Ventura County Air Pollution Control District FINAL STAFF REPORT – February 29, 2008



### Revisions To Rule 74.12
SURFACE COATING OF METAL PARTS AND PRODUCTS

EXECUTIVE SUMMARY

Rule 74.12, Coating of Metal Parts and Products, was first adopted on November 19, 1985, and has been the subject of several revisions. The proposed revisions are required because, under the provisions of Health and Safety Code § 40914(b)(2), staff is required to demonstrate that the District's plan to attain the California ambient ozone standard provides for expeditious implementation of "every feasible measure" to reduce ozone precursor emissions (including reactive organic compounds, or ROC).

On October 9, 2001, the Ventura County Air Pollution Control Board adopted an addendum to the Ventura County Triennial Plan that included a

Feasible Measure to amend Rule 74.12. This proposal will also implement Best Available Retrofit Control Technology (BARCT) as required by the

California Clean Air Act.

Staff proposes two revisions to Rule 74.12. The first is to reduce the current ROC limit for general air-dry coatings ("all coatings except the following") from 2.8 pounds of ROC per gallon (lb/gal) to 2.3 lb/gal.In addition, a new coating category, "Multi-Component Coatings," will be created with an ROC content limit of 2.8 lb/gal. This category excludes other listed specialty multi-component coatings. These revisions are based on similar coating categories and standards in South Coast Air Quality Management District (AQMD) Rule 1107, which became effective on March 1, 1999. Complying coatings are available and currently in use in both the AQMD and Ventura County.

The second revision will reduce the ROC content limit for surface preparation and cleanup solvent to 25 grams of ROC per liter (0.21 lb/gal). This limit appears in the November 7, 2003, revision to South Coast Air Quality Management District (SCAQMD) Rule 1171, Solvent Cleaning Operations . The proposal is feasible because complying solvents are available; these include acetone, acetone-blended solvents, and water. These solvents are currently in use at many metal parts paint shops in the county.

The proposed revisions may affect approximately 27 out of 53 facilities in Ventura County that coat metal parts or products. These facilities emit about 35 tons of ROC per year. The proposal will reduce ROC emissions by about 19 percent, or 6.64 tons per year. About 36 percent of the emission reduction results from the change to the coating requirements; the remainder results from the proposed low-ROC solvent requirements.

The cost-effectiveness of replacing certain 2.8 lb/gal coatings with 2.3 lb/gal coatings is $15,441 per ton ofROC reduced. It is possible to estimate cost-effectiveness because complying high-performance, onecomponent topcoats and primers at 2.3 lb/gal are readily available.

The cost-effectiveness of the proposed low-ROC solvent requirement can also be estimated becausecomplying solvents are available. The cost-effectiveness of this proposal ranges from $359 per ton of ROC reduced to $6,470 per ton.

Emission Source Inventory

The 53 metal surface coating operations are currently permitted in Ventura County, as shown in Appendix A. City location, Standard Industrial Classification (SIC) Code, and SIC Code description are included. Of these, 29 are known to use complying solvent in their process; acetone, water, and other zero-ROC

solvents are used. Three facilities use a combination of acetone and solvent, and six are unknown. Only 18 sources are known to use a non-complying solvent (see Appendix B)

In addition, 33 comply with the proposed 2.3 lb/gal coating requirement; 20 sources will be required to switch to lower-ROC coatings (see Appendix C).FINAL Staff Report – Rule 74.12 Page 2 February 29, 2008

PROPOSED REVISIONS

Rule 74.12, Coating of Metal Parts and Products, was first adopted on November 19, 1985. The proposed revisions are required because, under the provisions of Health and Safety Code § 40914(b)(2), staff is required to demonstrate that "every feasible measure" to reduce ozone precursor emissions is being done. The following amendments are proposed to reduce ROC emissions at metal surface coating operations:

1. Implement a lower ROC limit for general airdry one-component coatings and create a new multi-component coating category. Eliminate the special category for lab furniture coatings.

2. Implement the use of low-emission cleanup solvents for spray gun and general purpose cleanup. ROC content will be limited to no more than 25 grams per liter (g/l), or 0.21 lb/gal.

The effective date for these requirements is 90 days from the date of adoption by the Ventura County Air

Pollution Control Board.

Low-ROC Coating Requirements

In Subsection B.1, staff proposes to reduce the ROC limit for general purpose, single component, air-dry coatings ("all coatings except the following") from 2.8 lb/gal (340 g/l) to 2.3 lb/gal (275 g/l). In addition, a new coating category will be created for general multi-component coatings ; the ROC limit will be 2.8 lb/gal, or 340 g/l. The new category will exclude all multi-component coatings listed in the remainder of the ROC Limit chart. This proposal is based on the March 1, 1999, version of South Coast AQMD Rule 1107. The proposal does not change the ROC limit for baked coatings (2.3 lb/gal).

In a related proposal, the high-gloss coating category will be limited to two-component coatings. Without this change, coating manufacturers may circumvent the revised ROC content limit above by relabeling one-component coatings for high gloss application. The current ROC content limit in the high gloss category is 3.5 lb/gal (420 g/l).

Staff also proposes to delete the Laboratory Furniture coating category. This is possible because the only lab furniture coating company in the county, Hanson Lab Furniture, currently uses a 2.3 pounds per gallon waterborne baked acrylic enamel from Cardinal Coatings. This material is in compliance with the proposed one-component coating limit. Also, SCAQMD Rule 1107 does not include a separate category for lab furniture coating. To accomplish these changes, a modified ROC

content chart will be added to Subsection B.1. A strikeout/underline version of the chart appears in

Table 1.

Low-Emission Cleanup Solvent

Staff proposes to amend Subsection B.4 to limit the ROC content of all cleanup solvent used for spray gun cleaning and general purpose cleanup to 25 g/l. As previously noted, the effective date will be 90 days from the date of adoption. The proposed revisions will appear in Subsection B.4 as follows:

Surface Preparation and Cleanup:

a. After (90 days from date of adoption), no person shall use a material for substrate surface cleaning that has an ROC content exceeding 25 grams per liter of material.

a. On or before (90 days from date of adoption),

No no person shall use any material which contains more than 70 grams of ROC per

liter of material for substrate surface cleaning.

Substrate surface cleaning performed in a degreasing unit operate d in compliance with the requirements of Rules 74.6.1, 74.6.2 or 74.6.3 as applicable shall not be subject to

this ROC content limit.

b. After (90 days from date of adoption), no person shall use a material for either spray equipment cleaning or cleanup that has an ROC content exceeding 25 grams per liter of

material.

b. On or before (90 days from date of adoption),

No no person shall use organic solvent for cleanup unless:

1) An enclosed gun washer or "low emission spray gun cleaner" that has been approved in writing by the APCO is properly used for spray equipment cleaning, and

2) The ROC composite partial pressure of organic solvent used for cleanup, including spray equipment cleaning, is less than 45 mm Hg at 20 ° C.FINAL Staff Report – Rule 74.12 Page 3 February 29, 2008



### Table 1
Revisions ROC Content Chart in Subsection B.1

Air Dried Baked Coating g/L lb/gal g/L lb/gal

All coatings except 275 340 2.3 2.8 275 2.3 for the following:

Multi-Component

not listed below 340 2.8 275 2.3 Camouflage 420 3.5 360 3.0

Extreme Performance 420 3.5 360 3.0 Etching Filler 420 3.5 420 3.5

Heat Resistant 420 3.5 360 3.0 High Gloss (2 Component) 420 3.5 360 3.0 High Performance

Architectural 420 3.5 420 3.5 High Temperature 420 3.5 420 3.5 Laboratory Furniture 340 2.8 340 2.8

Metallic 420 3.5 360 3.0

Mold Seal 420 3.5 420 3.5 Pan Backing 420 3.5 420 3.5

Pretreatment Wash Primer 340 2.8 275 2.3

Silicone Release 420 3.5 420 3.5

Solar Absorbent 420 3.5 360 3.0 Vacuum Metalizing 420 3.5 420 3.5

Other Proposed Revisions

To accommodate the new coating categories,definitions of "One-Component Coating" and "MultiComponent Coating" are being added to Section G of the rule, as follows:

31. "Multi-Component Coating": A coating requiring the additi on of one or more separate reactive resins, commonly known as catalyst or hardener, pr ior to application to form an acceptable dry film.

32. "One-Component Coating": Any coating that is ready for application as it comes out

of its container to fo rm an acceptable dry film. A thinner or reducer, necessary to reduce the viscosity, is not considered a
component.

In Subsection B.7, the Liquid Cleaning Material Compliance Statement will be amended to exclude ROC Composite Partial Pressure information. This information will not be necessary 90 days after the date of adoption. Other minor text changes in other subsections are also proposed.

The definition of High Volume-Low Pressure (HVLP) spray equipment is being updated to be consistent with other District rules. The existing definition in Subsection G.24 will be replaced with the following:

25. "High Volume-Low Pressure (HVLP)": Equipment used to apply coatings by means of a spray gun designed to be operated and operated between 0.1 and 10 pounds per square inch gauge (p sig) air pressure measured dynamically at the center of the air cap and at the air horns.

The identification of HVLP spray equipment in the field has been an issue for District inspection staff.FINAL Staff Report – Rule 74.12 Page 4 February 29, 2008

To assist in this, staff proposes a paragraph in Section E, Test Methods, to specify methods of identification that may be used, as follows:

9. High Volume-Low Pressure (HVLP) equipment shall be identified by either test air cap measurements or an inlet pressure measurement that, when used with specifications published by the manufacturer, establishes that gun is being operated as specified in Subsection G.16.

As suggested by USEPA on another coating rule, we propose to strike existing Subsection E.4 on capture and control efficiency determinations and replace it with the following: 4. Capture efficiency shall be determined according to EPA Guidelines for Determining Capture Efficiency, dated January 9, 1995, and 40 CFR 51, Appendix M, Methods 204-204F as applicable. Control system efficiency shall be determined by 40 CFR 60, Appendix A, Methods 18, 25 or 25A.

In addition, at EPA's suggestion, a definition of "Capture Efficiency" is being added to Section G:

7. "Capture Efficiency": The percentage of ROC used, emitted, evolved, or generated by the operation, th at are collected and directed to an air pollution control device.

DISCUSSION

Emission Reductions

The proposed amendments to Rule 74.12 will reduce actual ROC emissions from the coating of metal parts and products about 19 percent, or 6.64 tons per year (tpy). About 36 percent of the emission reduction (2.40 tpy) results from the change in coating requirements. The remaining 64 percent (4.24 tpy) results from the proposed 25 g/l threshold for cleaning solvents.

Low-Emission Cleaning Solvent

Acetone is currently used by a number of metal surface coating operations for surface preparation, gun cleaning and general cleanup. Water is also used. Although acetone has a high vapor pressure and is extremely flammable, it is an exempt organic compound because its photochemical reactivity is

low.

Several vendors currently sell acetone-blend cleaning solvents that comply with the proposed revision. Theperformance of these cleaners has been demonstrated by their wide use in southern California.

These cleaners include:

• Pacific Coast Lacquer (PCL) 2085B

• Oxsol 100 (PCBTF, Parachlorobenzotrifluoride)

As shown in Appendix B, 18 of the 53 metal surface coating facilities in Ventura County use a known quantity of solvent for surface preparation and cleaning. Based on actual solvent use rates, the ROC

solvent emission rate from these sources is 4.40 tons per year. If it is possible to use either water or an exempt solvent at these facilities, the entire 4.40 tons per year can be eliminated. If solvents meeting the 25 gram/liter requirement are used, an ROC emission reduction of 4.24 tons per year is possible.

Low-ROC Coating Requirements

Complying one-components coatings (including high gloss coatings) are available to meet the proposed ROC content limit of 2.3 pounds per gallon. A number of manufacturers offer compliant coatings; see Appendix D for more details.

Of the 53 metal surface coating facilities in Ventura County, 20 are known to use single componentcoating materials that exceed 2.3 lb/gal (see Appendix C). The emission limit for these coatings is being reduced to 2.30 lb/gal from 2.80 lb/gal. Based on actual coating use, ROC emissions from these sources is 34.5 tpy. If coatings meeting the 2.30 lb/gallon requirement are used, an ROC emission reduction of 2.40 tpy is possible.

Cost-Effectiveness

Low-Emission Cleaning Solvent

Both acetone and water are popular substitutes for non-exempt ROC solvents. Both options have an ROC content of zero. It also appears that most ROC solvent is used for spray gun cleaning. With this in mind, staff has attempted to estimate the cost of switching from an ROC solvent to either acetone or one of two other popular exempt cleaning materials.FINAL Staff Report – Rule 74.12 Page 5 February 29, 2008

Staff assumed that the ROC solvent currently in use is common lacquer thinner; local inquiries establish the cost of this solvent at $12.00 per gallon. The cost of acetone is about $14.00 per gallon, for a cost differential of $2.00 per gallon. As noted above, an ROC emission reduction of 4.40 tons per year can be assumed when an exempt solvent us used. Based on this information, and the annual county-wide solvent use total in Appendix B, the following cost

effectiveness is estimated.

($2/gal)*(1524 gal/yr) / (4.40 ton/yr) = $693 per

ton of ROC reduced

Pacific Coast Lacquer (PCL) 2085B is a replacement solvent that meets the 25 gram/liter requirement. If this material is used, an ROC emission reduction of 4.24 tons per year is possible. PCL states that the cost is about one dollar more than lacquer thinner. 1
The resulting cost-effectiveness is:

($1/gal)*(1524 gal/yr) / (4.24 ton/yr) = $359 per

ton of ROC reduced

Another popular compliant solvent is PCBTF (Parachlorobenzotrifluoride), commonly known as Oxsol 100, an exempt compound. The local cost of this material is about $30 per gallon. Staff has no

information on the usefulness of this material inmetal surface coating. Nevertheless, the costeffectiveness of this material is:

($18/gal)*(1524 gal/yr) / (4.24 ton/yr) = $6,470 per ton of ROC reduced

The District maintains a Best Available Control Technology (BACT) cost-effectiveness guideline of $18,000 per ton of ROC reduced. All of the above estimates are well below this threshold. Therefore, the proposed revisions are reasonable based on the

cost of control.

Low-ROC Coating Requirements

As shown in Appendix D, a number of complying one-component topcoat and primers with an ROC content of 2.3 pounds per gallon or less are readily available. Staff surveyed a number of coating suppliers and got current prices for 14 complying coatings; the average cost of these coatings is $41.95 per gallon. In addition, prices for four in-use costing were also obtained; the average cost is $38.05. The difference in cost is $3.90 per gallon.

Based on this information, and the amount of annual coating use in Appendix C, the following cost

effectiveness is estimated: ($3.90/gal)*(9502 gal/yr) / (2.40 ton/yr) = $15,441 per ton of ROC reduced

As noted above, the District maintains a BACT costeffectiveness guideline of $18,000 per ton of ROC

reduced. The above estimate is below this threshold. Therefore, the proposed revisions to the coating requirements are reasonable and cost-effective.

Incremental Cost-Effectiveness

Health and Safety Code Section 40920.6 requires the performance of an incremental cost-effectiveness analysis for a regulation that identifies more than one control option to meet the same emission reduction objectives. Incremental cost-effectiveness is defined as the difference in costs divided by the difference in

emission reductions between one level of control and the next more stringent level of control.

No alternate control option is identified for the proposed 25 g/l ROC solvent requirement.

Low-ROC Coating Requirements

Staff has identified one alte rnate control option that is not being proposed at this time. This control option would require the use of air-dried and baked topcoats with an ROC limit of 50 grams per liter. The primary coating technology available for this option is powder coating.

For this option, powder coatings with an ROC content of less than 50 g/l are used in place of the solvent-based coatings at 380 g/l (2.8 lb/gallon). Information on the coatings under consider-ation in this control option appears in Table 2.

Table 2 Coating Data Used for Cost Analysis for Alternative Option

Existing Coatings VOC (lbs/gal) 2.8 Cost ($/gallon) $38.05 Volume Solids (%) 50

Zero ROC Coatings VOC (percent) 0 – 2 Cost ($/pound) $4.25 Volume Solids (%) 98

Ratio of Solids a 0.51

a - Ratio of solids = coverage correction factor.

Before the incremental cost-effectiveness is determined, the cost-effectiveness of the alternate control option must be calculated. Actual ROC emissionsFINAL Staff Report – Rule 74.12 Page 6 February 29, 2008

from metal surface coating operations in Ventura County using liquid coatings are estimated to be 24.65 tons per year; existing powder coating operations are not included in this total. This is equal to about 21,123 gallons of ROC coating per year. If only zero emission coatings were applied, emissions would be reduced to zero and all 24.65 tons per year of ROC would be eliminated. If a powder coating with a two percent ROC content were used, the reduction would be 24.16 tons per year.

The cost of the proposal is two-fold – the cost of powder coating material and the cost of replacing all liquid ROC coating equipmen t with powder coating equipment. Cost estimates for the latter appear in an EPA/RTI discussion of powder coating operations. 2

With respect to material applied, one gallon of ROCbased liquid paint is equal to about 7.4 pounds of powder coating. 3 Based on this information, and the annual liquid coating use noted above (and in Appendix E), the following cost effectiveness is

estimated:

(7.4 lb/gal)*(21,123 gal/yr) = 156,310 lb per year of equivalent powder coating material

The cost of powder coating materials ranges from $2.50 to $6.00 per pound, although specialty materials can exceed $25.00 per pound. 2 For this calculation, we assume $4.25 per pound. At this rate,

the annual cost of material is:

($4.25/lb)*(156,310 lb/yr) = $664,318 per year

The comparable cost for liquid coating is:

($38.05/gal)*(21,123 gal/yr) = $803,730 per year

Therefore, powder coating materials save a total of $139,412 per year county-wide.

The cost for new powder coating equipment can range from $50,000 for a batch system to $1,000,000 or more for a conveyorized system. 2 The difference between batch and conveyor systems is the amount and size of product that can be processed in a given period of time. For most sources, we assume a small batch operation with a 10 x 10 x 20 ft oven will be used and the following purchases will be necessary:

• Gun & feed system ..............................$5,000

• Spray booth ........................................$10,000

• Cure oven...........................................$30,000

• Pretreatment & cleaning system ........$10,000 $55,000 There are 46 metal surface coating operations in Ventura County that use liquid coating materials; seven other operations already use powder coating (See Appendix E). If we assume that there are 38 small liquid ROC coating operations in Ventura County that could use the small system, a total of $2,090,000 in capital expenses will be necessary to change all coating systems to powder coating. Eight other operations are larger and make products that may require larger powder coating equipment. If we will assume that, in these cases, the equipment will cost $300,000, the total capital cost for these seven facilities will be $2,400,000. Note that differences in operating costs are not reflected in these calculations; among other things, powder coating requires less energy and less hazardous waste disposal.

Assuming an equipment life of 10 years, the applicable capitol recovery factor applies:

10 years @ 8 percent = 0.149

The capital recovery factor is used to annualize the one-time cost noted above. The county-wide annualized project cost is as follows:

0.149 * $4,490,000 = $669,010 / year

Therefore, the cost-effectiveness of the alternative proposal is:

($669,010/yr)-($139,412/yr) / 24.16 tpy = $21,920 per ton of ROC reduced.

As noted above, the cost-effectiveness of the proposed revision is:

($3.90/gal)*(9502 gal/yr) / (2.40 ton/yr) = $15,441 per ton of ROC reduced

On this basis, the annual cost of the proposed

revision is:

($3.90/gal)*(9502 gal/yr) = $37,058 per year

Based on the definition, incremental cost-effectiveness is calculated as follows:

($669,010/yr - $137,451/yr) - $37,058 = $22,635 24.16 – 2.40 per ton of ROC reduced

Incremental cost effectiveness "represents the added

cost to achieve an incremental emission reduction between two control options." 4 This estimate is an independent economic assessment and is not related

to the maximum absolute cost effectiveness for Best Available Control Technology (BACT) of $18,000FINAL Staff Report – Rule 74.12 Page 7 February 29, 2008

per ton of ROC reduced. Although the capital cost of the alternative control option is relatively high, the potential ROC emission reduction is also high. Note also that some companies may not be able to use powder coating in their particular manufacturing process. However, with better information about processes and costs from stakeholders, the alternative control option may be found to be both feasible and

cost-effective.

SOCIOECONOMIC IMPACT

Health and Safety Code, Division 26, Part 3, Chapter 6.5, section 40728.5, which became effective January 1, 1992, requires that the District Board consider the socioeconomic impacts of any new or revised rule.The Board must evaluate the following socioeconomic information on proposed Rule 74.12.

(1) The type of industries or businesses, including small business, affected by the rule or regulation.

The adoption of these proposed amendments to Rule 74.12 will directly affect facilities that coat metal parts and products. These companies are listed in Appendix A of this report.

(2) The impact of the rule amendments on employment and the economy of the region.

Revisions to Rule 74.12 are not expected to have a significant impact on either employment or the economy of Ventura County.

(3) The range of probable costs, including costs to industry or business, including small business, of the rule or regulation.

Overall the probable costs range from zero cost for those companies currently in compliance with the proposed amendments to $64,490 per year county-wide for those companies that switch coatings and solvent cleaners.

(4) The availability and cost-effectiveness of alternatives to the rule or regulation being proposed or amended. One alternative control option has been identified; to require the use of a zero-ROCcoating such as powder coating. The costeffectiveness of the option is estimated to be $21,920 per ton of ROC reduced. Although the cost of this option is relatively high, the ROC emission reduction potential is also high. With better information from stakeholders, this option may be both feasible and cost-effective.

(5) The emission reduction potential of the rule or regulation.

The anticipated emission reduction potential of the proposed rule is 6.64 tons per year of ROC emissions, a 19 percent reduction. These

emission reductions result from the use lower ROC content air-dried coatings and the use of low ROC content cleaning solvents.

(6) The necessity of adopting, amending, or repealing the rule or regulation in order to attain state and federal ambient air standards pursuant to Chapter 10 (commencing with Section 40910).

Ventura County is classified as a moderate nonattainment area for federal Ambient Air Quality

Standards for ozone. It is classified as a severe

non-attainment area for state Ambient Air Quality Standards for ozone. These proposed

rule amendments will reduce ROC emissions that are precursors to the formation of ozone. These emission reductions will help the District

in its effort to attain both the federal and state

ozone standards.

ANALYSIS OF EXISTING FEDERAL AND DISTRICT REGULATIONS

Health and Safety Code Section 40727.2 requires Districts to compare the requirements of a proposed revised rule with other air pollution control requirements. These other air pollution control requirements include federal New Source Performance Standards (NSPS), federal National

Emissions Standards for Hazardous Air Pollutants (NESHAPS), Best Available Control Technology (BACT) and any other District rule that applies to the same equipment.

Federal NSPS and NESHAPS

Source to which Rules 74.12 applies include any facility that coats metal parts and products. The existing federal regulation that applies to this sourceFINAL Staff Report – Rule 74.12 Page 8 February 29, 2008

type is the National Emission Standards for Hazardous Air Pollutants (NESHAPs) for Large Applicances, Metal Furniture, and Miscellaneous Metal Parts. This regulation is being proposed by the U.S. Environmental Protection Agency.

District staff has evaluated the requirements of this federal regulation. We have determined that the proposed requirements of Rule 74.12 are at least as stringent as the federal regulation.

BACT Requirements

Health and Safety Code Section 40727.2 (a) requires that the proposed amendments to Rule 74.12 be compared with Best Available Control Technology. The CAPCOA Engineering Manager Rule Development Subcommittee developed guidance on this matter. Under this guidance, it was recommended that BACT be interpreted as a

District’s BACT determination.

A check of BACT Determinations made by the South Coast AQMD and ARB revealed a variety of control strategies for the coating of metal parts and products. The appropriate strategy depends on: the type, size, and shape of part; the process line speed; spray booth size and flow rate; and coating performancerequirements. Type of control strategies include addon controls such as thermal oxidation for conveyorized booths, waterborne coatings, high-solid coatings, powder coatings and UV powder coatings.

The BACT requirement for solvent cleaning of spray equipment is determined by SCAQMD Rule 1171. Effective November 7, 2003, the VOC content limit for spray equipment cleaners in Rule 1171 is 25 grams of VOC per liter of solvent (0.21 lb/gal).

ENVIRONMENTAL IMPACTS OF METHODS OF COMPLIANCE / CEQA

California Public Resources Code section 21159 requires the District to perform an environmental analysis of the reasonably foreseeable methods of compliance if the proposed rule requires “the installation of pollution control equipment, or [specifies] a performance standard or treatment requirement...” The proposed revisions to Rule 74.12 specify revised performance standards.

The analysis must include the following information on the proposed revisions to Rule 74.12:

(1) An analysis of the reasonably foreseeable environmental impacts of the methods of compliance. (2) An analysis of the reasonably foreseeable
mitigation measures

. (3) An analysis of the reasonably foreseeable alternative means of compliance with the rule or regulation. Table 3 lists all reasonably foreseeable compliance methods, the environmental impacts of those methods, and measures that could be used to mitigate the environmental impacts. The analysis indicates that the adoption of amendments to Rule 74.12 will not have a significant effect on the environment.

CEQA Requirements

Staff concludes that adoption of the proposed revisions to Rule 74.12 is within the scope of the categorical exemptions from the California Environmental Quality Act (CEQA) under state CEQA guideline Sections 15307, Protection of Natural Resources, and 15308, Protection of Environment, and that no exceptions to these categorical exemptions apply.

MEETINGS AND COMMENTS

Environmental Protection Agency August 27, 2007

In a telephone conversation, EPA suggested the addition of a "multi-component coating" definition. A definition of "capture efficiency" was also suggested. These changes were made; see pages 3 and 4 of this report. In addition, EPA also suggested

a few minor clarifications to the text. Public Workshop August 30, 2007

The public workshop was attended by one stakeholder. No significant changes to the rule were suggested.FINAL Staff Report – Rule 74.12 Page 9 February 29, 2008



### Table 3 Environmental Impacts and Mitigations of Methods of Compliance

Compliance Methods (including all reasonably foreseeable alternative means of compliance) Reasonably Foreseeable Environmental Impacts Reasonably Foreseeable Mitigation Measures

Reformulation of cleaning solvents Air Quality Impacts: Reformulation may result in the use of toxic

materials. Operators may use cleaning solvents containing less toxic

materials. Also the use of methylene chloride in cleaners is prohibited by the proposal.

Water Impacts: Improper disposal of cleaning solvents may cause water impacts. Compliance with wastewater discharge standards and waste disposal requirements will mitigate these impacts.

Human Health Impacts: Reformulation of cleaning solvents may contain more toxic compounds. Compliance with OSHA safety guidelines reduces these impacts. Also, methylene chloride, a carcinogen, will be prohibited.

Flammability Hazard Impacts: The use of acetone in cleaning solvents may increase the likelihood of fire or explosions. Standard operating practices when dealing with flammable materials will mitigate this hazard. Proper ventilation and

avoidance of heat sources or sparks are essential.

Advisory Committee

February 26, 2008

The committee asked about the depletion of noncomplying inventory; staff stated that 90 days should be enough time to accomplish the transition to complying compounds. A typographical error was

noted in Subsection B.2.e. Staff stated that metal coating operations will be notified of the rule changeby mail. The rule revision was unanimously recommended to the Air Pollution Control Board.

REFERENCES

1. Telephone conversation with Ruben Laguna, PCL, 800/752-1566, February 7, 2006

2. The Coatings Guide TM , RTI International and U.S.EPA Office of Research and Development, The National Risk Management Research Laboratory, October 03 2005, http://cage.rti.org/ altern_data.cfm?id=powder&cat=Economics 3. Powder Coater's Manual , Roger Talbert, Chapter XI, Section 4, January, 1998, http:// www.coatings.de/pcmanual/pcmanual.cfm

4. Incremental Cost-Eff ectiveness Guidance Document for Rule Development, California Air Pollution Control Officers Association, March 26, 1998, page 2

DISCLAIMER

This report contains references to company and product names to illustrate product availability. Mention of these names is not to be considered an endorsement by the Ventura County Air Pollution Control District.FINAL Staff Report – Rule 74.12 Page 10 February 29, 2008



### APPENDIX A Permitted Metal Parts Coating Operations in Ventura County

Facility Name Location SIC Code SIC Description
1 A-1 Truck & Equipment Saticoy 7532 Auto Repair & Painting 2 Air National Guard Channel Islands Port Hueneme 9711 National Security 3 All Valley Wrought Iron Simi Valley 3499 Fabricated Metal Products 4 Applied Powdercoat Oxnard 3549 Metalworking Machine Mfg. 5 Artistica Metal Designs Ventura 2514 Metal Household Furniture 6 B&R Scenery Camarillo 3999 Mfg. Industries, Other 7 Bell Powder Coating Ventura 3479 Coating, Engraving, Other 8 Bemco Simi Valley 3567 Industrial Furnace/Oven Mfg. 9 Bend-Pac Santa Paula 3542 Machine Tool Mfg. 10 Boeing – Santa Susana Simi Valley 3764 Rocket Testing 11 C. D. Lyon Construction Ventura 1799 Paint & Sand / Steam Blasting 12 Chapala Iron & Mfg. Company Ventura 3446 Ornamental Metal Work Mfg. 13 Clark Engineering Construction Ventura 1799 Paint & Sand / Steam Blasting 14 Custom Industrial Finishes Oxnard 3479 Coating, Engraving, Other 15 Custom Iron Designs Simi Valley 3499 Fabricated Metal Products 16 Data Exchange Corporation Camarillo 7378 Computer Maintenance & Repair 17 Datron Advanced Tech Simi Valley 3812 Radar/Sonar System Mfg. 18 Designworks/USA Newbury Park 7336 Commercial Art/ Graphic Design 19 E. J. Harrison & Sons Saticoy 7532 Auto Repair & Painting 20 Elite Metal Finishing Oxnard 3471 Electroplating

21 ERG International Oxnard 2522 Metal Office Furniture 22 Frias Wrought Iron Works Ventura 3446 Ornamental Metal Work Mfg. 23 G&H Technology Inc. Camar illo 3678 Electronic Connectors 24 G.I. Rubbish Company Simi Valley 7532 Auto Repair & Painting 25 General Magnaplate Ventura 3471 Electroplating 26 Haas Automation Oxnard 3549 Metalworking Machine Mfg. 27 Hales Engineering Camarillo 3499 Fabricated Metal Parts 28 Hanson Lab Furniture Newbury Park 3821 Lab Apparatus & Furniture 29 Industrial Electric Motors Oxnard 7694 Motor Rewind Shop 30 Int'l Power DC Power Supplies Oxnard 3679 Electronic Components – Other 31 Malabar International Simi Valley 3728 Aircraft Parts/Equip. Mfg. 32 Mares Wrought Iron Ventura 3446 Ornamental Metal Work Mfg. 33 Metalcrafters Simi Valley 3499 Fabricated Metal Products 34 Naval Base Ventura Co. – Pt. Mugu Point Mugu 9711 U.S. Naval Air Station 35 North American Imaging Inc. Camarillo 5047 Medical / Dental / Hospital Equip. 36 Oilfield Electric Company Ventura 7694 Motor Rewind Shop 37 Original 22 Camarillo 2599 Furniture/Fixtures, Other 38 Oxnard Public Works Equip. Yard Oxnard 9111 Government Agency 39 Pentair Pool Products Moorpark 3648 Lighting Equipment, Other 40 Power Machinery Center Oxnard 7359 Equipment Rental & Leasing 41 Raypak Oxnard 3433 Swimming Pool Heater Mfg. 42 Royal Coatings Simi Valley 3479 Coating, Engraving, Other 43 Smith Precision Products Newbury Park 3569 Industrial Machinery Mfg. 44 Southern California Gold Products Oxnard 3549 Metalworking Machine Mfg. 45 Sun Welding Simi Valley 3499 Fabricated Metal Products

46 T&T Truck & Crane Ventura 1389 Oilfield Services 47 Trumeta Corporation Camarillo 3446 Ornamental Metal Work Mfg. 48 Ventura Co. – Facilities & Grounds Ventura 9111 Government Agency 49 Vista Landscape Lighting Simi Valley 3499 Fabricated Metal Products 50 Vogue Sign Company Oxnard 3479 Coating/Engraving, Other 51 Waterpik Technologies Moorpark 3433 Swimming Pool Heater Mfg. 52 Weatherford Oil Country Ventura 3499 Fabricated Metal Products
53 Weatherford U.S., L.P. Santa Paula 1389 Oilfield ServicesFINAL Staff Report – Rule 74.12 Page 11 February 29, 2008



### APPENDIX B Metal Surface Coating Operations Requiring ROC Reductions - Solvent

Solvent Use and Emission Reduction Estimates

Facility # Permit Average Actual New Rule Difference Difference
gal/yr gal/yr lb/gal lb/gal lb/gal ton/yr
173 Oilfield Electric Company 70 38.40 4.00 0.21 3.79 0.07
207 A-1 Truck & Equipment * 503.80 6.52 0.21 6.31 1.59

596 Malabar International** * - - 0.21 - -
636 Trumeta Corporation** * - - 0.21 - -
712 Royal Coatings 100 91.14 6.76 0.21 6.55 0.30

719 T & T Truck & Crane Service * 26.86 4.00 0.21 3.79 0.05
841 Vogue Sign Company 120 2.80 0.50 0.21 0.29 0.00
868 Chapala Iron & Mfg. Company 36 5.00 4.41 0.21 4.20 0.01
1113 Designworks/USA 15 19.38 4.29 0.21 4.08 0.04

1174 Hanson Lab Furniture 250 46.19 6.77 0.21 6.56 0.15
1230 North American Imaging Inc. 125 25.76 6.57 0.21 6.36 0.08
1308 Power Machinery Center 100 5.11 6.50 0.21 6.29 0.02
1321 G & H Technology Inc. 138.6 12.26 2.91 0.21 2.70 0.02

1335 Artistic Distribution Enamel 150 113.63 4.46 0.21 4.25 0.24
7221 C.D. Lyon Construction Inc. 350 137.17 6.70 0.21 6.49 0.45
7221 C.D. Lyon Construction Inc. 55 16.20 4.00 0.21 3.79 0.03
7297 Weatherford Oil County 350 348.55 6.77 0.21 6.56 1.14
7392 Hales Engineering 350 120.50 0.40 0.21 0.19 0.01
7431 Elite Metal Finishing 10 10.82 6.77 0.21 6.56 0.04

* - Permitted solvent limit combined with coating limit 1523.54 4.63 4.24

** - No actual use data Total Average Total
gal/yr Reduction ReductionFINAL Staff Report – Rule 74.12 Page 12 February 29, 2008



### APPENDIX C Metal Surface Coating Operations Requiring ROC Reductions - Coatings
Coating Use and Emission Reduction Estimates

Coating Use and Emission Reduction Estimates

Facility # Mix Permit Average Actual New Rule Difference Difference
gal/yr gal/yr lb/gal lb/gal lb/gal ton/yr

103 Custom Industrial Finishes 1 1785 1173.12 2.56 2.3 0.26 0.15
173 Oilfield Electric Company 1 830 385.72 3.15 2.3 0.85 0.16
207 A-1 Truck & Equipment 1 1941 928.18 2.57 2.3 0.27 0.12
339 General Magnaplate 1 111 15.88 4.55 2.3 2.25 0.02

596 Malabar Int'l 1 2760 lb 357.32 3.98 2.3 1.68 0.30
605 Sun Welding 2 1412 524.46 3.50 2.8 0.70 0.18

629 Air Nat'l Guard-Channel Island 1 125 36.17 3.50 2.3 1.20 0.02

629 Air Nat'l Guard-Channel Island 1 75 5.70 2.84 2.3 0.54 0.00
636 Trumeta Corporation 1 6000 lb 1432.58 2.46 2.3 0.16 0.11
712 Royal Coatings 1 1500 275.86 2.80 2.3 0.50 0.07
825 Intl Power DC Power Supplies 1 445 36.67 2.41 2.3 0.11 0.00
841 Vogue Sign Company 1 500 50.09 2.60 2.3 0.30 0.01
1113 Designworks/USA 1 82 62.30 3.85 2.3 1.55 0.05
1308 Power Machinery Center 1 500 47.38 2.80 2.3 0.50 0.01
1321 G & H Technology Inc. 1 76.5 4.80 7.03 2.3 4.73 0.01
7086 G.I. Rubbish Company 1 3065 2365.79 2.80 2.3 0.50 0.59
7086 G.I. Rubbish Company 1 400 324.63 3.50 2.3 1.20 0.19

7232 Weatherford U.S., L.P. 1 300 83.50 2.83 2.3 0.53 0.02
7336 Custom Iron Designs 1 2500 887.57 2.83 2.3 0.53 0.24
7392 Hales Engineering 1 750 233.54 2.84 2.3 0.54 0.06
7417 Applied Powdercoat, Inc. 1 200 200.00 2.80 2.3 0.50 0.05
7431 Elite Metal Finishing 1 695 71.17 2.84 2.3 0.54 0.02

9502.43 0.91 2.40
Total Average Total
gal/yr Reduction ReductionFINAL Staff Report – Rule 74.12 Page 13 February 29, 2008



### APPENDIX D Partial List of Available Complying CoatingsFINAL Staff Report – Rule 74.12 Page 14 February 29, 2008



### APPENDIX D Partial List of Available Complying Coatings (con't)FINAL Staff Report – Rule 74.12 Page 15 February 29, 2008



### APPENDIX E Metal Surface Coating Operations in Ventura County
Summary of Calculation ResultsFINAL Staff Report – Rule 74.12 Page 16 February 29, 2008



### APPENDIX E Metal Surface Coating Operations in Ventura County (Con't)FINAL Staff Report – Rule 74.12 Page 17 February 29, 2008



### APPENDIX E Metal Surface Coating Operations in Ventura County (Con't)FINAL Staff Report – Rule 74.12 Page 18 February 29, 2008



### APPENDIX F General Discussion of Metal Coating Technology

Paints and coatings are made of materials that fall into the following four principal classes: pigments, solvents, binders, and additives. Pigments are finely divided solids of various shades used to give color,hiding, consistency, build, durability, and other properties to coatings. Binders, also called film formers, are oils, resins and plasticizers that go to make up the protective films. The solvents are the liquids added to most surface coatings to make them fluid enough for proper application. Solv ents evaporate to leave a residue of pigment and binder to form the protective and decorative films by various drying and hardening processes. Solvents are al so used for preparing the surfaces of various substrates and for cleanup. Finally, additives help to improve the performance characteristics in various ways. Additives may be driers, skinning inhibitors, biocides (including pesticides used as antifoulants) or wetting agents.

The solvents used in the coating of metal parts and cleaning of spray equipment are the primary source of ROC emissions. These solvents evaporate releasing organic compounds to the atmosphere. The organic compounds photochemically react with oxides of nitrogen when exposed to ultraviolet radiation from sunlight to produce ozone.

Coating Technology

Today’s metal coatings are formulated with several resin systems that provide excellent durability andperformance. Acrylics, polyurethanes, epoxies, polyesters, silicones, siloxanes, acrylates, and a variety of hybrids represent the majority of existing coating technologies. There are two ways to reduce coating emissions; either increase the solid content (resins and pigments) or replace the ROC solvent with water or exempt solvents. High-solids, multi-component, and Ultra-Violet (UV) curable coatings are in the former category, while waterborne and acetone-based coatings are in the second category. Most users have reduced solvent emissions by using either high solids, waterborne, or powder coatings.

High-Solids Coatings

High-solids coatings generally fall into the twocomponent air-dried category or the one-component heat-cured systems. An example of a new technology in the two-component, high-solids coatings is the engineered siloxane coatings from

Ameron International. These air-dried twocomponent coatings (80 to 90 percent volume solids) can be applied by brush, roller, or spray without thinning. The ROC content of this coating is 120 gram per liter and is a high-gloss, self-priming topcoat. This PSX resin from Ameron is the world’s first weatherable epoxy and contains the properties of both a high performance epoxy and an acrylic polyurethane in one coat. This coating has outstanding resistance to acid, corrosion, high humidity, and moisture.

Another example of the new resin technology for high-solids coatings is Lyondell’s ACRYFLOW P120 liquid acrylic polyol. High performance coatings can be formulated with this resin and be sprayable at 2.1 pounds ROC per gallon. This resin provides improved crosslinking properties without increasing isocyanate demand, which leads to improved hardness, chemical resistance, durability and appearance at lower cost. Urethane coatings using this resin can have longer pot lives, which increases user process flexibility. Conversely, these coatings can also be formulated to dry quickly, another important cost and time saver.

Waterborne Coatings

Waterborne coatings reduce emissions simply

because the solvent used is water. Almost all waterbornes contain some organic co-solvents or additives to provide added coating performance. Waterbornes can be formulated with many different resin systems: acrylics, epoxies, phenolic resins, polyamides and polyester. An example of the new waterborne coatings is DEVFLEX 4208QD from ICI Devoe Industrial Coatings. This is a premium quality waterborne acrylic gloss enamel. This coating features alkyd-like hardness and durability, exceptional adhesion, superior flow and leveling, fast dry, easy application, excellent gloss and color retention, low odor, and high hiding. The ROC content of this coating is about 205 grams per liter.

Powder Coatings

Powder coatings have long been used to coat metal parts because it is an efficient, no ROC, single-coat process that provides a high-quality, durable finish. Powder coatings offer the best way to reduce ROC emissions because they are 100% solids with very low emissions. Thermoplastic powders are applied to heated parts and immediately fuse to the metal substrate. Polyethylene, polypropylene, nylon, polyvinyl chloride, and polyester are commonly used thermoplastic resins. These are primarily functionalFINAL Staff Report – Rule 74.12 Page 19 February 29, 2008

coatings rather than d ecorative because they are applied at many mils thickness.

Thermoset powder coatings are principally used for decorative purposes and are applied from 1 to 3 mils thick. Epoxy, polyester and acrylic powder are the most common thermoset powders. They are used for shelving, bathroom fixtures, office and kitchen furniture, business machines and home appliances.

Epoxy resins do not perform well outdoors because they may chalk when exposed to ultraviolet light. Hybrid resins of epoxy and polyester provide greater performance and easier application characteristics. Dow Chemical has developed new epoxy resin for powder coatings that have low-temperature (110 o C) and improved flow, high temperature resistance and maximum transparency in clear epoxy powder coatings. Low-temperature cure powders may be used for pre-assembled metal parts and plastic substrates. Improved flow allows use for decorative purposes with a smooth surface for application on metal shelving, file cabinets, appliances, furniture and general metal parts.

Acrylic powders have an exterior durability similar to their liquid counterparts and may be used for heavymachinery, appliance exteriors and aluminum extrusions. Polyester and polyester triglycidylisocyanurate hybrid powders also have exterior uses such as

aluminum and steel wheels and outdoor furniture.

Use of powder coatings is a well-developed technology that has been used for the past 30 years and provides one of the most durable finishes available. Many types of parts are commonly powder-coated, including lawn and garden, appliance, and automotive. Recent developments include low-temperature cure of 250 o F versus 300 to

400 o F for standard powders. Total annual sales of powder finishes in North America is about $1 Billion, approximately 10 percent of the total industrial

finishes market. Other advances include metallic finishes and new application equipment that make color changes faster and easier.

Ultraviolet-Cured Powder Coatings

Ultraviolet (UV) curable coatings, inks, and adhesives have been used in a variety of industrial applications for more than 30 years; these include beverage cans, printing inks, overprint varnishes. UV curable powder coatings now make it possible topowder coat parts such as medium density fiberboard, plastics and preassembled and diecast metal parts. Plastics are difficult to powder coat because they are both heat sensitive and nonconductive. Additionally, galvanized and electroplated substrates that either outgas or are temperature sensitive can now be power coated without coating defects.

UV powder coatings may also be a better option for massive metal parts, such as engine blocks, iron light pole bases, and I-beams that act as heat sinks during processing. With a traditional powder coating, the part surface must remain at high temperature to ensure adequate curing. A massive metal part absorbs the heat, which results in high-energy costs and long dwell and cool-down times. Since UV powder is not heat activated, both the oven temperature and dwell times can be reduced. This offers finishers new options and traditional powder coatings an ability to expand their market.

UV coatings consist of monomers, oligomers, photoinitiators and additives. They exist in the acrylate chemical family as epoxy, urethane or polyester hybrids. Photoinitiators absorb UV or near Infra-Red light and generate free radicals that react with double bonds causing polymerization. So, one advantage is that the melt and flow step can be separated from the curing step, allowing superior flow out and levelingof the coating prior to crosslinking. Most UV powders melt and flow in infrared, convection or IR/convection ovens at 175 o F to 250 o F for 2 to 10 minutes

and cure in a UV oven in a matter of seconds.

Application to variable geometries were difficult before three-dimensional curing equipment became available. In addition, heavily pigmented UV coatings that have outstanding opacity at low film loadings are available. Both textured and smooth coatings are available in a variety of colors, though not as many as traditional powders. Typical UV curing is a very fast, low temperature process that requires little floor space and produces high-quality coatings. Thus, with a UV powder, you get high material utilization, no ROCs, increased productivity, low-temperature curing and a high-quality coating. Compared to low-temperature thermal cure powders, UV powders provide a more durable finish, more flexibility and faster line processing.

UV powders currently cost several times more than traditional powder coatings. But, costs are expected to drop as production volume increases. High material utilization, reduced floor space, increased line speeds will reduce costs in addition to reduced labor and energy costs.