CITY AND COUNTY OF SAN FRANCISCO

BIODIESEL ACCESS TASK FORCE

REGULAR MEETING

APPROVED MINUTES

 

THURSDAY, JULY 19, 2007, 10:00 A.M.

CITY HALL, ROOM 278

ONE DR. CARLTON B. GOODLETT PLACE

SAN FRANCISCO, CA 94102

 

1.      Call to Order and Roll Call.  The Biodiesel Access Task Force Meeting was called to order at 10:15 a.m.  Present Voting: Chair Bowen, Members Jordan and Ving, Excused:  Vice-Chair Hagen; Absent:  Member Hardy.  Non-Voting Members Present: Members Augustine, Bali, Franza, and St. Jean.  Excused:  Members Berman, Mackin and Mellera (present by teleconferencing); Absent:  Members Dennis, Ferry and Kornfield.

 

2.      Approval of the June 21, 2007 Biodiesel Access Task Force Regular Meeting Draft Minutes (Discussion and Action) (Explanatory Document:  June 21, 2007 Approved Minutes).  Upon Motion by Member Ving and second by Member Jordan, the June 21, 2007 Meeting Minutes were approved (AYES:  Members Ving and Jordan and Chair Bowen; Absent:  Vice-Chair Hagen and Member Hardy). 

 

3.      Status Report on Recommendations to the Board of Supervisors on Incentives for Gas Stations to Sell Biodiesel (Continued discussion from the June 21, 2007 Meeting) (Informational Report).

SPEAKERS: Chair Eric Bowen and Member Dina Mackin

 

Chair Bowen reported that the intention of this agenda item is to determine whether the Task Force should ask the Board of Supervisors to consider a request for an exemption on payroll taxes and health fee waivers as an incentive for gas stations to sell biodiesel. The feedback received from the Task Force was to pursue the health fee waivers administratively through the Department of Public Health and not go through the Board of Supervisors. The Task Force also concluded that payroll tax exemptions would not be a meaningful incentive at this time, and the Task Force would not support an independent ordinance to implement these incentives.  However, the Task Force has been working with Member Mackin to see if incentives could be part of a broader expansion of the original Clean Tech tax credits, and Vice-Chair Hagen stated that he would be following up with Supervisor Jake McGoldrick on this proposal.  Chair Bowen indicated that he has not yet met with Member Mackin to see if the legislation is moving. 

 

Chair Bowen suggested that the Task Force continue to monitor the overall expansion Clean Tech tax credit to include biodiesel.  It was stated that an overall report of recommendations to the Board at the end of the year would be made, but beyond that the Task Force has not thought of any cost-saving measures or engaged in discussions on whether grants or actual dollars should be proposed.

 

Member Ving stated that there could be an opportunity for people that qualify as a green business to receive fee waivers and recommended articulating this incentive as a form of encouragement as well as putting together a step-by-step process on biodiesel dispensing that would be useful for gas station owners.  Chair Bowen suggested continuing this discussion during Agenda Item 5.

 

Member St. Jean spoke in support of researching possible grants.  Member Bali reported that the Department of the Environment Director Jared Blumenfeld has been working with a consultant to develop a San Francisco carbon fund for projects in San Francisco.  Member Bali reported that she has been engaged in initial conversations with the consultant and there are key areas that they are focusing on for biodiesel and for plug-in hybrids.  Member Bali stated that preliminary suggestions that she made were to offer subsidies for small private fleets that operate in the Bayview Hunters Point district, e.g. subsidies for the incremental cost difference between petroleum diesel and biodiesel.  The other suggestion was for a subsidy for the Olympian Gas Station to offer biodiesel at petroleum diesel prices for a specified amount of time to help generate interest in the market.   Chair Bowen recommended that if subsidies were to be offered for gas stations to make biodiesel cost competitive with petroleum diesel, to not limit it to only petroleum diesel stations, encourage all stations to apply, but don’t award it to all as there will be fiscal impact.  Member Bali explained that just the one station that is offering biodiesel would qualify, but there are a couple of other stations that are interested.  Member Bali stated that this proposal ties in with the grant idea and would like to meet with Chair Bowen on this topic.  Member Bali stated that subsidies would also be provided to City departments with infrastructure costs.   Member Jordan recommended that funding be applied toward education, advocacy, and community events on alternative fuels or biodiesel.

 

Chair Bowen summarized that the source of funds for the potential subsidies would be the revenue from the carbon fund, which is a voluntary offset carbon fund that the City would set up, let people contribute into, and recycle the funds through the subsidy programs.  Member Bali stated that is the concept and the consultant is in the process of figuring out how it will all work in terms of implementation.  It was stated that there is also a Green Business and a Renewable Energy component to it.  The program would start small with a few pilot projects to see how it might work.      

 

4.      Recommendation Letter to the Health Department on Fee Waivers for Biodiesel Filling Stations (Continued discussion from the June 21, 2007 Meeting) (Discussion and Possible Action) (Draft Letter Fee Waiver Proposal Received in Task Force Meeting)

SPEAKERS: Chair Eric Bowen and Member Benjamin Jordan

 

Member St. Jean reported that the recommendation letter to the Health Department on fee waivers would only recommend B100 biodiesel as the consensus statewide is that B20 is still 80% petroleum diesel. It was explained that there is always a Clean and Green Business Program fee break, which has not passed the Board of Supervisors as yet, but the Ordinance amendments give a 20% fee break for any business that is Clean and Green.  It was stated that B100 could possibly receive extra fee waivers. 

 

Member Jordan reported that the Health Department Program Manager of the Hazardous Materials Unified Program Agency has the ability to implement fee waivers, and the letter would be sent out as a policy statement from the Task Force.  Member Jordan stated that next steps would be to hold a discussion with the Fire Department and Building Department on the possibility of fee waivers.

 

Chair Bowen proposed an amendment to the letter to add in parenthesis after B100 (B99 and greater) because from an environmental standpoint B99.9 is essentially B100 as tests indicate that you cannot detect the petroleum and to address IRS tax credits that would make biodiesel less expensive.  Upon Motion by Chair Bowen and second by Member Jordan, the Draft Letter has been approved for distribution to the Health Department with the proposed amendment (AYES:  Chair Bowen, Members Ving and Jordan; Absent:  Vice-Chair Hagen and Member Hardy).    

 

5.      Status Report on Discussions with Gas Stations on the Prospect of Selling Biodiesel to Individual Consumers (Informational Report and Discussion). 

SPEAKERS:  Vice-Chair Adam Hagen and Chair Eric Bowen

 

Chair Bowen reported that he has met recently with two interested station owners that had responded to the letter that was sent out to station owners on the prospect of selling biodiesel to individual consumers. It was stated that there had been five total responses and he has held conversations with all but one of the responders.  One of the two meetings was with a Shell Station on the corner of 17^th and Potrero, a great location that does not currently dispense any diesel so there would not be a problem with displacing an existing product.  The station owner is very supportive and will do everything he can to push this through.  It was stated that it would be an above ground tank model.  The owner has leased four parking spots to Zipcar for approximately $1500 a month and would like comparable income to lease a couple of spots to whomever would put in the biodiesel.  Chair Bowen reported that the major potential problem would be that Shell owns the underlying ground, and the station owner leases the land and has a franchise agreement.  Chair Bowen stated that his experience with other biodiesel companies and other locations has been that it is easier when you are only dealing with franchise restrictions rather than dealing with lease and franchise restrictions.  The station owner has indicated that he would do everything possible to influence Shell to support the program.  Chair Bowen reported that he is in the process of compiling a packet to send to the station owner that includes information on tanks, dispensing, containment, permits, and economics from a business perspective so it can be forwarded to the station owner’s district representative at Shell to seek out the initial approval.  Member St. Jean stated that she would start working on getting his station Clean and Green awarded.

 

Chair Bowen reported on his meeting with San Francisco Petroleum, who is the City’s fuel supplier. It was reported that there are positives and negatives to report on. The positive is that they have one 20,000-gallon+ B100 tank to store the biodiesel for the City program that is not hooked to any pump that they can use to dispense to the public.  They currently sell diesel, gasoline and premium gasoline at their card lock station on Illinois Street and have found that their premium gasoline sales have been plummeting because of prices and view that as an opportunity to switch to biodiesel.  They are familiar with biodiesel, they are using it, and carry it--it is just a matter of bringing it to the Island.  Member St. Jean stated that they would have to apply for a tank modification and request approvals from the Fire Department and offered to help advise them on the process. 

 

Chair Bowen reported that the downside is that San Francisco Petroleum is still on a card lock system.  A discussion had been held on their ability to use a point-of-sale credit card system, but they have questions with their electronic capability. If they can’t switch over, it is possible that a non-profit entity working as a fleet manager could issue cards, but there may not be enough revenue generated per user to warrant the overhead.  In the best-case scenario, dispensing could be implemented by mid September.  Member St. Jean reported that the Health Department inspector is working on required inspections and compliance issues for San Francisco Petroleum to be clean and green.  Member Mellera through teleconferencing asked if San Francisco Petroleum is selling formally to the public.  Chair Bowen stated that they are selling to the public during office hours but was told that they would prefer not to.  Member Mellera reported that San Francisco Petroleum is now accepting credit cards but had not in the past. 

 

Chair Bowen reported that the Olympian Station on 3^rd Street did not respond to the letter but stated that they would be interested in pursuing B100.  They currently are dispensing B20, would retain the B20 and add B100.  The location has underground tanks and is also on a card lock system, but has a non-profit that could manage a card lock fleet system.

 

Member St. Jean reported that she had attended a Water Board meeting on underground storage tank issues and that they are reviewing the compatibility of biodiesel on gaskets and other parts.  They are assuming that B20 is going to be similar enough to petroleum diesel, but they do not have the answers yet for approved systems for pumping the biodiesel B100.  They are waiting for a consensus between all the Water Boards and the State and do not have anything approved as of yet. 

 

Public Comment 

 

Mr. Randall von Wedel discussed the potential for the Olympian Station to dispense B20 and B100 and the use of methanol tanks.  Member St. Jean stated that the Water Board is now reviewing biodiesel and has the authority to make recommendations of compatibility systems, and people would have to use a system that is approved by them.  Mr. von Wedel offered his assistance in contacting the Water Board to advise them of the National Biodiesel Board’s paid studies from the 1990’s to evaluate different compatibility issues. Member St. Jean stated that she would forward contact information to Mr. von Wedel.  Member Jordan reported that a municipality in Carquinez was issued a citation from the Water Board to cease B20 use in underground tanks.

 

Ms. Michele Swiggers stated that she and her associate have identified two potential locations in San Francisco for dispensing biodiesel, but have not negotiated lease details at this time. Ms. Swiggers asked about San Francisco Biofuels’ supplier of biodiesel and if there had been any discussion on providing biodiesel from recycled vegetable oil.  Chair Bowen stated that this topic has been discussed regularly and reported that People’s Fuel Cooperative is the provider to San Francisco Biofuels.  Member Jordan explained that the People’s Fuel Cooperative is a worker owner cooperative that refuels biofuel through a truck. It was stated that fuel originates from approximately seven different sources and they are always looking for the highest quality and sustainable fuel.  Member Jordan reported that there had been issues reported with the quality of recycled vegetable oil and that it does not solve the question of sustainability.  Ms. Swiggers asked if the People’s Fuel Cooperative has been asked to provide their sustainable fuel at a retail location.  Member Jordan stated that they would love those kind of conversations and do not enter in them often enough.                            

 

6.      Update on Permitting Regulations for Biodiesel (Continued Discussion from the June 21, 2007 Meeting) (Informational Report and Discussion). 

SPEAKER:  Member Benjamin Jordan

 

Member Jordan reported that he is constantly meeting with the Department of Building Inspection (DBI) and the Fire Department about the way that biodiesel should be regulated.  The Fire Department is currently treating all biodiesel as diesel fuel until they can be provided with guidance otherwise. Member Jordan stated that he would be connecting with the State Fire Marshall and the Local Fire Marshall to discuss this issue.  It was explained that this document would be used to provide new station owners or anyone looking to have biodiesel stored or dispensed on their commercial or residential site, a list of regulations that would include emergency procedures and actions.  A summary of all the regulatory agencies and what they review as it is related to biodiesel would be included.

 

Member Jordan reported on pilot permitting projects for rail car handling and storage at LBRailco located at the Port of San Francisco; the Rainbow Grocery above ground storage tank application; and the permit for mobile fueling in the Rainbow Grocery loading dock that was submitted to the Fire Department and is under review.  Member Jordan explained that he is looking at creating Residential Best Handling Practices Guidelines for residents on storage, usage, and safety of biodiesel.  Member St. Jean recommended a flow chart of procedures or checklist on getting through the City system.  Member Ving stated that she could assist in creating a summary sheet of fee waivers and a step-by-step process for station owners to follow for dispensing biodiesel.

 

7.      Citywide Fleet Biodiesel Implementation Update (Continued Discussion from the June 21, 2007 Meeting) (Informational Report and Discussion). 

SPEAKER: Member Vandana Bali

 

Member Bali reported that fuel quality and supply issues have been identified since the Municipal Transportation Agency (MTA) had begun their pilot program.  It was stated that there had been a meeting with OCA, the Fire Department, MTA, PUC and Central Shops last Friday to discuss the status of the secondary fuel vendor getting compliant and starting to provide fuel.  Member Bali reported that MUNI was not able to receive fuel from San Francisco Petroleum, the main supplier, for their pilot program, and the backup secondary vendor was not in place to sell fuel so they were forced to purchase fuel from an outside vendor.  OCA has asked any City department that is currently in this program to provide details when they did not receive the biodiesel, such as turnaround time, and backup options.  It was reported that Central Shops is the only City department that has not experienced problems in getting biodiesel from SF Petroleum.  Member Bali stated that a review would be made as to why the contract with Golden Gate Petroleum had not been completed and on why People’s Fuel contract to ensure quality control of fuel at San Francisco Petroleum had not been signed and what if any legal standing the City has because it is paying for a service that has not been received.  

 

Member Bali reported that she is also putting together a meeting with all of the key fleet managers from all of the City departments in order to develop an ongoing quality control process for fuel in the fuel storage tanks.  The Fire Department is doing well--they just need software to monitor their tanks and have been directed to contact MTA to see what they are using and are also developing a QA program for their fuel.  PUC is moving forward.

 

Member Mellera stated that it was a significant surprise to him that the protocols called for under the City fuel contract were not being met by SF Petroleum or any of the other vendors as fuel quality and supply are crucial elements to the success of MUNI’s program as well as the reliability for fire trucks and ambulances.  Member Mellera commended MTA staff that were ready to go with backup vendors and being flexible enough so that their biodiesel program got underway.  MUNI is fueling at about 2-3,000 gallons of B20 a day and that will go up significantly as they gain a comfort level with the pilot program on clean air devices and with the fuel vendor itself.  Member Bali stated that for MTA to have on standby a purchase order for an emergency vendor is not the way to implement a successful program.  Chair Bowen asked if SF Petroleum is trying to rectify this situation and provide compliance in their fuel contract.  Member Bali stated that she has not had any success in reaching SF Petroleum.  Chair Bowen stated it would be his surprise to them if they were to learn that they would be losing MUNI’s volume of business.   Member Mellera stated that hopefully they are serious enough about their business to deliver the fuel and in a quality way.  Member Mellera reported that he is formalizing a letter to SF Petroleum and the other vendors that summarize the provisions of the contract.  It was stated that MTA has had very little success in receiving a response from SF Petroleum in response to biodiesel, and that is the reason for the OCA meeting.

 

Member Mellera reported on the success of the pilot program in that there was only one red flag received in the four weeks of the program on water and paint chips on one of the hybrid bus filters causing a road call, and the problem may have been related to biodiesel.  It was explained that these types of problems are normal with biodiesel when you are working with so many vehicles and so many miles.  Member Bali reported that 25 revenue diesel buses and 15 diesel hybrid buses would all be running with B20.  Member Mellera explained that the diesel hybrid runs on a diesel generator providing the electricity and that there is no mechanical connection between the engine and the wheel, and the engine is half the size of a normal bus engine.       

 

8.      Informational Report to the Board of Supervisors Update. (Continued Discussion from the June 21, 2007 Meeting) (Informational Report and Discussion) (Explanatory Document:  Draft Outline Received in Task Force Meeting).

SPEAKER: Member Benjamin Jordan

 

Member Jordan distributed a current version of an Informational Report Outline that included name assignments by each task.  Member Ving stated that she had drafted a Marine outline that will be scheduled for approval by the Marine Committee Members and then forwarded for inclusion in the Informational Report.  This item was continued to the August 16 meeting.

 

9.      Status Update on Building a Biodiesel Manufacturing Facility in San Francisco (Continued Discussion from the June 21, 2007 Meeting) (Informational Report and Discussion). 

SPEAKER: Member Dina Mackin

 

Member Mackin was not present for a discussion at this time.  This item was continued to the August 16 meeting.

 

10.    Biodiesel Access Task Force Sunset Date.  The Task Force will discuss whether to make a request to the Board of Supervisors for an extension of its sunset date of December 31, 2007 to a future date and/or develop a list of priorities on activities that should be completed before the sunset date if not extended (Continued from the June 21, 2007 Meeting) (Discussion). 

 

Chair Bowen reported on two suggestions for the Task Force after its sunset date of December 31, 2007: (1) the Biodiesel Task Force could serve as a clearing house for information and as a coordinating group for the implementation of the Green Depot program, start-up of biodiesel fueling stations, and addition of fleets.  It was stated that with the success of the City’s programs (MUNI, etc.), there is some benefit to a group whether it is this group or not continuing to play the clearinghouse and coordinating function. Chair Bowen felt that a request for extension could be requested and to move to quarterly meetings; (2) another possibility rather than to ask for an extension is to ask for a broadening of the portfolio, meaning to general alternative fuel or clean transportation (E85 or other various biofuels/clean fuel) with a big portion of the purview continuing to be biodiesel.  Chair Bowen stated that every other month would be appropriate for the second alternative. 

 

Member Jordan supported Chair Bowen’s suggestions and stated that permitting components would continue and it would be helpful to discuss them through a Task Force to better his understanding. It was stated that biodiesel is just the beginning of alternative fuels so this need will be reoccurring in the City. 

 

Public Comment:  Mr. von Wedel stated that this Task Force has served as a troubleshooting group and that “there are more troubles to shoot.”  The Task Force also serves to add credibility in efforts to establish City permitting requirements.

 

11.    Task Force Secretary Report—Correspondence Received (Informational Report and Discussion) (Explanatory Documents:  Gifts from Restricted Sources and Statement of Incompatible Activities). 

 

The Task Force Secretary reported on new Ethics requirements that apply to members of Commissions and Boards on acceptance of Gifts from Restricted Sources and Subordinates and the draft Statement of Incompatible Activities.  Members were asked to read the explanatory documents and forward any questions to the Secretary.

 

12.  New Business/Future Agenda Items (Information and Discussion).  Member St. Jean reported that the Federal Environmental Protection Agency (EPA) has granted a non-profit organization funding to organize a round table for biodiesel discussions.  The intent is to share what other jurisdictions have done to help provide valuable information.  Stakeholders are being put together to develop standards to be consistent with EPA requirements.  Member St. Jean stated that Members Ving and Jordan have been invited to attend today’s first meeting beginning at 12:30 p.m.  No date has been set for the formal round table as of yet. 

 

Public Comment:  Ms. Kelly Birdwell, EPA Intern, stated that she would be attending the brainstorming meeting and will be following up on related issues.

 

Member Jordan requested that a future agenda item be included on the Mayor’s mandated next steps for the Executive Order.  This item would be to discuss and provide Task Force recommendations for additional actions by the City of San Francisco that would address the Task Force’s position on feedstock issues, recommendation to increase the biodiesel blend of the Executive Order, and how the Master Fuel contract is or is not integrating all alternative fuels, and how as a City we could implement alternative fuels not only in our citywide fleet but for access to the public. Chair Bowen explained that this agenda item would be to develop a Task Force policy statement and issue recommendations.

 

13.  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.

 

14.  Adjournment.  The Biodiesel Access Task Force meeting adjourned at 11:16 a.m.

 

The next meeting of the Biodiesel Access Task Force is scheduled for Thursday, August 16, 2007 at 10:00 a.m.

 

Approved:   August 16, 2007

 

** 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 [email protected], or (3) on the meeting website as attachments to the agendas or meeting minutes.