PROPOSAL:
Execute Contracts to Fund Marine Vessel Projects under
RECLAIM Executive Order Mitigation Program
SYNOPSIS:
There is an immediate availability of very cost effective emission
reductions from marine vessel projects. These NOx emission reduction
credits are required to be generated under the RECLAIM Executive Order
Mitigation program. It is recommended that eight engines be funded for
re-powering under the RECLAIM Executive Order Mitigation Program in an
amount not to exceed $3.1 million, resulting in estimated total NOx
reductions of approximately 1,070 tons over four years. It is also
recommended that 14 engines be funded for re-manufacturing to new engines
under the RECLAIM Executive Order Mitigation Program in an amount not to
exceed $4.1 million, resulting in estimated total NOx
reductions of approximately 690 tons over four years.
COMMITTEE:
Technology, March 22, 2002, Recommended for Approval
RECOMMENDED ACTION:
- Authorize the Chairman to execute a contract with Seaboard Marine to
re-power two marine vessel engines and acquire one global positioning
system (GPS) unit in an amount not to exceed $366,300 from the RECLAIM
Executive Order Mitigation Program. The proposed marine vessel, as listed
in Table 1, is Tuffy II.
- Authorize the Chairman to execute a contract with OceanAir
Environmental to re-power six marine vessel engines and acquire three GPS
units in an amount not to exceed $2,716,900 from the RECLAIM Executive
Order Mitigation Program. The proposed marine vessels, as listed in Table
1, are Avalon Express, Super Express, and Tioga.
- Authorize the Chairman to execute a contract with OceanAir
Environmental to re-manufacture 14 marine vessel engines and acquire seven
GPS units in an amount not to exceed $4,017,100 from the RECLAIM Executive
Order Mitigation Program upon EPA approval. The proposed marine vessels,
as listed in Table 1, are Starship, Pacific Escort, Peter Foss, Leader,
Admiral, Master, and Philip W.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On January 17, 2001 Governor Davis proclaimed a State of Emergency in
response to the imminent threat of widespread and prolonged disruption of
electrical power. In response, the AQMD Executive Officer, on February 6,
2001, executed the RECLAIM Executive Order Mitigation Program. As part of
the executive order, mitigation fees for emissions in excess of RECLAIM
allocations from RECLAIM-power producing facilities having the capacity to
produce 50 MW or more, would be paid to the AQMD. These funds would then be
used to mitigate the excess power plant emissions.
At the July 20, 2001 meeting, the Board approved $5.3 million for marine
vessel contracts under Rule 118 Executive Orders #01-03 and #01-04 for NOx
and CO emissions mitigation. These contracts will potentially result in 170
tons of NOx and 11 tons of PM emission reductions annually. Up to
this date, AQMD has received approximately $22 million as mitigation fees
pursuant to the Executive Order.
Proposal
The recommended projects are immediately available, can be implemented in
the next three to six months, and are very cost effective. These proposed
projects will provide the District with much needed NOx emission
credits for electric utilities under RECLAIM. The projects include
re-powering and re-manufacturing marine vessel engines. Re-manufacturing
these engines include replacing pistons, liners, fuel pumps, turbochargers,
injectors, and cooling system with new factory certified low-emission
components into new engines. The only remaining part will be the outer
shell. The parts that are being replaced produce NOx, CO,
particulate matter, hydrocarbons, and green house gas emissions; and the
replacement of these components is a very cost and time effective approach
towards achieving significant emission reductions. After re-manufacturing,
the engines will be assigned new serial numbers by the original equipment
manufacturer, and these engines will be certified to emission standards for
new engines.
The engines that are being proposed for re-manufacturing are 8 to 12
years old, and the engines for re-power are approximately 25 to 30 years
old. Marine vessel engines in large tugboats are made to last 40 to 45 years
with periodic engine overhaul. The engine block can last 40 to 45 years with
no maintenance. For marine vessels in the category of large tugboats where
the average annual NOx reduction can be as mush as 40 tons per
vessel, most engine re-manufacturing can be completed in less than 3 months
whereas most engine re-powers take more than six months. Re-powering
involves cutting the hull, dry docking for extended periods, removing and
installing transmission and gears, and replacing the hull. This involves
significant labor costs and loss of business for the vessel owner.
The staff recommends that eight marine vessel engines be re-powered with
funds from the RECLAIM Executive Order Mitigation Program for an amount not
to exceed $3,083,200. These projects will result in total NOx and
PM reductions of approximately 1070 tons and 60 tons over four years,
respectively.
The staff also recommends that 14 marine vessel engines be
re-manufactured to new engines with funds from the RECLAIM Executive Order
Mitigation Program for an amount not to exceed $4,017,100 upon EPA approval.
These projects will result in total NOx and PM reductions of
approximately 690 tons and 35 tons over four years, respectively.
The combined four-year cost effectiveness of these projects is
approximately $3,700 per ton of NOx reduction, and this will
result in NOx reductions of approximately 1760 tons over four
years. These proposed projects must meet the requirements of Rule 1631, and
in particular this includes source testing the engines and the installation
of GPS units on the marine vessels. AQMD will reimburse Seaboard Marine and
OceanAir Environmental for the cost of the GPS units as listed in Table 1.
On July 20, 2001, the Board approved a $800,662 contract with Millennium
Maritime to re-power two marine vessel engines under the Pre-Funded RECLAIM
AQIP program. On February 26, 2002, Millennium Maritime notified the AQMD
that because of financial constraints, Millennium cannot pay for the labor
cost associated with this re-power project, which amounts to approximately
$500,000. It is recommended that Millennium be allowed to proceed with the
same type of engine re-manufacturing as described above upon EPA approval.
This proposed project will still remain under the Pre-Funded RECLAIM AQIP
program, and can be completed at a reduced cost of $460,000. The project
will achieve the same amount of NOx emission reduction. This
proposed approach will make will make this project more cost effective, and
can be completed in less than three months.
Benefits to AQMD
The above mentioned proposed projects will produce real and surplus NOx
emission reductions of at least 1760 tons over four years, which will be
credited to the RECLAIM Executive Order Mitigation Program. These projects
are also very cost effective, and can be completed within three to six
months, and this will provide the District with much needed NOx
emission credits.
Resource Impacts
The proposed funds of $3,083,200 and $4,017,100, which amounts to
$7,100,300 (Table 1) will be obtained from the RECLAIM Executive Order
Mitigation Program.
Attachment
List of RECLAIM Executive Order Mitigation Program projects
Table 1
List of RECLAIM Executive Order Mitigation Program
Projects
Marine Vessel |
Company |
No-Of
Engines |
Engine
Funding
($) |
Estimated
GPS Cost
($) |
Estimated
Total Cost
($) |
Estimated
NOx
Reduction
(tons/year) |
Estimated
PM
Reduction
(tons/year) |
4-Year NOx
Cost
Effectiveness
($/ton) |
20-Year NOx
Cost
Effectiveness
($/ton) |
Tuffy II
|
Seaboard
|
2
|
364,000
|
2,300
|
366,300
|
43.1
|
2.37
|
1,955
|
680 |
Avalon
Express |
OceanAir
|
2
|
930,000
|
2,300
|
932,300
|
80.0
|
4.40
|
2,680
|
932 |
Super
Express |
OceanAir
|
2
|
930,000
|
2,300
|
932,300
|
80.0
|
4.40
|
2,680
|
932 |
Tioga
|
OceanAir
|
2
|
850,000
|
2,300
|
852,300
|
65.0
|
3.58
|
3,016
|
1,049 |
Starship
|
OceanAir
|
2
|
750,000
|
2,300
|
752,300
|
50.0
|
2.75
|
3,461
|
1,204 |
Pacific
Escort |
OceanAir
|
2
|
729,000
|
2,300
|
731,300
|
39.0
|
2.15
|
4,313
|
1,500 |
Peter Foss
|
OceanAir
|
2
|
460,000
|
2,300
|
462,300
|
17.8
|
0.98
|
5,990
|
2,084 |
Leader
|
OceanAir
|
2
|
534,000
|
2,300
|
536,300
|
18.0
|
0.99
|
6,853
|
2,384 |
Admiral
|
OceanAir
|
2
|
534,000
|
2,300
|
536,300
|
18.0
|
0.99
|
6,853
|
2,384 |
Master
|
OceanAir
|
2
|
534,000
|
2,300
|
536,300
|
18.0
|
0.99
|
6,853
|
2,384 |
Philip W
|
OceanAir
|
2
|
460,000
|
2,300
|
462,300
|
11.0
|
0.61
|
9,666
|
3,362 |
Total
|
|
22
|
7,075,000
|
25,300
|
7,100,300
|
440
|
24
|
3,713
|
1,291 |
/ / / |