed in the growing of crops or raising of fowl or animals are currently exempt from Rule 4701.

The NOx limits in Table 3 of Rule 47 01 range from 50 to 600 ppm, or 20% to 90% reduction depending on the type of engine (i.e., rich burn, lean burn, beam-balanced or crank-balanced pumping rich burn) and the ty pe of fuel used (waste derived gaseous fuel, diesel, or dual fuel). The CO limit is 2000 ppmv and the VOC limit is 250 to 750 ppmv depending on the type of engine and fuel used. The NOx limit in Table 3 of Rule 4701 for diesel fueled (compression-ignited) eng ines is 80 ppmv or 90% reduction. The rule contains provisions for periodic source testing, monitoring, emission control plan, periodic compliance testing, and recordkeeping.
Currently, both Rule 4701 and Rule 4702 will be in effect at the same time for nonagricultural engines. It is necessary that both Rule 4701 and Rule 4702 be in effect at the same time because most engines currentlysubject to Rule 4701 would have several years before they need to be in compliance with Rule 4702. As noted in Section V below, District staff is proposing amendments to Rule 4702 that would specify that an engine would no longer be subject to Rule 4701 when such engine is required to be in full compliance with Rule 4702. This should limit the amount of time that an engine would be subject to both Rule 4701 and Rule 4702. AO engines would only be subject to Rule 4702 as they are exempt from Rule4701. Engines that do not require a Permitto-Operate could be subject to Rule 4702 but are exempt from Rule 4701.
B. Existing Rule 4702 Requirements
Rule 4702 was adopted on August 21, 2003, and was submitted to EPA for approval into the SIP. The purpose of Rule 4702 is to limit NOx, CO, and VOC emissions from stationary spark-ignited internal combustion engines. The rule applies to spark-ignited engines rated greater than 50 brake horsepower that require a Permit-to-Operate. California Air Resources Board’s (ARB) Final RACT/BARCT Determination for Spark Ignited Internal Combustion Engines was the primary guidance document used by District staff in the development of Rule 4702. The RACT/BARCT Determination, dated November 2001, presents the technology for controlling NOx, CO, and VOC fromSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 6 stationary, spark-ignited inter nal combustion engines. District staff also considered the provisions of District Rule 4701 and the engine rules of other air districts in California. Engines in agricultural operations used in t he growing of crops or raising of fowl or animals are currently exempt from Rule 4702 due to previous state law.

The current NOx limits in Table 1 of Rule 4702 range from 25 ppmv to 75 ppmv, or 85%to 96% reduction depending on the type of engine (i.e., rich burn, lean burn, beambalanced or crank-balanced pumping rich burn) and the type of fuel used (waste derived gaseous fuel, or other). The CO limit is2000 ppmv for all engines and the VOC limit is 250 ppmv for rich burn and 750 ppmv for lean burn engines. Table 1 of Rule 4702 does not have any limits for compression-ignited engin es, as the rule does not currently apply to such engines. The rule contains provis ions for monitoring, emission control plan, recordkeeping, periodic compliance testing, and an Alternative Emission Control Plan.
Rule 4702 allows engines used in certain specific applications, such as an emergency standby engine or a transportable engine, to be exempt from the emissions standards or other requirements of the rule. Rule 4702 also al lows engines that are operated no more than 200 hours per calendar year and m eet other conditions, to be exempt from the emissions standards of the rule and other requirements of the ru le. District staff anticipates that certain operators will modify the operation of their engines to take advantage of current exemptions allowed in Rule 4702.

C. Federal and State Clean Air Standards
The proposed amendments would im plement federal and state clean air standards. In addition to the standards recommended in t he ARB Final RACT/BARCT Determination for Spark Ignited Internal Combustion En gines, dated November 2001, District staff considered the standards for internal co mbustion engines in other air districts.

• South Coast Air Quality Management District, Rule 1110.2 (Emissions From Gaseous- and Liquid-Fueled Engines), requi res owners/operators to either remove such engine permanently from service or replace the engine with an electric motor or reduce emissions for any stationary engine to 36 ppm NOx (500 bhp or greater) or 45 ppm NOx (greater than 50 bhp and le ss than 500 bhp), 250 ppm VOC, and 2000 ppm CO.

• Ventura County Air Pollution Control District, Rule 74.9 (Stationary Internal Combustion Engines), requires the owner /operator of a stationary internal combustion engine to limit NOx emissions to the following limits: Rich-burn, general, 25 ppm or 96% reduction; Lean-burn, general, 45 ppm or 94% reduction; Diesel, 80 ppm or 90% reduction.

Neither the South Coast AQMD rule nor the Ventura County APCD rule applies to internal combustion engines in agricultural operations. District staff will consider the latest developments regarding other regulat ions from EPA and ARB that may impactSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 7 stationary internal combustion engines that would be subject to the proposed amendments to Rule 4702. In July 2003, ARB adopted new fuel standards that will require a reduction of more than 95% in the amount of sulfur in diesel fuel. The new sulfur standard will be phased in starting in mid- 2006. It aligns California off-road diesel fuel sulfur standards with federal diesel sulfur standards, wh ich require a sulfur limit of 15 parts-per-million starting in 2006. California's rule will apply to diesel fuel sold for both on-road and off-road vehicles, while the federal standards will apply to diesel fuel for on-road vehicles only. On February 27, 2004, ARB approved five dies el air quality measures. One of the measures was an Airborne To xic Control Measure (ATCM) to reduce public exposure to diesel particulate matter and to control criter ia pollutants emitted from stationary diesel fueled, compression-ignited engines (stationary diesel engines). The control measure would reduce diesel PM and control criteria pollutant emissions through a combination of limits on annual operating hours and application of best ava ilable control technology. Two other measures approved are an AT CM for portable diesel engines and modifications to the Portable Engine Regi stration Program. And, as noted above, SB 700 was signed into law in September 2003. Engine operators are reminded that they could be subject to other federal or state requirements in addition to the measures noted above and the proposed requir ements of draft Rule 4702.

V. PROPOSED AMENDMENTS TO RULE 4702
The purpose of this project is to control NOx, CO, and VOC emissions from stationary spark-ignited internal combustion engines used in agricultural operations and from compression-ignited engines used in either agricultural operations or non-agricultural operations. Rule 4702 would be amended in order to control the NOx, CO, and VOC emissions from these engines. The requirem ents of current Rule 4701 would remain in place for an engine until such engine is required to be in full compliance with the proposed amendments to Rule 4702. Engines used in agricultural operations would be subject to Rule 4702 and would not be subject to Rule 4701. A summary of the proposed amendments to Rule 4702 is listed below. In addition to the engines specifically exempt ed in Section 4.0 of the rule, Rule 4702 does not apply to mobile sources and engines for which the District is precluded from regulating per state or federal statue. This would include, for example, a motor vehicle engine that provides power through a pow er-take-off (PTO) device to an oil-well workover rig or portable agricultural irrigation pump. As necessary, the current requirements of Rule 4702 would be amended to explicitly specify whether the requirement applies to one or more of the following categories of engines: spark-ignited engines, AO spark-i gnited internal combustion engines, non-AO spark-ignited engines, compression-ignited engines, AO compression-ignited engines, or non-AO compression-ignited engines. Any new proposed amendments would alsoSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 8 explicitly specify, as necessary, whether t he requirement applies to one or more of the categories of engines.
In another rulemaking project, District st aff has started working on new Rule 2250 (Stationary Equipment Registration). New Rule 2250 would specify requirements for registering engines used in agricultural operations that do not require a Permit-toOperate and that are not subject tothe requirements of Section 5.1.
A. Section 1.0 Purpose
The purpose would be modified to limit the emissions of ni trogen oxides, carbon monoxide , and volatile organic compounds from all stat ionary internal combustion engines. The proposed change woul d make the purpose apply to st ationary spark-ignited engines at agricultural operations and statio nary compressio n-ignited engines.
B. Section 2.0 Applicability
The rule’s applicability would be modified to remove the Permit-to-Operate condition so that the rule would apply to any stationar y internal combustion engine with a rated brake horsepower greater than 50 horsepower. T he change would allow compression-ignited engines and some additional spar k-ignited engines tobecome subject tothe rule, even if the engine is not required tohave a Permit-to-Operate.

C. Section 3.0 Definitions
Definitions for the following te rms would be added: Agreemen t to Electrify, Agricultural Operations, Certified Spark-ignited Engine, Compression-Ignited Internal Combustion Engine, Installation Date, Mobile Agricultural Equipment, Public Utilities Commission (PUC) Quality Natural Gas, Tier 1 Engine, Tier 2 Engine, Tier 3 Engine, or Tier 4 Engine, Wind Machine. The addition of these te rms would provide clarity in the rule requirements. The requirem ent for a time meter cont ained in the definition for emergency standby engine would be modified so thatin lieu of installing a non-resettable time meter, the owner of an engine may use an alternative device, method, or technique, in determining operating time prov ided that the alternative is approved by the Air Pollution Control Officer (APCO). This change to the time meter requirement is proposed in response to comments from operators who have noted that their engines’ operating times are maintained through some type of computerized device. This change to the time meter require ment is also proposed for other sections of the rule that specify a time meter.
D. Section 4.0 Exemptions
The exemption for engines in agricultu ral operations and the exemption for transportable engines would be removed. T he agricultural engine exemption removal isSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 9 required to comply with the requirements of California Health and Safety Code Section 40724. District staff believes that there are technologies available that would make it possible for transportable engines to complywith the proposed requirements of draft Rule 4702; therefore, t he exemption for transportable engines would be removed. Engines that are transportabl e per Rule 4701 and are currently exempt from Rule 4701, or that are transportable per Rule 4702 would need to comply with the proposed requirements of draft Rule 4702 based on t he type and use of the engine. AO engines that would otherwise be considered as transportable per Rule 4701 would need to comply with the proposed requirements of draft Rule 4702 based on the type and use of the engine. The requirement of Section 4.3.1 for a time me ter would be modified so that in lieu of installing a non-resettab le time meter, the owner of an engine may use an alternative device, method, or technique, in determining operating time provided that the alternative is approved by the APCO.
Several new exemptions, listed below, are proposed that would allow an engine to be exempt from all the requirements of the rule.

• An engine used to propel implements of husbandry, as defined in Section 36000 of the California Vehicle Code dated January 1, 2003. This exemption is contained in California Health and Safety Code Sectio n 39011.5 (a)(2) as part of the definition of an agricultural source. This category incl udes, but is not limited to, tractor engines and equipment driven by the power takeo ff (PTO) attachmentof the tractor.

• An engine used exclusively to power Mobile Agricultural Equipment. This exemption is being proposed in response to a request from Industry. The District has not regulated this type of engine previously. Dis trict staff may consider some controls for such engines in the future. This category is equipment at an agricultural operation which is towed or mounted on a vehicle and is continuously moved during the operation of the equipment. Mobile Agricultural Equi pment includes, but is not limited to sprayers, balers, and harvest equi pment. Trailer-mounted irrigation pumps or similar equipment are not considered to be Mobile Agricultural Equipment since they are stationary during operation.

• An engine used exclusively to power a wind machine. District staff is proposing that an engine used exclusively to power a wind machine that is used for crop protection be exempt from all provisions of Rule 470 2. This proposed exemption is in response to industry’s comments and is based on info rmation provided by industry that noted the very limited operation of wind machines and the time of year that wind machines are operated.
According to information provided by indus try, wind machines powered by propane or diesel protect approximately 70 perce nt of the citrus crop acreage with approximately one machine for every ten ac res. Citrus growers will generally only operate their wind machines when the tem perature drops to 28 degrees and it is expected to remain at or below that leve l for at least four hours. Electric windSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 10 machines are used for only ten percent of the citrus acreage, as they are not cost effective due to the prohibitive stand-by charges assessed by the utilities. The remaining acreage does not have wind mach ine protection. Either the fruit is harvested prior to the frost season or a grower has made a personal decision not to install machines because his/her grov e is located in a warm microclimate.
It is important to note that several microc limates comprise the citrus region, hence not all machines operate simultaneously. Wind machines are expensive to operate, and their sole function is to protect the crop. They have no other use.
Operation/Historical Usage: The official frost season runs November to March. Historically, the coldest part of the frost s eason is mid-December to mid-January. As indicated above, usage is dictated by tem perature and there is a usage fluctuation from season to season. In the past th ree years, the usage has averaged 35 hours annually, with several machines running fewer hours or not operating at all. The rule’s proposed 200 hours threshold addresses the industry’s needs.

• A de-rated spark-ignited engine used in agricultural operations or to a de-rated compression-ignited engine, provided the de-rating occurred before June 1, 2005. District staff is proposing this exemption as itis very similar to the existing exemption for spark-ignited engines.
Section 4.1, Section 4.2, and Section 4.3 would be amended to clarify the requirements, if any, to which such engines are subject.
A new exemption from certain requirement s of Rule 2201 (New and Modified Stationary Source Review Rule) is proposed for cert ain replacement engines. A replacement certified engine installed for the sole purpose of complying with requirements of this rule would be exempt from the Best Availabl e Control Technology and Offsets requirements of District Rule 2201 provided that certain conditions are met. This exemption is proposed as Rule 4702 replacement engines would otherwise not qualify for the replacement engine BACT exemption in Rule 2201. This new exemption would not impact the requirements of Rule 4702 with wh ich these engines would need to comply.
E. Section 5.0 Requirements
Section 5.1 Engine Emission Limits/Standards - Section 5.1.1 of the draft rule would add the emission limit s/standards and the compliance schedules for AO sparkignited engines. Section 5.1. 2 of the draft rule would ad d the emission limits/standards and the compliance schedules for compression-ignited engines. Limits/standards for compression-ignited engines would depend on t he current level of control and brake horsepower of the engine. The primary fact ors considered in the determination of the proposed limits/standards were t he costs of the controls, t he current emissions level of the engines to be controlled, and the availability of certified engines. In addition, District staff has tried to mitigate t he results of the socioeconomic impact analysis as evidencedSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 11 by the proposed emission lim its/standards, compliance dates and other requirements (such as monitoring, emission control plan, and compliance testing) of the rule for the various types of engines.
Emission Limits/Standards for AO Spark-ignited Engines
The proposed amendments to Rule 4702 woul d require the owner of an AO noncertified spark-ignited engine to meet the emission limits byJanuary 1, 2008. However, if an owner of an AO non-certified spark- ignited engine has an agreement to electrify the owner would need to comply by 1/ 1/2010 by electrifying. The proposed amendments to Rule 4702 would require the owner of a certified spark-ignited engine to meet the emission limits/st andards by June 1, 2006. Table 1 below indicates the limits/standards for spark-igni ted engines used exclusively in agricultural operations.
District staff modified the proposed rule such that non-certified AO spark ignited engines without catalyst would not require source te sting, but only require surrogate monitoring of operating parameters and periodic m onitoring using a hand-held portable NOx analyzer. AO spark ignited engines with cata lyst would be source tested at least once every five years.
District staff revised the proposed NOx limit for AO spark-ignited engines to 150 ppmv (lean-burn) and 90 ppmv (rich-burn). The 150 ppmv can be met without installing and operating a selective catalytic reduction (SCR) on AO spark-ignited engines. The 90 ppmv limit can be met with the need to in stall and operate non-selective catalytic reduction (NSCR). Eliminating SCR and NS CR associated with more stringent limits would significantly reduce compliance costs of AO spark-ignited engines.
Staff believes the 150/90 ppmv limits are appropriate for AO spark-ignited engines considering the economic impacts on San J oaquin Valley agriculture if more stringent limits are imposed. Unlike AO diesel engines, AO spark-ignited engines are not eligible for Moyer funding which would reduce the economic impacts associated with compliance cost. Agriculture is economic ally depressed as evidenced by continued economic assistance from the federal government in the form of subsidies/grants in an effort to even the economic playing field re sulting from increased importation into the U.S. of cheaper cost products from foreign countries. Agri culture’s inability to pass the increased production costs to consumers as well increased competition with imported products make it difficult for agriculture to absorb the compliance cost associated with more stringent limits for AO spark-ignited engines. Additionally, the new proposed limits would prevent operators from replacing AO spark-ignit ed with a diesel engine (this would also prevent increase in PM emission s if spark-ignited engines are replaced with diesel engines).SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 12 Emission Limits/Standards for AO Compression-ignited Engines The proposed emission standards for compressi on-ignited engines are primarily based on repowering with EPA certified engines ra ther than installing a retrofit control technology to limit emissions of air pollu tants. EPA certified engines have to undergo stringent testing and certification procedures that guarantee the lowest possible emissions. An EPA certified engine is defined in the rule as a Tier 1, Tier 2, Tier 3, or Tier 4 compression ignited engine that is certified by EPA pursuant to Title 40 of the Code of Federal Regulations, June 29, 2004. A large majority of existing Tier 1 and Tier 2 engines have been funded by the Carl Mo yer Program (Moyer) and the Federal Environmental Incentive Quality Program (EQIP). It is sensible to maximize the investment already made on existing Tier 1 and Tier 2 engines by repowering with lower emissions Tier 4 engines instead of requiring retrofit controls. Repowering would allow utilization of Moyer and EQIP funding to offsetthe agriculture industry’s cost to comply with the proposed Rule 4702 and achieve emissi on reductions in advance of the rule deadline. In addition, repowering with EPA ce rtified engines would reduce the costs of periodic emissions monitoring and source testing associated wit h operating a retrofit control technology. Table 2 below indicates the proposed limits /standards for compression-ignited engines. Table 3 below summarizes the complianc e schedule for compre ssion-ignited engines. The proposed compliance schedul e was developed to reduce em issions from the dirtiest engines (i.e., uncertified units) first. Extended comp liance dates are proposed for cleaner Tier 1 and Tier 2 certified engi nes in recognition of their lower emissions. A two yearextended compliance date is proposed for the owner of a non-certified compressionignited engine that is 500 bhp or more and is operated 1,000 hours or more in an year and that has a binding contract to electrify. In addition, in response to stakeholders’ comments regarding the potentia l replacement of engines bef ore an engine’s useful life is over, the compliance date for Tier 1 and Tier 2 engines has been changed to allow such engines to be used for at least twelve y ears after its installation date (as defined in the rule).
During the rulemaking process, agricultural representatives have commented that the costs to comply with the proposed rule requirements, and with the PM10 standards requirements of the upcoming ARB Air Toxic Control Measure for existing AO diesel engines could have a significant financial impa ct on agricultural sources. They have further commented that the availability of Moyer funds is essential to ensure that agricultural sources will be able to comp ly with the proposed rule requirement to repower older, dirtier diesel engines with cleaner EPA certified engi nes. In recognition of these comments, District staff feels that the extended compliance dates would allow operators sufficient time to apply for Mo yer funding, purchase and install a compliant engine, and to operate their engine and generat e enough surplus emissions reduction to qualify for the maximum Moyer monetary in centive allowed. Moyer funds would help mitigate the financial impacts of engine replac ement and the installation of PM10 filter traps, if any. The AO diesel engine operators would actually have to comply with theSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 13 proposed Rule 4702 limits earlier than the propos ed compliance dates in order to qualify for the maximum Moyer monetary incentive. Therefore, emission reductions are obtained at the earliest date whil e allowing maximum use of Mo yer funds to mitigate the financial impacts to operators.
In light of the exten ded compliance dates, Distr ict staff was concerned that, prior to the compliance date, a non-permitt ed engine could be replaced with a dirtier engine. In addition, in light of the different requirem ents, and related complia nce costs, for sparkignited engines and certified compression-i gnited engines, District staff was concerned that operators would want toreplace a spark-ignited enginewith a compression-ignited engine. To prevent, or mini mize, these situations, Secti on 5.1.3 and Section 5.1.4 have been added to the ru le and District staff has a ttempted to make the proposed requirements for a spark-igni ted engine and a compression- ignited engine as comparable as is reasonable.

Stakeholders raised concer ns regarding how the propos ed requirements of Rule 4702 would impact rental engines used for irrigation. The propo sed requirements of Rule 4702 would apply equally to rental engines asthey would to non-rental engines. Permit-toOperate requirements for rental engines will be addressed in the pe rmitting rules of the District later. In addition, Dis trict staff has started working on the Rule 2 250 (Stationary Equipment Registration) rule making project and will specify requirements for rental engines as appropriate.

Table 1 – Emission Limits/Standards for S park-Ignited Engines Used Exclusively in Agricultural Operations (corrected to 15% oxygen on a dry basis)

Engine Description Proposed Emission Limits/Standards Compliance Deadline

Non-Certified Rich Burn NOx - 90 ppmv or 80% reduction CO - 2000 ppmv VOC - 250 ppmv 1/1/2008 or if owner has an agreement to electrify

comply by 1/1/2010 Non-Certified Lean Burn NOx - 150 ppmv or 70% reduction CO - 2000 ppmv VOC – 750 ppmv 1/1/2008 or if owner has an agreement to electrify

comply by 1/1/2010 ARB Certified Spark-Ignited Engine ARB Certified Spark- Ignited Engine with Certification Level for hydrocarbon plus

NOx emissions of 0.6 grams/bhp-hr (40.2 ppmv) or less 6/1/2006SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 14 Table 2 – Emission Limits/Standards for Compression-Ignited Engines (corrected to 15% oxygen on a dry basis)
Engine Description Proposed Limit/Standard Non-certified, great er than 50 bhp but not more than 500 bhp Meet EPA Tier 3 or Ti er 4 limits/standards
Non-certified, great er than 500 bhp but not more than 750 bhp and less than 1,000 annual operating hours Meet EPA Tier 3 limits/standards

Non-certified, greater than 750 bhp and less than 1,000 annual operating hours Meet EPA Tier 4 limits/standards
Non-certified, 500 bhp and greater than or equal to 1,000 annual operating hours 80 ppmv NOx/2,000 ppmv CO/750 ppmv VOC EPA Tier 1 Engine or Tier 2 Engi ne Meet EPA Tier 4 limits/standards EPA Tier 3 Engine or Tier 4 Engine Meet EPA Certified Engine Standard in effect at time of installation
Table 3 – Compliance Schedule for Compression-Ignited Engines

Engine Type Compliance Date Non-Certified Engines

. Greater than 50 bhp but not more than 500 bhp 1/1/2010

. Greater than 500 bhp butnot more than 750 bhp and less than 1,000 annual operating hours 1/1/2010 Greater than 750 bhp and less than 1,000 annual operating hours 7/1/2011
d. Greater than 500 bhp and greater than or equal to 1,000 annual operating hours 1/1/2008 or if owner has an agreement to electrify comply by 1/1/2010 EPA Certified Tier 1 and Tier 2 Engines 1/1/2015 or 12 years after installation date, whichever is later EPA Certified Tier 3 and Tier 4 Engines At time of installation
The likely control technology to meet the proposed emission limits for a rich-burn engine will be the use of pre-stratified charge cont rols. For a spark-i gnited lean-burn engine, the likely control technique would be to re trofit the engine with lo w-emission combustion controls. Other control techniques may be us ed to supplement these retrofits, such as ignition system modifications and engine de-rating.
The likely technology to meet the proposed emission limits/standards for a compression-ignited engine is by replaci ng with an EPA certified engine. For a compression-ignited engine that does not have an acceptable EPA certified engineSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 15 available, selective catalytic reduction may be used to achieve the proposed limits/standards.
California Health and Safety Code Sectio n 40724 requires the District to ensure that BARCT established pursuant to Section 40724 for an internal combustion engine is similar to BARCT for other stationary source engines subject to regulation by a district or state board. District staff has eval uated BARCT for non-AO spark-ignited engines and determined that the level of control (approximately 90% c ontrol of NOx from uncontrolled levels) is similar to the leve l of control for AO spark-ignited engines. District staff has also evaluated BARCT fo r non-AO compression-ignited engines and determined that the level of control is the same as t he level of control for AO compression-ignited engines.
Section 5.6 Monitoring Requirements A - Monitoring requirements would be amended so that Section 5.6 would apply to t he owner of a non-AO spark-ignited engine subject to the requirements of Section 5.1 or any engine subject to the requirements of Section 8.0. In response to stakeholder comments received, Section 5.6.6 would be amended to remove the requirem ent that a fuel meter be in stalled, except for an engine subject to Section 8.0. Section 5.6.6 would also be amended so that in lieu of insta lling a non-resettable time meter, the owner of an engine may use an alternative device, method, or technique, in determining operat ing time provided that the alternative is approved by the APCO. Section 5.6.9 w ould be amended so that engine owners would need to take NOx emission readings with a portable NOx analyzer in each calendar quarter that a source test is not perform ed and the engine is operated. This will ensure that an engine is not operated in a calendar quarter solely to take NOx emission readings with a portable NOx analyzer.

Section 5.7 Monitori ng Requirements B -The proposed monitoring requirements of Section 5.7 are limited in com parison to the requirements of Section 5.6. Section 5.7 would apply to engines subject to Section 4.2 (emergency standby engines and engines that operate less than 200 hours per year) and to AO spark-ignited engine and compression-ignited engine subj ect to the requirements of Se ction 5.1 that have not been retrofitted with an exhaust control and are not subject to the requirements of Section 8.0. For the purposes of this section, certified engines equipped with PM control traps or filters are not c onsidered retrofitted.
Proposed Section 5.7 would require the owner of an engine to comply with the following:

• Properly operate and ma intain each engine as re commended by the engine manufacturer or emission control system supplier.

• Monitor the operat ional characteristics of each engine as recommended by the manufacturer or emission control system supplier.SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 16 • For each engine, install and operate a no n-resettable elapsed ope rating time meter. The owner shall maintain the required ti me meter in proper operating condition.

• For some engines, use a portable NOx an alyzer to take NOx emission readings to verify compliance with the emission requirements of Section 5.1 or Section 8.0 at least once every six months or 24 m onths that the en gine is operated.
Section 5.8 Stationary Equipment Registration -The proposed requirements would apply to the owner of an engine used exclusively in agricultural operations except for an engine that meets any one of the following conditions:

• The engine is required to ha ve a Permit-to-Operate pursuant to California Health and Safety Code Section 42301.16, or

• The engine is not requi red to comply with Section 5.1 of this rule.
The proposed Stationary Equipment Registra tion requirements would require the owner of an applicable engine to register such enginepursuant to Rule2250 (Stationary Equipment Registration). Stationary Equipm ent Registration would provide the District with an enforcement mechanism in lieu of a Permit-to-Operate.

F. Section 6.0 Adminis trative Requirements
As previously noted, certified engines equipped with PM control traps or filters are not considered to be retrofitted certified engines.

Section 6.1 Emission Control Plan – Section 6.1 would be amended to clarify the requirements of the section an d to identify the engines that are subject to the section.
Section 6.2 Recordkeeping – Section 6.2 would be amended to remove the recordkeeping for the quantity of fuel used except for an engine subject to Section 8.0.
Section 6.3 Compliance Testing - Section 6.3 would be amended to identify the engines that are subject to the section. In addition, in response to a stakeholder’s comment, an amendment is proposed that would allow engines that are permitted to run exclusively on PUC quality natural gas to beexempt from the biennial source test requirements of Section 6.3.1 for VOC emission s. After reviewing th e results of previous years’ source test data, Dist rict staff has determ ined that VOC emissions from an engine that is permitted to run exclusively on PUC qual ity natural gas is consistently compliant with the VOC limits of the rule. An AO spark- ignited engine that has been retro-fitted with a catalytic emission control device and is notsubject to the requirements of Section 8.0 would be required to source testing in itially and every 60 months thereafter.
Section 6.5 Inspection and Monitoring Plan - Section 6.5 would be amended to identify the engines that are subject to the section. The proposed amendments wouldSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 17 make Section 6.5 not applicable to several types of engines. In most cases, this is proposed as these engines are subject to t he less rigorous monitoring requirements of Section 5.7.
G. Section 7.0 Compliance Schedules
Section 7.1 Loss of Exemption - Section 7.1 would be amended to clarify the requirements for the owner of an engine subject to Section 7.1 and that is not required to have a Permit-to-Operate or a Stationary Equipment Registration.
Section 7.2 Engine Removal - Section 7.2 would be amended to clarify the requirements for the owner of an engine subject to Section 7.2 to be consistent with other proposed amendment s of the rule.
Section 7.3 Compliance Schedule fo r an AO Compression-Ignited Engine - Section 7.3 would be added to specify the co mpliance schedule that the owner of an AO compression-ignited engine is required to m eet in order to be in compliance with the requirements of proposed Rule 4702.
Section 7.4 Compliance Schedule for an AO Spark-Ignited Engine - Section 7.4 would be added to specify the compliance sche dule that the owner of an AO sparkignited engine is required to meet in order to be in comp liance with the requirements of proposed Rule 4702.
Section 7.5 Compliance Schedule for a Non-AO Compression-Ignited Engine - Section 7.5 would be added to specify the co mpliance schedule that the owner of a nonAO compression-ignited engine is required to meet in order to be in compliance with the requirements of proposed Rule 4702. Additi onally, requirements would be added to clearly specify when the requirements of Rule 4701 would no l onger apply to a non-AO compression-ignited engine.
Section 7.6 Compliance Schedule fo r a Non-AO Spark-Ignited Engine – Amendments would be added to Section 7.6 to clearly specify the compliance schedule that the owner of a non-AO spark-ignited eng ine is required to meet in order to be in compliance with the requirements of proposed Rule 4702. Section 7.6 would be amended to clarify that Section 7.6 app lies to a non-AO spark-ignited engine. Compliance Schedule 1, in Secti on 7.6, for a non-AO spark-i gnited engine is unaffected by the proposed rule amen dments. Additionally, requireme nts would be added to clearly specify when the requirements of Rule 4701 would no long er apply to a non-AO sparkignited engine.

H. Section 8.0 Alternative Em ission Control Plan (AECP)
In response to stakeholders’ comments, a spark-ignited engine and a compressionignited engine that are subject to Section 5.1 are eligib le for inclusion in an AECP.SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 18 Section 8.3 would be amended to be cons istent with other proposed amendments of the rule. Section 8.6 would be amended to clarify that Section 8.6 applies to a spark-ignited engine.

VI. CURRENT EMISSIONS AND EMISSIONS REDUCTION

District staff has conducted an emissions reduction analysis of the proposed amendments to Rule 4702. The emissions reduction analysis is in Appendix B of this final staff report.

VII. COST EFFECTIVENESS ANALYSIS

District staff has co nducted a cost effectiveness analysis of the proposed amendments to Rule 4702. The cost effectiv eness analysis is in Appendix C of this final staff report.

VIII. SOCIOECONOMIC ANALYSIS
Pursuant to state law, District staff is requi red to analyze the so cioeconomic impacts of any proposed rule or rule amen dment that significantly affects air quality or strengthens an emission limitation. During the scoping meet ing, District staff solic ited volunteers from stakeholders, and manufacturers and vendors of control devices to participate as members of the socioeconomic focus group for th e rule. District sta ff worked closely with the focus group to estimate direct complia nce costs of the proposed amendments. The District’s independent consultant participated with the focus group to identify and analyze the socioeconomic impacts of the proposed amendments to the rule. District staff has considered the socioeconomic anal ysis to further refine the propos ed rule amendments. The socioeconomic report is attached as Appendix D to thisfinal staff report, and was presented to the public at the final workshop for the rules. The final socioeconomic report will also be presented to the District Governing Board in order to disclo se any expected economic impacts.
A document titled “Complianc e Cost and Socioeconomic Impa ct Analysis” (dated May 16, 2005) was submitted to t he District on May 18, 2005 by the San Joaquin Valley Agricultural Industrial Coalition. This document is attached asAppendix F to this final staff report. The views presented in the document do not represent the views of the District.

IX. ENVIRONMENTAL IMPACTS

Pursuant to Section 15061 of the California En vironmental Quality Act (CEQA), District staff investigated the likely environmental impacts of the proposed amendments to Rule 4702. Based on this review, staff determi ned with certainty that the amendments haveSAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
Final Staff Report: Rule 4702 June 16, 2005

Final Staff Report for Rule 4702 19 no possibility to result in significant impacts on the environment. Upon approval of this project, a Notice of Exemption will be filed.

X. RULE CONSISTENCY ANALYSIS

Pursuant to the state Health and Safety Code, Sect ion 40272.2, District staff has prepared a rule consistency analysis of Rule 4702. The rule consistency analysis is in Appendix E of this final staff report.

XI. REFERENCES

1. ARB “Final RACT/BARCT Determination for Spark-Ignited Internal Combustion Engines” dated November 2001.

2. California Health and Safe ty Code, Vari ous sections.
3. South Coast Air Quality Management District, Rule 1110.2 (Emissions From Gaseous- and Liquid-Fueled Engines ), amended November 14, 1997.
4. Ventura County Air Pollution Control District, Rule 74.9 (Stationary Internal Combustion Engines), Re vised November 14, 2000.
5. Federal Register: February 12, 2004 (Vol ume 69, Number 29), Proposed Rules, page 7098-7103.
6. Federal Register: June 29, 2 004 (Volume 69, Number 124) Control of Emission of Air Pollution from Nonroad Diesel Engines and Fuel; Final Rule
7. Technical Support Document for EPA's Notice of Proposed Rulemaking for the California State Implementation Plan, S an Joaquin Valley Unified Air Pollution Control District, Rule 4701 (Internal Com bustion Engines - Phase 1), Rule 4702 (Internal Combustion Engines - Phase 2), January 28, 2004.
8. California Senate Bill No. 700, C hapter 479, Filed September 22, 2003.SAN JOAQUIN VALLEY UNIFIED AI R POLLUTION CONTROL DISTRICT
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Final Staff Report for Rule 4702 20 This page intentionally blank.