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CVS News
California Motor Vehicle Pollution Control Program
News and Analysis for August 2003
In This Edition:
C
CARB Adopts Amendments to Diesel Fuel Regulations Despite
Strenuous Objection From Trucking Industry (page 2)
C
CARB Adopts Amendment Applying Riding Season Restrictions
to Off-Road Motorcycles and ATVs Beginning with the 2003
Model Year (page 16)
C
CARB and CEC Adopt Joint Agency Report on Reducing
California’s Petroleum Dependence (page 19)
C
Federal Appellate Court Overrules EPA’s Denial of CARB’s
Oxygenate Waiver Request (page 29)
C
CARB Staff Releases “15-Day Notice” of Proposed Final
Revisions to ZEV Regulations (page 30)
C
CARB Holds Another Workshop on Proposed Exhaust and
Evaporative Standards for Small Off-Road Engines and Issues
Proposed Regulations – Industry Challenges Feasibility of Staff’s
Evaporative Emissions Proposal and Raises Safety and Cost
Issues (page 35)
C
CARB Staff Issues Manufacturers Advisory Correspondence
Explaining Not-to-Exceed Requirements for 2005–2006
Medium- and Heavy-Duty Diesel Engines (page 42)
C
CARB Announces Workshop on Amendments to Service
Information Rule (page 44)
Copyright 2003©, by Sierra Research, Inc. All Rights Reserved.
1801 J Street, Sacramento, CA 95814, 916-444-6666
August 2003
C CARB Issues Manufacturers Advisory Correspondence on
High-Priced Parts Cost Limit for 2004 Model Year, and
Warranty Information Related to Vehicles Receiving Partial
Zero-Emission Vehicle Credits (page 47)
C CARB Holds Another Workshop on Transport Refrigeration
Units – Stakeholders Voice Objections to Risk Assessment
Methodology and Other Aspects of Program (page 48)
C CARB Holds Another Portable Equipment Workgroup
Meeting – Staff Presents Draft Fleet-Average Compliance
Proposal (page 52)
C I/M Review Committee Meets – Votes to Continue Without an
Executive Officer (page 55)
C Legislative Update (page 65)
C Rulemaking Calendar (page 72)
CARB Adopts Amendments to
Diesel Fuel Regulations
At the July 24 Public Meeting of the California Air Resources Board (CARB), the Board
voted to adopt staff’s proposed amendments to the existing California Diesel fuel
regulations. Seven of the eight Board members in attendance* voted in favor of the
proposal, while the eighth Board member, Matthew McKinnon, abstained from voting.
In all, the Board heard nearly four hours of testimony and discussion before voting on
this proposal.
The key components of staff’s proposed amendments, which have been detailed in
numerous past issues of CVS News (see the May, June, and July 2003 issues for the most
recent articles), are (1) a 15 ppmw Diesel fuel sulfur standard, which will be required for
both on- and off-road Diesel engines; and (2) a Diesel fuel lubricity standard. In
addition, staff proposed several relatively minor changes in a 15-day comment package at
the hearing. These changes include (1) a phase-in of the 15-ppm sulfur limit at low
throughput facilities; (2) modification of the definition of Diesel fuel; (3) deletion of a
*
Board members Barbara Riordan and Mark DeSaulnier were not present.
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CVS News
August 2003
proposed section related to downstream blending; (4) applicability of new candidate fuel
requirements for previously certified Diesel fuel formulations; (5) a new provision that
would sunset the proposed 2004 lubricity standard if the ASTM votes to adopt the same
standard; and (6) deletion of a proposed amendment to heavy-duty engine test procedures
regarding California Diesel test fuel. These changes are discussed in detail below.
Some of the most noteworthy comments from stakeholders at the hearing included (1) a
well-researched and concise presentation from Stephanie Williams of the California
Trucking Association (CTA) outlining the past and predicted effects of CARB Diesel on
her industry and requesting that CARB delay adoption of the amendments in order to
consider the real impacts of staff’s proposal,* (2) requests from environmental groups
that the agency require the use Diesel fuel that meets its standards in marine and rail
applications where it is currently not required, and (3) additional requests that the
proposed Diesel fuel requirements take effect prior to 2006 in the South Coast Air Basin.
Williams’ presentation seemed to have an effect on the Board members, even though
they ultimately voted in opposition to her recommendations. Several Board members
complimented Williams on a very effective presentation, and McKinnon cited his
concern for “the effects on California workers” as his reason for abstaining from the vote.
Staff Presentation
In his brief opening remarks, Chairman Allen Lloyd emphasized that “we are not opening
up the whole Diesel rule,” and that the amendments under consideration mainly pertained
to sulfur content. Lloyd then introduced California Assemblyman Manny Diaz (D-San
Jose). Diaz, chairman of the Budget Subcommittee on Information Technology and
Transportation, said he “wants the Legislature to get more involved in this process.” He
said he was trying to identify revenue sources to fund incentives for clean technologies,
and invited CARB to join the Legislature at its hearings next fall when this subject would
be discussed.
Background - Following brief remarks from Executive Officer Catherine Witherspoon,
the staff presentation was delivered by Gloria Lindner, who is with the Fuels section of
the Criteria Pollutants Branch of CARB’s Stationary Source Division. Lindner began
with a general discussion of California’s air quality problem. According to Lindner, the
percent of total statewide mobile source PM and NOx emissions attributable to Diesel
engines is 72% and 58%, respectively. Further, she said that Diesel PM is responsible
for 70% of the calendar year 2000 statewide risk from air toxics emissions.
The current California Diesel fuel regulations were first implemented in October 1993,
continued Lindner, and were applicable to Diesel sold for both on- and off-road motor
vehicle use. The original regulations also allowed for the certification of alternative
*
At all of the Diesel fuel workshops held this year, a sizeable portion of the meeting discussion was
devoted to CTA staff expressing strong objection to staff’s proposal. CTA wants a national fuel standard
(which would mean a repeal of the low-aromatic provision that has been part of the Diesel regulations since
1988), and feels that CARB staff reneged on an earlier promise to move toward that goal.
CVS News
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August 2003
formulas that maintain equivalent emission benefits. Lindner then presented a table,
replicated in Table 1, showing the difference in the current California vs. federal Diesel
fuel specifications.
Table 1
Comparison of Current California vs. Federal Diesel Specifications
Applicability
Specifications
Sulfur
Aromatic Hydrocarbons
- Large refiners
- Small refiners
*
California
Federal
On- and Off-road
On-road
500 ppmw
500 ppmw
10 vol. %*
35 vol. % or
Cetane No > 40
20 vol. %*
or equivalent alternative formulation
Lindner then briefly outlined the California Diesel Risk Reduction Plan (DRRP), the goal
of which is to reduce Diesel PM emissions and associated health risks by 80% by 2020.
In addition to the 15 ppmw sulfur limit for California Diesel, CARB plans to achieve
these reductions by establishing more stringent emission standards for new Diesel
engines, as well as particulate trap retrofit requirements.
Lindner also briefly discussed a South Coast Air Quality Management District
(SCAQMD) rule (Rule 431.2) that requires 15 ppmw sulfur beginning in 2004 for
stationary engines and in 2005 for motor vehicles, unless CARB adopts the same sulfur
limit. Lindner said the SCAQMD rule states that if CARB adopts the 15 ppmw limit, the
implementation date for the 15 ppmw sulfur limit in the South Coast would become
aligned with the 2006 implementation date in the CARB rule. (This provision ultimately
caused a great deal of discussion, as detailed later in this article.)
Staff Proposal - The specific amendments being proposed by staff are outlined below.
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Proposed Changes to Requirements of the Diesel Fuel Regulations
-
Reduce the CARB Diesel sulfur limit to 15 ppmw, applicable to on- and
off-road Diesel fuel as of June 1, 2006.
-
Revise the requirements for certification of alternative Diesel formulations.
This will provide further assurance that new certified alternative
CVS News
August 2003
formulations result in equivalent emissions relative to the 10% aromatics
standard.
C
-
Revise the sulfur specification for fuel used to certify Diesel engines.
-
Require a new test method that provides better precision for testing 15 ppm
sulfur Diesel.
-
Clarify the applicability of the Diesel fuel regulations to ensure effective
enforcement.
Proposed Changes to Increase Flexibility*
-
C
Proposed ATCM for Nonvehicular Diesel Fuel
-
C
Provide an option for complying with the 10% aromatic hydrocarbon
standard, which allows refiners to meet a set of specified limits without
undergoing testing. The proposed limits are based on the average properties
of certified formulations. Lindner said staff feels this is an important
provision both because it gives refiners additional flexibility in meeting the
aromatics standard, and because it will facilitate the importation of Diesel
fuel into the California market.
This refers to CARB’s proposal to require that Diesel fuel for stationary
sources and other uses meet the same standards as California vehicular
Diesel fuel. Lindner said this provision is needed to ensure that emissions
reductions required by the Diesel Risk Reduction Plan for stationary engines
and other sources are met.
Diesel Fuel Lubricity Proposal
-
Lindner explained that Diesel fuel lubricity refers to the ability of Diesel fuel
to provide surface contact lubrication. The current voluntary lubricity
standard was recommended by a 1994 Governor’s task force. Staff is
concerned, however, that there is currently no formal ASTM** lubricity
standard, and that the current levels will not sufficiently protect advanced
technology Diesel engine systems. Also, there is concern that the additional
refining required to meet the 15 ppmw sulfur limit would reduce the natural
fuel lubricity.
*
During later public testimony, a representative from the Western States Petroleum Association referred to
this provision as the “DELs,” an acronym standing for Designated Equivalent (Fuel) Limits.
**
As noted in previous articles, CARB has hopes that ASTM will ultimately adopt a lubricity standard,
because that would shift responsibility for enforcement of the standard from CARB to the California
Department of Weights and Measures.
CVS News
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August 2003
-
C
Staff is proposing a two-phase implementation plan that will apply to all
Diesel fuel either sold or supplied in California. The first phase is the
immediate adoption of a High Frequency Reciprocating Rig (HFRR)
maximum wear scar diameter (WSD) standard of 520 microns, with a 90-day
phase-in schedule beginning August 1, 2004.* The second phase would
involve conducting a technology assessment by 2005 in order to determine a
sufficiently protective standard for the 2006 and later engines designed to
operate on 15 ppmw sulfur Diesel fuel. CARB proposes to sunset the
lubricity standards if ASTM adopts similar standards.
Proposed Revision of Staff Proposal (i.e., 15-day Changes)
-
As briefly discussed in the introduction to this article, staff proposed a
number of minor changes to its proposal. The first is the phase-in of
15 ppmw sulfur limit fuel at low-throughput facilities. Fuel delivered to
such facilities prior to July 15, 2006, or delivered directly from a bulk plant
prior to September 1, 2006, will be exempt from the new regulations. This
new provision will apply to retail outlets and bulk purchaser-consumer
facilities, and is consistent with the EPA rule. Lindner said this provision
was being added so that low throughput facilities would not be required to
drain their tanks, or to take other extraordinary measures to comply with the
new regulations beginning on June 1, 2006.
-
Staff has further modified the definition of Diesel fuel to exclude any
product that is more than 50% biodiesel.**
-
Staff is proposing to delete the previously proposed section for downstream
blending. Staff concluded that since Diesel fuel will have to meet the same
sulfur standards throughout the distribution system, special downstream
provisions did not need to be included in the sulfur regulation.
-
Regarding the applicability of new candidate fuel requirements to previously
certified Diesel fuel formulations, staff has determined that an existing
formulation with a candidate fuel that does not meet the new specifications
would no longer be effective if all of the following criteria apply:
1. The aromatic hydrocarbon content is more than 3.5 times that of the
reference fuel.
2. The sulfur, nitrogen, and polyaromatic hydrocarbon (PAH) contents are
greater than that of the reference fuel.
*
One of staff’s 15-day changes is the sunset of this provision, if ASTM adopts a similar standard.
**
This means that biodiesel blends that are 51% or more biodiesel are not subject to the CARB Diesel
specification, including the 15 ppm sulfur limit. As was highlighted in testimony from WSPA, exclusion of
biodiesel blends of more than 51% could raise emissions-related issues associated with its use.
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CVS News
August 2003
3. The cetane number is less than that of the reference fuel.
Deactivation of an existing formula that meets the above criteria would be
effective 90 days after the effective date of the amendments.
C
-
The addition of a sunset provision for the 2004 lubricity standard, if ASTM
votes to adopt a lubricity standard (discussed in greater detail above).
-
Drop the proposed amendments to the heavy-duty engine test procedures,
since the existing California test procedure already specifies an ultra-low
sulfur content of 7-15 parts per million for Diesel fuel used in certification
testing of 2007 and subsequent model year heavy-duty Diesel engines.
Impact of Staff’s Proposal - Lindner reiterated that the most important reason for
adopting the 15 ppm sulfur limit for Diesel fuel is that it will enable the use of
new technologies that will significantly reduce the emissions of PM, ozone
precursors, and toxic air contaminants from Diesel engines. Lindner then listed
the following emission reductions, which she said are attributable to the
proposed amendments:
-
Statewide sulfur oxide emissions from all Diesel sources would be reduced
by about 90 percent, or 6.4 tons per day, based on calendar year 2000 levels.
-
Diesel PM emissions would be reduced by about 4% statewide (about 0.6
tons per year in 2010), for engines not equipped with advanced particulate
emissions control devices.
-
NOx emissions from stationary engines not currently using CARB Diesel
(about 10% of the stationary engine inventory) will be reduced by 7%, or
about 80 tons per year.
Lindner said the staff proposal would have no known or additional environmental
impacts on surface waters, groundwater, or soil, compared to the current Diesel fuel
regulations. She added that the reduction in sulfur emissions would reduce the
atmospheric deposition of sulfuric acid and sulfates in water bodies, and that a
multimedia environmental impact assessment would be prepared and reviewed by the
California Environmental Council prior to final adoption of the regulation.
Anticipated Costs - As noted in the July CVS News article on this subject, staff has not
included a traditional cost-effective analysis for this proposal because it feels the costs
are incurred to enable the application of advanced technology Diesel equipment, and
therefore this does not lend itself to a traditional cost-effectiveness analysis. Increased
costs to California Diesel consumers were calculated, however, by analyzing responses to
surveys submitted to California Diesel refiners, as well as the results of studies conducted
by the U.S. EPA and the SCAQMD. This information led staff to estimate that capital
costs to refineries would range from $200 to $300 million, and that the estimated cost of
CVS News
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August 2003
the lubricity standard would cost refiners between 0.2 and 0.6 cents per gallon. The
overall cost of the proposal to California refiners is estimated at between 2 and 3 cents
per gallon, which Lindner said is consistent with the SCAQMD estimate of 1 to 3 cents,
and with the EPA estimate of 4 to 5 cents per gallon. Lindner added that most of the cost
would be incurred regardless of the CARB proposal, because of the low sulfur Diesel
regulations that have already been adopted by EPA.
In conclusion, Lindner said staff was recommending that the Board approve the proposed
amendments, and that the Board also direct staff to conduct a technology review
regarding the appropriateness of the proposed lubricity standard, and report back in 2005
with those results.
Following Lindner’s presentation, Chairman Lloyd asked staff whether there was an
“energy penalty” associated with the delay in implementing a 15 ppm sulfur Diesel
requirement in the South Coast air basin. Staff replied that the penalty was “slight, if
any.” Board member Joe Calhoun then asked Catherine Witherspoon “where you think
you are (regarding) making the stakeholders happy?” Witherspoon replied that the
alignment of the federal and state Diesel sulfur standards was not controversial, and that
she believed most stakeholders were reasonably happy with the proposal.
Public Testimony
South Coast Air Quality Management District - Acting Executive Officer Barry
Wallerstein said the staff proposal does not adequately address the needs of the South
Coast district. Specifically, he said that delaying the implementation of a 15 ppm Diesel
sulfur standard by 17 months would cause an increase of 6 tons per day of direct and
secondary PM emissions, which would disproportionately affect environmental justice
communities. Wallerstein asked that the Board adopt the package, but also direct staff to
do “a full analysis and public comment” on this issue within 120 days. Witherspoon
replied that staff appreciates that the SCAQMD wants to institute a 15 ppm sulfur limit as
soon as possible, but “a bifurcated fuel system in California would be of more concern
than the emission increase caused by waiting 17 months.” She also added that “we
already did an analysis—we don’t need another 120 days.” Wallerstein countered,
saying that “rather than a two-page letter that is three years old, we would like to have a
more current analysis.” Chairman Lloyd asked staff how much 15 ppm sulfur Diesel is
currently available in the South Coast. Dean Simeroth, Chief of the Criteria Pollutants
branch of the Stationary Source Division, said about 10%, but noted that “they do
imports, which makes it more complicated.” Board member William Burke then entered
the discussion, stating that “41% of the state is choking to death, and I’m not sure it’s
good public policy to ignore them just so we can align the state and federal fuel
standards.” “Is this environmental justice?” he asked. Witherspoon replied that the best
solution would have been to require the whole state to implement the new standard in
2005, but that “there wasn’t enough time to do that.” And, she noted that other areas in
the state have the same environmental justice concerns as the South Coast.
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August 2003
Board member McKinnon asked staff if there were any State Implementation Plan (SIP)
issues associated with the 6 tpd increase Wallerstein mentioned. CARB Deputy
Executive Officer Lynn Terry answered that the South Coast does not take any SIP credit
for the introduction of 15 ppm sulfur Diesel before 2006, so although there are obviously
risk reduction issues, there is no SIP issue. CARB Deputy Executive Officer Mike
Scheible added that staff has had reservations about the South Coast rule from the
beginning, and that “we don’t think it was implementable.” Gordon Shremp, with the
California Energy Commission (CEC), added that the CEC feels that bifurcating the state
fuel regulations would be problematic for supply, and that “it is unlikely that refiners will
comply 17 months early for a market they only partially supply.” Burke persisted, asking
if staff had asked refiners whether they would be willing to give up 60% of the California
Diesel market rather than comply 17 months early. Shremp noted that 35% of the Diesel
supply in the South Coast is imported, and that it would not be 60% of any one refiner’s
business. Witherspoon effectively ended the discussion by stating that rather than
refiners stepping up to meet the South Coast demand, “this would more likely be forced
into a variance situation.”
California Trucking Association (CTA) - Stephanie Williams began her presentation by
stating that a 2005 ultra-low sulfur Diesel rule in the South Coast, discussed at length just
before she began her testimony, would be funded on the backs of California truckers.
As noted in the introduction to this article, CTA has voiced strong objection to the Diesel
fuel amendments since they were first proposed in calendar year 2000. CTA would like
to see a uniform national Diesel fuel standard, which it believes will eliminate the price
differential between California Diesel, and Diesel fuel available in the rest of the country.
The main points made by Williams against adoption of the staff proposal are summarized
below.
C
CARB’s refusal to comply with the Public Records Act - According to Williams,
CTA has submitted numerous requests to CARB for what she referred to as the
“secret formulas” used by Diesel producers who utilize the equivalent
alternative formulation option. Williams said that it was unfair to withhold this
information, and that if it were released, “anyone could make it and the price
would come down.” In response, CARB staff attorney Kathleen Walsh said that
this information is considered a “trade secret” and is proprietary information
protected under state law. Mike Scheible added that what is available are the
average fuel properties, rather than the precise formulations “which have been
developed at considerable expense.”
C
CARB exceeded its authority by providing no avenue to repeal the aromatics
requirements upon adoption of the Clinton Administration’s super clean Diesel
standards. Williams said that if staff would agree to support CTA’s efforts to
repeal the 10% aromatics standard, CTA would be willing to support a barrel fee
increase that would be used to contribute sufficient moneys to the Carl Moyer
Fund to offset emissions increases resulting from an increased Diesel aromatic
content. In response, Witherspoon said a relaxation of the aromatics standard
would amount to a SIP relaxation, and that “we’re already short on our SIP
CVS News
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August 2003
commitment.” However, she did add that if the legislature approved such a
scheme, “we would have to consider it.”
C
Alternative fuel formulation is an underground regulation that impedes
interstate commerce. Williams repeated the above argument regarding the
unfairness of CARB’s refusal to release the precise formulations for all
alternative Diesel fuel formulations. She also said the price differentials now
seen between California and its border states will become an even bigger
problem once NAFTA is put into practice and Mexican trucks are allowed
unrestricted entry into the United States. Board member McKinnon said he
shared some of CTA’s concerns regarding the effects of NAFTA, and asked
whether Diesel fuel sold on the U.S./Mexico border was produced in the U.S. or
in Mexico (with associated non U.S. fuel standards). Dean Simeroth answered
that staff is currently researching this question. He acknowledged that some was
produced in Mexico, but that “they’re going to have a fuel that is probably
between ours and the federal.”
C
Price spikes are smoothed in CARB’s analysis, eliminating market volatility.
Williams said the reason CARB’s analysis shows that there is no significant
price increase associated with California Diesel is because CARB compares
quarterly averages, rather than weekly averages. And, CARB compares the
quarterly California averages to the quarterly averages for the other seven
western states in the PADD V region, which includes Alaska and Hawaii. This,
said Williams, masks the true volatility of the Diesel market by smoothing the
weekly price spikes, and by drawing unfair comparisons with captive fleet
markets (i.e., Alaska and Hawaii). She then presented a slide showing the most
current Oil Price Information Service (OPIS) weekly average report, which
shows the average Diesel prices for the major metropolitan areas in California
and the border states. This slide showed that there was a price difference of over
30 cents per gallon in the Las Vegas vs. Los Angeles markets, and similar
disparity between other California metro vs. out-of-state metro areas near
California’s borders.
Williams then explained how this price difference is affecting the population of
trucks registered in California. Since 1994, the number of California truck
registrations has declined by over 50,000 trucks, which represents over half the
total 1994 fleet. During that same period, interstate truck traffic based out of
state has also doubled—a phenomenon that Williams said could not be
explained by estimated fleet growth alone. According to Williams, there has
also been a significant decline in “intrastate” truck registrations (i.e., trucks
registered outside of California, but who pay a fee to operate in California for a
length of time) since 1994. In fact, she said, only 5.25% of all the big rig trucks
operating in California are currently registered in California. She then presented
a chart that estimated the loss in funds to the State Highway Account and the
Federal Trust Fund due to “truck flight.” Losses in heavy use taxes, state fuel
excise taxes, and weight fees add up to an annual loss to the state highway
account totaling $3,044,594,300, said Williams. Similar losses in vehicle excise
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August 2003
taxes and federal fuel excise taxes add up to a total of $1,150,308,300 in lost
federal trust funds. Staff did not specifically dispute all of the points made by
Williams, but indicated that the total number of trucks registering out of state as
a result of the CARB Diesel regulation was far less than Williams claimed.
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Emission benefits are overstated and do not incorporate international and
interstate increases in vehicle miles traveled and slower fleet turnover.
Williams said her members cannot buy new vehicles if they are paying
significantly more for fuel, and that this, in addition to the increase in vehicle
miles traveled by truckers driving over the borders to get cheaper fuel, is not
accounted for in staff’s estimates of various heavy-duty Diesel control programs.
In conclusion, Williams urged that adoption of the staff proposal be delayed until CTA’s
concerns can be adequately addressed. Following Williams’ presentation, Chairman
Lloyd said “I feel for you, Stephanie.” He added that “I’m not sure what happened”
(regarding CTA’s claim that CARB “double crossed” it to obtain the association’s
support in convincing EPA to adopt a 15 ppm sulfur standard). “I don’t think (it was)
anything malicious, but unfortunately we can’t rewrite that,” said Lloyd. He stated staff
had spoken to Margo Oge, Director of EPA’s Mobile Sources Division, regarding a
national fuel standard that would include a 10% aromatics standard, and that while Oge
was receptive, she “didn’t promise anything.” He urged CTA to join with staff in its
work on this issue.
Williams then asked again if staff would consider CTA’s proposal for a barrel fee
increase to fund Carl Moyer programs in exchange for removal of California’s aromatics
standard. “Would the Board be willing to consider an alternative that would actually
bring in more money to districts that have air pollution problems to clean up the air and
put California's trucking industry back on track in lieu of NAFTA?” asked Williams.
Lloyd said it was hard to refuse “when you put it that way” and deferred to Witherspoon
to explain why this was not possible. Witherspoon explained that the current Diesel
regulation is a crucial component in a number of air plans, and that legally staff cannot
remove anything from, or substitute anything for, a component in an air plan that has
already been approved. Williams persisted in her efforts to get a commitment of some
sort from the Board. “So, if we introduce the bill and it passes, we can come back here
and repeal the aromatic standard? It’s (the proposed barrel fee funding) a lot more
money,” said Williams. At Lloyd’s urging, Witherspoon said that if all the associated
attainment commitments were in place, and CTA obtained legislative approval, “then we
can talk about it, yes.”
Witherspoon expanded on the recent conversations between staff and EPA regarding
adopting the California Diesel standards nationwide. She said California Diesel is not as
beneficial to the rest of the country because low-sulfur Diesel fuel is not generally
required for use in off-road vehicles anywhere except California, and because the number
of EGR-equipped vehicles, which are less sensitive to aromatics, in the U.S. fleet are
increasing. Witherspoon noted, however, that the Mexican fleet, which is older and
therefore includes fewer EGR-equipped vehicles, would probably realize a large benefit
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August 2003
from California Diesel, “so it might look better to Mexico than it does to the federal
government.”
University of California - Wayne Miller is part of a panel of four University of California
experts asked to review the staff proposal;the other three are Drs. Sawyer, Lucas, and
Caretto. Miller said these peer review arrangements are made under the interagency
agreement between the University of California and its members. After complimenting
staff on its thorough report, Miller said the panel believes that 15 ppm sulfur Diesel is
essential to the enablement of new emissions control technology. Miller also said the
panel feels the proposal to add an additional compliance option for meeting the aromatics
standard “is well founded, as emissions benefits are maintained by allowing more
manufacturing flexibility.” In addition, he stated that staff’s current estimate for the
emission reduction associated with the staff proposal is reasonable, and that his report
would be completed the following week.
Board member Hugh Friedman and Chairman Lloyd then asked Miller if he supports the
staff’s proposed lubricity standards, which Miller eventually said that he did.
Western States Petroleum Association (WSPA) - Dave Smith is with BP, but was
representing WSPA at this hearing. According to Smith, WSPA generally supports the
proposed amendments, and it appreciates staff’s willingness to work with WSPA on
these issues. However, he said, WSPA still had three recommendations to present to the
Board:
1. WSPA objects to staff’s decision not to regulate Diesel blends that are over 50%
biodiesel, because it would allow non-certified fuel to be used in engines that
would otherwise use only CARB-certified Diesel. WSPA asked that the issue be
brought back to the Board in 6 to 12 months to give staff time to ensure that all
biodiesel used in California is regulated consistently with CARB Diesel, and that
there is no NOx increase associated with its use.
2. The last two WSPA recommendations are related to the proposed Designated
Equivalent Fuel Limits, or DELs, said Smith. The DELs are supposed to
provide additional flexibility to refiners and importers; however, Smith said,
WSPA feels that in contrast to other recent flexibility proposals by CARB (i.e.,
CaRFG3), the current staff report contains very few assurances that the increase
in flexibility will not result in increased emissions. According to Smith, WSPA
wants the parameters of the DELs to be based on real-world averages for each
parameter (it particularly objects to the 500 ppm nitrogen standard), which
would prevent “environmental backsliding” and provide real flexibility for
refiners.
3. Since real-world data regarding the new Diesel formulation do not yet exist,
Smith said WSPA would like staff to report back to the Board in one year
regarding the emissions impact, sales volumes, number of importers, and
number of refiners producing the new fuel—similar to what was done with
CaRFG3 regarding the impact of substituting ethanol for MTBE.
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August 2003
Following Smith’s prepared remarks, Witherspoon responded to WSPA’s first
recommendation by stating that biodiesel is currently so expensive that it is being used in
very limited quantities. Further, she said, CARB is holding a symposium on alternative
Diesel fuels (in Sacramento on August 19–20), which will help staff better understand the
properties of and the emissions impacts associated with biodiesel, and other alternative
fuels. Following the symposium, Witherspoon said, staff would report back to the Board
with a summary of its findings. Board member Friedman asked if this was acceptable to
WSPA, and Smith replied yes, but noted that biodiesel is reported to be a new and
growing fuel in California, which is why WSPA is addressing this issue now. Smith
urged the Board to direct staff to prepare a formal proposal in the future to address the
certification of these fuels. Under pressure from Chairman Lloyd, Witherspoon said staff
would return to the Board with recommendations, but not a full proposal, by the end of
the year. Smith said he was sure WSPA could develop a proposal by the end of the year,
which led Lloyd to comment that “any time WSPA comes forward to help us, with a
concern about NOx increases, (staff) is going to work with you.” Smith said he was glad
to hear that.
Regarding WSPA’s second and third recommendations, Witherspoon said staff did not
think delaying the DEL provision was a good idea, but that it was “judicious” to do as
WSPA requested and prepare a report on the status of the new fuel program after it has
been implemented. “You’ll take two out of three?” Lloyd asked Smith. Smith said yes,
and that WSPA would continue working with staff to resolve its issues with the
parameter limits specified in the DELs.
Manufacturers of Emission Controls Association (MECA) - Deputy Director Joe Kubsh
said MECA supports the proposal, which it feels is essential to ensuring the success of
low-emission Diesel technologies.
California Independent Oil Marketers Association (CIOMA) - Jay McKeeman began by
complimenting Stephanie Williams for “putting the Board on the horns of a dilemma,”
which he said is the “tradeoff of having ever increasing and ever different fuel
specifications versus the economic impact that brings to the state.” McKeeman said that
the California Diesel specifications make it the most expensive Diesel fuel in the
continental U.S., and that translates into lost jobs, which, to his mind, is a form of
environmental injustice.
McKeeman said, however, that CIOMA supports the proposal because of the problems in
the South Coast related to the bifurcated gasoline supply (MTBE vs. ethanol). CIOMA
supports the swift adoption of a single, statewide Diesel standard. McKeeman said he
also supports the enforcement of the lubricity standard at the racks, rather than earlier in
the distribution system, so that imports would not be discouraged. McKeeman then
thanked staff for the 15-day notice change that allowed a slightly longer transition period
for small-volume Diesel marketers.
American Lung Association (ALA) - Bonnie Holmes-Gen said ALA supports this
rulemaking, but that it would like to see the new Diesel regulations required for marine
and rail applications as well. Board member Doreen D’Adamo asked staff to respond to
CVS News
Page 13
August 2003
Holmes-Gen’s comment regarding marine and rail applicability. Witherspoon said that
because CARB Diesel is required for both on-and off-road applications, marine and rail
engines that purchase fuel in California would be getting CARB Diesel, unless they are
looking for bunker fuel, which is heavier.* She said EPA is currently in the midst of
developing a Diesel fuel standard for locomotive and marine vessels, and that it is
considering imposing low-sulfur Diesel for off-road applications in 2010. D’Adamo
asked if staff could report back to the Board after EPA’s rule has been adopted, which
Witherspoon said would likely happen in April 2004.
Alliance of Automobile Manufacturers (the Alliance) - Automotive Fuels Director Ellen
Shapiro said the Alliance wanted to increase light-duty Diesel sales in California, and
that lower sulfur fuel is the key to meeting this challenge. Shapiro said the Alliance
supports the regulation, particularly the inclusion of off-road vehicles, because “it will
eliminate the risk of misfueling.” She also said the Alliance applauds the inclusion of a
lubricity standard in staff’s proposal, which she said is very important to the new
common-rail systems, although she said the Alliance is concerned that the 520 HFRR
standard is not protective enough. Shapiro said the Alliance favors a 460 HFRR
standard, and the World Wide Fuel Charter would like to see a 400 HFRR standard.
Shapiro said it was important for the industry to know what future limits could be
expected as soon as possible, because “production plans for 2006 and 2007 model year
vehicles are being set now.”
Coalition for Clean Air - Tim Carmichael, also representing the National Resources
Defense Council (NRDC), said that in general he supports the staff proposal, but that his
organizations would also like to see marine and locomotive applications included.
Excluding these sources is unfair to truckers, said Carmichael.
Carmichael also said he supports statewide implementation of the revised Diesel rule by
2005, that “the suggestion that a variance could cripple the program is laughable,” and
that “slowing down to let EPA catch up” is not sound public health policy. He also said
that CARB should feel guilty for not doing more when it has had the opportunity. In
response Witherspoon said that there is enough 15 ppm fuel to service the vehicles that
have already been retrofit, but she reiterated staff’s contention that there is not enough
time to transition the entire state to 15 ppm sulfur fuel by 2005.
National Biodiesel Board - Graham Noyes said his organization is working with CARB
and Southwest Research Institute on a B20 blend (i.e., 20% biodiesel) that is “NOx
neutral.” And he questioned why staff would limit the definition of Diesel to blends of
less than 50% biodiesel. Dean Simeroth responded, stating that this was done primarily
for enforcement purposes, and to be consistent with EPA. He also said staff intends to
propose a standard for the over 50% blends of biodiesel. Noyes responded that he looked
forward to working with staff on the standard, and noted there is already an ASTM
standard (D6751-02) for biodiesel blending stock (i.e., B100).
*
Despite Witherspoon’s statements, the fact is that the use of CARB Diesel in locomotives and marine
vessels of all types is not required. Therefore, even in California, they may use Diesel fuels that meet
neither the CARB regulations nor the U.S. EPA regulations for on-road Diesel fuels.
Page 14
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August 2003
Union of Concerned Scientists - The final speaker, Patricia Monihan, stated that she was
also representing the NRDC. She said that her groups wanted to register their very strong
support for the staff proposal, particularly the off-road vehicle applicability. Monihan
also urged staff to let the South Coast require 15 ppm sulfur Diesel in 2005, and to
include rail and marine in the package.
In response, Witherspoon repeated her argument that staff is waiting to see how EPA will
act regarding a marine and rail regulation, and noted that “we do already have a
memorandum of understanding with rail operations in Southern California that (says)
whatever CARB Diesel is, they will be using it—so as we go to low sulfur, so will they.”
Board member D’Adamo asked how quickly staff could develop a fuel standard for
marine and rail, to which Witherspoon replied one year. Board member Hugh Friedman
said he was not comfortable simply waiting to see what EPA would do, and said he
supported the idea of having staff report back on the feasibility of adopting a standard for
marine and rail. Witherspoon said the idea had been investigated by the previous
Executive Officer, Mike Kenny, and it was found that there were enormous complexities
involved, in part because both trains and marine vessels have the ability to fuel out of
state and carry fuel long distances. Deputy Executive Officer Mike Scheible noted that
“we’re not saying it can't be done, just that it is a sizable difficult undertaking. And if
we’re trying to do it quickly, it may not work at all.”
A discussion then ensued regarding whether a marine component could be added to the
existing rail Memorandum of Understanding (MOU) in the South Coast Air Basin.
Ultimately, Witherspoon said there were problems with both rail and marine vessels
refueling just before entering California and eliminating the purchase of California
Diesel, and for this reason, staff feels it would be far more effective to wait for the
adoption of a national standard. At this point, Monihan noted that this was exactly the
argument CTA was making, so if CARB was prepared to impose this set of
circumstances on the trucking industry, it was unfair not to impose it also on the rail and
marine industries. She said she recognized that this was a complex issue, but that
moving forward would put pressure on EPA “to do the right thing and to require 15 ppm
for these sources as well.” Lloyd then asked staff to come back to the next Board
meeting “with some options.” Witherspoon said the September agenda was already full,
and asked if October was soon enough. Lloyd indicated he was not willing to defer the
date and said that “we may have to clear up the agenda.” The discussion ended without a
firm commitment from staff regarding a date for its report to the Board on what it would
take to develop a fuel standard for rail and marine applications.
Board member McKinnon then began a discussion on his concern for the effects this
proposal would have on California workers, and indicated he was not willing to support
it. Chairman Lloyd said he felt the Board had to move ahead, even though there were
some concerns. Board member Ron Roberts said he felt the most compelling testimony
was from Stephanie Williams, and that he is very concerned about the loss in truck
registrations in California. He said that he had to leave before the vote was to be taken,
but indicated that he would not support the proposal. Chairman Lloyd also
complimented Williams on her presentation, as did Board member Burke, who said he
did not feel that staff was “respectful enough of Stephanie’s numbers vs. their numbers.”
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August 2003
Burke indicated that he was going to vote in favor of the proposal, but that he had
concerns about marine, rail, and truck issues. This is “definitely not a perfect solution,”
said Burke.
Following Board member McKinnon’s disclosure that he had one brief ex parte
communication with Ed Manning of Conoco, the Board members present voted to adopt
the proposal, with the exception of McKinnon, who abstained.
Analysis
As expected, this hearing was contentious given CTA’s objections to the staff proposal.
The adoption of the staff proposal was virtually assured prior to the hearing, even with
CTA’s constant and vocal objections. The discussion of the possible development of
California Diesel fuel specifications for rail and marine applications was interesting for
several reasons, notably the one presented by Patricia Monihan—that staff is using
CTA’s objections to the California Diesel standard as one of its chief reasons for not
developing a California Diesel fuel specification for rail and marine applications. In the
upcoming discussions on this subject, which will possibly take place at either the
September or October Board meeting, we expect the environmental community to exploit
this apparent disconnect in CARB’s philosophy in support of the development of a
California Diesel fuel specification for rail and marine applications. At least with respect
to locomotives, however, CARB staff is also correct in that—given their ability to travel
long distances and the higher price of California fuel—it is unlikely that a California
Diesel fuel standard would result in the use of CARB Diesel in that application. Marine
vessels may be another issue, however, as one would expect that many of the vessels that
purchase Diesel in California are likely to be tied to a California port and would end up
operating on CARB Diesel if a standard were put into place. CARB could clearly adopt
such a regulation and claim it is part of measure Marine-2 in the current draft of the
California State Implementation Plan for Ozone.
CARB Adopts Amendment Applying Riding Season
Restrictions to Off-Road Motorcycles and ATVs
Beginning with the 2003 Model Year
At its July 24, 2003 hearing, the California Air Resources Board (CARB) unanimously
voted to adopt an amendment to the Off-Highway Recreational Vehicles and Engines
regulations that changed the effective date of the regulation for motorcycles and allterrain vehicles (ATVs) from vehicles produced on or after January 1, 1997, to vehicles
of the 2003 and later model years. This amendment effectively “grandfathers” all nonemissions-compliant 2002 and earlier motorcycles and ATVs (primarily those with twocycle engines) to “green tag” license status, thus allowing all 2002 and older motorcycles
and ATVs unrestricted riding seasons in the future.
Page 16
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August 2003
Background
In 1994, CARB approved regulations, directed primarily at motorcycles and ATVs, to
control emissions from off-highway recreational vehicles (OHRVs). These regulations
were to apply to all OHRVs manufactured after January 1, 1997. Although the
regulations allowed the sale of non-certified, “competition” motorcycles, those
regulations effectively limited the use of competition motorcycles to closed-course
events by allowing only certified vehicles to obtain the necessary identification plate (i.e.,
Green Sticker) for off-highway vehicle (OHV) recreational use. Recreational riders
proved unwilling to purchase competition motorcycles, which could not legally be used
for off-highway recreational riding. This, coupled with the lack of certified product
available to the recreational rider, significantly reduced new off-road motorcycle sales in
the state and became an economic hardship for dealers.
In December 1998, in a rare retreat from an adopted regulation (albeit under the threat of
potential legislation that would kill the agency’s program*), CARB, working with the
state Department of Motor Vehicles (DMV), the state Department of Parks and
Recreation (DPR), the federal Bureau of Land Management (BLM), the U.S. Forest
Service (USFS), and a number of industry associations and manufacturers, adopted
changes** to the 1994 regulations that would allow recreational use of non-certified offhighway motorcycles and recreational vehicles in areas and during seasons in which their
impact on ozone nonattainment would be minimal. (No changes to the emission
standards were adopted, however.)
Under the amended regulation, there was to be a two-tier registration procedure in which
certified vehicles would continue to receive an OHV Green Sticker from the DMV,
allowing the rider unrestricted, year-round usage. Non-certified vehicles would receive
an OHV Red Sticker, designating them as “limited-use” vehicles. Red Sticker vehicles
could be used for noncompetitive recreational riding in areas and during periods of the
year when violations of air quality standards were unlikely to occur. Enforcement of the
use requirements was to continue to be the responsibility of OHV area land managers,
which were already enforcing the Green Sticker requirement (DPR, BLM, and USFS).
An analysis of CARB’s changes appearing in the January 1999 issue of CVS News
correctly predicted that “enforcement of the green/red sticker requirements will be spotty
at best and the overall result will be that non-complying motorcycles are used throughout
the year in all areas of the state—just as they were prior to the implementation of the
CARB regulations.” Aiding the ultimate accuracy of this prediction was the California
DMV, which has responsibility for issuing the Green or Red license tags. Inconsistency
in the registration procedures used by DMV between 1999 and early 2002 resulted in
*
The California Motorcycle Dealers Association sponsored SB 1726 (Johannessen), containing a provision
to prohibit CARB from adopting regulations for two-stroke off-road motorcycles and all-terrain vehicles.
Although the bill failed to pass in the Senate Transportation Committee, it likely helped push CARB staff
forward in proposing the revisions adopted in 1998.
**
This amendment was described in detail in the November 1998 and January 1999 issues of CVS News.
CVS News
Page 17
August 2003
what CARB staff is referring to as “public confusion” due to numerous instances of nonemissions-compliant OHVs receiving Green tags and emissions-compliant OHVs
receiving Red tags. As a result, it was impossible to equitably enforce the modified
regulations as written, and all OHVs have enjoyed uninterrupted year-round usage.
Staff Proposal
The staff proposal, presented by James Ryden, Chief of CARB’s Enforcement Division,
was made well after 5:00 pm on the day of the meeting. As a result, Ryden said he
would keep his presentation brief and not review all the background issues pertaining to
the proposed amendment. He referred the Board to the written staff report and briefly
stated that the DMV-related registration inconsistencies (that had given rise to the
inability to enforce the 1998 regulations) had been resolved, and an equitable
enforcement solution was being proposed by staff. Ryden stated that the proposed
amendment would “bring the regulations in line with reality.”
The proposed amendment stated that seasonal area restrictions would apply only to
“Model year 2003 and later” off highway motorcycles and ATVs registered with a Red
Sticker license tag. Ryder stated that DMV has demonstrated that its new automated
(VIN-based) registration system is now fully capable of handling the two tiers of
registration on 2003 and later motorcycles and ATVs. As part of the implementation of
this amendment, Ryder also stated that DMV would, upon the next renewal date, provide
Green sticker license tags to all 2002 and earlier OHVs regardless of emissions
compliance status.
Discussion
Due to the lateness of the hour, and the absence of comments from Board members,
CARB Chairman Alan Lloyd called for testimony from the public. The only person who
spoke was John Paliwoda, Chairman of the California Motorcycle Dealers Association.
He stated that while he supported the amendment in principle, his group felt that the
model year implementation date should be 2005, not 2003. His reason for suggesting this
change was that most 2003 models and some 2004 models have already been sold, and
the owners could be negatively impacted by such a change.
Lloyd asked for a staff response to this comment. Tom Cackette, CARB’s Deputy
Executive Officer, stated that the reasons for a delay in enforcement (insufficient
inventories of emissions-compliant OHVs and a registration process that produced
inconsistent applications of the license tags) no longer existed. According to Cackette,
DMV has been accurately registering OHVs since 2002. Thus, 2003 or newer OHVs
already possess the proper registration tag. He concluded his response by stating there
was no viable reason for any further delays in the enforcement of the riding season
restrictions on non-emissions-compliant vehicles.
Page 18
CVS News
August 2003
Analysis
The need for CARB to take this action raises a range of issues, not the least of which is
the impact of allowing six additional model years of noncompliant motorcycles and
ATVs to operate without restriction in areas of the state with air quality problems. It also
undoubtedly creates an emission reduction shortfall in the 1994 California Ozone
Attainment Plan that has probably not been identified in the current round of air quality
planning. Perhaps more importantly, the question also remains as to whether the state
and federal governmental agencies that manage these off-road recreational areas (the
DPR, BLM, and USFS) will secure adequate resources to achieve effective enforcement.
Finally, it should be noted that when CARB changed the 1994 emission reduction
regulations in 1998, it did so in part as an attempt to mitigate the negative economic
impact the regulations were having on motorcycle and ATV dealers. Had the DMV’s
inability to deal with the registration requirements of those regulations been fully
investigated prior to adoption, an unnecessarily long and painful period for many dealers
could have been avoided.
CARB and CEC Adopt Joint Agency Report on
California Petroleum Dependence Reduction
On July 23 and 24, in separate venues, both the California Energy Commission (CEC)
and the California Air Resources Board (CARB) voted to approve the goals and
recommendations contained in the report entitled “Reducing California’s Petroleum
Dependence.” As discussed below, the report was developed as a result of legislative
directives included in Assembly Bill (AB) 2076. The CEC and CARB conducted their
hearings at their respective Sacramento headquarters. Representatives from both
agencies, as well as a number of stakeholders, spoke on the draft staff report at a June 6
joint hearing, which was to have been the last opportunity for public comment. (Please
see the July 2003 issue of CVS News for details.) However, at the June 6 CEC hearing, it
was announced that publication of the final report would be delayed in order to allow
both agencies additional time to consider and respond to comments, an action that
delayed a vote for both agencies on the official adoption of the report by one month (i.e.,
to the July 23 and July 24 hearings).
There was a considerable amount of public comment on this report, particularly at the
CEC hearing on July 23. The majority of the comments were from stakeholders
interested in specific issues or in promoting products that they felt were not fairly
represented in the report. The general response from members of both boards was to
remind stakeholders that the report was not intended to exclude any technologies from
consideration, but rather to show that a reduction in petroleum consumption can be
achieved through a mix of technological options. Both agencies emphasized that they
will continue to investigate all of the different technologies that may help reduce
petroleum demand.
CVS News
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August 2003
Background
As we reported in the June and July issues of CVS News, the report on reducing
California’s petroleum dependence was prepared by CARB and CEC staff personnel and
consultants to fulfill the requirements of AB 2076, passed in 2000. This bill directed
CARB and CEC to develop and adopt recommendations for the Governor and
Legislature on a California strategy to reduce petroleum dependence. The statute
requires that the strategy include goals for reducing the rate of growth in demand for
petroleum fuels, and that it consider options such as increasing transportation energy
efficiency and using non-petroleum fuels, alternative-fuel vehicles, and hybrid electric
vehicles.
The staffs went further than simply finding a strategy for reducing the demand growth
rate, however. The report’s primary recommendation is that the state government adopt
the goal of reducing, by 2020, demand for gasoline and Diesel fuel used in on-road
vehicles to 15% below the 2003 demand level, and maintaining that demand level for as
long as possible. The means for achieving that goal presented in the report include a
large market penetration for Fischer-Tropsch (FT) Diesel fuel (produced from natural
gas), a 40 mpg corporate average fuel economy (CAFE) standard for light-duty vehicles,*
and the introduction of hydrogen fuel cell vehicles and the eventual ramp-up of their
market share to 20% by 2030.
July 23 CEC Hearing
Feasibility of a Strategic Fuel Reserve in California - The July 23 hearing was chaired by
CEC Chairman William Keese. Item 12 on the Commission’s agenda was consideration
of a CEC report entitled “Feasibility of a Strategic Fuel Reserve in California,” which
evaluated the development and operation of such a fuel reserve in order to protect
California consumers from short-term price increases caused by supply disruptions. This
report was also required by AB 2076. Leigh Stamets of the CEC reported that staff does
not recommend the development of a strategic fuel reserve in California, but does
recommend that (1) the Commission “should undertake a comprehensive evaluation of
California’s future petroleum product import needs” and (2) “the Governor and
Legislature should identify a state licensing authority for petroleum storage infrastructure
and related facilities.”
The only testimony on this item was heard from K.C. Bishop of ChevronTexaco
Corporation, who spoke on behalf of the Western States Petroleum Association (WSPA).
Bishop stated that WSPA agrees with the report’s findings that governmental
intervention could harm the marketplace. He said further that WSPA “applauds your
willingness to reach this conclusion independently.” According to Bishop, WSPA has
some questions about how staff’s recommended state licensing authority to regulate
petroleum storage would work, but that overall, WSPA considers the report very well
*
Currently, the CAFE standards are 27.5 mpg for passenger cars, and 20.7 mpg for light-trucks and SUVs.
Page 20
CVS News
August 2003
done. A brief discussion among the commissioners followed Bishop’s comments, after
which the report was unanimously approved.
Reducing California’s Petroleum Dependence - Item 13 on the CEC agenda was the
consideration of the more substantive report required by AB 2076, titled “Reducing
California’s Petroleum Dependence.” The item was presented to the commissioners by
Dan Fong, CEC’s lead technical staff for the report. Fong presented material that was
similar to that shown at the June 6 hearing, but placed an additional emphasis on the
“extensive public process” that staff* employed in developing the report.
Following an overview of the presentation, Fong reviewed staff’s recommendations and
methodology. As previously stated, the report recommends the following:
C
Adopting a statewide goal to reduce onroad gasoline and Diesel demand to 15%
of 2003 levels, by 2002;
C
Pushing for the establishment of new federal CAFE standards that would double
the current fuel economy of new cars and trucks; and
C
Establishing a goal to increase the use of non-petroleum fuels to 20% of total
on-road fuel consumption by 2020, and to 30% by 2030.** In 2020, this goal
equates to approximately 15% non-petroleum fuel in fuel blends (i.e., ethanol in
conventional gasoline and Fischer-Tropsch fuel in Diesel), plus 5% nonpetroleum fuel such as hydrogen used in hydrogen fuel cell vehicles. In 2030,
the 30% goal equates to approximately 13% in petroleum fuel blends and 17%
non-petroleum fuel.
Fong said staff believes these goals are appropriately flexible, but noted that if the federal
government fails to double the current CAFE standards, the first goal “would need to be
revisited.” Fong also emphasized that nonpetroleum replacement fuels that staff
specifically identified in the report should not be viewed as the only replacement fuels
that could be used to achieve the 20% and 30% reductions in petroleum demand targeted
for 2020 and 2030, respectively. Fong said that a mix of fuels would likely be needed,
and that “we are not necessarily picking winners . . . just identifying fuels that we think
would have a chance to be widely accepted in the marketplace.”
Edits to the report that were added as a result of comments received after the June 6
meeting include clarification that staff does not recommend that any new taxes or fees be
levied to fund the recommendations in the report. Footnotes were also added to clarify
cost issues related to Fischer-Tropsch Diesel fuel, and to simplify or clarify several
*
The use of the term “staff” in this article refers to the team of CEC and CARB staff members who were
involved in crafting this report.
**
The 30% goal in 2030 was added after the June 6 meeting, in response to comments from stakeholders.
CVS News
Page 21
August 2003
figures. In addition, a discussion on the use of ethanol, natural gas, and grid-connected
hybrid vehicles was added.
Fong then discussed the methodology staff used to develop its portfolio of recommended
technologies, which has been discussed in detail in previous CVS News articles on this
subject. In summary, Fong stated that staff recommended those strategies it felt were
practical, and that were determined to have a positive net societal benefit. Regarding the
goal of a reduced petroleum demand, Fong showed that improving the fuel efficiency of
new light-duty cars and trucks would have the greatest effect. Other options to reduce
fuel consumption by on-road vehicles included improvements in the fuel economy of
medium- and heavy-duty trucks, more fuel-efficient replacement tires (i.e., with lower
rolling resistance), improved vehicle maintenance, and increased governmental purchase
of fuel-efficient vehicles.
Regarding the goal of increased non-petroleum fuel use, staff evaluated the following
non-petroleum fuel options, nearly all of which were found to have met the “net positive
societal benefit” criteria noted above:
C
C
C
C
C
C
Natural gas used in gasoline and Diesel-like engines;
Ethanol blends (e.g., 10% with gasoline);
Liquified petroleum gas (LPG);
Non-petroleum derived Diesel fuels (i.e., Fischer-Tropsch and biodiesel);
Electric vehicles; and
Hydrogen fuel cell vehicles.
Based on this analysis, staff chose a final list of recommended options that could be
implemented in the near-, mid-, and long-term timeframes:
C
Near-Term Options (could be fully implemented by 2010)
-
C
Mid-Term Options (could be fully implemented in the 2010 to 2020 timeframe)
-
C
Double the fuel efficiency of current model light-duty vehicles to 40 mpg by
adopting new CAFE standards at the federal level.
Use natural gas-derived Fischer-Tropsch fuel as a 33% blending agent in
Diesel.
Long-Term Options (could be fully implemented in the 2020 to 2030 timeframe)
-
Page 22
Use more fuel efficient replacement tires and properly inflate tires.
Improve fuel economy in government fleets by purchasing more fuel
efficient vehicles.
Improve private vehicle maintenance to improve fuel economy.
Introduce hydrogen fuel cell light-duty vehicles in 2012, increasing to 10%
of new vehicle sales by 2020, and 20% by 2030.
CVS News
August 2003
Following Fong’s remarks, Eileen Tutt made a presentation on behalf of CARB Deputy
Executive Director Tom Cackette, reading his comments into the official record. Tutt
said CEC and CARB staff, as well as CEC Commissioners Boyd and Geesman and
CARB Chairman Lloyd, worked closely on this report for nearly three years, and that it is
based on sound technical analysis. From an environmental perspective, Tutt said, it is
imperative that California reduce its dependence on petroleum, in order to reduce the
associated criteria and toxic emissions associated with its use. Upstream (e.g., petroleum
refinery) emissions are of particular concern, due to the disproportionate effects they
have on nearby low-income and minority communities. Tutt also noted that a reduction
in petroleum usage is important in limiting climate change phenomena, which threaten
California’s air quality, agricultural industry, and abundant natural resources.
Following Tutt’s remarks, Commissioner Pernell asked staff whether any alternative
fuels were being specifically excluded from consideration. Fong replied that alternative
fuels are a dynamic field at the moment, and that staff is not ruling out any current
technologies, nor any technologies that may be developed in the future.
Western States Petroleum Association (WSPA) - K.C. Bishop returned to the podium to
speak on behalf of WSPA. Bishop said his organization feels that the findings in this
report are diametrically opposed to those in the Strategic Fuel Reserve (SFR) report
heard earlier. “The SFR report says that a government mandated approach will not work,
and this one says that is what we will do,” said Bishop. He continued, stating that
California refineries are the cleanest in the world and that their emissions will continue to
decline as technology develops. Bishop also said WSPA does not feel that staff has done
a complete economic analysis, because it did not examine the benefit to consumers that
results from “the convenience of being able to move around, wherever and whenever
they want to.” Bishop said WSPA recommended delaying the approval of this report,
and allowing the market to determine the most effective nonpetroleum technologies.
In reply to Bishop, Commissioner Keese proffered what would become a familiar
argument by the end of the hearing—that the Integrated Energy Policy Report (IEPR)*
(of which Keese apparently considers the Petroleum Dependence report to be a
component) is a “living document” that will provide a forum for stakeholders to discuss
future concerns regarding the recommendations in the report. AB 2076 requires us to
provide this report to the legislature, said Keese, and the forum for discussing its contents
now moves to the legislature. In conclusion, Keese said he looked forward to industry’s
recommendations for “other ways to reduce petroleum dependence.”
At this point, Commissioner Pernell added that “I’m not sure we should sit back and see
which way the market is going” considering that “the electricity market didn’t react very
well to that strategy.” He then asked Bishop whether he agreed that California should
*
On its website, the CEC notes that “The Energy Commission is preparing an integrated energy policy
report and recommendations on the most current and pressing energy trends and issues of concern to
California. Senate Bill 1389 (Bowen and Sher) requires that the Energy Commission adopt and transmit to
the Governor and Legislature a report of findings by November 2003.”
CVS News
Page 23
August 2003
become less dependent on foreign oil. Bishop said he does not believe “that any of us
think California really has the ability to change the defense of the Middle East, or what
OPEC does,” and noted that a number of WSPA members are active in developing LPG
and CNG. Bishop concluded his remarks by stating that WSPA feels the Commission
would best serve California by providing a diversity of energy resources.
California Natural Gas Vehicle Partnership - Chairman Norma Glover said her
organization is a consortium of 38 public and private partners that works to promote
acceptance and awareness of natural gas vehicles. She said the Partnership supports the
staff report recommendations, and would like to emphasize the importance of proceeding
toward its goals immediately, rather than relying on changes to the federal CAFE
standards.
California Natural Gas Vehicle Coalition - President Mike Eaves explained that his
organization is a trade group representing natural gas engine and vehicle manufacturers,
and fuel providers. He praised staff for a very comprehensive report, and said that while
he does not agree with all aspects of the report, he does support its overall goals and
recommendations.
South Coast Air Quality Management District (SCAQMD) - Executive Deputy Directory
Chung Liu said he recommends including language that will push the federal government
toward raising CAFE standards. Liu said including language stating the goals will be
reassessed if the federal government fails to do so, “shows a retreat before you have even
started.” He recommended dropping that language from the report. Liu also commented
that classifying CNG and LNG as mid-term, rather than short-term, strategies “does these
technologies an injustice.”
Stop Hidden Gas Taxes Coalition - Audrie Krause said she represents a coalition of
businesses, consumers, and taxpayers who support energy conservation but are concerned
that staff’s recommendations will result in increased gasoline taxes. Commissioner
Keese asked if she had read the language that had been added, stating that “we do not
recommend an increase in taxes or fees.” Krause said this did not adequately address her
group’s concerns, and that the recommended reductions in petroleum would lead to
higher taxes regardless of the additional language. Keese said that would happen “only if
the legislature ignores our recommendations not to raise taxes or fees.”
Center for Energy Efficiency and Renewable Technologies - V. John White said he
supports the recommendations in the report, but was struck by the comments regarding
price volatility. The clear lesson of the recent electrical crisis is that lower demand helps
stabilize prices, said White. He also said that California’s petroleum demand is putting
an unfair burden on the rest of the world, and that we should address this problem
aggressively. He noted that California has set aggressive standards in the past, which
have not always been met. “But,” continued White, “we would have made less progress
without those goals.”
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August 2003
The SAER Group, Strategic Analysis Experience Results - Ted Gibson said he was
retained by WSPA to comment on the report. First, he said, he did not think the report
adequately developed a rationale for a goal of a 15% reduction in petroleum use, but after
hearing the proceeding presentations and discussions he believes that goal must have
been established “mainly on environmental grounds.” He also said he was very
disappointed that the committee rejected price (i.e., fuel tax increases) as a mechanism to
decrease petroleum use—a strategy that he said would be the most efficient and cost
effective method of achieving the desired goals. At this point Commissioner Keese
asked Gibson if he was actually representing WSPA in this opinion. Gibson said he
represented WSPA “in a sense” but that while he had sent WSPA a copy of his
comments, he hadn’t asked if the association supports fuel tax increases as a way to
reduce petroleum demand. According to Gibson, higher prices would lead consumers to
demand more fuel efficient cars, which would be a more efficient way to address the
problem. He also pointed out the irony in the fact that California is currently seeking
relief from the ethanol requirement in reformulated gasoline, while at the same time
advocating its use in this report.
Following Gibson’s remarks, K.C. Bishop of WSPA clarified that while his organization
would never tell a noted economist like Ted Gibson what to say, his remarks were really
intended to illustrate that the hidden costs in imposing regulations like those
recommended in the report should be addressed.
National Biodiesel Board - Graham Noyes spoke on behalf of both the biodiesel industry
and World Energy, an alternative fuel supplier. He said that while his industry supports
the underlying effort, he took exception to the negative “net societal benefit” rating that
staff gave to biodiesel. In his lengthy testimony, he said he disagreed with the way staff
had interpreted the directives of AB 2076, and urged staff to revisit the assumptions that
led to the negative assessment of biodiesel. Keese reminded Noyes that this report would
become “a living document” and assured him that his concerns could be addressed later
in the process. CEC staff member Dan Fong reminded Noyes that fuels not specifically
mentioned in the report are not being excluded from the process.
Biodiesel Control Board - President Russell Teal made comments consistent with those
of Graham Noyes, adding that there is now a plant in Coachella, California producing
six million gallons of biodiesel per year, and that future expansion plans call for
production of 60 million gallons per year in California.
Green Car Institute - Board member Michael Coates said his organization is a nonprofit
research group working in the environmental automotive field. He said his review of the
report found that petroleum reduction in California is already underway, and that state
intervention may be premature because it is the state emission standards that are driving
the current trend in increased vehicle fuel efficiency. He said his conclusion is that “the
state can declare victory and move on.” In response, Commissioner Boyd said that there
had been a lot of “nudging” by the state to get the market to this point, and that while he
appreciated Coates’ optimism, he felt the state still had an important role to play in the
process.
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August 2003
Drive 55 Conservation Project - Tim Castleman said he objects to the report’s near total
omission of the role that fuel conservation associated with lower speed limits could play
in furthering the petroleum reduction goal. He also objected to the recommendation of
natural gas as a petroleum alternative, given the current nationwide shortage, and the
failure to include public transportation as a control measure. Following Castleman’s
comments, Dan Fong said staff did consider a return to the 55 mph speed limit as an
option, but that the associated reductions were not as great as Castleman claimed. Fong
said this, combined with comments from the California Highway Patrol that indicated
“complex issues” would have to be addressed if the speed limit were lowered to 55 mph,
led staff to exclude it from its list of recommendations.
Diesel Technology Forum - Pam Jones said her organization is pleased to see that clean
Diesel is shown in the report to have a positive net societal benefit, but that it also
believes light-duty Diesel vehicles, which were not included, could be part of the
solution. She claims the inherent 30% increased efficiency of the fuel would allow
Diesel to be a cost-effective solution. Jones went on to say that 40% of the vehicles in
Europe are Diesel-powered, and cited a report by the economic consulting firm M-Cubed
that claims a 25% penetration rate by Diesel-powered vehicles in California would result
in a fuel consumption savings of 530 million gallons per year.
Union of Concerned Scientists - Senior Analyst Patricia Monahan said her organization
strongly supports the goals of this report. She said there are ways the report could be
improved, and there are concerns about Fischer-Tropsch and biodiesel, but in general it is
a very positive step forward for California.
Dennis O’Leary, Physicist - Dr. O’Leary believes that our addiction to fossil fuels and
nuclear energy can be overcome with an “Apollo program” to develop clean energy.
Such a program would include technologies like low-energy nuclear reaction technology
(i.e., cold fusion), advanced hydrogen technologies, and zero point energy. Public
demonstrations of these technologies are not available yet, said O’Leary, but will be
soon, if additional research funding is made available.
Natural Resources Defense Council (NRDC) - Roland Hwang said he does not agree with
everything in the report, but that “overall it does a great job.” Hwang strongly
recommended adoption of the report, and said he believes that a 15% reduction in
petroleum demand means California can eliminate imported fuel by 2011.
International Truck and Engine Corporation - California Public Policy Program Director
Gretchen Knudsen said she believes that the role of light-duty Diesels has been
insufficiently addressed in this report, and noted that Diesel technology has made great
strides in recent years.
American Lung Association (ALA) - Bonnie Holmes-Gen said the ALA strongly
supports the adoption of this report and its recommendations, and that its goals are
essential to improving air quality and public health in California.
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August 2003
Department of Food and Agriculture - California Secretary William Lyons Jr. submitted
a letter that was read into the record by a CEC staff member. Lyons said he was
supportive of the overall report, but was concerned that the strategies outlined would not
be adequate to meet the 15% reduction. He also noted that the expanded use of
renewable fuels offers a viable near-term control measure, and should have been included
in the report.
Following the formal testimony, Commissioner Boyd spoke at some length, thanking the
CARB and CEC staff members who worked on this report, and noting that the “portfolio
approach” used in this report has become the accepted method of approaching supply
issues in all energy arenas in California. He also mentioned that the IPER (discussed
above) “affords an opportunity for almost continuous dialogue on energy issues,
including this one.” At the end of his remarks, Boyd motioned for a vote on the approval
of the report, which was subsequently approved unanimously.
July 24 CARB Hearing
Opening remarks at the CARB hearing on this item by Chairman Alan Lloyd and
Executive Officer Catherine Witherspoon were brief, and the staff presentation was
handled by Eileen Tutt of the Mobile Source Control Division. The staff presentation, as
well as a substantial portion of the testimony, was essentially a repeat of what was heard
at the CEC hearing the day before, and will therefore not be specifically reviewed here.
Comments that differ from, or expand upon, the July 23 discussions are included below.
Following Tutt’s presentation, Chairman Lloyd asked staff “how long are we giving
Congress to double the CAFE standards?” Dan Fong of the CEC replied that the
recommendation is to adopt the new standard in 2005, with a three-year phase-in, which
means it would be fully implemented by 2008.
Testimony repetitive of that heard at the CEC hearing was presented by the following
stakeholders:
C
Audrie Krause with the Stop Hidden Gas Taxes Coalition;
C
Gretchen Knudsen, California Public Policy Program Director for International
Truck and Engine Corporation;
C
Pam Jones, with the Diesel Fuel Technology Forum; and
C
Tim Castleman with the Drive 55 Conservation Project.
Testimony not heard on July 23 is summarized below.
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August 2003
National Biodiesel Board - Graham Noyes repeated the claim made at the CEC hearing
that biodiesel was improperly assigned an overall negative benefit rating by staff, and
that this finding contradicted EPA and “industry” findings, including those shown in a
comprehensive U.S. EPA report. Noyes claimed that biodiesel would provide excellent
benefits in the fight against global warming, and disputed staff’s finding that biodiesel
fuels resulted in increased criteria pollutants. He also said his organization objected to
the report’s emphasis on Fischer-Tropsch as a midterm option, and asked that biodiesel
be included in the report as a viable non-petroleum option. He noted that biodiesel has
been used successfully by the U.S. Marines at several California bases, and had been
instrumental in reducing fuel use by 20%.
Tom Cackette, Chief Deputy Executive Officer of CARB, responded by stating that
although it is not mentioned in the report, staff had evaluated biodiesel, and had found its
performance comparable to other natural gas fuels (from an emissions standpoint).
However, staff ultimately chose Fischer-Tropsch as its key mid-term recommendation
“because it performed much better than any of the others from a net societal cost benefit
standpoint.” Cackette then repeated the refrain heard so often the day before: this report
was not pointing to one specific “fuel of the future” but was attempting to identify the
three or four options that would be the most effective in reducing petroleum dependency.
And, he acknowledged, “other fuels may turn out to be the winners or may play a smaller
or larger (future) role compared to the ones we picked.”
California Motorcycle Dealers Association - Chairman John Paliwoda stated that the use
of motorcycles as an alternative solution was not mentioned in the report. He claimed
that since the average motorcycle achieves 70 miles per gallon, consideration should be
given to including their usage as a viable strategy.
Following this relatively brief round of testimony, the Board unanimously voted to
approve the Staff Summary Report on AB 2076.
Analysis
As we have stated before, in some ways the AB 2076 process represents just the latest
installment in politically correct government actions to promote alternative fuels. As also
mentioned previously, the first major effort by California to force the use of alternative
fuels came in the late 1980s and early 1990s when CARB and the CEC were promoting
the use of fuels such as M85 as a panacea for the state’s air quality problems. That effort
failed when it became clear that emissions from gasoline-powered vehicles could be
reduced to levels as low as or lower than those of alternatively fueled vehicles and that
the alternative fuels all faced severe economic or practicality problems. Now, the
rationale for California’s promotion of alternative fuels is that the state has become too
dependent on petroleum and that dependency could lead to serious economic
consequences in the future. In addition, the staffs of the CEC and CARB seem to believe
that reductions in petroleum use in California will somehow mitigate perceived adverse
impacts they associate with emissions of greenhouse gases.
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August 2003
Obviously, the AB 2076 report will be used by CARB as a justification for the adoption
of regulations to reduce greenhouse gases pursuant to AB 1493 (please see the April
2003 issue of CVS News for a summary of the events at CARB’s Symposium on Vehicle
Technologies to Reduce Greenhouse Gas Emissions). What remains to be seen is what,
if any, additional action the California Legislature will take in this area, and how a state
that faces serious financial difficulties will find the money required to subsidize what are
at present, and what appear to be for the foreseeable future, non-economical alternatives
to petroleum fuels.
Federal Appellate Court Overrules EPA Denial
of CARB Oxygenate Waiver Request
In a ruling issued on July 17, 2003, two judges on a three-judge panel of the U.S. Court
of Appeal for the Ninth Circuit in San Francisco determined that the U.S. Environmental
Protection Agency (EPA) “abused its discretion” in denying California’s request for a
waiver of federal Clean Air Act provisions requiring two percent oxygenate in gasoline
sold in ozone and particulate matter (PM) nonattainment areas in the state.
The litigation stems from action taken by Governor Davis early in 1999 to ban MTBE as
a gasoline additive in California due to concerns about water and soil contamination.
The MTBE ban opened the door for ethanol as a substitute for meeting the federal
oxygenate requirements. However, California determined that ethanol would adversely
affect its efforts to reduce ozone and PM levels and that reformulated gasoline (RFG3),
without a mandatory oxygen content, would better serve its air emission reduction
objectives. In April 1999, Davis formally requested EPA to waive the oxygenate
requirements.
On June 12, 2001, EPA Administrator Christine Todd Whitman denied California’s
waiver request. EPA agreed with California that granting the waiver would reduce NOx
emissions, but denied the waiver because of its determination that granting the waiver
would result in higher CO emissions and because the impact on VOC emissions was
“uncertain.” Because EPA regarded the adverse or uncertain impacts on CO and VOC
emissions as sufficient for denial, EPA concluded that it did not have to address
California’s claim that the waiver was also needed to prevent interference with its efforts
to achieve PM reductions. As allowed under the Clean Air Act, California appealed
directly to the Ninth Circuit.
Although the Court ended up ruling against EPA on one claim, it actually sustained
EPA’s decision on all other points. The Court agreed that EPA properly required
California to “clearly demonstrate” that a waiver was necessary, and that California did
not in fact clearly demonstrate that a waiver was necessary. In support of the latter
finding, the Court reviewed and accepted EPA’s scientific findings, and rejected
California’s evidence, on issues relating to modeling, commingling of fuels, and the
effect of “RVP boost.” In accepting EPA’s findings, the Court emphasized that they
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August 2003
were rational and supported by evidence, and that EPA’s expertise was entitled to
considerable deference. The court also ruled that EPA did not commit error by refusing
to conduct a formal rulemaking and not accepting California’s request for an
“exemption” from the oxygen requirement, and that California had legal standing to file
its appeal. All three judges agreed on these points.
The basis for the reversal, and for dissent by one judge, was EPA’s refusal to evaluate the
effect that an oxygen waiver would have on California’s efforts to comply with federal
PM standards. Two judges agreed that this was reversible error, while the dissenting
judge took the view that EPA did not commit error in refusing to consider PM-related
issues. Thus, by a 2-1 vote California’s waiver request was sent back to EPA for
reconsideration on the narrow question of whether California is entitled to a waiver in
order to reduce PM emissions.
Analysis
While California technically “won” its appeal and its waiver request is going back to
EPA, it was a slim victory. To satisfy the Court of Appeals ruling, EPA has only to
address the PM issue. Once that is done, its decision will be entitled to great deference
and will not likely be overturned. Of course, we cannot predict how EPA will decide the
PM issue, but we believe it is likely that a waiver will be denied on that basis. As
always, the issue of using ethanol in gasoline has to be viewed in the light of farm-state
politics, and with a presidential election approaching in 2004, we don’t envision the Bush
administration taking any action that would reduce demand for ethanol as a fuel additive.
“15-Day Notice” of Proposed
Final Revisions to ZEV Regulations
In a notice published on the California Air Resources Board’s (CARB’s) website* on
July 29, 2003, and signed by Robert H. Cross, Chief of the Mobile Source Control
Division, CARB staff announced its proposed final changes to the agency’s ZeroEmission Vehicle (ZEV) regulations (13 CCR sec. 1962, and other related sections). The
final day for public comment was set for August 25 to allow at least 15 days from the
actual mail-out date set for August 8, 2003.
The proposed regulatory text referenced in the notice includes changes to the ZEV
regulations approved by the Board at a public hearing conducted on March 27–28 and
April 24, 2003, consisting of revisions recommended in the original staff report released
on January 10, 2003; revisions in a supplemental staff report issued on March 5, 2003
(the so-called “alternative compliance” path based on fuel cell vehicles [FCVs]); and
*
http://www.arb.ca.gov/regact/zev2003/15day.htm
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August 2003
revisions directed by the Board at the public hearing. Please refer to the February,
March, April, and May editions of CVS News for reports on the staff proposals and the
public hearing. The 15-day notice also incorporates some revisions developed by staff
subsequent to the Board hearing. These revisions are highlighted separately below and
are marked in the revised regulatory text with a “post-hearing modification” notation.
The principal features of the proposed final ZEV regulations that resulted from the staff
proposals and the public hearing (as listed in Attachment D to the Board resolution) are
listed below.
C
Postpone the effective date of the regulations two model years (MYs), to begin
with the 2005 MY.
C
Exclude ZEVs produced to meet the regulations from the California sales base
that determines the number of ZEVs to be produced.
C
Define “primary requirements” for large-volume manufacturers (LVMs) as a
fraction of the overall 10% ZEV requirement, to consist of 20% ZEVs, 20%
Advanced Technology Partial Zero Emission Vehicles (AT PZEVs), and 60%
PZEVs, with the number of PZEVs not to exceed 6% of the manufacturer’s
California sales base as the ZEV requirement ramps up from 10% to 16% in
future years.
C
Establish new elective “alternative requirements” for LVMs allowing them to
market or obtain credits from “Type III” ZEVs over the 2005–2008 MYs
sufficient to achieve a cumulative percentage ZEV requirement of 1.09% of their
California sales base over the period 1997–2001; Type III ZEVs are FCVs with
a range of 100 miles or more and fast refueling. This requirement is intended to
require all LVMs together to produce about 250 FCVs by the end of the 2008
MY (or submit equivalent credits). As directed by the Board after its public
hearing, a provision has been included to allow one-half of the 1.09%
requirement to be met with non-fuel cell “Type I” or “Type II” battery-powered
ZEVs, which will count for 1/20 and 1/10 of a Type III ZEV, respectively.
C
Add new provisions for ramping up the number of FCVs to be produced (or
equivalent credits to be submitted) under the alternative approach in the 2009
and later MYs, with the targets being 2,500 more for the period 2009–2011,
25,000 more for 2012–2014, and 50,000 more for 2015–2017. The alternative
approach “sunsets” after the 2017 MY. There are provisions addressing how a
LVM must elect either the primary or alternative requirements for each MY,
how to switch between the two approaches, and what happens in the event of
noncompliance (if a LVM elects the alternative requirements and fails to meet
them, then the primary requirements become the basis for any noncompliance).
C
Allow excess PZEV credits for 2003–2004 MY vehicles to be counted as AT
PZEV credits in the 2005–2006 MYs.
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August 2003
Page 32
C
Shorten the warranty period for a PZEV traction power storage device (battery,
ultracapacitor, etc.) from 15 to 10 years.
C
Shorten the range requirements and increase the ZEV credits for PZEVs with
zero-VMT capabilities (i.e., for plug-in/grid-connect hybrid vehicles). Clarify
that PZEVs eligible for advanced componentry credits cannot also earn zeroVMT credits.
C
Delete provisions defining PZEVs as eligible for advanced componentry credits
in terms of their battery power capabilities. This was done to accommodate a
court judgment obtained by manufacturers last year finding that such
requirements are an illegal fuel economy requirement, preempted by federal fuel
economy laws.
C
A specific “severability” clause is added to the PZEV allowance portion of the
regulation, so that the remainder of the regulation is not invalidated if the new
provisions are also found to be illegal.
C
Delete the CO reduction method, the alternative efficiency method, and the
alternative percent peak power method for determining additional PZEV and AT
PZEV allowances. This too is done to eliminate any illegal fuel-economyrelated provisions. Delete the AT PZEV and ZEV high efficiency multipliers,
for the same reason.
C
Cap the maximum value of any allowances for 2012 and later MY AT PZEVs,
when added to its baseline value, at 3.0; and, for any MY, provide that the
maximum allowances for an AT PZEV cannot exceed the credits earned by a
Type III ZEV of the same MY.
C
Raise the “introduction phase-in multiplier” for 2008–2011 MY AT PZEVs with
zero-VMT capability, to encourage plug-in/grid connect hybrids.
C
Confirm that any ZEV multiplier credits earned on the basis of fuel economy
criteria under the prior 1999 version of the regulations can be retained, despite
the litigation declaring those criteria illegal.
C
Continue the ZEV credit multiplier for “early phase-in” 2001–2002 MY ZEVs,
but implement a requirement that such vehicles be “placed in service” by
September 15, 2003; delete early phase-in multipliers for 2003–2005 MY ZEVs
and the ZEV discount multiplier for neighborhood electric vehicles (NEVs).
C
Limit the ZEV “extended range” multiplier (including fast refueling) to the
2001–2002 MYs.
C
Define five new ZEV categories, ranging from NEVs to Type III ZEVs, and
assign ZEV credits based on category and MY. Type III ZEVs (FCVs) earn 40
CVS News
August 2003
C
credits thru the 2008 MY, four in MYs 2009–2011, and three for the 2012 and
later MYs. Add a new 1.5 multiplier for 2003–2011 MY Type I and Type II
ZEVs sold to motorists or leased for three years with an option to re-lease.
Implement an “extended service” multiplier for 2001–2004 MY ZEVs (other
than NEVs) with a zero-VMT range of more than 10 miles, for each year they
remain registered after the first three years of service, subject to a “sunset” after
2011. This is to prevent the extended battery warranty requirement from
becoming an impediment to placement of battery-powered ZEVs.
C
Limit the use of NEV credits that can be used to meet ZEV and AT PZEV
category requirements to specified fractions in 2006 and in 2007 and later.
C
Confirm that ZEV credits are transferable among manufacturers and other third
parties.
C
Make conforming changes to applicable definitions in sec. 1962 and in 13 CCR
sec. 1900(b).
We have identified the following revisions as staff-originated revisions, included as a
result of off-the-record decisions made by staff after the close of public hearing. As
discussed below, the CARB staff has limited authority to make post-hoc revisions
without going back to the Board for approval.
C
Minor, technical edits in several places to assure consistency with the basic
approach of re-starting the ZEV mandate in the 2005 MY.
C
Editorial and organizational changes to the alternative requirements and related
sections.
C
Deletion of a change listed in Attachment D to the Board resolution to allow
credits earned by extended in-use Type I and Type II ZEVs in 2003 and later at a
credit ratio of 33 to 1 towards satisfaction of one-half of the minimum floor
requirement that could be met with Type I and Type II ZEVs. The staff
commentary says the change was never proposed by staff, and that deletion is
consistent with the Board’s intent to encourage battery vehicles because other
provisions in the revisions provide sufficient additional incentives for battery
ZEVs.
C
Carry-over of excess ZEV credits is allowed from one period to another under
the alternative requirements, provided the credit values are based on the MY in
which they are used.
C
Change the definitions of intermediate- and small-volume manufacturers such
that vehicles made by one manufacturer but marketed under the nameplate of
another manufacturer count toward the marketing manufacturer’s ZEV baseline.
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August 2003
C
Define five new categories of PZEVs (Types A thru E) eligible for additional
PZEV or AT PZEV allowances, and state what the allowances will be (ranging
from 0.1 to 0.35, depending on the category and model year). In making these
changes the staff states that they are intended to give credits to “high
voltage/high power” hybrid electric vehicles (HEVs) (dubbed Type B HEVs)
and to increase allowances for a subset of low voltage HEVs with increased
power characteristics (dubbed Type C HEVs). The staff specifically asks for
comment on these changes (see sec. 1962(c)(4)(B)(1) thru (6)).
C
Cap the combined AT PZEV allowance in a given MY (including the baseline
PZEV allowance) such that it may not exceed the ZEV credits for a Type III
ZEV placed in service in the same model year. The stated rationale is that
technologies with direct emissions should not earn greater credit than the highest
scoring ZEV.
C
Through the 2011 MY, allow FCVs placed in service in other states that have
adopted the California ZEV program under sec. 177 of the federal Clean Air Act
to earn ZEV credits as if they were sold in California and, vice versa, allow
California-placed FCVs to earn credits in such other states. Although this
provision was in the material considered by the Board, the staff has made
changes to assure that credit recognition works in both directions, i.e., in
Sec. 177 states and also in California.
Analysis
Once again, CARB staff has engaged in the practice, of dubious legality, of adding
regulatory changes not addressed in the Board’s public hearing. Perhaps the most
important of these post-hearing changes is the revised table, and associated text, setting
up the five new HEV categories and stating what allowances they qualify for.
As we have stated previously, this set of revisions to the ZEV regulations signals the end
of the battery electric vehicle technology approach that was the basis for the ZEV
mandate since 1990. The Board made some concessions to continue incentives for
battery ZEVs, but they are essentially symbolic. Through the “alternative requirements,”
the Board has chosen a new technology “winner”—FCVs. In so doing it has ignored the
high costs of fuel cells, the even higher cost of the hydrogen refueling infrastructure
needed to support FCVs, the minuscule air quality benefits compared to low-emission
conventional vehicles, and the poor cost-effectiveness of the entire scheme. The ZEV
regulations remain a recipe for disaster. It will be interesting to see what transpires as the
2009 MY approaches, which is when the ramp-up in the ZEV percentage begins, the
number of required FCVs starts to increase, and prior credits and credit allowances and
multipliers are all but gone.
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August 2003
CARB Holds Small Engine Workshop
On July 2, the staff of the California Air Resources Board (CARB) held the latest in a
series of workshops related to the development of new exhaust and evaporative emission
standards for spark-ignited small-off road engines (25 horsepower or less) at the offices
of the Monitoring and Laboratory Division in Sacramento. Previous workshops were
held in November 2000 as well as in April and November 2002 (See the December 2000,
May 2002, and December 2002 issues of CVS News) and draft regulations were released
earlier this year (see the May 2003 issue of CVS News). As is discussed below, the
workshop was a relatively contentious affair and there are obviously serious
disagreements between CARB staff and industry on the feasibility and cost of the staff’s
proposal, with a number of the feasibility issues being related to product safety.
Despite CARB staff’s previous indications that it would consider the input provided by
industry at the workshop when finalizing its regulatory proposal, the proposal released on
August 8 differs only in minor ways from that discussed at the workshop. As a result, it
appears that most of the major issues remain unresolved and that the Board hearing on
the proposal, currently scheduled to be held at the South Coast Air Quality Management
District offices in Diamond Bar on September 24–25, may be contentious. It should also
be noted that the CARB Board will be considering approval of the latest South Coast Air
Quality Plan at the same hearing and that the proposed small engine regulations are
included as one of the measures that CARB is committing itself to adopt.
Staff Proposal, Workshop Presentations, and Discussion
This section summarizes the proceedings of the July 2 workshop and the staff’s August 8
regulatory proposal. Exhaust emissions standards are discussed first, followed by the
evaporative emission standards and other issues.
The staff of the Monitoring and Laboratory Division (MLD), which is responsible for the
evaporative emissions control portion of the proposed regulations, was represented at the
workshop by the Division’s Chief, Bill Loscutoff; Manjit Ahuja, Chief of the Stationary
Source Testing Branch; Pat Bennett, Manager of the Engineering Development and
Testing Section; and Jim Watson of Bennett’s staff. The Mobile Source Control Division
(MSCD), responsible for the exhaust emissions portion of the regulation, participated by
video conference due to travel limitations imposed by California’s budget crisis. MSCD
was represented by its Division Chief, Bob Cross; Mike Carter, Chief of the Emissions
Research and Regulatory Development Branch; Jackie Lourenco, Manager of the OffRoad Controls Section; and David Salardino of her staff. Also participating in the
workshop by video conference were Mark Carlock, Chief of the Mobile Source Analysis
Branch of the Planning and Technical Support Division (PTSD); Archana Agrawal,
Manager of the Off-Road Modeling and Assessment Section; and Walter Wong of
Agrawal’s staff. PTSD staff are responsible for estimating the emission inventory for the
engines and equipment that are the subject of the proposed regulation, as well as the
emission benefits associated with staff’s proposal. Finally, both CARB Chief Deputy
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August 2003
Executive Office Tom Cackette and CARB Chair Alan Lloyd were present for part of the
workshop.
CARB Exhaust Emissions Proposal - Following introductions, led by Pat Bennett, David
Salardino made the staff presentation on CARB’s exhaust emissions proposal. He began
by outlining his presentation and pointing out that small engines were responsible for 165
tons per day of exhaust HC and NOx emissions statewide in 2000 and, despite several
rounds of regulations by CARB and the U.S. EPA, that value would fall only to 97 tons
per day by 2020. Despite considerable discussion related to the small engine inventory
later in the workshop, these same values are presented in the staff report supporting the
regulatory proposal.
Having established, at least to staff’s satisfaction, the need for more stringent exhaust
emission standards, Salardino explained staff’s objectives with respect to the exhaust
emissions portion of the regulatory proposal. According to Salardino, the first objective
is to align CARB’s standards for handheld equipment engines (e.g., string trimmer and
chainsaw engines) with EPA regulations that take effect with the 2005 model year. He
added that another goal is to better align CARB and U.S. EPA test procedures for small
engines. The main purpose, however, is to adopt catalyst-forcing exhaust emission
standards for non-handheld engines (e.g., lawn mower engines) and to establish optional
“low-emission” standards.
Salardino then indicated that staff’s proposed exhaust HC+NOx standards for the 2006
model year for non-handheld engines are 8.0 g/kW-hr for engines greater than 80 but less
than 225 cubic centimeters (>80 < 225 cc) in displacement and 6.0 g/kW-hr for engines
of 225 cc or more in displacement (recognizing the 25 horsepower limit on the category).
The numerical values of the standards remain unchanged in the August 8 regulatory
proposal, but the proposed implementation date has been delayed until 2007 for engines
in the > 80 < 225 cc category and until 2008 for engines greater than 225 cc.
According to Salardino, the proposed standards were established by CARB staff based on
the assumption that a 50% reduction in exhaust HC+NOx emissions could be achieved
using catalysts. To support this assumption, CARB has contracted with Southwest
Research Institute (SwRI) to conduct an emissions testing program intended to
demonstrate the technical feasibility of achieving the proposed emission standards.
Salardino then presented a number of slides summarizing the emission results from the
SwRI test program, along with observed muffler surface and muffler out exhaust gas
temperatures. During this series of slides, which Salardino stated demonstrated that the
standards could be met without safety issues, he also pointed out that the project was not
intended to develop production catalyst and exhaust systems and that staff expected
manufacturers to do the additional work necessary to arrive at production systems.
Salardino presented the staff’s emission estimates of the 2010 statewide emission
benefits of the regulations, which were 9.0 tons per day of HC+NOx emissions from nonhandheld equipment and 3.5 tons per day from handheld equipment. He also said that
staff expected that the cost of complying with the proposed exhaust emission standards
for handheld equipment would be zero since CARB was simply aligning its standards
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August 2003
with those of the U.S. EPA.* With respect to non-handheld engines, Salardino stated that
staff expects the cost of compliance to range from $26–$32 per unit for engines in the
greater than > 80 < 225 cc range and between $45–$66 per unit for the larger engines.
Somewhat revised estimates of $16–$22 and $47–$74 dollars per unit for the two engine
size classes, respectively, were published in the August 8 staff report.
While no cost-effectiveness calculations regarding the proposed exhaust emission
standards were presented by Salardino at the workshop, the staff report contains
estimates for a limited number of equipment types. For engines in the >80 < 225 cc
range, cost effectiveness was evaluated for walk-behind lawn mowers and a portable
generator. For the mower, the cost-effectiveness of the exhaust standard was reported to
be between about $10,000–$14,000 per ton of HC and NOx emissions eliminated; for the
generator, the values were $580–$820 per ton of emissions eliminated. For the larger
engines, cost-effectiveness was evaluated for a riding lawn mower, where the values
ranged from about $11,000–$18,000 per ton of emissions eliminated, and commercial
turf equipment, where the values ranged from only $340–$520 per ton of emissions
eliminated. Despite the large variation in cost-effectiveness and the evaluation of only
two different types of equipment in each engine size category (out of at least dozens, if
not hundreds, of different types of equipment in this category), the staff report concludes
the proposed exhaust emission standards are cost-effective.
Salardino concluded his presentation by discussing additional aspects of the regulatory
proposal, including optional voluntary emissions standards (which CARB calls the “Blue
Sky Series”) that would be set at 50% of the new emissions standards and that could
presumably be used to produce engines eligible for use in mobile source emission
reduction credit programs.
Industry Response to the Proposed Exhaust Emission Standards - Following Salardino’s
presentation, there were a number of presentations made by representatives of Briggs and
Stratton, the Engine Manufacturers Association (EMA), and the Outdoor Power
Equipment Institute (OPEI). These presentations focused on issues related to the SwRI
test program and the use of catalysts on handheld and non-handheld engines.
First and foremost of the issues was the use of large (volumes were on the order of the
volume displaced by the engines) three-way catalysts with secondary air injection. The
industry speakers agreed that these systems could reduce emissions under the laboratory
conditions at SwRI, but pointed out that in assessing their feasibility for in-use engines,
CARB had completely ignored issues related to the practical production of such systems.
It was also asserted that due to problems with the location of temperature probes, the
temperature data collected by SwRI did not reflect the true peak temperatures being
experienced.
*
This is not the first time that CARB staff has highlighted the emission reductions associated with the
adoption of regulations that already apply in California due to federal action and then ignored the cost by
asserting that there are no costs associated with CARB’s action since compliance with federal standards is
already required.
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August 2003
With respect to practicality, several speakers pointed out that even when existing exhaust
systems had been used at SwRI, all of the sound muffling materials had been removed in
order to provide sufficient space for the catalyst. Given this, they claimed that exhaust
system sizes would have to be increased greatly to provide additional space for materials
needed for noise control, which in turn presented issues about placement of exhaust
systems and equipment redesign since in many cases there isn’t space for larger mufflers,
particularly given that many equipment producers do not make the engines that are
incorporated into their products. In other cases, it was pointed out that catalysts on the
SwRI test engines were placed much further away from the engine than could be
tolerated in practice.
Data were also presented showing that peak exhaust system and exhaust gas temperatures
would be much higher than indicated by the SwRI data, which in turn raised such issues
as the need for different exhaust system materials, additional head shielding, larger
cooling fans and therefore higher output engines, and a variety of safety concerns. The
potential for catastrophic heat releases that could melt catalysts, damage engines, and/or
start fires due to the use of secondary air injection and rich exhaust gases from misfire or
fuel system problems was also discussed. Also, a representative of the State Fire
Marshall’s office raised concerns regarding high exhaust temperatures and product
safety.
CARB staff’s response to the concerns raised by industry at the workshop was quite
confrontational. Although agreeing to review industry’s concerns with the SwRI
temperature data, staff stuck with its position that the application of catalysts capable of
achieving a 50% reduction in HC+NOx had been demonstrated convincingly by the
SwRI test program and that it did not expect manufacturers to experience any significant
problems in developing production systems. The August 8 staff report echoes the same
sentiments and, while acknowledging that heat management issues are real, simply states
that they have been dealt with in other applications and that engine and equipment
manufacturers face no real difficulties in handling for small engines.
CARB Evaporative Emissions Proposal - Pat Bennett presented the staff’s regulatory
proposal for reducing evaporative emissions from small engines. After outlining his
presentation, Bennett began by noting that evaporative emissions from small engines will
account for 41 tons per day of HC emissions statewide in 2000 and that in the absence of
CARB action, that value will increase to 51 tons per day by 2020. Once again, although
there was a considerable amount of discussion related to the emissions inventory at the
workshop, these values appear in the August 8 staff report.
Bennett described staff’s latest proposal regarding evaporative emissions, which was
released on November 13, 2002, and areas where staff was still contemplating the need
for additional changes based on input from industry. As Bennett explained, that proposal
featured a fuel tank permeation standard of 1.0 grams per square meter of tank surface
area per day that would apply beginning with the 2006 model year, but staff was
considering whether to increase the standard to 2.0 grams per day. This permeation
standard would have applied to all equipment using small engines, but staff will likely
limit it to apply only to engines displacing 80 cc or less. Testing would be performed
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August 2003
using a gravimetric procedure developed by CARB staff (TP-901). Further, staff has
indicated that there will be an exemption for equipment in this category that uses
“structurally integrated nylon tanks.” Tanks of this type are common on chainsaws and
other types of equipment. The August 8 staff proposal reflects exactly what Bennett
discussed at the workshop with respect to fuel permeation standards; however, the
proposed implementation date of the permeation standards has been delayed one year to
the 2007 model year.
For equipment with engines in the greater than 80 and less than 225 cc displacement
range, staff is proposing a 1.0 gram per day diurnal emission standard based on real-time
SHED (Sealed Housing for Evaporative Determinations) testing conducted from 65º to
105ºF (TP-902). As Bennett explained, however, the 1.0 gram standard may apply only
to walk-behind lawnmowers beginning in 2006 and a modified standard* that would
allow equipment with larger tanks to have somewhat higher evaporative emissions would
apply to the rest of this category beginning with the 2007 model year (instead of a
previously proposed 2 gram per day diurnal limit). This same new standard, which varies
with fuel tank size, would also apply to equipment with engines over 225 cc in
displacement, instead of the previously proposed 2 gram standard, beginning with the
2008 model year. Finally, a design-based standard would apply to “small volume”
equipment for which fewer than 400 units per year are sold in California. Once again,
the staff’s latest regulatory proposal released on August 8 differs little in form from the
proposal discussed at the workshop. The implementation date for the walk-behind
mower standard has been delayed until 2007, however, and staff has returned to the
2.0 gram per day standard for equipment with engines over 225 cc in displacement. As
with exhaust emissions, manufacturers are also given the option of certifying to lower
standards set at one-half the values listed above.
Although not discussed by Bennett at the workshop, CARB staff believes that the
proposed permeation standard for handheld equipment and the reductions in permeation
emissions required for compliance with the proposed diurnal emission standards can be
achieved using a number of technologies, including barrier surface treatments such as
resins, fluorination, or sulfonation, as well as through the use of multi-layer co-extruded
materials. According to staff, the additional control of diurnal emissions required for
non-handheld equipment can be achieved via pressurized fuel tanks or the use of carbon
canisters.
In addition to the standards, Bennett explained that CARB staff is not proposing to
perform any in-use testing and that there will be a phase-in of compliance margins for
testing performed on new equipment to help account for variability in the production of
small engine fuel tanks and other components. This phase-in would place the 95%
confidence limit for the compliance criteria at 1.5 times the standard for the first model
year, when equipment is required to meet an evaporative emissions standard; 1.3 times
the standard for the second model year; and then 1.1 times the standard for the third and
*
The standard in terms of grams per day of allowable diurnal emissions would be computed by multiplying
the tank volume in liters by 0.21 and then adding that value to 0.95.
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August 2003
subsequent years. These provisions also remain unchanged in the August 8 version of
the proposed regulations.
Also not discussed by Bennett was the cost of complying with the proposed evaporative
emission standards. The August 8 staff report estimates the cost of compliance with the
handheld permeation standards to be between $2 and $5 per unit. For equipment with
engines in the >80 < 225 cc range, staff’s cost estimates are based on the use of a sealed
fuel tank to control diurnal emissions and range from $22–$30 per unit. For equipment
that uses larger engines, the staff report assumes that carbon canisters will be used and
estimates the cost will range from $24–$105 per unit. Cost-effectiveness ratios for the
evaporative emission component of the proposed regulations range from $320 to about
$12,500 per ton of HC emissions eliminated.
Industry Response to the Proposed Evaporative Emission Standards - As was the case
with the proposed exhaust emission standards, the staff’s evaporative emissions proposal
was the subject of a number of industry presentations and a considerable amount of
criticism. One of the first issues raised was whether the fuel to be used in permeation
and diurnal emissions testing would contain ethanol. A number of presenters indicated
that if the test fuel were to contain ethanol, the proposed standards would have to be
increased significantly. In particular, Harold Haskew, representing Briggs and Stratton,
presented test data generated by CARB staff that showed permeation and diurnal
emissions to be about 50% higher from existing fuel tanks and equipment when ethanolcontaining fuel was used. Despite the addition of MTBE to gasoline in California being
banned prior to the implementation date for the staff’s proposed standards, several CARB
staff members reassured the industry representatives that the current CARB certification
test fuel, which contains MTBE, would be the test fuel for their products.* Also
addressed by Haskew was the lack of any test data generated by CARB showing that it
was technically feasible for non-handheld engines to meet the evaporative emission
standards that were being proposed. There were also a number of industry comments
regarding the stringency of the proposed permeation standards and the lack of
demonstrated technologies, other than metal fuel tanks and fuel lines, that would allow
compliance.
Much of the general discussion at the workshop focused on the issue of CARB requiring
actual evaporative emissions testing of small engines, rather than simply proposing a
design-based standard where manufacturers could choose from a list of materials and
products that CARB had determined would have low permeation emissions. The U.S.
EPA’s recent adoption of a design-based approach to the control of permeation emissions
from off-road motorcycles and all-terrain vehicles was also stressed. In addition,
industry representatives pointed out that the sheer numbers of different tank sizes and
volumes made testing completely impractical unless CARB was willing to wait years for
*
Unless existing federal law is changed or California ultimately receives a waiver from federal requirements
that mandate the use of oxygenates in gasoline in much of the state, most gasoline sold in California will
contain ethanol in 2004 and later years. It is not at all clear that a control program that is based on the use
of an MTBE-containing fuel will be effective in reducing permeation emissions in-use when the equipment
is used with ethanol-containing fuels.
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August 2003
full compliance. CARB staff’s primary objection to the design-based approach was its
belief that it could impair the effectiveness of the requirement by not ensuring proper
emissions performance.
Industry presentations were particularly critical of CARB staff’s assertion that the
proposed diurnal emission standards could be met by sealing the fuel tank such that it
becomes a pressure vessel. There were numerous photographs and videos presented
showing irreversible tank deformation resulting from pressurization as well as fuel sprays
that could result from tank failures. Other issues raised by industry included problems
with material durability due to pressure cycling and problems with the performance of
pressure relief valves. CARB staff’s primary response to these criticisms was that
manufacturers were not being forced to use pressurized systems and that there were
alternatives, including the use of automotive-style evaporative emissions canisters
containing activated carbon.
Other Issues Raised By Industry - In addition to comments directed specifically towards
the proposed exhaust and evaporative emissions standards, there were a number of other
issues raised by industry. The most frequently heard issue was that of needing more lead
time. According to the workshop participants, the structure of the industry has most
companies buying their engines from a few companies and then integrating those engines
into equipment they design. Therefore, equipment manufacturers have to use what is
available from engine manufacturers and changes in the size of the engine package, need
for cooling air, muffler configuration, or heat load may require expensive and extensive
redesign of equipment as well as testing to ensure durability and safety.
Similarly, lead time was also a major issue with respect to compliance with evaporative
emission requirements. Here, industry representatives stated that fuel tanks are again
produced by only a few manufacturers, are usually plastic, and are specially shaped to fit
into the available space on a piece of equipment. As a result, changes to either the size or
shape of the tank, such as what might be required in order to use a material that could not
be formed to a special shape (e.g., a metal fuel tank), could require equipment redesign.
It was also stressed that even a switch in tank materials requires considerable lead time
because of the need to test the new tank to ensure adequate durability and product safety.
One major engine manufacturer indicated that if CARB moved forward with the
proposed evaporative emissions regulations without providing substantially more lead
time, it would be forced to drastically curtail its product offerings in the state for a
number of years.
Other issues discussed at the workshop included problems with the baseline emission
inventory, emission reduction estimates, cost estimates, and cost-effectiveness estimates
of the proposed regulations developed by CARB staff.
The workshop closed with CARB staff obviously realizing that there were a number of
difficult issues associated with the current regulatory proposal and the industry asking
CARB staff to delay presentation of the proposed regulations to the Board in order to
provide enough time to reach an alternative acceptable to both sides. While CARB staff
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August 2003
indicated that there would be no delay in taking the regulations to the Board, it did make
it clear that it would be very willing to entertain an alternative proposal from industry.
Analysis
As noted above, the proposed small engine regulations will be presented to the Board at
the same hearing at which the latest South Coast Air Quality Plan for coming into
compliance with the federal ozone standards is considered. With the small engine
regulations being one of the measures the State is committing to adopt as part of that
plan, there is no doubt that the Board members will be anxious to adopt them in some
form to show the State’s commitment to clean air. Given this, the question becomes one
of whether CARB staff and industry can reach an agreement on a set of regulations that
achieve the emission reductions staff needs to show, while at the same time satisfying
industry concerns regarding the current proposal. Clearly, the Board will want to adopt a
regulation that strengthens staff’s position. It is unlikely, however, that the Board is
going to want to witness a highly contentious hearing in which manufacturers and
perhaps even fire fighters raise serious questions regarding product safety and at which
manufacturers state that their product offerings in California will be drastically reduced.
The hearing on this item has the potential to become a huge battle between staff and the
affected industry unless staff and industry can come to an agreement that both can live
with.
Manufacturers Advisory Correspondence Issued
to Explain NTE Requirements for 2005–2006
Medium- and Heavy-Duty Diesel Engines
On July 15, 2003, CARB’s Mobile Source Operations Division issued Manufacturers
Advisory Correspondence (MAC) 2003-02 to provide guidance on meeting applicable
not-to-exceed (NTE) requirements for certification of 2005–2006 model year (MY)
medium- and heavy-duty Diesel engines. Its primary purpose is to promote consistency
with EPA’s approach to implementing NTE requirements, and to provide greater
flexibility for manufacturers.
The MAC states that it was issued at the request of the Engine Manufacturers Association
(EMA). While not mentioned, we believe the MAC implements the terms of a recent
litigation settlement agreement between CARB and engine manufacturers under which
CARB agreed that engines that meet federal standards will be presumed to meet
California standards.
Using the European steady-state test cycle, the NTE requirements impose emission caps
on engines when they are operated outside the conditions encountered during the federal
test procedures (FTP). The need for MAC 2003-02 arises from CARB’s adoption of
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August 2003
regulations imposing NTE requirements for the 2005–2006 MYs, whereas EPA’s NTE
regulations begin with the 2007 MY. According to the MAC, CARB’s 2005 and later
NTE requirements are “similar” but “not identical” to EPA’s requirements for 2007 and
later. Further, CARB’s 2005–2006 MY NTE requirements differ somewhat from its
requirements for 2007 and later MY engines. In particular, for 2005–2006 MY engines,
CARB has no specific flexibility provisions, and can grant a “deficiency” only if a
manufacturer can show that a requirement is infeasible or unreasonable. EPA has also
issued guidance for applying NTE requirements in 2005–2006 as a “screening tool.”
With MAC 2003-02, CARB staff is issuing clarifying criteria that it will use during the
certification process for 2005–2006 MY medium- and heavy-duty Diesel engines, and
expressly states its intention of “harmonizing” with the EPA certification process.
Applications for Certification - Under its 2005–2006 guidance, EPA is not requiring
exhaust emissions test data showing compliance with NTE requirements, but does ask for
a “voluntary” compliance statement. In MAC 2003-02, CARB staff states that it will not
require test data, but will require a statement of compliance. Sample wording for the
statement is included in the MAC. While test data are not required by CARB, the MAC
makes it clear that there must be some kind of “reasonable basis” underlying the
compliance statement, such as a “robust emissions map” or a “technical analysis relying
on good engineering judgment,” which must be furnished to CARB staff on request.
Flexibility Policy - Since both the CARB and EPA regulations for 2007 and later provide
for greater “flexibility” in certain cases, MAC 2003-02 announces CARB’s policy of
allowing such provisions to apply to 2005–2006 MY CARB certification. CARB will
allow manufacturers to exclude specified operating points from the NTE control area, to
limit NTE testing in a single defined region of speeds and loads (if the defined region
accounts for less than 5% of all in-use operation and the region comprises a reasonable
geometric shape), and to exclude EGR operation under cold operating conditions.
Manufacturers must provide CARB with all data necessary for evaluation of any
compliance flexibility request at least 60 days before certification. In considerable detail,
the MAC lays out the data and engineering analyses requirements and conditions for
approval of a flexibility request. Also, as requested by EMA, CARB will accept EPAapproved auxiliary emission control devices (AECDs) that are within the scope of the
FTP engine operation, but is apparently reserving its right to evaluate them under
CARB’s “deficiency” criteria. The MAC confirms that it is CARB’s policy that “an
approved AECD is not considered a defeat device.” The staff also commits to providing
an initial response to an NTE flexibility request within 60 days, and a final decision
within six months prior to production, but asks for early consultation.
In justifying the policies announced in the MAC, staff states that it is recognizing the
EPA flexibility provisions under authority of the NTE deficiency provision in its current
regulations, but then states that the carryover restrictions and the infeasibility/
unreasonableness test that ordinarily govern the granting of deficiencies do not apply.
While not internally consistent, this justification is apparently given to provide at least a
semblance of regulatory authority for the MAC.
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August 2003
Analysis
In general, this MAC helps manufacturers by providing greater flexibility and
consistency with EPA requirements. However, MAC 2003-02 is a classic case of the
CARB staff’s modifying its regulations by administrative fiat. While such “informal
rulemaking” is not legally permissible, even if it is to implement a court-approved
settlement agreement, CARB staff is no doubt expecting that this MAC will be
sufficiently helpful to manufacturers that no legal challenge will be brought.
CARB Announces Workshop on
Amendments to Service Information Rule
On July 7, 2003, staff of the California Air Resources Board (CARB) issued Mail-Out
#MSO 2003-03, containing notice of a public workshop on August 14, 2003, to discuss
existing issues and the staff’s preliminary proposed amendments to the California Motor
Vehicle Service Information Regulations. The mail-out states it was issued in part
because of a Board hearing scheduled for December 11, 2003, where staff will provide an
update on the effectiveness of the service information rule. However, it also indicates
that CARB staff is proposing several amendments to this regulation addressing the
following matters that will also be discussed at the workshop:
C
“Harmonizing” the California regulations with amendments recently adopted by
the U.S. Environmental Protection Agency (EPA), including improved service
information availability via the Internet; and
C
Applying the provisions of the Service Information regulations to all heavy-duty
vehicles (i.e., vehicles with a Gross Vehicle Weight Rating [GVWR] of 14,000
pounds or more).
Background
On December 13, 2001, CARB approved regulations pursuant to Senate Bill 1146
(Chapter 1077, Statutes of 2000), which required motor vehicle manufacturers to make
available for purchase emissions-related service information, as well as information that
will ensure wide availability of diagnostic scan tools and reprogramming equipment. As
reported in CVS News articles in 2001 (in the April, May, August, and November issues),
and in January 2002, the regulations are intended to allow independent vehicle repair
shops access to the information needed to properly diagnose and repair newer vehicles
equipped with computerized engine control systems. The regulations were developed by
CARB staff for the stated purposes of preventing unnecessary pollution and assuring and
stimulating competition in the motor vehicle service and repair industry.
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August 2003
As indicated in the mail-out, the regulations address service information in three ways:
1. Motor vehicle manufacturers are required to make available all emission-related
diagnostic and service literature (e.g., service manuals, technical service
bulletins, initialization information and training materials) in an easily accessible
format at reasonable costs. Access to most of this information over the Internet
is specifically required.
2. Motor vehicle manufacturers must make available for purchase the same
diagnostic tools that franchised dealerships have access to. Further, specific
information that can be used to design and market comparable aftermarket
service and reprogramming equipment must be provided.
3. Motor vehicle manufacturers must make available basic OBDII system design
information to help service technicians understand OBDII system operation, and
better ensure that aftermarket parts manufacturers will be able to produce
emissions-related replacement parts that are OBDII compatible and effective in
controlling emissions.
Proposed Amendments
The amendments being proposed by staff to harmonize the California regulations with
those of the U.S. EPA do not appear to be particularly controversial. Those that appear
most significant are listed below.
1. Approved channels for distribution of repair information shall include
“intermediary information repositories.”
2. Vehicle manufacturers must include information on monitor-specific enabling
drive cycle information for “all major OBD monitors,” specifically including
those for the catalyst, catalyst heater, oxygen sensor and heater, evaporative
system, EGR, secondary air, and air conditioning system. Applicable monitors
for Diesel-powered vehicles are also listed.
3. The date by which vehicle manufacturers must make service information
available for vehicle models introduced on or before October 1, 2002 will
change to 180 days after October 1, 2002 (i.e., an implementation date of March
30, 2003). Availability of service information for vehicles produced after
October 1, 2002 remains as (a) no later than 180 days after date of “introduction
into commerce”* or (b) when that information is made available to franchised
dealers, whichever occurs first.
*
As the phrase “introduction into commerce” is part of the amendment, its interpretation could be the
subject of some discussion at the workshop.
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August 2003
4. Several detail changes to the type of information that must appear on the vehicle
manufacturer’s Internet website, including the necessity to immediately notify
the CARB Executive Officer in the event that postings for “emergency
maintenance” are made.
The proposed amendment adding heavy-duty vehicles as an applicable vehicle type under
this regulation is being made, according to the mail-out, because staff is intending to
propose this fall that OBD requirements apply to vehicles with a GVWR of 14,000
pounds or more beginning with the 2007 model year. Thus, should that proposal be
adopted, service information requirements for such vehicles will also be required.
Analysis
As reported in the previous CVS News articles on this subject, and reiterated below, there
were two contentious issues that have yet to be fully resolved and are likely to be the
subject of more debate than the amendments themselves: passive anti-theft systems
known as “immobilizers,” and the handling of information considered to be trade secrets.
Under the original staff proposal of 2001, manufacturers, under specific circumstances,
would be required to provide to the aftermarket industry the initialization procedures
used by their dealerships for vehicles equipped with integrated anti-theft systems (which
are typically referred to as “immobilizers”). A manufacturer would be required to
provide such procedures when necessary for installation of onboard computers, or repair
or replacement of other emission-related parts. It was acknowledged that manufacturers
using immobilizers, as well as law enforcement agencies, have expressed concern about
theft—if knowledge about initializing immobilizers (including codes) becomes
widespread, then the chances increase that the information will fall into the wrong hands.
More specifically, remanufacturers of on-board computers claimed they need this
information in order to enable bench testing of immobilizer-equipped computers.
The regulation ultimately adopted by the Board in 2001 did not contain the informationaccess requirements sought by the remanufacturers. However, when adopting the
regulation the Board required staff to submit (at an unspecified time) a further report on
immobilizer security. This led to discussions among vehicle manufacturers,
remanufacturers, and CARB staff that resulted in several proposed solutions, including a
“self-test” feature in computers produced for the 2004 and later model years. No good
solution has yet been identified, however, for in-use vehicles.
The mail-out indicated that staff does not plan to propose additional requirements for
access to immobilizer information, although it does hope that significant progress can be
made cooperatively by the vehicle manufacturers and the computer remanufacturers.
Extended discussion on this matter is likely to occur at the workshop.
Regarding trade secrets, the regulation allows vehicle manufacturers the latitude to
organize the information they release in such a way that is not necessary for them to
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August 2003
divulge specific algorithms, codes, or calibration data considered to be a trade secret.
Just what constitutes a “trade secret” and how the law (both federal and state) protects
those secrets was the subject of considerable debate prior to and during the December
2001 Board hearing. The constitutionality of this provision was even raised.* While this
issue is not mentioned in the CARB mail-out, it is entirely likely it will also be raised at
the workshop.
CARB Issues 2004 Parts Cost Limit, and
Guidance on PZEV Warranty Requirements
Under current warranty requirements, vehicle manufacturers are required to warrant
high-priced emission-related parts for a period of seven years or 70,000 miles. CARB is
required to periodically revise the original $300 replacement-cost level of these parts to
keep pace with the Consumer Price Index (CPI). In accordance with this, on July 24
CARB issued Manufacturers Advisory Correspondence (MAC) 2003-03, which
identifies the cost limit for high-priced warranted parts for model year 2004, as well as
the highest-cost metropolitan area for use in calculating labor costs.
As reported in MAC 2003-03, the cost limit applicable to all 2004 model year passenger
cars, light-duty trucks, medium-duty vehicles, medium-duty engines, and off-road large
spark-ignition engines is $460. (This is a $10 increase over the value that applied to the
2003 model year vehicles, the same level of increase that applied last year.) The MAC
also once again identifies San Francisco as being the highest-cost metropolitan area of
California, which is the same as in previous years. In determining the total replacement
cost of a warranted part, manufacturers are to base their labor rate on their rate in that
area (or a comparable alternative area if the manufacturer has no dealerships in that area).
As in the past, the MAC reminds manufacturers that they must submit documentation to
CARB identifying their high-priced warranty parts list for 2004 model year certification.
To determine whether costs have been adjusted to escape the longer warranty period, this
listing should include all emission-related parts whose replacement would cost more than
$360 (the calculated limit minus $100). The documentation should include estimated
retail parts costs, labor rates in dollars per hour, and the labor hours necessary to replace
the parts (including standard diagnosis). The MAC notes that manufacturers may include
emission-related parts on the list without having to submit the required documentation if
the parts have been identified as being consistently above the cost limit. Such parts will
remain on the high-cost list until future documentation is submitted showing that the cost
has dropped below the identified cost limit.
Also included in the MAC is information pertaining to warranty requirements for
vehicles for which manufacturers are requesting credit allowances as Partial Zero
*
See the January 2001 issue of CVS News for details on this subject.
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August 2003
Emission Vehicles (PZEVs). Those vehicles are required to have defects and
performance warranty coverage for 15 years or 150,000 miles, whichever occurs first.
The MAC notes that under the amendments adopted by CARB at the April 2003 hearing
on the ZEV program, hybrid electric vehicles (HEVs) with warranty coverage less than
15 years for the traction battery may, at the manufacturer’s request, be granted
conditional certification and PZEV credit allowances. Because these amendments* have
not yet received final approval from the Office of Administration Law, the MAC goes on
to state that if the amendments are not formally adopted, any PZEV credit allowances
granted under this conditional certification would be null and void.
Other information in the MAC related to PZEVs pertains to Emission Warranty
Information Reports (EWIR) and Field Information Reports (FIR). Manufacturers are
currently required to submit these reports for model year 1990 and later vehicles
throughout the warranty period, not to exceed the vehicle’s useful life. (MAC 94-06,
issued in August 1994, addressed these overall reporting requirements.) MAC 2003-03
states that for vehicles receiving PZEV credit allowances, these reports must be updated
for 12 years from the calendar year after the PZEV’s model year designation (e.g.,
reports for 2003 model year PZEVs must be submitted for 12 years after January 1, 2004;
the last EWIR would provide information through the fourth quarter of 2015). After that,
no further reporting will be necessary unless CARB requests it.
CARB Holds Another TRU Workshop
On July 22, staff of the Stationary Source Division (SSD) of the California Air Resources
Board (CARB) held another in a series of workgroup meetings, this time via conference
call, on an Air Toxic Control Measure (ATCM) to reduce emissions of particulate matter
(PM) from transport refrigeration units (TRUs). TRUs are one of many categories of
Diesel-powered equipment that have been or will be regulated under the state’s Diesel
Risk Reduction Plan (DRRP), which CARB developed after determining that Diesel PM
is a toxic air contaminant. CARB’s current proposal includes reducing TRU engine
emissions through new engine standards, retrofits, and reduced usage at places where
they are found in large numbers, such as food distribution centers.
As at past meetings (please see the April and July 2003 issues of CVS News for a
discussion of staff’s 2003 activities on this topic), staff presented further revisions to the
TRU emission inventory, reviewed past activities, and presented a revised TRU ATCM.
The current ATCM proposal harmonizes new Diesel TRU engine standards with EPA’s
Tier 4 nonroad Diesel engine standards, shown below in Table 2, which were proposed in
May 2003.
*
to 13 CCR 1962(c)
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August 2003
Table 2
EPA’s Tier 4 Nonroad CI Engine PM Standards (g/bhp-hr)
Model Year
Engine Power Rating
2008
hp < 25
25 > hp < 75
2013
0.30 PM
0.22 PM
0.02 PM
The CARB proposal also includes provisions that would mandate either the replacement
or retrofit of a TRU after approximately seven years of service, despite the engine having
met all applicable standards at the time it was certified and sold in California. (CARB
staff refers to this as a “retrofit” requirement even though it can in some cases be
complied with by purchasing a new engine.) Staff plans to hold the next public
workshop on August 26, and the proposed ATCM is scheduled for presentation to the
Board at the October 2003 hearing.
Workshop Presentations and Discussion
CARB was again represented by Tony Andreoni, Manager of the Process Evaluation
Section (PES) of SSD’s Emission Assessment Branch, and by Rod Hill, also with the
PES. The workshop began with an overview by Rod Hill of the proposed regulation and
a summary of the changes made to the proposed language after the last workshop on
June 5. Hill briefly outlined the following changes:
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CVS News
Regarding the “in-use” language:
-
Removal of the “low-use” exemption. Hill said this was a potential cause for
enforcement headaches because it created opportunities for cheating.
-
Enhanced operator accountability. More focus was put on “operators” rather
than “lessors/owners” as it was in the previous iteration.
-
Low-Emission TRU (LETRU) early compliance, and delayed Ultra-Low
Emission TRU (ULETRU) compliance.
-
CARB identification numbers. Staff said this number would indicate the
level of compliance achieved, and would be painted on either the chassis or
chassis housing. The ID numbers would be “no cost to the operator,” said
Hill, and are intended to help with compliance, which would be done
primarily during regular roadside inspections.
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August 2003
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Regarding facility requirements:
-
Simplified recordkeeping. Staff said it has simplified the recordkeeping
requirements that stakeholders previously objected to as being overly
burdensome.
TRU Inventory - This portion of the discussion was led by Sandee Kidd of CARB’s
Planning and Technical Support Division (PTSD), with assistance from Archana
Agrawal, Manager of PTSD’s Offroad Modeling and Assessment section. Kidd said the
following revisions had been made to the inventory since the June 5 workshop:
C
Analyzed additional sales data supplied by manufacturers;
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Revised population of TRUs; and
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Revised growth factors by horsepower groups.
Tables 3, 4, and 5 below show the results of these changes. Several stakeholders were
particularly interested in the revised growth factors, which Agrawal said were based on
actual 1992 through 2002 sales data. One stakeholder complained that they are
significantly lower than the previous growth factors, which will make a huge difference
over time in the assumed penetration of newer low emission engines into the fleet.
Agrawal promised to “revisit” this calculation with that in mind.
Table 3
Revised CY 2000 TRU Emissions Inventory
(tons per day)
Rated Power
PM (old)
PM (new)
NOx (old)
NOx (new)
< 15 hp
0.10
0.6
1.37
0.84
15-25 hp
0.07
0.04
0.79
0.44
25-50 hp (California)
1.94
1.82
13.66
12.67
25-50 hp (Out of State)
0.64
0.60
4.51
4.18
25-50 hp (Rail)
0.13
0.13
0.92
0.93
> 50 hp
NA
NA
NA
NA
TOTALS
2.65
2.60
21.25
19.06
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Table 4
Statewide CY 2000 TRU Population
Horsepower Group
Old Population Estimate
New Population Estimate
< 15 hp (California)
7,623
4,623
15-25 hp (California)
3,497
1,946
25-50 hp (California)
24,925
22,772
25-50 hp (Out-of-State)
8,225
7,515
25-50 hp (Rail)
1,678
1,678
> 50 hp
0
0
Total
46,007
38,535
Table 5
Yearly Growth Factors for TRUs for Calendar Years 2003 and Later
HP
Growth Factor (%)
< 15
4.58
15 - 25
3.04
25 - 50
5.20
Risk Discussion - Renee Coad, of Andreoni’s staff, presented the updates to staff’s
ATCM development. She discussed the Health Risk assessment and dispersion modeling
used in the development of the emission factors, which she said followed OEHHA* Risk
Assessment guidelines. There was a fair amount of discussion between the stakeholders
and staff regarding some of the assumptions used in the risk assessment calculations,
particularly regarding modeling TRUs as area rather than point sources, modeling a
70-year risk for equipment with a 20-year lifetime, and assuming that the average TRU
operates 300 hours per week. Several stakeholders seemed very concerned about staff’s
methodology, and told staff that they thought this would become a very big issue. Coad
then presented a graphic showing the cancer risk associated with five TRUs, with PM
emission factors ranging from 0.02 to 1.0 g/hp hr. At a distance of 100 meters from the
TRU “area source,” staff’s figure shows that the cancer risk from the highest-emitting
engine is 400 in a million, and 10 in a million from the lowest-emitting engine.
*
Office of Environmental Health Hazards Assessment
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August 2003
Cost Discussion - John Manji, also of the Stationary Source Division, discussed the costs
that staff had considered in developing this regulation. Manji said the current draft cost
assessment is between $3 and $129 per pound of Diesel PM removed. The lower cost
estimates include strategies such as the use of fuel-borne catalysts, Diesel oxidation
catalysts, and Fischer-Tropsch Diesel blends; the higher cost estimates generally include
engine replacements and repowers. Costs related to enforcement of the new regulation
were considered, as well as costs to operators and facilities, said Manji. He said staff is
still considering an exemption for facilities with fewer than 20 employees or 20 doors,
and that the cost effectiveness estimates would improve once these smaller facilities were
removed from the cost calculations. Other than asking why staff used the number of
doors as a criteria for exemption (which staff said was based on its personal observations
of TRU facilities), there was relatively little discussion on this topic.
Following an announcement that the next workshop would be held on August 26, the call
was concluded.
Analysis
It appears that staff has at least partially addressed stakeholder’s concerns regarding the
costly and burdensome recordkeeping requirements, but the provisions requiring retrofit
or replacement of in-use engines after just seven years of service are unprecedented.
Given these questions, stakeholder concerns regarding staff’s risk assessment
methodology, and the general complexity of the regulatory scheme that staff has
concocted, staff’s hope that this item can be presented to the Board at the October
hearing may be overly optimistic.
CARB Holds Portable Engine
Equipment Workgroup Meeting
On July 30, in Sacramento, the staff of the California Air Resources Board (CARB) held
another meeting of the Portable Engine Workgroup.* Previous 2003 meetings on this
item were held in January, March, May, and June (please see the February and July 2003
issues of CVS News for details). Staff plans to continue holding monthly meetings on
this topic, with the next scheduled for September 12 in Sacramento. In addition, this
item is still tentatively scheduled for presentation to the Board at the December 2003
hearing. The staff members who conducted the July 30 meeting, as well as the previous
meetings, are Mike Tollstrup, Chief of the Project Assessment Branch of the Stationary
Source Division (SSD), with assistance from Mike Waugh, Manager of the Program
*
Sierra did not attend this meeting in person; this article is based on conversations with CARB staff
subsequent to the workshop.
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August 2003
Assistance Section of the SSD, Grant Chin of his staff, and Todd Wong, Manager of the
Technology Assessment Section of the SSD.
The two main topics of discussion at these meetings continue to be (1) regulatory
approaches to be used in developing the Airborne Toxic Control Measure (ATCM) for
portable Diesel-fueled engines; and (2) proposed revisions to the Portable Equipment
Registration Program (PERP) regulation. According to staff, participation in the revised
PERP will remain voluntary. However, the ATCM that staff intends to promulgate,
which it now appears will be a fleet emission based program, will require the same
Diesel emission controls regardless of whether the equipment is being regulated by an air
district or the PERP. The fleet-average approach will require that the calculated average
annual emissions* from all engines within a given fleet meet a certain standard, and will
theoretically allow operators more flexibility than the previously proposed risk-based
approach; the risk-based approach limited each engine to a given number of hours of
operation per project, and was significantly more restrictive for older, higher emitting
engines.
At previous workshops, stakeholders have expressed serious reservations about the riskbased approach to the ATCM question, chiefly because it would have required restricted
operating time and burdensome paperwork requirements for engines certified to current
PM standards. Much of the discussion at both the May and June meetings was related to
the practical problems associated with the implementation of that proposal, and by the
end of the June 5 meeting, stakeholders appeared ready to consider switching to a fleetaverage approach to PM control—a strategy that was apparently rejected earlier in this
process.
ATCM Development - At the July 30 workshop, staff unveiled a draft weighted fleetaverage emission approach, which staff said was well received by stakeholders. The
weighted fleet-average emission factors are based on hours of operation, engine
horsepower, and emission standards for each engine included in a given project. Fleet
emission standards are being developed with an emphasis on replacement of current
engines with either Tier II or Tier III engines. The draft fleet PM emission target goals
being proposed by staff, which differ depending on whether an engine is already part of
the PERP program,** are listed below.
*
An example of staff’s suggested calculation methodology is available on the CARB website at
http://www.arb.ca.gov/diesel/portdiesel/073003/fleetexample.pdf.
**
In order to offset some of the cost burden for operators whose engines have not been previously regulated
by either CARB or a district (e.g., engines below the minimum regulatory horsepower threshold for a given
district), CARB is allowing what amounts to a slightly longer compliance schedule.
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August 2003
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PERP Registered or District Permitted Engines
Calendar Year
2008:
2010:
2015:
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$176 hp
0.28 g/hp-hr
0.21 g/hp-hr
0.08 g/hp-hr
Engines Previously Exempted from District Permits
Calendar Year
2008:
2010:
2015:
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< 176 hp
0.5 g/hp-hr
0.4 g/hp-hr
0.2 g/hp-hr
< 176 hp
0.6 g/hp-hr
0.5 g/hp-hr
0.2 g/hp-hr
$176 hp
0.34 g/hp-hr
0.28 g/hp-hr
0.08 g/hp-hr
Engines Without Valid State Registration or District Permit
Calendar Year
2008:
2010:
2015:
< 176 hp
0.5 g/hp-hr
0.4 g/hp-hr
0.2 g/hp-hr
$176 hp
0.28 g/hp-hr
0.21 g/hp-hr
0.08 g/hp-hr
Staff said that it has not yet discussed this new strategy with its upper management, but it
is confident the general approach will be acceptable. According to staff, the ultimate
goal of the program has always been either the purchase of Tier IV certified engines, or
retrofit with Level 3* verified technologies by 2020, and that the hourly limit vs. the fleetaverage compliance strategies simply represent different paths toward that goal.
Proposed Revisions to PERP - One of the major sticking points for stakeholders
regarding the proposed changes to the PERP is that large generators used in certain
applications, which are already part of the PERP, will no longer be eligible to participate
in the program.** Staff has proposed excluding these generators from the PERP at the
request of some local air quality districts that are concerned that the PERP program is
being used to circumvent stationary source regulations. Staff says it is trying to revise
the proposed language changes to accommodate the concerns of both the equipment
operators and district enforcement personnel.
*
Level 3 verification is for those technologies that achieve at least an 85% reduction in particulate matter or
less than 0.01 g/bhp-hr emission level.
**
The May 9 handout states that “generators used to power production back into the grid,” and “generators
used to provide primary or backup power to a stationary source or stationary equipment, except for
purposes of maintenance and/or repair operations, and essential public services,” will not be eligible for
registration in the PERP.
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August 2003
Analysis
It appears that a fleet-average emission strategy is less objectionable to stakeholders than
the previous approach. Assuming that details regarding emission factors and program
participation can be resolved at the next two or three monthly meetings, it appears staff
may indeed be ready to present this item to the Board for consideration at the December
2003 hearing, as scheduled.
I/M Review Committee Meets
On July 22, the Inspection and Maintenance Review Committee (IMRC) met in
Emeryville for its eighth meeting under the chairmanship of Victor Weisser. In addition
to Weisser, all eight members of the Committee were present at the beginning of the
meeting, although Robert Pearman had to leave for a portion of the meeting. Also
attending the meeting were representatives of the California Air Resources Board
(CARB), the Bureau of Automotive Repair (BAR), and about 10 members of the public,
including representatives of the test-and-repair (T&R) and test-only (T/O) industries, and
the Association of California Car Clubs.
The agenda for this meeting called for reports from CARB and BAR on the Voluntary
Accelerated Vehicle Retirement (VAVR, or “scrappage”) program, an update on BAR’s
Consumer Assistance Program (CAP), an explanation of the market for mobile source
pollution credits and how they are determined, and a presentation on the joint
CARB/BAR Smog Check program evaluation report to the Legislature and the IMRC.
As explained below, while these reports and presentations were given, the most
significant part of the meeting was devoted to a discussion about the future of the
Committee, as a result of the lack of approval of the Committee’s selection of an
Executive Officer. Therefore, the following report on this meeting is given in the order
of the subject’s relative importance to the Committee and its potential impact on the
state’s I/M program, rather than in the actual order in which the subjects were discussed
during the meeting.
Background
Among the duties assigned to the IMRC is the statutory requirement* to prepare or
review several periodic technical reports to the Governor and Legislature that are
intended to evaluate the effectiveness of the state’s vehicle inspection and maintenance
(I/M) program. These reporting responsibilities include the following specific tasks:
*
Under Section 44021 of the California Health and Safety Code
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August 2003
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Prepare a report at least once every 12 months on the “performance” of the
state’s I/M program. This report is specifically required to quantify both the
reduction in emissions and the improvement in air quality attributable to the I/M
program.
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Prepare a report at least once every 12 months recommending improvements to
the I/M program.
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Receive and review the triennial Smog Check program evaluation report by
CARB and BAR to the Committee.* This task includes a review of (1) the
comparison between the actual emission reductions achieved by the state’s
Smog Check program to those required under the State Implementation Plan
(SIP), and (2) recommendations made by CARB and BAR to improve the
effectiveness and cost-effectiveness of the program, including those addressing
any discrepancies between achieved emission reductions and those called for in
the SIP. This report was due to the Committee on January 1, 2003.
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Receive and review a report prepared by CARB and BAR complying with
Assembly Bill 1492 (Chapter 803, Statutes of 1997). This legislation called for
CARB and BAR to “design a new proposed program to replace the existing
vehicle inspection and maintenance program” and submit a report on the new
program to the Legislature by January 1, 2003. The bill further called for the
IMRC to review the program and submit a plan for the new program not later
than July 1, 2003.
The individuals who make up the IMRC are intended to come from a range of
backgrounds that allow them to have a good overall perspective of the Smog Check
program and the issues it faces. However, it is recognized that the members may not
possess the specific skills and technical expertise needed to compile and analyze the data
required for the preparation or review of these reports. For that reason, the California
Health and Safety Code provides that CARB and BAR shall provide the Committee with
any necessary technical and clerical support in its evaluation and study. During the
tenure of previous IMRCs, this support typically has taken the form of an Executive
Officer position along with at least one full-time staff assistant.**
At the January 2003 IMRC meeting, Kathleen Hamilton, Director of the California
Department of Consumer Affairs (DCA, the department under which BAR functions),
explained that the Executive Officer position is one that requires the approval of (i.e.,
appointment by) the Governor’s office. As a result, Weisser indicated to the Committee
at that time that it could take as much as six months to recruit and secure approval for
this position. It was clear to all members that filling this position is essential in order for
*
Typically this is the same report that CARB and BAR prepare for the State Legislature.
**
BAR is currently “loaning” two of its staff to the Committee on an as-needed basis to provide the
Committee with essential clerical and organizational support.
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August 2003
the Committee to complete its statutory reporting obligations. Following the January
2003 meeting, the Committee began the recruitment process to hire an Executive Officer.
At the Committee’s May 2003 meeting, Weisser announced that the Committee’s
selection process was complete, and a qualified candidate had been submitted to the
Governor’s office for approval.* The name of the candidate was not released.
During the June 2003 IMRC meeting (as outlined in the July issue of CVS News),
Weisser reported that the Governor’s office told him the appointment of an Executive
Officer was being held up “for budgetary reasons.” He also said there was also an
indication from the Governor’s office that there was some question as to whether funding
for the IMRC could continue, given the state’s current budget shortfall. However,
Weisser added that Hamilton had assured him that funding for the monthly meetings and
related expenses were “solid” and would continue as before. Weisser concluded his
remarks by stating that trying to operate the IMRC without an Executive Officer was like
“working with one arm tied behind your back.”
Status Report on Appointment of an Executive Officer
At the July meeting, Weisser reported that the appointment of the candidate it selected
for the position of Executive Officer is “caught in the net of the state’s budget impasse,”**
and the Committee’s efforts to secure this appointment are currently stymied. He further
indicated that once a budget was approved, it could reopen the door for this appointment.
However, as it is likely that some type of state hiring freeze will be part of any budget
compromise, he is not optimistic that the appointment would be made anytime soon.
Weisser also stated that it was clear to him that the IMRC needed the support that would
be provided by an Executive Officer in order to comply with its statutory reporting and
review requirements, and that it would not be possible for the Committee to meet those
requirements absent this position. Weisser reminded the Committee of a comment he
had made at an earlier meeting in which he stated he would resign if the Committee
could not complete its statutory charges on time.
Following his report, Weisser asked the members to indicate what each of them thought
would be the best course for the Committee to follow, given the assumption that the
approval of an Executive Officer would not occur anytime soon. He suggested they
consider at least one of the two following alternatives:
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*
Do not hold any further meetings, or
As reported in the June Issue of CVS News.
**
At the time of the July meeting, a state budget—required by state law to be in place by July 1—had not
been adopted by the Legislature or signed by the Governor.
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Meet as they have been doing over their first eight months, in order to become
better informed about the program and to take actions that do not require indepth technical analysis.
Discussion
Richard Scaggs was the first to speak to this issue and stated unequivocally that the
Committee should continue to meet. Scaggs indicated that keeping up with
developments that relate to the I/M program was essential, and, should the meetings stop,
it would be very difficult and time consuming to get back up to speed. Sheldon
Kamieniecki said he agreed with Scaggs, but thought the Committee should cancel its
August meeting [only] and communicate via email in order to set priorities for the items
appearing on the Committee’s Focus and Priorities List.* Judith Lamare supported the
comments made by Scaggs and Kamieniecki, and made a motion to cancel the August
2003 meeting. Bruce Hotchkiss, however, wanted to continue with the meetings and
would be very reluctant to “give up.”
Robert Pearman stated that he agrees with the other members who felt the Committee
had made significant progress on several important issues, and it would be extremely
valuable to continue with the meetings. However, he did add that a letter from the
Committee should be written to the Legislature and Governor stating that the Committee
cannot comply with its statutory reporting and review obligations so long as it does not
have the staff needed to accomplish these tasks (i.e., no Executive Officer means no
reports from the Committee).
Committee Action
Following this discussion, the Committee voted unanimously to continue with its
meetings as proposed by Weisser, and to write a letter to the Governor and Legislature as
suggested by Pearman. A second vote was then taken on Lamare’s motion to cancel the
August meeting. Following a vote (3 to 3, with Hotchkiss abstaining), Weisser cast the
deciding vote in favor of cancelling the August meeting. In order to show a unanimous
vote for the record, the three members who voted against the motion then changed their
votes to show support.
Smog Check Program Evaluation Report
Background - As mentioned above, CARB, in cooperation with BAR, is statutorily
required to provide (1) a periodic Smog Check program evaluation report to the
*
A list of 48 tasks or potential issues for Committee action (including those required by statute) identified
during this Committee’s first three meetings. The February 2003 IMRC meeting was the last time this list
of items was discussed or reviewed.
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Legislature and the IMRC, and (2) a proposal for a new inspection and maintenance
(I/M) program to be implemented by January 1, 2005. Both reports were due on
January 1, 2003, but have yet to be released by CARB or BAR. The IMRC is required to
review both reports in a timely manner, and is further required to submit its own plan for
a new I/M program to the Legislature no later than July 1, 2003. However, the
Committee has been unable to begin the review process or develop its own plans for a
new program because the two reports have not been submitted to the Committee yet, and
the appointment of an Executive Officer had not occurred.
During several past IMRC meetings, CARB and BAR staff members have cited a range
of Smog Check program data in support of their position on various program elements,
primarily those related to the supposed benefits derived from vehicles being directed to
test-only stations for their biennial inspections. However, it was properly noted by
Dennis DeCota at the Committee’s May 2003 meeting,* that the data being presented had
been developed for the CARB/BAR 2000 Program Evaluation Report from data
accumulated in 1998 and 1999. During the course of questioning by the Committee
during that meeting, David Amlin of BAR indicated more recent data would be included
in the joint report to the Legislature and the IMRC, and that report was expected to be
released in July. As it was rightly felt that the 1998–99 data were no longer
representative of today’s Smog Check Program, the Committee has been anxiously
awaiting the release of the 2003 report so it could better judge current issues in the light
of more recent data.
Furthermore, in a letter dated March 26 and addressed jointly to CARB and BAR, John
Burton, President pro-tem of the state Senate, blasted the two agencies not only for
failing to meet the statutorily required release dates but also for waiting until March 14 to
inform the Legislature the reports would be delayed.
Based on the urgency of getting underway on the reports, and Amlin’s assurance that the
CARB/BAR reports were scheduled for release in July, Weisser invited CARB/BAR to
make a presentation on the report at the July meeting.
BAR Presentation - Much to Weisser’s and the Committee’s dismay, Amlin began his
presentation by stating the joint report has still not been finalized and characterized his
presentation as a preview of the still-unfinished study and report. Amlin also commented
that his department had been negatively impacted by state budgetary cutbacks, including
some individuals that have been working on the report.
Since the report has not been finalized, Amlin was unable to present any specific
program data or conclusions. Instead, his presentation focused primarily on the
methodology used to collect and analyze the data. Thus, the Committee was no closer to
receiving the latest program data than it was two months before. Amlin indicated it
would be about another two months (sometime in September) before the report would be
released.
*
As reported in the June 2003 issue of CVS News.
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August 2003
Committee Comments - During the subsequent discussion period, Weisser expressed his
surprise and concern that the report was still not available. He and other committee
members then asked a range of questions about specific elements of the upcoming report.
Amlin’s responses to those questions indicated he was either unable or unwilling to
disclose specific data, results, or conclusions that were (or perhaps were not) to be
included in the report until such time as the report was released. Included in this range of
questions were the following:
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Weisser and Kamieniecki asked about the status of the RFP for the pilot Remote
Sensing Device (RSD) study. Amlin replied that there were some “technical
issues” with the contract that had to be resolved before it could be finalized.
Amlin declined to indicate the successful bidder, but did state there had been
only one bidder.
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Covell and DeCota asked if the report would clarify the number of vehicles that
are being directed to test-only stations for their biennial inspections. This is a
particularly troubling subject for the Committee because it is probably the most
volatile issue discussed during IMRC meetings. DeCota was very pointed in his
remarks when he correctly stated that the inspection industries have a right to
know what BAR considers to be the “testable fleet” upon which the 36%
directed rate is based (i.e., what value is BAR using as a denominator in the
calculation of the fraction of vehicles being directed to test-only stations—is it
the entire fleet, the entire testable fleet, the entire fleet in the enhanced area, only
the model years that are required to be inspected in the enhanced area, or some
other nebulous number). Amlin reminded the Committee that a significant
fraction of the vehicles that go to test-only do so voluntarily. However, he did
offer to research and clarify this question for the Committee.
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Pearman asked how station and technician performance was being evaluated.
Amlin replied by saying this subject was still being studied.
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Pearman expressed concern that there was only a single bidder for the pilot RSD
program. He questioned the potential accuracy of the results and if they could
be influenced by possible prejudices of a single contractor. Amlin replied that
the manner in which the RFP was structured precluded the possibility that data
could be biased by a contractor. He also indicated that the single bidder was
actually made up of several separate companies who would be working under a
master contract. As such, Amlin indicated it was felt that the checks and
balances between those entities would further assure accurate and unbiased
results.
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Covell expressed his hope that the pilot RSD project would definitively
determine the role of remote sensing in future I/M programs. Amlin indicated
this was the purpose of the study, and every conceivable use that remote sensing
could possibly play in I/M programs will be addressed.
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August 2003
Public Comment - Weisser indicated that scheduling restrictions on the use of the
meeting room were such that there was little time left for public comment. As a result,
he asked those persons who wanted to address the Committee to keep their remarks brief
and to the point, and said that the Committee would record their questions and comments
for possible responses at its next meeting.
Chris Ervine, Owner of a Test and Repair CAP Station in Stockton - Ervine, who
indicated he represents a coalition of test and repair station owners in the Sacramento and
San Joaquin Valley area, added his strong concerns about the 36% rate of vehicles being
referred to test-only, particularly in light of his understanding of the law that the Health
and Safety Code calls for only 15% of the fleet to be referred to test-only. He stated that
his experience indicated 50% to 60% of the testable fleet was being referred to test-only.
Ervine also commented that his experience as a CAP station owner contradicted what
Michael Lafferty, Manager of the CAP program, had stated during his presentation on the
CAP program at the June IMRC meeting. Ervine said that while Lafferty had stated the
CAP program made every effort to repair cars to lowest emissions level possible (not just
the minimum needed to get vehicles to pass the test), his experience indicated just the
opposite—that CAP would not authorize repairs beyond what was needed to pass the test.
Randall Ward, Executive Director of the California Emissions Testing Industries
Association (an association representing the test-only industry) - Ward reminded Amlin
and the Committee that there should be a period of time allowed for public comment on
the program evaluation report, as had occurred when the 2000 report was released.
Charlie Peters, Clean Air Performance Professionals - Peters posed the following
questions on the data collection and analysis methods that are expected to appear in the
CARB/BAR report:
C
Does the Acceleration Simulation Mode (ASM) test procedure used for the
random roadside inspections constitute an adequate evaluation of fleet emissions
levels, or should some version of the Federal Test Procedure (FTP) be
employed? and
C
Are vehicles tested at the random roadside inspections that have emission levels
exceeding the applicable cutpoints required to make repairs and be retested?
Len Trimlett - Trimlett asserted strongly that at least 50% of the testable fleet is being
directed to test-only, not the 36% indicated by BAR.
Other Committee Business
As indicated above, the agenda for this meeting called for presentations of reports by
CARB and BAR on three additional subjects. However, none of these presentations or
reports seemed to provide the type of information the Committee was seeking. This
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August 2003
resulted in a disconnected discussion by the Committee and members of the public,
something that had been avoided by Weisser during previous IMRC meetings under his
chairmanship.
Presentation by CARB on the VAVR Program - Edie Chang, who handles Federal
Liaison for CARB, indicated she was making this presentation on behalf of the person
originally scheduled to do so, who was ill. In a briskly paced presentation, she outlined a
number of the basic concepts of the program:
C
Recognizes that older vehicles are a significant contributor to air quality
problems,
C
Provides monetary incentives to retire such vehicles from the fleet, and
C
Assumes the retired vehicles are replaced by newer and cleaner models, thereby
creating fleet turnover that improves air quality.
Chang explained there were two programs in the California: one is currently operated by
CARB (in concert with several local air districts), and the other is a BAR program that is
currently suspended due to lack of funding. She explained that until February 2002, there
were a number of significant differences in the two programs. Until that time, the CARB
program had more stringent eligibility requirements, the scrapped vehicle was required to
have a current smog certificate, the owner was paid between $400 and $500 for the
vehicle, and none of the parts could be resold. Conversely, the BAR program was
intended for vehicles that had failed Smog Check, required less of the vehicle to be
present or in operating condition, and paid the owner $1,000.* In February 2002, CARB
modified its scrappage program to “harmonize” with the BAR program, which at that
time appeared to be more attractive to potential participants. However, the CARB
program still required a longer registration period than the BAR program, the vehicle
needed to operate in reverse gear, and some non-emission or drivetrain related parts
could be recovered and resold.
According to a table presented by Chang, the number of vehicles retired under the CARB
program dropped from 6,901 in the year 2000 to 4,028 in 2002,** whereas the BAR
program retired about 34,000 vehicles from July 2000 to January 2002. While it is clear
the data appeared to show that the BAR program retired far more vehicles than the
CARB program, it was impossible to draw a direct comparison between the two
programs because the data did not cover the same period of time.
*
A complete listing of the differences in the two programs appeared in the February 2002 issue of
CVS News.
**
No data for vehicle retirement under the CARB program were given for 2001.
Page 62
CVS News
August 2003
Chang also presented a table that attempted to illustrate the emissions reduction benefits
from the scrappage program. Those data appeared incomplete, however, and were
confusing to the Committee.
Presentation by CARB on Mobile Source Emission Reduction Credits - Beverly Werner,
a manager in the Regulatory Assistance Section of CARB’s Stationary Source Division,
made this presentation. She began by asking a rhetorical question about why someone
from the Stationary Source Division was giving a presentation on a mobile source matter.
Her answer was that stationary sources can use emission reduction credits from mobile
sources as well as from stationary sources, and that the value of the mobile source credits
is driven by needs in the stationary source market.
Unfortunately, her presentation was rather disjointed and addressed too many stationary
source matters that did not appear to respond to the Committee’s need to determine how
mobile source credits are calculated and applied, and how their value can be estimated.
Update by BAR on Consumer Assistance Program - Michael Lafferty, Manager of the
CAP program, made a very brief report to the Committee in which he indicated he had
provided the Committee with the following items that had been requested at the June
IMRC meeting: samples of program outreach materials, a scatter chart of vehicles
repaired under the CAP program by model year, and a schedule of the average repair
costs of those vehicles.
Discussion by Committee
Following the conclusion of the two presentations and the update on CAP, it was clear
the Committee and members of the public were struggling to make some sense of what
they were hearing. Weisser stated that he was frustrated that the presentations failed to
match his expectations, and indicated they appeared to be far too general in nature and
did not contain the type of data that could be used to evaluate the benefits of the subjects
being presented.
As a result, Weisser stated that the Committee needed more factual data on the VAVR
and CAP programs, and a better explanation on how mobile source emission reduction
credits were calculated and applied. Thus, he recommended that the following courses of
action be taken before the next IMRC meeting in September:
C
BAR and CARB need to do “more homework” in order to provide the
Committee with useful data and information,
C
Lynn Forsyth (a Contract Analyst on periodic loan from BAR to provide
organizational and clerical support to the Committee) should compile a list of
the questions the Committee and the public asked following the three
presentations and report made at the meeting,
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August 2003
C
Weisser and one other member of the Committee (to be named) should review
and organize the list of questions with the goal of extracting those that call for
responses from CARB or BAR, and
C
Weisser should be responsible for meeting with CARB and BAR to review the
questions that call for a response, and map out exactly what it is the Committee
wants to hear on these matters.
A motion to take these actions was unanimously approved.
Analysis
Given the Governor’s unwillingness to appoint the staff needed by the IMRC to complete
its statutory requirements, the Committee appears to have reached an equitable
compromise to continue meeting, albeit on a somewhat limited basis. Disbanding the
Committee would potentially reduce the chances that constructive program changes
might be made. Based on the first seven months under Weisser’s lead, this Committee
has been far more effective than its immediate predecessor in addressing and taking
appropriate action on real issues facing the program. It could prove useful to have the
Committee supporting legislative changes that will improve the effectiveness of the
program in the future. Moreover, with the statutorily mandated date for a new I/M
program only 18 months away, and a proposal from the IMRC for such a new program
being a required element of that same law, it would appear likely that the Governor will
have to relent on his blockage of the appointment of an Executive Officer sometime in
the not too distant future.
The failure of CARB and BAR to have the program evaluation report completed by this
meeting not only was disconcerting for the Committee but also exacerbated the issue
over the fraction of vehicles being directed to test-only stations. Clearly, Weisser was
expecting the report to include data that could be used to resolve this question.
It is now clear that the fraction of the fleet being directed to test-only has the potential for
growing into a significant issue. With prior testimony from numerous test-and-repair
station owners strongly stating substantial loss in test volumes, and with member DeCota
representing a sizable group of those station owners, this is an issue that is not going to
go away. The drop in test volume for test-and-repair stations is a serious economic issue
to station owners who need to recover the significant investments they made to purchase
test equipment. It is also an issue facing station owners in the Bay Area who are trying to
decide if it makes sense for them to invest in enhanced inspection equipment.
Page 64
CVS News
August 2003
Legislation Update
There is very little legislative action to report, as the Legislature has been focused on
adopting a state budget and several bills are now being held over as two-year bills.
Action in the past few weeks was limited primarily to two bills: SB 656, which addresses
measures to reduce particulate matter emissions, passed out of the Assembly
Appropriations Committee and is now being read on the Assembly floor; and the author
of AB 1390, which proposes tax credits for fuel efficient vehicles, amended the definition
of vehicles that would qualify for the credit.
Now being held over as two-year bills are AB 1394 (proposing to expand the Moyer NOx
reduction program to include particulate matter reduction projects), and both of the bills
that had proposed a fee on refineries to pay for various measures: AB 1500 (the
Petroleum Pollution Cleanup and Prevention Act), and SB 981 (the Children’s Health and
Petroleum Pollution Remediation Act).
Details on the above bills, as well as the others we are following, are provided in the
summaries below. Italicized bill numbers denote a bill that was amended since our last
summary; bills in brackets [ ] will be dropping from our coverage after this month.
Following the summaries is a quick guide to the status of each bill.
AB 740 (Pavley) - This bill is titled the Clean Air, Clean Water, and Coastal Protection
Act of 2004. If enacted, it would place a $2.9 billion bond act on the state ballot to
finance programs in the areas of air and water quality, and coastal protection. If the
proposed bond act were then approved by the voters, $200 million would be made
available to the California Air Resources Board (CARB) for the existing Carl Moyer
NOx reduction program, and $100 million would go to CARB to provide grants to
replace older schoolbuses. Another $100 million would be available for appropriation to
CARB for grants and loans to reduce air pollution from agricultural sources, including
replacement of engines and equipment, and support for equipment that would reduce
agricultural burning and reduce air pollution (e.g., tillage or fertilizing practices).
The largest outlay under the air quality section of the bill would go for incentives for the
early establishment of a hydrogen fuel infrastructure, for which $500 million would be
appropriated. CARB, in consultation with the California Energy Commission (CEC) and
various stakeholders, would be required to prepare a report to the Legislature outlining a
plan to use the authorized funds to “encourage the earliest practical, cost effective, large
scale inclusion of hydrogen fueled vehicles into the California vehicle market” and for
“projects that may be needed to promote the early commercial introduction of hydrogen
fueled vehicles in California.” The bill specifies that the plan should consider funding
subsequent infrastructure development through revenue bonds financed by a tax on
hydrogen. No money would be appropriated under this section until the required plan
had been submitted to the Legislature.
The remaining monies would go for projects related to water quality ($500 million),
watershed management ($500 million), river parkway projects ($300 million), and
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August 2003
protection of marine resources ($700 million). The bill includes an urgency statute so
that it would take effect immediately if approved.
The bill is currently on suspense in the Assembly Appropriations Committee.
AB 1390 (Ridley-Thomas) - Under this bill, sponsored by the International Truck and
Engine Corporation, a new section would be added to the tax code that would grant a tax
credit for the purchase of a new “fuel efficient vehicle.” The proposed tax credit is 20
percent of the purchase cost, with a cap of $2,000. To address budget concerns, the bill
specifies that the credit would be allowable only for years in which the Department of
Finance projects that state revenues will exceed expenditures, and includes several
criteria for the Department to consider in makings its projections. (Providing large tax
subsidies for the purchase of vehicles with higher fuel economy may be in conflict with
federal law preempting states from adopting standards relating to fuel economy.)
The credit would apply to new vehicles purchased beginning or after January 1, 2004,
and before January 1, 2008. The previous version of the bill specified that to qualify as a
“fuel efficient vehicle” and be eligible for the credit, the vehicle must operate on a nonpetroleum-based alternative fuel (e.g., electricity, ethanol, LPG) or have a fuel economy
rating at least 35 percent higher than the average fuel economy rating (miles per gallon)
for that particular CALCARS* vehicle class (vehicles with a combined fuel economy of
less than 21 miles per gallon would not qualify), when compared to the 2003 model year
vehicle in the same CALCARS class. The author amended this in July, however,
deleting the reference to alternative-fuel vehicles, deleting the specification for
comparison with the 2003 model year for comparison, and specifically including vehicles
“whose fuel economy is calculated in kilowatt-hours per 100 miles” (i.e., electric
vehicles). In deleting the 2003 model year comparison, the author also reinstated a
previous requirement that the California Energy Commission annually calculate the
average combined fuel economy for each CALCARS class. The bill continues to specify
that the CEC calculate the combined fuel economy for a qualifying vehicle based on an
assumed split of 55% city mileage and 45% highway mileage.
Another requirement for eligibility is that the vehicle must have been continuously
registered in California (from the date of purchase to the last date of the taxable year) to
the taxpayer claiming the credit. The amount of credit would be reduced by the
corresponding amount of any other incentive rebates or credits provided by CARB or
other state or local agencies for the purchase of fuel-efficient vehicles, and the length of
time over which the credit could be carried forward to another tax year would be limited
to the next year and five succeeding years.
The bill is being held under submission in the Assembly Committee on Revenue and
Taxation.
*
CALCARS refers to the predictive model (California Conventional and Alternative Fuel Response
Simulator) used by the California Energy Commission to forecast the penetration and use of conventional
and alternative-fuel vehicles.
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August 2003
[AB 1394 (Levine) - This bill contains several statements of legislative findings
regarding Diesel particulate matter (PM) emissions, particularly from older vehicles, with
the conclusion that it is in the public interest to replace older, higher-polluting heavyduty Diesel (HDD) trucks with newer, lower-emission vehicles. In accordance with that,
the bill would expand the Carl Moyer NOx reduction program to include projects that
reduce PM emissions. Under the bill, by July 1, 2004, CARB would be required to
assess HDD retirement programs, and revise the Moyer program guidelines by January 1,
2005, to include PM emission reduction projects. The bill specifies that for projects to be
eligible, the local air district in which the project would be located must have identified
areas (both geographic areas and industrial sectors) within the district where retirement
programs offered the greatest emission-reduction potential, conducted outreach efforts to
vehicle owners and potential purchasers, and have established a broker (either the district
itself, or a separate authorized entity) to receive donated vehicles and facilitate
transactions. The bill would require CARB to set the cost-effectiveness criterion for the
projects (NOx reduction projects must meet a cost-effectiveness standard of at least
$12,000 per ton of NOx reduced).
The bill had been scheduled to be heard in the Senate Transportation Committee in early
July, but that hearing was cancelled. It is now being held over as a two-year bill.]
[AB 1500 (Diaz) - Sponsored by the Sierra Club and Environment California (formerly
the environmental branch of CalPIRG, the California Public Interest Research Group, a
Nader organization), this bill would be known as the Petroleum Pollution Cleanup and
Prevention Act. Under this bill, a fee of $1 per barrel of crude oil received at a refinery
in California would be imposed, and the California Energy Commission (CEC) would be
required to determine the amount of crude oil refined into petroleum products other than
Diesel fuel and the amount refined into Diesel. Funds based on the amount refined into
Diesel would be allocated to Diesel emission reduction programs, including the Carl
Moyer program and CARB’s Lower-Emission Schoolbus program.
Based on the amount refined into non-Diesel products, the monies would fund two
accounts to be created by the bill: the Petroleum Pollution Remediation Account, which
would receive 15% of the non-Diesel funds; and the Petroleum Pollution Prevention and
Clean Transportation Account, which would receive the remaining 85%. The
Remediation Account would support activities related to remediation of soil and water
contamination. Funds in the Prevention and Clean Transportation Account would be
divided into two allocations: 10% would go to the CEC for incentives for low-emission
and alternative-fuel vehicles; fuels research and development; and infrastructure
development for alternative-fueled vehicles, particularly, as specified in the bill,
hydrogen fuel cell vehicles. The other 90% of the funds would go to the California
Department of Transportation for a variety of projects related to such things as
greenhouse gas reduction, improved access to public transit, and land use planning
projects that discourage sprawl.
The bill is now being held in the Assembly Transportation Committee as a two-year bill.]
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August 2003
SB 656 (Sher) - This bill is focused on reducing particulate matter (PM) emissions from
stationary, area, and mobile sources. Regarding mobile sources, the bill acknowledges
that CARB has already adopted a Diesel risk reduction plan to reduce Diesel PM, but
states that it is necessary to ensure prompt implementation of the plan. CARB, in
conjunction with the local air districts, would be required by January 1, 2005, to prepare
and adopt a list of all “readily available, feasible and cost-effective measures” for
reducing PM10 and PM2.5 from Diesel engines used in stationary and mobile applications.
These should include measures to retrofit and replace heavy-duty engines, provide
incentives in local government solicitations for use of lower-emitting heavy-duty
vehicles and equipment, establish heavy-duty vehicle idling restrictions, use ultra lowsulfur Diesel fuel, and provide incentives (and requirements, to the extent authorized by
law) for fleet turnover or the “pull-ahead” of new technology.
By July 31, 2005, CARB and the local districts would be required to adopt an
implementation schedule for the measures on the list that fall under their purview. (A
similar requirement would apply to stationary and area sources.) The bill specifies that
adoption and implementation should be prioritized based on the cost-effectiveness of the
measure and its effect on public health, air quality, and emission reductions, and that
there should be integration with the federal planning process for attainment of the PM air
quality standard to the extent that it does not delay implementation. Also, the schedule
adopted by a local air district should not include any control measure that has already
been adopted by the district or is scheduled for adoption within one year of the otherwise
proposed implementation date, is substantially similar (as determined by CARB) to a
proposed control measure, or for which the district has determined that is an alternate
measure that will achieve an equivalent or greater emission reduction and is readily
available, feasible, and cost-effective. In the latter case, the district would then be
required to adopt that measure. A further provision would allow districts to exempt a
stationary source from a control measure if the district determined that the source was
already pursuing all “readily available, feasible and cost effective” PM emission
reductions via either a market-based incentive program, or an emission reduction credit
program (in accordance with present requirements for those programs).
The bill passed the Assembly Appropriations Committee without amendment and is now
being read on the Assembly floor.
SB 701 (Florez) - This bill proposes a $4.55 billion California Clean Air Bond Act for
the March 2004 election. If enacted by the voters, the bulk ($3.9 billion) of the funds
would go to CARB, in accordance with the specified distribution outlined below.
Page 68
C
$400 million to the Carl Moyer program to reduce NOx emissions
C
$600 million to the Carl Moyer program specifically to offset NOx emissions
from farm equipment (included in this language is the provision that engines
powering farm equipment vehicles of any weight may be eligible, and that the
cost-effectiveness criteria otherwise specified in the Moyer program would not
apply)
CVS News
August 2003
C
$500 million for the purchase of low, ultra-low, and zero emission vehicles in
areas with the most severe air pollution impacts, as well as for the development
and purchase of propane motor fuel technology
C
$500 million for programs related to agricultural waste (e.g., agricultural waste
chipping)
C
$400 million to grants to local air districts or other agencies for technologies and
conservation management plans focused on improving air quality,
environmental protection, and agricultural production
C
$300 million to local air districts for emissions monitoring and heath and
environmental assessment
C
$500 million for asthma-related projects
C
$300 million for bus retrofit and fuel projects, including engine retrofit or
replacement programs for schoolbuses and transit buses, and refueling
infrastructure projects
C
$400 million for CARB’s Innovative Clean Air Technology Program
Of the remaining funds, $400 million would go to the Department of Agriculture for
programs related to animal operations, and $250 million would go to the Department of
Conservation for allocation to the California Farmland Conservancy Program and/or the
Williamson Act.
The bill passed the Senate Committee on Environmental Quality in early July and was
referred to the Senate Appropriations Committee.
SB 708 (Florez) - This bill addresses vehicles cited for excessive smoke emissions,
proposing to increase the fines for second and subsequent violations (from the current
range of $100–$250 to $135–$285), and allow low-income owners of smoking vehicles
to participate in the current repair assistance program available for vehicles that fail a
Smog Check inspection. (These vehicle owners would be eligible for participation only
if their vehicle failed a Smog Check inspection after receiving a smoking-vehicle notice.)
In addition, the bill would allow counties to establish combined sobriety and vehicle
smoke inspection checkpoints, and would designate a portion of the fines revenue to the
counties.
The bill is currently in the Assembly Appropriations Committee.
SB 709 (Florez) - This bill would authorize the San Joaquin Valley Unified Air Pollution
Control District (SJVUAPCD) to adopt a variety of vehicle and fuels-related programs,
and to require the District to impose fees on area-wide or indirect emissions sources to
cover the cost of programs related to those sources. It also would authorize the District
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August 2003
to impose a one-dollar vehicle registration fee to fund vehicle emission reduction
programs (including subsidies for vehicle purchases), and grant the District the discretion
to exempt zero emission vehicles (ZEVs) or partial zero emission vehicles (PZEVs) from
the fee.
The bill grants the SJVUAPCD the authority to adopt rules and regulations for vehicle
and/or fuel-related programs that promote the use of cleaner-burning alternative fuels,
and encourage and facilitate commuter reducer programs, and require employers with at
least 100 employees to establish such a program. In addition, the District would be
authorized to impose requirements for best available control technology and best
available retrofit control technology, and would be required to expand its small business
office to provide information and assistance to businesses and farmers. The District
would also be required to establish an expedited permit review process for facilities and
projects related to electric or other clean-fuel vehicle technologies. The bill defines
“clean fuels” as those designated by CARB for use in ZEVs or PZEVs, including
electricity, hydrogen, liquefied petroleum gas, methanol, and natural gas.
The bill passed the Assembly Committee on Natural Resources in June, and is now in the
Assembly Appropriations Committee.
[SB 981 (Soto and Romero) - This bill, titled the Children’s Health and Petroleum
Pollution Remediation Act, proposes a fee of 30 cents ($0.30) per barrel of crude oil
received at a California refinery for the production of gasoline and Diesel fuel. The
money would be deposited into a trust fund to be allocated to participating local air
districts based on their share of the state emissions inventory, which is to be determined
by CARB and reported to the State Controller. The bill specifies, however, that there
should be a minimum district allocation of $250,000. Each district receiving funds
would be required to develop and adopt programs to “mitigate or prevent the relative
harm caused by diesel and gasoline fuel in that district” that the “district determines have
a clear nexus with the relative public health harm caused by the refining and combustion
of gasoline and diesel fuels” within the district’s jurisdiction. Projects could include
those authorized under the Moyer program, as well as those established under a
competitive grant program to fund the intervention, treatment, prevention, and education
of sensitive populations with health maladies resulting from exposure to petroleumrelated emissions.
Some of the organizations eligible for grants, as specified in the bill, include mobile
asthma clinics and asthma research organizations; organizations examining the
relationship between air pollution and cancer; organizations dedicated to the treatment,
education, or prevention of the impacts of air pollution on the health and welfare of
communities; and organizations researching the health effects of air pollution from oil
refining and vehicle emissions. The district must also determine that the organization
provides health services to children and other sensitive populations for health problems
created by exposure to emissions from the refining and combustion of gasoline and
Diesel fuel.
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August 2003
Each district would be required to set funding priorities that take into consideration the
project’s cost-effectiveness, the use of new emission reduction control technologies in
conjunction with traditional fuels (e.g., retrofits), effects of public health and ambient air
quality, and other factors the district determines to be relevant.
The bill also imposes several requirements specifically on the South Coast Air Quality
Management District (AQMD), the Bay Area AQMD, the Sacramento Metropolitan
AQMD, the San Diego Air Pollution Control District (APCD), and the San Joaquin
Valley Unified APCD. Prior to adopting any program or spending any funds, these
districts would be required to adopt an expenditure plan that includes the expected costs
and the qualitative and quantitative benefits of each project, and determine that the
projects do not duplicate existing or past programs funded by CARB, the California
Energy Commission, or the State Department of Health Services. They would also be
required to hold at least one public hearing, identify potential sources of matching funds,
establish an advisory group, and prepare an annual report on the program.
The bill is currently being held in the Senate Committee on Revenue and Taxation as a
two-year bill.]
Quick Legislative Reference Guide
Bill
Subject
Status
AB 740
Clean Air, Clean Water, and Coastal Protection Act
Assy. Appropriations
AB 1390
Tax credit for fuel-efficient vehicles
Assy. Rev. & Tax.
AB 1394
Expand Moyer program to include PM emission
reduction projects
Two-year bill
AB 1500
Petroleum Pollution Cleanup and Prevention Act
($1.00/barrel fee)
Two-year bill
SB 656
List and implementation of PM emission reduction
measures for stationary, area, and mobile sources
Assy. floor
SB 701
California Clean Air Bond Act
Sen. Appropriations
SB 708
Increase fines for smoking vehicles
Assy. Appropriations
SB 709
Grant San Joaquin Valley UAPCD authority for
emissions reductions programs and $1 vehicle
registration fee
Assy. Appropriations
SB 981
Children’s Health and Petroleum Pollution
Remediation Act ($0.30/barrel fee)
Two-year bill
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August 2003
Rulemaking Calendar Update
There is no Board hearing scheduled for August. The tentative agenda for September
includes the Air Toxic Control Measure (ATCM) for solid waste collection vehicles, as
well as standards for Small Off-Road Engines (SORE). The most recent SORE
workshop and the recently released staff document for the hearing are covered elsewhere
in this issue. In early August, CARB released its supplemental staff report for the solid
waste collection vehicle item, which will be covered in the September issue of
CVS News.
CARB recently issued a revised scheduled for its upcoming series of workshops related
to development of a climate change regulation implementing the requirements of
AB 1493. The workshop to discuss Standards and Economics remains set for
September 18 in Sacramento, but the discussion of the inventory has been bumped from
that workshop (which was previously to run for two days, Sept. 18 and 19) and will now
be included in a two-part workshop that will also cover vehicle technology. The vehicle
technology workshop that was previously scheduled for October 15 has now been
delayed to a date yet to be determined. The remaining workshop, on alternative
compliance, has been delayed by two weeks, from October 2 to the date of October 14.
As we noted last month, there will be a workshop in El Monte on August 14 to discuss
proposed amendments to the vehicle service information rule (covered elsewhere in this
issue), and staff had hoped to coordinate this with a workshop on On-Board Diagnostics
(OBD) for heavy-duty vehicles. Subsequent to our publication last month, staff did issue
a notice for a workshop on August 13. That, however, was later postponed to September,
with a specific date not yet set. Staff did release the draft staff report and regulation,
which will be covered in our next issue.
Also in August will be a meeting of the Zero Emission Vehicle Stakeholder Outreach
group and the next in the series of workshops on Transport Refrigeration Units (TRUs),
as well as a symposium sponsored jointly by CARB and the California Energy
Commission to discuss the benefits of and issues related to alternative Diesel fuels. A
workshop has yet to be scheduled to discuss the proposed ATCM for fuel delivery tanker
trucks, but CARB continues to hope that it can make a November Board hearing.
The next meeting of the Portable Equipment workgroup has now been scheduled for
September 12. Although a date has not been set yet, staff also hopes to hold the next
workshop on the aboveground storage tank (AST) enhanced vapor recovery program in
early to mid-September. A revised draft certification procedure has now been made
available, and will be summarized in next month’s issue.
At this point, staff does not expect to hold any further workshops on its heavy-duty
Diesel software upgrade proposal before the final staff report is released in September
and the item goes to the Board in October. Similarly, regarding the heavy-duty Diesel
truck idling regulation, staff does not expect to schedule another workshop between now
and the Board hearing, believing that the final staff report (which will include revised
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August 2003
benefit calculations) should address the concerns raised at the last workshop and in
subsequent written comments. At this point, the item is still scheduled for the November
Board hearing, but staffing concerns may result in this being delayed a bit.
Consideration of rescinding or amending the Clean Fuels program (under which
alternative-fuel refueling stations are to be required once the anticipated number of
alternative-fuel vehicles reaches a certain number) has been “put on the back burner” for
this year and is not expected to be considered until next year. Also, the heavy-duty
Diesel in-use compliance regulation is now not expected to go to the Board until early
2005, so we are dropping both of these from our calendar for the time being, until there is
more activity.
The following table summarizes the status of the current rulemaking items. Those not
discussed above remain on schedule or uncertain at this time.
CARB Rulemaking Calendar
Projected by Sierra Research
Status as of August 2003
Next Action
Date of
Next Action
Projected
Hearing Date
Model Year or
Date of
Implementation
Amend Vehicle Service
Information Rule
Workshop
August 14
December
?
ATCM for Transport Refrig. Units
Workshop
August 26
October
2004-2009
Portable Equipment Regs
Workshop
Sept. 12
December
2006-2020
AB 1493 Implementation
Subject
Workshop
Sept. 18
September 2004
2009
ATCM for HDD Solid Waste
Collection Vehicles
Board Hearing
Sept. 25
September
2004-2009
SORE Standards
Board Hearing
Sept. 25
September
2005-2008
Heavy-Duty OBD
Workshop
September
?
2007
Adopt certific. & test procedures
for AST vapor recovery systems
Workshop
early to midSeptember
December
2006
Fuel cargo tank transfer regulation
Workshop
September
2005
2006
Heavy-Duty Diesel Engine
Software Upgrade
Board Hearing
October
October
1993-1998
Heavy-Duty Diesel Truck Idling
Reduction
Board Hearing
November
November
2007
ATCM for On-Road Heavy-Duty
Diesel Fueled Public Fleets
Workshop?
?
November
2005-2011
ATCM for Fuel Delivery Tanker
Trucks
Workshop
?
November
?
CVS News
Page 73
August 2003
Next Month:
Page 74
C
CARB/CEC Symposium on Alternative Diesel Fuels
C
ZEV Stakeholder Outreach Meeting
C
CARB Workshop on Service Information Rule
C
CARB Workshop on Transport Refrigeration Units
CVS News