Draft   X    
Approved         
Approved with Corrections     __

Minutes are not final until approved by Commission

The Environmental Quality Commission held a public meeting beginning at 8:30 a.m. on August 21, 2008, at the Hermiston Conference Center, 415 South Highway 395, Hermiston, Oregon.  

The following members of the EQC were present:

Bill Blosser, Chairman
Kenneth Williamson, Vice Chairman
Donalda Dodson, Member
Judy Uherbelau, Member
Jane O’Keeffe, Member

A.  Preliminary Commission Business: Adoption of Minutes of the June 13, 2008 Special Meeting and June 19-20, 2008 Regular Meeting
The Environmental Quality Commission reviewed and approved the draft minutes from the June 13, 2008, special meeting and the June 19-20, 2008, regular EQC meeting. Commissioner Williamson moved to approve the minutes as written. Commissioner Dodson seconded the motion. The motion passed unanimously.

Acting chairman Blosser asked the EQC for nominations for a new chair to replace former Chairwoman Lynn Hampton who retired from the EQC as of June 30, 2008. Commissioner Uherbelau nominated acting chairman Bill Blosser to be the new chair of the EQC. Commissioner Dodson seconded the motion, and it passed unanimously. Commissioner Dodson nominated Commissioner Ken Williamson to be the new vice chair of the EQC. Commissioner O’Keeffe seconded the motion, and it passed unanimously.
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B.  Action Item:  Update on the Status of the Umatilla Chemical Agent Disposal Facility (UMCDF)
Joni Hammond, Department of Environmental Quality interim deputy director, and Rich Duval, administrator of DEQ’s Chemical Demilitarization Program, gave an update on the status of recent activities at the Umatilla Chemical Agent Disposal Facility. Mr. Duval introduced the staff of the Chemical Demilitarization Program which is situated in Hermiston: Kelly Hodney, Steve Potts, and M.J. Davis. The programs’s VX campaign is underway, with the processing of eight-inch projectiles recently finished and the facility currently changing over to process mines. VX mine processing is scheduled to begin in October and end by end of 2008. Several permit modifications for the UMCDF will be considered this fall, pending the results of EQC decisions at this meeting. Vice chairman Williamson asked Mr. Duval to describe the VX mines, which are land mines intended to be detonated by pressure. The detonators are not stored with the mines.
 
DEQ Director Dick Pedersen reminded the EQC that the U.S. Department of Defense, in a report to Congress, recently brought up the possibility of shipping chemical weapons across state lines for destruction. Governor Kulongoski sent a letter to the Department of Defense strongly opposing shipping weapons to Oregon for destruction. Mr. Pedersen promised to keep the EQC updated on new developments related to this issue.
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C.  Action Item:  Inclusion of the Pollution Abatement System Carbon Filter System in the Umatilla Chemical Agent Disposal Facility Incineration Process as Best Available Technology
Rich Duval, administrator of DEQ’s Chemical Demilitarization Program, gave the EQC background information on the pollution abatement system carbon filter system, or PFS. The UMCDF has seven PFS systems, which are the last units that emissions pass through before going up the stack. Each PFS consists of a number of filters and carbon beds designed to remove various chemical compounds. When the UMCDF was originally permitted in 1997, the EQC required the UMCDF to add the PFS to the pollution abatement system at the facility, but did not include the PFS in the best available technology determination at that time because the UMCDF could meet emission standards without them. When the EQC made findings are part of the UMCDF’s 2003 Class III permit modification determination, it recognized the PFS as proven and effective technology, but did not include the words “best available technology.” The GASP judgment found that the EQC needed to make a best available technology determination related to the PFS.
 
Commissioner Uherbelau asked whether she had received the entire texts of the public comments for this item. Mr. Duval replied that the EQC had received all of the comments, but that some of the comments were more pertinent to the decision on mercury in the ton mustard containers under the next agenda item.
 
Vice chairman Williamson moved to approve the DEQ recommendation in the staff report. Commissioner Dodson seconded the motion, and it passed unanimously.
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D.  Action Item:  Best Available Technology Determination for Mustard Agent with Elevated Mercury Levels
Rich Duval, administrator of DEQ’s chemical demilitarization program, presented background information to the EQC on mustard containers found to have elevated mercury levels and the actions taken by DEQ to identify successful technologies to deal with the problem. The mercury likely resulted from mustard gas being put into insufficiently cleaned containers back in the 1940s. Sampling done at the Tooele Chemical Agent Disposal Facility in Utah, which also houses mercury ton containers originally from the Rocky Mountain Arsenal, found that 18 out of 96 ton containers sampled contained mercury. Some of the 18 containers also contained other heavy metals, such as arsenic. The Utah facility subsequently tested all of the mustard containers, over 6,300 in all, which took over five years.
 
Federal Land Disposal Restrictions apply to the mustard ton containers due to the contents of the containers, and require the highest level of treatment due to the concentration of mercury in the waste. The LDRs requirements affect the choice of technology for destroying the mustard ton containers. Incineration in the UMCDF metal parts furnace would meet the federal standards for disposal of high-mercury waste, as would a retort process.
 
UMCDF reviewed three demonstrated technologies to deal with disposing of the containers: incineration; neutralization; and the DAVINCH process. According to Mr. Duval, incineration has several advantages over the other processes. The necessary equipment for incineration is already in place and UMCDF staff are already experienced in the incineration process, which means that destruction of the containers could begin sooner than if UMCDF chose another process. Incineration would also save money compared to switching to a new process. However, there are concerns with incineration, such as the likelihood that mercury will collect in caustic brines used in the incinerator’s scrubber. Vice chairman Williamson asked a number of questions about the chemical composition of the mustard gas and the brines.
 
Mr. Duval next shared background information and DEQ’s findings about neutralization. Several methods fall under the name of neutralization, but the term generally refers to a process of water hydrolysis which naturally breaks down the mustard gas into its chemical components. After hydrolysis, the hydrolysate needs to be broken down further so that the chemicals do not re-form into mustard gas again. UMCDF considered a biotreatment system as secondary treatment; they did not consider the ArcTech system as it has not yet been used beyond the laboratory bench for the destruction of chemical weapons. Two other sites have used neutralization, but shipped their hydrolysate off-site for secondary treatment. Biotreatment is fairly standard at wastewater treatment plants, but in this instance a metals-removal step would need to take place before biotreatment so that the heavy metals do not kill the treatment system’s organisms. All of the residues would still be subject to the LDRs, which means the residues would need to be incinerated or retorted. In addition, any secondary waste and the containers themselves would need to be incinerated. The changeover from incineration to neutralization would also delay the destruction of the mustard ton containers, and entail additional costs.
 
The DAVINCH system destroys chemical weapons by detonating them within a large vacuum chamber. The system has been safely and effectively used in Belgium and Japan. It is standalone, in that no additional equipment is needed for the destruction process. Emissions are stored in a separate tank and treated as many times as necessary to meet air quality standards. One drawback is that the system has not been used on anything as large as a ton container; the company would need to build detonation chambers four times as large as the largest one they have built thus far. Switching to a DAVINCH system would also entail a five-to-eight year delay to gain federal approval, although building it would take one year less than building a neutralization system. Another concern is that the DAVINCH system would use 633,000 pounds of TNT-equivalent explosives to treat the 430 ton containers, which is a safety concern. Chairman Blosser asked if community members had any concerns about the transportation of that much explosive material through the community. Mr. Duval replied that he had not heard concerns about transport, but that community members expressed concerns about a large volume of explosives being stored at UMCDF.
 
Commissioner Uherbelau expressed concern that DEQ’s description of incineration was almost entirely positive, while the description of neutralization was almost entirely negative, especially given that three other weapons destruction sites have successfully used neutralization. Mr. Duval replied that neutralization looks worse at UMCDF because of the high mercury content in the ton containers and resulting land disposal restrictions, which causes problems that did not exist at the other sites.
 
Commissioner O’Keeffe asked for more information about the mercury-contaminated wastes that would still remain after each of the methods. Mr. Duval replied that each of the methods would create mercury waste requiring further treatment. However, since the wastes would be free of chemical agent, the Army could ship them to a commercial hazardous waste disposal facility elsewhere in the U.S.
 
Mr. Duval told the EQC that DEQ received considerable public comment about this decision, most of which were in favor of incineration. Commissioner Uherbelau brought up two questions raised by GASP, first whether DEQ is aware that neutralization technologies exist that would meet the federal LDR requirements and second whether DEQ is aware of the heavy water use of the incineration process compared to neutralization. Mr. Duval replied that the federal hazardous waste requirements would apply to this waste because of how it is stored, whether or not the treatment method would reduce the concentrations under the federal LDR threshold.
 
Vice chairman Williamson pointed out that neutralization also involves incineration, while the amount of water used in either method is relatively insignificant compared to local industrial uses. Commissioner Dodson pointed out that DAVINCH is still theoretical for this size of container, and that she worries that it might not succeed on the required scale. She asked Mr. Duval whether the containers themselves are being eroded away by the chemicals stored inside. Mr. Duval replied that the erosion of the steel containers is creating hydrogen gas, with internal pressures up to 600 pounds per square inch in some containers.
 
Commissioner Uherbelau expressed concern about incineration and the health effects of the emissions, recalling her observations of residents of the Johnson Atoll. Commissioner Dodson said that based upon her understanding, she has concerns about the knowledge available now, but that the containers are volatile and present a danger in their present state and that the EQC is responsible to act with the best information available now.
 
Vice chairman Williamson moved the DEQ recommended action. Commissioner Dodson seconded the motion. Four commissioners voted in favor of the motion, while Commissioner Uherbelau abstained.
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E.  Informational Item:  Director’s Dialogue
Dick Pedersen, DEQ director, updated the EQC about recent happenings at DEQ, including: the initiation of a public conversation about DEQ’s proposal to require strict emission controls at Portland General Electric’s coal-fueled power plant in Boardman; the recent signing of a Mutual Agreement and Order with Ash Grove Cement to reduce the company’s mercury emissions; a new proposed rulemaking to adopt new federal National Emission Standards for Hazardous Air Pollutants or NESHAPs for several categories of non-major air pollution sources, such as clay ceramics and hospital sterilizers; the proposed mandatory greenhouse gas reporting rule and the Western Climate Initiative; a collaboration between DEQ, the Department of Human Services and Building Codes to present a recommendation regarding the reuse of gray water to the House Interim Committee on Energy and the Environment in October; discussions with Lakeside Landfill regarding its permits; permit applications for two liquefied natural gas facilities, the Northern Star/Bradwood Landing Project and the Jordan Cove/Williams Connector Project; a recently released cancer cluster study by the Oregon Department of Human Services Health Division conducted in the Trainsong, River Road, and North Bethel areas of Eugene; and an update on the new E-Waste Program.
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F.  Public Forum
Mike Sullivan, political director of Oregon Association of Western Pulp and Paper Workers: Mr. Sullivan suggested that the EQC pick up a recent issue of the Willamette Week detailing the experience of Blue Heron Paper, an Oregon paper recycler which is competing with Chinese companies to purchase wastepaper from Oregon. The demand for wood chips is high as well. Mr. Sullivan expressed frustration at the competitive situation for Oregon companies whose foreign rivals do not have to comply with the same environmental and safety regulations. Oregon and the rest of west suffers from airborne mercury from overseas, as well as naturally occurring mercury from local sources like woodchips. In the 1970s there were 1.4 million steelworkers in the U.S.; now there are only 900,000.  He fears that the pulp and paper industry will suffer the same fate. He asks the EQC to consider the fate of industrial workers as they contemplate setting a new fish consumption rate.
 
Joseph Asahina, Kobe Steel Ltd: Mr. Asahina presented information from testing he did in response to public questions at a July 2008 public hearing related to the destruction of mustard ton containers contaminated with mercury. Using the Detonation of Ammunition in Vacuum Integrated Chamber (DAVINCH) system, his company has destroyed 2,700 chemical munitions in Japan and Belgium, all of which contained arsenic as well as heels of degraded chemical agent. Mr. Asahina and his colleague displayed photographs of the equipment used in the process, and explained the testing process and results. The process does not incinerate the chemicals in question, but oxidizes them. Analysis of the results in Japan and Belgium showed that 99.7 percent of arsenic remained in the chamber, while only 0.3 percent was released in the form of gas. 88 percent of the arsenic captured was in metallic form. His testing of the DAVINCH process on simulated munitions containing mercury showed that an even smaller percentage of mercury would be released as gas. Most of the remaining mercury was in metallic form, which can be collected with magnets. In comparing the toxicity of the gases released, the mercury chloride released by DAVINCH would be much lower in toxicity than the mercury oxide produced by incineration. The vacuum chamber used in the DAVINCH process has a safe design; the American Society of Mechanical Engineers has approved it in the ASME’s code.
 
Paul Romain, representing the American Petroleum Association: Mr. Romain discussed a current DEQ rulemaking on Stage I vapor recovery. Federal regulations currently govern stations with turnover of 100,000 gallons or more per month, which already have the required equipment. DEQ has proposed a rule that would apply to stations with a turnover of 20,000 gallons or more. Gasoline in the northwest contains more benzene than elsewhere in the country, although Senator Wyden has pushed through a change to federal law so that this will no longer be the case a couple years from now. Florida and Minneapolis-St Paul are the only places in the country planning to do something different than the federal government on Stage I vapor recovery. Net profit from selling gasoline at stations with 20,000 gallons per month volume is very small, perhaps around $3,600 a year. He asked the EQC not to impose requirements adding costs to small businesses without achieving significant environmental benefits, especially because the problem justifying the additional benzene requirement will go away soon. Mr. Romain also argued that the benefit of the vapor recovered will go to the distributor, not the station owner, while the station owner would pay for the equipment. DEQ staff  have told Mr. Romain that approximately 70 percent of gas station owners already have the vapor recovery equipment. Commissioner Williamson said that for the EQC, the main concern in eastern Oregon is the exposure of employees to benzene, not a general air pollution concern. Mr. Romain replied that vapor recovery equipment is used when a station owner’s underground tank is filled by a distributor, so the exposure time is small. Chairman Blosser noted that many other economic factors are driving rural station owners out of business, factors which overwhelm the cost of vapor recovery equipment. Sam Burns, a gas station owner, replied that people will drive several miles to save a few cents per gallon, which is not always a rational economic decision.
 
Karyn Jones, GASP and the Oregon Wildlife Federation: Ms. Jones asked when the order on the mercury BAT would be issued. She asked when the EQC received the staff reports on the UMCDF agenda items. Chairman Blosser replied that he received an electronic copy the day before the meeting, and read the entire report before the meeting. Ms. Jones asked when the destruction of mustard ton containers was scheduled to begin. Mr. Duval answered that the process is scheduled to begin in mid-2009.
 
Thane Jennings, Calpine: Mr. Jennings told the EQC that his company is the fourth largest electricity producer in the U.S. with about 80 power plants nationwide, and is currently a member of The Climate Registry. The company has contributed over $4 million to The Climate Trust to offset 17 percent of its emissions in Oregon. His company is in favor of reporting greenhouse gas emissions, but they already report their CO2 emissions to agencies other than DEQ. He does not believe DEQ realized that electric generators reporters already reported their CO2 emissions when it commenced the greenhouse gas reporting rulemaking process. At this point, Larry Knudsen, Department of Justice and legal counsel to the EQC, told the EQC that Mr. Jennings’ testimony appeared to be comment on a proposed rule for which the comment period has already closed. Mr. Jennings replied that he believes the final version of the proposed rule will be much different than the version his company originally saw and commented upon, and that DEQ will re-notice the rule. Chairman Blosser asked whether Mr. Jennings made these points in the comments he submitted about the proposed rules, and told Mr. Jennings that the EQC will read Calpine’s comments when the proposed rule comes to the EQC in October. Mr. Jennings encouraged the EQC to go on-line to read emissions data reported by electric companies already to other agencies. His company wants consistent, methodical reporting that uses the same process nationwide.
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Lunch Break
 
G.    Action Item:  Amend Plant Site Emission Limit Applicability Rules
Andy Ginsburg, Air Quality division administrator, introduced Gregg Dahmen, air quality specialist at DEQ, who presented background information to the EQC related to the proposed Plant Site Emission Limit rule amendments. The EQC adopted a temporary amendment to the PSEL rules in February, 2008; this agenda item would make the temporary rule permanent. PSEL rules regulate eight major air pollutants. The proposed amendment removes an incorrect cross-reference to other air quality rules, which would require DEQ staff to set emission limits for 277 additional chemicals in over 1,300 permits. According to Mr. Dahmen, this additional work would not result in any additional environmental protection because the chemicals in question are regulated elsewhere.
 
Mr. Dahmen told the EQC that Oregon already had air quality emission limits before the federal government set limits, but that once the U.S. Environmental Agency set emission limits for certain air pollutants, Oregon was obliged to revise its rules in order to keep federal delegation of air quality regulation. Somewhere in the complex process of incorporating federal rules into state rules and removing conflicts between state and federal rules that took place in 1993, an error was made with regard to PSEL rules.
 
Commissioner Uherbelau moved the staff recommendation. Vice chairman Williamson seconded the motion. The motion passed unanimously.
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H.  Action Item:  Title V Long-term Funding
Andy Ginsburg, Air Quality division administrator, introduced Andrea Curtis, air quality specialist at DEQ, who explained DEQ’s proposal for permanent amendments to the Title V fee rules. Federal law requires each state to have a Title V program regulating major sources of industrial pollution. Oregon’s program regulates 123 sources, and is required by federal and state law to be entirely funded by program fees. In 2007 Oregon Legislature passed Senate Bill 107, which increased Title V fees by 24 percent, to be phased in over three years starting in 2007. This is the first increase beyond the annual consumer price index increase in fees since the Oregon program was approved by EPA in 1994.
 
The Title V program has three types of fees: an annual base fee; an emission fee based on tons of emissions per year; and activity fees assessed when a source requests changes to their permits. The proposed amendments would implement the increases authorized by SB 107, as well as make other changes to:  align the three fees so that all use the same base year for the CPI; increase the fee caps; and simplify the rules by removing provisions relating to chemicals that produce little fee revenue. In order to assure financial support for the Title V program as sources reduce emissions over time, DEQ expects to reduce reliance on emissions fees and increase reliance on base fees.
 
In 2007 the EQC adopted temporary rule amendments to adopt the 2007 CPI increase. Chairman Blosser asked whether it was necessary to amend the rules every year to incorporate the change in the CPI. Mr. Ginsburg replied that unfortunately, it is necessary for the EQC to adopt the CPI increases, but that in the future it would need to happen every other year rather than annually.
 
Commissioner O’Keeffe moved that the EQC adopt the DEQ recommendation in the staff report. Commissioner Dodson seconded the motion. The motion passed unanimously.
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I.  Action Item: Conforming Oregon Air Quality Rules to Federal Clean Air Act Requirements
Andy Ginsburg, DEQ air quality administrator, introduced Jeffrey Stocum, acting manager of the air quality technical services section. Purpose SB 235 from 2007 Legislative session. Historically, Oregon state law has exempted all agricultural operations except for field burning in the Willamette Valley. In the fall of 2005, several environmental groups petitioned the EPA to revoke its approval of Oregon’s air quality permitting program and the State Clean Air Act Implementation Plan, or SIP, because of the blanket exemption for agricultural sources. Senate Bill 235 (2007) updated Oregon’s air quality laws to be consistent with the federal Clean Air Act by allowing DEQ and the Oregon Department of Agriculture to regulate emissions from agricultural sources if needed to meet federal CAA requirements.
 
Mr. Stocum told the EQC that this proposed rule is important because the new statutes allow the EQC to regulate agricultural emissions, most relevantly, large confined animal feeding operations or CAFOs. If the rule is adopted, agricultural operations above federal thresholds will need to obtain federal air operating permits. The proposed rule amendments would delete the existing language and replace it with the statutory language from Senate Bill 235, as well as make several changes to definitions requested by EPA. Senate Bill 235 also directed ODA and DEQ to agree upon a memorandum of understanding to specify how the agencies would work together to issue a permit to Oregon agriculture operations, should they meet the Title V threshold.
 
If the EQC adopts the proposed rules, then DEQ will submit the revised rules to the EPA. DEQ plans to bring the MOU to the EQC for signature once it is finished.
 
Commissioner Uherbelau asked whether these rule changes would affect field burning. Mr. Stocum and Mr. Ginsburg answered that the rule amendments would not affect field burning. Chairman Blosser asked whether this rule change would affect any agricultural operations at this time. Larry Knudsen replied that this proposed rule addresses a hypothetical problem which could occur in the future if an agricultural operation meets thresholds that make it subject to Title V permitting regulations. Mr. Ginsburg added that by removing the agricultural exemption, DEQ could regulate agricultural operations under state rulemaking efforts to meet the federal regional haze rule. The MOU describes how that rulemaking process would work.
 
Chairman Blosser asked whether any Oregon agricultural operations are currently big enough to fall under Title V. Mr. Stocum answered that agricultural emissions determine their own emissions level, but there is currently no good way for agricultural operations to accurately determine their emissions. Commissioner Uherbelau asked for clarification on the relationship between the proposed rulemaking and actions by the EPA. Mr. Ginsburg replied that EPA has been holding up all proposed changes to Oregon’s State Clean Air Act Implementation Plan, or SIP, because in order to change the SIP it must first address the 2005 petition which could result in EPA revoking DEQ’s delegated authority to implement the CAA. Hence, it is important that DEQ resolve this situation by removing the agricultural exemption and hence resolving the petition.
 
Chairman Blosser asked whether Senate Bill 235 allows the EQC to go beyond federal air requirements for agricultural operations. Mr. Stocum answered no, the EQC may not go beyond federal requirements, except related to dairies, which will be discussed under agenda item J.
 
Commissioner Dodson moved the DEQ recommendation. Vice chairman Williamson seconded the motion. The motion passed unanimously.
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J.  Informational Item: Dairy Air Quality Task Force Update
Andy Ginsburg, DEQ air quality administrator, and Katy Coba, director of the Oregon Department of Agriculture, presented the Dairy Air Quality Task Force recommendations, along with the co-chairs of the task force, Marty Myers, general manager of Three Mile Canyon Farms, and Jeremiah Bauman, task force co-chair and program director of Environment Oregon. Senate Bill 235 (discussed in Item I) established the Dairy Air Quality Task Force to make findings about dairy air emissions and possibly make recommendations.
 
Mr. Ginsburg described the task force’s membership and process. The task force found that dairy emissions consist mostly of ammonia, methanol, methane, odors, and particulate matter. However, currently there is not much good information nor methods for gathering information about emissions. The dairy task force wants to move ahead on this issue before the industry is subject to lawsuits or onerous legislation.
 
Ms. Coba told the EQC that she expects that ODA and DEQ will be working together often in the future. Senate Bill 235 was contentious; the task force was a compromise recommendation. Perspectives on the task force were divergent, but everyone worked hard. Ms. Coba shared some background information about the Oregon dairy industry, and congratulated them for being pro-active about wanting to act on their air emissions. ODA and DEQ both have requests for positions and research funds in their budgets to implement the task force’s recommendations.
 
Mr. Bauman, joining the meeting remotely by telephone, spoke to the EQC about the task force’s process and recommendations. He considered the task force to be quite robust, consisting of presentations by several national experts and tours of several dairy operations. By the end of the process, all members had developed a common understanding of the issues. Mr. Bauman believes knowledge and management practices are sufficiently developed that dairy operations can begin reducing emissions now. The heart of the program recommendations is that the ODA and EQC develop an emissions reduction program with best management practices at its core, giving operators choices about how they will achieve emissions reductions goals. The program should focus on ammonia, methanol, and odors. The task force was also concerned that emissions reductions of some checmicals do not have unintentional effects that harm water quality or exacerbate global warming. The program should transition from voluntary to mandatory, and evolve over time science and management practices evolve.
 
Mr. Myers told the EQC that he was very pleased with the process and results of the task force. He sees the recommendations as a balance between environmental concerns and industry concerns. The task force was successful because good science was brought before the task force, and the tours brought an awareness to all parties of what actually happens on dairy farms. Many improvements entail changes in practices, while others will require monetary investments. The task force tried to allow enough time to operators for them to be successful. ODA and DEQ should convene a Dairy Air Task Force. Legislative recommendations include: tax credits for dairy operators to implement the BMPs; funds for OSU to conduct research into the effectiveness and identify new technologies; and additional staff for the agencies to provide technical assistance.
 
Commissioner Uherbelau suggested that the agencies begin lobbying now, as state revenues are likely to be scarce. Ms. Coba admitted that her agency has many other priorities, including water quality monitoring, and that ODA may not be able to implement these recommendations. Mr. Pedersen pointed out that the task force did include several legislators, and that the task force has a lot of solidarity. Mr. Ginsburg pointed out that the recommendations ramp up their funding requests over time.
 
Commissioner O’Keeffe asked if task force members had presented the findings to the Board of Agriculture. Ms. Coba replied that they had, and that the Board was very positive. Mr. Ginsburg emphasized that the task force asked that the EQC adopt the recommendations as a whole, and that DEQ is planning to bring a rulemaking proposal to the EQC in late 2009. The task force members hope to receive tax credits from the Legislature in the 209 session. Chairman Blosser asked what would happen to the rest of the recommendations if tax credits are not adopted. Mr. Myers told the EQC that the recommendations can go forward with or without tax credits, but that small family operators will benefit the most from tax credits. Ms. Coba added that the impact of regulations fall hardest on small operators who are also suffering the most from feed and fuel cost increases. Mr. Ginsburg told the EQC that the task force specifically included all operators, not just the large ones, because a concentration of small operators will also have significant effects on the local airshed.
 
Chairman Blosser asked about the difference between methane and methanol. Mr. Ginsburg answered that methane is a greenhouse gas; the recommendations do not address methane emissions at this time, as climate change regulation is still evolving. Methanol is a toxic air pollutant and subject to the Clean Air Act; it, along with ammonia, could be the trigger for dairy operators to become subject to the Title V permitting program.
 
Chairman Blosser asked if this program could theoretically operate on a self-funding basis, like the Title V program. Mr. Ginsburg replied that the task force did consider self-funding through fees, but concluded that the costs of implementing the best management practices will already be significant. CAFO program is partially self-funded through fees, but also funded by lottery funds. Commissioner Dodson stated that keeping food prices low, particularly dairy products, is important for the population she works with.
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K.  Action Item: Pollution Control Tax Credits
Greg Aldrich, government relations manager at DEQ, presented DEQ’s analysis of tax credit considerations for Maggie Vandehey of DEQ who was absent due to a family emergency. The EQC considered tax credit applications as outlined in an addendum to the staff report incorporating additional costs that one applicant was able to claim, as identified by Ms. Vandehey in a site visit, as well as some minor corrections to a company’s name.
 
Commissioner Uherbelau moved that the EQC certify the 42 facilities listed in Attachment A. Commissioner Dodson seconded the motion. The vote was unanimous in favor of the motion.
 
The EQC also considered two requests for extensions of time to apply for tax credits for wood chippers, as outlined in Attachment C. Commissioner O’Keeffe moved to deny an extension for application 7815. Commissioner Uherbelau seconded the motion. The motion passed unanimously. Commissioner Uherbelau moved to allow an extension for application 7821. There was not a second for the motion. The EQC decided to delay a decision regarding application 7821 until the October, 2008, meeting when Ms. Vandehey will be able to supply more information.
 
The EQC considered the re-issuance of three certificates required due to the name change of the affected company, as outlined in Attachment D. Chairman Blosser moved that the EQC approve the re-issuance of the three certificates. Commissioner Dodson seconded the motion. The motion passed unanimously.
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L.  Action Item: Certification of 2009-11 Agency Request Budget
Greg Aldrich, Government Relations Manager, and Jim Roys, DEQ Budget Manager, gave the EQC an update on the legislative agenda development process. On September 1, DEQ will submit the Agency Request Budget to the Department of Administrative Services and the Governor. This fall DEQ will work with Legislative Counsel to finish drafting DEQ’s legislative concepts.
 
2007 was a very good year for DEQ, but still not restored to pre-2002 status. Federal funds are declining or flat, not keeping up with inflation. Lottery funding is declining as well, which is particularly affecting the water quality program.
 
The major themes of DEQ’s budget policy package requests are climate change, toxics reduction, water, agency infrastructure modernization, and monitoring and assessment. The agency request budget also includes miscellaneous requests, some of which would augment DEQ’s enforcement program. Mr. Aldrich told the EQC that very little in the agency request budget has changed since the June EQC meeting. Director Pedersen told
 
Commissioner O’Keeffe asked whether lottery proceeds in general are declining, or just DEQ’s share. Jim Roys answered that lottery proceeds are projected to decline next year, and not be able to fund all programs that get lottery funding.
 
Mr. Aldrich told the EQC that all ten of DEQ’s legislative concepts have been approved for drafting. In addition, DEQ is working with the Oregon Department of Agriculture on a legislative concept, as the EQC heard during the discussion of the Dairy Air Task Force.
 
DEQ has been and will continue to meet with stakeholders to discuss individual bills and DEQ’s budget generally. Conversations with legislators will pick up after the Governor’s office submits its budget and more budget information becomes available through the fall.
 
Mr. Aldrich gave the EQC some background on DEQ’s ten percent budget reduction options. The Governor is required to submit a budget proposing ten percent reductions from the previous biennium’s budget for each fund type. DEQ’s proposed budget reduction options were approved by Director Pedersen and the executive management team. Commissioner Dodson asked whether it was possible to quantify the environmental impacts of the reductions. Director Pedersen replied that DEQ did not attempt to quantify these impacts, but believes that all DEQ programs are doing important work. Mr. Roys added that the water quality program took a proportionately smaller share of proposed reductions, while the air quality program took a proportionately larger share. Mr. Aldrich illustrated how the Governor could choose to make reductions from DEQ’s list in order to fund some of his other priorities, or could take reductions from one agency and transfer them to another agency.
 
Mr. Roys told the EQC that very little has changed since the June EQC meeting, although the electronics recycling program budget request has been defined since June. He promised to send the entire agency budget request to the EQC on CD. Mr. Roys reviewed 2009-11 budget information from the staff report attachments. DEQ will not be able to afford to continue several 2007-09 positions in the next biennium, unless it receives additional funding.
 
The EQC voted unanimously in favor of the chairperson certifying DEQ’s request budget for submittal to DAS and the Governor’s Office. Director Pedersen acknowledged the work of DEQ staff on preparing the budget and legislative concepts.
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M.  Discussion Item: EQC’s Own Performance Measures
Joanie Stevens-Schwenger gave the EQC background on its performance measures, and asked the EQC members to fill in their score cards. Commissioner Uherbelau expressed her concerns that the self-evaluation will become a perfunctory exercise. Chairman Blosser initially had the same concerns, but realized that DEQ and EQC has set up procedures to make sure the performance measures are met. The Commissioners discussed the measures and whether yes or no answers are adequate.

Commissioner Dodson said that she had questions about item ten, whether the EQC is adequately accounting for resources. Ms. Stevens-Schwenger told the EQC that item ten will be covered at the October meeting. Chairman Blosser said that the EQC might consider forming an audit committee to look at financial information with more detail. Vice chairman Williamson noted that these criteria were given to the EQC, and some of them fit better than others. Mr. Roys told the EQC that he agreed with Vice chairman Williamson’s assessment, and gave the EQC more information about plans for a new financial report to the EQC which will meet the EQC’s needs. Chairman Blosser remembered that DAS gave the EQC its criteria to meet, but that the EQC itself developed its own systems for success (second column on Attachment B of the staff report). Director Pedersen said that as DEQ staff bring agenda items to the EQC throughout the year, DEQ will note when an agenda item fulfills a performance measure.
 
Commissioner Dodson said that her rankings are positive because she gets good information from DEQ about agenda items. Chairman Blosser said that the he believes the results are positive because DEQ staff have created systems for ensuring these tasks are completed.
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Thursday, August 21 – Town Hall Meeting 7:00 – 9:00 pm
The EQC held a town hall style meeting at the Hermiston Conference Center in Hermiston, Oregon. Approximately 30 citizens attended and expressed their views to the EQC on a range of topics, including: the Lower Umatilla Basin Groundwater Management Area and its efforts to mitigate local problems with nitrates in groundwater; the state of knowledge about the relationship between agricultural practices and groundwater quality; and the possibilities for using nitrate-laden water in agriculture. Attendees also spoke about the EQC’s decision related to destruction of mustard gas containers at the UMCDF and about field burning practices in eastern Oregon.

Friday, August 22 — Regular meeting began at 10:30 am

N.  Informational Item: Site visit
The EQC and a number of DEQ staff toured the Portland General Electric Boardman power plant prior to the beginning of the regular meeting.

O.  Informational Item: Fish Consumption Rate Project
Neil Mullane, Department of Environmental Quality, Mike Gearheard of EPA, and William Quaempts of the Confederated Tribes of the Umatilla Indian Reservation, gave introductory remarks. Mr. Mullane told the EQC that the fish consumption rate project is very important to the water quality program, and that the process has been a collaborative  and historic one. Mr. Gearheard told the EQC about water quality standards: they set goals for permitting, but also for cleanup programs and nonpoint source programs. Both Mr. Mullane and Mr. Gearheard agreed that new solutions will be needed to tackle the legacy and emerging problems of toxics in water. Mr. Gearheard thanked the members of the Human Health Focus Group, as well as the state of Oregon and the Tribes. Mr. Quaempts told the EQC how important the fish in the Columbia River and tributaries are to Tribal members, and how important improving the health of fish and water is for future generations.
 
Jennifer Wigal, DEQ water quality standards and assessment manager, reviewed the history of the fish consumption rate project. In 2004, DEQ adopted water quality standards that used a FCR of 17.5 grams/day, which EPA and the Tribes thought was not reflective of how much fish many people actually eat. DEQ initiated the FCR project along with EPA and the Confederated Tribes of the Umatilla Reservation in October, 2006. Ms. Wigal described the process, including the mission and work of the Human Health Focus Group and the Fiscal Impacts and Implementation Advisory Committee, and the timeline DEQ proposes for future work on water quality standards.
 
Mary Lou Soscia, EPA Region 10, described the public process that DEQ, EPA and CTUIR followed over the past two years. EPA has dedicated staff and funds for professional facilitators for the process. The project aimed to initiate and foster public dialogue, as well as dialogue among the three governments. She described the effort as nationally significant. Chairman Blosser expressed his appreciation to EPA for funding the process.
 
Deb Sturdevant, DEQ water quality standards program, summarized the work and findings of the Human Health Focus Group. The HHFG was asked to advise the three governments on the following: what would be the best data to use in determining the fish consumption rate; whether and how salmon should be included in calculating the rate; and what are the risks of health impacts to populations who consume a large amount of fish. The HHFG concluded that: the 17.5 g/d rate does not reflect actual fish consumption in Oregon; only people who actually eat fish should be included in calculating the FCR; DEQ should use an upper bound of either the 90th or 95th percentile for setting the FCR; current rates of fish consumption may be suppressed; and salmon and other marine fish should be included in the FCR. People eating more than 17.5 g/d are at increased risk of cancer and various other adverse health effects; some people may be more vulnerable than others. The HHFG provided a range of figures based upon its review of the available data.
 
Dr. Pat Cirone, member of the HHFG, thanked the EQC for the opportunity to speak. Commissioner O’Keeffe asked about the decision to exclude non-fish eaters. Dr. Cirone said that the HHFG recommends that the EQC set the FCR so as to protect people who eat fish. Commissioner O’Keeffe asked about what other states are doing. Director Pedersen told the EQC that Oregon is leading the way.
 
Vice chairman Williamson observed that according to the data, moving to the 95th percentile rather than the average has a bigger effect on the FCR than excluding non-fish eaters. Ms. Sturdevant added that the recommendations also make the change of including salmon. Vice chairman Williamson said that these recommendations represent a departure in policy-making, i.e. making decisions with the goal of protecting subpopulations, and that these considerations are incredibly complex. He used the example of field burning and associated health effects on certain subpopulations. Ms. Sturdevant and Dr. Cirone responded that the subpopulation of fish eaters is not insignificant in Oregon, although the data is not as detailed as they would like.
 
Ms. Sturdevant explained DEQ’s method for calculating water quality standards and how the FCR is incorporated into the water quality standards. The formula includes a bioconcentration factor that moderates the effect of increasing the FCR, so that increasing the FCR tenfold will not necessarily cause a tenfold change in water quality standards.
 
Kathleen Feehan, policy analyst with the Confederated Tribes of the Umatilla Indian Reservation, spoke in favor of a FCR of 175 g/d, which she believes is well-supported by the available data. Mr. Gearheard said that the EPA has approved a FCR of 175 g/d for the Warm Springs Tribe, and that the Portland Harbor is using a rate of 175 g/d in the water quality standards used to set its clean up goal.
 
P.  Informational Item:  Commissioner Reports
Commissioner Williamson reported on the federal forestry advisory committee which has recently finished a draft of its final report. The main conclusion is that Oregon needs to develop locally-based collaborative processes around private, state and federal forests to do large-scale (minimum 200,000 acres) forest restoration projects, largely thinning. Key issues include figuring out how to pay for the work and what to do with the thinnings. Juniper infestation affects 16 million acres in eastern Oregon. The Oregon Department of Forestry is submitting a policy option package to fund facilitators for the local collaborative processes. Chairman Blosser asked Commissioner O’Keeffe about a model biomass project in Lake county; she replied that the affected area was approximately 75 square miles. The Commissioners discussed demonstration projects they have seen which cover a few hundred acres.
 
Commissioner O’Keeffe described some of the orientation activities she undergone as a new member, including tours of wastewater treatment plants, a landfill, and a gas station.
 
Commissioner Uherbelau told the EQC about seeing and hearing glacier breaks in Alaska on a recent trip.
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O. (continuation of Fish Consumption Rate Project presentation) 
Ms. Wigal introduced representatives of the Fiscal Impacts and Implementation Advisory Committee and presented a summary of the findings of a study on the costs of compliance by Science Applications International Corporation. The study was funded by EPA. SAIC selected a sample of facilities for its cost analysis, comprised of a steel mill and the four largest facilities in Oregon plus fifteen randomly selected facilities, and used the sample to extrapolate the costs of compliance for the whole state. The largest facilities were assumed to have the highest costs, so the four largest sites and the steel mill were considered worst case scenarios. SAIC also assumed that companies would choose the least expensive method of compliance allowed under Oregon and federal law, even though some of those methods are not currently used by DEQ. SAIC estimated the statewide cost of baseline compliance (meaning compliance with existing standards) to be $3 million annually; this estimate did not include inflow and infiltration which could add substantially to the costs. The incremental cost of complying with new standards versus existing standards varied from $75,000 to $1.8 million, depending on the FCR chosen and whether inflow and infiltration costs were included. The majority of the costs were attributable to meeting the baseline standards. SAIC also considered nonpoint sources, finding that the costs related to reducing the relevant pollutants were “highly uncertain.” Implementing the regulations would also cause costs for DEQ.
 
Dr. Sarah Kruse, co-chair of FIIAC, told the EQC about the work of the committee. The FIIAC was tasked with evaluating the SAIC study, estimating benefits of higher water quality standards, and providing recommendations about implementation. The FIIAC reviewed an earlier draft of SAIC’s report, and its comments were considered in the final draft which is available online. The committee heard presentations from Northwest Pulp and Paper Association and the Oregon Association of Clean Water Agencies, but was not able to examine the underlying assumptions of those groups’ analyses; hence the FIIAC is not making evaluations or recommendations at this time. However, Dr. Kruse noted that the analyses by NWPPA and ACWA differed from SAIC in that they only considered end-of-pipe approaches, while SAIC considered toxics reduction programs (which Oregon does not currently use as a compliance method). Dr. Kruse also noted that none of the studies considered benefits of an increased FCR, which should be part of a thorough fiscal analysis.
 
Willie Tiffany, League of Oregon Cities, also a member of FIIAC, told the EQC that the FIIAC was in consensus that Oregon should protect fish consumers, but that the state needs to pursue a comprehensive approach to reducing toxics, as targeting point sources alone will not reach the new water quality standards. He discussed the matrix of compliance strategies compiled by DEQ, which outlined the compliance tools in use around the country, as well as the permitting process that FIIAC envisioned that DEQ could use to achieve toxics reduction.
 
Chairman Blosser asked how much of the work of FIIAC was tied to a possible new FCR, and how much was tied to meeting the 2004 standards (assuming that EPA approved them). Mr. Tiffany sees that municipalities are going to have to achieve higher water quality standards, whether due to a new FCR or other factors, and that toxics reduction programs will be the most cost effective way to reach those standards.
 
Rich Garber, corporate environmental manager for paper group of Boise, was the Associated Oregon Industries representative on FIIAC. Only implementation option used is compliance schedules, which has been legally challenged. Legal compliance is a big concern for industry; it’s critical for them to have legal certainty. Industry is concerned that they will not be able to meet the new standards, which will put them in an unclear legal situation. Mr. Garber also presented a handout on behalf of Kathryn Van Atta with results of a study by HDR Engineering, Inc. which estimates that costs of compliance will be prohibitive for pulp and paper mills.
 
Commissioner Uherbelau said that she was very concerned about Mr. Garber’s concerns, especially number five on his memo, which expressed industry’s concerns about the legal uncertainty of alternative compliance tools. Vice chairman Williamson advised Director Pedersen to consult with EPA and the environmental community when considering alternative compliance tools, since compliance schedules have been challenged in court. Chairman Blosser expressed his concern that fish consumption is a minor factor, and that the real concern is how to comply with the 2004 standards adopted by the EQC.
 
Kathleen Feehan, participated on the FIIAC on behalf of the Confederated Tribes of the Umatilla Indian Reservation of Oregon. Ms. Feehan believes that the state has to set the right goals, but that industry also has to be able to put these criteria into practice through their permits. Participation on the FIIAC was a learning opportunity about the permitting process for all involved. The Tribes are most proud of the table of implementation options and the work that went into it, which will also help industries comply with current water quality standards. Some of these tools could be used now in Oregon, and are in use elsewhere in the country, but others would require new legal authority.
 
Dr. Sarah Kruse read a statement by Kristin Lee, co-chair of FIIAC, which focused on the uncertainty of estimating costs and benefits. Her experience in the field is that studies tend to overestimate the costs of complying with environmental regulation and underestimate the benefits.
 
Ms. Wigal outlined the future work schedule for the FCR project, including an action item planned for the October 2008 EQC meeting, as well as a rulemaking effort in 2009 if the EQC directs DEQ to revise water quality standards to take a new FCR into account. DEQ staff plans to come back to the EQC in October with more information about implementation tools.
 
Chairman Blosser asked whether audience members who had been in attendance the previous day were now available to present. Ms. Feehan replied that, in addition to her testimony about the work of the FIIAC, she had letters from the Confederated Tribes of Warm Springs and the Klamath Tribe to present on their behalf.
 
Llewellyn Matthews, representing Northwest Pulp & Paper Association, testified about the cost to industry of complying with the stricter standards that would result from an increased FCR. She referred to an HDR Engineering, Inc. study, estimating that the costs of compliance with a FCR of 175 g/d would be $500 million. The industry does not have the profitability or borrowing power to make the necessary technological investments to meet the resulting standards. The result is that more paper will be sent to east Asia for recycling, where their processing will not be subject to the same standards as it would be in the U.S. Regarding some of the chemicals concerned, arsenic is naturally-occurring in the Pacific Northwest, while PCBs enter the recycling process in ink, and is also a legacy pollutant. Ms. Matthews made recommendations for how DEQ might proceed in a way that would be less onerous to industry while still achieving toxics reductions.
 
Chairman Blosser asked Ms. Matthews about the costs of complying with water quality standards based upon a FCR of 17.5 g/d, since the SAIC study indicated that the costs of complying with 17.5 g/d would be over 90 percent of the costs of complying with standards based upon a FCR of 175 g/d. Ms. Matthews did not have the costs of complying with the lower standards, but also said that SAIC used assumptions that do not apply to her industry. Mr. Garber said that SAIC’s cost estimates are very similar to HDR’s estimates for end of pipe regulation.
 
Charlie Logue, Clean Water Services of Hillsboro, Oregon, spoke to the EQC on behalf of the Oregon Association of Clean Water Agencies, which has participated in the FCR project for almost two years. ACWA has long advocated that the FCR project should focus on true toxics reduction, and has had many discussions with Tribal leaders about implementation strategies. They are concerned that new water quality standards be implementable, and recommend that the EQC include two additional points in its directions to DEQ: coordinate any rulemaking effort with DEQ’s Senate Bill 737 efforts, and focus all of the energy around this project on making true toxics reductions. DEQ’s work on solid waste and Superfund, as well as its work with agriculture, could be integrated with its toxics reduction work in water quality to achieve better results.
 
Mike Karnosh, representing the Confederated Tribes of the Grande Ronde, told the EQC that the fish are very important to Tribal people, and that there is no cultural replacement for them. He has not seen any information about how current consumption of fish is affecting Tribal members, especially unborn children whose mothers eat large amount of fish. The Tribal Council of the Grande Ronde tribes has endorsed a FCR of 389 g/d, which attempts to take into account uncertainty about the health effects on people of eating contaminated fish, as well as cultural and economic effects. Commissioner Uherbelau asked about the Tribe’s opinion of 175 g/d, which Mr. Karnosh said was a step in the right direction.
 
Tom Downey, representing the Confederated Tribes of Siletz Indians, brought a resolution with him from the Tribes of Coos, Lower Umpqua, and Siuslaw Indians supporting the selection of a FCR higher than 17.5 g/d. The Confederated Tribes of Siletz Indians support a FCR of 248 g/d, but is supportive of the CTUIR proposal. He noted that the Siletz Indians consume a lot of marine fish, as well as fish from the Willamette River which is known to be highly polluted. His Tribe is concerned about adverse health impacts of consuming contaminated fish, as well as the ability of the Tribe’s healthcare system to cope with those impacts in the face of declining budgets.
 
Ralph Saperstein, Oregon Water Quality Coalition, told the EQC that the OWQC has participated in the FCR project from the beginning. The Council supports efforts to improve Tribal health, but urges the EQC to take a common-sense approach to achieving toxics reductions, including an expedited clean up of legacy pollutants in waterways. Mr. Saperstein said that the water quality standards resulting from an increased FCR would be higher than federal drinking water standards, which does not make sense. Some of the new standards would require lower concentrations of certain chemicals than naturally occurs in Oregon waters. Mr. Saperstein cited ACWA estimates that the costs to the four largest municipal wastewater treatment facilities to install new equipment would be $2.3 – 3.3 billion. The nine paper mills in Oregon would have to spend $500 million to comply. He also said that efforts should concentrate on nonpoint sources, which will have a greater effect than regulation point sources.
 
Kathleen Feehan read into the record a letter from the Klamath Tribes supporting a new FCR of 175 g/d.
 
Director Pedersen thanked the participants in the FCR project for all of their work and their commitment to the process.
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The meeting adjourned at 2:10 p.m.