MEETING

STATE OF CALIFORNIA

AIR RESOURCES BOARD

JOE SERNA, JR. BUILDING

CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

BYRON SHER AUDITORIUM, SECOND FLOOR

1001 I STREET

SACRAMENTO, CALIFORNIA

THURSDAY, JUNE 23, 2011

9:09 A.M.

TIFFANY C. KRAFT, CSR

CERTIFIED SHORTHAND REPORTER

LICENSE NUMBER 12277

CALIFORNIA REPORTING, LLC

(415) 457-4417
APPEARANCES

BOARD MEMBERS

Ms. Mary Nichols, Chairperson

Dr. John Balmes

Ms. Sandra Berg

Ms. Dorene D'Adamo

Mrs. Barbara Riordan

Dr. Daniel Sperling

Mr. Ken Yeager

STAFF

Mr. James Goldstene, Executive Officer

Ms. La Ronda Bowen, Ombudsman

Mr. Tom Cackette, Chief Deputy Executive Officer

Mr. Bob Fletcher, Deputy Executive Officer

Ms. Ellen Peter, Chief Counsel

Ms. Lynn Terry, Deputy Executive Office

Ms. Analisa Bevan, Chief, Sustainable Transportation 

Technology Branch, Mobile Source Control Division

Ms. Mary Alice Morency, Board Clerk 

Ms. Bonnie Soriano, Staff Air Pollution Specialist,

Technical Analysis Section, SSD

Ms. Gayle Sweigert, Manager, Air Quality Analysis Section, 

PTSD
APPEARANCES CONTINUED

ALSO PRESENT

Mr. Bill Aboudi, AB Trucking

Ms. Diane Bailey, NRDC

Ms. Rosario Berretta, Daimler

Mr. Tim Brown, University of California, Irvine

Mr. James Boyd, Commissioner, California Energy Commission

Mr. Fernando Corral, Plug Power

Captain Aaron Cudnohufsky

Mr. Steve Eckhardt, Linde, North America

Mr. Stephen Ellis, American Honda Motor Company

Mr. Randal Friedman, Navy Region Southwest

Ms. Katrina Fritz-Intwala, UTC Power

Mr. Cooper Hanning, Natural Resources Defense Council

Mr. Henry Hogo, South Coast AQMD

Ms. Bonnie Holmes-Gen, American Lung Association

Mr. Edward Kiczek, Air Products and Chemicals, Inc.

Mr. Dan Krokosky, Chevron Shipping Company

Mr. Dominick Lee, VA Transportation, Inc.

Mr. Jaimie Levin, Alameda-Contra Costa Transit District

Mr. Marty Lico, Whole Foods Market

Mr. Ronald Light, West State Alliance

Ms. Kathy Long, Ventura County Supervisor

Ms. Joan Ogden, Co-Director, Hydrogen Pathways Program, 

Institute of Transportation Studies, University of 

California, Davis
APPEARANCES CONTINUED

ALSO PRESENT

Mr. Henry Pak, Hanjin Shipping

Dr. Scott Samuelsen, National Fuel Cell Research Center

Mr. Martin Schlageter, Coalition for Clean Air

Mr. Jonathan Sharkey, Councilmember of Port Hueneme

Mr. John Shears, Research Coordinator, Center for Energy 

Efficiency and Renewable Technology

Mr. Miguel Silva, Horizon Freight System

Ms. Gloria Stockmyer, Stockmyer Trucking, Inc.

Dr. Andreas Truckenbrodt, Automotive Fuel Cell Corporation

Mr. David Tulauskas, General Motors

Mr. Mike Upp, ClearEdge Power

Mr. Michael Villegas, Ventura County

Mr. Justin Ward, Toyota Technical Center
INDEX

Page

Item 11-4-1

Motion 4

Vote 4

Item 11-4-2

Motion 6

Vote 6

Item 11-4-3

Chairperson Nichols 6

Executive Officer Goldstene 7

Staff Presentation 9

Mr. Corral 137

Item 11-4-4

Chairperson Nichols 141

Executive Officer Goldstene 141

Staff Presentation 142

Q&A by Board 150

Item 11-4-5

Chairperson Nichols 154

Executive Officer Goldstene 156

Staff Presentation 157

Navy Presentation 174

Mr. Villegas 183

Ms. Long 185

Mr. Sharkey 187

Mr. Schlageter 188

Mr. Hogo 190

Mr. Hanning 192

Ms. Bailey 193

Mr. Friedman 195

Mr. Krokosky 197

Ms. Holmes-Gen 199

Q&A by Board 201

Motion 213

Vote 214
INDEX CONTINUED

Page

Public Comment

Mr. Schlageter 215

Ms. Stockmyer 217

Mr. Silva 218

Mr. Aboudi 220

Mr. Lee 223

Mr. Light 226

Adjournment 238 

Reporter's Certificate 239
this context where they're estimating the fence line or 

near-term concentrations of SO2 . In the industrial audits 

measure what they're doing is going through and looking at 

the emissions of various units within the facility,

whether it's a refinery or cement plant, and looking at 

ways -- you know, first of all what is the energy 

efficiency of the individual units within there? And then 

looking at the technology that could be applied to reduce 

that both from a greenhouse gas and a criteria 

pollutant -- criteria and toxic pollutant. 

So I don't think there's a conflict here in terms 

of what's required. 

CHAIRPERSON NICHOLS: But there is a connection. 

And the question is -- 

DEPUTY EXECUTIVE OFFICER FLETCHER: There's a 

connection but not a requirement. 

CHAIRPERSON NICHOLS: -- is there some 

potential -- 

BOARD MEMBER BALMES: Synergy. 

BOARD MEMBER BERG: I just think we need to be 

mindful as the same people are popping up, you know, 

because they're the ones that are going to be the larger 

emitters. And I just think we need to be mindful how can 

we look at our roles to be able to get the most bang for 

their buck. And I just would appreciate if staff could 

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keep that in mind. 

CHAIRPERSON NICHOLS: No, I think that's a good 

point, especially when you're even just about multiple 

communications coming from us; you know, first it's this 

and then it's that. I can -- from the perspective of the 

facility owner, it's going to look like something 

uncoordinated and potentially more burdensome than it has 

to be. 

So I guess the question, or maybe direction to 

staff, would be to take a look at how we're rolling out 

these two items and see if there's some potential to 

coordinate. 

DEPUTY EXECUTIVE OFFICER TERRY: Maybe just one 

quick comment. 

The only requirement really imposed on California 

that's new as a result of this process is the requirement 

to do the air quality modeling specific to SO2 for those 

34 facilities. In this particular case, the air districts 

will be doing the modeling or else ARB. So there's pretty 

limited impact on the facilities themselves. 

BOARD MEMBER BERG: Thank you for that 

clarification. 

CHAIRPERSON NICHOLS: Okay. Good. 

All right. If there's nothing more on this item, 

thank you very much for the report. 

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And we will move on to our last item, which is 

also a regulatory item, which is proposed amendments to 

the Oceangoing Vessel Clean Fuel Regulation. This 

regulation has been in the process of being implemented 

since July 2009 and requires ships within 24 nautical 

miles of the California coastline to use cleaner burning 

fuels. 

The amendments that we're considering today were 

developed with information that was learned during the 

first year and a half of implementation. As many of you 

will remember -- well, when this regulation was originally 

adopted in 2008, the Navy raised a concern at the time 

about the impacts of changes in vessel routing that might 

occur as a result of the regulation. And at the time the 

staff was directed to monitor the situation and report 

back to the Board if ships posed a potential problem for 

the operations at the sea range. 

Unfortunately, it did. And the staff has worked 

closely with the Navy and other stakeholders to develop 

amendments that address the Navy's concerns, as well as 

preserving the essential public health and air quality 

benefits from this regulation, some of which you already 

heard about just a minute ago when we were talking about 

our progress on SO2 . 

So the situation that we're facing is that there 

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has been a change in vessel routing that's resulted in the 

significant increase in the number of ships that are 

making their way through the Navy's Point Mugu Sea Range 

in southern California. And we're now in the process of 

trying to address that. 

For your information, I thought it would be 

useful to ask the Navy to come join us today and give us a 

short presentation about the sea range prior to the staff 

presentation of the proposed amendments. 

We have with us I, believe - I'm looking out 

here - Capt. Sinofsky, who's here to make this 

presentation. And I want to thank him for coming today. 

And I'll ask Mr. Goldstene first to just 

introduce the item. 

EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 

Nichols. 

As with any regulation adopted by the Board, ARB 

staff monitor implementation. If information becomes 

available to indicate that amendments are needed, we work 

with stakeholders to develop amendments for your 

consideration. This is the case for the Oceangoing Vessel 

Clean Fuel regulation, as Chairman Nichols just indicated. 

Amendments are needed to help address the change 

in channel traffic patterns that have occurred -- in 

vessel traffic patterns that have occurred in southern 

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California and that are creating the potential for vessels 

to interfere with Navy operations in the Point Mugu Sea 

Range. 

ARB staff worked closely with the U.S. Navy, U.S. 

Coast Guard, and other stakeholders on this issue. Based 

on the work, staff will propose amendments today that we 

believe will reduce the potential for vessels to interfere 

with Navy operations in the sea range and will help ensure 

a successful transition to low sulfur fuels by aligning 

the implementation dates of the regulation more closely 

with recently adopted federal requirements. 

These amendments retain the health protective and 

air quality benefits originally anticipated from the 

regulation. 

I'll now ask Bonnie Soriano of the Stationary 

Source Division to present the staff's proposal. 

Bonnie. 

(Thereupon an overhead presentation was presented 

as follows.)

STAFF AIR POLLUTION SPECIALIST SORIANO: Thank 

you, Mr. Goldstene. 

Good morning, Madam Chairman and members of the 

Board. 

Today we are proposing for your consideration 

amendments to the Oceangoing Vessel Clean Fuel regulation.

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--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: I have a 

brief presentation that will provide a background on the 

regulation, describe the amendments we believe are 

warranted, discuss the impacts from those amendments, 

propose one 15-day change, and then provide conclusions 

and recommendation.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Now a 

brief overview of the regulation itself.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

Oceangoing Vessel Clean Fuel Rule was approved by the 

Board in 2008 and began implementation in July 2009, and 

that's about two years ago. It requires ships to use 

cleaner marine distillate fuels instead of the dirtier 

residual fuel that they typically use. Ships are required 

to use the cleaner fuels within a clean fuel zone that is 

approximately 24 nautical miles off the California 

coastline. And that is shown in this figure on the slide 

as the lighter blue region along the California coastline. 

The fuel requirements are implemented in two 

phases having progressively lower fuel sulfur limits. 

Phase 1, which began July 2009, requires the use 

of either marine gas oil or marine diesel oil. The marine 

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diesel oil is capped at .5 percent sulfur. 

Both of these are distillate fuels. We are 

finding that on average the marine distillate fuels that 

the ships are using to comply with this regulation average 

about .3 percent sulfur. 

Phase 2 is scheduled to begin in January of next 

year, 2012, and establishes a fuel sulfur requirement of 

.1 percent.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: This 

regulation is a critical measure in our efforts to improve 

air quality and protect public health. It contributes 

over half of the reductions from new measures in the South 

Coast's 2014 PM2.5 attainment demonstration. 

It is also a key measure in the ports of Los 

Angeles and Long Beach clean air plan and reduces the 

public's exposure to diesel PM from ships by over 80 

percent. 

Because it is a clean fuel requirement, the 

benefits of the regulation begin immediately upon 

implementation. And over the past two years, the use of 

cleaner fuels has reduced emissions of sulfur dioxide, 

which I'm going to short cut as SOx through the rest of my 

presentation, by 73 tons per day; PM, which is particulate 

matter, by 8 tons per day; and NOx by 8 tons per day. 

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This translates to about 6,000 tons of both PM 

and NOx and 50,000 tons of SOx reduced over the last 

two years. 

While about 90 percent of the emissions benefits 

are realized with the Phase 1 fuels, the Phase 2 fuel 

requirement will also provide additional benefits of about 

2 tons per day PM and 17 tons per day of SOx. 

When you approved this regulation, it was the 

first comprehensive ship fuel requirement in the world. 

And as I'll discuss a little later, since that time

federal and international fuel requirements have been 

adopted. 

California's regulation is a critical bridge to 

these federal requirements that will be equivalent to our 

Phase 2 0.1 percent requirement in 2015.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Now I'll 

discuss the proposed amendments.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Overall, 

the implementation of this regulation has been going very 

well. We estimate that there have been over 19,000 ship 

visits since July of 2009, and we are seeing well over a 

95 percent compliance rate. However, we have encountered 

some challenges that warrant the need for amendments. 

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One of the things that has happened is that the 

traffic patterns have changed in southern California. 

This is because many vessel operators have elected to use 

a route outside the regulatory zone where they're not 

required to use the cleaner fuel. This has resulted in a 

significant increase in traffic through the Navy's Point 

Mugu Sea Range and according to the Navy has increased the 

potential for vessels to interfere with naval testing and 

operations. 

There have also been some operational challenges 

that have resulted in a small number of temporary loss of 

propulsion incidents, mainly related to the lower 

viscosity of the clean fuel. 

And, last, as I mentioned before, there are new 

federal and international requirements. While this is not 

necessarily a challenge, it does present an opportunity to 

better align the California program with federal 

requirements, which we think will facilitate successful 

implementation of both programs.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Over the 

past two years, we have worked closely with the maritime 

industry, the Navy, the U.S. Coast Guard, and local

districts in implementing the regulation and in developing 

the proposed amendments to address the issues that I have 

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described. 

Our objectives in proposing the amendments are: 

To minimize the impacts on the Point Mugu Sea 

range; 

To facilitate a more successful transition to the 

cleaner .1 percent sulfur fuel; and 

To make other minor adjustments to the regulation 

that we believe will help with implementation. 

In the next few slides, I will describe the 

amendments we are proposing and our rationale.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: First, 

we think that it is very important to do what we can to 

minimize the potential impacts to the Navy's Point Mugu 

Sea Range from the increased vessel traffic. To do this, 

we are proposing to expand the clean fuel zone in southern 

California. By expanding the clean fuel zone, we 

eliminate the cost advantage of using routes through the 

Point Mugu Sea Range. If this is done, we believe that 

the vessels will return to the historical routes they used 

before the regulation was implemented, lessening the 

potential for vessels to interfere with the military 

operations. 

In addition, because the vessels will be using 

the cleaner fuel, the emission reductions originally 

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anticipated in this region will be regained. 

And now I'll provide you with some background on 

the need for this amendment.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: In this 

slide, I will walk you through the changes in traffic 

Patterns in southern California. So I'm starting here 

with the region, which is about from the tip of Santa 

Barbara to the ports of Los Angeles and Long Beach. The 

Channel Islands are shown. And the large overwater areas 

shown in bright blue are the Navy's Point Mugu Sea Range. 

The Santa Barbara Channel route is now shown as 

the dark blue double line. This route is a long-standing 

traffic separation scheme that extends the length of the 

Santa Barbara Channel and is listed on NOAA and nautical 

charts. It is the only International Maritime 

Organization-approved routing measure in this area. And 

it was established to reduce the risk of collisions by 

separating arriving and departing traffic. 

This route is also typically the shortest route 

for both traffic arriving from Asia on the Great Circle 

route and traffic to and from northern California. 

As shown in the gray area, the current clean fuel 

rule extends out to about 24 nautical miles off the

coastline. Vessels operating in this zone must use the 

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cleaner fuels. 

After implementation of the rule, many shippers 

have increasingly chosen to transit through the Point Mugu 

Sea Range outside the clean fuel zone. We have depicted 

the transit through the sea range and called it the outer 

route. It is the red line on the southwest side of the 

islands.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: As shown 

in this figure, since implementation of the regulation 

began there's been a steady increase in the number of 

vessels that have elected to transit through the Point 

Mugu Sea Range. 

This chart shows the change in the percentage of 

vessels to the ports of L.A. and Long Beach that transit 

through the sea range. As you can see, historically about 

seven percent of the traffic used to transit through the 

sea range. That has now increased to about 50 to 60 

percent of all port vessel visits.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: We 

believe the changes in vessel routing are primarily driven 

by the fuel cost difference between the two routes. The 

cost of the channel route is about $3,000 higher since the 

more expensive fuel is required for that entire portion. 

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As you will hear in their presentation, the U.S. 

Navy has raised concerns about the higher number of

vessels transiting in the sea range, as it has increased 

the potential for vessels to impact exercises and 

operations that take place in the sea range.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: In this 

map, I will describe the proposed amendments to the clean 

fuel zone. So we are starting here at the same place we 

left off in the last map slide. And this shows the

current clean fuel zone in gray, the channel route in the 

double line in blue, and the outer route in red. 

We propose to expand the zone out past the 

Channel Islands in southern California. The expanded zone 

is consistent with the contiguous zone, which is a well 

realized zone on nautical charts. 

We also propose to exclude a small area of the 

contiguous zone from the clean fuel requirement. We have 

referred to this area as a window. 

The purpose of the window is to equalize the 

distance that the clean fuel is required for the two 

routes and correspondingly equalize the fuel costs. 

With these changes to the boundary in southern 

California, we believe vessel operators will return to the 

Santa Barbara Channel route and lessen the potential 

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impacts on the Point Mugu Sea Range.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

second amendment I will discuss is a proposal to extend 

the Phase 1 fuel requirement by two years and to begin 

Phase 2 in 2014. While we are fully committed to reaching 

the Phase 2 limit of .1 percent sulfur and believe it to 

be technologically and operationally feasible and cost 

effective, we do think that there are valid reasons to 

adjust the timing for the implementation of the Phase 2 

requirements. 

We believe that taking a little longer will help 

facilitate a successful transition to the cleaner 0.1 

percent fuel and still allow us to meet our SIP 

commitments. It will simplify integration of state and 

federal requirements and provide additional time to

address operational and fuel issues.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Since 

the adoption of the OGV rule, as I mentioned before, 

federal and international standards have been established. 

And just to give you some idea of these standards, in 

March of 2010, a North American Emission Control Area - or 

I'll call this the ECA - was approved. The ECA requires 1 

percent sulfur fuel, and it can be either heavy fuel or 

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distillate, beginning in August 2012 and then a 0.1

percent sulfur fuel beginning in January of 2015. The ECA 

zone is about 200 nautical miles from the U.S. And 

Canadian coastline.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: Moving 

the Phase 1 out by two years will more closely align our 

Phase 2 implementation date with the ECA Phase 2 

requirement, and also it will help to avoid having vessel 

operators manage different federal and state fuel 

requirement changes in 2012. 

The extension will also allow time for 

coordination with the U.S. EPA, U.S. Coast Guard, and 

others during the transition to the 0.1 percent sulfur 

fuel requirement. 

The extension will not impact the significant 

benefits that are achieved with the Phase 1 fuels. And as 

a reminder, over 90 percent of the emission reductions 

from the regulation are realized with the Phase 1 fuels. 

The two-year extension is also consistent with 

our 2014 SIP commitment for South Coast.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

proposed Phase 2 extension also provides additional time 

to address operational issues such as temporary loss of 

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propulsions. And I'll call those LOPs. With about 19,000 

successful vessel visits since the regulation began, the 

Coast Guard has reported that a small number of vessels - 

and this is about 2 percent of all vessel visits or about 

38 vessels - have experienced loss of propulsion incidents 

related to the use of distillate fuel. 

During the last two years, ARB has worked closely 

with the Coast Guard, Harbor Safety committees, the Office 

of Spill Prevention to address these operational issues. 

Under contract to the Air Resources Board, the 

California Maritime Academy investigated the LOPs and 

identified primary areas of concern. CMA identified that 

an area of concern was low fuel pressure related to the 

low viscosity of the distillate fuel. 

The extension in Phase 1 provides additional time 

to investigate causes and determine solutions for the loss 

of propulsion incidents prior to implementing more 

restrictive fuel requirements. 

The extension also provides more flexibility to 

find fuels with higher viscosity levels since Phase 1 is 

less restrictive, and provides more time for recent

viscosity related enhancements to the fuel specifications 

to more fully reach the marine fuels market. 

And that leads me on to our third objective.

--o0o--

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STAFF AIR POLLUTION SPECIALIST SORIANO: To 

further assist implementation, we are also proposing other 

minor amendments, such as the incorporation of a revised 

fuel standard that has enhanced viscosity and lubricity 

specs, that I just mentioned in the last side, and an 

updated nautical chart. 

We are also proposing changes to the 

noncompliance fee provision, which I'll discuss more in 

the next slide.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

noncompliance fee provision allows vessel operators to pay 

a fee instead of direct compliance. And it is limited to 

very special circumstances that are beyond the master's 

reasonable control, such as unplanned redirection at sea 

or purchase of defective fuel. This provision is not a 

fine or a violation, and it has only been used five times 

since the rule began. It also requires ARB approval prior 

to use. 

We are proposing to restructure the fees to 

encourage purchase of a compliant fuel on arrival to 

California by having the fee in that situation. 

We propose to retain the same fee for a single 

port visit, but adjust the fee structure for multiple port 

visits. 

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Staff believes that the proposal is a more 

reasonable fee structure. And even with these proposed 

amendments, all noncompliance fees are at least one and a 

half times higher than the cost of direct compliance would 

be if the vessels were using the fuel. 

We do not think that these changes will result in 

increased use of this provision, as we are not proposing 

any changes to the criteria that specify when the 

noncompliance fee can be used. And these criteria are 

very restrictive.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: So now 

I'll go over the impacts of the proposed amendments.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

charts on this slide show the projected PM on top and the 

SOx emissions on the bottom until 2015. The base line 

with no rule is shown in green, the current regulation is 

shown in blue, and the proposed amendments in red. 

As you can see from the charts, the proposal 

retains the emission reductions projected for the current 

rule for both PM and SOx, and emissions continue to

decline in subsequent years. 

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: We also 

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saw in the previous slide the protected emission 

reductions are greater statewide with the proposed 

amendments than with the current rule. However, due to 

the Phase 1 extension, the benefits are slightly lower in 

2012 and 2013. In that two-year period, the emissions 

will still continue to decline, just not as quickly. And 

the remaining emissions are far lower than originally 

anticipated, in part due to the recession. 

Staff has also evaluated the potential impacts to 

whales in the southern California region due to the

anticipated increase in vessel traffic using the channel 

route. We found that the impact will be similar to what 

it was before the regulation where the vessels primarily 

used the channel route.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: The 

total estimated costs of the proposed amendments are $10 

million per year in 2012 and 2013 and $47 million per year 

in 2014. 

The proposed amendments do provide cost savings 

compared to the original rulemaking primarily due to the 

extension of the Phase 1.

The cost effectiveness of the proposed amendments 

is about $16 per pound of diesel PM reduced, which 

compares favorably to many other regulations adopted by 

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the Board.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: I will 

now cover our proposed 15-day change.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: We have 

identified one 15-day change that will help further

integrate our regulation with the ECA. To align 

California's Phase 1 with the ECA Phase 1 sulfur 

requirement, we propose to include a 1 percent fuel sulfur 

limit for our Phase 1 marine gas oil. We propose that 

this requirement begins August 1, 2012, to coincide with 

the ECA Phase 1 implementation date. 

We do not expect this change to impact the 

regulated industry since Phase 1 complaint marine gas oil 

averages .3 percent, well below the one percent proposed 

limit. And inspection records show that 98 percent of the 

Phase 1 compliant fuels sampled by our enforcement staff 

are below 1 percent sulfur.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: In 

conclusion, we believe the proposed amendments will assist 

in the successful transition to 0.1 percent sulfur fuel. 

The amendments will lessen the potential for impacts on 

the Point Mugu Sea Range by removing the economic 

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advantage that drives the route changes in southern

California. 

The amendments will also provide the benefits of 

additional time to address operational issues that have 

been encountered and better integrate state and federal 

programs. 

The amendments before you today also continue to 

fulfill our 2014 SIP obligation and are cost effective.

--o0o--

STAFF AIR POLLUTION SPECIALIST SORIANO: We 

recommend that the Board adopt the proposed amendments 

with the suggested 15-day change. 

We also recommend that you direct staff to work 

with the Navy to monitor vessel traffic trends through the 

Point Mugu Sea Range, and also to continue to work with 

the U.S. Coast guard and the maritime industry to monitor, 

investigate, and evaluate any fuel-related issues. 

This ends our presentation. And I would now like 

to thank you for your attention. 

And now Richard Corey will introduce the U.S. 

Navy's personal. 

STATIONARY SOURCE DIVISION CHIEF COREY: Yes, now 

we're asking Tony Parisi, Randy Friedman, and Captain 

Cudnohufskyto join us for a presentation on the Point Mugu 

Sea Range. 

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And it will be Captain Sinofsky with the Naval 

Air Systems Command that will give the presentation. 

CHAIRPERSON NICHOLS: Thank you. Welcome. 

CAPTAIN CUDNOHUFSKY: Good afternoon. How are 

you?

CHAIRPERSON NICHOLS: Good afternoon.

CAPTAIN CUDNOHUFSKY: So what I'll be doing this 

afternoon is just talking about our mission as NAWCWD as 

well as the sea range and how this is impacting our

operations. 

(Thereupon an overhead presentation was presented 

as follows.)

CAPTAIN CUDNOHUFSKY: So the first slide shows an 

overview of the Point Mugu Sea Range. And it's part of 

the NAVAIR West Coast ranges systems, a very integral 

part. The connecting part is what we call the IR 200 

corridor that we can activate at different times to

support missions when required. 

The sea range provides safe, operational, and 

realistic environment for us to test and training -- 

testing and training for mainly naval air systems, but we 

also cater to all weapon systems for DOD and our allied 

counties as well. 

Our core mission is mainly testing, training, and 

experimentation associated with primarily air warfare 

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systems.

--o0o--

CAPTAIN CUDNOHUFSKY: So as I said, it's 

primarily providing a realistic open-air-range 

environment. It's 36,000 square miles of sea range. And 

it can be expanded as required to accommodate additional 

testing. For example, the Missile Defense Association 

when we work with some of their programs requires a much 

larger range. So we'll expand the range to accommodate 

those type of tests. 

We have operations and range control complexes 

that support the operation of the sea range and we have 

extensive instrumentation throughout the sea range. The 

TSPI is time, space, and position instrumentations. 

We have sophisticated data processing and display 

systems, as well as air and sea targets that we can

incorporate throughout the range. 

Range safety and security and environmental 

support is extensive throughout the range complex systems, 

and we have a whole host of support aircraft for our 

missions.

--o0o--

CAPTAIN CUDNOHUFSKY: We're the nation's largest 

and most capable instrumented sea range. We're ideally 

suited for our missions that we perform out there to 

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provide the nation with its air and sea weapons to defend 

our nation. 

It's ideal location where we are supported by the 

natural features such as the islands, San Nicolas Island, 

Santa Rosa Island, the Laguna Peak where our 

instrumentation is elevated well above the sea level, over 

a thousand feet, and look well into the range. 

Supports a broad array of testing and training 

scenarios. And I'll talk a little bit more about that 

later. But, again, primarily we're supporting the 

research, development, acquisition, testing and evaluation 

of our weapons, our nation's weapons. 

Not only do we support and test and train our 

Navy's weapon systems, but also all of DOD - Air Force, 

Army, Marine Corps as well as other international 

countries that are our allies.

--o0o--

CAPTAIN CUDNOHUFSKY: This cartoon provides you a 

little bit of insight into the type of -- a typical type 

of a mission we would do out on the sea range. We'd have 

the flight test vehicle performing out in the range and 

we'd have multiple instrumentation that would track it. 

And the TM is telemetry. That provides us the 

health and welfare and safety aspects of that vehicle. 

And that's all sent back to our range control back at 

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Point Mugu and then San Nicolas Island. And then through 

fiber optics and microwave connections, we're completely 

integrated with all of the instrumentation and sensors.

--o0o--

CAPTAIN CUDNOHUFSKY: This depicts a little bit 

of a typical type of a hazard pattern that would be

associated with a test or a mission that we would do out 

there. So different colors would indicate different type 

of tests that we would do. So when we're testing a

particular air vehicle perhaps, launching it from Point 

Mugu, there would be an associated hazard pattern that 

would be associated with that weapon. So before the 

launch of that weapon, we'd clear that air zone and the 

sea zone, make sure it's completely clear of ships,

nonparticipants, and ensure that it would be cleared for 

however long the window that our mission would take place. 

So, you know, a ship typically moves 12 to 15 

knots. We'd go out -- if it was a two-hour window, we'd 

go out 30 miles beyond the hazard pattern and make sure 

that no ship would be able to move within that pattern as 

we had cleared it. 

So some of them are smaller hazard patterns. 

Some are quite large and extensive.

--o0o--

CAPTAIN CUDNOHUFSKY: This is a depiction of the 

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type of operations that we would do it out on the sea 

range. We'd typically have about 17,000 events per years. 

The red is training events. The blue, 

operations. And green is RTD&E, research, test, 

development, and experimentation. And the yellow would be 

maintenance, maintenance of our sea range boats or 

aircraft that we'd need to do out on the sea range.

--o0o--

CAPTAIN CUDNOHUFSKY: Of course with any type of 

an operation we'd do out there, safety is paramount, and 

we're very serious about that and have a very good safety 

record. 

And it's very -- we take great pains to make sure 

that the evolution is safe. And part of that is clearing 

that range with our aircraft, making sure no one -- no 

nonparticipants are within there. And if we do happen to 

get what we call an interloper, somebody that doesn't 

belong in there, we'll cease all operations until we can 

clear the range and make sure we have a safe environment 

to conduct our tests. 

And we have extensive instrumentation to be able 

to help us do that and monitor what's out there and what 

should and should not be out there.

--o0o--

CAPTAIN CUDNOHUFSKY: So this is very similar to 

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the chart you had seen in the previous presentation, with 

the channel in green. And then what we've been observing 

with the red alternate shipping route that we've seen that 

interferes with the operations that the Navy does out on 

the sea range. As the ships divert out of the channel, 

they transit across the sea range, which then impacts our 

operations, causing either delays or cancellations in our 

operations.

--o0o--

CAPTAIN CUDNOHUFSKY: And to that extent, this 

next chart shows, again very similar to the chart you'd 

seen on the previous presentation, what we've observed on 

that behavior. So on the far left what we are seeing is 

one inbound and one outbound ship per day. And since that 

time of 1 July in 08 until present it is now up to seven 

to seven and a half times what we had seen historically. 

So a significant increase in shipping across the sea 

range.

--o0o--

CAPTAIN CUDNOHUFSKY: To help mitigate some of 

this, we've done extensive coordination with the shipping 

industry through L.A. and Long Beach, a marine exchange 

from our Ops conductors. 

Through our surveillance of the sea range, we 

have redirected the ships that were in the area. And that 

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typically results in quite a delay into the mission. 

Ships moving at 12 knots, it takes sometime to transit 

across the sea range. They can't just turn around or, you 

know, accelerate there. So typically it's an hour or 

several hours of delay into a mission, which represents a 

significant cost. 

And we tried to minimize operational impacts. 

But to that extent there's only so much we could do to 

mitigate that.

--o0o--

CAPTAIN CUDNOHUFSKY: And our concerns obviously 

in the future, what we see if we're unable to get the 

shipping behavior back into the channels, we're going to 

see increased transits through the sea range, which

obviously have impacts into our mission. 

As hopefully our economy recovers, I think it 

will be more incentive perhaps if we don't get this

regulation in place, that these ships will continue to 

divert the channel. 

Some of the delays and cancellations will be 

inevitable, will increase costs to the programs. As the 

economy and our budgets are all shrinking, that's a

significant impact into our programs and our ability to 

bring these needed weapons online. 

And the perhaps intangible costs are the training 

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events that are taking place out there for our military 

are unable to be completed. So we deploy our military 

without the really benefit of the needed training that 

would have been accomplished, if they're impacted and are 

unable to do their training due to ships through the sea 

range.

--o0o--

CAPTAIN CUDNOHUFSKY: And, in summary, again 

Point Mugu Sea Range and the missions that we complete out 

there and the testing and evaluation, support that 

acquisition programs for the weapon systems that we bring 

online, it's critical that we are able to conduct those 

tests and evaluations and training on time and when

needed. 

As an example, the Joint Strike Fighter Program 

operates at a burn rate of about $30 million a day. So 

every day that they're unable to collect the needed data 

to continue to progress the program, it essentially will 

cost the program $30 million. Obviously not every program 

is such a substantial program. But all programs have a 

limited budget in order to operate and complete their 

programs and bring these weapons online. So it is a 

significant impact. 

Increase in ship traffic through the sea range is 

impacting our ability to test and train. We've been 

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working with the shipping industry and there's significant 

coordination that's been taking place to try and mitigate 

these impacts. But as you can see, the data says that it 

still is an impact for us. 

And as the economy improves, the shipping 

industry will probably -- we'll see more and more traffic. 

And if we're unable to keep them in the channel, the 

results will be more impact into our mission. 

So our recommendation is to approve the 

modification to the low sulfur regulation. 

CHAIRPERSON NICHOLS: Thank you very much.

CAPTAIN CUDNOHUFSKY: More than happy to take my 

questions you might have. 

CHAIRPERSON NICHOLS: Thanks. 

I want to express my appreciation. I understand 

this has taken a lot of time and effort on your part, on 

the Navy's part, as well as on our staff. And the fact 

that you were willing to work together with us to try to 

achieve our mutual objectives here is really much 

appreciated. I know that in the past sometimes we've 

seemed like the two agencies were just not able to get on 

the same page. And I really appreciate how hard you've 

worked to try to make sure that that can happen. 

I know it was really tough for the staff to face 

the possibility of a loss of the emissions benefits from 

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this rule. And the fact that I think we've been able to 

design a way to do this that does not involve a sacrifice 

there is really terrific. It's a great outcome. 

So I don't know if anybody has any questions now 

or we can just hear from the witnesses. If that's okay, 

we'll just go straight to the witnesses. 

We do have a number of people who've signed up to 

testify. 

And you're welcome to stay up here if you would 

like. 

We'll start with Michael Villegas from Ventura 

County APCD and then Kathy Long and Jonathan Sharkey. 

And we do have your written, Supervisor Long. 

MR. VILLAGES: Chair Nichols, members of the 

Board. I'm Mike Villegas, Air Pollution Control Officer 

for Ventura County. 

Ventura County APCD staff is pleased to support 

the California Air Resources Board staff proposed changes 

to the regulations for oceangoing vessel fuels. These 

proposed amendments will achieve nearly all the emission 

reductions that were envisioned when this rule was 

originally adopted in 2008. 

The 83 percent reduction in toxic diesel 

particulates will provide a significant health benefit to 

Ventura County residents. Further, we will be achieving 

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reductions in sulfur dioxide and nitrogen oxides. 

In addition, the proposed amendments will do away 

with the economic incentive for vessels to pass through 

the Navy's test range. And this should prevent disruption 

of the Navy's operations. 

We've also reviewed the rationale for the delay 

in the Phase 2 sulfur standards. And we believe the delay 

is reasonable based on the fact it will better harmonize 

CARB's requirements with the ECA requirements. Also will 

give time for the development of additional fuels that 

will comply with the new ISO standards, which are going to 

address viscosity and lubricity for those engines, which 

should help with loss of power. 

In addition, we reviewed the proposal to reduce 

the noncompliance fees. And we believe this proposal once 

again makes sense. These provisions have been used only 

five times in over 18,000 port visits. Further, there's 

is no cost advantage to using the noncompliance fees 

versus complying with the rules, so we believe it makes 

sense. 

Lastly, I need to note that the Air Pollution 

Control board for Ventura County has submitted a letter of 

support for these regulations. 

CHAIRPERSON NICHOLS: We have that. 

MR. VILLEGAS: Thank you.

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CHAIRPERSON NICHOLS: Thank you very much. 

Supervisor Long. 

SUPERVISOR LONG: Yes, good afternoon. And thank 

you, Madam Chair and Board members. 

It is my pleasure to be here to speak to this and 

to certainly support the staff recommendation strongly on 

behalf of Ventura County. I thank the staff, applaud them 

for their efforts in working with the stakeholders. I 

believe we have a win-win recommendations with the 

amendments. 

I'm here representing as Co-chair of the Regional 

Defense Partnership for the 21st Century, RDP-21. It's a 

community-based organization in Ventura County that has 

been around for over ten years supporting our naval base 

in Ventura County for the many assets, both the military 

strategic importance of the base, but also for the 

economic driver that the base is for all of us, and the 

environmental stewards that they are. 

And so the RDP-21 represents both public and 

private. It has all ten cities in the county. It has 

other electeds, such as Senator Fran Pavley is very

supportive, and our Congressmen, both Capps and Gallegly. 

And certainly our goal is to provide and educate 

our community, engage them in understanding what the 

values of the base are. And as the base has been, and as 

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all bases in prior BRACs have been, threatened with

closure for a variety of reason, the reason that we've 

been able to stand so strong with our base is the sea test 

range and the value that it brings both again for the 

military importance but also the economic engine that it 

is for all of our county. 

We have more than 19,000 personnel, military and 

civilian, who are working at that base. So you can

understand what the multiplier of that is to our local 

economy: Over 20,000 at least jobs and the multiplying 

benefit of $1.2 billion in goods and services, and the 

fact that it continues to be such an important part in 

bringing new business to the base. And that does occur 

with the test range. 

RDP-21 is very supportive of the oceangoing 

vessel fuel rule. We certainly are supportive of 

everyone's goal to have clean air. And as I said at the 

beginning, this is a win-win to be able to carry this 

amendment through with the good work and the cooperation 

of the stakeholders to applaud that effort and to ask for 

a strong "yes" vote in support of this. 

Thank you for your time and your work on this. 

We appreciate it. Thank you.

CHAIRPERSON NICHOLS: Well, thank you for coming. 

Jonathan Sharkey, a council member from Port 

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Hueneme.

Welcome.

MR. SHARKEY: Yes, good afternoon, Madam Chair, 

members of the Board. I'm Jon Sharkey, Port Hueneme City 

Council, member of the Ventura County Air Quality Control 

Board, and a member of the Regional Defense Partnership. 

And coming third in the group, it's all been 

said. But I would like to personally thank the staff 

here, who's done a marvelous job in solving a problem. 

Clearly the previous rule did not achieve its objectives. 

We believe this new rule will achieve the air quality 

objectives and will reduce the impacts on naval base, 

Ventura County, a large part of which sits in my city. 

So thank you all. 

CHAIRPERSON NICHOLS: Thanks for coming. 

Henry Pak from Hanjin Shipping, followed by 

Martin Schlageter and Henry Hogo.

MR. PAK: Good afternoon, Chairwoman Nichols and 

all the Board members. 

First of all, on behalf of our company, Hanjin 

Shipping Company, I'd like to thank you for allowing us to 

express our concern. And it's going to be very short. 

We are not opposing to anything else but the 

implementation date of Phase 2. I understand that it's 

been pushed back to 2014 January from the initial starting 

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date of 2012 January. But we believe that -- or we feel 

that the implementation date should be conformed with the 

further requirement, which is 2015 January, which allows 

one more year -- or one additional year for carriers to 

prepare. 

And in line with that, considering fuel suppliers 

comment and our company's research, there is no fuel 

supplier that can supply 0.1 percent sulfur distillate 

fuel in the region of eastern Asia and in America. In 

this regard, be advised that sufficient market surveys and 

technical verifications should take precedence in order to 

confirm the possibility and availability of the low sulfur 

fuel in those regions by 2014. 

And, in addition, we need to ensure that there is 

sufficient infrastructure to supply low sulfur fuel

without difficulties. And that is our concern, and I 

would appreciate it if you give second thought to that. 

Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

I'll ask staff to respond later. 

Martin, Welcome. 

MR. SCHLAGETER: Thank you so much. Martin 

Schlauggeter with the Coalition for Clean Air. Thank you, 

Madam Chair and Board members and staff for considering 

this today. 

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This ship fuel rule since it was initiated a few 

years ago is one of the most impactful things this Board 

has done in my view, in part because it has helped shape 

globally shipping practices. And there's been a lot of 

reference here to aligning with ECA standards. I don't 

want to lose sight of the fact that one of the main

reasons we have this ECA adoption is because of what 

California's been doing under your leadership. 

So I'm very much in support of the extension of 

this clean fuel zone and appreciate the fact that staff 

acted so promptly in addressing the issues of carriers 

avoiding that zone. 

This change will, we expect, help bring into -- 

essentially bring into compliance and gain the emissions 

reductions that were expected from carriers who are now 

skirting this zone, interfering with the Navy, and 

unnecessarily polluting. 

Certainly, we are not excited about a delay to 

2014. We and the public health and environmental 

community are impatience. We like to see emissions

reductions that are on the table and that we had hoped 

would be achieved immediately. What I -- sort of the 

lemonade that I'd like to suggest we make out of that 

delay, if we could, is to complete the rulemaking of which 

initial steps were taken back in 2008 on vessel speed 

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reduction. By setting speed limits on ships, we can 

control some of the unnecessary pollution, we can optimize 

fuel use and reduce greenhouse gas pollution and indeed 

hopefully minimize some of the whale strikes that was also 

referenced here today. 

It's my belief that if we get to work on that - 

and this has been something languishing over the past 

couple of years - it's my belief with Board direction, if 

we can complete this rulemaking on vessel speed reduction, 

then at 2014 when carriers comply with fuel rules, they 

can also plan simultaneously for their timelines, their 

ship speeds, their logistics in that regard. And much was 

referenced by Ms. Berg in the last presentation, be giving 

a clear and concise package of instruction to carriers. 

And I thank you so much. I encourage your action 

on that. 

I have already submitted to the clerk a petition 

of more than 450 signatures that we've gathered over the 

past month out of interest in this speed limits issue. 

So thank you so much. 

CHAIRPERSON NICHOLS: Thank you. 

All right. Henry Hogo, followed by Cooper 

Hanning and Diane Bailey. 

MR. HOGO: Good afternoon, Chairman Nichols and 

members of the Board. I'm Henry Hogo, Assistant Deputy 

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Executive Officer of the South Coast Air Quality 

Management District. 

I'm here to express the South Coast AQMD staff's 

support for the extension of the regulatory boundary 

beyond the current 24 nautical miles to ensure that

oceangoing vessels use the cleanest fuel possible. And we 

would encourage you to adopt that today. 

Relative to the delay in the use of .1 percent, 

we just want to express caution in this delay. We would 

want to encourage that marine vessel operators use the .1 

percent as early as possible so we can understand some of 

the issues related to it and closely monitor it. But we 

don't want to see this delay go beyond 2014 because it is 

a critical element of our 2007 AQMP. 

Thank you. 

CHAIRPERSON NICHOLS: Thank you. I appreciate 

that. And it's just useful to observe that we've had 

examples in the past of at least one major shipper that 

introduced lower sulfur fuel long ahead of a requirement. 

So it is possible for that to happen or to be encouraged, 

and we should try to make that happen. 

MR. HOGO: Thank you.

CHAIRPERSON NICHOLS: Okay. Mr. Hanning.

MR. HANNING: Good afternoon, Chairman Nichols 

and members of the Board. My name is Cooper Hanning and I 

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represent the Natural Resources Defense Council. 

We thank the Air Resources Board for acting to 

reduce emissions from oceangoing vessels by expanding the 

clean fuel zone beyond the Channel Islands and for 

providing incentives for ship operators to bunker with 

clean fuel as soon as possible upon arrival at a 

California port. 

We also encourage the Board to consider 

additional regulations such as vessel speed reduction, 

which can reduce pollution in our communities and protect 

residents' health while decreasing California's greenhouse 

gas emissions. 

Oceangoing vessels account for a tremendous 

amount of toxic pollution in our state. In 2006 ships 

were estimated to contribute 18 percent of diesel 

particulate matter in California. Diesel particulate 

matter is associated with a growing list of adverse health 

outcomes, and these outcomes are most common in children 

and the elderly. The negative health impacts are 

concentrated in neighborhoods closest to the ports and 

these communities are disproportionately bearing the 

burden of pollution from oceangoing vessels. 

This pollution can be considerably reduced via 

vessel speed reduction. The Board should promulgate a 

regulation to limit ship speeds to 12 knots within 40 

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nautical miles of shore for all ship traffic in California 

waters. Slower ship speeds will reduce harm to marine 

life, cut greenhouse gas emissions, and reduce toxic air 

pollution in California. 

In 2009, Air Resources Board staff estimated 

emissions reductions for a 12 knot speed limit applied to 

all vessels within 40 nautical miles of shore. Such a 

regulation would decrease diesel particulate emissions by 

5.2 tons per day. California would also see daily 

reductions of 40 tons of nitrogen oxides and 43 tons of 

sulfur oxide. 

The Board should combat this pollution by 

preserving existing regulations and adopting further 

measures such as vessel speed reduction. 

CHAIRPERSON NICHOLS: Thank you. 

Ms. Bailey. 

MS. BAILEY: Good afternoon, Chairwoman Nichols, 

members of the Board, and staff. My name is Diane Bailey. 

I'm a senior scientist with the Natural Resources Defense 

Council. And as my colleague Cooper noted, we're here 

today in very strong support of the clean shipping fuel 

regulation and particularly the amendment to extend the 

clean fuel zone. 

As you know, NRDC has been to court with you to 

help defend these very important regulations several 

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times. And we're happy to say that the courts 

resoundingly agree that California has the right to

protect its coastal residents from the major health

hazards associated with oceangoing vessels and the toxics 

laid in bunker fuel that has been used in the past. 

California's clean fuel zone for international 

ships is one of the cornerstones of statewide emission 

reductions from this shipping sector, and it's really an 

important step to curb the pollution that comes into our 

state with the shipping to our ports, our rail yards, our 

distribution centers. This was really one of the biggest 

steps in reducing premature deaths from exposure to the 

pollution. And so we applaud the effort to extend the 

clean fuel zone and stem the 50 percent or so of ships 

that were evading this requirement in the past entering 

the ports of L.A. and Long Beach. 

I want to note that we do have some concerns over 

the proposed amendments. The tier delay of course does 

carry somewhat of a penalty in terms of lost emission 

reductions and health benefits. And I don't want to 

exaggerate that, but I think that there are ways to make 

up for it, as my colleague Martin offered that there are 

ways to make lemonade today. And I really encourage you 

to look at other measures. As Martin noted, the vessel 

speed reduction measure has really languished. This is a 

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measure that can deliver tremendous environmental benefits 

from significant greenhouse gas reductions to marine 

mammal and wildlife protections, avoiding whale strikes 

and such. And I encourage this Board to take up that 

measure and really get it going. 

We look forward to working with staff on further 

implementation of the clean shipping fuel zone as well as 

vessel speed reduction. 

Thank you very much. 

CHAIRPERSON NICHOLS: Thank you. 

Randall Friedman, did you wish to testify again? 

And Dan Krokosky and Bonnie Holmes-Gen.

MR. FRIEDMAN: Madam Chairman and Board members. 

Randall Friedman on behalf of the Navy Region Southwest. 

The Navy's long-standing position has been that 

shipping regulation in the Santa Barbara Channel would 

move ships into the sea range and threaten its mission 

capability. 

Today we are supportive of your staff's 

recommendation to amend this rule and take action to 

protect the Point Mugu Sea Range, as you indicated in the 

final statement of reasons you would do in the initial 

regulation. 

We ask for ARB's continued commitment to work 

with all stakeholders, for example, the ports of Los 

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Angeles and Long Beach, to take all feasible measures to 

further support the return of shipping to the Santa

Barbara Channel. 

Finally, just a quick comment in response to the 

vessel speed reduction. I would just strongly urge you 

that in any consideration of this, please remember that if 

you only do this in the Santa Barbara Channel, we'll be 

right back here with the same problem. Anything to do 

with regulation of shipping needs to be done globally and 

consistently and take full accounting of the economics of 

shipping, the time, and the value; and needs to not create 

any sort of incentive that would make a transit through 

our sea range more attractive than staying in the Santa 

Barbara Channel where we all believe they belong. 

Thank you. And again thanks to your staff for 

all the work they've done. 

CHAIRPERSON NICHOLS: Thank you. You could have 

said, "I told you so."

(Laughter.) 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: He 

has said that to us. 

CHAIRPERSON NICHOLS: It was very nice. 

(Laughter.)

MR. FRIEDMAN: I thought that was privileged. 

CHAIRPERSON NICHOLS: It was appreciated.

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All right.

MR. KROKOSKY: Good afternoon. I'm Dan Krokosky 

from Chevron Shipping. I'm the global bunker fuel and 

efficiency manager for the fleet. 

Chevron Shipping has a wide variety of ships that 

are operating in and out of the zone on utra-low sulfur 

diesel. We've been doing this in order to develop the 

lubricants and technical expertise in order to be running 

on this fuel. 

We're in favor of all of the changes you're going 

to make and we've been in support of the fuel change for 

the entire time. 

The one comment we'd like to add is to move this 

change from 2014 out to 2015. One of the reasons is for 

practicality of using this sort of three-fuel scheme, 

which is really practically hard to deal with both in and 

out of the zone. 

It's also unlikely that anybody's going to sell 

this 1 percent fuel. So that -- we'd also like you guys 

to take a strong look at this idea of viscosity of fuel. 

This is a very important safety aspect and ones that not 

all shipping companies have the expertise that we do in 

order to ensure they have the right viscosity. This could 

lead to a lot of problems with reliability of the ship, 

especially when you're maneuvering the ship. One of the 

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big dangers is the ship will not start. And of course the 

starting and stopping of the ship is what gives the ship 

its brakes. So again we'd really like to see a good look 

at this viscosity issue. 

The other comment is, to overcome some of the 

shortfall in that one year is -- use this idea of virtual 

arrival, where you actually don't let any of the ships in 

to wait around the port. We found this to be very 

effective in just our own energy efficiency program. And 

by actually timing the ship's arrival all in so that the 

berths are open, you can save a lot of energy and fuel on 

that. 

So please take these comments under 

consideration. Thanks again. 

CHAIRPERSON NICHOLS: Thank you.

Just one question before you leave. 

BOARD MEMBER D'ADAMO: Can you explain what you 

are looking for in viscosity of fuels. Are you saying 

that this additional time will give you the ability to 

look into that, or is there something more that you think 

that staff needs to do on this?

MR. KROKOSKY: I think you have an opportunity to 

set a viscosity. You set the sulfur level. You could 

also set a viscosity -- a safe viscosity level. 

We use -- you know, I like 2.8 is a good 

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viscosity. Anything below that, you know, it's out of my 

comfort range. And I think by setting this standard, you 

could, you know, do a lot to ensure the safety of the 

ships themselves. Because not everybody -- you know, 

whatever limit you set or don't set, they will use it 

anyway, right? 

BOARD MEMBER D'ADAMO: Thank you. 

CHAIRPERSON NICHOLS: Okay. Bonnie Holmes-Gen. 

MS. HOLMES-GEN: Good afternoon, Madam Chair, 

Board members. Bonnie Holmes-Gen with the American Lung 

Association in California. 

And the American Lung Association strongly 

supported this oceangoing vessel regulation when it was 

first adopted. We appreciate your hard work on this. We 

believe this regulation is extremely important to address 

the public health impacts from exposure to diesel ship 

emissions. And we're very pleased with the success that 

has been achieved to date, and we appreciate that 90 

percent of the emission reductions have been achieved. 

And we wanted to again thank you for the work 

that you've done in coordinating with the Navy and the 

Coast Guard and achieving some consensus and moving

forward. 

Three quick points. That we strongly support the 

proposal for the extended fuel zone -- clean fuel zone to 

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regain lost emission reductions. And I appreciate the 

presentation. It's made extremely clear how important 

that is. So that's a very positive step forward. 

And as with some of our colleagues with Coalition 

for Clean Air and NRDC, we are strongly supportive of 

implementing the .1 percent standard as soon as 

possible -- the .1 percent sulfur. 

And in light of the proposed delay, we would 

encourage the Air Board to do everything possible to work 

with the Coast Guard to address these loss of power issues 

as soon as possible to make sure we can get back on track. 

We do agree with the proposal to move ahead 

quickly with the vessel speed reduction regulation. And I 

think that is another very positive step we can take to 

move forward, because it does look like there are 

significant benefits from that regulation. 

And I appreciate you, Madam Chair, raising again 

that the vessels certainly comply early. And we would 

certainly like to work with you and do everything possible 

to promote early compliance with the .1 percent sulfur 

standard to get these early health benefits. So I think 

that was also a very important suggestion, and we would 

like to look at ways we can try to encourage that early 

compliance to move ahead. 

Thank you again for your hard work. And this is 

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a critical part of the Diesel Risk Reduction Program. 

CHAIRPERSON NICHOLS: Thank you. 

That concludes the list of witnesses that I have. 

And so I think we can close the record at this point. 

Just remind people that the record will be reopened when 

we issue a 15-day notice of public availability. And at 

that time we will be again accepting comments. But in 

between there won't be any comments after this hearing 

date. And when the record is reopened, then there'll be 

an opportunity for more comments on the proposed changes 

that will be addressed in the final statement of reasons. 

Before we move to a vote on this item, I do just 

really want to say how proud I am that the staff has been 

able to successfully navigate, if I may, a very, very 

difficult issue here. I understand that our friends in 

the environmental and public health community do not 

lightly come to support this kind of a change. And I 

really appreciate it, because they are tough critics and I 

think they have realized that we've actually done a pretty 

good job here of making, as somebody said, lemonade out of 

lemons. 

But I also -- I do want to ask the staff to just 

briefly address a couple of the points that we've heard 

more than one time. One is the question of whether the 

fuel will be available on the time frame that we're now 

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projecting. Another is the question of whether we're 

looking at this issue of vessel speed reduction in a 

serious way and if there's a plan to bring that forward. 

Also, I know you are looking at the fuel 

viscosity issue. But maybe you'd like to report a little 

bit more on where that's at, what kind of work is going 

on. 

And then, finally, on the last point that was 

raised by Mr. Krokosky, this issue about vessels waiting 

for berths and running their engines offshore. I know 

that's been addressed in some ports as a -- I mean it's 

like the air traffic control, a scheduling issue was an 

important issue. And I don't know that we have any

jurisdiction on it. But I'd be interested to hear if 

there's anything going on or anything that we could do. 

So I'm not quite sure who would like to address 

these, but -- 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Let 

me kind of -- this is Dan Donohoue. Let me kind of

orchestrate that. 

On the virtual arrival, Peggy, could you kind of 

talk to that at least as far as that is part of the T6 

goods movement area that we can look at. We've not been 

involved in it, but that's an area that there probably are 

opportunities that would fall into the work that we're 

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doing on the overall freight transportation thing. 

TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Yes, 

as part of the measure in our climate change plan to try 

to improve the efficiency of freight operations in the 

state, we will be looking at a broad range of measures to 

see, you know, how to implement them and working with, you 

know, the ports and the maritime industry to see which 

ones make the most sense. 

Seeing if we can move things quicker through the 

ports is clearly one aspect of that, and we will look at 

the virtual arrival aspects as well. 

CHAIRPERSON NICHOLS: Okay. So you'll add that 

to the list of things that are part of the discussion or 

part of the review? 

TECHNICAL ANALYSIS SECTION MANAGER TARICCO: Yes, 

uh-huh.

CHAIRPERSON NICHOLS: Okay. Good.

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: And, 

Bonnie or Paul, on the issue of what we're doing and what 

we have done with respect to viscosity, would you all like 

to respond to that one? 

STAFF AIR POLLUTION SPECIALIST SORIANO: I'll 

start with that one. And then if Paul has some additions 

to it, he can add them at the end. 

In my presentation, I did mention that viscosity 

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is one of the key issues in the distillate fuel. And it 

does have significantly lower viscosity than the heavy 

fuel oil. And so we have been looking at it -- we've 

looked at it a number of ways, in terms of we have -- our 

Enforcement Division, we have gotten all their records, 

which is over, at the time, 4 to 500 samples, and we 

looked at the viscosity of all those samples. And that 

was one of the things that led us to propose this 

extension, because we did find that the viscosity levels 

of the fuels from .1 to .5 percent sulfur were 25 percent 

higher than the viscosity for the fuel at .1. So that's 

one of the issues. 

Also, I talked about that enhanced fuel 

specification. And I continued to give the wrong number 

for the fuel specification, because I work on a testing 

spec too. But there's a new fuel grade called DMZ, and it 

has a three centistoke minimum fuel viscosity. 

So we believe that this viscosity issue is being 

addressed in a number of different ways by our Phase 1 

extension and by these enhanced fuel specifications. 

We also -- I think we would have to be very 

careful in specifying a minimum viscosity level. It's 

very dependent -- the engine manufacturers do have a 

minimum that they specify for their engines. But it's 

very -- the fuel viscosity is very specific on temperature 

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and operation. And so for us to provide a minimum, I just 

think it's too specific to the type of vessel. 

So I think in terms of extending the Phase 1 and 

the enhanced fuel specifications are two prongs that have 

been used to approach that issue. 

CHAIRPERSON NICHOLS: Well, obviously this is of 

great interest to the shippers, to every -- it's a safety 

issue. You know, loss of power is not something to take 

lightly. 

It seems to me that everybody's sort of converged 

on viscosity as the answer or the problem. Are we clear 

that that's the only thing that could be responsible for 

the problems that have been experienced? 

STAFF AIR POLLUTION SPECIALIST SORIANO: It is 

one of the key issues. When California Maritime Academy 

did the study, they found some other -- training, whether 

the vessels operated in an automatic kind of setting or 

whether there's an engineer that's actually down at the 

engine. That can change some parameters. 

But viscosity is one of the key fuel issues.

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: But 

as we've talked about this whole thing, there's a need to 

continue to investigate this closely. That's one of the 

reasons why it makes so much sense to have a delay right 

now and not have another change within that. As we look 

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at this more closely, we do think there may be other 

things that will come up. But as we have, all these 

people together, the experts both from the fuel, from the 

engine side and all that, we think we can work through 

this issue and certainly address the issues of both the 

loss of propulsion and other operational issues that 

they're seeing. And that's why we just think it makes 

sense. 

We from here -- you know, we have in place a very 

concerted effort with all of the effected things, 

particularly with the Coast Guard on working very closely 

on these. We have a lot of additional things that we are 

going to be requesting and following up on to see, as we 

can delve deeper into this issue, to make sure that we 

really are addressing it, particularly before we make the 

next step down to the .1 sulfur fuel.

CHAIRPERSON NICHOLS: Well, Any time there's a 

change in fuel, there's always a need for a very careful 

rollout. So I'm glad to hear that you're working on that. 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Now, 

would -- 

TECHNICAL ANALYSIS SECTION MANAGER TARICCO: I 

just wanted to add one more thing. 

The Coast Guard has been very helpful in this 

matter. And we do have someone here today, Michael

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Boyce -- Do you want to raise your hand, Michael. He's 

been excellent to work with. And they've been working to 

get the word out too. As they learn things when they 

investigate, like loss of propulsions, you know, they get 

that information back out to the industry. And they have 

a vested interest in making sure this works too, because 

the ECA is right around the corner. And, you know, we 

have the benefit now of we're learning. We're kind of the 

pilot here. And the more we can understand this, the more 

successful the ECA will be too, and I think we all want 

that to happen. 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: The 

next one with respect to the VSR issue, Peggy, can you 

respond to that one? 

TECHNICAL ANALYSIS SECTION MANAGER TARICCO: 

Yeah, I'll try to respond, and then you can add things 

that I might miss. 

Well, I think the Chairman is very familiar with 

this, because I think the concept of slowing vessels down 

has been around for a long time. I think we first started 

looking at this back in the 90s. So we did make a 

commitment to do a technical evaluation of vessel speed 

reduction programs in the AB 32 Scoping Plan in our SIP 

and a diesel risk reduction plan, that we would see, you 

know, if it can work, how to implement it. Because of 

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resource issues that's been delayed a little bit. 

The good news is that even though it's been 

delayed, there's a very successful program being 

implemented at the two largest ports in the state, the 

Port of Long Beach and Los Angeles, where they are slowing 

vessels down. They have a very high rate of compliance in 

part because they've incentivized the Vessel Speed 

Reduction Program, that vessel operators will get a

reduced dockage fee if they slow their vessels down. 

So I think a big chunk of the benefits that we 

could get from a VSR program here in California is already 

occurring, thanks to the ports. 

We will still complete the technical report. 

We've committed to do that, and we'll get going on that 

later again this year. There's going to be some really 

tough questions to answer though as we look at this. 

Because, you know, what's the best way to implement this 

type of a program? Is it voluntary? Is it regulatory? 

Is the state the best agency to be mandating speeds for 

ships? Or is another agency, an international body or the 

Coast Guard? Are they in a better position to establish 

those ship speeds? 

The other thing we need to keep in mind here is 

that what we're asking today is to try to keep the vessels 

out of the sea range and get them back in the channel. A 

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Vessel Speed Reduction Program could undo that work here 

today and incentivize vessels to go back through the sea 

range. So we need to keep that in mind. 

We also have to keep in mind our longer term air 

quality goals. As you look to the future, we know we're 

going to have to get more reductions from ships. So we're 

going to have to look at -- when we look at VSR, kind of 

look at it in the context of a broader range of measures, 

what's going to be the best way to get the next set of 

reductions from vessels? And we will do that. We think 

it's a little premature at this point to commit to 

adopting a regulation to mandate vessel speed reductions, 

but we do think there's merit in continuing to look at it 

as a one way to reduce emissions, and we will do that as 

we look at our program. 

CHAIRPERSON NICHOLS: I understand the 

explanation and I think it makes good sense. I just 

think, you know, it would make also sense to include the 

advocacy groups that have been working with us on trying 

to defend this regulation and our authority in a very 

difficult area to, you know, have them involved in looking 

at the same kinds of analyses that you are. So I think 

that will help us come up with something more sustainable 

in the long run. 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: We 

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certainly will. 

I think there's just two real short questions 

left. One had to do with the .1 sulfur fuel availability. 

And there were some comments made about early compliance. 

About 40 percent of the samples that we've done so far is 

at or less than .1 fuel. So there is a fair amount out 

there. There are people using it. Looking at the 

regional basis from where these came, we are seeing .1 

fuel available in most of those regions, probably in 

fairly limited quantities. Except for South Africa, we're 

not seeing too much come out of there. 

So we're doing pretty well on that. We are going 

to follow this .1 sulfur fuel availability very closely, 

because it's also linked to other fuel properties that 

we're concerned about. So that's something that we're 

going to be following. And if there is an issue on that, 

we're certainly going to, you know, bring that back to you 

all and let you know what's happening. 

Then the final one was really why not go out to 

2015. That does make a lot of sense from actually 

dovetailing with the ECA. The issue is, as you saw in the 

previous presentation, these reductions are very critical 

SOx reductions. These are, as we talked about, essential 

for achieving the PM SIP commitments, which come in in 

2014. This regulation has provided about -- as is has 

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provided about 50 percent of those reductions needed. So 

that's -- you know, originally we looked at that as the 

most practical way. But we have some air quality 

requirements that we need to meet. And so that's why 

we're recommending 2014. 

CHAIRPERSON NICHOLS: All right. Thank you. 

Dr. Balmes. 

BOARD MEMBER BALMES: I just wanted to echo your 

comments about the vessel speed reduction issue. I

appreciate from staff the complexity of this issue. And I 

also appreciate from the Navy they don't want to see -- if 

we're hoping to get the vessels through the channel

corridor not to reverse that by vessel speed reduction 

concept that's not well thought through. 

But I would encourage staff along with the 

Chairman to try to navigate this difficult issue with the 

various agencies. And, you know, maybe we're not the 

right agency to spearhead this. But I think it would be 

useful if we could figure out a way to amplify what's 

already being done by the ports in Long Beach and L.A. 

EMISSIONS ASSESSMENT BRANCH CHIEF DONOHOUE: Just 

one final comment on that. We are seeing additional 

movement on the international level to look at greenhouse 

gas reductions from shipping. In fact, at the July IMO 

meeting coming up, they are going to initially start 

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looking at the idea of is it reasonable to try and get 

emission reductions by some type of international vessel 

speed reduction. So at least they're beginning right now 

to start looking at that. I know the time line is 

probably longer than what we usually like. But at least 

it's up there for consideration, which is a good thing. 

CHAIRPERSON NICHOLS: Considering how long it 

took to get the IMO to address the sulfur issue, it's 

practically warp speed. 

BOARD MEMBER BALMES: I would just encourage us 

to be actively engaged in those discussions. 

CHAIRPERSON NICHOLS: We should be encouraging 

that. 

If there are no further questions -- we've 

already closed the record. I should ask for any ex partes 

communication. Yes, down here. 

BOARD MEMBER BERG: I did have one phone call 

with Coalition for Clean Air with Candice Kim and Martin 

Schlageter. I should say that was on June 20th. 

BOARD MEMBER BALMES: And I also had a phone call 

on June 20th with Candice Kim, Coalition for Clean Air, 

and John Kaltenstein, Friends of the Earth. 

BOARD MEMBER D'ADAMO: Same phone call, June 

20th, but adding Steven Sanders. 

CHAIRPERSON NICHOLS: All right. Thank you all. 

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May I have a motion to approve Resolution 11-25 

which contains the staff recommendation? 

BOARD MEMBER D'ADAMO: So moved. 

BOARD MEMBER RIORDAN: Second. 

CHAIRPERSON NICHOLS: All right. All in favor 

please say aye.

(Ayes)

CHAIRPERSON NICHOLS: Any opposed? 

Great. Thank you all very much. Good work. 

Successful. 

We are not quite done, although I think we may 

lose a quorum. That doesn't prevent us from finishing 

what we need to do. 

We do have several persons who have requested to 

testify during the open comment period, most of whom are 

here to talk about the drayage truck regulation, although 

Martin Schlageter had asked to talk to us about economic 

benefits of the regulation. 

So I'm going to ask our Vice Chair Ms. Riordan to 

take the gavel such as it is. To take charge and thank 

everybody for their attendance. And she and/or our

counsel will explain if we need to what the status of 

these public comments is. Thank you. 

ACTING CHAIRPERSON RIORDAN: Thank you, Madam 

Chairman. 

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First of all, let me invite people that are going 

to speak under public comment, Martin Schlageter, Gloria 

Stockmyer, Miguel Silva, Bill Aboudi, Dominick Lee, and 

Ron Light to come down to the front row, please, and then 

we will proceed. 

Those of you who have participated under public 

comment, remember that you do have our traditional 

three-minute rule, just as we do during the hearings. And 

so I'm going to ask that you observe that with the lights 

as we have them. 

And also to remind you that under public comment, 

these are items that the Board has jurisdiction over but 

that are not on the agenda. And we cannot take any formal 

action today as a result of your testimony. 

However, we can ask staff to investigate or work 

with you or make some disposition perhaps of those issues 

that you bring to us. Some are simply informational, and 

I would assume that our first speaker is going to be more 

of an informational one. And others may have some 

requests. And we will handle it that way. 

Martin, I'm going to begin with you. If you'd 

give us your name, as all of you who are testifying, if 

you would begin with your name. And if you're 

representing an organization or a company, if you would 

give us that information as well. 

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So, Martin, let's start with you. 

MR. SCHLAGETER: Thank you so much. 

Martin Schlageter with Coalition for Clean Air. 

I submitted through the Clerk to you an executive summary 

of a paper the Coalition for Clean Air recently released. 

ACTING CHAIRPERSON RIORDAN: We have that. 

MR. SCHLAGETER: I wanted to share that with you 

because it's a series of case studies showing business and 

economic benefits from greenhouse gas and other pollution 

regulations that have been initiated here at CARB. 

The shipping clean, growing green, how companies 

are earning more by polluting less at California ports. 

Goes through a wide variety of sources in the ports of 

freight transportation sector and gives case studies where 

economic benefits are being achieved, efficiencies are 

being found, new markets are being opened up, and green 

technologies are being developed. And that is the vision 

of greening the economy that is I know a part of our 

California mandate here, of which CARB is so important. 

One of the findings I want to highlight there in 

this report to you is that it is a call for us 

collectively to be resilient and committed to the 

deadlines that we set when we set forth regulation. 

Emerging companies and investors and green technology 

developers and workforce training programs are all reliant 

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upon the commitment you make when you set clean air

regulations. These clean air regulations are creating 

markets. They're improving efficiencies, as I said. And 

they're creating jobs here in California. 

And so to stay committed to your deadlines and 

stay committed to your standards allows investors and 

emerging companies to plan and to be assured of the

marketplace that they are planning for and gaining 

investment around. As we came across today, certainly 

there are necessary changes that occur. 

But know that to stay committed to your 

regulations is one way of helping ensure that the green 

economy continues forth. And these emerging companies, 

which are feeding companies that are trying to comply with 

your regulations, they need to be protected by a 

commitment to those regulations. Companies that are 

investing to comply need your continued vigilance in 

rooting out companies that are trying to skirt compliance. 

So these are -- this is a report that I think 

you'll find useful and encouraging and I wanted to share 

with you today as a way to raise my pom-poms as the

cheerleader for clean air regulations. 

Thank you. 

ACTING CHAIRPERSON RIORDAN: Thank you very much, 

Martin. And we do have that and we will keep that. 

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Okay. Next speaker will be Gloria Stockmyer. 

MS. STOCKMYER: Good afternoon. My name is 

Gloria Stockmyer, Stockmyer Trucking. 

I'm here today to comment on the Board's decision 

in December to dismiss staff's recommendations to offer 

the same concessions and delayed rules to drayage trucks 

that you have given to trucks governed by the truck and 

bus regulations. Your decision shows your failure to 

acknowledge the substantial investments made by many of 

the 5400 drayage trucks that visit the Port of Oakland 

regularly. 

Based on information that CARB published, a lot 

of the trucks went and purchased 2004, '05, and '06 engine 

model trucks with the plan of retrofitting them. And now 

they're being told that there are no certified filters or 

retrofit devices. So these men and women are stuck with 

trucks that are worthless. And they're stuck with 

payments and they can't sell them. And if they were able 

to sell them, they couldn go buy a 2007 model truck. But 

because they've been de-valued by this decision, they're 

going to be jobless. 

And, you know, I really ask that you reconsider 

and revisit this issue. Very important to a lot of

drivers. Thank you. 

ACTING CHAIRPERSON RIORDAN: Thank you very much 

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for your presentation. I think we'll take it all. And 

because all of the speakers are on this subject, then 

we'll respond at the end. 

The next one speaker will be Miguel Silva.

MR. SILVA: Hi, members of the Board. My name is 

Miguel Silva, and I work with Horizon Freight Systems in 

the port of Oakland. 

First of all, I wanted to thank you for 

responding to my comments regarding your decision not to 

send Phase 2 of the drayage truck rule back in December. 

Unfortunately, the letter that I received from the Board 

was extremely disappointing, not only because you denied 

my request to reconsider your decision, but because the 

reasons were inadequate. It failed to justify the 

decisions to potentially put thousands of port drivers out 

of business for minimal environment benefit, while 

granting relief to non-port truckers. 

You tell us that the Board found it necessary to 

retain Phase 2 requirements to protect residents of the 

impacted communities from exposure to diesel PM and ozone. 

Yet, you failed to recognize the cleanest trucks in those 

communities currently are the drayage trucks. 

A 2010 air district study found an anticipated 40 

percent in reduction in NOx emissions at the port due to 

the replacement of many older polluting trucks that had 

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occurred in Phase I implementation. But yet you continue 

to allow significant emissions from non-port trucks

through those same communities and freeways. 

The balance of emissions today has changed. And 

there is no valid justification for widening the disparity 

between the trucking rules. If the goal is to protect 

communities like West Oakland, Phase 2 will not achieve 

that goal. 

You also say that the Board concluded that 

retaining existing Phase 2 requirements would provide 

fairness within the drayage truck industry to the truck 

owners who have made greater investments in new trucks; 

that delaying Phase 2 requirements would have favored 

truck owners who have not yet invested in pollution

controls and penalizes the owner/operators of fleets 

driving cleaner trucks. 

This statement is elitist. It favors wealthy 

companies and punishes the poor. Every truck that 

currently serves the port of Oakland has made investments 

in pollution control, be it by retrofitting the trucks or 

by purchasing newer year model trucks that they could 

afford. All have made sacrifices commensurate to their 

economic situation. Phase I already has played a heavy 

financial burden on port truckers. To ignore that seems 

to be deliberately contemptuous of the plight of the 

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working class. Many have gone out of business. Many have 

incurred high interest rate loans and large amount of 

debt. Port truckers have done their share and more to 

meet State clean air regulation at a great personal cost. 

Not delaying Phase 2 to favor a handful of 

wealthy companies at the expense of thousands of 

owner-operators made up of mostly low income minorities is 

discriminatory. The Civil Rights Act of 1964 requires 

your agency under State law to conduct your program, 

policies, activities in a manner that ensures the fair 

treatment of people of all races, cultures, and income 

levels, including minority populations and low-income 

population of the state. 

I think it would be inappropriate and unlawful to 

proceed to implement these policies without mitigating or 

even looking at the impending devastating impact of your 

decision. 

Thank you for the time. 

ACTING CHAIRPERSON RIORDAN: Thank you Mr. Silva. 

Mr. Aboudi. 

MR. ABOUDI: We've been here since 9:00. And my 

name is Bill Aboudi. I'm with AB Trucking. I work at the 

port of Oakland. I've been there since 1988. 

And I've learned over the years that before you 

punch somebody because they're stepping on your toe, you 

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better tell them. So I want to tell you, you guys are 

stepping on all of our toes at the port of Oakland. We've 

had enough. 

I've gone from 13 trucks to six trucks. We've 

been suffering for the last three years. The promises 

that were made to us are not kept. The money didn't come. 

Then you call us something like an actor that came late to 

the show, that we didn't apply early. It's bull. We 

applied when the outreach was done. The money ran out. 

Didn't run out for one or two. It ran out for 1300

people; 1300 people that stood in line day and night to 

try to go through this process. 

You've overcomplicated the system. I've attended 

every drayage workshop that was in Oakland. We've 

participated in everything. We tried to do everything. 

This is not the way it was supposed to go. We were going 

one year ahead of on-road rule. We're being backed by the 

money, because we're the guinnea pigs. And we're being 

slaughtered right now. 

And you have to look at it. This is a very 

dangerous situation. You can talk to Cynthia Marvin. You 

can talk to Diane Bailey from NRDC. We have done our best 

to comply with everything. We want to reduce pollution. 

We live in those communities. We interact with that 

community. 

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But your decisions and what you're doing is not 

correct. The 2004, '05, and '06, that rule was changed 

after people were led to believe that that's an option 

that they had. The years were shortened. Then we were 

told that we didn't promise you that there was going to be 

a DPF that would reduce NOx. We had hoped. What does 

that mean? How do you make a law hoping that somebody was 

going to do something? You have to make sure. Just like 

with the earlier regulation, you're mandating. You're 

watching. You're adjusting. You've adjusted it for 

on-road rule. Why not adjust it for the port drayage 

trucks that reduce the pollution by 50 percent, NOx by 40 

percent? 

We did that already. We upgraded our trucks. We 

upgraded it on our own dime; 2700 of us upgraded on our 

own dime. Didn't take a penny. 1300 got -- instead of 

20,000, we got 5,000. 

So we can always ask the military to go ahead and 

give them some efficiency so they can do their test a 

little faster and give us that $30 million that they burn 

in one day. If you have that kind of money, we'll buy 

brand-new trucks or the two-million-dollar bus. 

ACTING CHAIRPERSON RIORDAN: Thank you. 

Dominick Lee. 

MR. LEE: Members of the Board, my name is 

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Dominick Lee. I'm with VA Transportation in Oakland, 

California. There's about 90 owner-operators working 

there. 

As you can probably already tell, we are a little 

bit upset in Oakland at this decision that was made in 

December. We are all, of us here, work in Oakland. We 

are not one-time visitors. Especially like my guys, 90 

owner-operators, 80 percent of my guys stay at the port 

all day. 

If you want to talk about emissions to problem 

that were there previously and the correction that was 

done is largely due to the community of truckers like me 

and me colleagues here based in Oakland itself. 

I also had the pleasure the past year to be on 

the Truckers Work Group in Oakland where you sent your 

staff members down on a monthly basis to talk about

amendments to be made to the drayage rule based on the 

affects of the economy. 

And I'm kind of a little bit -- not upset -- I 

don't know if you were misinformed, but some of the basis 

that we got from Mr. Goldstene on behalf of Chairman 

Nichols was based upon drayage industry or the port

industry is rebounding. I don't know where you really got 

that. We haven't responded or rebounded at all. I went 

from having about 170 trucks in about 2006 to running 

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about 80 trucks in the port of Oakland. There's about 

half of that. 

Now, if you look at Journal of Commerce, we may 

have rebounded last year, but all steamship lines -- and I 

believe my customers estimate money for us to trickle down 

and be economically better. They've all lost hundreds of 

millions of dollars in the first quarter. They're all 

bracing for another 2009 where some steamship lines have 

lost over a billion dollars. If there is to be any relief 

made to the trucking community, it should come to the 

drayage. It should come to the guys that have already 

invested house payments and are seriously looking for 

relief. 

The gentleman here earlier talked about you need 

to keep deadlines and technology and all that. I think 

sometimes we jump ahead of the schedule and propose

deadlines when don't have technology. There is these guys 

that went out there and bought 05-06 trucks with the 

promise of technology to keep on working until 2020. You 

don't have that available. And at this point, you're 

proposing options for them that are just not viable at 

this point. 

It's a promise. If it's not there, then some 

changes need to be made to make accommodations for these 

truckers that want to stay at work. It's about fairness. 

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And I think sometimes we all sit here and play a zero sum 

game. I think there could be compromises that could be 

made and keep everybody working. 

I am seriously asking you guys to reconsider and 

keep Oakland's port drivers working. Thank you. 

ACTING CHAIRPERSON RIORDAN: Thank you, Mr. Lee. 

Mr. Lee, the Committee that you mentioned just 

briefly, how many are on that Committee that you just 

mentioned? 

MR. LEE: You're talking about the Truckers Work 

Group? 

ACTING CHAIRPERSON RIORDAN: Yes.

MR. LEE: Well, Truckers Work Group is a monthly 

meeting put on the trucking community in the Port of 

Oakland and is open to all terminal operators, steam ship 

lines, and all trucking companies that serve the port of 

Oakland, including truckers who come in from the valley as 

well. 

ACTING CHAIRPERSON RIORDAN: But individual 

truckers can be there? 

MR. LEE: Yes, ma'am. And actually, that's 

really been the misinformation. I mean, for a year, you 

sent staff down saying there's going to be amendments 

made, extensions made to the filters, extension made to 

their trucks. And, you know, within ten minutes, you guys 

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change your mind as to take that away from them. That's 

what I'm asking you -- 

ACTING CHAIRPERSON RIORDAN: But the group 

represents pretty fairly all of the interests in the area? 

MR. LEE: All of Oakland truckers, yes. 

ACTING CHAIRPERSON RIORDAN: Thank you. 

Appreciate that. 

Mr. Light. 

MR. LIGHT: Good afternoon, Madam Vice 

Chairman -- is it -- and Board members. My name is Ronald 

Light. I'm Executive Director of West State Alliance, 

which is the Port of Oakland Truckers Trade Association. 

I'd like to try to hit a few high points, if I may. 

Our organization over the past six months has 

submitted comments to Chairman Nichols, to the Board 

members individually, to the Board collectively during the 

last 15-day open comment period. We can only hope that 

you avail yourselves of our written comments where we go 

into great detail and analysis and documentary support of 

our various positions. 

I was coming here, I raised the question -- I 

posed the question to myself what would be the best course 

of action at the point in which to address all of you 

today? What I believe that it is, is to question what 

your intentions were on December 17th and whether or not 

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the Board was fully aware and fully apprised of the

consequences of their actions and of their intentions when 

you made the decision not to enact the delay to the Phase 

2 NOx regulation, which would have postponed the rule from 

2014 to 2020. So it's within that vein that I would like 

to continue. 

As a couple of my colleagues have alluded, a 

research scientist at U.C. Berkeley, Dr. Rob Harley, was 

commissioned by the ENAQMD to conduct a study this last 

year to determine to what extent there had been emission 

reductions from 2009 to the advent of the Phase I PM 

regulation in January 1st -- or actually, it's more like 

June of last year. 

And as my colleagues have alluded, there was a 

50 percent reduction in PM diesel emissions and an 

unanticipated 40 percent reduction in NOx. And that's 

extremely significant, because what it reflects is the 

fact that as older trucks were phrased out and newer 

trucks were purchased largely at the expense of the port 

truckers themselves, it's created a vast unanticipated 

improvement in NOx reductions, thereby eliminating the 

need to remain consistent with the implementation schedule 

for Phase 2 that had been adopted. 

And in fact, staff had proposed, as you well 

know, a delay in implementation of the Phase 2 rule until 

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2020, in part to reflect the fact that there were far 

fewer emissions being emitted into the atmosphere during 

this period. 

As my colleagues also have intimated, one of the 

big issues was the fact that when the Phase 2 rule was 

originally adopted by this Board, it was predicated on the 

existence of not only PM filters, but of NOx reduction 

filters. And in the case of vehicles of 2004, '05, and 

'06 engines, the idea was that as those trucks required 

diesel filtration that a dual purpose diesel and NOx 

emission reduction filter could be purchased and 

retrofitted. In fact, that does not exist. It has not 

been developed. It's not been submitted to the CARB 

Board. It's not been approved. It's not on the market. 

So all of those 2700 truck owners have no option 

when it comes time for them to retrofit their trucks. 

They would do so -- this is with PM emissions filters. 

They would do so with the fore knowledge that on January 

1st, 2014, that their trucks would no longer be compliant 

due to the NOx emissions rule. That means they need to 

purchase a $20,000 filter and keep them in compliance for 

perhaps one year. 

I'm sorry I've gone over. I did have a few more 

points to make. 

ACTING CHAIRPERSON RIORDAN: I felt that because 

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you represented a larger group, you could have 15 seconds 

extra. 

Mr. Light, I appreciate your comments. And I 

thank you. And I'm going to have to tell you I have to 

review your submittals. And maybe other Board members 

will have some questions. 

And I'm sorry, Board members, I didn't ask if 

there were any questions on your behalf for any of the 

other speakers. But this would be the time. And then I'm 

going to ask staff to perhaps make some remarks and make a 

suggestion about where we might go from here. 

But first let me just invite any questions, if 

there are any, Board members. 

BOARD MEMBER BERG: I'd be interested in what 

staff has to say. 

ACTING CHAIRPERSON RIORDAN: Mr. Goldstene. 

EXECUTIVE OFFICER GOLDSTENE: Thank you, Ms. 

Riordan. 

We'll ask Cynthia Marvin to provide a brief 

overview and provide context of where we are. She can 

respond to some of what you just heard. 

ACTING CHAIRPERSON RIORDAN: And then perhaps 

some direction what the next step might be. Why don't do 

you the overview and response. 

ASSISTANT DIVISION CHIEF MARVIN: Thank you. 

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We certainly are very well aware of the level of 

concern in Oakland. Have spent a fair amount of time 

listening to those concerns, looking ourselves at what was 

possible from the system standpoint, and also trying to 

assess what the impact is in terms of the number of

trucks. 

So the letter that Chairman Nichols had sent back 

to Miguel Silva and the West State Alliance on behalf of 

many of the truckers who spoke today really attempts to go 

through each of the substantive issues that they raised 

and provide the facts as we understand them. 

I think in terms of overall context, we 

absolutely are making progress, and happily so, in 

reducing diesel pollution at west Oakland. 

As Dr. Harley's study confirms, I think it's 

important to note those improvements are due to a 

combination of cleaner trucks, cleaner ships, cleaner ship 

fuel, cleaner cargo handling equipment, really the whole 

spectrum of sources that operate in that community. So 

many of those are cleaner due to the Board's regulations, 

but it's not solely trucks that are driving that 

improvement. We're certainly happy for it, regardless. 

In terms of where we go in the future, many of 

these folks did submit comments in the 15-day comment 

process on the changes to the drayage rule. So staff will 

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be going through the prescribed process to evaluate and 

respond to those comments. 

Separate from the regulatory process, I've been 

in some discussions with the city counsel member from 

Oakland who has raised many of the same financial concerns 

and expressed an interest in looking at how we can find 

new ways to help finance additional upgrades at the port 

of Oakland. And what we've talked about doing is trying 

to combine the State's loan and loan guarantee programs 

that are expanding right now, as Ms. Berg is well aware, 

and perhaps combine those with funds generated or 

developed by the city of Oakland so that there is a

stronger financing program available. 

In the letter back from Chairman Nichols to the 

West State Alliance, we did note the recovery or the 

rebound at the Port of Oakland. That was not in the 

analysis of any one company's economic state. It was a 

statistical look at the amount of cargo that's flowing 

through the Port of Oakland. And what we see by the Port 

of Oakland's own statistics is that the cargo volumes have 

returned to the pre-recessionary levels. So that tells us 

that there is a need to stay vigilant in terms of 

requiring cleaner trucks and also that ultimately that 

business will provide a source to help finance those 

cleaner trucks. 

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ACTING CHAIRPERSON RIORDAN: Mr. Goldstene. 

EXECUTIVE OFFICER GOLDSTENE: I think at this 

point we are in the middle of the process of the 15-day 

process where we will respond to the comments we've

received. 

I agree with Cynthia that the letter from 

Chairman Nichols already responded to the issues raised 

here. And what we can do is make sure we distribute that 

to the Board so you have that information. 

ACTING CHAIRPERSON RIORDAN: Yes, Dr. Balmes. 

BOARD MEMBER BALMES: Well, I appreciate your 

comments, Cynthia. 

But being from Berkeley, I know that the City of 

Oakland is in a great financial straits. When you talk 

about partnering with the city to try to generate some 

more funds, is there any reality there on the city side? 

Not to mention the State budgetary issues. 

ASSISTANT DIVISION CHIEF MARVIN: Excellent 

question. And that was part of my discussion with the 

city counsel member. 

I think I'm realistic enough not to expect the 

city itself to provide funding. But what she was talking 

about was looking at some of the economic development 

funds that may be available for the city or some of its 

subsidiaries, non-profits to apply for as a financing 

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mechanism. 

So I can't answer the question. I can just tell 

you that there is a local elected official who wants to go 

for that, try it, and we committed to work with her. 

EXECUTIVE OFFICER GOLDSTENE: I've been corrected 

by Mr. Fletcher. We did send the letter that Mary sent to 

the Board already, but we can re-send it. 

MR. ABOUDI: Can I have a rebuttal? 

ACTING CHAIRPERSON RIORDAN: No. I think based 

on fairness -- 

MR. ABOUDI: But there's wrong information being 

dished out. 

ACTING CHAIRPERSON RIORDAN: I realize there's a 

disagreement -- 

MR. ABOUDI: It's not a disagreement. It's 

inaccurate information that's been dished out to the 

Board. 

EXECUTIVE OFFICER GOLDSTENE: We'll finish the 

rule making process. In that forum and in that context, 

we will reply to the comments. 

ACTING CHAIRPERSON RIORDAN: And I think, Mr. 

Goldstene, then what -- after you've done that, I think 

because of the interest shown by the speakers that then 

the -- it would be helpful if you then made that 

information available to us. Lots of times after the 

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15-day comment period is over or the period is over, then 

we just -- that moves on. I think in this case perhaps 

we'd like to be a little bit more aware of the response. 

In terms of looking at opportunities for funding, 

realistically, cities are in straits now. State is in a 

straight. 

If the port has come back financially -- well, 

not financially. Let's say the trade or the commerce 

there has come back, is the port doing anything to help in 

this regard at all? No. All right. No. 

ASSISTANT DIVISION CHIEF MARVIN: Unfortunately, 

no. But that would certainly be another potential source 

of funding to help the sort of financing program. 

ACTING CHAIRPERSON RIORDAN: Have we contacted -- 

forgive me, because you probably have told me this and I 

just don't remember. 

Have we contacted them? Have we asked them? 

Have we worked with them at all to see if there was any 

interest in helping? 

ASSISTANT DIVISION CHIEF MARVIN: We've certainly 

had that discussion, both the Air Resources Board staff 

and the Bay Area Air Quality Management District staff 

have had that discussion repeatedly with the port of 

Oakland. But we are willing to have that again. 

ACTING CHAIRPERSON RIORDAN: I think it would 

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bear, you know, doing it again. 

I think sometimes if people are presented as we 

have been today with some of the individual stories, you 

know, maybe there would be an interest. 

I don't know if there is a model to follow in the 

ports of Long Beach and L.A. Maybe there is a model 

there. Do I not remember they did something? 

ASSISTANT DIVISION CHIEF MARVIN: Down in 

southern California, the two big ports were very 

aggressive in both setting their own requirements for 

access to the port for cleaner trucks. They established a 

dirty truck fee. They raised money by allowing those 

dirty trucks to come to the port prior to the ARB 

regulation. And they took that money, and then a number 

of port operators revenues and greatly subsidized the 

transition to cleaner trucks. 

The port of Oakland contributed $5 million to the 

overall funding program that was implemented in 2009 and 

2010. But it is a much smaller contribution proportional 

than the southern California ports. They considered doing 

a gate fee and a similar program to the L.A. and Long 

Beach situation, and the Oakland Port Commissioners

declined to pursue that approach. 

ACTING CHAIRPERSON RIORDAN: Are they governed 

similarly -- the three ports -- in other words, is there 

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any difference in the governance and the way it's set up? 

ASSISTANT DIVISION CHIEF MARVIN: I think there 

are some technical differences. But from a general sense, 

I would say each of the ports are run by an appointed 

Board of Commissioners or the Port of Harbor Commissioners 

generally appointed by the cities where those ports are 

located. So in Oakland, the Mayor appoints the Boards of 

Port Commissioners. 

BOARD MEMBER BERG: But they do run 

independently. 

ACTING CHAIRPERSON RIORDAN: But I'm trying 

decide where to put the -- I mean, we obviously need to 

have a discussion, we and Bay Area and all. But I'm 

looking at those who are in the audience and I'm thinking 

where would their time be best spent if we were looking 

for some additional resources that would mirror what's 

happening down in the other two ports. 

And I'm going to make a suggestion -- not knowing 

the exact governance and how they're set up. But usually 

the Port Commissioners or Board members, however this 

governance is designed, they need to hear from you. And 

you may have been there many times. But if we go and 

talk, you go and talk, maybe something can happen based on 

our belief that commerce has returned to that port. 

Now, if it hasn't, then that's a different story. 

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But if it has, then I think the case could be made that 

you need to be there along with us, not physically in the 

same room at the same time, but there at their public 

meetings and we at our meetings. And that's what I'm 

going to suggest to everybody. 

But I would like our staff -- if the Board agrees 

with me -- to go back and have another conversation with 

them and explain to them what has happened in the other 

ports and that there is a real interest on our part to see 

some effort being made to help with the finances. 

EXECUTIVE OFFICER GOLDSTENE: We'll talk to the 

port and the air district. And we'll also keep the Board 

informed as we move forward on completing the 15-day 

process. 

ACTING CHAIRPERSON RIORDAN: Thank you. Thank 

you, Mr. Goldstene. Any other comments, Board members? 

With that, then we'll adjourn our meeting. And I 

thank you very much. 

(Thereupon the California Air Resources

Board meeting adjourned at 3:43 p.m.) 

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CERTIFICATE OF REPORTER

I, TIFFANY C. KRAFT, a Certified Shorthand 

Reporter of the State of California, and Registered

Professional Reporter, do hereby certify:

That I am a disinterested person herein; that the 

foregoing hearing was reported in shorthand by me, 

Tiffany C. Kraft, a Certified Shorthand Reporter of the 

State of California, and thereafter transcribed into 

typewriting.

I further certify that I am not of counsel or 

attorney for any of the parties to said hearing nor in any 

way interested in the outcome of said hearing.

IN WITNESS WHEREOF, I have hereunto set my hand 

this 9th day of July, 2011.

 

TIFFANY C. KRAFT, CSR

Certified Shorthand Reporter

License No. 12277 

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