CITY AND COUNTY OF SAN FRANCISCO
BIODIESEL ACCESS TASK FORCE
THURSDAY, SEPTEMBER 21, 2006, 10:00 A.M.
TASK FORCE MEMBERS: VOTING: Eric Bowen (Chair), Adam Hagen (Vice-Chair), Melissa Hardy, Benjamin Jordan, Karri Ving. NON-VOTING: David Augustine (Treasurer/Tax Collector), Richard Berman (Port), Sarah Dennis (Planning Department), Kevin Drew (Department of the Environment), Mike Ferry (Fire Department), Tom Franza (SFPUC), Laurence Kornfield (DBI), Jennifer Matz (MOCD), Marty Mellera (MTA), Virginia St. Jean (DPH).
TASK FORCE SECRETARY: Monica Fish
ORDER OF BUSINESS
1. CALL TO ORDER AND ROLL CALL
The meeting was called to order at 10:12 a.m. Present: Members Bowen, Hagen, Hardy (10:15 a.m.), Jordan, Augustine, Berman, Dennis, Drew, Ferry, Franza (Substitute: Steve Medbery), Kornfield (Substitute: David Leung), Mellera, and St. Jean. Absent: Members Ferry and Matz; Excused: Members Franza, Kornfield, Mellera and Ving.
2. ACTION: Approval of the August 17, 2006 Regular Meeting Draft Minutes. Upon Motion by Member Hagen and second by Member Jordan, the August 17, 2006 Meeting Minutes were approved with no objection. (Absent: Member Ving) (Explanatory Document: August 17, 2006 Approved Minutes.)
Item 4 was heard before Item 3.
3. INFORMATIONAL PRESENTATION. Blue Water Action Presentation on Marine Use of Biodiesel. (Explanatory Document: Biodiesel on the Bay Presentation September 21, 2006)
SPEAKER: Teri Shore
Ms. Teri Shore, Clean Vessels Campaign Director, Bluewater Network, division of Friends of the Earth stated that cleaning up the marine fleet in San Francisco Bay of emissions and discharges has been their primary focus for about five to six years. One of the objectives is to convince ferry operators that biodiesel is an effective method to clean up their emissions. Ferries are the primary focus of upcoming regulations as marine engines are diesel and unregulated. It was stated that some vessels on the bay are 20 to 30 years old and diesel emissions are significant.
An overview was given of the following topics. For more information on these particular topics, click on the presentation weblink.
§ Harborcraft: Focus is on commercial harborcraft vessels, 4000 in California, mostly comprised of fishing (2,500), ferries (400) and tugboats (128). Bay Area—about 20 ferries for commuter and charter service and fishing, tugs, crew boats and others. All use diesel fuel.
§ Harborcraft annual diesel use—California: Commercial (82 million gallons); Recreational (5 million gallons); Bay Area: Commercial: 27 million gallons per year; Recreational: 400,000 gallons per year. By January 1, 2007, all must use California formulated ultra-low sulfur on-road diesel.
§ Air Resources Board (ARB) Challenges. No formal policy from ARB. Governor signing Executive Order this year that sets biodiesel production targets in California (20% by 2010); (40% by 2020) and (75% by 2050) that may help.
§ New California Harborcraft Regulations for new engine standards and biodiesel as a way to comply are in the process. Proposal is going to the Air Resources Board in February 2007, new standards to begin in 2008-2014 for engine emissions.
§ Ferry Operators and Biodiesel. Working with Ferry operators such as the Red and White Fleet (uses B20), Hornblower (will use B20 in generators on Alcatraz, possibly vessels in the future), Water Transit Authority (B20 on one route, possibly more in the future), Golden Gate Ferry (reviewing, possible B5 use), and Blue and Gold (no biodiesel, conducted a study and are not willing to use biodiesel as they do not feel emissions and Nox would be reduced. The maritime community is used to their diesel engines and it will take an effort for them to change.
Member Jordan recommended influencing Board of Supervisors members who sit on the Golden Gate Bridge District to urge ferry operators to participate. Ms. Shore stated that Supervisors McGoldrick and Sandoval are participating in the effort.
§ West Coast Maritime Use: not widely used on the maritime community at this time.
§ Marine Biodiesel Obstacles: Biodiesel air emissions profile and concerns, ARB regulations, availability (no marine fueling stations), and operations.
§ Marine Biodiesel Opportunities: Costs: B20 selling for the same as California diesel for maritime, harborcraft pressure to clean up, high visibility, City commitment, good for the environment, and create renewable fuels jobs.
§ Next Steps: Biodiesel fueling station, Outreach, City Resolution, permitting, establishing Maritime Subcommittee and team effort to move forward.
Member St. Jean asked if some of the resistance could be related to passenger safety issues and asked if biodiesel may have been a cause of the recent Blue and Gold fleet fire. Ms. Shore reported that biodiesel was not the cause.
Public Comment: Mr. von Wedell asked if the Navy was producing B20 or B100. Chair Bowen stated that Russ Taylor, one of the pioneers of biodiesel in the state and the country, worked with Biodiesel Industries to put a small-scale facility there that produces B100 and blends it down to B20 for military use. Mr. von Wedell inquired about Coast Guard use. Ms. Shore stated that the military is a big user and that one of the distributors mentioned that the Coast Guard in Yerba Buena may be using B20. Member Jordan heard that they would be using B20 in their boilers, not in their vehicles. Mr. von Wedell stated that the Coast Guard is on another level of technology in terms of fuel processing for their offshore vehicles. Mr. von Wedell stated that biodiesel does not qualify to be considered a red dye fuel.
Public Comment: Mr. Bob Hayden inquired as to the origination of the supply of B20 for ferry use. Ms. Shore stated that Red and White gets it through Golden Gate Petroleum and is being distributed by Ramos. Golden Gate Petroleum gets most of their biodiesel from Midwest soybean.
Member Bowen recommended forming a Marine Subcommittee to focus on providing access in the marine environment and to work with General Petroleum to make that happen. The Task Force would meet at the Port and would include two of the five voting members and an open invitation to any of the non-voting members to join. General Petroleum, Red and White, Golden Gate Ferry and other relevant community members will be invited to participate.
4. INFORMATIONAL REPORT. Report on meeting with the California Service Station and Automotive Repair Association.
SPEAKER: Vice-Chair Hagen
Topics covered in the informational report include:
Vice-Chair Hagen stated that on August 21, he had met with Mr. Dennis Dakota, head of the California Services Station and Automotive Repair Association. Mr. Dakota’s background as an environmentalist working with Supervisor Ammiano to create a zone fixed pricing for gas for San Francisco was discussed. It was explained that the Brown Administration was not in favor of the proposal. Vice-Chair Hagen stated that he encouraged Mr. Dakota to approach the current administration to support the issue again because of the high price of gasoline. Vice-Chair Hagen advised that even though Mr. Dakota is part of this organization, he understands that gas and oil companies are not always doing what they should be doing. It was explained that most gas stations are at odds with the oil companies in terms of distribution, pricing and regulations.
Mr. Dakota agreed to merge his list with the Task Force list, target stations that sold diesel, ask for volunteers, and identify the independently owned stations that may or may not own the land so they can be contacted. Dave Sahagun, a City gas station owner was mentioned as a likely candidate and Olympic Fuel who may be an ally to biodiesel. Mr. Dakota was also willing to do a co-branded letter or email to his membership base. It was stated that Mr. Dakota has been forwarding proactive emails to different state agencies advocating biodiesel.
Vice-Chair Hagen stated that a discussion was held about the idea of switching a current diesel tank to a biodiesel tank and the propane model of having an above ground biodiesel tank away from the canopy. Mr. Dakota explained that if the gas station owns the land, then an in-ground tank would not be possible. If the gas station owner owns the land, there may be a chance of exchanging the diesel tank for a biodiesel tank. There are restrictive regulations with the gas and oil companies as to what they can sell under the canopy. If they don’t own the land, it can apply to an underground tank away from the canopy. The probable solution was the above ground propane model on independent owned stations where they may or may not own the land.
The other obstacle discussed was around liability of voided warranties on automobiles that use biodiesel. If they sold biodiesel to a car and it would somehow damage the engine, the members concern would be that if it would somehow damage the engine and the consumer would be able to sue. Mr. Dakota agreed to check with insurance companies on liability, what could be covered, and how much that would cost. Member Hardy stated that the BioFuel Oasis does not have additional insurance for engine warranties, but described her experience with a consumer that did buy their fuel and sued Ford under their warranty, instead of dealing with biodiesel quality issues. Member Hagen agreed to report back on the information received from Mr. Dakota on the insurance rider issue.
Chair Bowen explained that blends above B20 are regulated as experimental fuels in California. In order to sell that fuel, the person that is using it has to sign an acknowledgement that they are aware of the risks of using the fuel as an experimental fuel, which should go a long way to insulate the station owners selling it as long as the fuel being sold is within specifications. It was reported that no engine manufacturer warrants any fuel-- they warrant the manufacture and workmanship of their engine. If the fuel is not proper, it is not the fault of the manufacturer it is the fault of the fuel.
Chair Bowen discussed California State Law that indicates that if you sell B100 you have to be part of a fleet, have a variance from the Department of Measurement Standards, and every person would have to sign a waiver joining the fleet. The Department of Measurement Standards is only allowed to have experimental fuel used in fleets. They have allowed user coops to be broadly defined as a fleet. If a station is selling B20, that is fine, but if it is B21 and above, there is no way for the station owner to sell their fuel legally without having them join the Department of Measurement Standards’ Biodiesel User Group, be part of the fleet, and signing the waiver paper work. Member Jordan reported that his organization operates fleets, that they have a standard form that is signed to become a member, and usage and vehicle makes are tracked so reports can be made.
A discussion was held about the Carl Moyer program that the Air District administers in partnership with the California Air Resources Board (ARB). The Carl Moyer Program provides grants to reduce exhaust emissions from heavy-duty diesel engines. Funding is available for projects to:
Member Jordan discussed his grant award from the Carl Moyer program and the ease in the application process.
Member Hardy inquired about the Moss-Magnussen Act that set a precedent for warranties and engines. Chair Bowen advised that the Moss-Magnussen Act is a general consumer protection bill that does not have any special application to fuel and was not clear how it would apply to biodiesel.
Public Comment: Mr. Randall von Wedell stated that that federal law implies that fuel that goes into a car cannot be held as the cause of the problem in the warranty.
The Task Force stated that they would be receptive to a joint communication process with Mr. Dakota.
5. INFORMATIONAL REPORT. Agency Report on Six Scenarios for Biodiesel Dispensing and Storage.
SPEAKERS: Members Jordan, and Dennis and St. Jean
Member Jordan reported that biodiesel is a non-traditional fuel and is distributed in a variety of ways. It was stated that biodiesel is moving into vehicles in a variety of applications and a good percentage are not permitted. The importance of regulatory agencies that have knowledge of environmental health and safety commenting on the appropriateness of blended and pure biodiesel and what constitutes pure and unblended was discussed. Six scenarios that articulate some of the common actions include:
§ Scenario 1 – Business dispensing biodiesel – regulations clearly define
§ Scenario 2 - Buyers club dispensing
§ Scenario 3 – Personal use in a residential and/or commercial area
§ Scenario 4 – Commercial use in a commercial area
§ Scenario 5 – Filling of residential and commercial
§ Scenario 6 – Mobile dispensing of fuel for special events and fleet vehicles, blended or neat
Member Jordan stated that the Fire Department has been asked to clearly articulate the physical properties of blended and pure biodiesel and identify whether it would be regulated under federal, state, or local jurisdiction and if all three, which one governs.
Member Dennis stated that Scenario 1 from a Planning permitting perspective is basic. If it were an automobile repair shop, it would require a change of use or conditional use to become an actual automotive gas station. If biodiesel were a factor, it would be under the same permit. The type of district the station is in (whether residential, commercial, residential-commercial) would be a consideration also. The Department of Public Works would consider the permit to see if it requires more access and more curb cuts. Member Jordan inquired about variance issues. Member Dennis stated that it would still be a commercial establishment that members belong to.
Mr. Leung, Department of Building Inspection (DBI) stated that permitting would be the same as a remodel or remodification on any fuel tank station. Member Jordan inquired about procedures for dispensing biodiesel for an auto service center on 38 Otis Street. Mr. Leung stated that a permit would have to be applied for through the Department of Building Inspection. They would look at land use, consider structural changes, and then route it to the Fire Department to consider the type of fuel. Ms. Dennis stated that Planning does not consider the different types of fuels and reviews from the perspective of land use and how land use is used. Member St. Jean stated that the Fire Department would have to produce a rating, Weights and Measures would sign off on the dispenser, the Office of Hazardous Materials and Safety would be involved and possibly the Water Board.
Member Dennis stated that Scenario 2 would contain a licensing requirement, a separate use permit. It was stated that automotive gas stations are restricted primarily to industrial use districts and have always been separated from residential areas. Dispensing on a smaller scale would have to be determined as there is no precedent.
Member Dennis discussed Scenario 3 in terms of storage, and reported that the Planning Department permits a primary use and not an ancillary use and may never see a permit for this use. Mr. Leung stated that if you store hazardous material or flammable material, you have to enclose it so the other area is safe for residential and commercial spaces. The threshold is located in the Building Code. Mr. Leung stated that DBI would probably not make a distinction between diesel and biodiesel on flammability. Member St. Jean stated that the Office of Hazardous Materials and Safety does not have jurisdiction over residential storage and makes referrals to the Police and Fire Departments.
Member Dennis stated that Scenario 4 would be an accessory use and permitted in industrial districts. Member Jordan stated that if a business operates a fleet and fills their vans, they are zoned for operating a fleet and could have fuel on-site. The Building Department would have to review the fuel storage to make sure it is enclosed properly, and if it were commercial, the Health Department would look at flammability, hazards, and containment.
Member Dennis stated that Scenario 5 would not apply to Planning or Building Departments if tanks are already there being filled. Scenario 6 would require some kind of permit and research would be required. Mr. Leung stated that if it would be on the sidewalk or roadway, it would require a street use permit from the Department of Public Works. Member Jordan stated that he would also check with the Fire Department. Member Jordan stated that he believes that the City does not regulate mobile fueling of contractor vehicles or any vehicles. Member St. Jean stated that the Department of Public Health does not make judgments unless it becomes more of a stationary tank.
Member Jordan indicated that next steps would include (1) asking questions and pulling information together, (2) using scenarios to articulate which agencies regulate what and in what capacity, and (3) report from the Fire Department on properties of pure and blended biodiesel.
6. DISCUSSION AND POSSIBLE ACTION. Recommendation to the Board of Supervisors on payroll tax incentives for gas stations to switch over to biodiesel and report on the permitting process. (Explanatory Documents: Active SF Businesses Self-Identified as “Gasoline Service Stations” as of August 2006; Received in Task Force Meeting: Underground Tank Facilities; Gas Station Fees)
SPEAKERS: Members Augustine and St. Jean
Member Augustine reported that he has submitted an amended version of “Active San Francisco Businesses Self-Identified as Gasoline Service Stations—see weblink above.” New information on gas stations and how much they pay in payroll tax is listed. It was stated that information is self reported by station owners and based on information submitted to the Treasurer Tax Collector’s Office by the stations. Research highlights:
§ 98 total active businesses self-identified as “Gasoline Service Station”
§ 48 locations (approximately half) paid payroll tax of $2500 or more. The average paid is $5700; 50 did not pay payroll tax. The half that does not pay payroll tax pay only registration fees anywhere from $25 to $500 a year.
§ Total payroll tax paid: $277,448
§ Average payroll tax: $5,780
§ Median payroll tax by ownership $6411.
Member Augustine reported that only half of those businesses paying the payroll tax would be able to take advantage of payroll tax incentives. Most of those may include chain businesses and should be included as part of the incentive program for it to be an effective program. Member St. Jean stated that the list includes underground storage tank sites that dispense fuel that include a diesel tank and could easily switch to biodiesel. Member Augustine stated that there are other businesses that are not included on the list that are not classified as service stations such as hotels, businesses, and back-up generator facilities.
Member St. Jean reported that gasoline stations are already zoned for that use and there isn’t an incentive there. It was reported that the way the Bay Area Quality Air District regulates these gas stations is by dispensing nozzle for gasoline only. There is no fee for diesel coming out of a nozzle. For gas stations, it is per nozzle fee.
It was stated that for above ground storage tanks in California, it doesn’t matter if oil is petroleum or veggie, you have to do a Spill Prevention Control and Counter Measure Plan, which can be quite expensive.
San Francisco Health Department, Hazardous Materials Unified Program Agency (HAZMAT) fees are not that different. For underground tanks, it is a per tank fee. For above ground tanks, it is a volume fee based on how much you have. It is a risk-based scenario in general for Hazmat fee schedules. If it is a gas station only versus a gas station with auto repair service, it would be a big difference. Additional fees are charged for auto repair sites that have waste generation. The range can go up to $298 for a typical repair shop in addition to other fees. A Fire Department fee is around $300 a year for a permit to operate.
Chair Bowen stated that there may not be a lot of fees to remove. Member St. Jean stated that was correct because you are looking at a pool of businesses that are already regulated. The Air District fees may be enticing, but HAZMAT fees may not change. It was recommended that guidance could be provided on the Spill Prevention Control and Counter Measure Plan to bring the fee down to $2000.
Chair Bowen reported that at the next meeting a report would be made on Member Hagen’s discussion with the service stations, and fees and the payroll tax would be revisited as a package as to what incentives the Task Force could recommend be provided.
7. INFORMATION: New Business. Chair Bowen reported that the Task Force received coverage from a Biofuels Journal (article distributed at the meeting). It was requested that this article be scanned and placed on the Task Force website. It was requested that Ms. Shore’s Biodiesel on the Bay presentation also be included on the website.
Mr. Randall von Wedell discussed the City of San Francisco’s progress toward biodiesel. It was stated that the Fire Department has taken the brunt of the experimental work and have had difficulties with a single ladder truck that is underpowered. It was stated that MUNI is ready and final protocols are going through. Other San Francisco agencies are making slow progress. Issues reported included getting City contract suppliers up to speed, getting them properly trained, and providing education about quality control. Mr. von Wedell also showed slides on a New Zealand 100% biodiesel vessel called the “Earthrace” website link www.earthrace.net.
Monica Fish, Task Force Secretary distributed an “Application Form for Payroll Tax Exclusion” form that was prepared by Member Drew. It was requested that this form be reviewed at the next meeting.
Ms. Fish requested that the Task Force members review correspondence received from (1) the City Attorney’s Office regarding Political Activity of City Officers and Employees; Board of Supervisors Resolution 502-06 on developing a Task Force attendance policy at meetings. It was stated that this item would be placed on the next agenda as a discussion and action item.
8. DISCUSSION: Future Agenda Items. Future agenda items were discussed in previous agenda items.
9. PUBLIC COMMENTS: Members of the public may address the Task Force on matters that are within the Task Force’s jurisdiction and are not on today’s agenda. There was no public comment at this time.
10. ADJOURNMENT. The meeting adjourned at 12:01 p.m.
Respectfully submitted by,
Monica Fish, Task Force Secretary
** Copies of explanatory documents are available at (1) the Task Force office, 11 Grove Street, San Francisco, California between the hours of 9 a.m. and 5 p.m., (2) upon request to the Task Force Secretary, at telephone number 415-355-3709 or via e-mail at Monica.Fish@sfgov.org, or (3) on the meeting website as attachments to the agendas or meeting minutes.
Adopted: October 19, 2006