Southern California Air District Re-Adopts New Source Review Credit Tracking System

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DIAMOND BAR, Calif.--The South Coast Air Quality Management District approved a measure Feb. 4 to ensure hospitals, schools, publicly owned sewage treatment systems, and certain small businesses continue to have access to the agency's internal bank of emissions offset credits.

By a 10-1 vote, the agency's governing board approved Rule 1315, replacing a rule a state court invalidated in 2008 after finding SCAQMD failed to adequately weigh its environmental impacts (Natural Resources Defense Council v. SCAQMD, Cal. Super. Ct., No. BS 110793, 7/29/08; 151 DEN A-6, 8/6/08).

Rule 1315 is designed to demonstrate that the SCAQMD's new source review program meets federal Clean Air Act requirements. Specifically, the rule establishes a system to track new source review emissions reduction credits.

Under the Clean Air Act, major sources of air pollution in nonattainment areas must offset any new emissions and install best available control technology when building new facilities or modifying equipment.

SCAQMD's new source review program applies to both major and minor sources of air pollution in the Los Angeles area, and its regulations generally require state-of-the-art pollution controls.

Essential Services, Small Business.

The air district established an internal bank of emission-reduction offsets to ensure that essential public services, such as hospitals and wastewater treatment facilities, as well as small businesses, have access to free credits if they cannot afford to purchase them on the open market.

Environmental groups, who brought the lawsuit that voided the earlier Rule 1315, are not embracing the latest version of the measure, even though it includes a detailed environmental analysis.

Rule 1315 attempts to strike a balance between the need for economic growth and the ongoing effort to clean up the air, SCAQMD staff said prior to the vote.

Natural Resources Defense Council and other environmental groups who filed the lawsuit challenging the earlier measure object to SCAQMD's credit accounting system, particularly with the number of offsets available.

Credit for Shutdowns.

Before 2006, SCAQMD built the bank of credits with emissions decreases that resulted when major sources permanently shut down.

Under the new Rule 1315, SCAQMD decided to retroactively eliminate all pre-1990 credits in its offset accounts that it cannot authenticate, which accounts for about 60 percent of all the pre-1990 credits.

At a public hearing the SCAQMD Jan. 7, environmental groups argued for alternative strategy that would make the pool of available offset credits even smaller (6 DEN A-6, 1/10/11).

SCAQMD Deputy Executive Officer Mohsen Nazemi told the governing board at the Feb. 4 meeting that a smaller pool of offsets would “eliminate jobs and limit economic growth.”

“We have to have a balance [between growth and air quality] and I think the staff proposal has that,” Jane Carney, a Riverside attorney and member of the SCAQMD governing board, said before the vote.

By Carolyn Whetzel

A copy of SCAQMD Rule 1315, as proposed, is available at