BILL ANALYSIS AB 1431 Page 1 Date of Hearing: April 27, 2009 ASSEMBLY COMMITTEE ON TRANSPORTATION Mike Eng, Chair AB 1431 (Hill) - As Amended: April 14, 2009 SUBJECT : Port of Oakland: Emission reduction strategies SUMMARY : Establishes emission reduction strategies for the Port of Oakland (Port). Specifically, this bill : 1)Requires the Port and entities involved in goods movement at the Port to establish emission reduction strategies that are no less stringent than emission reduction strategies employed at the Port of Los Angeles and the Port of Long Beach (San Pedro Ports). 2)Defines "no less stringent" to mean achieving a comparable quantity of emissions reductions as achieved by the separate clean air action plans of the San Pedro Ports. 3)Requires the Bay Area Air Quality Management District (BAAQMD) to determine, after consultation with the South Coast Air Quality Management District (South Coast) and the California Air Resources Board (CARB), whether the Port and the entities involved in goods movement at the Port have established emission reduction strategies that are no less stringent than those employed by the San Pedro Ports. EXISTING LAW : 1)Establishes the California Port Community Air Quality Program in the BAAQMD and South Coast. The program requires those districts to provide grants to offset the advanced introduction costs of eligible projects that reduce onroad emissions of particulate matter within communities adjacent to marine terminals or ports within the jurisdiction of those districts. 2)Establishes the Port under the Oakland City Charter in 1927, as an autonomous, self-supporting department of the City of Oakland that manages and operates a container seaport, a passenger/cargo/general aviation airport, and waterfront property for commercial and recreational purposes. Under the governance of a seven-member Board of Port Commissioners AB 1431 Page 2 nominated by the Mayor of Oakland and appointed by the City Council, the Port's Executive Director, Deputy Executive Director and staff operate three revenue-producing divisions (Maritime, Aviation and Commercial Real Estate). The Port occupies 19 miles of waterfront on the eastern shore of San Francisco Bay with 771 acres devoted to maritime activities and another 3,000 acres devoted to aviation activities. The Port owns, manages, and markets seaport facilities on San Francisco Bay and the Oakland Estuary. The seaport is the fifth busiest in the nation and in the top 20 in the world in terms of annual container traffic. The Port currently has eight operating marine terminals with 20 deep water berths. The Port owns and operates Oakland International Airport and markets its facilities to tenants, including airlines and air cargo companies. The airport serves more than 14 million passengers and handles more than 1.4 billion pounds of cargo annually. 3)Authorizes, through the enactment of Proposition 1B as approved by the statewide voters in November 2006, the state to sell approximately $20 billion of general obligation bonds to fund transportation projects to relieve congestion, improve the movement of goods, improve air quality, and enhance the safety and security of the transportation system. Of the $20 billion, allocates $1 billion to the California Air Resources Board (ARB) for emission reductions, not otherwise required by law or regulation, from activities related to the movement of freight along California's trade corridors (commencing at the state's airports, seaports and land ports of entry). Provides funds for the replacement, repower, or retrofit of heavy-duty trucks, locomotives, commercial harbor craft, ocean-going vessels related to freight, and cargo-handling equipment with cleaner technology alternatives. The Port environs qualify as one of four targeted freight corridors for expenditure of the $1 billion. 4)Establishes the Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer program), which is administered by the State Air Resources Board, to provide grants to offset the incremental cost of eligible projects that reduce emissions of air pollutants from sources in the state. Under the Carl Moyer program, the state board is authorized to provide funding for, among other things, eligible heavy-duty fleet modernization projects, including a project that replaces an old engine or vehicle with a newer engine or AB 1431 Page 3 vehicle certified to more stringent emissions standards than the engine or vehicle being replaced. FISCAL EFFECT : Unknown COMMENTS : Background : The author contends that his bill "would cut air pollution coming from thousands of trucks, ships, trains, and cargo handling equipment associated with the Port of Oakland. AB 1431 seeks to work at creating a long-term and sustainable solution that addresses the local public health impacts of commercial shipping activities associated with the Port of Oakland. Residents living in the shadow of the Port of Oakland can expect to die, on average, more than a decade before other residents in the Bay, appallingly, this gap may be increasing. One of the underlying causes of this disturbingly large health disparity is the extremely high rates of respiratory disease, primarily asthma, in West Oakland. Diesel pollution is well known to be hazardous to human health. Groups at particular risk include workers in diesel industries, such as trucking and rail, and communities located near major sources of diesel pollution, such as ports and freeways. While the Port of Oakland approved the MAQIP which sets the master plan of air quality earlier this month, but the port's plan ultimately does little more than reiterate a statewide goal of 85% reduction in health risk by 2020. The commissioners refused to act on the recommendations of many task force members (including two of the four co-chairs) and all regulatory agencies to include measurable programs to achieve clean air goals." MAQIP : According to the Port, the MAQIP was developed in collaboration with a task force of diverse stakeholders, to reduce criteria pollutants, notably diesel particulate matter, associated with maritime (seaport) activities at the Port. The MAQIP, recently adopted on April 7, 2009, is the Port's master plan to reduce air pollution from both mobile and stationary on/near-shore and off-shore sources at the seaport. The MAQIP not only supports current and future state and local emission reduction requirements, but enhances these requirements through early implementation goals and by targeting emission reductions that exceed legally mandated requirements. Further, it builds upon the Port Maritime Air Quality Policy Statement ("Port Air Quality Statement"), adopted by the Board of Port Commissioners in March 2008. The Port Air Quality Statement sets a goal of AB 1431 Page 4 reducing the community cancer health risk related to exposure to diesel particulate matter (PM) emissions associated with the Port's maritime operations by 85% from 2005 to 2020, through all practicable and feasible means. It also commits the Port to implement early action emissions reduction measures to reduce the duration of the public's exposure to emissions that may cause health risks, through all practicable and feasible means. The MAQIP relies on the 2005 seaport air emissions inventory (completed in 2007, and revised in 2008) and 2008 human health risk assessment studies prepared by the Port and ("CARB"), respectively, to establish baseline emissions and to set emission reduction goals. West Oakland Risk Assessment : The Port partnered with the BAAQMD, CARB, and the Union Pacific Railroad to estimate the health risks from diesel exhaust in West Oakland. Draft results of the comprehensive Health Risk Assessment (HRA) were made available in March 2008 and take into account emissions generated from: Diesel trucks and buses; locomotives (cargo and passenger trains); ships (cargo and cruise); harbor craft (e.g., tugs, ferries, fishing vessels); construction equipment; cargo handling equipment; stationary sources. According to BAAQMD, the study determined that "the West Oakland community is exposed to diesel PM ambient concentrations that are almost three times higher than the average background diesel PM in the San Francisco Bay Area. The estimated lifetime potential cancer risk for residents of West Oakland from exposure to diesel PM is about 1,200 excess cancers per million over a 70 year lifespan. On-road heavy-duty trucks result in the largest contribution to the overall potential cancer risk levels in the West Oakland community, followed by ships, harbor craft, locomotives, and cargo handling equipment?CARB has adopted numerous regulations to reduce diesel PM emissions and expects to adopt additional rules. These rules will significantly reduce cancer and noncancer risk in West Oakland and other communities affected by diesel PM?Even with the adoption of CARB's proposed regulations, BAAQMD is committed to further reducing diesel PM in the Bay Area beyond those measures prescribed by CARB. To achieve this objective, the BAAQMD developed a mitigation action plan that involves the communities and businesses to seek grant funding for diesel emission reduction projects and offers decision-based tools to assess potential health risks associated with proposed land use projects." AB 1431 Page 5 San Pedro Ports Clean Air Action Plan (CAAP) : Adopted by the San Pedro Ports, the CAAP addresses every category of port-related emission sources - ships, trucks, trains, cargo-handling equipment and harbor craft - and outlines specific, detailed strategies to reduce emissions from each category. The measures that will be implemented under the CAAP are expected to eliminate more than 47 % of diesel PM emissions from port-related sources within the next five years and significantly reduce associated health risks. Smog-forming nitrogen oxide (NOx) emissions will be reduced by more than 45 %. Measures outlined in the CAAP will also result in the reduction of sulfur oxides (SOx) by 52 %. It is expected that in five years, under the CAAP, diesel PM from all port-related sources would be reduced by a total of 1,200 tons per year; NOx emissions would be reduced by 12,000 tons per year; and SOx emissions would be reduced by 8,900 tons a year. BAAQMD : Despite its Executive Officer having served as one of four co-chairs of the MAQIP advisory Task Force, the BAAQMD voted to oppose the adoption of the MAQIP unless the Port adopted key implementation steps for control measures as follows: 1)The adoption of a container use fee of no less than $12.50 per loaded 20-foot equivalent unit (TEU). 2)A policy to expend the first three years of revenues from the container use fee on air quality improvement efforts at the Port of Oakland that will reduce health risk in the western Oakland area. 3)A policy to expend the first two years of revenue exclusively on assisting trucking firms and individual truck owners doing business at the Port of Oakland in purchasing used and new trucks that are compliant with the CARB emission standards for 2007 and newer model year engines. 4)A policy to expend the third and subsequent years of revenue from the use fee on clean trucks and infrastructure for shore power systems for marine vessels docking at the marine terminals. 5)The adoption by January 1,2010 of an incentive program for the use of marine diesel oil with a sulfur content less that 0.5% AB 1431 Page 6 by weight in ocean-going vessels transiting to or from, or berthing at, the Port of Oakland between January l, 2010 and December 31, 2011. As the BAAQMD is the bill's sponsor, it would appear that the impetus for this bill could be attributed to BAAQMD and other task force members' inability to persuade the Port to adopt the above and other voluntary emission reduction strategies. SUPPORT : In support of this bill, the BAAQMD indicates that "AB 1431 would simply require that the Port of Oakland begin to address the public health burden it places on the region. This bill would require Oakland to have an emissions reduction strategy that is no less stringent than the strategies of the San Pedro Bay ports, the Ports of Long Beach and Los Angeles. The bill would require Oakland to achieve a comparable percentage reduction in emissions. The contrast between Oakland and its southern California competition is stark. Whether it is cleaner, less polluting fuels in the boats, self-imposed container fees to clean up the trucks, vessel speed reductions, or aggressive action on shore power, Oakland has sat idle while southern California has acted. Long Beach and Los Angeles have taken multiple steps beyond existing State regulations to cut pollution. Oakland has not only done nothing to go beyond the few requirements imposed by the State, but has announced in its own air quality plan that it does not even anticipate full compliance with these minimal requirements. In fact, Oakland has lobbied the Administration, the Legislature, and CARB to be exempted from both current and possible future regulatory requirements. For literally years, we have worked with the Port and other stakeholders to try to collaboratively cut emissions from the goods movement at the Port. Unfortunately, these voluntary efforts have not yielded either the pollution reductions that adjacent communities deserve or that southern California communities have begun to receive. The Port's air quality planning has been long on process but short on defined, measurable, specific commitments. The Oakland Tribune Editorial Board, United States Environmental Protection Agency, CARB, Alameda County Public Health Department, a host of local community and environmental groups, national environmental organizations, the BAAQMD, and others all found the results to be unacceptable. We have no choice but to ask the Legislature to address this problem." OPPOSITION : In opposition to this bill, the Port indicates that AB 1431 Page 7 it adopted, on March 18, 2009, an aggressive air quality goal to reduce community health risk related to diesel PM emissions from the maritime sector by 85% by the year 2020. "This emissions reduction goal sets a very high bar for the Port of Oakland, its tenants and business partners to improve public health in our local community by all practical and feasible means. CARB and the BAAQMD, as well as many environmental and community stakeholders, have lauded the Board of Port Commissioners (Board) for its adoption of this ambitious public health goal. ?More recently, on April 7, 2009, the Board approved the MAQIP. As you may know, the MAQIP is an air quality master plan that provides both near-term (Year 2012) as well as longer-term (Year 2020) emission reduction goals to achieve a healthier community while promoting a sustainable economic future at the Port. This policy framework provides comprehensive and stable guidance upon which all stakeholders can rely to achieve the MAQIP's air quality improvement goals, and includes specific emission reduction measures for all mobile source categories involved in goods movement at the Port of Oakland, including those for ocean-going vessels, harbor craft, cargo-handling equipment, trucks, locomotives, and harbor craft?.As an immediate result of approval of the MAQIP, the Board directed implementation of near-term emission reduction strategies, including support for the CARB Drayage Truck Regulation. The Board also authorized the Port and BAAQMD to enter into a funding agreement that will allow BAAQMD to use $2 million of funds previously provided to BAAQMD to fund retrofit devices on drayage trucks to meet the January 1, 2010, CARB drayage truck deadline, with a provision for an additional $3 million to further support drayage truck retrofit efforts or other air quality improvements. Further, on April 7, the Board authorized an additional $154,000 to retrofit 10 Port-owned trucks with diesel particulate filters. Previously, the Board approved an accelerated schedule to adopt the Port's comprehensive truck management program by June 2, 2009. Given the almost two years of public consultation in developing the MAQIP, we are deeply concerned with any attempts to have the extensive public consultation process which resulted in this plan replaced by an administrative and/or legislative requirement that the Port pursue any and all emissions reductions strategies that may be pursued by our counterparts at the Ports of Los Angeles and Long Beach, including efforts not required by law or regulation. This requirement dismisses any concerns about cost-effectiveness, technological feasibility, AB 1431 Page 8 legal exposure, and the markedly different financial circumstances and market position between the Port of Oakland and the San Pedro ports as we all strive to clean the air in our respective communities and meet the aggressive regulatory compliance deadlines at the state and federal levels?.While well-intentioned, this legislation will certainly divert scarce Port resources from the important task of implementing MAQIP's programs and cleaning up the air." COMMITTEE SUGGESTED AMENDMENTS : This bill requires PM emission reductions to be achieved in quantities comparable to that received by the San Pedro Ports. However, to expect equal quantities of emission reductions from Oakland in comparison the quantities of emission reductions received from the implementation measures by the San Pedro Ports is ill-conceived, especially as the business activities at the San Pedro Ports are significantly more than the operations at Oakland. Accordingly, the bill should be amended as follows: On Page 2, lines 8-9, delete: quantity of emissions reductions And replace with the following: percentage reduction in emissions on a comparable schedule Related bills : SB 974 (Lowenthal) of 2006, would have authorized a fee of up to $30 on each shipping container processed at the Ports of Los Angeles, Long Beach, and Oakland, to fund congestion relief and air pollution mitigation projects related to the ports. That bill was vetoed by the Governor who indicated that Proposition 1B provides funds for port related air quality emission reductions as well as the impact upon businesses. AB 1101 (Oropeza) of 2006, would have established requirements that diesel magnet sources, including ports, must meet in order to comply with the Air Toxics "Hot Spots" Information and Assessment Act of 1987. That bill died on the Senate floor. SB 764 ( Lowenthal) of 2006, would have required the Ports of Long Beach and Los Angeles to establish air quality emission baseline levels. That bill died in the Assembly Appropriations Committee. REGISTERED SUPPORT / OPPOSITION : AB 1431 Page 9 Support Bay Area Air Quality Management District (sponsor) American Lung Association of California Breathe California California Natural Gas Vehicle Coalition California League of Conservation Voters Coalition for Clean Air Natural Resources Defense Council Pacific Institute Planning and Conservation League Sierra Club California Union of Concerned Scientists West Oakland Environmental Indicators Project West Oakland Neighbors Opposition Bay Planning Coalition BNSF Railway Company Bridgeport Transportation and Warehousing, Inc. California Chamber of Commerce California Retailers Association California Short Line Railroad Association California Teamsters Public Affairs Council GSC Logistics, Inc. Matson Navigation Company NYK Line (North America) Inc. Pacific Merchant Shipping Association Port of Oakland The California Railroad Industry The California Trade Coalition Union Pacific Railroad Waterfront Coalition Yang Ming (America) Corporation \Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093