PROPOSAL:
Adopt Update of Technology Advancement Plan for Clean Fuels Program and
Approve Technology Advancement Annual Report
SYNOPSIS:
SB 98 (Alarcon) amended and extended the Clean Fuels Program until
January 1, 2005. Amendments under Health & Safety Code Section 40448.5.1
require the submittal of an Annual Report covering the past year’s Clean
Fuels Program activities to the Legislative Analyst and air quality
committees of the State Legislature by March 31, following Board approval.
The law also requires the Board to adopt the Technology Advancement Plan
for the current year. These documents have been accordingly prepared,
reviewed and approved by the state-mandated Clean Fuels Advisory Group,
and submitted for Board approval.
COMMITTEE:
Technology, January 25, 2002, Recommended for Approval
RECOMMENDED ACTION:
Approve the attached Resolution:
- Finding that the update of the Technology Advancement Plan and its
proposed projects do not duplicate any past or present programs of
specified organizations;
- Adopting the Technology Advancement Plan: 2002 Update, and include
it in the AQMD’s Clean Fuels Program; and
- Approving the Technology Advancement Office Annual Report: 2001, for
the Clean Fuels Program.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Achieving federal and state clean air standards in Southern California
will require emission reductions from both mobile and stationary sources
beyond those available from current technologies. The AQMP relies on the
expedited, future implementation of cleaner-burning fuels and advanced
technologies in Southern California to achieve these standards. To meet the
needs of the AQMP for progressively lower-emitting fuels and technologies,
the AQMD adopted a Clean Fuels Program in 1988 and established the
Technology Advancement Office to administer the program. Concurrently, the
State Legislature authorized funds for the AQMD’s Clean Fuels Program via SB
2297 and subsequently renewed this funding authorization via SB 316 in 1993.
On June 8, 1999, SB 98 (Alarcon) was signed by Governor Davis into state
law, which extended the Clean Fuels Program funding mechanism until January
1, 2005, added administrative requirements, and specified the creation of
and expectations for the Clean Fuels Advisory Group.
The objectives defined for the Clean Fuels Program in California Health &
Safety Code (H&SC) Section 40448.5 are:
"(a) The South Coast district shall establish an Office of Technology
Advancement to administer the clean-burning fuels program established
pursuant to this section. The program shall encourage projects that
increase the utilization of clean-burning fuels that reduce public health
hazards from air pollution."
"(d) In developing its program, the south coast district shall consider
promoting projects in the transportation and stationary source sectors
utilizing methanol fuel, fuel cells, liquid petroleum gas, natural gas,
including compressed natural gas, combination fuels, synthetic fuels,
electricity, including electric vehicles, and other clean-burning fuels."
The AQMD Clean Fuels Program is implemented as a public-private
partnership in conjunction with private industry, technology developers,
academic institutions, research institutions, and government agencies. This
public-private partnership has enabled the AQMD to leverage its public funds
with outside investment in a ratio of more than $4 of outside funding to
every $1 of AQMD funding.
H&SC Section 40448.5.1 requires that the AQMD adopt a plan that describes
the expected cost and benefits of proposed projects prior to any Clean Fuels
Program expenditure after January 1, 1996 and find that the proposed
projects do not duplicate programs of specified organizations. The Board
initially adopted such a plan at its March 8, 1996 meeting. SB 98 amended
this provision by requiring annual updates to this plan and 30-day public
notice to specified interested parties and the public prior to the annual
public hearing at which the Board takes action on the Clean Fuels Program.
SB 98 also requires the preparation of an annual report with specified
contents. This annual report must be reviewed by an advisory group and the
results of such consultation provided to the Board, prior to the Board's
approval and the final submittal of the annual report to the Legislative
Analyst and to specified offices of the Legislature by March 31 of each
year. This legislation also specifies the make-up of this advisory group and
its primary responsibilities to make recommendations regarding the most
cost-effective projects that advance and implement clean fuels technology
and improve public health. The Board previously approved the membership of
this advisory group on September 10, 1999. Changes to the composition will
be reviewed by the Technology Committee and submitted to the Board for
approval on an as-needed basis.
Proposal
The attached Update to the Technology Advancement Plan for the Clean
Fuels Program is the seventh submittal of the required plan. This update
identifies potential project areas to be funded during 2002. The proposed
projects reflect new promising low- and zero-emission technologies and
applications that have emerged since the initial submittal. The 2002 update
includes a number of proposed project areas, not all of which are expected
to be funded in the current fiscal year given the available budget, staff
resources, and suitability of potential projects. Projects not funded in
2002 may be considered for funding in subsequent years. There is no
requirement to expend all of the allocated monies in any specific area
within this year.
In addition to identifying proposed projects to be considered for
funding, this Update establishes six key technical areas of highest priority
to the AQMD. Those high priority areas include:
- Fuel cells for transportation and power generation
- Diesel alternatives
- Electric and hybrid electric technologies
- Off-road applications of alternative fuel technologies
- Infrastructure development
- VOC reduction technologies for stationary sources
These technical priorities will necessarily be balanced by funding
availability and the availability of qualified projects. Revenues from
several sources support the AQMD's Technology Advancement program. The
principal revenue source is the Clean Fuels Program, which, under H&SC
Section 40448.5 and Vehicle Code Section 9250.11, establishes mechanisms to
collect revenues from mobile and stationary sources to support the program’s
objectives, albeit with constraints on the use of the funds. The Clean Fuels
Program funding legislation is currently due to sunset on January 1, 2005.
The ARB has established the Carl Moyer Memorial Air Quality Standards
Attainment Program to provide incentives to replace or retrofit
higher-polluting diesel vehicles, off-road vehicles and equipment, as well
as infrastructure support. Matching funds are required from local air
districts such as the AQMD in order to receive state funding and administer
the program locally. In addition the Governor has also provided state funds
to support the replacement of older, highly polluting school buses in
California. Local funds are again required to receive the state funding and
implement the school bus replacement program locally. The Plan includes a
provision to provide such matching funds to implement these important
incentives programs. Furthermore, due to uncertainty with regard to state
funding allocations, the Plan allows for the Board to execute the option to
transfer funds up to an additional $10,000,000 from other project areas into
the Alternative Fuel Technologies - Incentive area, in the Clean Fuels
Program.
Grants and cost-sharing revenue contracts from various government
agencies, such as the ARB, CEC and DOE, also support technology advancement
efforts. Another potential source to fund the development and demonstration
of advanced clean air technologies is the Advanced Technology Fund. This
fund was established primarily as a special revenue fund for revenues
received by the AQMD as a result of fines, penalties, and settlements from
violations of applicable air pollution control rules or laws.
Although not required by legislation, but in an attempt for completeness,
the proposed Update to the Technology Advancement Plan includes some
projects that may be funded by revenue sources other than the Clean Fuels
Program. For example, there are several proposed projects that address the
development of technologies that would reduce VOC and PM emissions from
various stationary source applications. These projects are essentially
efforts designed to specifically address the technology advancement needs
related to Federal Clean Air Act Section 182(e)(5), as mentioned in the 1997
AQMP Revision.
Not all projects identified in this plan are expected to be recommended
for funding. Projects in the plan that are deemed ready will be presented
individually to the Board for review and approval. At that time, additional
details will be provided about the technology to be demonstrated, the
intended application, the specific scope of work, the capabilities of the
contractor and project team being recommended, and how the project will be
cost-shared by various parties.
The proposed update is the result of a comprehensive planning and review
process. This process has included consideration of AQMP control measures
and coordination activities involving outside organizations. This update has
been reviewed by the Technology Advancement Advisory Group, a panel of key
stakeholders, and the SB 98 Clean Fuels Advisory Group, an external panel of
experts, listed in the Appendix to the Update. Based on communications with
the organizations specified in H&SC Section 40448.5.1 and review of their
programs, the project areas proposed in this update do not appear to
duplicate any past or present projects. As each individual project is
recommended to the Board for funding, staff will continue to coordinate with
these organizations to avoid duplication and ensure optimal expenditure of
Clean Fuels Program funds.
Also attached is the Technology Advancement Office Annual Report,
covering projects and progress of the program for calendar year 2001. This
report addresses all of the requirements specified in H&SC Section
40448.5.1(d), as amended by SB 98. Specifically, the report includes:
- A description of the core technologies that the AQMD considers
critical to ensure attainment and maintenance of ambient air quality
standards and a description of the efforts made to overcome barriers to
commercialization of those technologies;
- An analysis of the impact of the AQMD’s Clean Fuels Program on the
private sector and on research, development, and commercialization efforts
by major automobile and energy firms, as determined by the AQMD;
- A description of projects funded by the AQMD, including a list of
recipients, subcontractors, co-funders, matching state or federal funds,
and expected and actual results of each project advancing and implementing
clean fuels technology and improving public health;
- The title and purpose of all projects undertaken pursuant to the Clean
Fuels Program, the names of the contractors and subcontractors involved in
each project, and the amount of money expended for each project;
- A summary of the progress made toward the goals of the Clean Fuels
Program; and
- Funding priorities identified for the next year and relevant audit
information for previous, current, and future years covered by the report.
As required, staff has consulted with the SB 98 Clean Fuels Advisory
Group which has approved the annual report.
Attachments
- Resolution
- Technology Advancement Plan for the Clean Fuels Program: 2002 Update
- Technology Advancement Office Annual Report: 2001
Due to the size of the Annual Report, the Appendix C Final Report
portion will not be available electronically. It is available by hard copy
only from the Technology Advancement Office.
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