MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, JULY 30, 1998 9:00 A.M. Vicki L. Medeiros, C.S.R. License No. 7871 Janet Nichol, C.S.R. License No. 9764 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Joseph C. Calhoun Mark DeSaulnier Dr. William Friedman Jack C. Parnell Barbara Patrick Sally Rakow Barbara Riordan Ron Roberts James W. Silva Staff: Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer Kathleen Walsh, General Counsel Jim Schoning, Ombudsman Also Present: Joan Denton, Ph.D., Director, OEHHA Dr. Paul Blanc, Scientific Review Panel Dr. John Froines, Scientific Review Panel Dr. Anthony Fucaloro, Scientific Review Panel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --o0o-- Page Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1 Opening remarks by Chairman Dunlap 3 AGENDA ITEMS: 98-6-1 Continuation of a Public Hearing to Consider the Appeal of the City of Los Angeles from Order No. 070297-04 of the Great Basin Unified Air Pollution Control District Introductory remarks by Chairman Dunlap 4 Staff Presentation: Mike Kenny 5 Public Comment: Andrea Lawrence 6 Jerry Gene 8 Brian Lamb 9 Philip Shiner 10 Todd Campbell 11 98-8-1 Public Hearing to Consider the Adoption of a Regulatory Amendment Identifying Diesel Exhaust as a Toxic Air Contaminant Introductory remarks by Chairman Dunlap 18 Staff Presentation: Mike Kenny 23 Robert Krieger 26 Melanie Marty, Ph.D. 36 Robert Krieger 45 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (Continued) --o0o-- Page Scientific Review Panel Presentation: Dr. John Froines 49 Ombudsman Presentation: Jim Schoning 69 Public Comment: Ellen Garvey 75 Paul Knepprath 76 Allan Zaremberg 79 Richard McCann 83 Jed Mandel 89 Bill Bunn 108 John Duerr 117 Mohsen Sohi 125 Dave Smith 129 Allen Schaffer 135 Stephanie Williams 145 Janet Hathaway 179 Dan Eisentrager 191 Merlin Fagan 195 Roger Isom 200 Todd Campbell 202 Bonnie Holmes Gen 213 Tim Carmichael 216 98-8-2 Public Meeting to Consider a Report by the Fuel Cell Technical Advisory Panel Program Introductory remarks by Chairman Dunlap 265 Staff Presentation: Mike Kenny 267 Dr. Fritz Kalhammer 268 Public Comment: Ken Smith 294 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v I N D E X (Continued) --o0o-- Page Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 301 98-8-3 Public Meeting to Update the Board on the Status of the ARB's Zero-Emission Vehicle (ZEV) Program and ZEV Technology Introductory remarks by Chairman Dunlap 302 Staff Presentation: Mike Kenny 304 Eileen Tutt 305 Public Comment: David Hermance 332 Cecile Martin 337 Mike Wirsch 338 Enid Joffe 340 Howard Levin 348 Janet Hathaway 352 Adjournment 354 Certificate of Reporter 355 Certificate of Reporter 356 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 2 P R O C E E D I N G S 3 --o0o-- 4 CHAIRMAN DUNLAP: Will this, the July meeting of 5 the California Air Resources Board, come to order. 6 Supervisor Roberts, will you lead the audience and 7 our Board in the Pledge of Allegiance. 8 (Thereupon the Pledge of Allegiance was recited.) 9 CHAIRMAN DUNLAP: Thank you, Ron. 10 Ms. Hutchens, would you please call the roll. 11 MS. HUTCHENS: Calhoun. 12 BOARD MEMBER CALHOUN: Here. 13 MS. HUTCHENS: DeSaulnier. 14 Edgerton. 15 Friedman. 16 BOARD MEMBER FRIEDMAN: Here. 17 MS. HUTCHENS: Parnell. 18 BOARD MEMBER PARNELL: Here. 19 MS. HUTCHENS: Patrick. 20 BOARD MEMBER PATRICK: Here. 21 MS. HUTCHENS: Rakow. 22 BOARD MEMBER RAKOW: Here. 23 MS. HUTCHENS: Riordan. 24 BOARD MEMBER RIORDAN: Here. 25 MS. HUTCHENS: Roberts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Silva. 2 BOARD MEMBER SILVA: Here. 3 MS. HUTCHENS: Chairman Dunlap. 4 CHAIRMAN DUNLAP: Here. 5 Thank you. I would like to remind those of you in 6 the audience that would like to present testimony to the 7 Board on any of today's Agenda items to please sign up with 8 the Clerk of the Board. 9 If you have a written statement, we would ask that 10 you provide us with 20 copies, so that the Board and the key 11 staff members may track your testimony. 12 Before we begin today's meeting, I would like to 13 take a moment to give some recognition to a Board employee in 14 the Technical Support Division, Mr. Chris Nguyen. 15 I received a letter a while back from Gene Kulesza, 16 the Environmental Manager of Riverside Cement, expressing his 17 appreciation for the immediate help he received from Chris. 18 He was having difficulty downloading the 19 Ceidars-Lite program from the Internet, so Chris sent the 20 update for the file to him by E-mail. 21 Not only did he send it, but he talked to the 22 gentleman. He talked him through getting it installed, so he 23 could use the program. 24 Chris then later called to make sure that the 25 program was working, and Mr. Kulesza expressed his PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 appreciation for the courteous and timely help and added that 2 it was refreshing to receive it from someone who was as 3 patient, and certainly took the time in his work in 4 government service to make sure that it worked out. 5 Since our Board prides itself on providing quality 6 customer service at all opportunities, it was gratifying to 7 receive such positive comments. 8 Is Chris with us today, by chance? 9 Chris, hi. Come on up here and take a bow, if you 10 would. 11 As I said, we pride ourselves on having fine staff. 12 This letter caught my attention, not so much that it was so 13 out of the ordinary, but it just showed a helpful quality 14 that we just want to recognize, so I want to commend you for 15 that. 16 MR. NGUYEN: I would like to take this opportunity 17 to thank the Board for recognizing for my contribution to the 18 Board and to the members of the public. 19 I would like to also thank my immediate supervisor, 20 Dennis Gudenow, who has given me the opportunity to work on 21 Ceidars-Lite, which brings me to the podium today, and I also 22 would like to thank Mrs. Linda Murchison, who is my Branch 23 Chief and my immediate supervisor, for helping me, supporting 24 me and encouraging me for many the years that I have worked 25 with the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 I look around and see many of my friends here today 2 who are also from the same branch. We are supporting actors 3 basically, helping many of the programs with the Board, and I 4 think that many of them could be here today standing here in 5 place of me, but, well, thanks. 6 CHAIRMAN DUNLAP: You're welcome. 7 That wasn't a bad speech, Chris. I know you didn't 8 know that was going to happen to you. 9 We will move into the Agenda. The first Item on 10 the Agenda today is 98-6-1, the Continuation of a Public 11 Hearing to Consider the Appeal of the City of Los Angeles 12 from Order Number 070297-04, of the Great Basin Unified Air 13 Pollution Control District. 14 This Item is a continuation from our June 15 twenty-fifth meeting. It is an appeal from the City of Los 16 Angeles regarding the Owens Lake Control Measures proposed by 17 the Great Basin District in its 1997 PM 10 Plan. 18 The hearing on the appeal was conducted 19 May 20, 1998. At the close of that hearing, the Board 20 continued the matter for one month and asked the parties to 21 work to gather in the interim in an attempt to resolve issues 22 raised in the Control Measures appeal. 23 On July twenty-fifth, after hearing from both 24 parties that tremendous progress had been made in 25 negotiations since the May twentieth hearing but that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 additional time was needed to finalize the process, the Board 2 granted the parties a joint request for further continuance 3 of the appeal hearing to today's meeting. 4 On Tuesday, July twenty-first, I received a letter 5 from the District advising our Board that the District's 6 Governing Board and the City of Los Angeles, through their 7 City Council, have approved a Memorandum of Agreement between 8 the District and the City to resolve the disputes concerning 9 the District's adoption of the Owens Valley Attainment 10 Demonstration SIP. 11 So, very good news. I understand that we have 12 representatives from both parties here to describe the 13 settlement and resultant actions. 14 Before that, however, I'll ask Mr. Kenny if he has 15 anything to add to this Item, and Mr. Kenny, if you would 16 introduce Ms. Barnes, I'd be grateful. 17 MR. KENNY: That would be fine. Ms. Barnes is here 18 again as a representative from the Attorney General's Office 19 as an advisor to the Board. 20 The only comment that I would make is that I have 21 also heard the good news, and I am pleased by it, and the 22 staff in general is pleased by it. 23 We always have thought that the best way to get a 24 solution here is for the parties to basically come to a 25 mutual consensus between themselves. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 So, with that, I guess I would turn it back to you, 2 Mr. Chairman. 3 CHAIRMAN DUNLAP: Okay. I guess we are going to 4 hear from the two parties. 5 I would ask them to come forward. We would ask you 6 to introduce yourselves again, though you are familiar to us 7 from a couple of months ago. 8 MS. LAWRENCE: Thank you, Mr. Chairman. It is a 9 pleasure to be here today. 10 Mr. Chairman and Members of the Board, I am Andrea 11 Lawrence, Mono County Supervisor and a member of the 12 Governing Board of the Great Basin Air Pollution Control 13 District. 14 The District's Chairman, Chris Gansberg, and our 15 APCO, Dr. Ellen Hardebeck, have asked me to address you on 16 behalf of the District. 17 Of course, it is my great pleasure to do so, and in 18 fact, it's nice, furthermore, to be able to start the day off 19 for all of you with some very glad tidings. 20 On Monday evening of this week, our District Board 21 unanimously approved an historic agreement with the City of 22 Los Angeles to settle our legal disputes and to promptly 23 start controlling the extreme particulate pollution 24 experienced by thousands of people in and around the region 25 of the Owens Lake. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 This agreement contains a categorical commitment by 2 the City of Los Angeles to attain the Federal Air PM 10 3 Standards by the deadline set out in the Federal Clean Air 4 Act. 5 The commitment is backed up by specific time tables 6 and milestones that assure the effective controls will be 7 promptly implemented and that control efforts will continue 8 unabated until attainment of the Federal Standard is 9 achieved. 10 I must, obviously, take this opportunity to 11 acknowledge some very important players. I'm leaving you for 12 last, Mr. Chairman. 13 I have to start off -- last but not least, I need 14 to say that -- but I need to acknowledge the officials of the 15 City of Los Angeles, whose willingness to address the 16 problems squarely and to work toward a solution. 17 In this regard, I would really like to acknowledge 18 David Freeman, the General Manager, who has just done an 19 outstanding job. In fact, he has been so effective we may 20 absorb him into the east side of the Sierra Nevada. 21 Also, Ruth Galanter, from the City Council, has 22 worked very hard with all of us as well, and very 23 effectively, and they have been tireless in that. 24 And finally, Mr. Chairman, to you who set us on the 25 right track that many months ago on May twenty-second. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 I need to tell you that you did exactly the right 2 thing from all of our point of view. You stepped back and 3 let us in the sense of cooperation and collaboration do what 4 we felt we could do all along, and we are enormously 5 appreciative and want you to know that we feel very good 6 about how far we have come and what the results will be, and 7 as you know me, I'm always willing to invite you over to the 8 east side to come and see us. 9 There are other members who will walk you through 10 the agreement briefly, but thank you very much, all of you. 11 CHAIRMAN DUNLAP: Okay. Mr. Jerry Gene. 12 MR. GENE: I am the Director of Water Resources for 13 the Department of Water and Power. 14 I'm here on behalf of our General Manager, David 15 Freeman, who would have liked to have been here for this 16 occasion, but about a year ago he made a commitment to be the 17 keynote speaker in a conference on electric vehicles in 18 Switzerland, and he didn't feel he could back out, so I think 19 that would be near and dear to your hearts as well. 20 We are appreciative also of the opportunity that we 21 have had to work together and the role of your Board and 22 staff in encouraging us to work out the problems. 23 I believe we have reached an agreement that meets 24 the needs of both parties; the City committing to solve the 25 problem, but also in return receiving the opportunity to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 extend the timeframe and cooperation in terms of developing 2 the measures as we move forward to solve the problem. 3 I think this has been in the best interest of both 4 parties, and we look forward to 2006 when we can tell you we 5 have reached attainment. 6 CHAIRMAN DUNLAP: Thank you. Very good. 7 All right. Mr. Phillip Shiner. 8 Brian, I was going to come to you. 9 MR. LAMB: Mr. Chairman, I am District Counsel, and 10 I'm appearing here with Phillip Shiner, Assistant City 11 Attorney. 12 We are jointly appearing to just walk through the 13 legal steps that we need to get from here to there very 14 briefly, and I want to first thank you, Mr. Chairman, and 15 your Board, for the patience and accommodation that you have 16 shown counsel throughout these proceedings. 17 I say this with good feelings that I am hopeful 18 that you will see less of me in the future. Mr. Chairman, 19 this Memorandum of Agreement provides that the District will 20 consider and presumptively adopt a revision to the State 21 Implementation Plan that was adopted by the Board on 22 July 22, 1997, and that provision will modify the timetables 23 and the milestones to provide the City with more flexibility 24 and working in a cooperative and adaptive relationship with 25 the District to attain the Federal Standards within the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 deadlines provided by law. 2 At this time what we are asking you to do is, in 3 order to keep our feet to the fire, is instead of dismissing 4 this appeal is to further continue it until the first public 5 hearing, the first regular Air Resources Board hearing to be 6 held after November 30, 1998, and to direct the Clerk to 7 comply with Government Code Section 11129 regarding 8 continuances. 9 We have asked you to serve the formal fee decision 10 that you adopted at the last meeting and to order off 11 calendar any other proceedings and any other pending City 12 appeal. 13 CHAIRMAN DUNLAP: Okay. If I could, Ms. Barnes, if 14 I could ask you to track what a motion or resolution might 15 look like, and then we will come back and revisit it with 16 you, so we can capture as much of this as we can. 17 MS. BARNES: Certainly. 18 CHAIRMAN DUNLAP: Great. 19 Mr. Shiner. 20 MR. SHINER: I'm here on behalf of the City of Los 21 Angeles. 22 I know that staffs on both sides have worked long 23 and hard to reach this agreement, and I'm confident that if 24 this matter is continued that it will make further progress 25 to get this problem solved. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 CHAIRMAN DUNLAP: Thank you. Very good. 2 I will ask you gentlemen to stay close. We have 3 one more witness, Mr. Campbell, from the Coalition. 4 We are appreciative of your traveling a great 5 distance to be here, but we also want you to know that we are 6 anxious to deal with this issue, so brevity would be a virtue 7 this morning. 8 MR. CAMPBELL: Brevity you will have. Good 9 morning, Mr. Chairman, Members of the Board. 10 I'm here to represent the Coalition for Clean Air, 11 a nonprofit dedicated to restoring healthful air to the State 12 of California, and I also represent a coalition of groups 13 today, namely the ADRO Environmental Company, the Asian 14 American Drug Abuse Program, the Communities for a Better 15 Environment, Heal the Bay, Korean Youth and Community Center, 16 Mono Lake Committee, Mothers of East Los Angeles-Santa 17 Isabella and the Natural Resources Defense Council. 18 We are all here today to support the negotiated 19 agreement between the City of Los Angeles, Department of 20 Water and Power and the Great Basin Air Pollution Control 21 District. 22 It is our belief that the implementation of the 23 agreement will help to protect the health of those who reside 24 near Owens Lake. 25 We are in full support, and I will keep that brief, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 and I thank you for your time. 2 CHAIRMAN DUNLAP: We have your written comments, 3 and we will make sure they get put into the record. Thank 4 you. 5 Okay. What I think I would like to do at this 6 juncture is do my best to recap this, and Ms. Barnes, I will 7 come to you, we have a letter, and our friend, the counsel 8 from Great Basin, just walked through that. 9 We are basically -- they have come to agreement. 10 They have followed the counsel we gave them to go back and 11 try to work this out. 12 They found the common ground. They need some time 13 to put together this MOA, and you are going through a process 14 to work on the details -- I'm looking to the legal counsel 15 there, a nodding of heads would be fine if I get that 16 right -- where you are going to negotiate the specificity. 17 We are not going to see it today. It's something 18 that you are working on. 19 There is going to be some attendant SIP that will 20 keep our plans whole; is that correct? 21 This will come together in the late November 22 timeframe. It will be all buttoned up, and then there will 23 be a SIP provision and that would come to us, Mr. Kenny -- 24 MR. LAMB: Mr. Chairman, sorry, just to be 25 specific, the parties have concluded a Memorandum of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 Agreement. 2 The Memorandum of Agreement is what was adopted by 3 the Los Angeles City Council and by our Governing Board. 4 So, it is an agreement. It's a model of 5 simplicity. It's almost two typewritten pages. 6 What it does is it provides that the District will 7 adopt a SIP revision before November thirtieth that conforms 8 to the terms of this Memorandum of Agreement. 9 So, we are going to be doing a SIP revision between 10 now and November thirtieth. At the end of November, then we 11 will submit to you the revised SIP for your consideration, 12 approval and regular course. 13 The only circumstances under which this appeal 14 would have to be resuscitated is if for some reason the 15 process broke down between now and November, which we 16 consider extremely unlikely. 17 We will, just to walk through the timetable, we 18 will give you the SIP by November thirtieth. Our agreement 19 provides that ARB has contemplated to approve it by the end 20 of February of next year, and then it will be sent to EPA. 21 It's contemplated that EPA would approve it by the 22 end of August of 1999 and that the Federal Plan would then be 23 avoided. 24 CHAIRMAN DUNLAP: Very good. 25 The reason why, just to remind a couple of my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 colleagues here, the reason why we are even engaged in the 2 details of this issue is because that the State law provides 3 that if agreement, common ground cannot be found, then we are 4 the appeal body that they come to. So, that's why. 5 The time process, Dr. Friedman, for example, would 6 be what would be considered normal or reasonable for SIP 7 updates or modifications. 8 Right, Mike? 9 MR. KENNY: Yes. 10 CHAIRMAN DUNLAP: Okay. So, this is not 11 extraordinary, Dr. Friedman, relative to time. 12 MR. KENNY: May I clarify one thing though, 13 Mr. Chairman, which is that it seems to me that what we are 14 talking about is continuing the Appeal of the Orders until 15 probably the December Board hearing, at which point there 16 would be a determination as to whether the Appeal is to be 17 abandoned or to be maintained. 18 Presumably there will be a SIP that will have been 19 adopted in November by the Great Basin, and so at that point 20 in December the Appeals would be abandoned, and then we would 21 actually go through the regular course of a SIP review 22 process and a SIP approval in January or February timeframe. 23 CHAIRMAN DUNLAP: All right. Would what I would 24 ask, would it be acceptable to both of your parties to 25 perhaps give us a written update for the September, October PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 Board meeting, just like you did this last letter, or date it 2 the twenty-eighth, would you do that? 3 MR. LAMB: We will be honored to do so. 4 CHAIRMAN DUNLAP: I think I can speak for the Board 5 on this, we are heartened and enthusiastic about your 6 willingness to sit down and work through this. 7 I think it is very good. We are very pleased, and 8 we also think that there is a lot that can be done by two 9 parties working together working through this issue, and 10 there is great history here, and there has also been the 11 feeling that there has been a new look at this issue, and 12 there has been some new leadership, and I think that has 13 boded well for all of us. 14 Any comments that the Board wants to make before we 15 put this into some form of a motion? 16 All right. I will do my best to get this going. 17 Ms. Barnes, if we were to incorporate what these 18 gentlemen suggested along with some report, we will 19 memorialize that in a resolution or a motion, what would it 20 look like? 21 What would it sound like? 22 MS. BARNES: Actually, the Board could certainly at 23 its discretion just adopt the proposals that have been made 24 to the Board from the parties and the correspondence that you 25 just referred to from July twenty-eighth. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Basically, they are asking to have the Control 2 Measures Order continue until after November thirtieth, and I 3 believe this Board is meeting the first part of December, I 4 want say December tenth; is that accurate? 5 CHAIRMAN DUNLAP: Yes. 6 MS. BARNES: You could continue it to the date 7 certain of December tenth and then incorporate in that a 8 request for an update, a written update from the parties. 9 The parties are also asking that this Board direct 10 staff to serve on the City and the District the Board's 11 decision, adopted on June twenty-eighth, regarding the 12 District Board Order Number 041697-05, which is the Project 13 Budget Order. 14 They are also asking this Board to take off 15 calendar the City's Appeal of District Order Number 16 040198-02, which is pending Appeal of the District's 1997-98 17 second fee assessment. 18 So, you could certainly just adopt, make a motion 19 to adopt those three requests and go from there. 20 CHAIRMAN DUNLAP: All right. The Chair would 21 entertain a motion. 22 BOARD MEMBER ROBERTS: So moved. 23 BOARD MEMBER PATRICK: Second. 24 CHAIRMAN DUNLAP: A motion made by Supervisor 25 Roberts and seconded by Supervisor Patrick. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 Any discussion we want to have on the motion? 2 I would ask Supervisor Roberts and Supervisor 3 Patrick that you would accept some written report from them 4 in October being added to your motion or to include that? 5 BOARD MEMBER ROBERTS: I would accept that. 6 CHAIRMAN DUNLAP: Well, we will look for a written 7 communication from both parties, hopefully together on one 8 letterhead, if possible, in that early October timeframe. 9 Any discussion on this Item? 10 Further discussion? 11 We will proceed with a voice vote. 12 All those in favor of the motion as outlined by our 13 counsel incorporating the July twenty-eighth request from 14 both the City of Los Angeles and the Great Basin Air 15 District, please, say aye. 16 Any opposed? 17 All right. The motion carries. 18 Thank you. Good luck. 19 It has been recommended to me that we take the 20 Diesel Item up next. I want to make sure that those that 21 have come some distance to be here for either the Fuel Cell 22 Item or the ZEV Item that we take it very seriously, 23 certainly our priority programs for us, but I think we are 24 going to move into the Diesel Item at this juncture. 25 I know we have a healthy witness list, so we will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 do our best to get to the witnesses. Before we begin this 2 Item, I would like to let you know how we handle sign-up for 3 testimony on it. 4 There is a Request to Present a Comment Card 5 available on the table outside of the hearing room, and staff 6 is there to assist you. 7 Please fill out the cards completely, giving all 8 requested information, and return them to the staff seated 9 outside, not the Clerk of the Board as is usually done. 10 This will facilitate the sign-up of so many people 11 that seem to be wishing to testify. If you have a written 12 statement, please give the staff the 20 copies. 13 For the other Items, you may sign-up with the Clerk 14 of the Board as has been the usual course. 15 I want to thank you for your cooperation. 16 The next Item on the Agenda today is 98-8-1, a 17 Public Hearing to Consider the Adoption of a Regulatory 18 Amendment Identifying Diesel Exhaust as a Toxic Air 19 Contaminant. 20 This Item for our consideration today is the staff 21 proposal to identify diesel exhaust as a TAC. 22 I want to take a moment and describe the process 23 that we are going to use for this very important Item. 24 It has received a lot of attention from both the 25 public and the Legislature, and many misconceptions have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 arisen. 2 Towards correcting these misconceptions, the 3 Legislature Senate Transportation Committee has scheduled an 4 informational hearing on August fourth. 5 They will be hearing from panels on the future of 6 diesel fuel use in California and related health effects 7 topics. 8 A number of Legislators have asked to defer our 9 action today until this Legislative Hearing occurs on the 10 fourth of August. 11 Out of respect for this request, I responded by 12 suggesting that we would proceed with hearing this Item today 13 and taking testimony, but we would defer action to our next 14 Board hearing date of August twenty-seventh. 15 I emphasize in my response that the Air Resources 16 Board's decision to list the substance as a toxic air 17 contaminant must by law focus on the health evidence 18 concerning exposure to the substance and possible adverse 19 health effects associated with this exposure. 20 Of course, we can consider information from the 21 Legislative hearing in our process, but we must base our 22 decision on the scientific evidence before us in order to 23 meet the requirements set out by State law. 24 What do the rest of the Board Members think about 25 deferring our vote on this Item until after the Senate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 hearing? 2 I have had some conversation with some of you, 3 there seems to be a consensus that it is a good thing. 4 Okay. With that, I will continue with a few more 5 comments, and then we will get into the presentations. 6 In the past we have heard about diesel exhaust with 7 regards to criteria pollutants, and in fact, great strides 8 have been made in reducing emissions from new engines. 9 These steps have significantly reduced ozone 10 precursors and particulate matter emissions from diesel 11 fueled vehicles and engines. 12 Along with reduction in criteria pollutants, there 13 have been significant reductions in toxic pollutants as well. 14 Today we are going to hear from members of our 15 staff, the staff of the Office of Environmental Health Hazard 16 Assessment, or OEHHA, Dr. Denton is here, welcome, and the 17 Scientific Review Panel, that exposure to diesel exhaust 18 presents a potential public health risk and is being 19 recommended for identification as a toxic air contaminant 20 under State law. 21 Diesel exhaust has been under review for listing as 22 a TAC for almost ten years. The identification process has 23 been a full public process consisting of three formal public 24 comment periods, three workshops, three SRP meetings and 25 numerous individual meetings and conference calls with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 interested parties. 2 In April, the SRP approved the report and 3 subsequently sent us their findings. The past 45 days has 4 constituted the fourth and final public comment period. 5 The identification is a listing process. No 6 controls are being proposed at today's hearing. 7 If the Board finds that diesel exhaust meets the 8 State law definition of a toxic air contaminant and adopts 9 the listing as such, that will complete the identification 10 process. 11 Diesel exhaust will then enter what we call the 12 Risk Management Phase. I would like the audience to know 13 that in the Risk Management Phase we will not consider 14 banning diesel fuel or engines. 15 As we will hear from staff, we will use an 16 inclusive process to determine whether any additional 17 emissions controls are needed to further reduce emissions 18 from diesel fueled engines. 19 Meanwhile, I want to emphasize to the audience, 20 again, and to the Board, that what we are deliberating on 21 today is the listing of diesel exhaust, and in our 22 deliberation we need to keep in mind the definition of a 23 toxic air contaminant, which staff will be presenting to us 24 shortly. 25 I would like to acknowledge the three Members of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 SRP who are here today, Dr. John Froines, from UCLA -- John, 2 good to see you -- Dr. Paul Blanc, from UCSF, and Dr. Anthony 3 Fucaloro, from Claremont McKenna College. 4 Thank you for coming. 5 The SRP continues to make an invaluable 6 contribution to our Toxic Air Contaminant Program by 7 providing a comprehensive and scientific peer review of our 8 reports. 9 These scientists are nationally and internationally 10 known and respected. We are fortunate to have them as 11 participants in this process. 12 The participation of the SRP along with other 13 stakeholders ensures that the best available scientific 14 information is used in the identification process. 15 At this point, I would like to ask Mr. Kenny, our 16 Executive Officer, to introduce the Item and to begin the 17 staff's presentation, which will be followed by Dr. Froines, 18 who will present the SRP's findings on diesel exhaust. 19 We will also hear the report by the Ombudsman, Jim 20 Schoning on the staff's outreach on the Item, and I 21 understand, Mr. Kenny, that you will begin your introduction 22 with an overview of our TAC Program. 23 MR. KENNY: Yes, Mr. Chair. 24 Before I do begin, I just want to, for the sake of 25 the record, clarify one thing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 When you looked to the rest of the Board Members to 2 determine whether or not there was consensus about deferring 3 until after the Senate hearing, what I observed was 4 essentially that every Board Member was in agreement that, in 5 fact, to defer was appropriate. 6 BOARD MEMBER ROBERTS: Mr. Chairman, just a 7 procedural question. 8 I have the feeling that there is going to be a fair 9 amount of testimony today. Does that mean that we are going 10 to repeat all of this in August once again? 11 CHAIRMAN DUNLAP: No. 12 We are going to have some management of that. We 13 will check witnesses and whatnot. 14 Ron, my concern about closing the hearing today, I 15 want to leave it open so that if anything emerges from the 16 Legislative Hearing we have an opportunity to have it brought 17 back and be considered in our deliberation, but I will do 18 some management so we do not have repeat witnesses covering 19 the same ground again. 20 BOARD MEMBER ROBERTS: Is it possible to close 21 additional public testimony but have a report on the Senate 22 information that was provided at the Senate? 23 CHAIRMAN DUNLAP: Later in the meeting I will get 24 together with our legal counsel, and we will have an 25 opportunity to chat. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 It is going to be a full day, I'm sure, and I will 2 come back and address that, but I don't know at this point. 3 We will figure out how to do it. 4 MR. KENNY: The Toxic Air Contaminant Program was 5 established in 1983 by Assembly Bill 1807 and consists of two 6 phases, risk management and risk assessment. 7 During the risk assessment, or identification 8 phase, the potential health effects of exposure to a 9 substance are examined. 10 During the risk management phase, the need for an 11 appropriate degree of controls for the substance are 12 evaluated. 13 As you can see from the slide, the first step of 14 the identification phase begins with a prioritization of 15 substances of importance in California. 16 Factors considered include California specific 17 emissions and exposure, persistence in the atmosphere and 18 potential risks to the public health. 19 Once a substance is selected for evaluation, we 20 prepare the Exposure Assessment Report, and OEHHA prepares 21 the Health Assessment Report. 22 Meanwhile, lead members of the SRP are appointed to 23 work with staff. The lead members are responsible for 24 providing scientific guidance to the staff in developing the 25 reports. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 The draft reports are distributed for public review 2 and comment. Public workshops are held where interested 3 parties can discuss issues with the staff and the Scientific 4 Review Panel lead persons. 5 After the public comment periods and workshop, 6 staff of the Air Resources Board and the Office of 7 Environmental Health Hazard Assessment consider the comments 8 received on the Report and revise the Report accordingly. 9 The Report then goes formally to the SRP, which is 10 charged with reviewing the Report to determine whether sound 11 scientific knowledge, methods and practices were used. 12 After the SRP is satisfied with the science 13 presented in the Report, it prepares Findings which are 14 submitted to the ARB. 15 The ARB then prepares a Staff Report that is 16 released for a 45-day public comment period preceding the 17 regulatory hearing to consider identification. 18 After an extensive nine-year effort, this is where 19 we are today with diesel exhaust. Once a substance has been 20 listed as a toxic air contaminant, the ARB begins a second 21 phase of the State's Air Toxics Program, Risk Management. 22 In this phase a needs assessment is conducted to 23 determine a need for an appropriate degree of further 24 controls with full public participation. 25 If diesel exhaust is listed as a toxic air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 contaminant, the ARB staff will create a Diesel Exhaust Risk 2 Management Working Group. 3 Participants will include interested industries, 4 associations, environmental groups, other governmental 5 agencies, such as the U.S. EPA, and the air districts, 6 including other interested parties. 7 The Working Group would advise ARB staff and serve 8 as a forum for ongoing communication as additional 9 opportunities to further reduce emissions from diesel engines 10 are examined. 11 I also want to point out that when the Board 12 identifies a substance as a toxic air contaminant, it does 13 not adopt, per say, the risk values included in the health 14 assessment. 15 These risk values are provided to reflect an 16 assessment of the current scientific knowledge on the 17 potential magnitude of the risk posed by a substance and to 18 provide guidelines for risk managers. 19 The ARB and OEHHA staffs recognize that these 20 health values are subject to change based on new peer 21 reviewed scientific studies, and a process is in place to 22 amend these health values should new studies so indicate. 23 During the risk management phase, we would work 24 closely with the risk managers on how the health information 25 is used. So, in many respects the proposed action today is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 similar to the action taken almost ten years ago by the 2 International Agency for Research on Cancer, that is to 3 recognize that diesel exhaust is a toxic substance. 4 With that, I would like to call upon Mr. Robert 5 Krieger, of the Stationary Source Division and Dr. Melanie 6 Marty, Acting Chief of the Air Toxicology and Epidemiology 7 Section at OEHHA, to present the exposure and health 8 assessments for diesel exhaust. 9 Mr. Krieger. 10 MR. KRIEGER: Thank you, Mr. Kenny, and good 11 morning, Chairman Dunlap and Members of the Board. 12 My name is Robert Krieger, and I will be presenting 13 a brief history and then an overview of Part A of the 14 Exposure Assessment prepared by ARB staff for diesel exhaust. 15 In my presentation I will provide you with a 16 summary of the proposed action for the listing for diesel 17 exhaust as toxic air contaminant, a background of Diesel 18 Exhaust Identification Program and a brief summary of our 19 Part A Exposure Assessment. 20 At that point, I will be turning my presentation 21 over to Dr. Melanie Marty, of the Office of Environmental 22 Health Hazard Assessment, who will provide a summary of the 23 health assessment for diesel exhaust. 24 Then, I will close with a discussion on the steps 25 that will follow the identification process and our staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 recommendation. 2 Today, the Board will be considering diesel exhaust 3 an a toxic air contaminant. The listing is based on whether 4 diesel exhaust meets the definition of a toxic air 5 contaminant and whether or not a threshold exposure level can 6 be identified, in other words, no significant adverse health 7 effects are anticipated. 8 If diesel exhaust is listed as a toxic air 9 contaminant, the Board accepts but does not adopt the cancer 10 and noncancer health values as presented in the comprehensive 11 risk assessment, in doing so, essential guidance is provided 12 to the risk management process. 13 Next, I will provide a background to our Toxic Air 14 Contaminant Program. 15 As you heard from Mr. Kenny, we have a 16 Comprehensive Toxic Air Contaminant Program in California. 17 A toxic air contaminant, or TAC, is defined in the 18 law as an air pollutant, which may cause or contribute to an 19 increase in mortality or in serious illness or which may pose 20 a present or potential hazard to human health. 21 In October of 1989, we entered diesel exhaust into 22 the identification phase of the Program. The National 23 Institute for Occupational Safety and Health first 24 recommended that whole diesel exhaust be regarded as a 25 potential occupational carcinogen based on animal and human PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 evidence in 1988. 2 In 1989, the International Agency for Research on 3 Cancer listed diesel exhaust as a probable human carcinogen, 4 and the U.S. Environmental Protection Agency initiated an 5 evaluation of both the cancer and noncancer health effects. 6 ARB and OEHHA gave priority to the evaluation of 7 diesel exhaust because it met the Toxic Air Contaminant 8 Program criteria related to the potential risk of harm to 9 public health, emissions, exposure and persistence in the 10 atmosphere. 11 This slide shows the chronology of the extensive 12 nine year process for the evaluation of diesel exhaust. 13 I won't go through each bullet on the slide, but I 14 will summarize for you a few key activities. Diesel exhaust 15 entered the Toxic Air Contaminant Identification Process in 16 1989. 17 Since that time, three SRP versions of the draft 18 report were prepared and provided for public review and 19 comment. 20 Three public workshops were held to discuss the 21 report. Two focused scientific meetings were held, with the 22 most recent being the March 11, 1998 Special SRP Meeting with 23 invited scientists, which culminated in the SRP approving the 24 Report in April of 1998. 25 With the next few slides I will be providing an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 overview of the Exposure Assessment Report. Diesel exhaust 2 is a complex mixture of thousands of gases and fine particles 3 emitted by internal combustion engines. 4 Some of the components are suspected or known to 5 cause cancer in humans. Diesel exhaust contains over 40 6 substances that have been identified as toxic air 7 contaminants. 8 Over 90 percent of the particles are much smaller 9 than 2.5 microns in diameter and therefore can be inhaled 10 deep into the lung. 11 This slide shows the 40-plus compounds that have 12 been designated as Federal hazardous air pollutants, or HAPS, 13 and have been identified by ARB as toxic air contaminants; 15 14 of these, marked by asterisks, are listed by the 15 International Agency for Research on Cancer as carcinogenic 16 to humans or as possible or probable human carcinogens. 17 This slide shows the sources in emissions of diesel 18 exhaust in California. Diesel exhaust PM contributes about 19 26 percent of the total statewide PM from all stationary and 20 mobile source fuel combustion sources. 21 Of sources of diesel exhaust, almost 60 percent is 22 from on-road vehicles. Diesel exhaust PM was used as a 23 primary measure of our exposure assessment. 24 It is important to note that many existing Federal 25 and State regulations already provide significant reductions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 in emissions from diesel trucks and buses, including oxides 2 of nitrogen and particulate matter. 3 This slide shows the significant reductions in the 4 emission rates from diesel exhaust particulate matter from 5 uncontrolled on-road heavy-duty diesel engines to today's 6 diesel engines. 7 Particulate matter emissions from newer on-road 8 heavy-duty diesel engines are about 90 percent cleaner today 9 than from uncontrolled levels. 10 I would also like to note that hydrocarbon 11 emissions have also decreased as a result of meeting these 12 particulate matter standards. 13 This slide shows the reductions in the emissions of 14 nitrogen oxides from uncontrolled on-road heavy-duty diesel 15 engines to those effective in 2004. 16 NOx emissions from newer on-road heavy-duty diesel 17 engines are about 60 to 70 percent cleaner today compared to 18 uncontrolled levels. 19 The ARB, U.S. EPA and the manufacturers of diesel 20 engines have signed two statements of principles to reduce 21 further emissions of NOx and hydrocarbons from on-road 22 heavy-duty diesel engines and off-road farm and construction 23 equipment. 24 The on-road standard will cut NOx and hydrocarbon 25 emissions from these vehicles in half by 2004, as shown on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 this slide. 2 Full implementation of the off-road standard is 3 expected to cut NOx and hydrocarbon emissions by more than 60 4 percent from many off-road engines. 5 Reducing NOx will also reduce particulate matter 6 emissions formed because of the secondary reactions in the 7 atmosphere. 8 Several other regulations or programs have been 9 implemented to reduce the exposures to diesel exhaust. 10 These include the 1993 Cleaner Diesel Fuel 11 Regulation, PM NOx standards for new off-road diesel engines, 12 PM standards for cars and light-duty trucks and a Road-Side 13 Smoke Inspection Program for On-Road Heavy-Duty Diesel 14 Vehicles. 15 New alternative fuel buses on order are about 70 16 percent of the average annual purchase of urban buses in 17 California. 18 ARB staff are currently pursuing programs which 19 would involve the use of reformulated diesel fuel in 20 locomotives, more stringent PM emission standards for 21 off-road diesel engines and further PM reductions for 22 light-duty cars and trucks. 23 In addition, the Administration has proposed a 24 major Incentives Program to assist in the early introduction 25 of cleaner engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 Currently, the pending budget includes $25 million 2 for this Program. 3 As stated in the previous slides, there have been 4 significant advances in the development of technology to 5 control diesel emissions. 6 This slide demonstrates the projected diesel 7 exhaust PM emissions through 2010. Diesel exhaust 8 particulate matter emissions are expected to decrease by 9 about 30 percent between 1995 and 2010. 10 Although not shown on this slide, diesel exhaust, 11 NOx and hydrocarbon emissions are both expected to decrease 12 by about 15 percent between 1995 and 2010. 13 The projected emissions include the reductions 14 anticipated from not only the heavy-duty diesel truck and bus 15 engine standards, as in the previous slide, but other 16 measures, such as the 1993 Reformulated Diesel Fuel 17 Regulation and off-road engine and light-duty diesel vehicle 18 standards. 19 Some of the approaches used to meet the standards I 20 described in the last few slides include engine 21 modifications, such as exhaust gas recirculation, timing 22 retard, high pressure injection and electronic engine 23 controls. 24 The use of reformulated diesel fuel has also 25 resulted in decreased emissions of particulate matter in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 nitrogen oxides. 2 Next, I will present our estimates of Californian's 3 exposure to diesel exhaust. We estimate that in 1995 the 4 population weighted average outdoor concentration is 2.2 5 micrograms per cubic meter. 6 We have also estimated a daily exposure 7 concentration considering the time you spend indoors to be 8 about 1.5 micrograms per cubic meter. 9 Near source concentrations of diesel exhaust PM may 10 be several times average outdoor concentrations. As a result 11 of current control measures already in place, we estimate 12 that the average outdoor concentrations will decrease about 13 30 percent from 1995 to 2010. 14 Emission reductions from adopted new engine 15 emission standards and diesel fuel reformulation were taken 16 into account in calculating these exposure numbers. 17 This table lists the ambient diesel exhaust PM 18 concentration estimates developed by a number of researchers 19 using a variety of data bases and estimation methods. 20 As you can see, ARB's outdoor ambient estimates 21 compare well with the ranges of concentrations presented by 22 these researchers. 23 In the course of developing the Report, we 24 considered how emissions from the use of pre-1993 diesel fuel 25 differed from post-1993 reformulated diesel fuel. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 To address this question, we contracted with the 2 College of Engineering, Center for Environmental Research and 3 Technology, at the University of California, in Riverside, to 4 study the differences in exhaust emissions from the use of 5 these fuels. 6 Results show a comparable criteria of pollutant 7 reductions to those estimated for the 1993 Reformulated 8 Diesel Fuel Regulation. 9 Results also show that although the mass of some of 10 the individual compounds may have decreased, the same toxic 11 air contaminants exist in the exhaust from the use of both 12 pre-1993 and post-1993 diesel fuel. 13 We also acknowledge that this study was limited in 14 scope and that further research would be helpful to quantify 15 the amounts of specific compounds admitted from a variety of 16 engine technologies, operating cycles and fuel to better 17 characterize the differences between old and new fuels and 18 technology. 19 Currently the ARB is funding research to evaluate 20 further diesel exhaust. For the fiscal year 1998-1999, ARB 21 has approved three diesel exhaust related studies. 22 These include studies to further improve our 23 off-road diesel emissions inventory, develop analytical 24 methods to add oxides of nitrogen testing to our Heavy-Duty 25 Diesel Inspection and Maintenance Program and to test the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 physical and chemical characteristics of size segregated 2 particulate matter emissions from gasoline and diesel powered 3 on-road motor vehicles. 4 That concludes my summary of Part A Exposure 5 Assessment. 6 Now I will turn the presentation over to Dr. 7 Melanie Marty, who will give an overview of the OEHHA's 8 Part B Health Risk Assessment, and then I will close our 9 presentations with the steps that we would take following the 10 identification and our staff recommendation. 11 Melanie. 12 DR. MARTY: Good morning, Chairman Dunlap and 13 Members of the Board. My name is Melanie Marty, and I'm with 14 the Office of Environmental Health Hazard Assessment. 15 I am here this morning to provide you with a brief 16 overview of the health effects assessment of the diesel 17 exhaust. 18 The proceedings will cover a summary of the process 19 we went through to conduct our evaluation. I will touch 20 briefly on the assessment of noncancer health effects, and I 21 will also describe the cancer Health Effects Assessment, 22 including information on genetic damage, cancer epidemiology, 23 the findings of OEHHA and of other health agencies, our 24 cancer risk estimate and some related concerns. 25 The Health Effects Assessment review process was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 extensive. OEHHA reviewed all available health effects 2 studies of diesel exhaust, including studies of animals and 3 studies of genetic damage to cells. 4 OEHHA reviewed and considered all submitted public 5 comments during the four years since the release of our 6 original draft. 7 We coordinated our assessment with the U.S. EPA 8 staff, who are also required to evaluate the health effects 9 of diesel exhaust, and this includes reviewing each other's 10 work and communicating staff to staff. 11 OEHHA jointly sponsored a scientific workshop on 12 the human health effects of diesel exhaust in January of 13 1996. 14 As you have heard, the Health Effects Assessment 15 was discussed at several Scientific Review Panel meetings and 16 workshops. 17 In March of 1998, the Scientific Review Panel 18 invited scientists who worked on diesel exhaust issues to 19 provide testimony to them. 20 The Scientific Review Panel peer reviewed the 21 Health Effects Assessment and approved the document in April 22 of 1998. 23 The noncancer health effects include increased 24 symptoms of throat and bronchial irritation in humans exposed 25 to diesel exhaust. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 Recent studies have demonstrated allergic 2 immunological responses in humans and animals. Lung damage 3 has been demonstrated following long-term exposure in humans 4 in the occupational setting and in experimental animals. 5 We estimated a safe level of exposure based on 6 animal studies, and this is for noncancer health endpoints. 7 For long-term exposure, OEHHA estimates that a 8 level of five micrograms diesel exhaust particulate per cubic 9 meter of air would be protective against noncancer health 10 effects. 11 This is in line with the U.S. EPA's existing 12 reference concentration as published in their Integrated Risk 13 Information System of five micrograms per cubic meter, and 14 also falls within the range of estimates of exposures that 15 the World Health Organization considers to be protective 16 against noncancer health effects. 17 The presence of chemicals that cause gene damage 18 provides a basis for the biological plausibility of 19 carcinogenicity of diesel exhaust. 20 Whole diesel exhaust and diesel exhaust extracts 21 were reported to be mutagenic, or to cause genetic damage to 22 bacteria, to human cells and other mammalian cell systems. 23 There is evidence which suggests that diesel 24 exhaust components are bound to the DNA of workers and of 25 animals exposed to diesel exhaust, and finally, mutagenic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 components of diesel exhaust were found in the urine of 2 exposed workers and animals. 3 Studies in animals have demonstrated that diesel 4 exhaust exposure induces lung cancer. The U.S. EPA, the 5 International Agency for Research on Cancer and the World 6 Health Organization all concluded that diesel exhaust causes 7 lung cancer in animals. 8 While OEHHA agrees that diesel exhaust exposure 9 induces lung cancer in animals, we did not use animal data in 10 developing the range of risk estimates to humans, because 11 human data were available. 12 Use of human data thus avoids the uncertainty of 13 trying to extrapolate from evidence in animals to people. 14 The U.S. Environmental Protection Agency's Clean 15 Air Science Advisory Committee also suggested to the U.S. EPA 16 staff that they use human epidemiology data to quantitate the 17 risk to humans rather than using the animals, so we are on 18 the same wave length as the U.S. EPA. 19 There are 30 independent human studies of workers 20 exposed to whole diesel exhaust which consistently show a 21 pattern of elevated lung cancer risk. 22 These worker studies evaluated bus and truck 23 drivers, railroad workers, dock workers, transport workers 24 and heavy-equipment operators. 25 In addition, various diesel fuels and engine types PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 were used in these occupational settings. I want to 2 emphasize that OEHHA assessed all available human studies and 3 reports which described the relationship between diesel 4 exhaust exposure and cancer risk. 5 The published studies consistently show elevated 6 lung cancer risk in diesel exhaust exposed workers. 7 We concluded that the findings were likely not due 8 to a bias in the studies or to chance. 9 Finally, the results of these studies are 10 biologically plausible, that is, they make sense in light of 11 the constituents of diesel exhaust, which includes a number 12 of carcinogens. 13 This is probably the most important slide. As they 14 say, a picture is worth a thousand words. 15 This graph presents 20 estimates of relative risk 16 from 12 of the human studies that accounted for the influence 17 of cigarette smoking on lung cancer in the workers. 18 A relative risk of one, which used to be indicated 19 by a dotted line in the slide, I don't know what happened to 20 the dotted line. 21 If you look on the left axis, you can see it starts 22 at zero and goes up to one. A relative risk of one means 23 that basically there is no effect, that the incidence of lung 24 cancer in the workers who are exposed to diesel exhaust isn't 25 any different than the incidence of lung cancer in workers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 who were not exposed to diesel exhaust. 2 The average relative risk estimates from 12 human 3 studies that accounted for the influence of cigarette smoking 4 on lung cancer are depicted here. 5 We have 20 relative risk estimates from 12 studies. 6 The little dashes on the slide represent the average relative 7 risk estimated from the data. 8 If there was no effective diesel exhaust, the bold 9 dashes would be expected to more or less fall above and below 10 one. 11 One can see that all but one of the dashes are 12 above one, and in many cases, the 95 percent competence 13 interval, which is represented by the vertical bar, is also 14 completely above one. 15 We combined all the information from these studies 16 in what is called a meta-analysis. That point is indicated 17 as the last point on the right by the arrow. 18 It is clear from the meta-analysis that 19 occupational diesel exhaust exposure increases the risk of 20 lung cancer by about 40 percent in the worker study. 21 In 1990, diesel exhaust was listed as known to the 22 State to cause cancer under Proposition 65. The current 23 Report states that the evidence is consistent with a causal 24 relationship between occupational diesel exhaust exposure and 25 lung cancer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 A number of other health agencies have also looked 2 at diesel exhaust. The U.S. EPA produced several drafts, the 3 latest of which was in 1998, and in that they state that the 4 human evidence is highly suggestive of carcinogenicity and 5 characterized diesel exhaust as just short of a known human 6 carcinogen. 7 The International Agency for Research on Cancer in 8 1989, stated there was limited evidence for carcinogenicity 9 in humans and classified diesel exhaust as a probable human 10 carcinogen. 11 The Health Effects Institute in 1995, and the World 12 Health Organization in 1996, wrote reports on diesel exhaust 13 carcinogenicity in which they state the data are consistent 14 in showing weak associations between exposure to diesel 15 exhaust and lung cancer. 16 I'll briefly discuss our quantitative cancer risk 17 estimates. Our unit risk range is based on human data as 18 suggested by the Scientific Review Panel and also are 19 suggested, coincidentally, by the Clean Air Science Advisory 20 Committee to U.S. EPA staff. 21 We estimated cancer unit risk in our document from 22 the summary of all the human studies, that was our first 23 step, just trying to bracket the range of risk. 24 We then conducted a detailed, quantitative risk 25 assessment with data from two railroad worker studies, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 unit risk from our detailed analysis fall within the range 2 estimated from the results of the meta-analysis. 3 The risk to truck drivers calculated by NIOSH, 4 that's the National Institute for Occupational Safety and 5 Health, and recently published, I believe this month, fall 6 within our range of risk. 7 In our document we have thoroughly evaluated 8 uncertainties, especially that associated with exposure 9 estimates. 10 To take into account these uncertainties, OEHHA 11 provides a range of unit risk as required in the statute. 12 Research is always welcome to help reduce 13 uncertainty, and as you have heard, the ARB is supporting a 14 research proposal by the Health Effects Institute, which 15 might produce information to reduce uncertainty, in which we 16 would use sometime down the line. 17 This slide compares other researchers unit risk 18 estimates to OEHHA's estimates. OEHHA's down at the bottom, 19 130 to 2400 per million per microgram per cubic meter. 20 The U.S. EPA range is the top number, falls between 21 30 and 2000 per million persons exposed per microgram of 22 diesel exhaust particulate. 23 Their range includes animal studies, and the animal 24 studies generally provide a lower estimate than the human 25 studies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 The World Health Organization also used animal 2 studies to estimate a range of 16 to 71 per million. 3 NIOSH evaluated risks based on a study of truck 4 drivers, which had relatively good estimates of exposure. 5 Their range is 100 to 1600 per million and is comparable to 6 that developed by OEHHA from the railroad worker studies. 7 Harris, back in 1983, estimated risks of 1400 per 8 million from data in transport workers in England, and Smith 9 in 1998, estimated a risk of 300 per million based on 10 meta-analysis of a variety of workers. 11 In summary then, OEHHA's noncancer risk analysis 12 supports the existing U.S. EPA value of five micrograms per 13 cubic meter as an exposure level that would be protective of 14 noncancer health effects. 15 OEHHA was unable to identify thresholds below which 16 no carcinogenic health effects are anticipated. The range of 17 potential lung cancer risks that we calculated is 130 to 2400 18 per million persons exposed to one microgram diesel exhaust 19 particulate per cubic meter and is based on human data. 20 Just for information, the average daily total 21 exposure is about one and a half micrograms per cubic meter, 22 as we heard earlier in ARB's presentation. 23 Increased lung cancer risk has been observed in 24 numerous studies of diesel exhaust exposed workers. 25 The animal data and studies of genetic damage PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 support the cancer findings in humans. Noncancer health 2 effects include respiratory irritation, lung damage and 3 allergic responses. 4 Finally, independent assessments, both simple and 5 complex, lead to similar risk estimates using a variety of 6 data sets from different occupational settings. 7 Then, finally, OEHHA believes that there is an 8 increased cancer risk to the public from breathing diesel 9 exhaust. 10 That concludes my presentation. 11 MR. KRIEGER: I will now provide a summary of the 12 steps that we would take following the identification of 13 diesel exhaust as a toxic air contaminant. 14 If ARB identifies diesel exhaust as a toxic air 15 contaminant, a needs assessment will be conducted to 16 determine if any further regulatory action is necessary. 17 The needs assessment will include diesel exhaust 18 present in future emissions, available control technologies, 19 cost for reducing emissions and the potential adverse impacts 20 to the public and environment associated with the 21 implementation of a control measure. 22 In its assessment, the staff would focus on 23 technological opportunities beyond those already in place to 24 further reduce public exposure to diesel exhaust. 25 If this assessment identifies additional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 technically-feasible and cost-effective opportunities for 2 reducing exposures to diesel emissions within the authority 3 of ARB, the ARB would then develop specific control measures 4 in an open, regulatory process with full public involvement. 5 In order to facilitate this process, we plan to 6 create a Diesel Exhaust Risk Management Working Group to 7 advise ARB staff during the process. 8 We also plan to work with OEHHA, the air pollution 9 control districts, affected industries and other interested 10 parties to develop Risk Management Guidelines for the air 11 districts to use when permitting stationary diesel engines. 12 The Diesel Exhaust Risk Management Working Group 13 would be advisory in nature and would provide a forum for 14 ongoing communication and coordination in the development of 15 the needs assessments for diesel exhaust. 16 The group would also identify research needs and 17 share the status of ongoing diesel research. Participation 18 in the Working Group would be open to all interested parties, 19 including interested industries, associations, environmental 20 groups and other governmental agencies, such as the U.S. EPA 21 and air districts. 22 Meetings of the group would be publicly noticed and 23 open to all. If diesel exhaust is listed as a toxic air 24 contaminant, the Working Group could be formed within two 25 months of the listing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 If the ARB determines a need for further control, 2 the Working Group would work with us in prioritizing the 3 effort. 4 Some of the strategies we would look at include 5 tighter emission standards for new vehicles, further 6 reformulation of diesel fuel, maintaining low emissions in 7 use and intensive programs to promote early introduction of 8 cleaner engines, such as the accelerated turnover of in-use 9 diesel engines and alternative engine and fuel technologies. 10 We anticipate that the focus will be on the 11 particulate matter and volatile organic component of diesel 12 exhaust. 13 As mentioned before, during this process, we would 14 not consider banning diesel fuel or engines. 15 In summary, diesel exhaust is a complex mixture of 16 gases and fine particles. Diesel exhaust has widespread 17 exposure and is present in the ambient air. 18 Much has been done to significantly reduce 19 emissions of and exposures to diesel exhaust. As a result, 20 diesel exhaust exposures have decreased and are anticipated 21 to continue to decrease through 2010. 22 The evaluation of diesel exhaust as a toxic air 23 contaminant has been under an extensive nine year public 24 process. 25 OEHHA has reviewed the science and concludes that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 an increased lung cancer risk has been observed in numerous 2 studies. 3 Although the current available science is strong, 4 we support efforts for further research on diesel exhaust 5 composition and health. 6 And if the Board identifies diesel exhaust as a 7 toxic air contaminant, we are committed to an inclusive 8 stakeholder process and will form a Diesel Exhaust Risk 9 Management Working Group. 10 We are also committed to developing Risk Management 11 Guidelines for air districts. 12 We conclude that diesel exhaust meets the 13 definition of a toxic air contaminant and recommend that the 14 Board approve our proposal to identify diesel exhaust as a 15 toxic air contaminant with no identified level of exposure 16 below which no cancer effects are anticipated. 17 We recommend that the Board direct staff to begin 18 the risk management phase for diesel exhaust and to form a 19 Diesel Exhaust Risk Management Working Group to coordinate 20 efforts with the U.S. EPA, industry, environmental groups and 21 other interested parties. 22 We also recommend that the Board direct staff to 23 work closely with OEHHA, the air districts, affected 24 industries and other interested parties to develop Risk 25 Management Guidelines that the districts can use for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 permitting stationary diesel engines. 2 The staff will report back to the Board within one 3 year on the progress towards developing these guidelines. 4 Thank you. That ends my presentation. 5 CHAIRMAN DUNLAP: Thank you, Mr. Krieger. 6 I would like to introduce Dr. John Froines, who has 7 been serving as an acting Chair of the SRP. Dr. Froines is 8 the Director of the UCLA Center for Occupational 9 Environmental Health, and he will be providing an overview of 10 the SRP's findings on diesel exhaust. 11 I think he will be shedding some light on the core 12 of the debate as well. 13 Dr. Froines, welcome. 14 DR. FROINES: Thank you. Thank you, Chairman 15 Dunlap. 16 Good morning, Members of the Board. I'm pleased to 17 present the findings of the SRP this morning. 18 Looking over my notes before I got here, I realized 19 that I was a little bit like a graduate student preparing for 20 an exam, and I may have over prepared in terms of the number 21 of materials that I have before me, so I think that what I am 22 going to do is go along for awhile and give you some of the 23 information that I have developed and then stop, and 24 hopefully, I won't then try your patience with me. 25 What I think the first thing that I need to say is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 as we talk about the evidence, as OEHHA talks about the 2 evidence, and the ARB, I think it is important to keep the 3 definition of a toxic air contaminant in mind, because the 4 question really comes down to whether the agency staffs and 5 the SRP have met our requirements within the context of that 6 definition. 7 So, I say that at the outset. 8 I want to quote from our Findings the Conclusions, 9 so we know at the beginning what we have agreed upon. I just 10 want to quote three quickly. 11 Based on available scientific information, a level 12 of exhaust exposure below which no carcinogenic effects are 13 anticipated and have not been identified, based on available 14 scientific evidence, as well as the results of the risk 15 assessment, we conclude that the diesel exhaust be identified 16 as a toxic air contaminant. 17 Finally, for these reasons, which are stated 18 throughout the findings, we agree with the science presented 19 in Part A by ARB and Part B by OEHHA, in the Report on Diesel 20 Exhaust, and the ARB staff recommendation to its Board, that 21 diesel exhaust be listed by the ARB as a toxic air 22 contaminant. 23 So, those are the conclusions that we start with. 24 Now, let me go back and begin to fill you in on some of the 25 evidence and other factors that will go into this process. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 First, I want to introduce Dr. Anthony Fucaloro, 2 who is sitting at my right. Dr. Fucaloro is responsible for 3 the Part A, the exposure assessment phase of the documents of 4 the SRP review, and so he would be available for answering 5 questions specifically about those general areas. 6 Secondly, Dr. Paul Blanc, from the University of 7 California, in San Francisco, will be joining us sometime 8 between now and 11:00, I think, and so he will be available 9 for questions. Paul is an Occupational Physician whose 10 principal area is in the area of health effects. 11 I am not going to go over the other findings of the 12 SRP in detail, you have them, and I want to focus on some 13 specific issues rather than trying to cover everything. 14 Let me say at the outset that, as you know, and we 15 know, and everybody who is sitting behind me knows, that this 16 has been a very long process. 17 Hopefully we are bringing it to some level of 18 closure, at least with respect to the risk assessment phase. 19 The Scientific Review Panel has been an active 20 participant throughout that nine-year process. We 21 participated in the San Francisco workshop. We participated 22 in a workshop held in this room in Sacramento, and we held 23 our own workshop. 24 I want to say a couple of words about our own 25 workshop. Basically, the Panel recognized how important PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 diesel exhaust was going to be. 2 Now, you should realize that the Panel has never 3 taken verbal testimony at a meeting since it was begun in 4 1983. 5 We've participated in workshops and hearings or 6 other kinds of scientific venues, but we have never taken 7 public testimony during the course of SRP meeting. 8 We broke that precedent with diesel exhaust. We 9 held our own workshop for the first time in our history, 10 precisely because the issues before us were so important. 11 We held a workshop on the scientific issues related 12 to diesel exhaust on March 22, 1998, to hear from some of the 13 most respected scientists in the United States on the diesel 14 exhaust issue. 15 There were four representatives requested by 16 industry, a speaker from the Natural Resources Defense 17 Council, five scientists not affiliated with particular 18 interests and one speaker from OEHHA. 19 One interesting facet that occurred at the meeting, 20 most of which was devoted to scientific discussion, at one 21 point during the course of the meeting an SRP Panel Member 22 asked if any of the participating scientists degreed with the 23 conclusion that diesel exhaust met the definition of a toxic 24 air contaminant. 25 None, none of the invited scientists disagreed that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 diesel exhaust met the definition of a TAC, and as I say, 2 these scientists came from a very wide range of backgrounds 3 and interests, and I think that their views have to be taken 4 quite seriously. 5 I want to comment on some recent research findings 6 that have not been included in the reports, because I believe 7 that they underscore the conclusions made by the staff of 8 OEHHA, ARB and the Panel. 9 These findings became public after the completion 10 of the Report. First, there is the paper by Steenland, which 11 came out just recently, and his colleagues at NIOSH have 12 recently published a study of diesel exhaust and lung cancer 13 in the trucking industry. 14 The full report was not available to us at the SRP 15 meeting. The authors conclude, and I quote, "In summary, our 16 data suggest a positive and significant increase in lung 17 cancer risk with increasing estimated cumulative exposure to 18 diesel exhaust among workers in the trucking industry. 19 "The data indicated that a male truck driver 20 exposed to five micrograms per cubic meter of elemental 21 carbon, which is typical for a truck driver, over a 45-year 22 working lifetime, has an increase in lung cancer risk of one 23 to two percent above the background risk of five percent." 24 That is a risk of lung cancer of one to two in a 25 hundred, which is a very high risk by our standards. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 This is a particularly important report, because it 2 carefully evaluates the dose response relationship, and it 3 does a thorough investigation of exposure related issues. It 4 addresses smoking. 5 The increasing trends with cumulative exposure is 6 particularly relevant. It compares exposures to those in the 7 railroad worker study and concludes the risk analysis for 8 truckers is consistent with Cal EPA evaluation of railroad 9 workers. 10 A related paper by Stayner, et. al., reviews the 11 various risk assessments for diesel and finds strong 12 consistency between the various approaches. 13 Quote, "It is noteworthy that the epidemiologic 14 risk assessments lie within a tenfold range, regardless of 15 which data set was used or what modeling approach was taken." 16 And we are going to find that throughout the course 17 of this discussion, that, in fact, the risk assessment 18 estimates really, actually do fall within a relatively narrow 19 range. 20 A recent report presented at the American Thoracic 21 Society meeting at the end of April by German scientists 22 concluded, "All jobs, in this case it's professional drivers, 23 with diesel engine exhaust exposure combined at an odds ratio 24 of 1.4," and it was statistically significant. 25 "The study provides further evidence that exposure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 to diesel engine exhaust is associated with an increased lung 2 cancer risk," unquote. 3 Dr. Daniel Greenbaum, of HEI, reported a study of 4 potash miners in Germany from 1997 which found a relative 5 risk of lung cancer as high as 2.2 compared to unexposed 6 workers. 7 So, what we have here is four new studies, 8 essentially, since the April meeting of the Scientific Review 9 Panel, all of which show positive findings with respect to 10 lung cancer and exposure to diesel exhaust. 11 Twelve additional studies of diesel exhaust of 12 varying types were reported at the American Thoracic Society 13 this year. Many of those studies look at the mechanism of 14 diesel exhaust producing adverse consequences to the 15 respiratory system. 16 In general, the studies illustrate noncancer 17 respiratory effects and are associated with diesel exhaust 18 exposure. 19 I really do want to emphasize that. You know, in 20 these discussions we spend a lot of time talking about lung 21 cancer and risk assessment and all of these other very 22 weighty issues, and they are weighty, but I think we can not 23 pay attention to the immense evidence for noncancer effects, 24 and in particular respiratory effects associated with diesel 25 exhaust exposure, and so that is an issue which I think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 sometimes doesn't get the focus of attention. 2 Now, I want to turn away from the most recent 3 research and say a few words about the criteria for making 4 decisions. 5 I really want to talk about two criteria. One, is 6 there a biological plausibility, is there a biological basis 7 to think that diesel exhaust would be a lung carcinogen? 8 Secondly, I want to talk about whether or not there 9 is a sufficient evidentiary basis for the decisions that we 10 are making today. 11 Melanie has gone through a lot of this, so I am 12 going go very rapidly through it. 13 First, I think that we can ask the question, are 14 there chemical compounds in diesel exhaust that are known or 15 suspected of causing cancer in humans? 16 The answer is clearly, yes. There are 15 compounds 17 that have been identified as human carcinogens, and there are 18 more than 100 compounds which have been identified in animal 19 or genotoxicity studies as having evidence of mutagenicity or 20 carcinogenicity. 21 So, we have a real soup, contained of a very large 22 number of compounds known to be carcinogens. It is also 23 known that the particle size of diesel exhaust is small, and 24 therefore we have significant deposition of those particles 25 in the alveolar regions of the lung. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 Much of what we breathe gets breathed out because 2 it's so small, but that which is breathed in and deposits is 3 deposited in the alveolar region, and the result of that is a 4 very slow clearance process, so that when something is 5 deposited in the alveolar region of the lung, it stays there 6 for a long time, and I'm not talking about 24 hours, or 48 7 hours, I'm talking about months to a year or a half life, and 8 that is when the particle is deeply embedded, it's there for 9 a considerable period of time, and what does that mean? 10 That means that you have a lot of time for PAHs to 11 be desorbed from particles because of the long residence 12 time. 13 So, there is a greater potential for a dose to the 14 lung than one might anticipate unless one thinks about the 15 long residence time in the lung. 16 The data available to us indicates diesel exhaust 17 contains a large number of known animal and human 18 carcinogens. It is genotoxic. It is mutagenic. 19 The carcinogens on the carbonaceous particles are 20 bioavailable, that is, they can be extracted from the 21 particles and enter various cells, and there is animal and 22 human evidence of carcinogenicity. 23 In other words, there is a clear biologic rationale 24 for identifying diesel exhaust as a lung carcinogen. 25 Let me switch and say a few words about the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 evidentiary basis for this decision. Dr. Allan Smith 2 reviewed 35 studies and chose 23 which met his selection 3 criteria. 4 The pooled risk estimate was 1.33. He chose 21 of 5 23, pardon me, that had risk estimates greater than one. 6 The two he did not include had less than ten lung 7 cancer cases. Michael Lipsett, who is here, reviewed 30 8 studies and determined 25 had relative risks greater than 9 1.0, although all of them were not statistically significant. 10 The pooled risk estimate for studies that I just 11 spoke of is 1.43. 12 Debra Silverman, of the National Cancer Institute, 13 has discussed Dr. Allan Smith's analysis and made the 14 following conclusions: The scientific contribution of this 15 analysis is that it elucidates the striking consistency of 16 the findings of studies of diesel exhaust and lung cancer. 17 As the authors point out, only 2 of 23 studies had 18 a relative risk of less than one, a finding that is unlikely 19 due to chance. 20 The authors convincingly show that potential 21 confounding by cigarette smoking is likely to have little 22 impact on estimated relative risk for diesel exhaust and lung 23 cancer. 24 Third, this bias, and here she is talking about the 25 exposure assessment issue, this bias due to misclassification PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 of exposure would probably have been to bias point estimates 2 to the null value, that is, underestimate risk. 3 Let me translate that for you. If we say that 4 everyone up there is exposed to high levels of diesel, and 5 everybody here is exposed to low levels of diesel, but we 6 make a mistake and John and Mike are exposed to high levels, 7 and two of you are exposed to low levels, that's 8 misclassification of exposure. 9 We have mixed up who has high and low exposures. 10 Well, what is the effect of that on the risk 11 estimate? 12 If you misclassify or misestimate exposure, that 13 tends to underestimate risk. So that if you have a, quote, 14 "misclassification of exposure," and exposure has been a 15 major issue throughout all of this discussion, then keep in 16 mind that the bias will tend to underestimate risk rather 17 than overestimate risk. 18 The epidemiologic studies show consistent evidence 19 for a causal relationship between occupational diesel 20 exposure and lung cancer, and as previously stated, this 21 finding is biologically plausible. 22 Now, I was going to go through here and talk about 23 a paragraph about noncancer effects, but let me just quickly 24 say a few words. 25 Essentially, I think that we have to be careful to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 not to give -- we have to be careful to give attention to the 2 noncancer effect, because I personally think they are quite 3 important. 4 There is growing evidence that diesel exhaust plays 5 a role in the increasing prevalence of asthma and other 6 allergic respiratory disease, including allergic rhinitis. 7 Much of this work has occurred since 1996, and some 8 of the best work is being conducted by Andrew Saxon and his 9 colleagues in Immunology at UCLA. 10 Allergic reactions have been shown to be increased 11 following exposure to diesel exhaust. The implications of 12 recent work is that natural exposure to diesel exhaust may 13 result in increased expression of respiratory allergic 14 disease. 15 Diesel is also associated with excess bronchitic 16 symptoms of cough, phlegm, wheezing and decrements in 17 pulmonary function. 18 Now, let me say a few words about the range of risk 19 estimates, and these are important. The data from human 20 epidemiologic studies was used to develop a risk range for 21 lung cancer associated with diesel exhaust exposure in 22 occupationally exposed populations. 23 The Scientific Review Panel concluded that a unit 24 risk value is three times to ten minus four. 25 The unit risk value in this case derives from the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 Panel, it does not derive from OEHHA, so what you have before 2 you is essentially the range of risk developed by OEHHA. 3 I wrote out a lot of numbers here, and I am not 4 going to give them to you, but I'm going to want to say that 5 when one goes through all the other investigators, whether it 6 be Keil-Steenland, Dale Hayes, Dr. Allan Smith, 7 Dr. Stayner and others, and other agencies, what you find is 8 that the range of risk is extremely narrow, basically running 9 from around 10 to minus four to around ten to minus three, 10 and there is internal consistency within those ranges among a 11 very large number of investigators, and I think that's 12 extremely important, because as you know, the law requires 13 the agencies and the SRP to develop a range of risk and it is 14 very, we take it as a very positive statement that the range 15 of risk from a number of investigators is so close and there 16 is such consistency in the data. 17 I want to say just a couple of words about 18 uncertainty, and then I'll stop. In terms of quantitative 19 risk assessment, further research will assist narrowing the 20 range of risk identified in the Part B document. 21 Particular attention should be given to improve the 22 exposure assessment associated with diesel exhaust. 23 Most of the epidemiologic studies did not collect 24 quantitative information on exposure level. The exposure 25 estimation represents a key area of uncertainty, and this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 uncertainty limits identification of the dose response 2 relationship. 3 Evaluation of the changes in fuels and technology 4 on the emissions, both in terms of concentrations and 5 composition, represent important areas for research. 6 The recognition of the ongoing research needs 7 should not impact, however, our determination of diesel 8 exhaust as a TAC. 9 I should caution you when we talk about exposure, 10 because I have written a lot about it, when we are talking 11 about cancer, we are talking about people who are exposed 20, 12 30, 40 years, people who are exposed over a very long period 13 of time. 14 Then we talk about, how do we estimate exposure, so 15 we make sure we know when they were being exposed to diesel 16 exhaust what those exposure levels were. 17 Well, we have before us a problem which is inherent 18 in occupational epidemiology, and that is we always have to 19 go back and do retrospective exposure assessment analysis, 20 because we don't collect information over a 40-year period on 21 exposure. 22 There is no information of that kind being 23 collected in the United States today on these kinds of 24 issues. 25 So, we talk as though doing better exposure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 assessments was a kind of panacea, but the fact of the matter 2 is we are always going to have problems with 3 misclassification and estimation of exposure because we don't 4 collect it at a level which is adequate. 5 In some cases it would be far too costly to have 6 the levels of exposure data collection. So, be aware of 7 that. 8 I think that we desperately need to improve our 9 exposure assessment in these epidemiologic studies, but there 10 is also no free lunch. 11 We have to be cautious and work to design studies 12 that will really answer the questions that we have before us. 13 Just on a personal note, I have served on the SRP 14 since 1983. This is the sixth chemical that I have presented 15 to the Board. 16 The five previous were benzene, ethylene dibromide, 17 formaldehyde, perchloroethylene and methylene chloride. 18 I can safely say that all of them were 19 controversial. 20 Each had uncertainly associated with the evidence 21 of its toxicity or carcinogenicity. 22 With benzene it had to do with risk modeling. 23 With methylene chloride it was the use of 24 toxicokinetic models to adjust for differences in species. 25 With perchloroethylene it had to do with the degree PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 of metabolism and so on and so forth. I won't go through all 2 of them. 3 Of those five that I presented to the Board, four 4 of them the decisions were based on animal evidence and one 5 was based on animal and human evidence. 6 As you can appreciate, in animal studies we can 7 control conditions, we can control exposure and we can 8 control timing and a host of other factors. 9 In human studies we are stuck with the fact that 10 humans eat, drink, move around, drive cars and do all sorts 11 of things they shouldn't, and because of that, when we get 12 around to estimating exposure, we say, well, how do we do 13 that? 14 It becomes very difficult. So, when you do 15 epidemiology, epidemiology is very difficult to establish 16 causality, to establish the relationship between exposure and 17 an outcome precisely because human beings are, unfortunately, 18 not well controlled. 19 Animal evidence is different. We can control the 20 condition, but then we ask questions about the relevance of 21 the animal studies, about the interspecies variability and so 22 on and so forth, and you know all of those arguments. 23 Let me just say, with methylene chloride, we 24 extrapolated from animal studies that were collected at 4,000 25 parts per million and extrapolate down to the ambient levels PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 of three parts per billion, that's a millionfold 2 extrapolation. 3 With diesel we are using human data, and we are 4 extrapolating down from around a value of 60 micrograms per 5 cubic meter to 70 micrograms per cubic meter, down to levels 6 of one, two and three micrograms, so we are extrapolating in 7 a range of 30. 8 In this case, we have a narrower range of 9 extrapolation than any other chemical that I am aware of, 10 that I have had to deal with as precisely, because we are not 11 going from the high dose animal studies to low dose human 12 atmospheric conditions. 13 So, in some respects with diesel we have very 14 consistent data in terms of the number of epidemiologic 15 studies and the quality of those studies. We have consistent 16 risk of range findings, and we have very strong biological 17 plausibility. 18 I think that, basically, that is the reason that 19 the SRP unanimously concluded that the State had met the 20 requirement of AB 1807 in preparing their Report, and we 21 agree that diesel should be listed as a toxic air 22 contaminant. 23 Thank you for your patience. 24 CHAIRMAN DUNLAP: Thank you, Dr. Froines. I 25 appreciate that overview and the time you put in to give us a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 context. That was important. 2 All right. 3 Do any of the Board Members have questions at this 4 juncture? 5 I will perhaps lead with one. 6 Dr. Froines, I'm asking for an opinion in your view 7 about what is the CASAC situation, what is going on there, 8 substantively? 9 We have heard some things about them. 10 DR. FROINES: I am not the person to answer that 11 question. 12 I have not been involved in the CASAC. 13 CHAIRMAN DUNLAP: Well, what I was getting at, 14 perhaps you are not, but it was having to do with animal 15 versus human studies and the like, I wanted to try to get 16 that clarified for me. 17 DR. FROINES: I could just say one thing. 18 I think that in this case the evidence around the 19 human studies is extremely strong and consistent and all of 20 the other things that I said. 21 I think that one of the problems with the animal 22 studies, and they are certainly very, very strong animal 23 studies, especially in the rat, but there are also positive 24 findings in the mice, I think the problems with those studies 25 is that there is still considerable debate about the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 mechanism of the carcinogenicity of diesel exhaust in the 2 rat, and I think that CASAC recognized that and felt that 3 essentially the risk assessment that was to be done should be 4 done on the basis of the human evidence for which there is 5 less controversy around mechanistic detail, and I think that 6 is the underlying basis. 7 CHAIRMAN DUNLAP: Okay. That is what I was looking 8 for, kind of a context. 9 We have a healthy witness list. It seems to be the 10 Board's druthers to move into the witnesses. 11 We will take up questions as they come. 12 DR. FROINES: We will be here in case you have 13 questions after the testimony. 14 CHAIRMAN DUNLAP: Very good. Thank you. 15 I would like to recognize Dr. Fucaloro as well. 16 You are patiently sitting there. If there anything 17 that you wish to add, please pipe up. 18 DR. FUCALORO: Actually, I'm not shy. 19 DR. FROINES: He is the newest member of the Board. 20 I'm not sure he would have gone on the Panel if he 21 knew his first test was coming. 22 CHAIRMAN DUNLAP: Well, it is that high pay, I 23 know, that keeps you involved. 24 All right, Mr. Kenny, or staff. 25 Genevieve, Dr. Froines' quick overview on the CASAC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 thing, do you want to add to that at all? 2 MS. SHIROMA: Yes. 3 Dr. George Alexeeff can provide some additional 4 brief insights. 5 CHAIRMAN DUNLAP: The reason that I bring it up is 6 that I noticed in some of the correspondence we received, it 7 is likely going to be covered by some of the witnesses, and I 8 just want to kind of get a context for the Board before we 9 got into the witnesses, and when it comes up we will have 10 some reference point. 11 That's all. 12 DR. ALEXEEFF: My name is George Alexeeff. I'm 13 Deputy Director for Scientific Affairs at OEHHA. 14 And just to give you also a little bit of context, 15 CASAC is the Clean Air Advisory Committee for the U.S. EPA, 16 performs a similar function to the Scientific Review Panel in 17 this case. 18 U.S. EPA has had a health document that they have 19 been developing for three years longer than us. So, they 20 have been going through a long process as well. 21 They presented their document to their science 22 committee a couple of months ago, I believe in May. 23 At that meeting, in my perspective, what the CASAC 24 concluded, and the guidance they gave the U.S. EPA staff, was 25 similar to the guidance that our Scientific Review Panel gave PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 us last October. 2 Last October we went to the Science Panel, and we 3 said, we have received a large number of public comments, 4 particularly about the use of animal data and whether the 5 animal data was really a relevant or the best use of 6 information. 7 The Science Panel told us, you have an ample 8 evidence of human information, use the human information. 9 So, that is what we did for our side. Now, U.S. 10 EPA went to their Science Panel with the animal data and 11 heavily relied on that animal data. 12 So, what happened at the CASAC meeting is CASAC 13 told their staff, use the human data. 14 CHAIRMAN DUNLAP: Okay. All right. Very good. 15 What I think we will do is hear from our Ombudsman 16 and then go to the witnesses. 17 MR. SCHONING: Thank you, Mr. Chairman and Members. 18 As you have heard, the Item before you has traveled 19 a lengthy road before arriving in your laps. 20 In 1989, with Board approval of ARB staff commenced 21 developing the risk assessment for diesel exhaust, and on 22 March nineteenth and twentieth of 1990, the ARB conducted a 23 public meeting, the first, to discuss risk assessment of 24 diesel exhaust. 25 Some 25 stakeholders participated this time. More PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 than 300 were notified. 2 I might add that as briefings and meetings 3 progressed, the item drew additional interest, and the 4 mailing list grew to 1600 stakeholders. 5 In addition, meeting workshop notices have also 6 been posted on ARB's Website. In June of 1993, stakeholders 7 representing more than 20 organizations were given a risk 8 assessment progress briefing, and in December of that year, 9 ARB conducted a diesel fuel task force organizational meeting 10 pertaining to cleaner diesel fuel. 11 In June of 1994, the ARB conducted the first of two 12 public briefings on its diesel exhaust risk assessment work. 13 The first public comment began two days later on 14 June 19, 1994, when ARB released Parts A and B of the Diesel 15 Exhaust Risk Assessment. 16 In September of that year, the ARB conducted a 17 public workshop about the proposed identification of diesel 18 exhaust as a toxic air contaminant. 19 This drew more than 100 stakeholders. Staff took 20 the comments received, did further work on the risk 21 assessment, and this was followed by the second ARB conducted 22 workshop in January of 1996. 23 Comments received at this workshop, again, resulted 24 in additional staff work. ARB conducted a second public 25 briefing on the risk assessment on May 9, 1997, just last PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 year, and this commenced the second public comment period on 2 the assessments document. 3 Yet a third public workshop was held in July of 4 1997, and the second public comment period closed in August 5 of 1997. 6 This was followed by the first of three SRP 7 meetings, which Dr. Froines described to you, on 8 October 16, 1997, to consider the Diesel Exhaust Risk 9 Assessment document. 10 As Dr. Froines indicated, the format of these 11 meetings and the purpose is to enable the Panel Members to 12 receive the risk assessment document and all written public 13 comments in advance. 14 Some of the Members read the comments, I'm told, 15 before they read the actual risk assessment document. 16 The SRP meeting function is to enable the Panel 17 Members to discuss the adequacy of the document among the 18 nine disciplines, which are represented on the Panel. 19 OEHHA and ARB staff made presentations about 20 particular parts and aspects of the report, and dialogue then 21 ensues among panelists and agency staff. 22 Although the statute authorizes the Panel to 23 receive verbal testimony, the Panel has opted instead to 24 receive public comments in writing before its meetings and to 25 consider them during their deliberations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 ARB and OEHHA staff made some changes in the risk 2 assessment in response to public and SRP comments, and 3 published a revised risk assessment document on the 4 twenty-third of February of this year for public comment. 5 During this comment period, the SRP held its first 6 ever Invited Scientist Public Workshop on March 11, 1998. 7 The Panel invited ten world renown scientists with 8 diesel exhaust expertise to discuss various aspects of the 9 science. 10 Eight were in attendance, one participated from 11 Florida by teleconference and another from Cambridge, 12 Massachusetts, by video conference. 13 The audience included two especially keen 14 observers, Board Members Calhoun and Friedman. 15 This was followed by the closing of the public 16 comment period on the twelfth of April, this year, 1998. 17 ARB and OEHHA staff further revised the diesel 18 exhaust risk assessment in response to public and SRP 19 comments, and the SRP met for the third time on this subject 20 on the twenty-second of April of 1998, to consider the 21 revised risk assessment and all received public comments. 22 This SRP meeting resulted in the approval of the 23 report and agreement on the Panel's findings. 24 These are the Appendix 2, I believe, in the yellow 25 Initial Statement of Reasons for Rulemaking. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 The fourth public comment period on this Diesel 2 Exhaust Risk Assessment document commenced on the twelfth of 3 June 1998, and brings us to today. 4 As you are well aware, an extensive and 5 comprehensive outreach program has occurred, and clearly, by 6 virtue of those present today, interested and affected 7 stakeholders have had extensive opportunities to participate 8 in shaping the report and the recommendation which is before 9 you. 10 CHAIRMAN DUNLAP: Okay. Thank you, Mr. Schoning. 11 For those of you that haven't been to our Board 12 meetings in a while, we have asked Jim to give us an overview 13 on the public process that any item has gone through before 14 it gets to the Board for decision. So, I appreciate that 15 perspective. 16 All right. We have some 20 witnesses or so that 17 have signed up. 18 Yes, Dr. Froines. 19 DR. FROINES: I have written comments, and so I 20 will give them to staff so the Board might have them, because 21 I didn't cover everything that I have written down. 22 CHAIRMAN DUNLAP: That will be fine. We will make 23 sure that gets distributed. 24 We will ask the Board Clerk to do that. 25 All right. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 When I call your name, if I could get you to kind 2 of cue up on the wall there. I don't know where we are with 3 seating. I know the seating is short, but we will have you 4 cue up on the wall, and we will move -- 5 I am not going put a time limit on people, but I am 6 going to ask that as a courtesy you try to limit your 7 remarks, particularly those that follow some of the earlier 8 speakers, so that you are not redundant, and try to limit 9 them in the neighborhood of five minutes or so per speaker. 10 If you need more time, we will give it to you, but 11 I would prefer that you try to limit it for that period of 12 time. 13 We will start with Ellen Garvey, from CAPCOA, and 14 then Paul Knepprath. 15 Ellen, please come forward, and then a panel that 16 is headed up with eight or so speakers, Allan Zaremberg will 17 be the third. 18 Allan I will let you kind of broker that panel, if 19 you would, of the speakers. 20 Yes, Ms. Garvey. 21 /// 22 /// 23 /// 24 /// 25 /// PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 MS. GARVEY: Good morning, Chairman Dunlap and 2 members of the Board. My name is Ellen Garvey, and I am the 3 executive officer of the Bay Area Air Quality Management 4 District in San Francisco. 5 I'm here this morning representing the California 6 Air Pollution Control Officers' board of directors. The 7 California Air Pollution Control Officers' Association 8 represents the 35 local air districts throughout the State 9 of California. 10 We would like to express our support for the ARB 11 staff recommendation for the identification of diesel 12 exhaust as a toxic air contaminant. This position is also 13 provided to your Board in the form of a letter, 14 Mr. Chairman. 15 The Air Resources Board has a long tradition of 16 basing decisions on sound science. In the case of diesel 17 exhaust, the evidence overwhelmingly shows that the health 18 of many Californians is adversely impacted by this source of 19 emissions. 20 The California Air Pollution Control Officers' 21 Association looks forward to working with the Air Resources 22 Board, as well as with OEHHA, during the risk management 23 phase of this process. 24 It is our understanding that potential control 25 measures will be developed in a full public forum where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 concerns of affected businesses and industries will be 2 addressed. 3 We support this public process as well and stand 4 ready to assist you and members of the Air Resources Board 5 and OEHHA in any way we can. 6 I thank you very much for the opportunity for us 7 to express our position. I'd be happy to answer any 8 questions. 9 CHAIRMAN DUNLAP: Thank you. 10 Those of you who are not familiar with Ellen know 11 that she's the air pollution control officer for the Bay 12 Area district and works with Mark over there. 13 Any questions for her? 14 All right. Very good. Thank you. 15 Mr. Knepprath from the American Lung Association. 16 Come on, Paul, you've got to step it up there. 17 MR. KNEPPRATH: Good morning. 18 CHAIRMAN DUNLAP: Supposed to be queuing up. 19 MR. KNEPPRATH: All right. Let's queue up. 20 Good morning, Chairman Dunlap and members of the 21 Board. My name is Paul Knepprath. I'm here representing 22 the American Lung Association of California and our medical 23 section, which is the California Thoracic Society. 24 We appreciate the opportunity to be here today and 25 to comment on the proposed identification of diesel exhaust PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 as a toxic air contaminant. 2 We congratulate the Board for its leadership in 3 guiding a very comprehensive and exhaustive scientific 4 investigation and examination of the human health impacts of 5 diesel exhaust. I think the presentations this morning by 6 Dr. Froines and others clearly showed that over this last 7 nine-year process there has been an exhaustive, no pun 8 intended, review of the health data, including six public 9 workshops, public meetings, forums and at least three draft 10 reports of what you have before you today. 11 As public health and scientific organizations, the 12 Lung Association and the Thoracic Society have long been 13 concerned about the adverse health consequences of diesel 14 exhaust, particularly as it relates to the lung cancer and 15 the other respiratory adverse health effects which have been 16 identified also for you today. 17 We strongly believe that the overwhelming 18 scientific evidence presented in the proposed identification 19 document warrants listing diesel exhaust as a toxic air 20 contaminant. 21 As the previous speaker said, we believe that this 22 recommendation is based on sound science, that the human 23 health studies have consistently showed a pattern of 24 increased lung cancer risk, and the occupational exposure 25 studies, we think, raise serious concerns about people who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 work around diesel exhaust. 2 There may have been, and I know that there's 3 criticism of some of the studies or a particular study in 4 this body of work, but we think that the collective science 5 and the data that the SRP has looked at, clearly, along with 6 their unanimous recommendation, support listing diesel as a 7 toxic air contaminant. 8 The lung cancer risk assessment in this document 9 is a serious one, I think, and we're very concerned that 10 people in California who are exposed to diesel may die, and 11 I think the numbers are somewhere in the neighborhood of 12 12,000, based on the cancer risk assigned to this. 13 Clearly, diesel exhaust meets the definition, the 14 legal definition, that sets forth this process, and I just 15 want to state what that definition is, if you haven't 16 already heard it, that it's an air pollutant which may cause 17 or contribute to an increase in mortality or in serious 18 illness which may pose a present or potential health hazard 19 to human health. 20 Clearly, diesel exhaust, from everything we know 21 and everything that's put before the Board, meets the 22 requirements of that definition. 23 The American Lung Association recognizes that the 24 listing process is the beginning of a public investigation 25 to examines avenues to reduce public exposure and risk from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 diesel exhaust. We support the process that has been 2 outlined for you today, that we will be providing our input 3 into this process, along with other stakeholders, and we 4 urge you and the ARB to follow your duty to protect public 5 health by listing diesel exhaust as a toxic air contaminant. 6 Thank you. 7 CHAIRMAN DUNLAP: Thank you, Mr. Knepprath. 8 Any questions of Paul? 9 Very good. Thanks. 10 Allan, the CEO of the California State Chamber. 11 I'll let you be the floor manager, if you would, for the 12 next speakers on your panel. 13 And those in the audience may not be familiar with 14 this, but I have it up here, he's got a handful of speakers 15 that are going to give overviews of various parts of this 16 issue. 17 MR. ZAREMBERG: My chairman, members of the Board. 18 I'm Allan Zaremberg, the president of the California Chamber 19 of Commerce. 20 And I'm kicking it off because diesel engines, as 21 you all know, are an integral part of our economy in 22 California, whether they transport goods or food or help in 23 the manufacture of all those products that have produced 24 jobs in California. 25 So what you do here today may have a significant PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 effect. 2 And let me step back a little bit, because I want 3 to put everything in perspective. This is not the first 4 time I've been here. And I think it's through a cooperative 5 effort between the regulated community and the Air Resources 6 Board that we have been able to reduce emissions in 7 California in the most cost-effective manner. 8 I think one of the best examples was when we had a 9 federal implementation plan on the Clean Air Act that we 10 thought was extremely costly, would have cost jobs to 11 Californians, would have sent business elsewhere, and 12 through a cooperative effort we were able to achieve those 13 same emission goals at a much reduced cost without impairing 14 the California economy, and that's evident in the state 15 implementation plan. And part of that was dealing with 16 diesel engines and diesel fuel. 17 You know, I find that to be a process that works 18 well, and in fact the previous speaker, and I'll paraphrase, 19 was quoted in the paper today as saying there's much already 20 underway to regulate emissions from diesel engines. In 21 fact, there's little else we can do. 22 So what are we doing here today and what are the 23 consequences? 24 And I submit to you that in some circumstances the 25 consequences may be worse than the cure. And let me go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 through and give you a couple examples of what I'm talking 2 about. 3 First of all, I understand that this is the first 4 time you've listed a complex compound, rather than 5 individual chemical elements. 6 So what are the consequences of that? 7 And, to me, the consequences of that may be that 8 this is not the best thing to reduce pollution in the future 9 and emissions in the future. 10 And the reason why is because it's vague and it 11 doesn't provide certainty for the incentive for people to 12 provide fuels and engines in the future that are going to be 13 less polluting. 14 Let me give you a good example there. As I 15 understand this, this is a rule that requires any exhaust 16 that comes out of any diesel engine that's powered by any 17 fuel to be a toxic air contaminant. 18 And I think that's a rhetorical question. 19 So let's take this situation. The railroads are 20 experimenting right now with using natural gas in 21 conjunction with current diesel fuels or reformulated diesel 22 fuels to power their engines. Is that what's intended here 23 to list that as a toxic air contaminant, because if it is, 24 is that an incentive to continue to produce that particular 25 type of engine, that particular type that uses that kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 fuel? Are the consequences exactly the same? No. 2 And is the fuel tomorrow that's reformulated or 3 the fuel today the same fuel that the studies were done 10 4 and 20 years ago? And you know the answer to that question 5 too, it is not. 6 So if we know the elements that your staff and you 7 can tell us are what's causing the risk to cancer, then we 8 can work together to reduce that exposure. But if we don't 9 know that and if it's any fuel burned in any diesel engine, 10 how can we move forward and provide a cleaner fuel? 11 Let me say one other thing that I think expands 12 upon our ability to work together, and it's happened in the 13 past that provides the same reductions in emissions at a 14 more cost-effective basis, is that it's through working 15 through a coordinated effort of one agency. 16 You know, I've probably 100 members of mine in the 17 South Coast District that would probably shoot me if they 18 heard me talking about this, but it's, you know, we do work 19 together better than if it's a fragmented system and it may 20 not always be happy with what you do and some of what the 21 control districts do, but it's better than having it done 22 through a system of litigation and each individual 23 community. 24 I submit to you that when you list this as a toxic 25 air contaminant, as the previous witness said in the paper, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 there may not be much else we can do to control it, but we 2 sure can get an awful lot of litigation. 3 And you lose control over a coordinated effort to 4 reduce air pollution and to make cleaner engines and cleaner 5 fuels. 6 And that is the appropriate way to go and you 7 don't have to list it as a toxic air contaminant to continue 8 to work with us to produce the most efficient engines with 9 the cleanest fuel and reduce emissions and risk to public 10 health. 11 I'd be happy to answer any questions before we 12 move on to our next witness. 13 CHAIRMAN DUNLAP: Okay. Allan, do you want to -- 14 you're comfortable with calling them up -- 15 MR. ZAREMBERG: Yes. 16 CHAIRMAN DUNLAP: -- and introducing them. 17 MR. ZAREMBERG: Our next one is Richard McCann, 18 from M-Cubed. He's going to give a little bit of an 19 economic analysis. 20 CHAIRMAN DUNLAP: Richard, good to see you. 21 MR. McCANN: Good seeing you again. 22 Mr. Chairman, Board members, I'm Richard McCann. 23 I'm an economist and partner with the firm M-Cubed. 24 We stood before you in 1994 reviewing the economic 25 impacts of the 1994 state implementation plan, and we also PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 authored a guide for reviewing environmental policy studies, 2 which was produced for Cal EPA, and distributed to all the 3 member departments of the agency. 4 I'm going to talk today about the economic 5 impacts, or the potential economic impacts, of the proposed 6 identification of diesel exhaust as a TAC. 7 And what I want to begin with is discussing how 8 trucking is an integral part of the California economy. 9 Trucks transport almost three quarters of all goods measured 10 by weight and in fact virtually all goods are transported by 11 trucks at some point in their product life cycle. 12 Trucking and the warehouse sector may be 13 responsible for as much as $35 billion of the state's gross 14 product, which is a substantial amount when compared to 15 other industries. For example, agriculture is the largest 16 sector with about hundred billion dollars of the gross state 17 product. 18 About one million Californians, or one out of 19 every 15 workers, are employed in the trucking and 20 warehousing industry and they earn about $5 billion in 21 wages. 22 And over two thirds of the firms in the trucking 23 and warehousing sector employ fewer than ten people and 95 24 percent of them receive less than $5 million in revenues. 25 In other words, this industry is dominated by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 small businesses, and that should be an important 2 consideration. 3 What we looked at were possible responses to 4 designation as a TAC for diesel exhaust. And this, the 5 responses are not contingent on the Air Board doing anything 6 further than designating diesel exhaust as a TAC. That is, 7 we did not assume that the ARB has adopted any type of 8 control measures in the future in order to control diesel 9 exhaust, any further than the control measures which are 10 already on the board. 11 What we were looking at is potential responses to 12 increased legal liability resulting from the designation as 13 a TAC. 14 What we saw were possibilities of increased risks 15 of lawsuits. There's already 350 lawsuits which have been 16 filed against heavy-duty truck users who rely on diesel 17 fuel. 18 We also saw that there would be risks from induced 19 need to purchase costly alternative fueled vehicles, for 20 example, liquid natural gas engines, as defensive measures 21 to limit legal liability exposure or to settle impending 22 suits. 23 We also looked at whether this was a signal to 24 employees and consumers that it was unsafe to work or shop 25 anywhere around any level of diesel exhaust. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 And that also affected facilities may be required 2 to pay additional permitting fees to local air districts. 3 Some of those costs we could quantify, some of 4 them we couldn't go any further than to identify them, and 5 that is because these scenarios cannot be yet fully 6 developed. We don't have sufficient information. 7 But we did construct two possible scenarios in 8 response to increased legal liability, using the analytic 9 methods that derive the least cost approach to meeting the 10 stated objectives that we have in the scenarios. And this 11 methodology is a similar methodology to what we used in 12 evaluating the 1994 SIP. 13 In our first scenario we assumed that only new 14 trucks were required to be fueled by liquid natural gas and 15 that these purchases would be phased in over a five-year 16 period by 2003, so that basically it would match with the 17 phase-in of trucks meeting the new federal standards by the 18 year 2004. 19 In that case, the truck fleet costs increased from 20 92 to 144 million dollars annually between 1999 and 2005, 21 and this would cost increased truck fleet costs by about one 22 percent. 23 Now, there's the other alternative, which is that 24 all trucks are required to be fueled with liquid natural gas 25 over a set period of time, and again we looked at the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 five-year phase-in period. In this case, the truck fleet 2 costs increased from 1.5 to 2 billion dollars per year 3 between 1999 to 2005, or between 16 -- 11 to 16 percent of 4 total fleet costs for operations. These would be 5 significant cost increases that would almost certainly be 6 passed on to consumers in increased consumer prices and 7 businesses in terms of increased production costs. 8 We did not account for some other potential costs, 9 which would be significant to the State of California. 10 Costs to construction, because we did not look at off-road 11 vehicle engine emission controls. Costs to agriculture, 12 because again we did not look at costs for controlling 13 tractors or for switching from diesel pumps to natural gas 14 or electricity. 15 For truck fueling operations, we did not look at 16 the individual retrofit costs at various truck fueling 17 stations around the state. 18 The cost to oil refining, because oil refiners 19 would probably have to off-load a large portion of their 20 diesel fuel out of state or reconfigure their refining 21 process in order to limit the amount of diesel that they 22 produced in the State of California. 23 We also did not look at the overall impacts of the 24 California economy, in part because we weren't able to 25 identify these other costs within various sectors and that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 we also did not have sufficient information in construction 2 of our scenarios in order to identify specific economic 3 impacts, but they would be substantially greater than the 4 direct costs impacts that we have identified in our 5 scenarios. 6 One of the things that happens with a decrease in 7 economic activity in the state is in fact recent studies 8 have found that mortality rates increase as economic 9 activity falls. That is that wealth makes health. That was 10 reinforced this morning by a study that was released and 11 published in The Sacramento Bee, which indicated that a 12 large increase in income actually increased life expectancy 13 a substantial amount. That's a very important 14 consideration. 15 What that means is that as you decrease economic 16 activity, you increase the death rate within the population. 17 And working through the calculations that are available in 18 the studies that are available, you find that basically that 19 there would be an increase of about 14,000 deaths over the 20 life of an individual from the high-end costs of the direct 21 costs that we have identified in this study. 22 That happens to be about the amount of increased 23 deaths caused or identified as being caused by diesel 24 exhaust as identified by the ARB staff. In other words, the 25 decrease in economic activity almost exactly offsets the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 improved life expectancy from eliminating diesel exhaust. 2 That's a very important consideration in how you deal with 3 this particular substance in your rulemaking process. 4 One thing I wanted to point out is that these 5 studies were preliminary in nature and that there is much 6 work that would have to be done in order to resolve the 7 economic questions and clearly identify what the economic 8 impacts are, and that a full assessment of the economic 9 impacts is necessary before proceeding further on adopting 10 the proposed regulation, that you need to consider those 11 balances of risks that occur in this whole rulemaking 12 process, considering how ubiquitous diesel fuel is in the 13 California economy. 14 Thank you for your time. 15 I would like to introduce Bill Bunn, who is going 16 to talk about the science issues of identifying diesel 17 exhaust as a TAC. 18 MR. MANDEL: Actually I'm not Bill Bunn and I 19 don't play him on TV. But if, Mr. Chairman, you'll allow 20 us, we're going to slightly alter the order. 21 CHAIRMAN DUNLAP: That's fine. My intent was to 22 allow you guys the flexibility to do that. 23 Were there some slides that we were supposed to 24 see that didn't make it up on the screen, Richard? Richard, 25 were there some slides that didn't get up on the screen that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 you wanted? Was there -- 2 MR. McCANN: To tell you the truth, I wasn't 3 looking. 4 CHAIRMAN DUNLAP: I guess what I'm asking staff, 5 there were some things that were going to be on the screen 6 that didn't get on the screen. What I'd like to do is make 7 sure we get hard copies in real time so we can look at them. 8 MR. McCANN: Right. There is available fully 9 written testimony in effect -- 10 CHAIRMAN DUNLAP: I just ask staff -- 11 MR. McCANN: -- that has that testimony. 12 CHAIRMAN DUNLAP: I'd ask somebody to get it to us 13 and then we may have a couple questions. I want to look at 14 it a little bit, Richard. 15 MR. McCANN: Yes. 16 CHAIRMAN DUNLAP: Okay. Jed, I'm sorry to do that 17 to you. Please come back. 18 MR. MANDEL: That's all right. 19 Good morning, Mr. Chairman, members of the Board. 20 I'm Jed Mandel speaking on behalf of the Engine 21 Manufacturers Association. 22 I do have extra copies of my statement. I believe 23 it was provided to you in advance, but I do have copies up 24 here if somehow our delivery system didn't work. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 As you know, the Engine Manufacturers Association, 2 EMA, is the principal organization representing the 3 manufacturers of diesel engines used in trucks, buses, farm 4 and construction equipment, marine vessels, locomotives and 5 stationary applications. 6 Today we are here to discuss the proposed 7 identification and listing of diesel exhaust as a toxic air 8 contaminant. 9 There are substantial problems with such a 10 listing. Diesel exhaust is a complex mixture of gases, 11 particles and vapors, 99.9 percent of which is harmless, 12 nitrogen, oxygen, water vapor and carbon dioxide. 13 Significantly every other substance currently 14 listed as a toxic air contaminant under California law is a 15 specific identifiable chemical. Indeed that is the very 16 intent of the TAC statute, identifying a specific substance 17 that may pose health risks and then assessing and crafting 18 specifically targeted emission controls for that specific 19 substance. 20 That purpose cannot be met with a TAC listing for 21 whole diesel exhaust. So long as there are engines burning 22 diesel fuel, there will be diesel exhaust. 23 What was emitted from locomotives and other diesel 24 vehicles in 1965 before the advent of stringent regulations 25 was called diesel exhaust, just as what comes out of today's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 technologically advanced diesel engines running on cleaner, 2 reformulated fuels, also is called diesel exhaust. 3 However, the emissions from those engines are not 4 the same. To the contrary, diesel exhaust is comprised of 5 thousands of gases and fine particles, the composition of 6 which will vary, depending on engine type, operating 7 conditions, fuel composition, lubricating oil and whether 8 and what type of emission control system is present. 9 Consequently, listing whole diesel exhaust 10 provides no help whatsoever in identifying what specific 11 constituent of diesel exhaust might cause adverse health 12 effects and provides no guidance as to what specific 13 constituent of diesel exhaust, if any, should be reduced or 14 eliminated to protect public health. 15 Further, the underlying epidemiological studies of 16 railroad workers, drivers, miners and dock workers from the 17 1960s and 1970s, the health studies relied on in the staff 18 report, studies compositions of diesel exhaust that are no 19 longer being emitted and thus are not relevant to assessing 20 the potential health risks from today's technologically 21 advanced engines and vehicles. 22 Consequently, those old and out-of-date studies 23 cannot justify the listing of today's diesel exhaust as a 24 TAC. Those studies do not even justify a listing for the 25 diesel exhaust that was representative of what was examined PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 in those old studies. 2 The staff report acknowledges this problem by 3 describing diesel exhaust as, quote, a complex mixture 4 emitted by a diesel fuel internal combustion engine, close 5 quote. 6 The report, however, does not attempt to 7 characterize diesel exhaust in terms of specific chemical or 8 physical properties, but rather from where it comes. 9 As such, the proposed TAC listing for diesel 10 exhaust is really not a substance listing at all. It's a 11 source listing, targeting diesel-fueled engines. 12 Significantly, such an improper listing has never 13 been attempted before. Of the more than 200 substances 14 identified as TACs to date, all are specific chemical 15 compounds. Not one is a complex mixture or, as in this 16 case, a de facto source listing. 17 There is then no basis for the proposed source 18 listing at issue, a listing that in essence turns the TAC 19 statute on its head by first identifying a source and then 20 presumably attempting to identify the specific substances to 21 be controlled. 22 There's also no basis for singling out diesel 23 engines from the many combustion sources that operate 24 throughout the state and to produce a similar set of 25 byproducts. Needless to say, eliminating or reducing all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 sources of diesel exhaust is not feasible, practical or 2 desirable. Diesel-fueled engines are essential to 3 California's economy and its standard of living. 4 Diesel-fueled engines move goods, transport 5 people, harvest crops and perform many other types of work, 6 all with a level of efficiency and durability unmatched by 7 other sources of power. 8 All of these essential jobs require a power 9 source, which necessarily will have some kind of emissions. 10 Only by identifying the specific emission's 11 constituents to be specifically eliminated or reduced can 12 regulators, manufacturers and users work to build and use 13 products which minimize potentially harmful health effects. 14 Indeed, only by obtaining this necessary data can 15 well-reasoned public policy choices be made. 16 Whole diesel exhaust was identified in the 1980s 17 as a potential source of adverse health effects. However, 18 based on scientific research carried out over the past 19 decade, it is clear that new studies must be undertaken to 20 determine whether emissions from today's advanced and 21 highly-regulated diesel engines, using current fuels, pose a 22 risk and, if so, to identify specifically what substance in 23 diesel exhaust might be responsible for such risks and to 24 quantify the risks. 25 EMA is not alone in concluding that the existing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 data are scientifically inadequate to support the 2 conclusions articulated in the staff report. 3 The recent actions of US EPA's Clean Air Science 4 Advisory Committee unanimously recommending further work on 5 a report similar to that at issue here confirms the 6 inadequacies of the current data. 7 Indeed, the principal scientists upon whom OEHHA 8 relies all have gone on record establishing that the 9 underlying data are insufficient to justify the risk asset 10 that staff has constructed. 11 EMA has detailed those inadequacies in its written 12 comments and we urge you to review them. 13 New studies then are clearly needed to determine 14 whether there is any actual causal link between constituents 15 found in diesel exhaust and adverse health effects, and to 16 determine the degree of that potential risk at real world 17 exposure levels. 18 The fact that diesel exhaust contains trace 19 amounts of certain substances already listed as TACs in 20 California is not enough to justify a separate TAC listing 21 for diesel exhaust. Those substances are present in other 22 sources. 23 Moreover, listing diesel exhaust on a TAC on the 24 basis that it contains substances previously identified as 25 TACs is redundant and does nothing to protect public health. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 The prior listings, in fact, are a reason why a 2 separate listing for diesel exhaust is unnecessary. 3 The real question remains what, if any, specific 4 substance in diesel exhaust might be demonstrated to cause 5 potentially adverse health effects and whether that 6 substance is present in a sufficient quantity in today's 7 diesel exhaust to justify reduction or elimination of that 8 substance from diesel exhaust. 9 Unfortunately, the pending proposed TAC listing 10 for diesel exhaust does not address, let alone answer, that 11 critical question. 12 The importance of this question is magnified by 13 the significant changes in the composition of diesel exhaust 14 over the past 20 years. As this Board well knows, and I've 15 appeared before you many times on these issues, the engine 16 industry has reduced PM emissions from heavy-duty on-highway 17 trucks and buses by 90 percent from unregulated levels. At 18 the same time, hydrocarbon emissions have been reduced by 19 over 90 percent and NOx emissions have been reduced by 70 20 percent. NOx emissions are slated for another 50 percent 21 reduction in 2004. 22 Similar significant emission reductions have or 23 will soon occur for non-road farm and construction equipment 24 engines, locomotives and marine engines. 25 Those significant emission reductions are resulted PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 from major redesign of the diesel engine combustion process, 2 the addition of new emission control technologies and 3 reformulation of diesel fuel, all of which affect the nature 4 and composition of diesel exhaust. And, of course, more 5 changes and improvements will be coming. 6 As a result of these efforts, California air 7 quality has improved and will continue to improve for the 8 foreseeable future, and as already noted, today's and the 9 future's diesel exhaust are substantially different from 10 that which has been studied. 11 But all of those good efforts mean nothing in the 12 effort to manage potential health risks without any guidance 13 as to what specific substance, if any, should be controlled 14 or eliminated. 15 Consequently, listing diesel exhaust as a TAC 16 simply makes no sense, especially given the adverse 17 consequences that can be anticipated from such a list. 18 Those consequences include the fostering of inappropriate 19 public alarm and costly proceedings alleging unfounded 20 duties to warn and personal injuries and burdensome 21 permitting and hot spot evaluation requirements. 22 Instead of proceeding with this ill-advised 23 listing, we encourage the Board to recognize the need for 24 research, focus toward an identification of what specific 25 substance in diesel exhaust might cause potential health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 problems. 2 That research also should focus on what levels of 3 exposure for that substance might be problematic. 4 Specific recommendations on the needed scientific 5 studies are contained in our written comments. 6 The Board also should clarify the import and 7 meaning of any TAC listing for diesel exhaust that it might 8 adopt. In that regard, it should be noted that a TAC 9 listing concerns assessment of the potential health risk 10 associated with lifetime exposures to diesel exhaust in 11 ambient air, not risk associated with intermittent or 12 short-term exposures to emissions from a specific source or 13 group of sources. 14 Indeed, we hope that the Board will caution 15 against any extrapolation of data or conclusions from the 16 TAC report. 17 That report is based on lifetime exposures to 18 ambient air concentrations of diesel exhaust, assessed 19 principally on the basis of estimated high-level 20 occupational exposures that may have been experienced during 21 the 1960s and the 1970s to old technology, unregulated 22 engines, burning high sulphur, high aromatics diesel fuel. 23 That's not today's situation. 24 Given the inappropriateness of listing whole 25 diesel exhaust as opposed to a specific identifiable and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 controllable substance, given the need for additional 2 studies, and given the fact that ARB has and will continue 3 to regulate the emissions from diesel engines to the 4 greatest degree possible, I'm confident of that, we believe 5 that there is no need to list diesel exhaust as a TAC. 6 We expect that EPA and CASAC will be taking 7 further action on essentially the same studies and issues as 8 are in the OEHHA report within the next several months. 9 As the Governor's Executive Order states, 10 consistency and uniformity among state and federal risk 11 assessments must be assured. Accordingly, ARB should wait 12 at least until EPA takes action before proceeding with an 13 inappropriate and inconsistent action listing whole diesel 14 exhaust as a TAC. 15 In addition, the initial recommendations from the 16 Health Effects Institute's diesel epidemiological study are 17 expected this fall. Those recommendations also should guide 18 any further action on this matter. 19 I would be pleased to answer any questions that 20 members of the Board might have. 21 We do have a couple of other EMA members who are 22 prepared to testify after me. 23 CHAIRMAN DUNLAP: Yes, Mrs. Riordan. 24 BOARD MEMBER RIORDAN: Mr. Chairman. 25 First of all, Mr. Mandel, thank you very much for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 your presentation. 2 There is a larger document, very large, that came 3 in today, and I'm not sure that the staff has had an 4 opportunity to look at some of those issues that were 5 raised, as well as the scientific panel, but it would seem 6 to me prior maybe to either the conclusion of today's 7 hearing or perhaps when this is taken up again it would be 8 helpful for the Board to look at the issues that were raised 9 and maybe have a response to them by our staff and maybe 10 utilizing the Scientific Review Panel. I think that would 11 be very helpful, at least for me, to have, but I appreciate 12 the fact that it's so clearly delineated. 13 Thank you very much. 14 MR. MANDEL: We thank you for that comment. And I 15 hope that the additional time that the Board is going to 16 afford itself will give you and your staff time to carefully 17 look at those comments, because we think that they do merit 18 your review. 19 CHAIRMAN DUNLAP: But I'm not going to let you off 20 the hook. What's the deal? We're getting this big package 21 today. You're usually working us over pretty good weeks 22 ahead of time. 23 MR. MANDEL: Well, I'm not sure which way to take 24 that, Mr. Chairman. I'm not sure if that was a compliment 25 or not. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 But we have worked with your staff, with the 2 Scientific Review Panel very closely throughout this 3 process, and we, throughout the process, have made an effort 4 to provide our technical expertise, not only always 5 directly, we have asked for special expertise to be brought 6 into play. 7 So to some degree we are disappointed that the 8 Scientific Review Panel didn't try to assess in its 9 evaluations that they presented to you all of the different 10 views that we presented. 11 I am not the expert to assess that. There was 12 some people coming behind me who have scientific expertise. 13 But we think that there could have been more of a 14 balance to try and assess all of the expertise that's been 15 brought to bear. 16 Having said that, we are going to continue to work 17 with the members of the Scientific Review Panel, if there's 18 that opportunity, and certainly with the ARB and OEHHA staff 19 on these issues. 20 And we tried, in recognition that the hearing was 21 today, to pull together all these materials so they would be 22 in one place for you. 23 CHAIRMAN DUNLAP: All right. I certainly would 24 support my colleague in saying we ask staff to run through 25 this, we have some time between now and next month to go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 through it. I appreciate that. 2 And, you know, I want to acknowledge and 3 appreciated your comment also about the fact that you know 4 how seriously we've taken controlling the sources that your 5 member companies produce and that we do have a number of 6 things that are going to be coming on line in the relatively 7 near future. They're going to have an impact in this area. 8 We acknowledge that and we know that. We've had, I think, a 9 good working relationship with you and, again, those 10 companies you represent. 11 MR. MANDEL: I just want to add to that, that 12 because of substantially the efforts of this Board, emission 13 regulations are getting more stringent. 14 Mr. Chairman, as you know, because I think you 15 visited some of my members' facilities, the work that's 16 being done is truly fantastic to reduce emissions from 17 diesel engines and to make them even cleaner than the 18 engines today. 19 We also think that there's more that needs to be 20 done with fuels, so that California will continue to have 21 the best fuels available in the world. 22 It is a little strange in this process that now 23 we're facing a listing of diesel exhaust, which as I've 24 indicated in my comments, is a complex mixture. We don't 25 know what in there presumably causes the concerns. We are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 investing literally multimillions of dollars to improve the 2 emissions from diesel engines and yet we've having a listing 3 that doesn't recognize what it is in diesel exhaust, if 4 anything, that should be further reduced. It doesn't make 5 sense to us. 6 CHAIRMAN DUNLAP: Dr. Friedman. 7 BOARD MEMBER FRIEDMAN: I've been listening pretty 8 carefully. You have cleaner diesel fuel today and on that 9 basis you think that all previous studies may be invalid. 10 You have no idea, neither do we, whether the components that 11 arise now in cleaner diesel fuel are carcinogenic or not. 12 And that is the nature of the complexity of the 13 exhaust is recognized by us, it's recognized by you, and you 14 don't have any evidence either for the comment you made. 15 Let me just finish. 16 Then you would suggest that we study it more. 17 Now, I'm not sure what would satisfy you, but I 18 know what can't be done. You cannot subject humans to 19 compound by compound of known potential carcinogens for X 20 years to a stimulus and then wait 20 or 30 years for the 21 results while there is a truly obvious increase in risk, 22 poorly understood all the reasons, but a clear increase in 23 risk. 24 Now, if the human studies, which would take three 25 to four decades to complete, might satisfy you, but no one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 would enter a human into such a study, and animal studies 2 are not good enough, what would you have us do? 3 MR. MANDEL: I think your question really focuses 4 us on the problem. There are substances, specific 5 identifiable chemicals in diesel exhaust, which are toxic 6 air contaminants. I forgot what the number was, but I think 7 it was -- 8 BOARD MEMBER FRIEDMAN: 30. 9 MR. MANDEL: 30. 10 BOARD MEMBER FRIEDMAN At least. 11 MR. MANDEL: That you all have previously 12 identified as being toxic air contaminants. As part of that 13 process, under the risk management phase, you're obligated 14 to look at the sources of those toxic air contaminants and 15 determine what, if anything, should be done. 16 Those are essentially trace amounts in diesel 17 exhaust. They were trace amounts in diesel exhaust 30 and 18 40 years ago. They're trace amounts now under the CE-CERT 19 study. They are in fact been reduced. There's still some 20 trace amounts. 21 But if you feel that those toxic air contaminants 22 cause a problem, let's identify those particular chemicals. 23 What the scientists have been studying when they 24 look at diesel exhaust in fact is particulate matter, which 25 I think is a source that we ought -- substance that we ought PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 to be looking at, we ought to be studying, we ought to be 2 determining what, if anything, about particulate matter 3 causes a problem. 4 But, in fact, as you've heard both from your own 5 staff, from myself today and, as you know, from your role as 6 a regulator, you have caused the particulate matter 7 emissions from diesel engines to be reduced by 90 percent 8 from when those studies were conducted. 9 So it's unclear if particulate matter is the 10 problem, whether it continues to be a problem today. If 11 that's the problem that's identified, let's work to address 12 it. 13 My members are certainly able to focus their 14 efforts to see what, if anything else, can be done to reduce 15 that particular chemical compound. If there is formaldehyde 16 or arsenic or 1,3-butadiene or something else in diesel 17 exhaust that's a problem that you've already listed, tell us 18 and we'll work to address it. 19 But listing this whole complex substance doesn't 20 help us, it doesn't help you as regulators, it doesn't help 21 the public. We don't know what to reduce. 22 BOARD MEMBER FRIEDMAN: We can talk more, but not 23 right now. 24 CHAIRMAN DUNLAP: John, thanks. Dr. Froines. 25 DR. FROINES: We have always had very positive PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 relationships with the Engine Manufacturers Association and 2 we would hope to continue that. So we're open to further 3 evaluation of the material that they may provide. And 4 hopefully that will go on. 5 I should say, however, that at some point we would 6 like an opportunity, whether it be at the next meeting or in 7 between now or later today, to respond, because I think, let 8 me say this as nicely as possible, I don't agree with many 9 of the suggestions, comments, he's made. I think it's a 10 misstatement of science, the way it's being described, and I 11 think we should address what I consider to be incorrect 12 views of the scientific issues. 13 CHAIRMAN DUNLAP: Then that's a good point, 14 Dr. Froines. 15 It's my hope that we can hear from these witnesses 16 today. Mr. Kenny has come to me and said there's a point or 17 two he'd like to clarify, and what I've asked him to do is 18 keep the list. What I'd do at the end, and folks will still 19 be here when we finish up, I'd like to do at the end, and I 20 think we'll have folks still here when we finish up, I'd 21 like to be able to go through some of those points, not so 22 much in a point-counterpoint format, but address some of 23 them thematically and then if there's some specific things, 24 we can take those up. 25 And so I want to encourage interaction with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 Board for points of clarification like I tried to do with 2 you at the outset on the CASAC issue, just because I knew 3 that was going to come up. I wanted to have a context. 4 We'll come back at the end and -- 5 DR. FROINES: I should say that the chair of CASAC 6 is a fellow named Joe Mauderly. Joe Mauderly was asked at 7 our workshop did he think diesel should be declared a toxic 8 air contaminant, and the answer was yes. So that the chair 9 of CASAC has a consistent view with the other scientists at 10 our workshop and he is the chair of CASAC and he did express 11 the interest that this should be a TAC. 12 CHAIRMAN DUNLAP: That's certainly information 13 that I had either forgotten or hearing for the first time, I 14 can't recall. I remember he was the key participant. 15 Okay. Yes. Mr. Parnell, do we need Jed to 16 remain? 17 BOARD MEMBER PARNELL: Only that a comment that he 18 made, and I'm not going to ask for clarification today, but 19 as this hearing moves along, I would like clarification, and 20 that is this is a precedent-setting event if we were to list 21 diesel exhaust as a category, as a group of constituents. 22 So in essence he says, makes sense to me, that 23 there is a concern that we're identifying a source as 24 opposed to those issues that they, engine manufacturers and 25 others, are really trying to get at. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 So as we unfold the hearing I'd like someone to 2 rationalize to me why we're moving in that direction as 3 opposed to each individual constituent. 4 CHAIRMAN DUNLAP: Also along those lines, Jed, and 5 I felt we've had, I think, as I mentioned earlier, a good 6 working relationship with your members, and we've seen you 7 willing to tackle some things in concert with us in 8 aggressive time frames and all that, and I'm not sensing in 9 your comments the reluctance to follow through and to make 10 sure that we attack the issue by getting better and cleaner, 11 more efficient engines. I'm not seeing any reluctance. 12 It's just you want us to be fully aware of what the impact 13 would be by identifying the soup rather than the individual 14 chemical compound. 15 MR. MANDEL: Give us the right direction so we can 16 continue to do the things that we've been doing. 17 CHAIRMAN DUNLAP: I think that's an important 18 point. 19 Do you have a couple -- 20 MR. MANDEL: As always, thank you for your 21 patience with me. 22 Next speaker will be Dr. Bill Bunn from Navstar. 23 DR. BUNN: Thank you, Mr. Chairman. 24 I would like to briefly go over some of the 25 chronology of the scientific events that led to this meeting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 today. 2 I know there will be differences in perspectives 3 with the SRP. We have had discussions with OEHHA and the 4 SRP over time, and I think it's important to hear both sides 5 of this issue. 6 There were studies in the '50s and even into the 7 '70s in cell cultures that identify potential health effects 8 of diesel exhaust. 9 In the 1980s, maximum tolerated dose studies in 10 rats showed that there were increases in lung tumors at very 11 high dose levels, 800 times the ambient air level. 12 In addition, human studies, epidemiologic studies, 13 suggested weak but exposure-related effects related to 14 diesel exhaust. As we've seen in 1988 and 1989 through this 15 significant event, the International Agency for Research on 16 Cancer found that diesel exhaust was a probable carcinogen. 17 This was based on sufficient animal data, but limited human 18 data. 19 A risk estimate was later given by another agency 20 of the World Health Organization suggesting that 3.4 times 21 10 to the minus five would be a unit risk value that was 22 consistent with that data set. 23 In 1989, as you see, US EPA and California EPA 24 began proceedings under authoritative bodies' 25 recommendations coming from IARC. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 So the question is what's happened since that time 2 that brings us here today? 3 First, we must remember the primary studies that 4 led us to the conclusion at IARC were the rat studies which 5 were found to be sufficient. 6 Since that time, further studies were conducted in 7 other animal species, in mice, in hamsters and later we've 8 used monkey models, and we have also looked at pathology in 9 human species and compared them to these models. All of 10 these studies have been found to be negative. It did not 11 support the rat data. 12 Some equivocation in mice, but it was not 13 repeatable and the majority opinion at this point is that 14 the mice studies are negative. 15 Further, in looking at the rat studies, work has 16 been conducted by Dr. Mauderly and others, which has shown 17 that in the rat studies the tumors were only produced at 18 what were called overload conditions, extremely high doses 19 of diesel, and that this was not dependent on diesel. Any 20 inert dust produced similar results. 21 Therefore, the findings in the rats were not found 22 to be significant and these studies are not suitable for use 23 in risk assessment. 24 In addition, these rat studies showed something 25 else. At the very highest dose levels the DNA changes that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 one would expect, if the PAHs of diesel exhaust were truly 2 available to the animal, were not shown even at 500 times 3 ambient air levels and higher. So the bioavailability, the 4 best studies we have at the highest doses, was not shown. 5 Regarding the epidemiology. Looking back and 6 remembering there were key studies in the '80s, particularly 7 the studies at Harvard by Dr. Eric Garshick, and also the 8 study at NIOSH previously referenced, Dr. Steenland. 9 In 1991 US EPA looked at the Garshick studies, 10 particularly the cohort study, to see if they were suitable 11 for risk assessment. In that study it was found that a 12 large number of deaths were missing from the cohort in key 13 years. 14 In addition, the researcher found no association 15 between increasing exposure to diesel exhaust and lung 16 cancer. In fact, he found a negative association. 17 Recently, this debate was concluded, in my 18 opinion, when Dr. Garshick, at the CASAC meeting, stated 19 that he agreed with the finding that there was no exposure 20 dose relationship in his data set. And I think that is very 21 probative as we look at risk assessment, because even with 22 some increase in risk, it does not appear in this data set 23 to be related to exposure to diesel. 24 In 1997 and 1998, to clarify this issue two 25 extremely large and expensive epidemiologic studies have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 been initiated, one by Dr. Garshick at Harvard, and one by 2 the National Institute for Occupational Safety and Health 3 and the National Cancer Institute. 4 For the first time we will have extensive exposure 5 data, and I would agree wholeheartedly with John as the 6 exposure data is the key here, we've not had concurrent 7 exposure data, we have had almost no exposure data. I think 8 that's very important in the scenario where we have a very 9 weak association. And, again, the authoritative bodies have 10 been consistent in saying this is a weak association at this 11 level and it's very hard in these cases without good 12 exposure data to be sure about the scientific findings. 13 John also mentioned some recent studies that came 14 out. I know Kyle Steenland relooked at his data. As you 15 know, John, that was original research, and since you threw 16 out the potash study, which is again an unpublished study, 17 it should also be noted that the Australian group has 18 presented twice data in miners, 24,000 miners, with diesel 19 exposure data and in that study the SMR is 30 percent less 20 than what would be expected. That is, there's less cancer 21 than one would expect. 22 Again, there are difficulties with this data and 23 we have to wait for publication. 24 But these are important observations in a scenario 25 where the epidemiology is said to be consistent with good PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 science. 2 On May 5th, US EPA reviewed and rejected 13 to 3 nothing a document very similar to the document that you see 4 today. It was not based -- the risk assessment there was 5 not based on animal data, it was based on human data and 6 risk estimates. 7 I think it's very important that rather than 8 speculate that we actually look at this transcript, which we 9 have to be made available to you, and discuss it with 10 Dr. Mauderly, as John has suggested, and find out what 11 exactly the final rulings would be. But it is very clear 12 that this was a human risk estimate and the document was 13 rejected. 14 So where are we in 1998? 15 First, if IARC met today, and this has been stated 16 by several members in public places, the result would be 17 different, and I don't believe we'd be having this meeting 18 if we had all the data that's currently available. The 19 animal data has changed substantially. 20 In fact, we believe the animal data does not 21 support the finding of lung tumors in animals, and this is 22 an extensive database at very high exposure levels in 23 multiple species. I, in fact, find it rather reassuring we 24 have such a large database and haven't been able to identify 25 a cancerous effect. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 The human data originally found to be limited by 2 IARC is less convincing today. There are significant 3 problems with exposure and with other factors. We're 4 clarifying that with the research that's going on with these 5 very expensive and very large studies, and the reason we're 6 doing these studies is not because we have extra money, it's 7 because we really need to know the answers. The very 8 researchers who conducted the first studies are going back 9 and saying we need something where we have large exposure 10 banks in order to define this issue. 11 So the question from a scientific perspective that 12 we have is that given the changes in the data and the 13 findings since 1988 and 1989, CARB has come forth with a 14 document that now suggests a causal effect, suggesting a 15 known carcinogen. This has not been present in previous 16 documents. 17 In addition, the risk level that is suggested in 18 this document is ten times greater than what was suggested 19 at the point in time when it was originally reviewed. 20 We find that inconsistent with the changes in the 21 science. 22 Finally, we would mention that with newer 23 technology and newer fuels, we think it extremely important 24 that the science evaluate exactly what these risks may be, 25 because these risks may have changed and regardless of which PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 direction they go it's extremely important that we have good 2 science, and I think we would all agree on that. 3 Thank you. 4 BOARD MEMBER RIORDAN: Are there any questions for 5 this particular witness by the Board? 6 Seeing none, would you introduce then the next 7 person in your group. 8 DR. BUNN: John Duerr. 9 MR. KENNY: Chair. 10 BOARD MEMBER RIORDAN: Yes. 11 MR. KENNY: Is it appropriate at this point to 12 have the SRP members respond to some of the issues that were 13 raised by Mr. Bunn? 14 BOARD MEMBER RAKOW: There were other issues 15 earlier by other witnesses that I thought that perhaps the 16 chairman had indicated that we were going to respond to in a 17 series of issues. 18 BOARD MEMBER RIORDAN: No. Let me suggest -- he's 19 back. 20 CHAIRMAN DUNLAP: I heard it. 21 My only reluctance in -- by the way I was 22 listening in the back -- to doing a point-counterpoint every 23 time is I'd rather take them as themes and then deal with 24 them at the end more efficiently. That's my only 25 reluctance. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 Now, I don't want to, if you want -- if my 2 colleagues on the Board feel strongly they want to take it 3 up individually, we can do that. I think I have kind of 4 done this for a little while and I think that's the way to 5 do it. Then we can deal with it. And I'll make sure 6 witnesses get a chance to have some back and forth if you 7 feel your themes have been misrepresented. 8 DR. FROINES: We'd be happy to do it however the 9 Board decides. I'd just ask one question. 10 I'm developing a rather long list at this point. 11 So if you would go so long and then give us a chance before 12 it gets to be one of those things that you've got a two-page 13 list and it sounds like you're going over and over and over. 14 CHAIRMAN DUNLAP: Right. And we haven't had 15 enough witnesses yet to be completely redundant, but we 16 will, and we'll -- I'll try to catch that. 17 So if that's okay. 18 BOARD MEMBER RAKOW: That's fine. 19 CHAIRMAN DUNLAP: But my intent is not to preclude 20 some back and forth, just to manage it better, that's all. 21 BOARD MEMBER RIORDAN: Mr. Chairman, there seems 22 like there's a natural break after the listed witnesses in 23 this panel where you can wrap up all of those -- 24 CHAIRMAN DUNLAP: Be happy to do that. 25 BOARD MEMBER RIORDAN: -- with similar philosophy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 and issues. 2 CHAIRMAN DUNLAP: And I'd ask the folks that are 3 going to follow that wrap-up to pay attention to the back 4 and forth and we can go from there. 5 DR. BUNN: John Duerr, Detroit Diesel. 6 CHAIRMAN DUNLAP: Now is this the -- Jed, where 7 are you, Jed? Don't go too far. Is this your last from 8 your group, your last -- 9 MR. MANDEL: This is our last member. 10 CHAIRMAN DUNLAP: Very good. Thank you. Please 11 proceed. 12 MR. DUERR: Good morning. I'm John Duerr and I'm 13 here today representing Detroit Diesel Corporation. 14 Detroit Diesel is a major manufacturer of 15 heavy-duty diesel engines. Our engines are used to power 16 on-highway trucks, buses and a variety of off-road and 17 stationary equipment in California and throughout the world. 18 With the purpose of protecting public health, the 19 California Health and Safety Code specifies a two-step 20 process for the identification and control of substances 21 that may be harmful to the public health. 22 As has already been noted, the first step is the 23 identification phase, and concludes with the decision by the 24 Air Resources Board whether or not to list a substance as a 25 toxic air contaminant or TAC. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 The second step of the process is the risk 2 management. This phase involves a determination and ranking 3 of emission sources of the TAC, and then, if the Board 4 determines that reductions in exposure are needed, the 5 implementation of suitable controls. 6 Step two follows logically from step one, and 7 together the two steps in sequence constitute a rational and 8 effective public process for making the oftentimes tough 9 public policy decisions associated with environmental 10 controls. 11 Unfortunately, in this instance the staff's 12 recommendation to list whole diesel exhaust as a toxic air 13 contaminant not only fails to follow this established 14 process, but effectively turns it completely upside down. 15 The result of this flip-flop is to replace a 16 process which provides a strong assurance of good public 17 policy decisions with a process which, if allowed to 18 proceed, will almost certainly result in poor public policy 19 choices. 20 Let me explain. 21 As I've already noted, the staff is recommending 22 that whole diesel exhaust be listed as a toxic air 23 contaminant. 24 The staff reports supporting this recommendation 25 does not attempt to describe diesel exhaust in terms of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 specific chemical or physical properties, properties which 2 in theory could be associated with human health effects. 3 To the contrary, the report states that diesel 4 exhaust is a complex mixture of thousands of gases and fine 5 particles, and further acknowledges that the composition 6 will vary depending on engine type, operating conditions, 7 fuel composition, lubricating oil and whether an emission 8 control system is present. 9 In short, diesel exhaust, as it is described for 10 the purposes of the proposed TAC listing, is not an 11 identifiable substance and is not even a consistent or 12 reasonably well-defined mixture of substances. 13 As such, diesel exhaust does not meet the 14 definition of the Health and Safety Code, which identifies a 15 toxic air contaminant as an air pollutant and refers to a 16 TAC as a substance. 17 The full description of diesel exhaust in the 18 staff report is a complex mixture of thousands of gases and 19 fine particles emitted by a diesel-fueled internal 20 combustion engine. 21 Therefore, the common feature of the proposed TAC 22 listing is not chemical composition or a physical property, 23 but rather it is the source of the material, namely, a 24 diesel fuel internal combustion engine. Through this 25 subtle, but all important distinction, the proposed TAC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 listing effectively becomes a source listing and not a 2 substance listing. 3 Thus, the proposed listing not only fails to 4 identify a substance as required in step one of the Health 5 and Safety Code procedure, but it names a source which is 6 appropriate only as part of step two of the procedure 7 defined in the code. This is the first half of the 8 procedural flip-flop. 9 If the Board accepts the staff's recommendation 10 and proceeds with this inappropriate listing, the Board must 11 then decide if and how to regulate diesel exhaust under the 12 step two management phase of the process. 13 Before discussing the Board's options under step 14 two, and the reasons why all of these options lead to poor 15 public policy, it is useful to provide a more complete 16 description of what is actually in diesel exhaust. 17 For modern heavy-duty diesel engines that are in 18 compliance with on-highway emission standards, over 99.9 19 percent of the total exhaust mass is made up of nitrogen, 20 oxygen, carbon dioxide and water vapor. These species all 21 occur naturally in the environment. 22 Oxides of nitrogen and carbon monoxide constitute 23 several hundreds of one percent of the exhaust mass. They 24 are criteria pollutants and their health effects have been 25 well understood for many years. As a result, standards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 protective of the public health have been set and met. 2 Oxides of nitrogen and carbon monoxide are not 3 unique to diesel engines, but are emitted by essentially all 4 combustion sources. 5 The remaining few thousandths of one percent of 6 the exhaust products is comprised of hydrocarbons, 7 particulate and other miscellaneous species. Clearly, if 8 there are species in diesel exhaust that could justifiably 9 be listed as toxic air contaminants, they are among the 10 literally thousands of chemical species in this subfraction. 11 Indeed, the staff report claims that over 40 12 species that have been already listed as TACs are or may be 13 present in this tiny fraction of diesel exhaust. 14 Just as clearly, if hazardous species do exist in 15 this fraction of diesel exhaust, they are present only in 16 extremely minute amounts. 17 If a decision is made to list diesel exhaust as a 18 TAC, the Board has three choices in the control phase. 19 The first option is to impose no additional 20 regulations beyond those already in place or under 21 consideration for diesel-fueled engines. This could be the 22 most cost-effective outcome of such a listing. 23 However, there would be considerable public and 24 private expense associated with completing the necessary 25 studies and making the determinations required in step two PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 of the process. 2 And, of course, if the net result of this activity 3 is no change in regulations or controls, there must be zero 4 benefit for this added cost. Costs without benefit is 5 clearly bad public policy. 6 The second option is to take regulatory action to 7 limit public exposure to whole diesel exhaust. This option 8 is particularly troubling for those of us who work in the 9 diesel engine industry. Our engineers and designers have 10 worked and continue to work tirelessly to reduce regulated 11 constituents from the exhaust of our engines. 12 We are committed to working toward the goal of 13 achieving the ideal exhaust of nitrogen, oxygen, carbon 14 dioxide and water vapor, but we realize that even if we 15 could attain this, there is no way we can design a diesel 16 engine to operate without producing diesel exhaust, as it 17 has been defined in the staff report. 18 There simply are no technical solutions available 19 for limiting public exposure to diesel exhaust, short of 20 banning or limiting the use of diesel engines in the state. 21 Because replacement engines will not meet the 22 standards for performance, durability, safety, utility and 23 fuel economy set by diesel engines in many applications, 24 restricting the use of diesel engines will have significant 25 economic and social implications and will handicap PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 California's economic growth. 2 Furthermore, given the fact that specific toxic 3 substances have not been identified, there is no assurance 4 that conversion to alternate power sources will reduce the 5 threat to public health. 6 The third option would be to attempt to identify a 7 particular species found in diesel exhaust which may be 8 harmful to public health and then put controls on this 9 species. Note that this option is effectively the 10 identification of a particular substance which was 11 improperly deferred in step one of this process. 12 Identifying a substance in step two effectively 13 completes the procedural flip-flop which I referred to 14 earlier. One might argue that the flip-flop is simply a 15 resequencing of steps and leads to the same end results. 16 This is not true. 17 If, as has been proposed, diesel fuel engines are 18 first identified as the source, then it is clear that under 19 such a listing only diesel engines can ultimately be 20 regulated, and if a particular substance X were targeted for 21 control in step two, only substance X from diesel engines 22 would be controlled. 23 CHAIRMAN DUNLAP: Mr. Duerr, if I can encourage 24 you maybe to close, I would be grateful. We're following 25 the logic, but again we're -- I'm hearing you kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 mention that economic impact of banning diesel, and we've 2 heard all that stuff. So just, what would you have us take 3 away, what would be the final point you'd want to make on 4 the Engine Manufacturers' position on this? 5 And we have, I'm sure there's written testimony we 6 have it here. 7 MR. DUERR: Yes. Detroit Diesel believes the 8 Board must reject the staff's recommendation to list diesel 9 exhaust as a toxic air contaminant, because it is an 10 improper source listing and because it leads to poor public 11 policy choices. 12 If the Board feels that there is sufficient 13 evidence that there are harmful substances in diesel exhaust 14 which are not already listed as TACs or regulated criteria 15 pollutants, that it should direct the staff to identify 16 these substances for appropriate listing. 17 Thank you. 18 CHAIRMAN DUNLAP: Very good. Thank you. And I 19 appreciate the effort that went into packaging those remarks 20 and coordination with your colleagues. 21 Any questions for the last EMA witness? 22 Very good. 23 MR. DUERR: I believe the next speaker is 24 Dr. Mohsen Sohi, Allied Signal. 25 CHAIRMAN DUNLAP: I was kind of looking for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 Chamber to kind of introduce them, because I know there have 2 been some deviation. I guess the Chamber is not here to do 3 that. 4 Mr. Sohi, I guess you're up, from Allied Signal. 5 MR. SOHI: Mr. Chairman, members of the Board, my 6 name is Mohsen Sohi, and I'm the vice president of 7 engineering and technology for Allied Signal Turbocharging 8 Systems, headquartered for over half a century in Southern 9 California. On behalf of our business and its many 10 California employees throughout California, I appreciate the 11 opportunity to provide comments on the proposed listing. 12 CHAIRMAN DUNLAP: You can't just say Southern 13 California with this Board. You've got to tell us where in 14 Southern California. 15 MR. SOHI: Torrance, California. 16 CHAIRMAN DUNLAP: LA County. 17 MR. SOHI: At Allied Signal we are proud of our 18 history in developing some of the world's most advanced 19 environmental and safety technologies such as ozone-friendly 20 HCFCs, and emission control technologies, including catalyst 21 turbochargers and charger coolers. 22 As the world's largest manufacturer of 23 turbochargers, Allied Signal Turbocharging Systems has a 24 vital stake in the outcome of the proposed listing. 25 As the Board is aware, over the past two decades PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 the composition of diesel exhaust has changed dramatically, 2 as we've heard repeatedly. Diesel engine PM emissions and 3 NOx emissions are down dramatically. 4 We're proud that California-made Allied Signal 5 products have played a major role in this success story, 6 which began some 50 years ago. 7 In 1955 Allied Signal produced the first 8 turbocharger for diesel-powered construction equipment, 9 dramatically reducing PM emissions. 10 Since that time we have developed numerous 11 break-through technologies including compact high-speed, 12 high-efficiency turbo machinery designed to improve 13 turbocharger response time and PM emissions. Also ways for 14 turbochargers to further reduce turbocharger response time 15 and PM emissions and charger coolers to reduce NOx 16 emissions. 17 More recently our development of valuable geometry 18 VNT turbochargers has revolutionized the passenger car 19 diesel market in Europe by significantly reducing PM 20 emissions, improving engine response and cutting vehicle 21 weight through engine downsizing. The VNT is quickly 22 becoming the turbocharger of choice across much of Europe. 23 We expect similar environmental benefits for 24 heavy-duty diesel engines as we transition this technology 25 to heavy-duty engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 Our emissions control technologies have also 2 helped heavy-duty diesel engines to become more efficient, 3 improving their fuel economy by 20 percent over the past two 4 decades. 5 In light-duty and medium-duty vehicles, fuel 6 consumption may be cut by as much as 35 percent with 7 associated environmental benefits, while the emissions that 8 cause global warmings are also reduced. 9 But as positive as these developments have been, 10 we continue to search for new technology enhancements. And 11 others are developing innovative product design to even 12 further increase efficiency and reduce emissions. 13 For example, in the near future we'll be bringing 14 to market hydraulically-driven or electrically-assisted 15 turbochargers that offer improved air-fuel ratio control on 16 demand and reduce PM emissions. 17 Also electronic control systems which reduce PM 18 emissions to more precise air-to-fuel ratio. 19 And also in the very near future, exhaust gas 20 recirculation system designed to integrally work with the 21 VNT technology to reduce NOx while minimizing the impact on 22 PM emissions. 23 The diesel engine has come a long way since we 24 produced the first diesel turbocharger in 1955. These 25 technological achievements at Allied Signal and throughout PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 the industry are not by accident. They are the product of 2 our and the diesel OEM's continuing commitment to enhance 3 diesel engine performance by reducing emissions and 4 increasing engine efficiency. 5 We are particularly proud of what our products 6 have done to help the environment. We know that in some 7 segments of the economy it is not always the 8 environmentally-friendly products that win, rather it is 9 sometimes the technology that provides the economic and 10 competitive performance advantages that carry to date. 11 Fortunately, the new technologies satisfy both the economic 12 and environmental issues. 13 Any action that would have a chilling impact on 14 the demand for diesel engines would stifle the development 15 of advanced turbocharger technologies that could hold the 16 key to further emission reductions. 17 Certainly, listing diesel as a TAC would have such 18 an impact. 19 Our view is that in light of what's already in 20 progress, we believe that the consequences will be worse 21 than the proposed cure. Therefore, we urge the Board to 22 reject the proposed listing of diesel exhaust as a TAC. 23 Thanks for the opportunity to appear before you. 24 I'll be happy to answer any questions. 25 CHAIRMAN DUNLAP: Any questions of this witness? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 Very good. Thank you. 2 MR. SOHI: I would like to introduce Dave Smith 3 from Arco. 4 CHAIRMAN DUNLAP: Hello, David. 5 MR. SMITH: Hello, Mr. Chairman. 6 CHAIRMAN DUNLAP: You have a visual for us. 7 MR. SMITH: I have a visual. 8 CHAIRMAN DUNLAP: Will that get on our clothing? 9 MR. SMITH: If you drop it, it might. 10 CHAIRMAN DUNLAP: We had that problem one time. 11 MR. SMITH: We'll try to be very careful. I was 12 wondering how that would work. 13 Let me just say that I'm Dave Smith from Arco 14 Products Company. I'm representing the Western States 15 Petroleum Association, and we're part of a coalition that 16 the Chamber has set up to support to oppose the listing of 17 diesel exhaust as a toxic air contaminant today. 18 The coalition has asked me to talk about two 19 issues specifically. You could imagine that as a 20 representative from WSPA my comments are going to be 21 directed towards fuels, principally. 22 As many of you know, or some of you know, I 23 currently chair the diesel task force within WSPA, and 24 several years ago in the '80s I had the privilege to also 25 lead a task force within WSPA that worked with your staff, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 Peter Venturini and Dean Simeroth, on creating the 2 reformulated diesel that we're currently enjoying today. 3 But, you know, the CARB diesel that we're using in 4 California is probably, or is, the cleanest diesel in the 5 United States, if not the world. There's probably just a 6 few other fuels in the world that are cleaner in the sense 7 of emissions. 8 I thought just for you to get an example of 9 this -- and this is where I hand out my visual aid. I'll 10 also pass around a piece of paper to describe this. Why 11 don't I do that, the paper first. And then I'll kind of 12 point this out so the rest of everyone can see this. 13 What this is is samples of various diesel fuels 14 that we currently produce within most of the refineries in 15 California. 16 You'll see this clearest fuel is what we call a 17 No. 1 diesel. It's used in engines or sources that need a 18 very light fuel. 19 This kind of yellowish fuel is CARB diesel. This 20 is a diesel that's used in the majority of diesel engines 21 throughout the state. 22 The red one is fuel that we call off-road diesel. 23 It's dyed red for tax purposes. 24 And these last two are referred to as No. 4 diesel 25 and No. 6 diesel. They are heavier diesels. They sometimes PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 get used in marine vessels, in locomotives. 2 And we believe, and we're not sure about that, but 3 we believe that the fuel that was likely used in the '50s 4 and '60s that resulted in the health, alleged health 5 effects, was probably closer to one of these two fuels. 6 Now, it's interesting to note that the fuels we 7 used today are much cleaner than what they were in the '80s 8 or '90s, but importantly for today they are probably a lot 9 cleaner that what was used in the '50s, the '60s and the 10 '70s, during the time that the railroad workers and other 11 individuals were exposed it resulted in the results that 12 we've heard about earlier. 13 I am no health scientist, but as they talk about 14 the health studies that were completed in the '80s and the 15 '90s, most of those are based, as I understand it, on 16 exposure that resulted during the '50s and '60s probably 17 using the fuel on -- the darker fuel. 18 Why is this so important? 19 You know, if we were listing, like you have 20 benzene or hexavalent chrome, this probably wouldn't be an 21 important issue. But inasmuch as we're listing diesel 22 exhaust, whole diesel exhaust, fuel formulations do make a 23 difference. 24 If it didn't, it would seem funny that over the 25 last 10 or 15 years we, as well as your Board and staff, has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 spent so much time trying to reformulate diesel and also 2 CARB gasoline. 3 I think we all understand that one way or another 4 the formulation of the fuel that's burned in whatever engine 5 or source can make a significant difference in the 6 emissions. 7 Now, if we were able to really quantify the 8 difference between the fuels used back then and the fuels 9 used now, I'm afraid that we really still don't have enough 10 information about how the emissions would vary. 11 Now, ARB in their comments and in their testimony 12 today referred to the CE-CERT study. 13 Now, it bears worthy to make some comments about 14 the CE-CERT study. Most importantly for the purposes of 15 time, the CE-CERT study looked at three different fuels. 16 Two of the fuels were actually fuels that would qualify as 17 reformulated diesel in California. So that's the cleanest 18 fuel in the United States, with regards to diesel. 19 The third fuel is something called pre-'93 diesel 20 fuel. Now, in fact that fuel would be considered a 21 low-sulphur diesel, it would be kind of like something like 22 the red diesel that you're seeing here. 23 So really the CE-CERT study looked at a very 24 narrow type of fuels and really never got to the really 25 types of fuels that are really at the heart of, at least the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 question in my mind, what kind of fuels were used in the 2 '50s and '60s. 3 The other point about the CE-CERT study was I had 4 the privilege, I guess, of serving on the advisory committee 5 to that group. And although I have to admit I didn't 6 understand a lot of the discussions about the technical 7 nature of it, I did bring up concerns about how those test 8 results would be used, because of the study was very 9 limited, and it only had one engine, three fuels, and the 10 study was really more of a preliminary assessment or a pilot 11 study to determine how, in fact, would we get a better 12 handle with regards to fuel formulations and toxic 13 emissions. And it really wasn't to be used in the way that 14 I think that the ARB is using it today. 15 In fact, there's a quote in the final draft that 16 I've seen, and I haven't seen the final report, so I can't 17 tell you that it's there, but the ARB indicated in that 18 report that this study was only supposed to be used as a 19 baseline study, and it was not to be used in any way to 20 formulate new rules with regards to diesel fuel. 21 Now, to me, it seems like this question about what 22 fuel was used and when and the impact and the emissions is 23 very important. And at least in their presentation it 24 seemed like the staff tried to answer those questions by 25 referring to the CE-CERT study. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 Now, I've asked to comment on one other point, and 2 that has to do with the economic impact on our industry. 3 Now, it's been made a point several times that 4 today's -- what we're considering today is only listing 5 diesel exhaust as a toxic air contaminant, that we're not 6 proposing any type of control measures that would ultimately 7 have some kind of drastic effect on my industry or the users 8 of the diesel feel. 9 And within the staff's report, let me quote a 10 couple things, they say the listing of toxic -- diesel 11 exhaust as a toxic air contaminant will not require any 12 private person or business to incur any cost in reasonable 13 compliance with the proposed action. 14 Now, it's interesting that the staff goes on to 15 say some other things that seem to contradict that finding. 16 Also, you've already heard testimony from M-Cubed 17 that seems to raise questions about the true economic impact 18 from just listing diesel exhaust in California. 19 On page 14 and 15 of the staff report they say 20 that there could be an economic impact on stationary sources 21 with regards to district rules and permits, South Coast AQMD 22 1401 and 1402 rules, AB 2588 hot spots programs. They raise 23 the possibility of increased permit fees. 24 Finally, there's really no mention of the pending 25 and future lawsuits that might occur from the listing of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 diesel exhaust as a toxic air contaminant. 2 It's also noteworthy to find that the ARB staff is 3 recommending that a task force be set up to establish 4 guidelines to help the districts implement the listing of 5 this toxic air contaminant. 6 So to sum this up, WSPA and the coalition is 7 committed to working with the staff on both these issues 8 with regards to the issues of fuels and also the economic 9 impact of the listing of toxic air contaminants. 10 Really the two questions that I leave you with is 11 should we label the exhaust from California's reformulated 12 diesel fuel and current technology vehicles as a toxic air 13 contaminant, which is based on estimated health risks from 14 emissions from fuels that very likely had very different and 15 arguably dirty formulations, and should we also list diesel 16 exhaust as a toxic air contaminant without clearly knowing 17 the economic impact of its listing. 18 Thank you very much. 19 I get to introduce Allen Schaffer from the 20 American Trucking Association. 21 CHAIRMAN DUNLAP: David, don't leave. We have a 22 question for you. 23 Dr. Friedman. 24 BOARD MEMBER FRIEDMAN: David, do you know what 25 specific substance is responsible for the color? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 MR. SMITH: No, I don't. But I do know that as we 2 reformulate the diesel and hydro treat it and do various 3 things to it, it tends to change the color of the fuel. So 4 I don't mean to, by passing this around, that the color and 5 the emissions have a one-to-one correlation. 6 But you can tell by looking at them and sloshing 7 them back and forth these are very different fuels. 8 BOARD MEMBER FRIEDMAN: But I mean to say that the 9 color and the risk to cancer bear no relation to one another 10 either. 11 MR. SMITH: And I'm not suggesting that, Doctor. 12 BOARD MEMBER FRIEDMAN: Thank you. 13 MR. SMITH: I'm just suggesting that the fuels 14 used today and the fuels used back in the '50 and '60s were 15 very significantly different, not only in color, but also in 16 formulations, and we also believe very different in the 17 sense of emissions. 18 CHAIRMAN DUNLAP: Mr. Schaffer, all the way from 19 Washington to visit us. 20 MR. SCHAFFER: Good afternoon. Thank you, 21 Mr. Chairman, members of the Air Resources Board. 22 Sorry I don't have any exciting visuals to hand 23 out, like our previous speaker. I guess all the visuals 24 that I have you're all using. Everything in this room all 25 of us have, we eat, we wear, are brought to you by trucks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 So trucking is among us. 2 My name is Allen Schaffer. I'm vice president of 3 environmental affairs with the American Trucking 4 Association, ATA. We are the national trade association 5 representing the trucking industry. Our members, including 6 our state affiliates, including the California Trucking 7 Association, number over 37,000 that do business all across 8 the country and in North America. 9 ATA has been an active participant and partner 10 with the ARB over the years in developing solutions to 11 improve air quality in California and we remain committed to 12 doing so. And especially to chart an environmentally and 13 economically responsible course of action for the continued 14 use of diesel fuel in California. 15 And we are encouraged by the fact that the ARB has 16 deferred its decision until after the hearing in the 17 California Senate next week. 18 However, we believe firmly that based on our 19 review of the information that the ARB has no choice to 20 adopt the position that diesel does not meet the criteria 21 for being listed as a toxic air contaminant. 22 I would like to focus my remarks on the pages 7 to 23 14 of my written statement, which you all received in 24 advance, which is the inconsistencies between the state and 25 federal process and findings on the health effects of diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 exhaust. 2 First of all, we believe that OEHHA's risk 3 assessment is deficient and inconsistent with state mandates 4 that proscribe there to be consistency with US EPA risk 5 assessments. Let me try and explain that. 6 EPA's Clean Air Science Advisory Committee, which 7 you've heard about this morning, has recently returned the 8 staff's draft report on the basis that the scientific 9 evidence is inadequate. All of CASAC's specific concerns or 10 recommendations are applicable here in this venue to 11 California's risk assessment. 12 And based on what appears to be a determined path 13 of the ARB to list diesel as a TAC, it appears that there 14 will be inconsistency between the findings and 15 recommendations of the ARB and the US EPA. 16 This development would be wholly inconsistent with 17 the finding and recommendations of California's Risk 18 Assessment Advisory Committee, or RAAC. 19 We don't believe that CARB should rely on OEHHA's 20 health risk assessment for diesel exhaust, the May 1998 21 publication, as a basis for identifying it, because OEHHA 22 has failed to fully justify the discrepancy between its 23 assessment of health risks from diesel and that of EPA. 24 The RAAC -- state legislation conducted in 1993, 25 Senate Bill 1082, directed OEHHA to convene a Risk PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 Assessment Advisory Committee to review the risk assessment 2 practices of Cal EPA agencies and to recommend changes, and 3 some of those, the language specifically directing that, is 4 referenced in my comments. 5 RAAC conducted that review in October 1996, issued 6 a review of the California Environmental Protection Agency's 7 risk assessment practices, policies and guidelines, herefrom 8 referred to as the RAAC report, which found some differences 9 in risk assessment prepared by Cal EPA and US EPA that are 10 difficult to explain, including discrepancies in cancer 11 potency factors for certain chemicals, and conclude that it 12 is important that such differences are justified, and this 13 has not always been the case, unquote. 14 The RAAC has specifically noted that the parallel 15 federal and state efforts to assess the health effects of 16 diesel exhaust, commenting that US EPA's participation in 17 the CARB OEHHA diesel exhaust workshop in February of '96 18 was laudable, but such efforts lacked of process to resolve 19 conflicts. 20 December 1996, Governor Wilson issued Executive 21 Order W-137-96 requiring all agencies within Cal EPA to 22 implement the RAAC's report recommendation and to take 23 immediate steps to enhance consistency and foster 24 agency-wide state and federal uniformity with risk 25 assessment methods and practices. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 And Cal EPA and OEHHA have taken those steps. 2 Three steps in particular have prepared plans for 3 carrying out the RAAC recommendations, calling for 4 harmonization of state and federal risk assessment programs 5 to reduce the potential for conflicting approaches and 6 methods and for close cooperation and collaboration between 7 the two bodies in application of new scientific advances and 8 risk assessment. 9 CARB's plan specifically provides that the program 10 for identifying toxic air contaminants will be conducted 11 consistent with US EPA practices. That's in CARB's final 12 draft action plan for implementation of the SB 1082 RAAC 13 recommendations, May 8th, 1997. 14 Secondly, a risk assessment coordination work 15 group was formed, chaired by OEHHA, whose task was to ensure 16 that risk assessments which are used for the basis of risk 17 management reflect the best available science. 18 And, third, OEHHA and EPA's National Center for 19 Environmental Assessment entered into a memorandum of 20 understanding, an MOU, committing the agencies to work 21 towards harmonization of state and federal hazard 22 identification, the exposure evaluation and risk assessment 23 programs, including the development of annual work plans and 24 a process to resolve disputes. 25 The most recent work plan in '96-97 specifically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 provides for harmonization of risk assessment approaches for 2 diesel exhaust. 3 So pursuant to the Executive Order's mandate, 4 consistency with EPA's risk assessments is clearly 5 established policy goal with both CARB and OEHHA. While 6 consistency does not require OEHHA and EPA's risk 7 assessments always must reach the same results, some 8 justification must be offered for departures from the goal 9 of federal and state harmonization. 10 For example, differences in the information 11 available to the agencies at the time the risk assessment 12 decisions must be made or whether lifestyle and/or 13 population demographic differences between California and 14 the United States as a whole might justify OEHHA's adoption 15 of a more conservative approach than EPA's. 16 Unfortunately, though, OEHHA does not even offer 17 such state-specific rationalizations in the case of diesel 18 exhaust. What is it that is different in California than 19 the other 49 states? 20 Instead, CARB and OEHHA and the SRP wrongly assert 21 that OEHHA's risk assessment for diesel exhaust is 22 consistent with EPA's CARB OEHHA initial statement for 23 reasons of rulemaking and the staff report. 24 This claim of consistency is unsupportable because 25 it is based on EPA's February '98 draft health assessment PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 document. What the June '98 CARB OEHHA staff report failed 2 to mention is that EPA's CASAC had recently rejected the 3 February '98 draft risk assessment on many of the same 4 grounds. And I won't go over those. They've already been 5 mentioned in great detail, changes in the nature of diesel 6 exhaust over time, extraordinary small quantities of 7 compounds being available, et cetera. There's a whole range 8 of those on pages nine and ten of my comments. 9 For these and other reasons, CASAC concluded that 10 the February '98 draft risk assessment did not provide a 11 scientifically adequate basis for regulatory decision 12 making, requiring substantial revision and further review of 13 the revised draft by CASAC. 14 Yet, OEHHA's risk assessment, on which CARB 15 proposes to rely in identifying diesel exhaust as a toxic 16 air contaminant, suffers from the same flaws and over 17 extrapolations from inadequate data. 18 The RAAC report called on Cal EPA to take the lead 19 in developing consistency with EPA's risk assessment 20 practices, to refrain from placing industry in double 21 jeopardy where EPA has estimated the risk of the same 22 chemical and to justify any differences between Cal EPA and 23 US EPA risk assessments, specifically including estimated 24 cancer potency factors. 25 Such harmonization is mandated by Executive Order PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 and by policy. But consistency with US EPA's demands that 2 CARB must reject rather than rely on risk assessment 3 approaches that EPA's reviewing body now rejects as plainly 4 inadequate. 5 What does this mean for the trucking industry and 6 other transportation providers that are interstate 7 businesses? 8 We are particularly troubled by the possibility 9 that we may find ourselves looking at two very different 10 classifications of diesel exhaust. 11 For the trucking industry, which is by definition 12 a very mobile interstate industry, an ARB decision to list 13 diesel as a TAC creates a very uncertain environment for the 14 hundreds of thousands of trucks that deliver goods into 15 California and all across the nation each and every day. 16 Aside from the clear competitive issues where 17 California-based carriers would be at a disadvantage, there 18 are other serious concerns about inconsistent federal and 19 state interpretation of the health effects of diesel 20 exhaust. 21 We are particularly concerned because, at the 22 federal level, we are using diesel fuel that is even 23 different and perhaps less refined than you are here in 24 California. 25 So by establishing an inconsistent standard here, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 the effect on the trucking industry could be severe. 2 Presumably the ARB may be compelled alone or from 3 legal action to adopt and impose control measures on 4 California-registered trucks that could compel changes in 5 diesel trucks, engines, fuels or operations. 6 In this circumstance, what would be required then 7 of non-California registered trucks with shipments for 8 delivery in California, on locomotives burning 9 non-California diesel fuel across the border? 10 Could there be a violation of the interstate 11 commerce clause of the United States Constitution that 12 arises out of control measures or impacts of a listing? 13 We're very concerned about that and we're also 14 concerned about whether or not we're going to need to have 15 permits as well. 16 In conclusion, we appreciate the opportunity again 17 to be here today. 18 There are significant gaps still in the scientific 19 knowledge about critical aspects of this potential listing, 20 exposure levels of dose, and we need to take time to look at 21 those and understand those completely. 22 The cost of listing diesel exhaust as a TAC will 23 reverbrate well beyond the reassurances offered by the ARB 24 that the listing is, quote, just a listing and that no 25 control measures will be needed, unquote. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 These words offer very little encouragement to the 2 hundreds of trucking companies, many of whom are ATA 3 members, delivering the goods and providing things to you 4 right now this very minute, who are now facing the frivolous 5 litigation based on allegations of public harm from exposure 6 to diesel exhaust brought by parties in this room. 7 Again, we implore the ARB to look at the science 8 thoroughly as in the eyes of EPA, and recognize presumptions 9 and postulations are not the foundation of effective public 10 policy. 11 Thank you very much. 12 CHAIRMAN DUNLAP: Thank you. 13 Any questions for the witness? 14 Very good. 15 MR. SCHAFFER: I'd like to introduce our final 16 speaker on this panel, last but not least, Stephanie 17 Williams of the California Trucking Association. 18 MS. WILLIAMS: Thank you, Allen. 19 Good afternoon, Chairman, and members of the 20 Board. 21 First of all, I'd like to thank you for deferring 22 your vote until the Legislature can review this very large 23 policy issue. We appreciate it. 24 As you had heard from the Chamber coalition today, 25 which we are a part, this listing is more than just a simple PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 TAC listing. There are huge policy implications and we 2 recognize that you are listening to that, and we thank you. 3 Just to tie things up, we, CTA, have submitted 4 written comments that we hope that you will read. We don't 5 want to go over the same thing that has been said, in the 6 interest of time. 7 We do have one interest in a due process issue. 8 We've requested documents that have been denied. It's in 9 our written comments and you can find our concerns there. 10 Also we have concerns with California diverting 11 from the federal particle standard, PM 2.5 standard, that 12 has been adopted by CASAC and federal EPA is 15 micrograms 13 per cubic meter. There really is no reason to have five for 14 diesel. A particle is a particle. We've heard this from 15 Art Pope and six city studies. There's no difference 16 between a diesel particle and any other particles. And 17 there's really no science that's been put forward that says 18 that it should be three times more stringent for the diesel 19 particle than any other particle. 20 Also we'd like you to evaluate the Australian 21 study. There are two studies that could be used for the 22 risk assessment. The Australian study has 20 years of 23 exposure in its documented exposure. 24 The Garshick study does not have documented 25 exposure and all of the participants died by 1983. Some of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 those people that passed away had only five years of 2 exposure, and it takes a little more than that to get 3 cancer. 4 So we would ask that you reevaluate the Australian 5 study as the risk assessment study. 6 Also, there's a study that was introduced and has 7 been talked about by Bhatia, et al, if you would refer to 8 our written comments. The Bhatia study was done under 9 contract with OEHHA. It is not an independent study. 10 Dr. Allan Smith is the author. 11 We have been unable to locate Bhatia and wonder 12 who he is, so we would like that into the record. 13 And really just to close things up, the Chamber 14 coalition, as well as the members, there are a lot of 15 unintended consequences. The California Trucking 16 Association and our members are using the cleanest fuel in 17 the world. We go to the gas station, we fill up, we get 18 sued. We know these are unintended consequences. We want 19 to move forward with the clean-up of diesel. We like being 20 out front and looked at as the clean air truckers in 21 California, but we also want to keep our jobs. 22 So we ask that you consider these things. 23 Thank you. 24 CHAIRMAN DUNLAP: Thank you. 25 Ms. Walsh or anybody from legal staff, it always PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 troubles me when somebody says they can't get public 2 documents. What's being asked for and what's not being 3 supplied if, in fact, that's the case? 4 MS. WALSH: I can assure you that your staff here 5 takes that responsibility very seriously as well. 6 All of the documents related to this rulemaking 7 have certainly been made available to all of the 8 participants. 9 There have been a number of Public Records Act 10 requests submitted by the California Trucking Association, 11 some to the Air Resources Board and some to OEHHA and other 12 state agencies. 13 We have been responding to those Public Records 14 Act requests as they come in as quickly as possible. We 15 have responded fully to each and every one of those Public 16 Records Act requests. 17 I believe that requests submitted to OEHHA have 18 involved some discussion of documents that were privileged 19 or confidential and that there are exemptions in the Public 20 Records Act request that provide for some nondisclosure of 21 documents that, for example, would reveal deliberative 22 process, those kinds of things. These are well-established 23 principles of public records and documents. 24 I will tell you that from your staff's 25 perspective, we basically give folks everything when they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 ask for it. 2 I do believe that that is the nature of the 3 comment that was submitted on behalf of the CTA by 4 Ms. Williams. 5 CHAIRMAN DUNLAP: All right. Any questions for 6 the witness? 7 Supervisor Roberts. 8 BOARD MEMBER ROBERTS: Yeah. One question, 9 Mr. Chairman. 10 Ms. Williams, our staff and our scientific panel 11 laid out some risk factors for us in some very thorough 12 fashion at the beginning of the meeting. 13 MS. WILLIAMS: Yes. 14 BOARD MEMBER ROBERTS: And you're quoted by one of 15 the newspapers as saying that is junk science. 16 MS. WILLIAMS: Yes, we believe that. 17 BOARD MEMBER ROBERTS: It's junk science and the 18 report is bogus. 19 MS. WILLIAMS: Yes. 20 BOARD MEMBER ROBERTS: Do you want to elaborate on 21 that? 22 MS. WILLIAMS: Yes, I do. Actually thank you for 23 that opportunity. 24 BOARD MEMBER ROBERTS: I don't want you to take 25 all afternoon. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 MS. WILLIAMS: We do have the original scientist 2 opposing a document, and you were using a literature search. 3 It is easy to identify that as junk science. When you have 4 the head of CASAC come forward and say you can't use my rat 5 data, please take it out, that is the scientist that you're 6 depending on, that alludes to junk science. 7 When you have Eric Garshick, who did the railroad 8 study, come out and say you can't use my data like this, and 9 you do it anyway, then you can say junk science. 10 You're using other people's work and you're 11 interpreting. Why not just use it the way they did it? 12 BOARD MEMBER ROBERTS: Thank you. 13 MS. WILLIAMS: You're welcome. 14 CHAIRMAN DUNLAP: Okay. Now -- 15 MS. WALSH: Excuse me. 16 CHAIRMAN DUNLAP: Yes, Kathleen. 17 MS. WALSH: To clarify on my response on the 18 Public Records Act request and due process, counsel, general 19 counsel for OEHHA, is also here and could provide some 20 information about their response to the Public Records Act. 21 CHAIRMAN DUNLAP: I just -- people want to get on 22 the record, I just want to get on the record on behalf of 23 our entire Board and the administration, when people want 24 documents, they're to be provided. And I just want to make 25 sure that we are being up-front and getting material out to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 people who have requested it, and within those guidelines we 2 have about confidential or proprietary. That's all. Just 3 want to reiterate. I don't need a legal argument about 4 that. 5 You guys, matter of fact, if anybody is 6 interested, I personally read, and you know this, Kathleen, 7 because you provide it to me with some other staff input, I 8 look at all the Public Records Act requests we get 9 personally. I'm interested in that. I want to make sure 10 those requests get filled. 11 MS. WALSH: Absolutely. 12 CHAIRMAN DUNLAP: So I have a commitment to that 13 program. And I know you share it. 14 Let's make sure that if we're not providing people 15 with documents, they understand why and the rationale behind 16 it, and the legal elements to it. That's all. 17 MS. WALSH: That's certainly where your staff is 18 and I believe that OEHHA just wanted to indicate that they 19 also are there with that. 20 CHAIRMAN DUNLAP: I know Ms. Denton shares that 21 same view. 22 Okay. Now, it's been suggested that we have a 23 break, not so much a break for the Board and/or the 24 audience, per se. Our Board is going to take their lunch 25 kind of staggered. It's in the back. So we will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 disappearing and there will be some food back there that 2 people will be eating quickly to get back out here, because 3 we want to get through this, we want to give people an 4 opportunity to say what needs to be said. 5 But is this a good time, Mr. Kenny, for us to take 6 a break and try to address some of the themes and some of 7 the issues that have been asserted thus far? 8 MR. KENNY: I think it would be. 9 CHAIRMAN DUNLAP: My Board member colleagues 10 support that? Okay. 11 Mike, why don't I turn to you, and I know 12 Mr. Venturini is busy back there writing, taking notes, if 13 you would attempt -- now the reason I'm imposing this theme 14 concept on you is it will allow us to lump them together, 15 which we've tried to do with some of the witnesses today. 16 So, Mike, I'll let you broker it. 17 I know Dr. Froines and his colleagues have a few 18 things I want to make sure get covered as well. 19 So, Peter, if you need to get up and consult with 20 Dr. Froines while Mike kicks this off, this is fine with me, 21 but let's get some things out. 22 Mr. Kenny. 23 MR. KENNY: That would be fine. Thank you, 24 Mr. Chair, members of the Board. 25 What I've tried to do is look at the different PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 themes as the chairman has suggested and it seems to me that 2 the themes really break down into three primary areas. 3 One is the question about diesel exhaust and the 4 issues of source and substance, whether it is a source or 5 whether it is a substance. And I think that actually has 6 subparts to it in the nature of there's a legal aspect to 7 that, whether or not the identification of diesel exhaust is 8 precedential or whether there has been, has kind of been an 9 approach in the past, whether there's consistency with 10 regards to what is occurring here today with what has 11 happened with US EPA and how that fits into the context of 12 the RAAC process that was identified. 13 In the nature of the science, there are questions 14 about how this fits into what CASAC has done. I know that 15 was briefed, briefly mentioned earlier today. I think it's 16 probably appropriate to go back into that at least a little 17 bit and talk about what CASAC did or did not do. 18 There was mention as to specific studies, 19 particularly the Australian study and what the Australian 20 study does or doesn't mean. 21 Mr. Bunn talked about that a little bit, or 22 Dr. Bunn, excuse me, talked about that a little bit, and I 23 think it's appropriate probably for the SRP and OEHHA to 24 look at that. 25 There have also been a lot of questions about old PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 versus new diesel and whether or not we are looking at a 2 substance today that is consistent with what the studies in 3 the past have basically told us. So I think that issue 4 ought to be identified. 5 And then there have been the questions that have 6 been raised just very recently about whether or not what has 7 been presented to you today by the staffs of OEHHA and ARB 8 and the SRP as junk science. So I think it's appropriate to 9 respond to the allegation of junk science. 10 And then finally the last theme really is one of 11 the identification consequences. What happens if in fact 12 this Board does identify diesel exhaust as a TAC. 13 And there are issues there really with regard to 14 permitting and hot spots and what would happen with regard 15 to the permitting process and the identification of the hot 16 spots process, whether or not there should be some guidance 17 in the use of the risk numbers that are associated with this 18 report, the economic impacts that are associated with any 19 kind of identification, and the legal impacts that are 20 associated with any kind of identification, what kind of 21 lawsuits would we be looking at potentially, and what is the 22 likelihood of legitimacy of those lawsuits. 23 So that is kind of a brief outline of really the 24 three main areas that I think are important to look at and 25 then the subparts of those three main areas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 And with that in mind I'd suggest that Peter 2 Venturini look at the first question and coordinate with the 3 OEHHA staff and then we go to the Scientific Review Panel 4 for the issue of science and then come back to ARB staff 5 primarily for the last issue, which was the identification 6 consequences. 7 CHAIRMAN DUNLAP: Okay. Peter, we have a new 8 court reporter here, so identify yourself. 9 MR. VENTURINI: Good afternoon. I'm Peter 10 Venturini. I'm chief of the Stationary Source Division. 11 What I suggest is Mr. Kirk Oliver, our legal 12 staff, will start off with the legal basis on the source 13 versus the substance. And my staff can follow up on that. 14 And then if OEHHA wants to respond, go through each of these 15 in order. 16 MR. OLIVER: Thank you, Mr. Venturini. 17 Members of the Board, the law envisions and 18 specifically authorizes you to identify complex mixtures as 19 toxic air contaminants. And the law even establishes how 20 controls are to be developed of emissions of TACs from 21 vehicular sources. 22 Now, let me specifically enumerate what those 23 provisions of law are and tell what you they say. 24 Toxic air contaminant is defined in Health and 25 Safety Code Section 39655, and it says the toxic air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 contaminant means an air pollutant which may cause or 2 contribute to an increase in mortality or in serious illness 3 and which may pose a present or potential hazard to human 4 health. 5 Throughout the air toxics law we call AB 1807, air 6 toxics are repeatedly called substances. 7 And the law goes further, substance would 8 certainly incorporate the vehicular emission known as diesel 9 exhaust. 10 But the law goes further and specifically defines 11 air contaminant for you to mean any air contaminant or air 12 pollutant means any discharge, release or propagation into 13 the atmosphere and includes, but is not limited to, smoke, 14 charred paper, dust, soot, grime, carbon, fumes, gases, 15 odors, particulate matter, acids or any combination thereof. 16 I think that lays to rest any doubt about your 17 authority to call diesel exhaust a toxic air contaminant 18 under our law. It clearly authorizes you to do that. 19 The law goes even further and establishes a 20 process whereby these kind of air toxics, once they've been 21 identified by you, if they come from a vehicular source that 22 there's a specific process that's developed in our law for 23 coming up with the control measures to handle these kinds of 24 emissions and the exposures to them. 25 That provision is in Health and Safety Code PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 Section 39667 where it specifically provides a process for 2 how toxic air contaminants that come out of vehicular 3 emission sources are to be incorporated in our vehicular 4 emissions standard and in our standards that we set for the 5 cleanliness of the fuel that's burned in California 6 vehicles. 7 So I guess the argument that's being made here 8 that you've been evaluating is kind of like saying that you 9 can't call something an egg because it comes from a chicken. 10 And I'd submit to you that that doesn't really make any 11 sense in raising poultry and it doesn't make any sense in 12 the context of our air pollution laws, which, as you've 13 seen, give you clear, repeated authority to name something 14 like diesel exhaust a toxic air contaminant. 15 MR. VENTURINI: I'd like to ask Ms. Shiroma on my 16 staff to provide some perspective on the issue of mixture 17 versus substance, and then we'll have some response from 18 OEHHA. 19 MS. SHIROMA: Thank you, Peter. 20 For the record, my name is Genevieve Shiroma. I'm 21 chief of the Air Quality Measures Branch. 22 The Board has in fact identified almost 200 23 substances as toxic air contaminants, and within those 24 listing there are mixtures. A few examples are cresols, 25 cresyfic acid isomers and mixtures, coke oven emissions, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 chlorinated dioxins and dibenzofurans, chromium compounds 2 and so forth. 3 So actually the Board has adopted mixtures in the 4 past as toxic air -- or identified mixtures in the past as 5 toxic air contaminants. 6 MR. OLIVER: I would only add this, that all of 7 the vehicular emission standards that this Board has 8 developed have treated a number of different air pollutants 9 in their control strategy. Every one of the emission 10 standards that we have deal with a number of different 11 chemicals that are found in vehicular emissions. So we have 12 a long history of controlling mixtures here. The law is 13 very clear on that. 14 MR. VENTURINI: I think it might be appropriate as 15 well if OEHHA would provide the Board their perspective on 16 why the listing is being proposed as a listing of diesel 17 exhaust. Of course the members of the SRP would like to add 18 their comments on that. They certainly could as well. 19 DR. ALEXEEFF: Yes. This is George Alexeeff. 20 I'll just be very brief. 21 The studies on which we based the risk estimates 22 and evaluated the health effects of diesel exhaust, both the 23 non-cancer health effects, everything from allergic 24 hypersensitivity to the cancer effects that occurred in 25 truckers or railroad workers or other occupational sources PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 were based on exposures to whole diesel exhaust. So for 2 that reason our health effects are based on whole diesel 3 exhaust. 4 Now, in terms of addressing the issue of new fuel 5 versus old fuel, all of the studies that we looked at also 6 realize this concern of trying to figure out how can we 7 compare this study with another study. 8 For that reason, all the studies in some way when 9 they're looking at measurements base their exposure per 10 microgram per cubic meter of particulate. So that helps by 11 basing everything on microgram per cubic meter of 12 particulate allows us to normalize the exposures. So in 13 that sense we have a way of comparing the exposures. 14 MS. SHIROMA: To follow on to George's indication 15 that with risk assessment the information is normalized, we 16 did in fact look at this issue of old technology, old fuel, 17 versus new technology and new fuel. 18 And in the presentation that you saw today in our 19 staff report we have accounted for all of the advances that 20 have come about. So the emissions inventory and ambient 21 exposures that you see presented today do fold in all of 22 those advances and are reflected in the emissions numbers 23 and ambient numbers. 24 Now, numbers of years ago this issue arose and so 25 we funded a research study, which Dave Smith referred to, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 for Arco, called CE-CERT, the College of Engineering at 2 Riverside. 3 The intent of that study was to take a look at 4 gram for gram, understanding that in fact the emissions have 5 come down, gram for gram is the thumbprint very similar. We 6 knew that we wouldn't have the definitive study. There are 7 many steps that are needed for this kind of thing, but we 8 looked at were the same toxic components in the old exhaust, 9 the exhaust from the old fuel, as we would see in the new 10 fuel. 11 And in fact the study did show the same toxic 12 components, the 40 that we had on the table, and then some 13 were in the old fuel and the new fuel exhaust. 14 We do acknowledge that there is much more to learn 15 about the characterizations and so forth, but our key goal 16 was to see did you have that same complex mixture, the very 17 similar thumbprint before and after, and that's what the 18 study showed. 19 CHAIRMAN DUNLAP: Mr. Calhoun. 20 BOARD MEMBER CALHOUN: What about the 21 concentration in these exhaust of these different studies 22 conducted at CE-CERT where comparing the old with the new 23 fuel? 24 MS. SHIROMA: Again, for the most part -- well, 25 first of all, we showed very nicely that the new fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 complies with the regulations, that in fact you do see less 2 emissions of the particulate, and that was the goal of the 3 new fuel. 4 In terms of concentrations, for the most part the 5 various constituents are very similar. There were some 6 compounds that were higher or lower, but not in a 7 statistically significant concentration. 8 CHAIRMAN DUNLAP: Dave. 9 MS. SHIROMA: In some cases higher, some cases 10 lower. 11 MR. SMITH: It's somewhat terminology. When we 12 use the word old fuel, the old fuel that's being talked 13 about is what is in the CE-CERT test was they referred to as 14 a pre-'93 fuel. It was a low sulphur fuel. It was a fuel 15 that would almost meet EPA's low sulphur requirements. It 16 was not anywhere near or modeled -- there was no attempt, I 17 was on the advisory committee, I participated in those 18 meetings, there was no attempt to model the fuels that were 19 used in 1950 or 1960. 20 So as long as you understand what they say by old 21 fuels, the old fuel in this CE-CERT study was actually in 22 1990. 23 And the other thing is that because of the way the 24 study was done, only one engine, these three fuels, ARB told 25 us those results would not be used in the way of formulating PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 new regulations. So the use of it in this context is 2 surprising. 3 CHAIRMAN DUNLAP: Dave, I don't mean to quibble 4 over words, but certainly you don't believe that this 5 discussion today is one about regulation, do you? 6 MR. SMITH: I think that's what you are doing, 7 adopting a regulation to list diesel exhaust as a toxic air 8 contaminant. 9 CHAIRMAN DUNLAP: No. The regulatory element, if 10 in fact we were to identify it as a -- diesel exhaust as a 11 TAC, if that would emerge at all it would be many years down 12 the road, a couple at least, with a bunch of process 13 involved. 14 And I might remind you and others that are pretty 15 adept at watching what regulators do, I think you have a 16 pretty good confidence level about the fact that with our 17 '94 SIP we put forward just about everything we thought 18 could reasonably be done to control the source. 19 I'm not going to let you get away with asserting 20 that this is some kind of a regulatory action or regulatory 21 discussion, because it isn't. 22 And I don't think you need to hear from legal 23 counsel to describe again what this hearing is about, but 24 it's just not a regulatory hearing. 25 MR. SMITH: As you probably know, I'm not an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 attorney, so I won't argue the point. It just seems like a 2 regulatory action that the Board is taking. And I find that 3 from our perspective -- 4 CHAIRMAN DUNLAP: Feels like it. 5 MR. SMITH: It just feels like it. 6 And irrespective of that, irrespective of that, 7 it's very important that it be understood that the CE-CERT 8 study initially when we talked about it, it was supposed to 9 have a number of different engines, a number of different 10 fuels, but because of a number of reasons, time and cost 11 being the most precedent, that scope of the test was very 12 much reduced to where we only had one engine, a modern 13 engine, and these three fuels, two of which were CARB 14 diesels. So I just find it hard that ARB is trying to use 15 the results from that study, whether they should or 16 shouldn't, to try to explain whether or not we are actually 17 looking at the fuels that were used in 1950 or 1960, because 18 I don't think they did. 19 CHAIRMAN DUNLAP: Genevieve, anything else? 20 MR. VENTURINI: Mr. Chairman, if I can bring a 21 little closure on this CE-CERT from my perspective. 22 Basically, we were questioned that new fuels were 23 going to be substantially different from older fuels in 24 their makeup, and somehow that would affect the toxicity, so 25 we undertook this study. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 The bottom line was the newer fuel contained the 2 same profile and the same kinds of constituents in it as the 3 older fuel, admittedly in lesser quantities, which is good 4 news. It means we're reducing emissions and we are reducing 5 particulates in some of the organics, so that's the good 6 news. But it did contain the same substances. 7 We did recognize that that study was one engine 8 with three fuels. In fact, we acknowledge, and even the SRP 9 in their findings acknowledged, that some additional work 10 would be very helpful to further quantify the amounts of 11 some of these specific compounds from a variety of engine 12 technologies, operating cycles and so forth to provide some 13 additional information. 14 But the initial purpose of this is to try to get a 15 perspective, was there a substantially different profile. 16 What we found was, there wasn't. 17 And I just wanted to get that summary perspective. 18 MR. SMITH: The only thing is that that didn't 19 come as a big surprise to me, because all the three fuels 20 looked in many ways a lot of the same. If we had the 21 ability to take a No. 6 fuel, which was used in railroads in 22 1950, and submit it to the same type of testing, I think 23 we'd see a much different result. 24 CHAIRMAN DUNLAP: Okay. I think we've covered 25 that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 Mr. Parnell. 2 BOARD MEMBER PARNELL: Actually, I wanted to just 3 belabor that point. It seems as though his feeling on our 4 staff's part, the constituencies found in the two fuels 5 after the test, albeit a one-engine test, were substantially 6 the same. 7 But what obviously your belief is is that it would 8 have been substantially different had they been able to test 9 1960 fuels. 10 MR. SMITH: Actually I was really surprised that 11 we did see a significant difference between what they called 12 the pre-'93 fuel and the post-'93 fuel, because in many ways 13 they weren't as different as I hoped that they would be. 14 When I was giving them advice on it I said let's really try 15 to make these different. 16 But based on the time and the fuels that were 17 available, they got a fuel that wasn't that much different. 18 So I was actually surprised that they came up with 19 the reductions that they saw. I was pleasantly surprised. 20 So I mean I guess our coalition would very much 21 like to see a continuation of the CE-CERT study, to continue 22 that study not only looking at other types of fuels, the 23 older fuels, but maybe looking at the old technologies that 24 were available. That would help us define are these health 25 studies that are based on those old fuels and old engines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 applicable to today. 2 CHAIRMAN DUNLAP: Yeah. My concern, you know, if 3 there were commitments made by our staff relative to the use 4 of certain information and that there's a trust relationship 5 that one needs to have with people we work with, if that's 6 been violated, Dave, and I'm hearing you say it has, at 7 least in the context of how you view this whole 8 deliberation, that's something that we'll deal with as a 9 Board with our staff. 10 I can assure you that's not an operating process 11 that we encourage or condone here. So I take that 12 seriously. And I'm going to have the right conversation to 13 make sure that that doesn't happen again and it's very clear 14 about in the future when we do collaborative research that 15 people are very clearly aware of what is going to emerge and 16 how it's going to be used. 17 MR. SMITH: Sitting on the advisory board, I've 18 been through enough of these things that I appreciate that 19 where you sit that you have to make decisions based on the 20 available information. So that's why I was very sensitive 21 about how this report was going to be used. And that was my 22 understanding after we agreed on the test. 23 CHAIRMAN DUNLAP: Okay. Anything else, Jack, on 24 that other point? 25 BOARD MEMBER PARNELL: Just briefly, it's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 concerning to me that unless my understanding is incorrect, 2 that much of the data that we relied on was a result of 3 prior-1960 fuels being burned and we take that and then we 4 take a set of different fuels and try to prove up something 5 that seems to me is very frail at the best. 6 MR. SMITH: If, you know, if we actually do the 7 studies, maybe it will substantiate what ARB staff believes 8 to be true now, but I don't believe they can make those 9 findings based on the test results they have. 10 BOARD MEMBER FRIEDMAN: Excuse me. 11 CHAIRMAN DUNLAP: Dr. Friedman. 12 BOARD MEMBER FRIEDMAN: I understand the question 13 very well, but what confuses me is I know of no studies that 14 can, in any fuel at any age, in this heterogeneous mix in 15 which a specific carcinogen is not identified, can answer 16 your question. Can't be done. At least not now by current 17 technology. 18 So, you know, the notion of let's study fuel from 19 1914, let's study fuel from 1940, it's not going to help. 20 It will not provide an answer. It's very straightforward. 21 MR. SMITH: My sense, and I'm not the scientist, 22 the health scientist, but you do know that CARB has 23 regulated cleaner burning gasoline where they're 24 specifically regulating toxics and they're specifically 25 looking at very specific toxic emissions from that fuel. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 And by doing that, we are formulating our fuel 2 under cleaner burning gasoline rules to limit those specific 3 toxic emissions. We're not trying to limit gasoline exhaust 4 emissions, hopefully to try to get the right one. 5 So I think it's been done. 6 DR. FROINES: Can I comment? 7 CHAIRMAN DUNLAP: Yes, Dr. Froines. 8 I didn't mean to cut you off, Bill. 9 DR. FROINES: I wanted to follow up. 10 Bill, I think that his comments are right to the 11 point, because at some level it's very clear we should be 12 looking at the fuels and the technologies and look at what 13 happens when combustion occurs and what products are 14 produced, and we should be doing that over a long period of 15 time. No problem. 16 But at another level, this has nothing to do with 17 what we're talking about today also, because let's assume 18 that there is a qualitative change in the levels of 19 emissions, the size of the particulate, the PAHs on the 20 particulate, the other vapors that have been formed, let's 21 assume that there are significant differences. 22 Well, what do you do with that? 23 You don't do anything with it. All you can say is 24 those changes have occurred. What you have to then do is to 25 do some kind of studies, whether they be epidemiologic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 studies or animal studies or in vitro studies, but you then 2 have to relate those changes to -- you have to relate the 3 changes that you find to changes in health effects. That's 4 fine too. I think we should do that too. 5 But you have a problem. Those are going to take 6 somewhere between 10, 20, 30, 40 years to do all that. 7 We're not talking about something that's going to happen 8 next week. You're talking about looking at changes in 9 technology in fuels, evaluating these changes, doing major 10 epidemiologic studies. Remember, we're talking here about 11 40 studies. 40 studies. Not one. 12 And so when you look at the scope of what we're 13 doing here, this is all well and good, but keep in mind what 14 has to be done. You must look at the changes and you must 15 then look at the impact of those changes on the health 16 effects. You can't do one versus the other. 17 So you're talking about a very very major 18 undertaking in the very least. 19 I want to say one thing more about this. Two 20 things. 21 One, mixtures. Smoking is a mixture. It causes 22 lung cancer. 23 Coke ovens is mixture. It causes lung cancer. 24 Coal gasification is a mixture. It produces PAH, 25 it causes lung cancer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 Aluminum smelters produce lung cancer in workers 2 who are part of the electrolytic process of aluminum 3 reduction. 4 If you use smoky coal in China you have excess 5 lung cancer. 6 In other words, everywhere you have a complex 7 mixture made up of products of incomplete combustion, you 8 have excess lung cancer risk. Period. Across the board. 9 Smoking, smoky coal, coal gasification, coke ovens 10 and the list goes on and on. Complex mixtures produce lung 11 cancer. 12 The evidence for diesel is that diesel produces 13 lung cancer. It is consistent. There are a large number of 14 studies and those studies are very very good. 15 That's what you have before you. 16 That, ladies and gentlemen, is the definition of a 17 toxic air contaminant. You don't have to go one step 18 further. Forget everything that's been said about risk 19 assessment. 20 What's been said here today is that diesel exhaust 21 as a complex mixture causes lung cancer and that's a TAC. 22 And then the law says OEHHA has to come up with a 23 range of risk, and that's what they've done. In fact, they 24 have come up with about five to ten ranges of risk, all of 25 which are in the same ballpark and all of which are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 reasonable and all of which have uncertainty, but they've 2 met that statutory responsibility. So they have met their 3 responsibility within this context. 4 And finally I want to say something about biology. 5 When you're exposed to five different carcinogens, they 6 don't act by themselves. The cancer of the lung you get 7 happens from the mutations that occurs in the lung from one, 8 from two, from three, from four, from five and from the 9 hundreds that you're exposed to. 10 In other words, what you have is a multicausal 11 phenomenon. Those multiple carcinogens are causing cancers. 12 You're getting mutations in different parts of your genes. 13 You're seeing the effects of the multiple exposures and you 14 may even be seeing the effects of interactions. 15 It's impossible, it is fundamentally impossible to 16 separate diesel constituents into individual components 17 within all of our lifetimes and ever reach anywhere. But it 18 would be wrong to do so, because the stuff that produces the 19 cancer are the hundreds of compounds that enter the lung 20 and cause genetic changes. 21 CHAIRMAN DUNLAP: Okay. Appreciate it, 22 Dr. Froines. We want to come back. You did a good 23 summation, but say that we want to hear more about some of 24 the specifics of that. 25 Dave. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 MR. SMITH: Am I done? 2 CHAIRMAN DUNLAP: Yeah, you're done. Thank you. 3 Peter, you're moving swiftly through your list 4 here. 5 MR. VENTURINI: The next items really relate to 6 health issues and they are the consistency with our US EPA, 7 the RAAC findings. 8 CASAC, which I should probably reiterate once 9 again, CASAC there was the Australian study and then the 10 point about junk science. So I'll ask OEHHA and I'm sure 11 Dr. Froines will also want to address this. 12 DR. ALEXEEFF: This is George Alexeeff. 13 Let me first talk a little bit about consistency. 14 I think we've -- actually our slides really address this 15 issue fairly well. 16 First of all, all the agencies we've talked about 17 that have taken some action on diesel exhaust, whether it's 18 the State of California for Prop 65 or IARC or NIOSH or WHO, 19 have all done that action based upon whole diesel exhaust. 20 There's consistency right there. 21 In terms of now getting into what are the health 22 effects, is there consistency on what the health effects 23 are? No, there are not. 24 The difference that might exist is very small. As 25 you saw in terms of the cancer -- the non-cancer levels, we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 proposed five. US EPA proposed five. World Health 2 Organization is 2 to 14. That is very very consistent. 3 We go now to the cancer effects. Okay. Let's 4 talk about consistency. 5 First of all, is there consistency that there is 6 some cancer risk to humans? Yes. There's a lot of 7 consistency. Do they all use the exact same words? No. 8 Everybody states it a little bit different, because a 9 scientist just states it slightly different. 10 But it's essentially very very close to being a 11 known human carcinogen, if not a known human carcinogen. 12 And how one states is really not relevant here, 13 because all we have to know is if there is a risk. 14 So US EPA is consistent with that and the World 15 Health Organization is consistent with that, NIOSH is 16 consistent with that, and so are we. 17 The next question comes down to the range of risk, 18 what is the consistency of that? We had a slide on the 19 range of risk consistency. 20 Now, the only inconsistency within that range of 21 risk is whether you included the animal data. 22 We can all -- we have a study, we can all do the 23 calculations the same and come up with the same number. 24 So in our range of risk, we did not include the 25 animal data. And that's the only difference. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 As it turns out, humans are more sensitive than 2 animals to the cancer risks. 3 Now, let me get to the issue of the Clean Air 4 Advisory Committee, the CASAC report. As I indicated 5 earlier, I felt that US EPA's report was about six months 6 behind ours, and I still think that is the case, because 7 what happened at the CASAC meeting? 8 Well, first of all let me just step one step 9 further back, because it was mentioned, a representative 10 from the epidemiologist from US EPA came to our workshop, 11 the workshop that we had here, and testified that the US EPA 12 report is consistent with the Cal EPA report. That 13 testimony was given and it is the case. 14 CHAIRMAN DUNLAP: That was Mauderly? 15 DR. ALEXEEFF: No. This was a representative from 16 US EPA. Mauderly is a private individual. 17 CHAIRMAN DUNLAP: Right. But he's the chair. It 18 wasn't him, it was -- 19 DR. ALEXEEFF: He's the chair of CASAC. No, I'm 20 actually talking about the staff -- 21 CHAIRMAN DUNLAP: To the committee. Got it. 22 Okay. 23 DR. ALEXEEFF: Okay. Now, with regards to that, 24 the staff made a presentation to their science panel 25 recently and their science panel suggested that there should PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 be more discussion regarding the non-cancer health effects, 2 the immunologic effects. 3 Well, we were given that same advice six months 4 ago and we incorporated that into our report. 5 Now, in terms of the cancer health effects, the 6 science panel told -- the US EPA science panel told their 7 staff to not use the animal data in the range. They voted 8 the use the human data in the range. That is what our 9 science panel told us six months ago. 10 So the science panels are actually also 11 consistent, as well as the EPA staff reports. It's simply a 12 timing issue of when things are being told. 13 So in many ways what has happened at the CASAC 14 meeting is that US EPA's CASAC has told their staff to make 15 efforts to be more consistent with the Cal EPA report, and 16 our staff went there and testified in support of US EPA to 17 clarify what the issues are. 18 So I don't think there's inconsistency, and I 19 think that we are working very very closely with US EPA. 20 CHAIRMAN DUNLAP: Okay. 21 DR. ALEXEEFF: I think that it's also -- the Risk 22 Assessment Advisory Committee asked us to work towards 23 consistency and harmony and we have had many workshops 24 together, we've testified for each other, we have phone 25 conversations. So I think we've worked as hard as we can to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 be consistent. 2 CHAIRMAN DUNLAP: What I'm going to do is exercise 3 some prerogative. It seems to me that we're never going to 4 get to the other witnesses unless I break it off and we hear 5 from the rest of the witnesses and then we'll come back. 6 Does anybody on the Board want to argue with me 7 about that? Okay. 8 MR. MANDEL: Mr. Chairman, one point of response 9 to the debate. You did say there would be an opportunity 10 to -- 11 CHAIRMAN DUNLAP: I'm not going to do this right 12 now, Jed. What I'm going to do is call up the rest of the 13 witnesses. We're going to run through and then at the end 14 we're going to finish with the summary and you'll get a 15 chance to have some back and forth. I'm not precluding the 16 back and forth, I'm just going to continue with the 17 witnesses. 18 MR. MANDEL: I only want the back part, not the 19 forth part. 20 CHAIRMAN DUNLAP: All right. 21 DR. FROINES: John, I do think, I won't do it now, 22 I'll wait -- 23 CHAIRMAN DUNLAP: We've chewed up an hour and 24 we're only through, Peter, as far as the themes, I think 25 you're halfway through the first theme of the three. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 So I got to hear from the rest of the witnesses, 2 because we're going to be coming back to the same thing. 3 They're going to be rebutting what's been said thus far. 4 I'm going to go with the witnesses, finish the witness list. 5 DR. FROINES: I just want to say that at some 6 point, and there's no hurry, or I'll write you a letter 7 afterwards, however you want to do it, but at some point I 8 would like, as the chair of the Scientific Review Panel, to 9 respond to Stephanie Williams' claim that what's been done 10 is junk science. I don't think this is junk science and I 11 think that I would like to respond to that, because I think 12 it's inappropriate. 13 CHAIRMAN DUNLAP: Okay. 14 BOARD MEMBER ROBERTS: Mr. Chairman, I had asked 15 that question and I was going to bring us back to that, but 16 I'd like to hear the rest of the witnesses first. 17 CHAIRMAN DUNLAP: We'll go through the witnesses 18 and then we'll come back. 19 And so what I'm going to do is I'm going to 20 announce the rest of the witnesses. We're going to have 21 them run up. 22 Now, there is going to be some Board members who 23 are going to be missing, so I don't want anybody to take it 24 personal. We're going to go have a bite to eat and then 25 we're going to come back out here. So I'm going to excuse a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 few of my colleagues to go back and start taking care of 2 that more personal need, which is nourishment. But we'll be 3 listening and we have the sound piped in. 4 So, Janet, you're up. 5 Then Dan Eisentrager from the Bus Association. 6 Merlin Fagen, from the Farm Bureau. Roger Isom from the 7 Nisei Farmers League. And Todd Campbell from Coalition for 8 Clean Air. Bonnie Holmes Gen from the Sierra Club. And Tim 9 Carmichael from the Coalition. 10 So, Janet, I didn't mean to steal your thunder, 11 but we are going to do that simultaneously. 12 Can I step out for a minute? 13 Hold her if she goes on for more than five 14 minutes, give her a bad time, and we'll follow up. 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 MS. HATHAWAY: My name is Janet Hathaway. I'm the 2 with the Natural Resources Defense Council, an environmental 3 group here in California and also nationwide. 4 We're very supportive of what you have done here. 5 Go to the next slide, please. Sorry. 6 We're very supportive of the listing of diesel 7 exhaust. We feel that the process has been anything but 8 hasty and would urge you to move to the risk management 9 phase. 10 This slide, which you can't see entirely, is to 11 point out that ARB and OEHHA have been very careful in their 12 examination of the noncancer hazards as well as the cancer 13 hazards of diesel exhaust. 14 On the noncancer hazard side, ARB would be 15 justified just looking at the noncancer effects in listing 16 diesel exhaust. 17 Not only is there diminution of lung function in 18 people that are exposed over a long period of time, but there 19 are new data that suggest an allergic or asthmatic response, 20 and those alone would be a sufficient reason for listing. 21 These are very fine particles, and the third point 22 here is that these fine, fine particles. 23 Most of them much less than a micron in length, 24 lodge deeply into the lungs and remain in the lungs much 25 longer than coarser particles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 Next slide, please. 2 This is who we are. NRDC. 3 Diesel exhaust, as you have heard, it's a complex 4 mixture. Many of these substances in diesel exhaust, in 5 addition to the fine particles, are identified as 6 carcinogens. 7 Some of those you know as formaldehyde, benzene, 8 potent carcinogens. The nitro PAHs are coming up again and 9 again in evaluations of what is in diesel exhaust, and they 10 are not all being reduced by this reformulation of the fuel. 11 I've looked at the Riverside data, and it does not 12 suggest that there is an across-the-board diminution in the 13 micro PAHs, which are the most likely to be of concern of 14 some of these substances in diesel exhaust. 15 So, it's not at all clear that there is a direction 16 toward eliminating a risk, even though the particle 17 concentrations are going down. 18 The particles are becoming finer, and the 19 concentrations are going down, so they may actually still 20 pose a similar risk, and that is something that should be 21 examined in the next phase. 22 Next slide, please. 23 The new evidence on asthma and immunological 24 responses is very, very important, and it is piling up. 25 The last couple of years have just been a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 proliferation of studies about asthmatic responses, and 2 there has been a world wide increase in asthma. As I am sure 3 many of you are painfully aware, the deaths from asthma have 4 been increasing very greatly, and that is happening not just 5 in this country but Japan and in Western Europe, and many, 6 many people are engaged in trying to understand this 7 phenomenon. 8 Diesel exhaust may play a significant role, 9 especially in combination with other allergens. It seems 10 to -- in some of these studies there has been a demonstrated 11 interaction between other allergens and the diesel exposure. 12 Next. 13 As it's been said before, health agencies 14 throughout the world have been looking at the question of 15 diesel exhaust and lung cancer. 16 NIOSH in 1988, International Agency on Research on 17 Cancer, 1989, World Health Organization, these organizations 18 are all looking at the same kind of data, coming to the same 19 conclusion that the Air Resources Board has, so the 20 consistency here is kind of overwhelming. 21 The U.S. EPA is revising their data, but they 22 continue to agree that there is a probable human cancer risk 23 from diesel. 24 The studies are very convincing on cancer, because 25 they are so diverse, and they are so consistent. It is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 important to understand that, yes, the fuel has been changing 2 over time, but the fuel is different in different parts of 3 the world, and it is different in different occupational 4 settings. 5 The occupational settings did not all involve 6 railroads, did not all involve number six diesel oil. Some 7 of the occupational settings were mines. Some of them were 8 truck drivers, and some of them were fairly recent. 9 They all indicate a similar kind of increase in 10 cancer, about a 40 percent increase in cancer for the people 11 occupationally exposed. 12 This would suggest that there is something similar 13 going on. Even when you have low sulfur fuel in some parts 14 of the world and high sulfur fuel in other parts of the 15 world, you are having some similar effects. 16 So, I think that is very, very strong evidence 17 that there is a consistent health problem that isn't resolved 18 simply by the reformulation that we have done. 19 Again, constituents have consistently been shown to 20 damage DNA, our genetic material, by extracts from the diesel 21 exhaust and by full diesel exhaust. 22 That again suggests that this is causing changes in 23 our genetic material that are biologically then likely to 24 result in cancers. 25 Again, it is another piece of the puzzle coming PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 together. The animal studies supply some information. The 2 workers study supply some information. They all point in the 3 same direction. 4 Again, the workers data, one has to keep in mind 5 concurrent exposure data. Concurrent meaning that while 6 these people were being exposed, were they wearing monitors, 7 that kind of thing. 8 It virtually never can be done that you really 9 track how much exposure occurred over a many-year process as 10 people work in an occupation like mining or trucking or 11 whatever. 12 There are almost always reconstructions after the 13 fact. That's occurred here, and that is not unusual. 14 It's imperfect, but it's the kind of data that we 15 use for all of our regulatory processes, and so I think that 16 those who suggest that it's somehow anomalous or insufficient 17 data are simply wrong. 18 Again, in the EPA, the Cal EPA, and ARB 19 assessments, the consideration of the improvements in diesel 20 fuel and diesel engines has been done. 21 I think that that is very important to emphasize, 22 because I think the impression might be taken from some of 23 the comments that have been made that there is an over 24 estimate of risk here; not so. 25 The estimate of risk is based on today's fleets. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 That means the engines that are in use today, and there is a 2 projection in the ARB Exposure Assessment of the reductions 3 that are likely in the future, because of increasingly 4 improved engines. 5 That's very important to keep in mind. 6 So, we are really looking at the kinds of vehicles 7 that are likely to be on the road now until the year 2010 in 8 this assessment. 9 Furthermore, the fuel changes which have reduced 10 particle emissions have also been evaluated and are a part of 11 this overall assessment, and were that not done, you would 12 have a much higher risk that you would be calculating. 13 Total miles traveled from heavy diesel is 14 increasing. So that somewhat counterweighs the fact that we 15 have improved the fuel, and we have improved some of the 16 engines. 17 You have to keep in mind a lot of these engines 18 stay on the road a very long time. Some of them are capable 19 of staying on the road for three decades or more. 20 So, it's important not to assume that simply 21 because new engines can be clean that all the engines are 22 rapidly becoming new. 23 The transition period for heavy-duty engines is 24 much slower than for light-duty engines or personal computers 25 or those kinds of things. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 These are durables, and they last a long, long 2 time. There are still first generation engines that are in 3 use in agriculture and off-road and other places. 4 Next slide. 5 Nothing about this decision that Air Resources 6 Board is to make will end controversy, and it certainly will 7 not end new studies. 8 There are studies that will need to go on to answer 9 further questions. It would be very helpful to understand 10 better what mechanisms are going on, but keep in mind the 11 debate still continues about the exact mechanisms involved in 12 cancer caused by cigarette smoke. 13 So, we can't expect to resolve all those issues 14 before we begin risk reduction. 15 Next. 16 Here are some of the studies that are ongoing that 17 we will get some answers from, and they will be incorporated 18 into risk reduction processes. 19 There is a further study of truckers' exposures, 20 and the trucker exposures were very similar to ambient level 21 exposures. 22 Many of the truckers were exposed to an average of 23 around 10 micrograms per cubic meter, and that's like being 24 on the side of a heavy freeway and that's not very much 25 different from ambient levels of 1.5 or 2. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 That study is supposed to be published this month, 2 but it's not yet out. There will be some studies on diesel 3 and asthma further refining the question of whether there is 4 a causation role there, or whether there is something that 5 exacerbates already existing asthma, and that will help us 6 understand the asthma problem better. 7 Health Effects Institute has talked about their 8 study, which will, again, take many years, but when it is 9 done it will be part of the database that will help us 10 understand diesel better, but that is not a reason to wait. 11 Next slide. 12 The goal here from the environmental community is 13 not to ban diesel. I think that many people have 14 mischaracterized the purpose and the motivation of 15 environmental groups as to attack or ban diesel. 16 That is simply not true. Our goal is to identify 17 high risk situations and to reduce that risk. 18 We know, as well as everyone in this room, that 19 gasoline combustion also poses real risks. We would like to 20 have the gasoline combustion further controlled. 21 We know that there needs to be alternatives there 22 as well. There are no easy answers, but there are risk 23 reduction methods. 24 Cleaner alternatives are available for heavy-duty, 25 including newer, cleaner diesel, but all these things need PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 incentives and support. 2 Among the things that we would like to see happen 3 after listing is further incentives for the transformation of 4 old fleets by actual financial assistance. 5 There is legislation and an initiative, Proposition 6 7, which will be on the November ballot here in California. 7 The Union of Concerned Scientists and the Natural 8 Resources Defense Council have helped to get that on the 9 ballot, which will provide money precisely for this purpose, 10 so that the old engines can be replaced with cleaner, new 11 engines, and the differential cost will be paid for by the 12 public, since this benefit is going to be enjoyed by us all 13 of having cleaner air to breathe. 14 We support legislation and initiatives that would 15 help to provide financial incentives for this rapid turn-over 16 that we are talking about. 17 But the goal here, again, is to reduce the use of 18 the dirtiest, oldest diesel engines, and it is not to ban 19 diesel. 20 Now, there has been a lot said in the way that 21 lawsuits are going to be generated by listing. I think it is 22 important to note that lawsuits have already been filed on 23 the diesel exhaust issue. 24 There are not hundreds of lawsuits that have been 25 filed. As a matter of fact, there are only a handful. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 There are notices that have gone to many people, 2 but there are only a handful of lawsuits that have been 3 filed, and those lawsuits are not going to be affected in any 4 way by the listing. 5 They are filed under Prop 65, which is a law that 6 requires that if you exceed a certain risk, you have to 7 provide notice to the people that you are exposing to that 8 risk, and ARB's listing would have no effect on those 9 lawsuits. 10 So, I think that is important to keep in mind. We 11 would welcome OEHHA taking a role in providing guidance on 12 how risk numbers such as those that they are providing about 13 diesel exhaust should be used in Prop 65 lawsuits, but ARB's 14 listing results in no regulation, nothing that would actually 15 foment or change the outcome of lawsuits. 16 ARB's listing, as you've heard over and over again, 17 just begins the process. That process will include the 18 industry that uses diesel to determine cost effective risk 19 reduction. 20 The best solution for those people who are 21 concerned about litigation is to find a way to reduce risk. 22 That's the one thing that is guaranteed to reduce litigation. 23 If people are feeling at risk, their likelihood of 24 getting involved in a contentious lawsuit is very small. 25 Next. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 BOARD MEMBER RIORDAN: Well, just while you have 2 sort of taken a slight breath there, and I'm mindful of the 3 time, and I'm mindful of our Chairman's admonition, maybe we 4 could get some of the conclusions. 5 MS. HATHAWAY: I just have a few more slides. 6 Listing other substances as toxic air contaminants 7 has not resulted in either bans or in floods of lawsuits. 8 The claim that there is going to be a flood of 9 lawsuits is not grounded in reality. Toxic lawsuits, or any 10 kind of personal injury action, are extremely costly. 11 You have to prove not just that you were exposed to 12 something or other, but you have to prove that you have an 13 injury that was caused by that exposure, by that precise 14 exposure, which virtually could be done for something like 15 diesel when the injury, lung cancer, is a commonplace injury, 16 1 in 100 persons or so develops lung cancer over a lifetime, 17 and there are many, many more frequent -- many, many other 18 things, especially smoking and environmental tobacco smoke, 19 which more readily cause that injury. 20 So, in other words, because smoking can increase 21 your risk ninefold, it is going to dwarf any effect that 22 diesel has in a lawsuit type setting. 23 So, you simply are not going to have people 24 bringing lawsuits on this ground, and indeed you never have 25 had people bringing lawsuits for injury, for a lung cancer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 injury on these grounds. Next. 2 So, the goal here, the purpose of listing is to 3 reduce risk. 4 For diesel, what does this mean? 5 Further improvements of the fuel can be examined. 6 Improved engine designs, that can be examined. 7 Some of those engine designs are already out there, 8 but no one has an incentive to purchase them until there is, 9 in fact, an acknowledgment that we have a problem with diesel 10 exhaust. 11 We also need to look at reducing idling in the 12 populated areas. Truck idling, bus idling, all of that kind 13 of thing increases risk and increases exposure. 14 We also have to examine ways of increasing 15 alternative fuels, like natural gas. These are all kinds of 16 things that we would be talking about doing, not banning. 17 Next. 18 Finally, listing diesel is simply acknowledging 19 that that is a health hazard. It does not stop the process. 20 It does not end the question. It just acknowledges 21 the health hazard. Then the efforts to try to address that 22 health hazard can be undertaken. 23 But it is important to keep in mind that pretending 24 there isn't a risk is not going to reduce that risk. 25 Simply walking away from it or saying, we want more PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 studies, does not reduce it, and there are means available to 2 us today to reduce the risk. 3 So, I just want to say, I hope political pressure 4 here does not interfere with the Air Board's effort to, in 5 fact, reduce risk. 6 Thank you. 7 BOARD MEMBER RIORDAN: Thank you, Ms. Hathaway. 8 Are there any questions by any of the Board Members 9 for this witness? 10 Then we will move on to the next witness. 11 Thank you. 12 Dan Eisentrager, from the California Bus 13 Association. 14 MR. EISENTRAGER: Good afternoon, Board, Chairman 15 Dunlap and staff. 16 You had a good lunch, didn't you? 17 CHAIRMAN DUNLAP: A quick lunch. 18 MR. EISENTRAGER: I'm Dan Eisentrager, the current 19 President of California Bus Association. 20 I have met with staff before. We're here this 21 afternoon just to make a few points, a few comments for our 22 members. 23 The California Bus Association members are very 24 concerned about the Air Resources Board efforts to name 25 diesel exhaust as a toxic air contaminant. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 To propose the identified diesel exhaust as a toxic 2 air contaminant with no identifying threshold exposure level 3 is opening every diesel user, engine user, to financial 4 exposure that will be damaging to their business to the point 5 of many of them closing their doors because of the financial 6 drain on limited resources and funds. 7 Having no levels of exposure for guidelines, how do 8 we know what levels we are to operate at? 9 California bus owners are being subjected to 10 potential economic loss solely for the reason that they 11 operate diesel engines, which represent the only type of 12 engines reasonably available to the California bus owner at 13 this time. 14 Most motor coach companies are very small, 15 family-owned entities that do not have extensive capital to 16 purchase the newest technology, which only comes in a new 17 motor coach at a cost of between $325,000 to $400,000 per 18 vehicle, plus tax and license fees. 19 At these costs, updating one's fleet constitutes a 20 very substantial investment. It will take time for bus 21 companies to update their fleets, assuming that workable 22 alternatives are made available by vehicle manufacturers. 23 Currently, we have six CBA members that are 24 involved in Prop 65 lawsuits. These members are upstanding 25 operators and not industry renegades who don't care. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 All of these companies have first rate maintenance 2 facilities and programs in progress. They pride themselves 3 on operating safe and environmentally efficient 4 transportation. However, they have been subjected to 5 expensive and time consuming litigation. 6 The motor coach operators offer a valuable service 7 to the State of California by taking masses of people out of 8 their cars, as well as bringing millions of tourism dollars 9 to the State. 10 Naming diesel as a toxic air contaminant will cost 11 private business and the government billions of dollars. 12 There is a very definite cost. Some businesses 13 will have to close due to inability to raise the necessary 14 capital to buy into the new technology. 15 It will also damage the public in that many travel 16 options now available will be possibly eliminated as bus 17 owners close their doors or reduce present service levels. 18 The small businesses in the motor coach industry 19 cannot afford to invest thousands and thousands of dollars in 20 litigation if this is passed. 21 The California Bus association would suggest that 22 the ARB and the Legislature create a safe harbor for business 23 if this regulation is passed to protect the California 24 businesses until other viable alternatives are within the 25 infrastructure, which enables us to have the most economical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 solution possible. 2 The California Bus Association is asking the ARB to 3 let technology continue to clean up the diesel burning 4 engines as well as seeking the ultimate solution to the 5 emissions problems that have been identified. 6 CARB regulation should be adopted to establish 7 threshold exposure levels below which it is determined that 8 significant adverse health effects will not occur. 9 We ask you to keep California as competitive as 10 possible and let the engine manufacturers continue to reach 11 for those economical solutions as they have been doing for 12 the last 12 years. 13 We have worked with the ARB. We stand with the 14 ARB. 15 We try to stay environmentally sensitive and will 16 continue to do so. 17 Thank you very much. 18 CHAIRMAN DUNLAP: Thank you. I appreciate that. 19 Any questions of the witness? 20 All right. Very good. 21 Merlin Fagan. We got your letter. I just saw it 22 up here a minute ago. 23 MR. FAGAN: You have received the testimony, and 24 so are you suggesting that I abbreviate it even more? 25 CHAIRMAN DUNLAP: I am not. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 Let your conscience be your guide. 2 MR. FAGAN: And good sense, that's the other part 3 of it. 4 CHAIRMAN DUNLAP: I need Jack out here to back me 5 up. He's back there having lunch. 6 MR. FAGAN: Mr. Chairman and Board Members, I'm 7 Merlin Fagan, with the California Farm Bureau. 8 It is a pleasure to be here on this rice straw -- 9 diesel exhaust. 10 CHAIRMAN DUNLAP: It's not rice. We have done 11 that. 12 MR. FAGAN: Not rice. Almost as contentious, I 13 see. 14 It is a very grave issue, as you have heard from 15 many other witnesses. It is an important issue, and I'm here 16 on behalf of the California members of the -- let me start 17 over, the farmers and ranchers who are members of the 18 California Farm Bureau. 19 We have about 70,000 members. I will break this 20 statement into three broad areas, the importance of 21 agriculture, some concerns with the proposed action and then 22 some recommendations. 23 So, most people who are not intimately involved in 24 agriculture don't recognize that it is the State's number one 25 industry, that we have a gross of over $70 billion and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 value-added crops, that's growing the crops and then what it 2 is converted into in the ag area. 3 The other key part is that this is renewable. We 4 create a crop, and it comes back year after year, whether 5 it's a seed or a product off the tree. 6 Also, it's a basic product. We grow cotton, and it 7 creates fabrics, or we grow tomatoes, and it becomes catsup. 8 We create other jobs along the way. 9 Agriculture production, a recent university study 10 that California's agriculture employs about 1.2 million 11 people. 12 The major impact area, as you would think, is the 13 Central Valley. About 28 percent of the population comes 14 from agricultural-related jobs. 15 The work horse of this bountiful production is 16 diesel powered equipment, both mobile and stationary, and 17 that is our concern. 18 We are very concerned when we have new regulations 19 that will be proposed at some stage about some type of 20 regulation, or some changes, or some possible disruption of 21 supplies, and that creates anxiety. We see new burdens and 22 economic uncertainty. 23 We certainly compliment your staff for coming out 24 and visiting with some of our leaders and explaining this 25 very complicated and controversial issue, and we have also PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 read the background documents that you have. 2 Unfortunately, many of our members still recall the 3 reformulated diesel issue, and they ask, could this be 4 happening again, and that moves us on to our specific 5 concerns. 6 We believe that, even though some other witnesses 7 have said that they won't see a lot of litigation by listing 8 diesel exhaust as a toxic air contaminant, you open producers 9 and manufacturers to a variety of new environmental laws and 10 legal liability and these uncertainties. 11 The key issue, we think, is that this action be 12 very well-structured and reasoned to not create these 13 uncertainties and these possible new legal attacks and 14 liabilities. 15 We should realize in California there are very few 16 diesel refiners, and if we create these uncertainties and 17 they say, well, look, we don't need to create diesel fuel for 18 ag equipment, or for trucks, we can convert it to gasoline, 19 or we can convert it to aviation fuel, that would be more 20 profitable, then you create a big problem for us, because we 21 are not sure how we would then power our equipment. 22 We have been through a number of the bounty hunter 23 actions by Prop 65, and our concern of that type of 24 uncertainty is before us. 25 It is not only that we are able to produce a lot of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 produce and crops on the farms and ranches, but 2 transportation from the perishable crops from the farms to 3 the processing to the consumer are also important. 4 So, transport is a critical issue, and maintaining 5 the prosperity of agriculture. 6 So, moving on to the recommendations. 7 We support Senate Bill 1083, and that may bring to 8 rest the issue of where diesel fits as a substance and 9 whether we should go forward or not. 10 So, maybe the Board would watch carefully and see 11 how that issue is then resolved, and it takes care of some of 12 the concerns mentioned by other witnesses, and if the Board 13 felt compelled, it could probably support that as well. 14 The issue of the Federal differences and the State 15 differences we heard from other witnesses, and I think your 16 staff made an effort to come to grips with the risk 17 assessment differences, that there seems to be a parallel 18 effort, but a timeframe difference, or even some preliminary 19 differences of where we are headed between the Federal and 20 State, we would urge that the State and the Feds not only 21 coordinate but integrate their efforts, that this would 22 minimize the confusion that we heard earlier by other 23 witnesses and would ensure uniform review, analysis and 24 impact. 25 There is no point in setting California growers at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 a disadvantage either to other states or other nations by 2 taking an action that in the short-term causes them problems 3 and possible disruptions in the workplace. 4 The other -- our last recommendation is that we 5 like the Board's recommendation of a stakeholders working 6 group but would urge that that be appointed prior to your 7 action. 8 I think many of the things that you are hearing are 9 concerns over implementation. If the regulated community had 10 a better sense of where we were headed and what practices 11 would be in place, that may remove some of the anxieties that 12 you have heard so far, which we think are very legitimate. 13 So, finally, Mr. Chairman and Board Members, we 14 appreciate this opportunity to express our concerns and look 15 forward to working with you and your staff in the future. 16 Are there any questions? 17 CHAIRMAN DUNLAP: I appreciate that. 18 We also -- one of the great educational processes 19 of my experience in Sacramento has been learning about your 20 role and impact, and not just in California economy, but also 21 in debate and public policy debates, so I appreciate your 22 investing time in this issue. 23 Any questions of our friends from the agricultural 24 community? 25 Okay. Roger Isom, Todd Campbell, Bonnie Holmes Gen PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 and Tim Carmichael. 2 I have your written testimony here, Roger. 3 MR. ISOM: Good afternoon, Mr. Chairman and Members 4 of the Board. 5 I would like to clarify one thing. I'm here 6 representing California Cotton Growers. 7 The NISEI Farmers League were unable to be here, so 8 they asked that I give their comments. I think that 9 Mr. Kenny does not need anyone to speak for him, so I just 10 wanted to clarify that. 11 I will limit my comments to two points. I just 12 want to clarify two things that are in my written comments. 13 The first one is, and it's the reason that I am 14 here, is that diesel is the blood of our industry. 15 It drives our tractors and our trucks that produce 16 and harvest our crops and get our products to market. 17 So, it is extremely important, and that is why I am 18 here. The second one is that we're not here today to dispute 19 the work that has been done by Ms. Shiroma's staff and Dr. 20 Alexeeff and Dr. Marty. 21 We are here, and this is the main point, to express 22 concern that there is a difference between the old diesel and 23 the new diesel. 24 To say that there is not a difference really leads 25 us to question, why did we do reformulated diesel, why we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 spent the money that we had in new engine technology in our 2 trucks? 3 Right now, you know, the California farmer, we are 4 burning diesel that no one else in the United States or the 5 world is burning. 6 We are using engine technology in our trucks to 7 haul our cotton bales to market that nobody else is using, 8 and that is an added cost for a commodity that is subject to 9 a world price that we are having to eat. 10 We are willing to do that for the sake of air 11 quality, and we just feel that that needs to be recognized. 12 So, while I understand that the wait until the 13 studies are completed may take 10, 15, 20 years, whatever may 14 be the case, we do feel that it is important that those be 15 done, and we can find out whether or not there really is a 16 difference. 17 If you go back to those hearings in 1993, the same 18 staff was saying that there is a difference, we are going to 19 reduce the toxicity of diesel exhaust. 20 So, we want to make sure that we do spend the money 21 and spend the time to quantify that and recognize that simple 22 fact. 23 So, with that, again, my comments, most of them 24 have already been made, so I don't need to go over those. 25 CHAIRMAN DUNLAP: Thank you very much. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 appreciate it. 2 Any questions for the witness? 3 Okay. Todd Campbell. 4 Is Bonnie, and Tim, are you still here? 5 Come on forward. 6 MR. CAMPBELL: Good afternoon, Chairman Dunlap and 7 Members of the Board. 8 My name is Todd Campbell. I represent the 9 Coalition for Clean Air. 10 The question before us today that we must answer 11 is, is diesel exhaust a toxic air contaminant? 12 Does diesel exhaust cause or contribute to an 13 increase of death or serious illness or pose a potential 14 human health hazard? 15 On March 11, 1998, and Dr. Froines correctly 16 pointed this out, a scientific panel of the experts in this 17 field, which includes Dr. Eric Garshick, Dr. Katherine 18 Hammond, Dr. Dale Hayes, Dr. Joe Motterly, Dr. Thomas Mack, 19 Dr. Allan Smith, Dr. Tom Smith, Dr. Duncan Thomas and Barbara 20 Zalinska, were asked the question from Stan Glantz whether or 21 not diesel exhaust -- whether or not they would object to 22 diesel exhaust being listed as a toxic air contaminant. 23 None of these scientists, even the experts on 24 industry's behalf, objected to this. John Froines statement, 25 I think, is right on the mark. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 I think you got silence the first time. Given this 2 resounding and unified expert testimony, the unlimited 3 scientific evidence supporting the TAC listing, the unanimous 4 recommendation of the California Scientific Review Panel, the 5 recognition by the California State, or the State of 6 California that diesel exhaust is a known carcinogen since 7 October 10, 1990, the Cal EPA and CARB's meticulous nine-year 8 evaluation of the over 40 studies that we have studied for 9 nine years, comes to this conclusion, and that diesel exhaust 10 was identified as a probable human carcinogen by the National 11 Institute of Occupational Safety and Health and the 12 International Agency for Research on Cancer, I think one is 13 required to answer in the affirmative, both due to diesel 14 exhaust's carcinogenic potential and its noncarcinogenistic 15 respiratory effects, diesel exhaust clearly meets this 16 definition. 17 On the topic that -- in terms of what diesel 18 exhaust does, and we all understand that there are -- all the 19 studies show a relation to lung cancer. 20 We also don't want to underestimate or 21 underemphasize that they also have noncancerous health 22 effects. 23 Industry continually tries to make the point that 24 there is brand new diesel on the market, that 90 percent of 25 the particulate matter has been reduced. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 The argument that they miss is that recent studies, 2 including a study from the HEI, states that recent engines 3 are made to make a decrease in particulate matter but 4 increase fine particulate matter. 5 We all know that the United States Environmental 6 Protection Agency just passed a fine particulate matter law. 7 These are the exact constituents that are coming 8 with it, the exact health matter that is being increased in 9 diesel engines. 10 Another point that I would like to make is that 11 diesel engines are not personal computers. I think this is a 12 great point that Katherine Hammond pointed out, that the 13 diesels on the road, or at least a large majority of the 14 diesels on the road, or a good percentage I would say, are 15 probably equivalent to 386's. 16 The industry would like you to believe that they 17 are all Pentiums out there. They are not. 18 You have a useful life of locomotives that are 40 19 years. You have a useful life for trucks of 20 to 30 years. 20 You are not seeing 1998 Cummins or Detroit Diesel 21 engines on the road. This is a big point that I think the 22 industry misses completely. 23 Another fact is that a draft report from the UC 24 Riverside and also UC Davis says that the entities in the 25 reformulated diesel is a mixed bag. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 In fact, they find some toxics within this mix to 2 be higher, for example nitro PAH's. 3 Thirdly, I would like to say that I think it would 4 be bad public policy, with a Master's in Public Policy and a 5 Master's in Environmental Studies, I say this is a bad public 6 policy to consider new diesel versus old diesel because of 7 the latency effect in cancer. 8 It takes at least 10 if not 20 years to evaluate 9 whether or not you can get lung cancer, or you can start to 10 begin to find the effects, and I think this is an important 11 point. 12 By the time that the study they would like to 13 propose, diesel may not even be on the market anymore. It 14 might be depleted. 15 I would strongly encourage the California Air 16 Resources Board to move forward on the existing studies as 17 they present formidable, sound findings. 18 I believe that the science also must prevail over 19 politics. Tim Carmichael will cover most of this, but I am 20 just going to say that most of the debate CARB will hear 21 about and has heard about from industry does not consider 22 whether or not diesel is a toxic air contaminant or not. 23 It considers more of the financial interests, and 24 who makes the diesel engines and what are the impacts on the 25 economics. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 I would like to testify that I do not believe 2 listing diesel does ban diesel. I want diesel to be 3 nontoxic. 4 I don't care if it is banned or not. I don't want 5 it to be banned, but if it is nontoxic, I'm happy. 6 The thing that we are talking about here is whether 7 or not it is toxic or not, and the scientists, including 8 Joseph Motterly, who has helped so often, even said in his 9 own workshop, he concludes, Joe Motterly concludes that 10 California has been very responsive and receptive in not 11 relying on the animal data for its analysis. 12 This tells me that Cal EPA and CARB are not 13 ignoring his advice. They are not using the animal data for 14 the risk assessments. 15 They are taking his -- he is the Chairman of CASAC. 16 In the letter, July fourteenth, from the California Truckers 17 Association, they quote that Joe Motterly and Eric Garshick 18 adamantly oppose the California-only listing. 19 It is simply not true. As I already stated, both 20 of these scientists have been asked whether or not diesel 21 exhaust was TAC, and they answered in the affirmative from 22 their silence, and that is what is at issue here today. 23 In terms of whether or not diesel is a multiple 24 substance constituent, I think CARB has answered that 25 beautifully. I don't need to elaborate much more on that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 I think the important fact is that even we found at 2 least three multiple substances, and I handed this out to 3 you, you have it in front of you, listed under AB 1807, at 4 least 25 under AB 2728, and there is another constituent that 5 we found this morning under the Air Toxics Hot Spots Program, 6 under AB 2588, that lists gasoline vapors, so diesel exhaust 7 is not being targeted independently. 8 I don't think this is some kind of plot. We are 9 simply caring about public health here, and this is what, 10 hopefully, this workshop, all these workshops for nine years 11 and the testimony has been about. 12 Finally, on the Australian study, I would like to 13 comment on just a couple of things. 14 I think Cal EPA and California Air Resources Board 15 have been absolutely correct in excluding the New South Wales 16 Study in evaluating the health risks posed by diesel exhaust. 17 First off, the study is not a direct analysis of 18 diesel exhaust exposure but of all of causes of mortality 19 associated with mining. 20 The second point is that it is incept cohort, that 21 means that it is not a complete cohort. In other words, 22 they excluded certain data prior to 1973, and then used the 23 data -- I don't know how they draw this line, but from 1973 24 to 1992, that is their database. 25 They started out with 72,000 people. They reduced PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 it down to 23,000. 2 In terms of a reliable database, it makes me have 3 strong concerns when they exclude women from the study. They 4 exclude members in the study above 60 years old, and 5 supposedly they don't apply to their study. 6 You should read the study yourself. 7 The next point that I would like to say, and this 8 is right in the study itself, it says, because the latent 9 period of industrial cancer is at least ten years, the number 10 of person years of observation available after this time is 11 much reduced with a consequence diminution of power. 12 In other words, this study is way too immature to 13 even be considered. 14 The next point I would like to say is that the 15 credibility of this analysis is further impaired in that not 16 only is the incept cohort extremely young, that means it 17 looked at people that are being exposed to diesel exhaust in 18 the coal mines for 40 years, or the timeframe that we should 19 be looking at, it only considers only extremely young coal 20 miners. 21 The fourth point, the total of 300 -- this is right 22 out of the study, the total of 302 cancers have been reported 23 after distribution by site reflects the relative youth of the 24 cohort. With the passage of time, the numbers of people in 25 the present inception cohort will increase and the expected PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 number of cancers will increase. 2 Reanalysis of the cohort at some time in the future 3 would have the numbers to provide more certain answers. From 4 the experience gained with this inception cohort, it is 5 recommended that the analysis of mortality and cancer 6 occurrence for this cohort should be repeated as a 7 surveillance exercise in three to five years. 8 In conclusion, it is way too early to tell what the 9 health impacts are from the coal mining industry in this 10 study, not to mention its tacit mention of diesel exhaust 11 exposure, which I guarantee was one sentence in the study. 12 I would like to conclude that the State of 13 California has strong evidence that diesel exhaust is a human 14 health hazard and a toxic air contaminant. 15 The State should proceed to list diesel exhaust as 16 a toxic air contaminant and begin measures to reduce risk. 17 It is a question of moral grounds. 18 We all know that diesel exhaust is a toxic air 19 contaminant, and I haven't heard one speaker here that has 20 credibly refuted that point. 21 Thank you. 22 CHAIRMAN DUNLAP: Any questions for Mr. Campbell? 23 BOARD MEMBER CALHOUN: Mr. Campbell, as I 24 understood your testimony, you talked about comparing old 25 versus new diesel. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 MR. CAMPBELL: Right. 2 BOARD MEMBER CALHOUN: And you said that, what 3 difference does it make about whether you use old fuel, or 4 something to that effect, and I guess -- are you suggesting 5 by that that there is no benefit to try and improve the 6 diesel fuel such as to reduce the contaminants? 7 My question relates to the threshold, and the staff 8 has already said that there is no identifiable threshold, so 9 I am trying to figure out where you hit it. 10 MR. CAMPBELL: I do believe in reformulation. 11 There is probably minor benefits. The problem in 12 the draft study of UC Riverside and UC Davis study shows kind 13 of a mixed bag of results. 14 In other words, some toxics increased, some toxics 15 decreased. The reformulation not only dealt with toxics, it 16 also deals with PM and NOx, and in terms of PM and NOx, that 17 is fairly successful. 18 I think that the objective debate is that when they 19 keep on saying that 90 percent of reduction to particulate 20 matter, we are doing such a great job, it misses the point 21 that the particulates that are being left are fine 22 particulates, particulates that can intercept your lungs and 23 get into your system more readily than the coarse particulate 24 matter, particulates that are 10 microns, and that on top of 25 that the toxics haven't been much reduced. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 The second fact that we have a lot of diesels out 2 there that are still 30 years old, that is an important 3 point. 4 Finally, the staff from the California Air 5 Resources Board and the Office of Environmental Health Hazard 6 Assessment have also taken this change into account. 7 They are not trying to pull a fast one here. They 8 are taking these measures very seriously. 9 This is a very serious issue. I go and shop at the 10 store. I enjoy my life and enjoy the conveniences of life, 11 but if we can make diesel safer, cleaner, and this is all 12 that this TAC listing does, we should do it. 13 I think that's the bottom line. I have nothing 14 opposed to diesel except that it is toxic, and it creates 15 lung cancer. 16 I'm the one that did the monitoring at all of the 17 sites for the Natural Resource Defense Council, and I can 18 tell you that the only lawsuits that are probably going to 19 play out here are the big gross polluters. 20 I have seen many mom and pop stores, many small 21 distribution centers, you have to get above a risk level and 22 it has to be a single party. 23 I found five. I have been on this for a year. 24 That's it. 25 On top of that, these distribution centers have to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 be near residential areas. 2 There are other lawsuits that were presented that I 3 can't tell you about, but only two of them have been final. 4 To my memory, this is also another point to make, 5 there have been lawsuits prior to this whole big explosion of 6 notices that were settled with the forklifts. 7 To my knowledge, there are only six cases out 8 there, not hundreds, six. You could claim 10 if you want to 9 say the four Attorney General suits and the four NRDC suits, 10 which are the same suit, and then the two from the 11 Corporation for Clean Air, not the Coalition, the Corporation 12 for Clean Air, that is six to me. 13 The listing was October 10, 1990. I don't see any 14 industry moving out of the State of California. 15 There has been plenty of time. It is just a fact 16 of life. 17 CHAIRMAN DUNLAP: Very good. 18 Two more witnesses. 19 We appreciate that. 20 Bonnie, you and Tim are all that remains, and I 21 encourage anyone else that desires to address the Board on 22 this subject, please. 23 Is the table still set up out there in the foyer? 24 There is an opportunity for you to sign up. I'm 25 not encouraging, but I'm not discouraging either. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 Bonnie, thank you for your patience. 2 MS. HOLMES GEN: I'm Bonnie Holmes Gen, with Sierra 3 Club California, with no benefit of a lunch break yet. 4 Sierra Club California is here today because diesel 5 exhaust is a public health threat. Diesel exhaust increases 6 the risk of cancer. 7 Millions of Californians are exposed to the soot 8 from diesel exhaust on a daily basis. This diesel soot, we 9 now know, is a highly toxic cancer-causing mixture of 10 chemicals, especially populations in highly urbanized areas, 11 people that live and work near highways, truck loading docks, 12 freeways, people that are experiencing diesel exhaust on a 13 daily basis as they live and go to work are affected by the 14 public health impacts of diesel. 15 Diesel exhaust has been evaluated by national and 16 international scientific bodies and determined consistently 17 to be a potential human carcinogen. 18 Your Board is being presented today with a 19 scientifically peer reviewed Report, including over 30 human 20 studies that demonstrate a 40 percent increased risk of lung 21 cancer in individuals after worker exposure to diesel 22 exhaust. 23 These studies include a broad array of individuals, 24 including truck drivers, mechanics, equipment workers, dock 25 workers, railroad workers, highway workers. These studies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 are the best science that is available, the best science that 2 is out there right now. 3 A clear and consistent conclusion is that diesel 4 exhaust presents a serious threat to public health and 5 increases cancer risk. 6 Diesel exhaust contains many harmful elements that 7 when combined have special impacts and create this cancer 8 risk. 9 People are not exposed to one or two substances in 10 diesel exhaust. They are exposed to the chemical mixture. 11 This mixture is what the studies that you are 12 reviewing today have studied. These are the human studies 13 that cover 20 or 30 years of exposure. 14 We are urging you today to not be swayed by the 15 dire predictions of economic loss and the "sky is falling" 16 rhetoric of the trucking industry. 17 Your job today is to focus exclusively on the 18 public health risk. The law, the Toxic Air Contaminant law 19 was carefully crafted to separate out the risk assessment and 20 risk management phases for a reason. 21 The reason is to have a clear evaluation of the 22 public health risk of substances, like diesel exhaust, 23 separately and apart from any discussion of economic impacts, 24 or control measures. 25 I think it is unfortunate that much of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 testimony today has focused on the economic impacts and 2 control measures, which is a separate phase. 3 Your job today is to focus on the public health 4 risk. We urge you to listen to the expert findings of your 5 own Scientific Review Panel to consider the consistency in 6 the 30-plus human studies that were reviewed by the Panel to 7 recognize that you are evaluating the best science available. 8 It is not junk science. There is consistency in 9 the findings. There is a clear scientific consensus on your 10 Scientific Review Panel. 11 Despite the cries of the trucking industry, this 12 listing of diesel exhaust is not the end to diesel. 13 In fact, the process today is just the first step 14 in a dialogue. It's a recognition of the seriousness of the 15 problem that millions of Californians face. 16 There is no predetermined outcome if diesel exhaust 17 is listed. There is no predetermined outcome of what the 18 control measures might be. 19 After the listing, as you well know, there will be 20 a dialogue among all the stakeholders. There will be an 21 evaluation of the range of measures that could be used to 22 reduce exposure. 23 We believe that conversions to cleaner fuels should 24 be one of the measures evaluated, and we are supporting 25 legislation to provide incentive payments to truck owners to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 help them convert to cleaner equipment and fuels. 2 But that is not the topic of today's decision. 3 This discussion cannot occur until the ARB completes the 4 listing process. 5 Let's keep studying the issues. Let's keep an open 6 dialogue, but you must act on the data that you have before 7 you. 8 You must not delay in declaring diesel exhaust a 9 toxic air contaminant, and we urge you to stand up against 10 the pressure of the trucking industry and to do your job to 11 protect the public health. 12 Your staff and the OEHHA staff have done a 13 painstaking scientific review, nine years of study, and now 14 is the time to clearly identify the public health impacts of 15 diesel exhaust and declare it a toxic air contaminant. 16 We urge you to not delay. 17 BOARD MEMBER RIORDAN: Thank you very much. 18 Are there any questions for this witness? 19 Seeing none, then we will move on to the next 20 witness, which is Mr. Tim Carmichael, for the Coalition for 21 Clean Air. 22 MR. CARMICHAEL: Good afternoon. Thank you for 23 remaining attentive throughout this long testimony. 24 Tim Carmichael with the Coalition for Clean Air. 25 I just wanted to clarify a few things that have been raised PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 and not try and rehash so many of the points that have been 2 put before you today. 3 It was referred to that the environmental community 4 supports the listing of diesel exhaust as a toxic air 5 contaminant. 6 You have heard from the American Lung Association 7 today, you've heard from the Natural Resource Defense 8 Council, the Coalition for Clean Air and the Sierra Club, but 9 strongly in alliance with us in our support are the 10 California Public Interest Research Group, the Planning and 11 Conservation League, the Environmental Health Coalition in 12 San Diego, the Environmental Defense Center in Santa Barbara, 13 the Communities for a Better Environment, all of the major 14 environmental and public health groups that work on air 15 issues in the State of California are unified in their 16 support for the listing of diesel exhaust as a toxic air 17 contaminant. 18 Taking a step back from all of the details that 19 have been put before today, I think it is important to come 20 back to the fundamental question, fundamental mission of this 21 agency. 22 The People of California rely on this Board and the 23 staff that works for you to protect them from air pollution. 24 That is, above all, your mission, protect the 25 people of California from air pollution. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 The scientific body that advises you on technical 2 matters, risk matters, the Scientific Review Panel has stated 3 unanimously, recommended this listing, unanimously. 4 Some have suggested today that that is not good 5 enough, that you should wait for EPA to act. The staff here 6 and the Board should know as well that if California waits 7 for EPA to act, nothing will get done. 8 We wait for EPA on many fronts. This is not an 9 area where we should be waiting for EPA. 10 We have loads of evidence. Some have suggested 11 that it is not appropriate to look at a complex compound in 12 trying to list a complex compound and reduce risk. 13 I have a different view. If that is the most 14 effective way to reduce exposure, to reduce risk, to protect 15 public health, and we believe it is, by listing diesel 16 exhaust as the most effective way to protect the public 17 health from exposure to that mix of toxins, then that is what 18 should be listed, and that is what we should be pursuing. 19 A process, a method that is the most effective way 20 to protect public health, reduce exposure, reduce risk to 21 protect the public health. 22 While we are not proposing a ban, and unfortunately 23 this has gotten a lot of play in the media and will probably 24 get more, the environmental community is not proposing a ban 25 on diesel. We are proposing an expeditious transition to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 cleaner fuels. 2 The technology is there. The risk is there that 3 warrants this transition. 4 We need to be moving in that direction. We are not 5 talking about a ban. We are talking about a responsible 6 transition to cleaner fuels. 7 It is a pity that the Legislature has felt it 8 appropriate to interfere in this process. This is a long 9 standing scientific process that is designed to protect 10 public health. 11 In our opinion, it is not appropriate for the 12 Legislature to be interfering with this. Please don't let 13 politics stop you from using sound science to protect the 14 public health of all Californians. 15 List diesel exhaust as a toxic air contaminant, and 16 then we will move on together to ensure that there is a 17 cost-effective, responsible transition to reduce risk and 18 reduce exposure from that toxin. 19 Thank you very much. 20 CHAIRMAN DUNLAP: Thank you, Mr. Carmichael. 21 Any questions for the witness? 22 You double-teamed us, Tim. We saw your colleague 23 up here earlier. 24 Okay. That is it for the witness list. 25 Ms. Hutchens, anybody else sign up? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 MS. HUTCHENS: Not with me. 2 CHAIRMAN DUNLAP: That will conclude the testimony 3 for today. 4 We will leave this Item over. We are just going to 5 conclude it today, and when we take this up at a future Board 6 meeting, Mike, the record will be open, and people that have 7 something new to say are welcome to speak, and that was an 8 issue that Supervisor Roberts is concerned about, and I share 9 that concern. 10 All right. There were the three themes. 11 Peter, the last time we checked, we were half-way 12 through the first one. You had Jed Mandel, and I saw 13 Stephanie Williams out there somewhere that was interested in 14 having something to say. 15 MR. KENNY: I think we were pretty much through the 16 first theme, and we were pretty much prepared to begin the 17 second one. 18 CHAIRMAN DUNLAP: Okay. That's fine, but the 19 witnesses -- Jed, are you out there somewhere? 20 He's probably having lunch. How dare him. 21 Okay. We will go to the second theme, and then if 22 people that want to speak that have already spoken on these 23 issues want to -- I don't want to get into this rebuttal 24 thing, but if there is some factual point you want to make, I 25 will allow it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 Mike, go ahead. 2 MR. KENNY: Well, I think the key things that were 3 still outstanding with regard to science, because it did 4 somewhat -- you covered a little bit where the studies 5 themselves, and in particular, the Australian study was 6 raised, and then there was obviously the question that needed 7 to be addressed with regard to the allegations of junk 8 science. 9 MR. VENTURINI: What I would like to suggest, 10 Mr. Chair, this may be an opportunity for Dr. Froines to make 11 his comments, since they relate to these points. 12 DR. FROINES: Well, I think everyone is probably 13 getting tired and would like this to end, so I will be very 14 brief. 15 First, the Australian study, I don't know if the 16 Board has had a chance to see it, but I won't go through it 17 in detail. 18 I want to be perfectly honest with you, I don't 19 think this study would be before us if this issue had not 20 become so politicized. 21 I think that is the tragedy of this process, that 22 what we have is not a scientific deliberation but a process 23 that has had so many other elements into it now that it is 24 hard to separate risk management from risk assessment from 25 people's point of view from various agendas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 I say that because this Australian study is not a 2 study. It is not a research study. 3 What this is is an attempt by some investigators, 4 agencies in Australia, to put together a cancer surveillance 5 program. 6 Please understand, I wish Bill were here, but 7 please understand that there is a difference in science 8 between a surveillance program and a research study. 9 Surveillance tends to look like, syphilis and 10 veneral diseases like AIDS, surveillance tends to look at 11 things over time. 12 Research studies are based on hypothesis. So, you 13 might say, what is a hypothesis? 14 A hypothesis is whether exposure to diesel exhaust 15 causes lung cancer, and then you would design the study to 16 test that. 17 This is not a study that does that at all. This is 18 a study that sets in motion a cancer surveillance project, 19 and then they look at the results, the results of which will 20 have implications for workers' compensation programs and will 21 let them look at how the trends of cancer are occurring in 22 mining. 23 This is like a government report. It is not a 24 scientific study. It is certainly not an etiologic study, 25 and it is certainly not a study that would be classified as a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 serious research study looking at the issue of diesel. 2 Diesel is not in this study. This is not a diesel 3 study, and we shouldn't bother with it one second more, nor 4 should we have bothered with it to begin with. 5 Now, that is pretty harsh language, but I think 6 there are matters of integrity going on here, and as a 7 scientist I feel that this should not be before us as a test 8 of diesel exhaust, because it is not, and I think anybody in 9 this room could read this and in ten minutes figure out what 10 it is all about. 11 There is nothing more to say. 12 CHAIRMAN DUNLAP: All right. 13 DR. FROINES: The second thing is junk science. 14 Clearly, without whining, you know, we spent nine 15 years on this issue. We have spent day upon day upon day 16 studying the science associated with diesel exhaust. 17 It is, at best, rude and disrespectful, as far as I 18 am concerned, for somebody to tell me that what we have been 19 doing is junk science. 20 I think that what we have been doing is the highest 21 level of science that I have ever seen in my entire life, and 22 I have unfortunately gotten to 59 years old, so I am at a 23 stage where I have had some experience. 24 What happens here is we have worked beyond words to 25 do the best science possible, and that's what we have done, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 and that is what we will always do for this Board as long as 2 I am around. 3 Now, you take this stuff, and this is about a 4 quarter of what we have, this isn't junk science. These are 5 a lot of people working as hard as they can to do the best, 6 the very best science. 7 I think we should have to recognize that, and 8 anybody who has tried to read Part B knows very quickly how 9 good the science is. 10 When you get into Part B you say, God, I wish they 11 could have written the damn thing clearer, but because I know 12 there is so much in there that I would like to benefit from. 13 DR. FUCALORO: Ditto for Part A. 14 DR. FROINES: Then let me tell you about the 15 Garshick papers. 16 What we have heard now is that Garshick is 17 repudiating his work, and he doesn't want it used for risk 18 assessment. 19 Fair. He can go travel around the country trying 20 to get the $10- or $15-million that is currently being 21 offered to do an ongoing study, and I won't raise the issue 22 of whether that affects his point of view, but it is at least 23 out there. 24 Let me just say this, Garshick says in one paper, 25 quote, "These results taken in conjunction with other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 reported results support the hypothesis that occupational 2 exposure to diesel exhaust results in a small but 3 significantly elevated risk for lung cancer." 4 Paper 2, "This study supports the hypothesis that 5 occupational exposure in diesel exhaust increases lung 6 cancer." 7 Paper 3, "These elevated levels of mutagens found 8 in diesel locomotive repair shops are consistent with the 9 increased mortality from lung cancer that has been found 10 among railroad workers." 11 All right. We have three papers by Garshick, all 12 of which conclude the same. As far as I am concerned, Eric 13 Garshick has concluded that diesel is a lung carcinogen. 14 Now, he may come here and tell you different, but 15 as far as I am concerned, he has never repudiated his finding 16 that diesel is a lung carcinogen, never. 17 He may say we don't want to use it for risk 18 assessment, but we have done a lot of work developing ranges 19 of risk, and I think that work is quite solid. 20 So, whether you use his number or not is not the 21 cutting edge of the whole issue. What is the cutting edge of 22 the whole issue is that he hasn't repudiated the fact that 23 his study shows that there is lung cancer in diesel workers. 24 And I say that's not junk science. This is, in 25 fact, good science. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 So, I think that what we should do is acknowledge 2 the depth of these incredibly difficult scientific papers and 3 say, not only is this not junk science, but we applaud people 4 who did it, and we applaud the people who have been trying to 5 put this together into a coherent package to the ultimate 6 end, protect the public health from exposure to diesel 7 exhaust. 8 DR. FUCALORO: One of the co-authors of the 9 Garshick paper, Katherine Hammond, approves of what was done 10 with the numbers in terms of risk assessment for it, so -- 11 CHAIRMAN DUNLAP: Was she a co-author? 12 Okay. Dr. Blanc. 13 DR. BLANC: One of the things that I think is 14 sometimes confusing to nonspecialists is the trying to 15 describe risk in terms of increased risk and relative risk, 16 and as an epidemiologist, one of the things that impressed me 17 in seeing the number of studies that were reviewed was the 18 consistency of the elevated risk, and although I have heard 19 the term bandied about of a weak association, this is 20 actually a very powerful association. 21 When you are talking about low levels of exposure, 22 relatively low levels, even among people occupationally 23 exposed, but when you are talking about a very large 24 potential population of exposure as you get to the lower 25 levels, then seeing a 30 to 40 percent increased risk, which PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 is what we are seeing consistently in these studies, and 2 which was reaffirmed in the very well done meta-analysis by 3 Dr. Rojif Batjia and colleagues, which was published in the 4 peer review literature, which puts it far above most analyses 5 that are done for these purposes, then you are talking about 6 what has a major public health implication on the level of 7 the kinds of public health implications related, for example, 8 to environmental, or second-hand tobacco smoke. 9 Again, if you see a relative risk increase of 15 10 percent even for an adverse health effect, and yet 50 percent 11 or 60 percent of the population may be exposed to significant 12 amounts of environmental or second-hand tobacco smoke, there 13 you are talking about a major population of attributable risk 14 of disease. 15 So, we are really talking, when we are talking 16 about lung cancer, it is really quite an impressive risk 17 association because of its consistency, and this, again, has 18 focused so much on the numbers for the cancer risk, in part 19 because of the framework, the regulatory framework involved 20 in the deliberations, but in fact, to me, as a scientist, I 21 was equally impressed by the data which consistently showed 22 noncancer health effects in the lung, and most of my work has 23 related to lung diseases and, in fact, focuses on asthma. 24 I think the recent work that is emerging is 25 extremely consistent in showing adverse noncancer lung PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 effects at levels which could be anticipated to be certainly 2 of an issue for designation as a toxic air contaminant. 3 CHAIRMAN DUNLAP: Okay. Very good. 4 Any questions on that? 5 If not, Mike, continue with your theme on junk 6 science. 7 MR. KENNY: I think, actually, unless there is 8 something else on that particular issue, I think we are going 9 to move on to the next theme. 10 CHAIRMAN DUNLAP: Ms. Williams, you jumped up. 11 Do you want to say something? 12 MS. WILLIAMS: Could I use the screen, please? 13 CHAIRMAN DUNLAP: Sure. 14 MS. WILLIAMS: Stephanie Williams, of the 15 California Trucking Association. 16 I would like to show you the number of trucking 17 companies, the rude and disrespectful one's that have been 18 noticed that they will be sued based on this document. 19 If you scroll this you will see that it is very 20 small print, because it's hard to get them all on one page, 21 Notice of Intent to Sue, 24 of these companies are already in 22 the courts, and these are the companies that are placeholders 23 to enter the courts. 24 So, there is a lot at risk here. We're in no way 25 trying to offend the politically appointed scientists. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 are trying to stay in business. 2 So, it is fair for us to bring these concerns up, I 3 think. 4 Moving to the next slide, if you look at the first 5 page -- 6 CHAIRMAN DUNLAP: Could I ask a question on that? 7 These are Prop 65, right? 8 MS. WILLIAMS: No. 9 These are everybody right now. 10 CHAIRMAN DUNLAP: The basis for it is what? 11 MS. WILLIAMS: The basis for it is the toxic air 12 contaminant puts in a head count, the number of people that 13 die of lung cancer because of diesel, and this number is 14 being used by the environmental groups who tend to make a lot 15 of money, a lot more than $15-million in these lawsuits when 16 they go after bounties for trucking companies. 17 All we do is we move freight. We bring food to the 18 grocery stores. 19 We are not supposed to figure out engines. We are 20 not supposed to figure out fuel. 21 We are supposed to move freight so you can buy 22 groceries. 23 CHAIRMAN DUNLAP: The question that I have, 24 Stephanie, is, tell me, they are suing using Prop 65? 25 MS. WILLIAMS: They are suing under Prop 65 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 because diesel is under Prop 65, a known carcinogen. 2 That is because IRAC listed it as sufficient. Our 3 Scientific Review Panel has said the RAC data is thrown out. 4 So, throw out the Prop 65, and we don't have a problem. Take 5 it off of Prop 65. 6 We can't have it both ways. There is unfairness 7 going on. 8 CHAIRMAN DUNLAP: We are talking about junk science 9 here, right? 10 MS. WILLIAMS: We are moving into the Australian 11 study. 12 The Australian study, if you look at the authors of 13 this study, you will see that this is the Cancer Registry in 14 Australia and the University. 15 These are independent people that looked at 25 16 years of exposure to diesel exhaust. Eric Garshick himself 17 will tell you that there is five to ten years in the Garshick 18 study. 19 If after 25 years it says, in the paper from the 20 Cancer Registry, overall there does not appear to be an 21 increase in cancer for coal miners that have one thousand 22 times the risk that the ambient air has, we have a problem. 23 We are not trying to be disrespectful. We are 24 trying to point something out here. 25 BOARD MEMBER FRIEDMAN: Excuse me. This study has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 absolutely nothing to do with the question of diesel exhaust. 2 It doesn't approach the question -- 3 MS. WILLIAMS: Yes, it does. 4 BOARD MEMBER FRIEDMAN: It does not. It does not 5 ask the question -- 6 MS. WILLIAMS: May I respond then? 7 BOARD MEMBER FRIEDMAN: No. 8 When I am finished you will have your say again and 9 again, I'm sure. 10 MS. WILLIAMS: You are right. 11 BOARD MEMBER FRIEDMAN: This study does show an 12 increase in cancer. 13 It is not a study. It's a surveillance activity, 14 and there is no scientific question posed by this study. 15 MS. WILLIAMS: I disagree, and I was at the Society 16 of Risk when this data was presented, and it was presented as 17 25 years of diesel exhaust exposure, what they are doing to 18 reduce diesel exhaust. 19 This is the highest level of diesel exhaust study 20 that is known. 21 BOARD MEMBER FRIEDMAN: On the contrary, you are 22 not a scientist. I am. 23 There are other scientists in the room. This is 24 not a scientific study. 25 MS. WILLIAMS: Well, it is from the Cancer Registry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 and the University. I assume that a Ph.D. behind their name 2 works, too. 3 On to the next subject, if you look at this, you 4 will see the meta-analysis, the Batjia, which was paid for by 5 OEHHA under contract with Allan Smith, we have data records 6 showing that, you will see that of the 30 studies used in 7 here, 13 of the studies did not evaluate smoking tobacco as a 8 potential compounder in cancer risk. 9 Smoking was not known in the 50's and 60's to cause 10 cancer. Diesel exhaust was not measured in the 50's and 60's 11 studies. 12 We did not get diesel trucks until the late 50's, 13 early 60's. We didn't have diesel trucks in the light-duty 14 area, and city trucks, until 1985. 15 So, these people weren't even exposed to diesel 16 exhaust, and if we could work together, the industry and the 17 scientists, we can tell you when the trucks came in, and you 18 will know then that we weren't exposed. 19 This is unfair. 20 The rest of the remaining 17 studies show that 21 control for smoking, 11 found no risk of lung cancer, 11. 22 Of the six studies remaining, you have chauffeur 23 drivers in Switzerland, lung cancer in Florence, Italy, it 24 doesn't even mention diesel, a physician paper on smoking 25 where diesel is not mentioned, the Garshick study -- which I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 am shocked and appalled at the comments that were made about 2 Garshick -- he's part of that six cities group that came up 3 with PM 2.5, all of those people are used by the 4 environmentalists as the bolstering for PM 2.5. 5 It's not a coincidence that they are trying to 6 prove their hypothesis that diesel causes cancer. They just 7 haven't yet, and I'm sure they would like to. 8 I believe that they think there is a health risk in 9 diesel, and you haven't heard us say today there isn't a 10 health risk in diesel. 11 We said that it doesn't show that it causes cancer. 12 As far as a toxic air contaminant goes, there are other 13 things that you could list diesel for. 14 You don't have to say it causes cancer and put our 15 members in jail. If you look at the rest of the Federal EPA 16 science, CASAC rejected it. 17 We have included with our comments CASAC's, and the 18 comments made today are not fair. 19 Also, in the study, we have gone over every single 20 one of the 30 studies. They do not show cancer. 21 So, how do you take no cancer, stir it up into a 22 pot, call it meta-analysis, have OEHHA pay for it and get 23 cancer? 24 Those are the questions that we have to answer to 25 our members who are being sued. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 CHAIRMAN DUNLAP: Stephanie, if I might, I would 2 like to go back, and I would like to ask Dr. Froines and his 3 colleagues on the SRP about -- Dr. Friedman has expressed the 4 point of view about this -- what was it, Stephanie, what do 5 you call the first one, Stephanie, the Australian study? 6 DR. BLANC: Let me comment on the Australian 7 study. 8 I found it very interesting when the study was 9 brought up to the Scientific Review Panel and was commented 10 on by OEHHA. 11 In fact, there were some earlier comments made on 12 the study that were very germane. It's not really to me an 13 issue so much as whether or not there was a focused 14 hypothesis, although it's clear that this wasn't a study 15 specifically of lung cancer, it's certainly not a study of 16 lung cancer related to diesel exhaust. 17 What is, I think, the more important criticism of 18 the study, not in the published paper, but in the 19 governmental report, they make it very clear and provide the 20 additional data so that you would know that the most anyone 21 could have had in terms of follow-up in the study, the 22 absolute most was 20 years, but that was the most. 23 By far the most, the bulk of person years of 24 exposure were far less than 20 years, so this was not a study 25 yet, a study population yet that one can effectively study PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 lung cancer or other cancers, and that is why in their report 2 they state that they need further years of follow-up. 3 I think the clearest example of that in the 4 published piece that was just shown on the slide is that, in 5 fact, they show that this employment is statistically 6 protective of all forms of lung cancer. 7 Therefore, if all of us wanted a healthy life, we 8 should go work as coal miners, and the reason that is shows 9 that is something that is commonly called, the healthy worker 10 effect, that is when you select at inception a cohort of 11 people who are able to hold down jobs as coal miner, in fact, 12 some people applied for jobs and never were exposed and never 13 were employed, but for quite a number of years you will see 14 increased survival because you have selected to start with a 15 healthy population, and it takes some number of years until 16 that effect washes out. 17 That number of years have not transpired in the 18 study, and that is why when OEHHA commented on this to us 19 they very appropriately said that this was not a relevant 20 study to impact the bulk of the findings that they had or 21 would impact the findings in any meaningful way at all. 22 I think it does highlight, when you start to get 23 into these very complicated epidemiologic arguments, why I 24 think the system is set up the way it is, so that a lot of 25 work can be done by staff, and then there can be a Scientific PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 Review Panel representing a variety of different disciplines 2 that take the time to delve into this and really address 3 these issues as have been done, I believe. 4 DR. FROINES: Very briefly, I will just read to you 5 the current average age of the cohort is between 40 and 50 6 years old. 7 So, if that is the average age, that means that 8 that is a very young cohort, and people don't start 9 developing cancer that young. 10 So, you have a sufficient latency to begin to see 11 the ill health effects associated with it. 12 Secondly, of the total cohort, approximately 30 13 percent of the cohort have been employed in the industry less 14 than ten years, well, you have got no exposure of 30 percent 15 of the people, so you are not going to be getting -- one, you 16 are not going to begin to see cancers, because they are too 17 young, and secondly, they haven't had any kinds of exposures, 18 and nobody is looking for diesel exposure within the study 19 anyway, so they are not looking for diesel exposure, and 20 then, of course, the other thing, as Paul says, is that this 21 is a study which demonstrates very clearly that there is 22 something called "the healthy worker effect," because you are 23 comparing miners to general population. 24 So, you have people who are more sick and infirm in 25 the general population compared to a healthy person who can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 work as a miner. So, for those reasons this study really 2 wouldn't pass muster in a solid scientific review. 3 DR. BLANC: But that is why we addressed those 4 issues when this was presented to us in fact. 5 CHAIRMAN DUNLAP: So, you did look at it? 6 You did assess it? 7 DR. BLANC: Yeah. 8 Also, I will not go into it point by point, the 9 issues related to the selection criteria for the 10 meta-analysis by Dr. Batjia, I would say that if you need to 11 get a hold of Dr. Batjia, you might call Area Code 12 (415)206-5200, the Division of Occupational Medicine, at the 13 University of California, San Francisco General. 14 He has recently received a very prestigious 15 research award from the National Institute of Health to look 16 at birth defects, and I think you would probably be able to 17 contact Dr. Batjia easily that way. 18 CHAIRMAN DUNLAP: Okay. 19 Any questions, does the Board have any questions on 20 the second study that Stephanie brought up? 21 MS. WILLIAMS: The important thing to remember is 22 about the Garshick study. 23 The Garshick study, all of the people died by 1983, 24 and the exposure started in 1960. So, these people were 25 exposed five to ten years when you look at it, you know, they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 didn't retire the day they died. 2 You can't get lung cancer after five years of 3 exposure, and you are saying ignore the 25 years of exposure 4 because they are not old enough to have it yet. You can't 5 have it both ways. 6 DR. BLANC: Well, we will get into a lengthy 7 scientific discussion with you in some different forum. 8 What I would like to say, also, in terms of Eric's 9 work, Eric Garshick's work, which I very much respect, and I 10 respect him individually as well, that when I had the chance 11 to discuss with him at the Panel hearing when he came, he 12 absolutely, unequivocally on the record stood by the risk 13 association that he found. 14 His only area of concern was in estimating the 15 point estimate of dose response risk, but in no way did he 16 retract to us when asked the underlying validity of the risk 17 association that he found, which was right on the money in 18 terms of the same level of risk that we have seen in the 19 other studies. 20 CHAIRMAN DUNLAP: Okay. All right. 21 Mike, we were with you -- Jed, is this a good time 22 for you on this point? 23 Is it on this point? 24 Okay. Then I will come to you. 25 Anything else on the science? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 Peter. 2 MR. VENTURINI: I think that wrapped up the 3 science items. 4 We had one other item, and we can cover it very 5 hurriedly. 6 MR. KENNY: The third item was identification 7 consequences, and it broke down into preventing hot spots. 8 CHAIRMAN DUNLAP: Yeah, and Stephanie just brought 9 that as far as the listing she had on the Prop 65 intent to 10 sue. 11 MR. KENNY: And issues regarding the economic and 12 legal impacts of identification, I think those are things 13 that actually should be addressed by both ARB staff and 14 OEHHA. 15 DR. FROINES: I was just going to say something 16 about EPA. 17 The TAC process of 1807, I think is substantially 18 different than the EPA developing their regulations. 19 So, finding something as a TAC is a qualitative 20 matter, is that if it is a lung carcinogen, that fits the 21 definition, we move forward. 22 EPA, because of their regulatory strictures, is 23 under much more responsibility to come up with very, very 24 refined risk numbers. 25 I think that we are talking a little bit about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 apples and oranges, and it would be a mistake to link 1807 2 with that overall risk process with EPA on diesel. 3 I think that they are two different regulatory 4 processes, and ours, I think, may get more heated and 5 problematic at the next stage. 6 CHAIRMAN DUNLAP: Yeah, and I'm not disagreeing 7 with you about the process, but the industry folks, I think, 8 have a very legitimate concern, and that is that it may not 9 line up directly, Dr. Froines, but they have the ability to 10 be perceived as being very strongly linked at having some 11 profound, at least perceived, impacts, and so that is one of 12 the reasons that people feel so strongly about the economic 13 element of what we do and what the impact would be. 14 DR. FROINES: Jim Seiber, who serves on the SRP, 15 was Chair of the RAC Committee, and we have talked in the SRP 16 about the linkage between the State and Federal a great deal. 17 Jim always made it clear to us that, yes, there was 18 a general agreement that the two try to walk down similar 19 paths, or parallel paths, but that was to occur as long as it 20 made sense, and as long as it was a reasonable and feasible 21 thing to do, and where that was not going to work out we 22 would go our different ways. 23 So, I think that we were not placed in concrete 24 through that RAC decision. 25 CHAIRMAN DUNLAP: All right. Very good. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 Mr. Venturini. 2 MR. VENTURINI: Yes, Mr. Chairman. 3 What I would like to do is ask Genevieve Shiroma to 4 briefly go through and just refresh the Board of some of the 5 things that we have mentioned in our presentation regarding 6 the next steps for us and also our next steps with regard to 7 districts and the 2588, and then OEHHA will probably want to 8 mention their next steps with respect to Prop 65. 9 CHAIRMAN DUNLAP: Genevieve, if I could have one 10 mental place holder to give you, it would be on -- some folks 11 have alluded to the fact that local districts could somehow 12 start moving and doing, even perhaps, some mobile regulations 13 or something. 14 I would like you guys to address that. 15 Peter, I know you have some experience with the 16 guidance document work that we have done historically and how 17 that is played out. 18 MS. SHIROMA: Yes, thank you. 19 Should the Board identify diesel exhaust as a toxic 20 air contaminant, it is then placed on the list with the other 21 toxic air contaminants. 22 It then initiates the next phase, which is a 23 multi-year phase where the initial effort is towards a needs 24 assessment. 25 It is also a commitment to form a Diesel Exhaust PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 Risk Management Working Group inviting all of the 2 stakeholders, the effected industries, associations, air 3 districts, U.S. EPA, the other governmental agencies, the 4 environmental groups and interested parties, and we would 5 convene this meeting very quickly. 6 Within the umbrella of that Risk Management Working 7 Group, we would look at the various sources within the 8 inventory of what has been done already, and we chronicled 9 that today, but we would take a hard look at what has been 10 done already, what is currently being worked on, because 11 there are some other efforts under way now, and whether or 12 not there are any other opportunities in the future for 13 emerging technology for engines and fuels, incentive 14 programs, what have you. 15 With the air districts, we have been in 16 communication with them for some time now. You heard from 17 Ellen Garvey today. 18 The 30 some air districts do have their own local 19 authority for permitting, for requirements under what is 20 called the Hot Spots Program and so forth. 21 They have made a commitment to us to work with us 22 on the guidelines of how this information is used in making 23 those decisions. 24 All of that must be done through a public process. 25 Again, that commitment is that they will work with us and not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 get out ahead of us on this information. 2 Again, within the Hot Spots Program, new source 3 review permitting and so forth, they have their authority for 4 stationary sources. We have the authority over the mobile 5 sources, as far as the fuels, engine technologies and so 6 forth. 7 In fact, within the Hot Spots Program, that 8 particular program does not govern the tailpipe emissions. 9 The law makes that distinction. 10 So, again, during that next phase, we would 11 envision the working group being the umbrella group, bringing 12 in all the stakeholders, working closely with us and the air 13 districts on development of the initial needs assessment, 14 which is essentially a plan that would come back to the Board 15 as far as a roadmap for the future, guidelines to the 16 districts on how that information is used from the risk 17 assessment, and should that effort indicate that we need to 18 do more, then we would proceed with that next multi-year 19 again, regulatory development. 20 Peter, anything else to add? 21 MR. VENTURINI: No, I think that about covered it, 22 Genevieve. 23 OEHHA may want to have some comments regarding Prop 24 65 and their next steps there. 25 CHAIRMAN DUNLAP: George, do you want to say PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 anything? 2 I mean, Mr. Kenny's back now, George, say what you 3 need to say to augment what Peter has just said, but I would 4 like Mr. Kenny and/or Ms. Walsh to talk a bit about any legal 5 challenges, legitimate or otherwise, that the trucking 6 community is concerned about. 7 I understand that. The list that Stephanie had up 8 on the Board, you know, troubles me. 9 I would like perhaps some discussion about the 10 context. 11 Okay. 12 George. 13 DR. ALEXEEFF: George Alexeeff. As indicated 14 already, diesel exhaust is already listed under 15 Proposition 65. 16 In terms of -- we have a separate project within 17 OEHHA to develop no significant risk levels for Proposition 18 65 chemicals. 19 Currently there are about 450 chemicals on the 20 Proposition 65 list. We have risk numbers for about 250 of 21 them or so. 22 So, we don't have risk numbers for all the 23 chemicals. With regards to diesel exhaust specifically, we 24 will wait until this process is over before we even consider 25 whether or not there is a need to develop a number for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 Proposition 65. 2 That is a separate process. 3 CHAIRMAN DUNLAP: Okay. 4 Mike, do you and Kathleen want to -- what about 5 this list of companies receiving the Prop 65 notices? 6 Some, you know, I think -- we, as Board Members, 7 can understand there is a Prop 65 law which allows for some 8 things to occur in the legal arena. 9 That happens with or without our taking action in 10 this area, but our taking an action, many people are 11 asserting that this is going to create some very difficult 12 situations, some enhanced liability, you know, you need to 13 shed some light on that, because there are a lot of 14 assertions in this area that I haven't been fully able to 15 surf through. 16 MS. WALSH: There certainly has been an indication, 17 a number of statements that have confounded two different 18 statutory processes. 19 Prop 65 was adopted into California law as a voter 20 initiative. It is in law. 21 It requires any business of a certain size that is 22 going to expose the public to levels of toxics that create 23 certain specified exposures to warn folks that that is going 24 to happen. 25 Under Prop 65, the State has already determined PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 that diesel exhaust is one of those chemicals known to the 2 State to cause cancer, and in fact, long before the Notice 3 went out for this Board to take the action that is being 4 contemplated today, long before the SRP considered, and 5 blessed the Report that is before you today, there had been 6 suits filed with respect to diesel exhaust exposures under 7 Prop 65. 8 So, there is no direct legal link between the Prop 9 65 lawsuits, the few lawsuits that are out there, or the 10 Notices of Intent to Sue which are also required under the 11 Act as a precursor to filing a lawsuit. 12 In fact, one thing I think folks ought to be 13 looking at and considering is that under AB 1807 this Board 14 has an opportunity to identify a substance, like diesel 15 exhaust as a toxic air contaminant and move into the control 16 phase. 17 That kind of activity, that statewide activity with 18 the types of work groups and concerted efforts on the part of 19 folks, both at the district level, State level, looking at 20 issues related to controls, is exactly the kind of activity 21 that's likely to address the concerns that you see coming up 22 through these Prop 65 lawsuits. 23 If the State agencies that are responsible for 24 looking at this compound, deciding whether it is a toxic air 25 contaminant and deciding whether additional controls are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 necessary in doing that, then citizens are going to feel 2 protected. 3 I think there are a number of specific questions 4 related to Prop 65 lawsuits. We have heard a lot of rhetoric 5 about individual truck operators and small companies being 6 subject to lawsuits, being put out of business and being 7 forced to change their equipment. 8 I think that the AG's Office, the Attorney 9 General's Office is responsible directly for implementation 10 and enforcement of Prop 65, has made a number of 11 pronouncements with respect to this specific issue, and I am 12 going ask Kirk Oliver of my staff to provide you with a few 13 of the insights from those efforts that have previously gone 14 on the part of the AG's Office. 15 CHAIRMAN DUNLAP: We had a Deputy AG here earlier 16 that we let get away. 17 We could have put her on the spot, couldn't we? 18 MS. WALSH: It is a big office, and I'm not sure 19 she would have wanted to be on the spot for these questions. 20 CHAIRMAN DUNLAP: Kirk, it is my understanding that 21 you had some briefings, too, on this, right? 22 MR. OLIVER: Thank you, Mr. Chairman, and Members 23 of the Board. 24 I would just like to reiterate that Proposition 65 25 is a separate law that operates separately from the law that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 you are here today with evaluating and enforcing. 2 Your identification of diesel won't heighten the 3 liability for exposing the public to diesel exhaust, and if 4 anything, as Ms. Walsh represented to you, it will have 5 exactly the opposite effect. 6 The identification will be accomplished in a 7 regulation, but that regulation will not impose any controls 8 or prohibit any kind of conduct related to diesel exhaust. 9 Again, you are operating in a law that is entirely 10 separate from Proposition 65. Proposition 65, however, is 11 merely a notice law. 12 It has listed diesel exhaust as a chemical known to 13 the State to cause cancer since 1990. Even so, in that time, 14 in the intervening eight years, only a handful of lawsuits 15 have been filed regarding diesel exhaust under Proposition 16 65, and the vast majority of these lawsuits do not concern 17 individual diesel truck exposures. 18 That list of notices you see there on the board, I 19 will have to tell you that we have obtained information from 20 the Attorney General's Office that indicates that throughout 21 the history of Proposition 65 that only a very small 22 percentage of all those notices ever turn into lawsuits, and 23 a small percentage of those lawsuits ever turn into any kind 24 of a meaningful resolution. 25 However, when Proposition 65 lawsuits have been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 resolved in the past, they have been resolved primarily for 2 the agreement of the party that has been sued that a notice 3 would be given to the people that are exposed due to their 4 conduct, and that is it. 5 No unreasonable penalties have been obtained in 6 those lawsuits according to the information that we have. 7 Additionally, the Attorney General has assured us 8 in our conversations that none of these diesel related 9 lawsuits or these notices were prompted in any way or relied 10 on your proposed action. 11 Again, Proposition 65 has listed diesel has a known 12 carcinogen since 1990. Those Proposition 65 notices and 13 lawsuits have proceeded on that basis only. 14 The Attorney General has also written an opinion 15 that Proposition 65 will not be applied to exposures from 16 single diesel trucks due to the insurmountable proof problems 17 involved in making that association between one vehicle's 18 emissions and one individual's exposure. 19 We have a letter to that effect that we will add to 20 the record. Additionally, we have a letter from the AG, two 21 representatives of the California Truckers Association that 22 talks about this relationship between the numbers of notices 23 and the actual number of lawsuits that have resulted under 24 Proposition 65. 25 Remember, Proposition 65 is only a notice law. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 It's unrelated to our law, and its liability is avoided by 2 giving a simple warning that we have seen so many responsible 3 businesses in California do since Proposition 65 was adopted 4 almost 12 years ago now by the People. 5 Proposition 65 won't not ban diesel. That has not 6 been the result of any Proposition 65 lawsuit, and they have, 7 again, settled beyond the primary condition that the required 8 notice be provided. 9 Again, we don't have any information that any 10 private lawsuit has ever even been filed alleging injury due 11 to exposure to diesel exhaust. 12 That is despite the fact that all of these health 13 studies that have been evaluated and the documents before you 14 have been available for years and years, available not only 15 to us but members of the public that might think that they 16 have gotten injured due to diesel exhaust exposure. 17 Your ID won't make these private lawsuits any more 18 likely than they have ever been because the information that 19 the identification would depend upon has been available for 20 many, many years. 21 Finally, your identification won't increase the 22 liability for exposing the public to diesel exhaust. 23 Your identification would have no regulatory effect 24 but technically would be placed in the California Code of 25 Regulations and appear as a regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 That regulation would not prohibit anybody from 2 doing anything that they are entitled to do now, and it 3 wouldn't require them to do anything that they are not 4 required to do now. 5 Your identification is entirely separate from 6 Proposition 65. Proposition 65 has had a dramatically 7 smaller impact than has been portrayed by a number of the 8 speakers and comments that we have heard today, and again, 9 Proposition 65 liability can be avoided by giving a simple 10 warning. 11 No private party lawsuit that we know of has ever 12 been even filed alleging injury due to exposure to diesel 13 exhaust. 14 If anything, the identification that is proposed 15 for you today will add certainty to this area of the law, and 16 if anything, this certainty will make this negligible risk of 17 additional liability even less than it is now. 18 CHAIRMAN DUNLAP: Okay. 19 Jed, did you want to say anything? 20 MR. MANDEL: I really promise to be brief, and I 21 appreciate the opportunity. 22 First of all, it's Jed Mandel with the Engine 23 Manufacturers Association. 24 It is my understanding that the Board will keep 25 open the record on this process, and that's going to cut my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 remarks very short, because what I want to represent to you 2 is that there are a number of issues that we have heard 3 today, factual questions that we will respond to while that 4 record is additionally open so that you can have the benefit 5 of our comments and don't have to hear it with the arms 6 waving up here this morning, I'm sorry, that's afternoon for 7 me. 8 So, we will be supplying some additional 9 information. 10 A couple of other really quick points. 11 Whether or not you all have the legal authority to 12 list whole diesel exhaust as a toxic air contaminant, we will 13 comment on. We will provide you our best information, but 14 irrespective of that, what we hope you have taken away from 15 our comments today is that, frankly, it does not make sense 16 for you to list whole diesel exhaust, because it cannot be 17 controlled. 18 There will always be diesel exhaust. If there is 19 something in diesel exhaust that's a problem, we should 20 identify it and then control it if it causes potential harm. 21 I realize that under the risk management phase that 22 would presumably come as the next step, you all suggested a 23 public process to identify what it might be, but that's where 24 we think we have gotten this out of whack, frankly, because 25 that should come first. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 There always will be diesel exhaust as long as 2 there are diesel engines. If diesel engines worked bad and 3 there were other power sources, they will be producing 4 similar combustion exhaust, as does the diesel engine, and we 5 don't know if that's a problem or not. 6 So, I think that you are not helping yourselves as 7 regulators, us as manufacturers, or users, or breathers in 8 terms of controlling the problem. 9 With respect to Prop 65, I don't think this is the 10 time to debate it. It has created a problem in the State of 11 California with respect to diesel exhaust. 12 There are innumerable complaints. This is not just 13 a question of providing notice. 14 Prop. 65 is focused differently than this action 15 today on specific sources and specific emissions as opposed 16 to ambient exposure, but that distinction seems to have been 17 lost, and how people would provide notice if that is what 18 they are obligated to do is quite problematic, and, of 19 course, the plaintiffs in these cases are not just seeking 20 notices, they are seeking significant bounties, significant 21 financial penalties, and, in fact, they are seeking a change 22 from diesel combustion sources to some sort of alternative 23 fuel sources, which would be problematic for the State. 24 CHAIRMAN DUNLAP: Okay. Thank you. 25 DR. FROINES: If there are going to be additional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 submissions that have technical or scientific or health 2 related questions associated with them, the Panel will want 3 to review them, and so, what we would like to have is things 4 submitted to the Board as soon as possible so that we may 5 hold an SRP meeting to review any scientific -- 6 CHAIRMAN DUNLAP: Sure. We will make sure that if 7 there is the relevant scientific information, it will be 8 shared with you. 9 We will figure out a process as to what makes the 10 most sense. 11 DR. FROINES: They can send things directly. 12 CHAIRMAN DUNLAP: I know there is a hunger to share 13 scientific information, which is good. 14 I'm glad that you all are -- we all agree, I think 15 everybody in the room, that there needs to be more work done 16 in the science area. 17 So, okay. Good. 18 Jed, thank you. 19 Okay. Mike or Peter, anything else you want to add 20 on the themes? 21 MR. VENTURINI: I think we are through with the 22 themes, Mr. Chairman. 23 We do have a number of letters that were submitted, 24 witnesses that did not testify, and if you would like us to 25 go, we can do it very quickly, go through those. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 CHAIRMAN DUNLAP: We are going to undoubtedly get 2 more letters, and we are going to get letters from the same 3 people, just updates. 4 So, with my Board's indulgence, I would just as 5 soon take that up first thing when we take the testimony up 6 at the next month's meeting, we will just bring them up then, 7 and I'm sure there are people that will want to change what 8 they said, so we will just bear ourselves that. 9 Kathleen, Mike, is that okay with you, processwise? 10 MR. KENNY: Fine. 11 MS. WALSH: That is fine, processwise. 12 There was one package of comments which related to 13 the procedure today, and I think that it would be helpful if 14 I asked Kirk to go ahead and address those very quickly on 15 the record. 16 CHAIRMAN DUNLAP: Briefly, and then I am going to 17 come back to my colleagues and see if there is anything that 18 you want to address now, and we will conclude this Item, and 19 we will take it up again next month. 20 Yes, Kirk. 21 MR. OLIVER: Yes, very quickly, we have had a 22 number of requests termed as demands by the California 23 Trucking Association that separately ask for a right to 24 cross-examine each one of the commenters here today that ask 25 for a preliminary hearing to make initial findings regarding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 the scientific justification of the findings and the 2 resolutions and staff report that also ask for a preliminary 3 determination of a hearing panel to hear certain issues 4 raised by the Trucking Association that give notice of their 5 participation and lodge a continuing objection over any 6 evidence that is presented to you that could be termed to be 7 hearsay in nature. 8 We have responded through a letter to the 9 California Trucking Association that those concerns are 10 inappropriate in a rulemaking hearing context. 11 They may have some validity in a judicatory, or 12 judicial hearing, but not here; but we wanted to place those 13 on the record now for the Board. 14 CHAIRMAN DUNLAP: Okay. 15 Despite our experience with Owens Lake a couple of 16 months ago -- 17 To my colleagues on the Board, anything -- kind 18 of -- we heard an awful lot today. We have got a Legislative 19 Hearing. 20 We have deferred our action until after the 21 Legislative Hearing. We had a number of Legislators that 22 have expressed the desire for us to hold off. 23 It's my understanding that both Houses are likely 24 to have some discussion in our State Legislature in August. 25 We are going to track that. Dr. Denton has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 invited to participate, Dr. Froines, there are others. These 2 are going to be largely scientific based panels. 3 They are going to have some of the issues that we 4 touched on today, several panels, I should say. 5 We are going to be there. We will have 6 representatives there, and we have an invitation to 7 participate if we desire as an organization. 8 So, I will make sure that in real time you will all 9 get notice of what went on and the key questions and themes. 10 Mike, I will ask for you to have that tracked and 11 get some formal communication to the Board, and Joan, I would 12 also ask you to, and perhaps Dr. Froines, to give us some 13 notes so we can kind of see it from the different angles 14 about how you perceive that process is going. 15 DR. FROINES: I will submit my testimony to you for 16 distribution. 17 CHAIRMAN DUNLAP: That would be fine. That would 18 be great. 19 So, we have a month to think on this. We are going 20 to be getting some more material. 21 We heard Mr. Mandel and Stephanie, I think, 22 Stephanie Williams, from CTA, we would have some follow-up 23 material and whatnot. I will make sure that we get that in 24 real time. 25 Also, there is going to likely be some analysis PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 done by the SRP on some of the points made by our own 2 technical staff, and Joan, I'm sure, your team, as well. 3 Mike, it is going to be a big job getting all of 4 this material to the Board. 5 We have one Board Member, Lynn Edgerton, very 6 interested in this issue, is out of the county, and we will 7 make sure she gets sent the transcript. 8 Pat, I will ask for you to get that put together so 9 that she can, you know, read it and be caught up, and so she 10 can participate at the next meeting as well. 11 Is there anything that you all feel, Board Members, 12 should be addressed? You have something that you want to 13 make sure you get answered today? 14 Ms. Rakow. 15 BOARD MEMBER RAKOW: Not an issue, but you 16 mentioned real time. 17 I would hope that everybody would get us the 18 material, considering the fact that some of us will be away 19 for perhaps a week at a time during August, or something, so 20 we will really will have time to go through it thoroughly. 21 It is very complex, and it is a lot of material, 22 and receiving a lot of it just today did put at least me, as 23 one Board Member, at a disadvantage in that I was not able to 24 pursue every page as thoroughly as I would have wished to. 25 CHAIRMAN DUNLAP: Yeah. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 We also had a box brought up here that I have been 2 tripping over for part of the meeting, so there is a lot of 3 material to read, and you know, we have an obligation to do 4 that, and I'm certain you will, but we do need to get it 5 quickly. 6 BOARD MEMBER RIORDAN: Mr. Chairman, I hate to ask 7 this, because I'm sure I don't have time to read probably 8 everything that is before me and coming in my direction, but 9 one of the things that I think has been at issue, and whether 10 or not it is directly related, it is indirectly related in 11 driving some of the testimony, and that is the Prop 65 12 lawsuits. 13 I hate to ask this, but I would very much like to 14 see that -- I think there are four that were brought against 15 four supermarkets. 16 If they are all the same, I only need to see one, 17 but I would like to see, because there has been so much 18 discussion back and forth, one of those lawsuits. 19 MS. WALSH: We will put a packet together for the 20 Board Members and distribute that. 21 CHAIRMAN DUNLAP: That will be helpful. 22 I know that there has been communication with the 23 AG's Office, which has been good. We want to encourage that 24 to continue, so we are at least as smart as we can be on this 25 issue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 Anything else? 2 I want to thank Dr. Friedman. We always pick on 3 our medical representative. 4 I have appreciated him and his views, his 5 forthright nature and his views on these things. It is very 6 important as we deliberate this issue to get his take on 7 things, and it strengthens us, and I want to thank him for 8 attending meetings beyond what we have going here and 9 whatnot, because it has helped, and I appreciate it. 10 Somebody on the staff mentioned that he went with 11 Joe Calhoun to one of the SRP meetings or workshops, which I 12 was glad to hear. 13 Supervisor Roberts. 14 BOARD MEMBER ROBERTS: One of the questions that 15 occurred to me, we have been largely making the assumption 16 that diesel exhaust is the end result of diesel fuel being 17 burned in diesel engines, but you and I have talked about 18 some things that are going on whereby diesel engines are 19 burning other things other than diesel fuels. 20 We do not have to work this out right now, but as I 21 have gone through all of the material, there has never been a 22 real clear definition of what diesel exhaust really is. 23 It concerns me in that there are some very positive 24 things out there. There is at least one technology that we 25 were looking at where a diesel truck would be converted so it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 would actually start on diesel fuel going a short distance 2 and then in the operation it would be switched over to the 3 CNG and would largely be powered by CNG. 4 I guess I am wondering -- I want to make sure that 5 if we do take some action that we have spelled that out so 6 that we don't cause some problems in areas that are 7 unintended with respect to having not defined this. 8 I have seen some definitions in there, what is 9 diesel exhaust, but it doesn't go to that kind of an issue. 10 I may have missed it, and it may be in there. The 11 summary, the staff summary at the beginning of this did not 12 go to that kind of a question, and it's probably not a major 13 issue, but I would be more comfortable if somebody could 14 define a little more precisely what we were talking about 15 when we are saying diesel chemical composition. 16 MR. KENNY: Let me respond very quickly. 17 We have actually tried to define diesel exhaust as 18 essentially diesel fuel combustion in a compression ignition 19 engine. 20 The situation in which you just described, 21 Supervisor Roberts, in which you would have a start-up on 22 diesel fuel, and you would have it shift over to CNG, or some 23 other type of natural gas, that initial start-up there would 24 qualify as diesel exhaust, but we look at that in the context 25 of any kind of risk management if identification did occur, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 because that would be the kind of thing that actually would 2 reduce the risk. 3 BOARD MEMBER ROBERTS: I wanted to make sure that 4 we weren't calling just whatever happens to come out of that 5 diesel engine, the whole thing, diesel exhaust. 6 CHAIRMAN DUNLAP: I think maybe you make the point 7 a little bit differently, too. 8 There are a number of innovative fleet pilot 9 projects and some fleets that work on fuels other than just 10 diesel. 11 Those things are in play. We have been aware that 12 the Trucking Association and EMA and others have made us 13 aware of those innovative projects, and we track those. 14 I don't want anybody here to leave thinking that we 15 are looking at banning diesel, and that's one of the things 16 that I was pleased to see in the staff report. 17 We do recognize that significant progress has been 18 made. We have things coming on line in the next few years 19 that are going to come on line and are going to improve air 20 quality and protect public health, and we need those things. 21 We need them to work, but at the same time there is 22 a process here that has been underway for some years that we 23 need to deal with. I think we are trying to do that in a 24 responsible way. 25 If there are no other comments from the Board, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 will make a closing remark or two, and then we will move on 2 to the other items. 3 First of all, I want to thank everybody that has 4 come today. I know that some of you have come great 5 distances to be here and spent a long time listening, and I 6 appreciate that, and it strengthened, I think, the whole 7 debate, because people now have a better understanding about 8 where people are coming from. 9 I have said this before, my father has been in the 10 trucking industry for many, many years. I am well-aware of 11 how hard people work in the industry and of how competitive 12 it is and how difficult it has been economically and is 13 challenging. 14 It is not our intent to make it even more 15 difficult. I can promise that this Board will deliberate 16 very carefully on this Item. 17 There are some concerns that have been expressed 18 about some people who are fearful about what this 19 identification that's been discussed today could mean 20 legally, what it could mean relative to everything from 21 employee relations to community relations, and we are 22 sensitive to that. 23 We also have heard from our own SRP, as well as the 24 staff of both OEHHA and the Air Board, that more research 25 needs to be done. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 Nobody would argue that more focused research is 2 certainly in order. I think we have made a commitment. 3 I think, Mike, your team mentioned that we were 4 committed to doing some research, and we talked about some 5 things specifically, and I think that's going to happen no 6 matter what. 7 What I am going to do is stop there and thank 8 everyone for coming. We are going to actively track what 9 goes on in the Legislative Hearing. 10 We have very good relations with the Legislative 11 Committee Chairs. We are going to communicate with them, and 12 we will continue this Item to the August Board meeting. 13 If there is no other discussion, we don't need a 14 motion to do that, do we, Mike? 15 We can just continue it, right? 16 MR. KENNY: A motion. 17 CHAIRMAN DUNLAP: The Chair would entertain a 18 motion to continue this Item to the August meeting. 19 BOARD MEMBER RIORDAN: I so move. 20 CHAIRMAN DUNLAP: A motion by Mrs. Riordan and 21 second by Dr. Friedman. 22 Any further discussion? 23 All those in favor, say aye. Any opposed? 24 We will take a five minute break. 25 (Thereupon a brief recess was taken.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 CHAIRMAN DUNLAP: I'm going to ask the audience to 2 take their seats, please, and the staff take their place. 3 This seemed like a pretty tense group this 4 morning. There's an awful lot of joking and backslapping 5 right now. What did we just do, Mike? 6 We're going to the fuel cell report, Tom? Is that 7 your preference? 8 MR. CACKETTE: Yes. 9 CHAIRMAN DUNLAP: Okay. Again, I'd like to remind 10 the audience who would like to present testimony to the 11 Board to check in the Board clerk over there, Ms. Hutchens. 12 Ms. Hutchens will wave right now. She's over there. 13 The next item on the agenda is 98-8-2, a public 14 meeting to consider a report by the Fuel Cell Technical 15 Advisory Panel. 16 It is with great interest that the Board now turns 17 to the next agenda item, a report from the Fuel Cell 18 Technical Advisory Panel. 19 We all know that fuel cells are a promising new 20 low-emission vehicle technology that has certainly captured 21 the world's attention. 22 I recently had the pleasure of visiting one of the 23 leading fuel cell developers in the world, Ballard. This 24 visit, combined with a discussion and meetings with auto 25 manufacturers, has left me very impressed with both the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 significant progress made during the last several years, and 2 with the magnitude of resources and commitments now being 3 allocated worldwide. 4 Some have said to follow the money and I would say 5 if you follow the money as it relates to zero-emission 6 vehicle technology, you see a lot of it going to fuel cells, 7 and that's exciting. 8 Our regulatory program, our LEV program, is 9 driven, as Dr. Calhoun has said in the past, certainly say 10 today, has driven a lot of technology development, 11 accelerated it. And we as a Board are proud of that fact 12 and I think in this area it is no different. 13 Fuel cell powered vehicles have great potential 14 for achieving a zero or near zero emissions levels. 15 However, with any new technology there are many 16 challenges to overcome, and that's something that we also 17 watch very closely. 18 So in an effort to better understand this 19 technology and its potential role within our mobile source 20 program, the Board established a Fuel Cell Technical 21 Advisory Panel, and the panel was charged with providing an 22 independent assessment of the technology and the prospects 23 for commercialization in the next five to ten years. 24 And we're pleased to have this report today. 25 My apologies to those that have come to track this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 item for how long it's taken us to get to it, but that does 2 not in any way signal that it isn't important. We just had 3 another item that had kind of come to critical mass and we 4 had to deal with it first today. 5 So with that, Mr. Kenny, would you introduce the 6 item. 7 MR. KENNY: Thank you, Mr. Chairman and members of 8 the Board. 9 In 1996 ARB established the Fuel Cell Technical 10 Advisory Panel. The panel is comprised of four recognized 11 experts in the field of fuel cell and power systems 12 technology. The panel has completed a comprehensive 13 fact-finding study in which they collected and reviewed 14 information on mobile source fuel cells that are being 15 developed worldwide. 16 As part of its work, the panel met with all 17 leading fuel cell developers to determine the status of 18 current research efforts, information on corporate 19 capabilities and commitments and plans for commercial 20 production. 21 I want to say that I'm truly impressed by the 22 outstanding job that the panel has done. The panel members 23 have provided a comprehensive assessment of mobile source 24 fuel cell research efforts as well as zeroing in on the key 25 technological and economic hurdles that are still PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 outstanding. 2 Their analysis included a review of the current 3 and expected future performance of fuel cell stacks, fuel 4 processors and integrated engine systems. 5 They have looked at cost targets that they believe 6 will need to be met and the issues related to the fuel that 7 is ultimately chosen. 8 Dr. Fritz Kalhammer, panel chairman, will now 9 provide a summary of the report, and in particular the key 10 findings of their work. 11 Dr. Kalhammer. 12 DR. KALHAMMER: Good afternoon, members of the 13 Board, Mr. Chairman. It's a pleasure to give this report on 14 the study that was just described. I want to say it was a 15 multiple privilege for me to be associated with this study 16 as the chairman, not only because of the outstanding 17 colleagues that I had worked with, but also the very 18 positive interaction with the ARB staff all along, and 19 finally, and perhaps most importantly, the remarkable 20 openness with which the sources of information that we 21 contacted worldwide were forthcoming with important 22 information. Didn't all give us information on the same 23 level, but we felt that particularly the leaders were very 24 open, so that we came out of this study with a feeling that 25 we really understood what was going on, what the prospects PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 were. And we, just like Chairman Dunlap said a moment ago, 2 really came out of this study with a great sense of 3 excitement and, as he also said, with a sense that there 4 were still tremendous challenges ahead. 5 Now, let me, before I go into the findings and 6 conclusions from our study, give you just a few minutes of 7 some basics on fuel cells, because I think that will make it 8 very clear why fuel cells are an exciting target as a new 9 automotive engine on the one hand, but why on the other hand 10 a lot still needs to be done to make a practical engine out 11 of an existing concept. 12 This is very simplified. The scheme, the 13 principle of the fuel cell, and in a sense you should 14 compare this single-fuel cell that you see here in a 15 schematic way with, for instance, the cylinder in the 16 combustion engine. This is the place where the fuel and the 17 oxygen, which is air, react in order to produce energy. 18 In the case of the combustion engine, of course, 19 the fuel, which here I've written as hydrogen, but it can be 20 any reductant gasoline, methanol. The fuel and oxygen from 21 the air react through combustion in the cylinder. 22 The key of the fuel cell is that we do not permit 23 the fuel and the oxygen to combine directly. We are making 24 the fuel, in this case hydrogen, contact and electrode shown 25 here at A, or anode, where the hydrogen will dissociate, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 giving off an electron to the electrode and the proton to 2 the electrolyte, green in this sketch. 3 On the other electrode, oxygen picks up an 4 electron and then becomes together with water, OH, in the 5 electrolyte. 6 The point of all of that is that the fuel, the 7 reductant, and the oxidant, react with the electrodes, not 8 with each other, and as a result we are allowing the 9 reaction to create an electric current. When that electric 10 current passes through a load, for instance an electric 11 motor, electric energy is generated, so a fuel cell is a 12 device that allows the energy from a fuel and oxygen to be 13 converted directly into electricity. No combustion is 14 involved and no processes are involved that involve heat and 15 loss of efficiency. 16 And that is the excitement of the fuel cell, the 17 promise of high efficiency and a promise of zero pollution. 18 Next. 19 Now, what you saw a moment ago was a single cell, 20 and of course just like a single cylinder you don't normally 21 build cars with a single cell. You have to assemble lots of 22 these cells together in order to have a practical engine, so 23 you stack up the cells one behind the other and then in fact 24 the individual cell is probably only about an eighth of an 25 inch thick. Many of them get stacked together in series and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 form something called a fuel cell stack that consists of 2 perhaps two or three hundred cells packed together very 3 closely. 4 Next. 5 Now, with these stacks you still only have the 6 counterpart, if you will, of an engine block with cylinders. 7 An engine involves a lot more. That is shown here on this 8 scheme, unfortunately a little difficult to read for you, 9 but I believe the Board members have a handout which you can 10 later study. 11 And you see that the fuel cell engine not only has 12 a fuel cell stack, it also needs a device for any fuel other 13 than hydrogen to produce a hydrogen-rich gas, which then 14 becomes the fuel for the stack itself, but you have to have 15 this fuel processor. 16 There is also a feedback of gases and of heat 17 between fuel processor and stack. In order to make the 18 engine as efficient as possible you need to have a 19 controlled system for this entire engine and then you have a 20 DC output that still has to be converted into something that 21 is suitable for driving an electric motor. So there is the 22 need for something called a power conditioner. 23 All of these pieces make the complete fuel cell 24 engine and a lot of the complexity of developing a fuel cell 25 from the principle into a practical automotive power source PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 is to develop the pieces of the system and to put them all 2 together in something that is compact, potentially low in 3 weight and potentially inexpensive. 4 Next. 5 Now, to our findings, and just a word on the scope 6 of our inquiry. We found that important development work 7 was going on not only in North America, and I'm saying that 8 rather than the United States because one of the leaders, 9 Ballard, is in Canada. 10 There are very large and active program, 11 particularly under Daimler-Benz in Europe, and the main 12 Japanese auto makers, Honda and Nissan and Toyota, are 13 deeply involved in fuel cell development. 14 Not only are the car makers involved, but the 15 developers of fuel cell technology itself, the biggest ones 16 in the world, a long list is shown on this slide. We 17 visited all of them. 18 We also visited the major developers of the key 19 components, and that's very important because some of these 20 components, the catalysts, the membranes and others, are 21 potentially show stoppers, because in their current form at 22 their current state, they're extremely expensive. And you 23 have to understand whether the costs of these components can 24 come down through mass production or whether they cannot. 25 One of the crucial questions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 Next. 2 Now, to our findings and conclusions, and the way 3 I would like to present these is to give you a number of 4 simple conclusions, and then after each one of them some 5 backup findings that support these conclusions. 6 In order not to belabor the points too much I'm 7 probably going to go through the background information 8 fairly quickly, but you have it in your handouts and of 9 course our report expands on that information in 10 considerable detail. 11 The very first and early finding that we made is 12 that there is right now really only one fuel cell technology 13 of the many nearly a dozen or so that have been developed 14 for various purposes that meets the criteria for potential 15 application as an automotive power source, and that's the 16 so-called PEM, or proton exchange membrane technology, that 17 simply speaks to the electrolyte in that technology. 18 The only system right now that works in acceptable 19 temperature, that's compatible with air and that is also 20 compatible with carbon dioxide. 21 The very first and probably central finding that I 22 should note here is that the stack technology itself, the 23 development of these devices that I showed you a moment ago, 24 has progressed remarkably over the last five years or so. 25 So when five years ago you could have discounted the idea of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 ever using a fuel cell to drive a car, in five years the 2 stack technology, the heart of the fuel cell, has come a 3 long way and is today at a level of performance of power per 4 unit weight, power per unit volume, efficiency that makes it 5 a bona fide candidate to be the core of a fuel cell engine. 6 Next. 7 This table I will not belabor. It's more by 8 nature a backup. It summarizes the argument by the PEM fuel 9 cell, the fuel cell technology of choice, and indeed is the 10 technology that is being developed by all the leading car 11 makers and fuel cell stack developers for automotive use. 12 Next. 13 Here you see the progress of fuel cell stack 14 technology. These are these assemblies of cells that I 15 spoke about. 16 Here the technology of Ballard in Canada, which 17 is, I think, the leading organization with respect to stack 18 technology. 19 And this picture shows you how far we've come. On 20 the left is a stack that is less than ten years old 21 technology. Five kilowatts in that stack. 22 If you go to the right, a stack that has basically 23 the same volume and the same weight can now produce 50 24 kilowatts. 25 And by the time something similar to that is going PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 to be mass produced it will produce 75 kilowatts. 2 So an increase in power density by more than a 3 factor of ten is really at the core of, if you will, the 4 revolution in fuel cell technology that makes it a candidate 5 for cars. 6 Next. 7 There is an issue with fuels. Hydrogen, of 8 course, is the fuel that powers the Ballard stack in buses 9 that are currently being demonstrated. Hydrogen is the best 10 fuel from an electrochemistry point of view. All of the 11 performance data that I just mentioned, the stacks that I 12 just showed, work with hydrogen. 13 Hydrogen is not now a practical fuel and probably 14 not for some time to come. It is difficult to store on 15 vehicles. It's still expensive. And the infrastructure 16 that's going to be needed to make hydrogen widely available 17 for personal cars is still a thing of the future. 18 So we have to look to other fuels if we want to 19 have fuel cell electric vehicles within the next ten years 20 or thereabouts. 21 Methanol is very interesting because methanol is 22 the only fuel, the only carbonaceous fuel, that has 23 significant electrochemical reactivity in these stacks. So 24 you can think of using methanol directly in these stacks, 25 you wouldn't need a fuel processor, and that makes it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 attractive. Unfortunately, the performance of methanol is 2 down probably a factor of five, at least, and you need a lot 3 of catalysts to make it react. So for the foreseeable 4 future without any future breakthroughs, the direct methanol 5 cell is still something for the future. It may happen, but 6 it's difficult to predict when. The technical basis for 7 developing engine technology around direct methanol cells is 8 not there yet. 9 So the automotive developers, the automotive 10 manufacturers are now concentrating on methanol, but also on 11 gasoline for the fuel cell, which requires that these fuels 12 are being processed into a hydrogen-rich gas before that gas 13 can really react in the fuel cell. 14 A lot of the challenge of developing fuel cells 15 for automotive use is in the development of these fuel 16 processors. 17 It's too early to say from our observations what 18 the tradeoff between methanol and gasoline is going to be. 19 Methanol is somewhat easier to convert to a hydrogen-rich 20 gas. On the other hand, gasoline, of course, is available 21 and we do not yet have a well-developed infrastructure for 22 methanol. 23 The methanol industry tells us that that is 24 something that they will be able to handle, that they can 25 build the plants, that they can team up with the oil PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 industry to develop the infrastructure for distribution of 2 methanol, but that's not yet something that exists. 3 So there are a number of tradeoffs here that are 4 technical, economical, probably policy, and I don't think 5 these tradeoffs are going to be resolved within the next two 6 or three years at the earliest. 7 Next. 8 This is a comparison of the fuels in terms of the 9 parameters that matter. I will not go into that other than 10 to say wherever you see a double minus, that's basically a 11 no-no right now. That is a show stopper. 12 Where there's two positives that means we have 13 this in hand today. 14 And in all other cases there's still work to be 15 done. 16 So you see no-nos for hydrogen at least right now. 17 You see, of course, gasoline as very favorable 18 with respect to cost and infrastructure, but not so 19 favorable with respect to its suitability to be used in a 20 car, and methanol is somewhere in between, resolution two, 21 three, years away. 22 Next. 23 Now, I said a moment ago that the development of 24 the fuel processor is probably one of the most difficult and 25 most important tasks and, indeed, a lot of the development PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 work going on worldwide is focusing on the fuel processor. 2 The fuel cell stack technology, as I said earlier, really is 3 essentially in hand. 4 Then the next challenge after the fuel processors 5 are developed is to put the fuel processors, the stacks and 6 all the balance of planned equipment together and make a 7 practical, compact engine that has sufficient power in the 8 space that is available on the vehicle and, and that's 9 extremely important, that can be produced for a cost that 10 will be acceptable for an automotive engine. 11 The most advanced state of technology in assembly 12 of fuel processor and the integration of the fuel processor 13 into an experimental car is, in our opinion, the 14 Daimler-Benz NeCar 3, which is a vehicle that has in fact 15 reached a state of being driven around a track and has even 16 ventured out on public roads a few times when the driver 17 wasn't watched carefully. 18 And so there is some very encouraging news here. 19 There's also encouraging news with respect to the 20 very first measurements of emissions from the NeCar 3. 21 And a word on emissions at this point is 22 important. We are now talking about vehicles using 23 carbonaceous fuels. We are talking about vehicles that at 24 least at this stage require the carbonaceous fuels, the 25 methanol gasoline, to be converted into hydrogen and that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 does involve potentially some emissions, because there are 2 some low-level catalytic combustion processes involved that 3 could have some emissions. 4 So it's not trivial that fuel cells that have fuel 5 processes and use carbonaceous fuels have absolutely zero 6 emissions, that's to say only water and carbon dioxide. 7 Nevertheless, the very first measurements of the 8 NeCar 3 vehicle have confirmed the expectation that these 9 emissions are near zero or extremely low. 10 But when you talk to Daimler-Benz and you show 11 something like this, they get very nervous and say, but this 12 is only a test cycle that doesn't involve cold start, these 13 are the very first measurements, this is not yet a 14 production vehicle and the data were acquired on a 15 dynamometer, not on the road. 16 So with all these caveats, we can only say 17 indications are that these vehicles will indeed be something 18 close to zero emission. 19 Next. 20 Here you see the Daimler-Benz package in the NeCar 21 3, and you can recognize the rails of the car's chassis, the 22 fuel cells between the rails, the stacks themselves, I 23 should say. Not an issue. They are near ready, at least 24 technically, but the fuel processor is still much too big. 25 Everything that kind of rises above the level of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 chassis's rail has to do with the processing of the fuel. 2 And right now this still takes up the rear seat 3 and the trunk space of the Mercedes A class vehicle, which 4 is the platform for the NeCar 3. 5 So this has to be reduced. It has to be packaged. 6 The performance of every one of these units has to be 7 increased so that they can be more compact and there's still 8 a big job ahead here. 9 Next. 10 Now, I said a moment ago perhaps the greatest 11 challenge for the development of fuel cell engine and 12 therefore a fuel cell car that can make it in the 13 marketplace is to achieve competitive cost. 14 If I were to show you some of the fuel cell costs 15 of fuel cell technologies that exist now and have been 16 developed for power production, they would be more than a 17 factor of ten higher than what the costs can be for 18 automotive application. 19 So you have to push very very hard in the 20 development of automotive fuel cells to get the cost of 21 every component, every functional component, every 22 subsystem, every assembly operation down to the very lowest 23 levels that are possible. 24 And the work on doing this is really only now 25 beginning among the major developers of fuel cells and car PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 makers. This is a very challenging task that's still ahead. 2 Now, it isn't something that cannot be done. We 3 did not identify any single item where we could say this is 4 a show stopper and we cannot get beyond that with good 5 design and engineering and manufacturing development. But 6 all of this development is largely still ahead. 7 Next. 8 I'm not going -- this is again by way of 9 background, but I want to just tell you that we pretty 10 carefully went through all of these components of a fuel 11 cell car, and we started at the bottom with all these 12 various pieces. We went to the various manufacturers and 13 developers of these pieces, and we looked at the potential 14 costs and how they aggregate in the cost of the overall fuel 15 cell engine. And it is clear that in every case, every box 16 there is a challenge. And in every case we are not yet at 17 the goal. And in every case, and that's very important, 18 mass production on the level of at least 100,000 units per 19 year or more is going to be necessary to get the economics 20 of scale that will lead to the low costs that are shown here 21 really as goals. 22 Next. 23 Perhaps the most encouraging observation that the 24 panel made, and we spent quite a bit of time on this 25 subject, was the observation of the very dedicated, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 well-funded, well-focused development programs that we have 2 seen worldwide. 3 We literally have the very best people in the car 4 manufacturers, the leading fuel cell development 5 organizations and worldwide leaders in the development of 6 the key materials and components engaged in massive efforts 7 to develop fuel cell technology on every level. 8 Even at this point there are commitments for 9 probably a billion to a billion and a half dollars over the 10 next couple years to resolve the technical and the cost 11 issues committed by these organizations. 12 So you could say that if everything goes well, if 13 the cost barriers are overcome, if all the technical issues 14 are being resolved over the next two years or so, that the 15 developers and manufacturers of fuel cell engine will be 16 able to make commitments for manufacturing plants. It will 17 probably take at least two years to build these plants and 18 shake them down, and then there will still be technology 19 improvements necessary. 20 So we are talking here about a time scale which in 21 a complete success scenario might lead to the first 22 thousands of fuel cell vehicles, perhaps beginning in 2003 23 and maybe tens of thousands in 2004 and possibly hundreds of 24 thousands in 2005. That is a success schedule, but that's 25 also what you hear from the CEOs of these various PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 manufacturers, much of which I think is today a game of work 2 competition that makes the staff that has to come up to 3 these deadlines pretty nervous in these organizations. 4 Nevertheless, the resources are being committed to 5 these goals. 6 Next. 7 This is simply a list that shows you the various 8 organizations that are engaged worldwide in all the critical 9 developments, the catalysts, the proton exchange membranes, 10 which are so important and still very expensive now, the 11 membrane electrode assemblies that are being put together 12 from the catalysts and the membranes, the complete stacks, 13 the fuel processors, extremely important, and of course the 14 total power plant for the engine. 15 This is kind of a who's who of the technology 16 leaders in the world today and much of the confidence and 17 ultimate success in developing fuel cells for cars comes 18 from the fact that these organizations are extremely 19 competent and very committed. 20 Next. 21 If you want to sketch out and get a feel for how 22 long all of this is going to take, you can write down, as 23 the panel did, the various phases of fuel cell engine 24 developments and you see these phases sketched out and 25 roughly speaking this is in a success scenario a ten-year PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 process. 2 With that in mind, this ten-year schedule we then 3 tried to do, and you see that in the next sketch, an 4 indication where the leading fuel cell electric engine 5 developers and vehicle developers are. And here are the 6 engine developers. Ballard with its hydrogen engine. 7 Hydrogen very important, for buses are, I think, leading the 8 pack and they're probably only about four years away from a 9 truly commercial product. 10 All the other bars concerned the development of 11 fuel cell engines that use carbonaceous fuels, either 12 methanol or gasoline. 13 And here is our perception where these engine 14 developers are with a lead of Daimler-Benz, Ballard, Ford, 15 Toyota behind that, International Fuel Cell very strong in 16 fuel cell power plant development, and then General Motors 17 still in the beginning of the engine development process. 18 Next. 19 Now, when you try to translate this in a 20 perception of where these car makers are with respect to the 21 development of the entire fuel cell vehicle, then you get 22 our perception here and that says that Daimler-Benz is 23 probably in the lead by a year or two, but they are still 24 about six years away from a truly commercial product in our 25 perception. And the others are somewhere behind. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 The length of these bars simply indicates 2 uncertainty in our assessment where the organizations really 3 are. 4 And let me repeat what I said before. It's going 5 to take a success at every turn. The earliest commitment to 6 manufacturing success in the various demonstration and pilot 7 programs, market acceptance, all of this, in order to make 8 it in that six short years between now and 2004, which is 9 the number that we hear most often from some of these 10 manufacturers. 11 Next. 12 Now, we were not particularly asked to make any 13 recommendations and so we really didn't, but we do have one 14 more set of observations on risks and risk-reducing 15 strategies, and these are not necessarily the observations 16 or, let's say the deliberations of the panel, but these were 17 the kinds of things that we heard from all of the 18 organizations, particularly also the leaders with whom we 19 visited to put together this information. 20 They felt that the proposition of developing fuel 21 cells as a new car engine was, for them, a very risky 22 proposition. Something that is at least six years away 23 before the money starts coming in again is by definition a 24 risky proposition. 25 There are open questions still on some of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 technology features of the technology, cold start being one 2 of them. 3 There are sizable uncertainties as to the ultimate 4 ability to produce these fuel cell engines, every part and 5 the entire system for competitive costs. 6 There are even uncertainties and therefore risks 7 for the car makers with the public acceptance, the consumer 8 acceptance of this new technology. 9 There is large risk here and large monies are 10 being put at risk by every one of the organizations that I 11 showed you on that chart not a moment ago. 12 So with that in mind, it's obviously very 13 important that wherever that risk can be reduced or the 14 perception of risk can be reduced to do so. 15 And one of the ways of doing so, I think, where 16 the Air Resources Board comes in in the opinion of many of 17 the developers, and as a panel we agreed with that, is to be 18 very clear from a regulatory point of view how fuel cell 19 electric vehicles are going to be treated. 20 Early classification and crediting of fuel cell 21 electric vehicles as ECVs is certainly one thing that we 22 heard repeatedly. 23 The fuels issue is a very important one and is one 24 of risk. Reducing that risk by fostering, for example, the 25 availability of methanol or of gasoline with extremely low PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 sulphur, which is a bad actor for fuel cells, is an 2 important consideration. 3 If any credits could be given to fuel cell 4 electric vehicles because of their high efficiency, it would 5 be very helpful to have an early indication, and that is 6 with respect to of course to the carbon dioxide emissions 7 contribution that we're talking about here. 8 And it goes without saying that demonstration 9 programs and the early market phases are going to be risky 10 and expensive and any assistance that can be provided in 11 these phases I think would be very conducive to risk 12 reduction and risk reduction perception. 13 I think I want to stop here, and I certainly want 14 to invite your questions if I can clarify any of the points 15 that as a panel we had the privilege to observe. 16 CHAIRMAN DUNLAP: Dr. Friedman. 17 BOARD MEMBER FRIEDMAN: I really enjoyed this 18 presentation. I appreciate it. Thank you on behalf of all 19 of us. 20 Couple of quick little things. 21 What are the membranes made out of? 22 DR. KALHAMMER: They're basically made out of a 23 chemically-modified Teflon. 24 BOARD MEMBER FRIEDMAN: Is that the sort of a weak 25 link in terms of longevity of component parts? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 DR. KALHAMMER: The answer to that is definitely 2 no. They are extremely stable. 3 The big issue with them is just cost. These 4 membranes are now used in chlorine and alkaline electrolytic 5 cells. They sell at $600 a square meter. This is a mature 6 market. For an automotive application the cost needs to 7 come down to something like 20, 30, $40 per square meter. 8 BOARD MEMBER FRIEDMAN: If a single or two cells 9 of a stack become defective for any reason, are they 10 replaceable or does the whole stack have to be replaced? 11 DR. KALHAMMER: I would say for all practical 12 purposes you would have to replace the stack. 13 BOARD MEMBER FRIEDMAN: It could be very 14 expensive? 15 DR. KALHAMMER: Yes. But, I think there's a lot 16 of evidence that if you have good quality controls and 17 materials that we are now talking about that the stack life 18 will be very long. I think the issue of say achieving 5,000 19 operating hours on a stack is probably one of the easier 20 ones. The cost is going to be difficult. 21 BOARD MEMBER FRIEDMAN: Someone tell me what 5,000 22 hours means in the life of a car. 23 MR. CACKETTE: Over 100,000 miles. 24 BOARD MEMBER FRIEDMAN: Thank you. 25 DR. KALHAMMER: For power plant applications, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 incidentally, the goal is more like 20,000 hours and there's 2 definitely a sense that that can be achieved also. 3 CHAIRMAN DUNLAP: Yes, Mrs. Rakow. 4 BOARD MEMBER RAKOW: I know that your panel was 5 only looking at the mobile fuel cell applications, but you 6 just mentioned the power plant, so you do see an interchange 7 of application, or do you? There's quite a bit going on 8 with distributed generation. 9 DR. KALHAMMER: Yes. The answer to that is yes. 10 I think the developments that have been going on and for 11 which in many places ARB is credited to create the 12 incentive, I think will have a very very salutary impact on 13 the power plant applications where people have been 14 struggling for years and years to get the costs down, and 15 the large efforts for the automotive applications may well 16 get the cost down to the point where the power application 17 is going to be almost a shoe-in. 18 CHAIRMAN DUNLAP: I had the opportunity a couple 19 days ago to attend a Desert Research Institute out in 20 Nevada, fuel cell conference, and, Fritz, I've got to tell 21 you, that they were clamoring, I had one copy that Tom gave 22 me of this report, carried in my briefcase, and I had some 23 pretty generous offers to take that. But I brought it home 24 with me. 25 But the interesting thing that I found there was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 that all of the energy that -- there was a panel that they 2 had of basically World Bank and some investment types that 3 were talking about how the market for fuel cell technology 4 overall in a variety of applications was extremely 5 promising, and that these people took time to be there to 6 meet folks that were involved in bringing fuel cells to 7 market and wanted to learn from them. 8 So I think the timing of the work, and I know you 9 felt it as you have done it with your colleagues, is really 10 important, and I think right on. 11 And let me ask you this, Fritz, and you've been -- 12 we put you in a tough spot, I remember when you did battery 13 panel work for us last time when we were working on the ZEV 14 changes. What do you think we can do differently or better 15 to facilitate the development of a fuel cell market in the 16 environmental area, not just restricted to what we do here 17 for mobile applications? 18 DR. KALHAMMER: In my opinion, which I think was 19 shared by the panel members, the most important thing is 20 clarity of the regulatory posture. Obviously it ought to be 21 supportive and I don't think it's hard to be supportive, 22 given the basic potential for cleanliness and efficiency. 23 But to make that position clear, to stick with it for the 24 periods that we're talking about, so that there is a 25 recognizable intent on the part of bodies like ARB and to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 see this through to a successful end, I think, is very 2 important. 3 I mean, the history of technology is littered with 4 examples where there was great excitement and then after a 5 while there was burnout and then everybody would drop it 6 despite the fact that there may have still been significant 7 promise. 8 Today I think it's important to keep the 9 difficulties in perspective and not become disappointed when 10 the schedule slips a little bit, because these are very 11 difficult things to develop. Good people are working with a 12 lot of money on it, but they can't do it instantaneously. 13 So sticking with it and being clear, I think is 14 probably the most important thing that you can do. 15 CHAIRMAN DUNLAP: We hear that all the time, 16 particularly in the mobile area. 17 Tom, I know you and I have been to meetings, and I 18 think when we went back to Detroit several of us heard that 19 the consistency with the regulatory message is something 20 that they depend on. They might do advocacy and argue with 21 us about time frames and specifics, but they really like the 22 idea that we're going to be predictable. 23 Any other questions? 24 We have one witness, too. 25 Joe. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 BOARD MEMBER CALHOUN: Dr. Kalhammer, on, I guess, 2 page five of your report, statement to the effect that the 3 panel -- let me preface the statement by mentioning some of 4 the difficulties that you encounter, that the manufacturers 5 are encountering in trying to develop this process, then 6 there's a sentence in your report which states the panel 7 therefore considers the statements of several major 8 automobile manufacturers, that they expect to have 9 production rated fuel cell vehicles by -- fuel cell electric 10 vehicles by the year 2004. 11 Do you consider that to be a realistic estimate of 12 time in view of what you know about the problems that may 13 come up? 14 DR. KALHAMMER: I think I spoke to that when I 15 said everything has to go right. And, for instance, in two 16 years from now the methods of engineering every component 17 for low cost have to be in hand. Commitment needs to go out 18 to build plants and the plants must be able to really meet 19 the expectations. Then all the tests, you know, no sudden 20 environmental or safety issue must be picked up that might 21 take a year or two to resolve. None of these things can 22 happen if 2004 is to see the production of some tens of 23 thousands of engines. 24 The tens of thousands of engines that 25 Daimler-Benz, Ballard, Ford say they are planning to build PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 in the year 2004 must also have customers. Daimler-Benz may 2 not buy all of those. Ford will have to buy them. And 3 obviously they will be bought only when there is a 4 perception that there will be customers for the vehicles and 5 that's all tied to the cost, and so there are all kinds of 6 feedback loops between volume and cost and customer 7 acceptance. 8 So that's a lot to ask. 9 And if you ask my personal opinion, am I going to 10 say 40,000 fuel cell engines produced in the year 2004? I 11 would say I wouldn't be surprised if that slipped a year or 12 two, but right now I'm in no position to say that it will, 13 because everybody with whom you talk says we are committed 14 to these goals, and the commitments go right from the very 15 top from the chairman of these big, powerful companies, 16 right down to the last worker. So there's a tremendous 17 spirit of enterprise and enthusiasm. 18 And the other thing that is important is that many 19 other components are really beyond the expertise of the car 20 makers, the membranes, the catalysts and so on. And there 21 are organizations, Dupont, Gore, Asahi, Bicks, and others, 22 who are putting money down right now that this will become a 23 market, so that their part of the critical path is handled 24 too. There aren't really any holes in the total effort 25 right now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 BOARD MEMBER CALHOUN: Thank you. 2 CHAIRMAN DUNLAP: Any other questions of 3 Dr. Kalhammer? 4 Very good. 5 Thank you. 6 And we apologize to you for the delay. Appreciate 7 your patience. 8 DR. KALHAMMER: Don't. You had a lot of important 9 business. 10 CHAIRMAN DUNLAP: We have one witness. Ken Smith, 11 are you here? 12 MR. SMITH: I'm here. 13 CHAIRMAN DUNLAP: Come on over here. You might be 14 the only friendly witness we've had today. I might have 15 spoken too soon, though. 16 MR. SMITH: No. I'm Ken Smith and I represent 17 Methanex. We are the largest producer of methanol in the 18 world and we are exclusively a producer of methanol. 19 We are very pleased with the report. In general 20 we agree with almost everything in the report. We think 21 they did a good job. They did a good canvassing. 22 We spent a lot of time talking to manufacturers 23 and to the component manufacturers of this equipment. We've 24 worked a lot with the original equipment manufacturer 25 automotive industry. And we can see that clearly methanol PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 is the leading fuel here and we want to continue to work 2 with them on that. 3 We are a little concerned, though, that the direct 4 methanol fuel cell did not get as much play as we thought it 5 should. We think that's a very promising technology. 6 However, it is still in the laboratory, but we think it can 7 advance rapidly with the right incentives. And I know that 8 you are working on that. 9 The primary concern, one of our primary concerns, 10 not with the report but with what's going on with fuel 11 cells, is that a lot of effort is being diverted into trying 12 to make petroleum into hydrogen. We think that's a pretty 13 difficult task and we'd like to see more of it devoted to 14 the easier fuel, methanol. Of course our bias here comes 15 out. 16 The primary concern with methanol has always been 17 the infrastructure. But I think we've proven in the 18 California Energy Commission program and others that we can 19 put this infrastructure in. 20 Part of the problem is the cooperation from the 21 fuel retailers. We're not fuel retailers. We sell a 22 commodity, so we don't own the corner gas station. We're 23 working on that though. We're looking for partners. We've 24 searched worldwide for partners in the petroleum industry to 25 do this, and we are looking very hard at the difficulty of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 what it takes to put methanol into existing infrastructure. 2 And we called out for any cooperation from government and 3 from the petroleum industry to move forward with a methanol 4 infrastructure with our help. 5 Essentially we're committed to helping in 6 development of a fuel cell. We're here. We'd like to 7 participate in demonstrations and we're very pleased with 8 what you've done and what the Fuel Cell Technical Advisory 9 Panel did. 10 Thank you. 11 CHAIRMAN DUNLAP: Thank you. 12 And you've been -- you're to be commended and the 13 folks you represent in trying to keep a dialogue open with 14 us, tell us what you're about, what you've been thinking 15 about and giving us counsel as we consider advanced 16 technology and what it can do for the environment and for 17 what other fuels, the potential. That's important for us to 18 hear. 19 Sally, I think he said something nice about the 20 Energy Commission. Do you want to pipe up? 21 BOARD MEMBER RAKOW: I think he did too. I'd like 22 him to repeat it. 23 A lot will happen between 1991 and 19 whatever. 24 MR. SMITH: Sally was a big supporter when we were 25 working with them over there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 BOARD MEMBER RAKOW: I also drove a demonstration 2 vehicle, Chevy Lumina, M-85, and gave it a good workout, and 3 it was excellent. It was an excellent car. 4 CHAIRMAN DUNLAP: Good. Thank you. Appreciate 5 it. 6 Well Tom, you guys want to sum up anything? 7 I know one thing I should mention to the Board 8 colleagues, we asked -- we asked a lot of our mobile source 9 program. They're busy, certainly with a full regulatory 10 calendar, but they also find a way to squeeze in time to do 11 work like this, visionary work. 12 And I appreciate, Tom, you and your team being 13 able to do this and interact with Dr. Kalhammer and his 14 colleagues, because it's hard to make time to do that. I 15 know that. It's difficult to lead, but you guys really, I 16 think, delivered a quality product here. 17 Thank you for the notebook. I encourage -- 18 MR. CACKETTE: I would only add that this is one 19 of the more fun ones, so it's got so much prospect and it 20 was such an exciting technology that it really can continue 21 to develop at this pace, we'll all look back on it quite 22 favorably, I think. 23 CHAIRMAN DUNLAP: Thank you. 24 Mike, you want to add anything to this? 25 MR. KENNY: I do have a few remarks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 And, again, I think I'd like to just simply 2 emphasize the outstanding work that the fuel cell panel has 3 done in preparing the report. 4 The report provides a comprehensive summary of the 5 progress that's been made to date and current information on 6 the status of fuel cell programs worldwide. 7 The panel estimates that research and development 8 estimates investments already made in the commitments for 9 the next several years will approach $2 billion. 10 This includes the financial as well as the 11 technical resources. These investments are being undertaken 12 by the leading auto manufacturers and include key alliances 13 with industry. 14 And the support from what the panel characterizes 15 as well-focused government research and development 16 programs. 17 To emphasize a significant worldwide investment, I 18 would like to take a minute or two just to focus on some of 19 the recent achievements and commitments that give us great 20 optimism for the future. 21 Daimler-Benz has been testing fuel cell vehicles 22 since 1993, and has already unveiled their third-generation 23 experimental vehicle, the NeCar 3. 24 NeCar 3 utilizes the Mercedes A class platform and 25 is the world's first methanol fuel cell powered car. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 According to recent press statements, Daimler-Benz 2 plans to run some small fleet demonstration studies in 1999, 3 and enter pre-series production in 2002 and 2003. 4 Another important development is the alliances 5 that have been developed between the auto manufacturers and 6 industry. For example, Daimler-Benz has committed $725 7 million in partnership with Ballard. 8 And last December Ford Motor Company announced 9 that it will bring its electric vehicle technology and $420 10 million in the alliance with Ballard and Daimler-Benz. 11 Last year Chrysler unveiled a full-size model of a 12 vehicle that was run on gasoline. They target a proof of 13 concept by early 1999 and a demonstration vehicle by the 14 year 2000. 15 This January, GM unveiled an advanced model of a 16 fuel cell drive train and has stated their intent to have a 17 production-ready vehicle by the year 2004. GM vice chairman 18 Harry Pearce has stated to the press that GM's fuel cell 19 test vehicle gets 80 miles per gallon. 20 Other manufacturers such as Nissan, Honda, Volvo 21 and Volkswagen have all bought Ballard fuel cells for their 22 research. 23 They all realize that there are many challenges 24 that lie ahead before fuel cell vehicles become a reality. 25 As the panel pointed out, not the least of which is being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 able to make the vehicles cost effective. 2 But with the level of effort and commitment that 3 is being made by the leading organizations in the world and 4 the successes that have been achieved in the last few years, 5 there are many reasons to be very optimistic. 6 I've had staff prepare informational binders for 7 the Board which include background information on fuel 8 cells, as well as the recent press articles. And hopefully 9 those will be helpful. 10 Thank you. 11 CHAIRMAN DUNLAP: Thank you, Mike. I appreciate 12 that. 13 I heard Sally mention that she had a Chevrolet 14 Lumina and I like General Motors products, but I think we 15 need a couple Mercedes test vehicles. See, maybe 16 Dr. Kalhammer can see if he can help us with that one. 17 Thank you. And please express our thanks to your 18 colleagues, your other three colleagues, Dr. Kalhammer, for 19 their work. We'll get a letter off properly recognizing 20 them for that work. 21 Mr. Calhoun. 22 BOARD MEMBER CALHOUN: One thing I guess I'd like 23 to -- Dr. Kalhammer mentioned some of the strategies that 24 may help to foster the investment. I'd like to add some 25 follow-up on that. They are listed on the last sheet. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 CHAIRMAN DUNLAP: Okay. Any letters on this item? 2 MR. KITOWSKI: Yes. We received one comment 3 letter from the American Methanol Institute. Basically they 4 were very complimentary of the panel's report, and they 5 provided a report of their own, entitled, "Looking Beyond 6 the Internal Combustion Engine, the Promise of Methanol Fuel 7 Vehicles," in which they examined the ability of the 8 methanol industry to serve in the emerging market for fuel 9 cells, including taking a look at the infrastructure 10 possibilities. 11 CHAIRMAN DUNLAP: Very good. Thank you. 12 We'll move on now to conclude that item. 13 I'm going to -- we have two items left. One is 14 very short, I would assume, and I'll take care of that right 15 now. We have an open comment period. 16 Does anybody wish to address the Board? 17 We can't obviously take formal action on any item 18 that you choose to speak to us on, but we'll provide an 19 opportunity for members of the public to directly address 20 the Board on items of interest that do not appear on today's 21 agenda. 22 We're asking that each witness limit his or her 23 testimony to topics that are within the subject matter 24 jurisdiction of the Board. 25 Is there anybody here that wishes to speak to us? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 Very good. 2 We will put this item away, and we'll go to the 3 final item, which would be the fuel cell -- we just did the 4 fuel cell report -- which will be the ZEV item, which is the 5 public meeting to update the Board on the status of the 6 Board's Zero-Emission Vehicle program and ZEV technology. 7 In September of 1990 the Board approved the 8 low-emission vehicle and clean fuel regs. These regs 9 include a requirement of ten percent of all new vehicles in 10 model years 2003 and beyond to be zero-emission vehicles, or 11 ZEVs. 12 Currently the only technology available -- excuse 13 me, capable of meeting the ZEV standard is the 14 battery-powered electric vehicles. 15 The Board believes that the success of 16 battery-powered ZEVs in the marketplace is dependent on 17 advanced batteries that provide range and performance 18 characteristics acceptable to a large number of consumers. 19 In March of '96 the Board entered into a memoranda 20 of agreement, or MOAs, with the seven largest auto makers. 21 These MOAs commit manufacturers to continue research and 22 development of advanced batteries, as well as conducting 23 demonstration program involving advanced battery-powered 24 ZEVs. 25 The Board is committed to placing ZEVs in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 government fleets and developing the infrastructure 2 necessary to support ZEVs. 3 As a direct result of these MOAs, we have seen 4 impressive progress in development and commercialization of 5 advanced batteries. 6 Honda and Toyota have marketed vehicles with 7 nickel-metal hydride for many months now. 8 General Motors began offering the EV1 one and a 9 half years ago, and although it currently uses lead-acid 10 batteries, the style and responsiveness of the EV1 broke 11 through many preconceptions of electric vehicles as golf 12 carts. 13 Both General Motors and Ford have announced plans 14 to offer vehicles with advanced batteries by the end of '98. 15 And Nissan is the first manufacturer to come out 16 with a lithium-ion battery-powered vehicle that offers 17 real-world range of over 100 miles. 18 These vehicle programs represent a commitment to 19 clean transportation that cannot be denied, and on behalf of 20 the Board I'd like to congratulate them on their 21 accomplishments to date. 22 Because battery technology is the key to 23 successful introduction of a sustainable market for ZEVs, 24 the Board staff has closely followed the progress of the 25 most promising battery technologies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 1 Today we'll hear about the progress made by auto 2 manufacturers, our Board and other agencies in meeting the 3 commitments and MOAs. In addition, we'll get an update on 4 the status of the most promising advanced battery 5 technologies. 6 With that, Mr. Kenny, will you introduce the last 7 item? 8 MR. KENNY: Thank you, Mr. Chairman and members of 9 the Board. 10 I want to take a moment to comment on the 11 importance of the advanced battery technology to the ZEV 12 program. 13 The Air Resources Board staff believes that 14 advanced batteries are essential to the success of ZEVs in 15 the marketplace. 16 Progress made thus far to commercialize advanced 17 batteries for use in vehicles has been impressive. 18 I firmly believe that much of this progress is a 19 direct result of the MOAs and the requirements for ZEVs in 20 2003. 21 However, we are still in the development stages 22 for these new advanced technologies. The next few years 23 will be pivotal, and based on the hard work and 24 determination demonstrated thus far, I believe we will 25 continue to progress and meet the goals we set for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 1 proliferation of zero-emission vehicles in the marketplace. 2 I also want to commend the auto manufacturers on 3 their efforts in developing electric vehicles. I've driven 4 today's electric vehicles and can attest these bear no 5 resemblance to golf carts. These cars are clean and quiet, 6 in addition to being fast and fun to drive. 7 I recognize that many hurdles have been overcome 8 to bring these cars to market and that additional progress 9 is needed to reduce cost. 10 However, based on the development so far, I have 11 confidence that the industry will develop vehicles that meet 12 the consumers' needs and expectations. 13 Now I'd like to introduce Eileen Tutt of the 14 Mobile Source Division, who will make the staff 15 presentation. 16 Eileen. 17 MS. TUTT: Thank you, Mr. Kenny. 18 Good afternoon, Chairman Dunlap and members of the 19 Board. 20 My presentation today will serve as the biennial 21 review from ARB's Zero-Emission Vehicle program. 22 This presentation will include a brief review of 23 the ZEV's program history, information about the auto 24 manufacturers' and ARB's progress towards meeting the 25 requirements of the memoranda of agreement that were signed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 1 in 1996, and a summary of the status of an advanced battery 2 technology. 3 In September 1990, ARB adopted the low-emission 4 vehicle and clean fuels regulations. These regulations 5 included a requirement that the seven largest auto 6 manufacturers produce certain percentages of zero-emission 7 vehicles, or ZEVs. Beginning in model year 1998, two 8 percent of the new vehicle fleet was required to be ZEVs. 9 This percentage increased to five percent in 2001 and 2002, 10 and to ten percent in 2003 and beyond. 11 Currently the only technology meeting the ZEV 12 requirement is the battery-powered electric vehicle. But as 13 you heard from Dr. Kalhammer, fuel cell technology shows 14 promise in meeting the ZEV requirement in the future. 15 I'd first like to emphasize why the ZEV program 16 has been and continues to be such an important strategy in 17 meeting California's long-term air quality goals. 18 This graph demonstrates the substantial emission 19 reductions achieved by electric vehicles, or EVs. 20 Even when we include the power plant emissions 21 associated with producing electricity used by the EV, the EV 22 is over ten times cleaner than even the cleanest emitting 23 vehicle currently required by ARB, the ultra low-emission 24 vehicle, or ULEV. 25 NOx and NMOG emissions associated with the EV PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 1 equate to less than five pounds over a ten-year life. 2 If we calculate tailpipe evaporative and refueling 3 emissions from the gasoline ULEV, we end up with over a 4 hundred pounds of NOx and NMOG over a ten-year life, and an 5 average model year 1996 vehicle will emit almost 300 pounds 6 over a ten-year life. 7 Electric vehicles clearly provide significant 8 emission benefits. 9 In addition to the emission reductions indicated 10 in the previous chart, there are other benefits associated 11 with EVs. Unlike conventional gasoline-powered vehicles, 12 EVs have no emission control system that can deteriorate 13 over time. EVs never become gross emitters. EVs also have 14 no emissions associated with the evaporation of fuel while 15 the vehicle is operating or at rest. 16 Finally, the upstream emissions associated with 17 EVs are extremely low relative to gasoline vehicles. 18 For example, there are no refueling emissions 19 associated with EVs, whereas pumping gas results in 20 significant emissions of hydrocarbons. 21 ARB believes that advanced batteries are essential 22 to ensure a successful introduction and a sustainable market 23 for ZEVs. 24 In August 1995, ARB provided funding to establish 25 a Battery Technology Advisory Panel. The panel determined PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 1 that although significant progress had been made in the 2 development of advanced batteries, these batteries would not 3 be available in production quantities until the 2001 time 4 frame. 5 Thus, in March 1996, ARB modified the regulations. 6 In place of a requirement for ZEVs in 1998 through 7 2002, the modifications include a market-based introductory 8 period, while maintaining the ten percent requirement for 9 2003 and beyond. 10 To ensure that progress toward commercialization 11 of advanced batteries continues at a rapid pace, ARB entered 12 into memoranda of agreement with the seven largest auto 13 makers. 14 These memoranda of agreement, or MOAs, commit the 15 auto manufacturers to offset the emission benefits lost due 16 to the elimination of the ZEV requirement in 1998 through 17 2002, to continue research and development through a 18 demonstration program, to meet the market demand for ZEVs in 19 1998 through 2000, and to provide ARB with annual and 20 biennial reports on their progress and future plans. 21 The MOAs commit ARB to continue working with 22 government agencies to place ZEVs in government fleets, to 23 work with other government agencies to ensure adequate 24 infrastructure is available to support EVs in the 25 marketplace, to work with state and local officials to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 1 address emergency response and other safety issues as they 2 relate to EVs, and to support reasonable incentives for ZEVs 3 and related infrastructure. 4 The next section of the presentation covers the 5 progress made by the auto makers to meet the requirements of 6 the MOAs. 7 The MOAs require the auto manufacturers to offset 8 the emission benefits lost due to the elimination of the ZEV 9 requirement in 1998 through 2002 through participation in an 10 national low-emission vehicle, or NLEV program, or some 11 other means that would achieve equivalent emission 12 reductions. 13 The benefits associated with the NLEV program 14 result from cleaner vehicles that either travel through or 15 relocate to California from other states. 16 All seven of the auto makers that signed the MOAs 17 have opted into the NLEV program beginning in 2001, a full 18 three years earlier than could be required under federal 19 law. 20 The demonstration portion of the MOAs is referred 21 to as the Technology Development Partnership. This 22 partnership is intended to accelerate the commercialization 23 of advanced batteries and ensures continuing research and 24 development through the placement of advanced 25 battery-powered EVs with consumers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 1 In 1998 through 2000, each manufacturer is 2 expected to place its prorata share of 3,750 advanced 3 battery-powered EVs in the marketplace. 4 Manufacturers receive multiple credits for EVs 5 that use advanced batteries with higher specific energy. 6 Specific energy is the amount of energy per unit weight and 7 is directly related to range capability. 8 The actual number of ZEVs that are expected to be 9 placed in 1998 to 2000 by each manufacturer are shown in 10 this slide. These numbers are based on actual advanced 11 batteries now being used and those expected to be used by 12 the manufacturers. 13 Factoring in that auto makers will get extra 14 credit for advanced battery-powered EVs, it is expected that 15 during 1998 to 2000 that the total number of ZEVs placed 16 will be just over 1800. 17 If a manufacturer chooses to place more advanced 18 battery-powered EVs than shown here, that manufacturer would 19 get credit towards the 2003 requirement. 20 Note that Mazda has stated its intention to 21 purchase MOA ZEV credits from Ford, and in the graph the 22 requirement for both is combined. 23 General Motors is to be congratulated as the first 24 auto maker to offer EVs to consumers. The EV1 can be leased 25 from Saturn dealers by individual consumers or fleets. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 1 The EV1 currently uses lead-acid batteries and 2 therefore does not receive MOA ZEV credit. However, the EV1 3 does address the requirement in the MOAs to introduce ZEVs 4 as the market demands and will apply towards the requirement 5 for ZEVs in 2003. 6 Over 300 EV1s have been placed in California as of 7 March '98. 8 General Motors also began offering the Chevy S-10 9 to fleets in May 1997. Most of the S-10s placed thus far 10 use lead-acid batteries. However, General Motors has placed 11 13 EV1s and S-10s that use nickel-metal hydride batteries 12 and is expected to meet its MOA obligations by placing 13 approximately 80 more vehicles that use nickel-metal hydride 14 batteries by the end of this year. 15 The Honda EV Plus was introduced in May 1997. 16 This car uses advanced nickel-metal hydride batteries, which 17 makes it eligible for about two MOA ZEV credits per vehicle. 18 As of this month, over 170 EV Pluses have been 19 placed in California, which means Honda has far exceeded its 20 MOA obligations for 1998 and is well on its way to meeting 21 the total requirement of about 250 vehicles during the MOA 22 period. 23 Toyota introduced the RAV4 for lease in the fall 24 of 1997. The RAV4 uses advanced nickel-metal hydride 25 batteries, which make it eligible for two MOA ZEV credits PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 312 1 per vehicle. Thus far, over 160 RAV4 EVs have been placed, 2 and Toyota has orders for almost 100 more by the end of this 3 year. Given the popularity of this vehicle, Toyota has 4 exceeded its MOA obligations for 1998 and will clearly meet 5 or exceed its total requirement for about 340 vehicles 6 during the MOA period. 7 Ford introduced the Ranger EV in January of 1998. 8 Currently the Ranger uses lead-acid batteries. However, 9 Ford is expected to meet its 1998 MOA obligations by placing 10 just over 100 Rangers with nickel-metal hydride batteries 11 this fall. This number of Ranger EVs would satisfy both 12 Ford and Mazda's MOA obligations for 1998. 13 Nissan is the first auto maker to announce its 14 intention to place an EV using lithium-ion batteries in 15 California. The use of lithium-ion batteries will allow 16 Nissan to generate almost three MOA ZEV credits per vehicle 17 sold. To meet its MOA obligations for 1998, Nissan is 18 expected to place 30 Altras in California by the end of the 19 year. 20 Chrysler introduced the Epic minivan using 21 advanced lead-acid batteries in May of 1997. Chrysler has 22 placed 17 advanced lead-acid battery-powered Epic minivans 23 on military bases. These vehicles allow Chrysler to 24 generate one MOA ZEV credit per vehicle in 1998. 25 Chrysler is expected to meet the remainder of its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 313 1 1998 MOA obligations by placing about 30 Epics that use 2 nickel-metal hydride batteries later this year. 3 Each of the auto manufacturers has laid out a plan 4 to ramping up to the ten percent requirement for ZEVs in 5 2003. In most cases, these plans include a retail and fleet 6 placements of the vehicles currently being demonstrated. 7 Most auto makers have indicated that a marketing 8 program including more than one vehicle platform would be 9 needed to meet the ten percent market requirement in 2003. 10 Several manufacturers are developing new platform 11 designs and appear better prepared to meet the ZEV challenge 12 than others. 13 ARB staff will continue to closely follow the 14 progress made by auto manufacturers and expects specific 15 product plans in the manufacturers' 2000 biennial reports. 16 In addition to progress made by auto manufacturers 17 in meeting the requirements of the MOAs, ARB has worked to 18 fulfill our obligations in the MOAs and has been successful 19 in many areas. 20 ARB has dedicated additional staff resources to 21 work directly with senior managers at other boards and 22 departments to facilitate the purchase and use of EVs. 23 A number of EVs have been leased by state 24 agencies. These vehicles were leased by a leasing agreement 25 that were designed to streamline the leasing process for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 314 1 state and local government agencies, as well as California 2 universities, thereby encouraging the use of EVs in 3 government fleets. 4 In addition to the development of streamlined 5 lease agreements for government agencies, ARB staff has been 6 working closely with the Department of General Services, the 7 South Coast Air Quality Management District and the 8 California Energy Commission to develop an EV loan program. 9 Through the EV loan program government entities can borrow 10 an EV and the associated recharging equipment for a 11 short-term loan. 12 This program is intended to familiarize state 13 agencies with this new technology while allowing a wide 14 variety of agencies to determine how the available vehicles 15 meet their specific needs. 16 Currently there are over 500 charging stations 17 throughout the larger metropolitan areas of California 18 thanks to a concerted local effort and incentives by state 19 and local agencies and the federal government. 20 The ARB formed the Implementation Advisory 21 Committee made up of representatives from government and 22 industry to work cooperatively to address the complex issues 23 related to the introduction of a new technology in the 24 marketplace. 25 Additionally, EV owners have had recharging units PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 315 1 installed in their homes with good results. 2 This process is improving at a rapid pace and 3 private industry groups such as EV Edison, as well as local 4 utilities, have stepped up to the plate to make the process 5 more streamlined and success oriented. 6 We have seen a number of major companies join the 7 effort to provide sufficient recharging for EVs, notably 8 Costco, Raleys/BelAir, Hilton Hotels, Hyatt Hotels and 9 smaller locations such as the local food co-op here in 10 Sacramento. 11 To facilitate the uniform and safe availability of 12 recharging equipment, the California Energy Commission 13 formed the Building Codes Working Group. This group, made 14 up of representatives from the government and industry, 15 developed revisions to the California building standards 16 that became effective in 1996. A training program was 17 developed for building officials to update them on the 18 changes. 19 In an effort to provide a national standard for 20 building code requirements related to EV charging systems, 21 the Building Code Working Group suggested changes to the 22 National Electric Code that are likely to be approved by 23 their governing organization. 24 ARB has been attending meetings of the national 25 Infrastructure Working Council. Although the IWC works on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 316 1 many issues regarding infrastructure, a key issue for ARB 2 has been the standardization of a conductive connector 3 standard for charging units, and IWC recently recommended 4 that the Society of Automotive Engineers adopt a single 5 standard for the butt-type connector, such as currently used 6 by Honda and Ford. The Society of Automotive Engineers is 7 expected to implement this recommendation in September of 8 this year. 9 Similar to the Building Codes Working Group, the 10 CEC formed the Emergency Response Working Group, made up of 11 representatives from government and industry. Early this 12 year the group completed the development of a training 13 program that has resulted in the registration of more than 14 two dozen trainers and hundreds that have taken the 15 training. Through the Infrastructure Working Council the 16 complete package of training materials has been distributed 17 to every fire marshal office in the United States. 18 ARB has been working cooperatively with government 19 agencies, auto manufacturers and other stakeholders to 20 determine the most effective ways to support the 21 introduction of ZEVs into the marketplace. 22 Incentives currently in place include a federal 23 tax credit towards the purchase of a ZEV of up to $4,000, as 24 well as $100,000 deduction for businesses that install 25 recharging facilities; state and local funding for charging PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 317 1 systems, as well as a $5,000 credit towards the purchase of 2 a ZEV; and utility incentives that include off-peak charging 3 rates by all the major utilities in California, and an 4 interesting incentive that may be the benchmark for other 5 companies is an offer by Edison International to its 6 employees that amounts to an additional $100 off per month 7 off of the lease or purchase price of an EV. 8 I will now review staff's assessment of the 9 progress made in advanced battery development over the past 10 two years and summarize the current status of the most 11 promising battery technologies for ZEV applications. 12 Probably the most prominent group in advanced 13 battery development in terms of funding and 14 commercialization is the United States Advanced Battery 15 Consortium, or USABC. 16 The USABC was established in 1990 and is comprised 17 of Ford, General Motors, Chrysler, the Department of Energy, 18 the Electric Power Research Industry and major electric 19 utilities. 20 ARB staff participates in the USABC monthly 21 meetings as an observer. 22 The purpose of the USABC is to establish 23 technology performance goals for advanced batteries, 24 specifically for electric vehicle applications, and to 25 provide funding support for the most promising battery PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 318 1 technologies. USABC has established mid-term, 2 commercialization and long-term performance goals for 3 specific energy, specific power, cycle life and price. 4 Specific energy relates to the amount of energy 5 that can be within a given battery weight. A higher battery 6 specific energy would allow greater vehicle driving range. 7 Specific power relates to a battery's ability to 8 provide power on demand. A higher battery specific power 9 would allow greater vehicle acceleration and hill climbing 10 ability. 11 Cycle life relates to the number of times a 12 battery pack can be recharged before replacement is needed. 13 And price in this context relates to a battery's 14 cost to a vehicle manufacturer. 15 While there are many factors that determine an 16 electric vehicle's performance, there are some general EV 17 performance estimates that correlate with USABC goals 18 identified in the previous slide. As shown, vehicle 19 performance improves as battery performance transitions from 20 mid-term goals to long-term goals. 21 The next few slides will provide a summary of the 22 1996 and current performance characteristics for the four 23 most promising candidate battery technologies, nickel-metal 24 hydride, sodium-nickel chloride, lithium-ion and 25 lithium-polymer. Here, energy capacity, or more precisely, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 319 1 specific energy data are presented. 2 Note that the USABC mid-term goal for specific 3 energy is 80 watt hours per kilogram. Also note that the 4 data presented for lithium-polymer is not for a full-size 5 battery pack, but rather a module within the pack assembly. 6 Values from a full pack would be lower. 7 In terms of specific energy, all four advanced 8 batteries are expected to meet the USABC mid-term goals by 9 2003. 10 This slide provides a summary of the progress made 11 in specific power. As a comparison, the USABC mid-term goal 12 is 150 watts per kilogram for specific power. As can be 13 seen, all of the advanced batteries now meet the USABC 14 mid-term specific power requirement. 15 This slide summarizes the progress made in battery 16 life characteristics in terms of cycle life and calendar 17 life. The USABC mid-term goals for battery life are at 18 least a five-year calendar life and 600 cycles. 19 Because a full-size lithium-polymer battery pack 20 has not been evaluated, data are not presented for this 21 technology. Although it is noted here that recent data 22 suggests that lithium-ion may have a calendar life 23 shortfall, efforts to resolve this issue are underway. 24 As can be seen, all of the advanced batteries now 25 meet the USABC mid-term calendar and cycle life PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 320 1 requirements. 2 Based on the Battery Panel findings and more 3 recent discussions with battery and automotive industries, 4 ARB staff has developed these projections for advanced 5 battery production levels in 2003 time frame. 6 With all four advanced battery technologies 7 expected to at least meet all of the major USABC mid-term 8 performance goals, adequate production volumes are possible 9 by the year 2003. 10 Perhaps the greatest concern for advanced 11 batteries is their cost to the vehicle manufacturer and 12 ultimately to the consumer. 13 Although none of the four technologies is expected 14 to meet the USABC cost goal of $150 per kilowatt hour by 15 2003, technology improvements and volume production may 16 permit some batteries to approach the goal. Also, higher 17 initial battery costs may be offset by the extended life we 18 would expect with further improvements in battery energy 19 capacity. 20 A market may also exists for retired EV batteries 21 that could still offer satisfactory performance in other 22 applications. These would include stationary backup power, 23 golf carts, lawnmowers and other applications. This 24 residual value may help to offset the initial high cost of 25 EV battery packs and merits further evaluation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 321 1 Although there are some issues related to the four 2 candidate advanced battery technologies, staff expects 3 resolution by the 2003 time frame. This slide provides a 4 review of the issues related to each of the technologies. 5 Nickel-metal hydride offers a good overall 6 performance with thermal control, charging and safety 7 systems integrated into the pack. The greatest challenge 8 for nickel-metal hydride is the cost. Because of the high 9 material cost, nickel-metal hydride manufacturers must focus 10 on more efficient manufacturing processes and other cost 11 reduction efforts. 12 While sodium-nickel chloride is the most proven of 13 the advanced battery technologies, its high operating 14 temperature continues to cause some concern. 15 Currently lithium-ion exhibits inadequate calendar 16 life, but it is believed that this problem will be overcome. 17 Also, as with nickel-metal hydride, materials cost for this 18 technology remains high. 19 For lithium-polymer, while good progress is being 20 made in terms of battery performance, manufacturability and 21 cost reduction, full-size battery packs have not yet been 22 demonstrated in vehicles. 23 The following slides provide a look at actual 24 advanced battery hardware. 25 Here is an Ovonic Battery Company nickel-metal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 322 1 hydride battery module. This battery is currently being 2 installed in some General Motor EV1s and S-10 EV trucks. 3 The Panasonic nickel-metal hydride battery packs 4 are currently powering the Toyota RAV4 EVs and Honda EV Plus 5 fleet within California. 6 The Sony lithium-ion battery pack is currently 7 being demonstrated in the Nissan Altra EV. 8 The AEG Zebra sodium-nickel chloride battery 9 technology has accumulated more on-road vehicle miles in 10 European test programs than any other advanced technology. 11 This is a mock-up lithium-polymer battery pack 12 being developed by 3M/Hydro-Quebec under a USABC-funded 13 program. 14 In conclusion, I would like to point out that the 15 seven major auto manufacturers have placed over 750 EVs in 16 service in California beginning with GM in 1996 to the 17 present time. 18 All the auto makers have either met or have plans 19 in place to meet their 1998 obligations for placing advanced 20 battery-powered EVs. 21 ARB staff will continue to work with other state 22 and local government, as well as private industry, to ensure 23 the proper infrastructure is in place to meet consumer 24 needs. 25 We will also continue to monitor the progress made PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 323 1 toward the commercialization of advanced batteries and 2 follow the cost issues associated with production of these 3 batteries. 4 Finally, ARB expects specific future product plans 5 in the auto makers' 2000 progress reports and will update 6 the Board on this situation during the 2000 review. 7 That concludes the staff's presentation. 8 CHAIRMAN DUNLAP: Thank you very much for that 9 thorough overview. 10 Do any of the Board members have questions before 11 we go to the witnesses? 12 Ron, Joe, anything? 13 BOARD MEMBER CALHOUN: I'd like to ask one 14 question. 15 Has the ARB honored its commitment under the MOA? 16 Have we kept up with that? 17 MR. CROSS: Short answer is yes. The listing of 18 all of the government activities is derived directly from 19 the MOA obligations on the state side. 20 BOARD MEMBER CALHOUN: I guess my next question 21 would be is there anything else you can think of that we 22 could do to ensure that this program is a success? We have 23 some milestones that we're supposed to be meeting in the 24 short term, very shortly? 25 MR. CROSS: I think the big thing is the vehicle PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 324 1 placement and marketing activities that Eileen discussed, 2 were all of the things we're doing to get the vehicles out 3 into happy homes and in government fleets I think is 4 important. I think continuing on infrastructure is 5 important. I think we need to continue monitoring the 6 battery issue, because I think that if the cost issues do 7 play out well, i.e., the lithium-polymer battery, for 8 example, does reach USABC cost goals, we should be in good 9 shape in terms of implementation. 10 BOARD MEMBER CALHOUN: Thank you. 11 CHAIRMAN DUNLAP: Supervisor Roberts. 12 BOARD MEMBER ROBERTS: Mr. Chairman, couple quick 13 questions. 14 Two weeks ago I was in Detroit and I spent some 15 time with the Ford Motor Company people and toured their 16 facilities there and I'll give you the good news and the bad 17 news. 18 Their production of the electric cars and their 19 Ranger was about three a day, if I remember correctly. 20 They've got a staff of about 12 people working on it, and in 21 putting them together in what looked like the same system 22 you probably used to put a stagecoach together at one time. 23 That rate compares to their successful Expedition 24 that we're going to be discussing, I guess, later this year 25 in November, in which there you have three full shifts PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 325 1 working around the clock producing just under one a minute 2 too. And it left me with some real questions. 3 But I think the thing that concerned me, this 4 nickel-metal hydride when you talk about expense, you didn't 5 put any dollars on that, but to add some perspective I was 6 told that battery package is running about $30,000 per unit 7 right now. That's just for the battery package. 8 I guess the good news is it's smaller than the 9 lead-acid battery and it lasted about three times as long. 10 But it really struck me how far that we have got 11 to go. I guess I was a lot more optimistic two years ago 12 than I am now. 13 I'm wondering, though, and because it wasn't 14 mentioned, ARB put some significant money into a car that 15 was being developed by, if I remember, it was the Troy 16 Design Center, and while we visited that two years ago there 17 was no feedback in your report today, nor has there been any 18 mention in a couple years. And I'm wondering what we got 19 from our investment, how that's doing, because I thought 20 that was supposed to be on the road and was supposed to be 21 the first of very long-range vehicles. At least they were 22 using, at the time we visited there they had some Zebra 23 batteries or something that they were looking at. And I'm 24 kind of surprised with all the money that we've spent that 25 given this update that nobody has mentioned that. So that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 326 1 one of the questions I would have for you if you can bring 2 us up to date. 3 And then secondly you mentioned standardization of 4 the charging system, but that's really a kind of refinement, 5 I guess, on the conductive, and we still have the major 6 issue of whether it's conductive or inductive, which I think 7 is at some point probably has to get resolved, and it seems 8 to me it's potentially a pretty significant issue. And I 9 was hoping that staff might speak to that, since they 10 didn't. 11 CHAIRMAN DUNLAP: We also have some witnesses too 12 that can speak to that, Ron. 13 BOARD MEMBER ROBERTS: Maybe those two things that 14 struck me as being missing from the presentation, maybe they 15 can comment on. 16 MR. CROSS: I can start. And before I do, though, 17 I wanted to -- one thing I wanted to mention was that the 18 $30,000 battery price for, when you were quoted for that 19 nickel-metal hydride battery, is kind of on track. If you 20 remember the battery report, they have to go through a phase 21 of pilot production batteries. And the purpose of -- the 22 high cost, modest volume to demonstrate the production 23 processes. And the purpose of the MOA was to place a modest 24 volume of these vehicles with these high-cost batteries out 25 in the world where they can be demonstrated and evaluated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 327 1 without pushing the manufacturers to high-volume production 2 of hardware that really isn't quite ready for high-volume 3 production. 4 So I think while the cost is high, it's the right 5 thing to do. And in other words the right thing to do is to 6 have modest volumes out there at this point. 7 And that kind of plays into the connector issue 8 too. I think that there was wisdom in the Board's decision 9 to slow this down a little bit and let some of these issues 10 work themselves out. And I think that the MOA fleet is 11 doing exactly that. Maybe we'd like to see a few more 12 vehicles placed than are actually being placed, but on the 13 other hand I think it would have been much worse to push a 14 lot of cars out there and have them fall on their faces. I 15 think at least this way we get the issue sorted out before 16 the public ends up with a vehicle which is not acceptable. 17 When I think there's still -- I think the other 18 part of it is is that on the cost side, lithium-polymer has 19 the most promise of the whole set, and that one is kind of 20 the furthest off. So all -- shoving a bunch of high-cost 21 batteries out there at this point could poison the consumer 22 well in terms of accepting the battery that has the best, 23 the most promise cost wise. 24 So that speaks to the connectors and the 25 batteries. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 328 1 On the TDM vehicle the good news is the vehicle 2 was completed. We have evaluated it. We've had it in El 3 Monte for some time. The goal of the vehicle was to 4 produce -- or the goal was to produce a production plan, if 5 you will. In other words, to do a pilot vehicle and then 6 with that pilot vehicle to put together a plan to get the 7 vehicle on the street or into production. 8 And that was all accomplished, i.e., the 9 production plan was done and there are companies that are 10 endeavoring to generate interest in actually producing the 11 vehicle. 12 The downside, if you will, to give a totally 13 candid answer to all this, is that the TDM vehicle is a 14 prototype, has prototype vehicle characteristics. In other 15 words, its ride isn't totally refined and, you know, you 16 slam the door and you don't get that absolute high-quality 17 fit sense that you get from a full production vehicle and 18 some of that stuff. 19 So we're not touting the vehicle, if you will, as 20 a fully developed vehicle, because it's not. It's a 21 prototype to try and demonstrate the production process. 22 BOARD MEMBER ROBERTS: Let me, if I can cut 23 through some of this. 24 MR. CROSS: I'm done. 25 BOARD MEMBER ROBERTS: I know we invested, we, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 329 1 think, as a Board, invested over a million dollars in it. 2 CHAIRMAN DUNLAP: I think it was a half a million. 3 BOARD MEMBER ROBERTS: Half a million, whatever it 4 was. There was several million dollars total that was into 5 the thing and I would have thought that we'd get some kind 6 of report back in terms of its -- 7 MR. CROSS: Yes, we did. 8 BOARD MEMBER ROBERTS: I don't care if the door 9 slams or not, that's not what I'm interested in. I mean, I 10 don't have a clue what the range is. I don't have a clue 11 what we got for that money. 12 MR. CROSS: We can do a report for you. 13 BOARD MEMBER ROBERTS: It's like somebody -- you 14 know, I'd rather I not have to ask you, but if we're coming 15 back with a report it seemed to me that should have been 16 part of it. 17 MR. CROSS: Yes. We did get a report and we did 18 test the vehicle and I think -- 19 BOARD MEMBER ROBERTS: We haven't gotten a report. 20 MR. CROSS: Yes, I understand that. 21 MR. CACKETTE: Yes, we have the report. 22 But the key part of it, what we were really after 23 was someone that knows how to build vehicles, because this 24 company builds low-volume vehicles, would put together a 25 production plan and the cost estimation to say can you build PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 330 1 an electric vehicle of this type, which was advanced 2 materials, in a manner that was a reasonable cost. 3 And they provided us with the data that showed 4 what you could do and what you could not do. And that plan 5 is what we're -- has been made available to people so that 6 if they choose to go out and market it and perhaps create 7 some jobs in California by helping put together some 8 partnerships between companies all over the world. 9 BOARD MEMBER ROBERTS: Why don't you come back and 10 share some of that with us? 11 CHAIRMAN DUNLAP: We need the report. Just get a 12 report, the scope, what we learned and that kind of thing. 13 Ron is right. We look for -- and you guys have always been, 14 I'd like to think, honest in your presentation of where 15 we're at, where we're not at, and this is an element where 16 we invested some dollars. I do believe there was some 17 public comment on it, I believe the Board took a little bit 18 of heat for being supportive of this. So you need to get 19 back to us and tell us what we got for the money. 20 BOARD MEMBER ROBERTS: There were goals that we 21 had for it and I'd like to know what -- I just, I feel 22 better if we kind of had that feedback. 23 MR. CROSS: The good news is the battery is 24 working really well. 25 BOARD MEMBER ROBERTS: Well, that would be of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 331 1 interest. 2 CHAIRMAN DUNLAP: Why don't we get back to the 3 Board with a report in the next month. 4 BOARD MEMBER ROBERTS: And I guess the other 5 question I was asking about, the inductive versus the 6 conductive, I guess that's still -- that's a contest that's 7 still going on, apparently. 8 MR. CROSS: Yes. By Toyota moving to the 9 inductive camp somewhat publicly, that has isolated Ford and 10 Chrysler as the kind of holdouts. 11 CHAIRMAN DUNLAP: Bob, why don't we do this. 12 We'll get Ron the answer, but through the witnesses, and 13 that way you guys can -- Ron can hear what's going on out in 14 the marketplace. 15 All right. Any other questions of staff? 16 If not, we'll go to the witnesses. We have five. 17 Dave Hermance from Toyota. Dave, come on down. 18 And then Cecile Martin from the California 19 Electric Transportation -- Vehicle Transportation Coalition. 20 And I see Dave Modiset back there too from that group. 21 Mike Wirsch from SMUD, Enid Joffe from EEV, and 22 Howard Levin from Sempra Energy, if you folks would come to 23 the front row, we will get you up here. 24 Dave, how is that new Prius doing? 25 // PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 332 1 MR. HERMANCE: Good afternoon. I'll try to be very 2 brief, and I'll also try not to be very contentious, try not 3 to be. 4 I would like to make a couple of comments about the 5 report. First, let me say that I am not opposed or even 6 negative regarding battery EV's. 7 In fact, I may be one of the few people in the room 8 with very driving experience in one. I have driven our 9 vehicle for about four months on my daily commute of a 40 10 mile round trip up and down the 405 from the corner of Orange 11 County up into LA County. 12 I find the vehicle range and performance to be 13 totally adequate for my commute. I also find it would be a 14 totally successful vehicle in my two car household as one of 15 the two vehicles in the household and would replace a 16 gasoline vehicle in my application. 17 Toyota shares the Board's desire to improve the air 18 quality in California, and we understand the multiple 19 benefits that staff has identified for battery vehicles. 20 I believe, by the way, that the Toyota has now 21 passed Honda in placement of advanced ecology battery 22 vehicles in California, and if we haven't this month, we will 23 next month, and we are rapidly closing on General Motors, as 24 a matter of fact. 25 However, there is still one critical issue that was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 333 1 discussed briefly, it was discussed a little bit further and 2 probably will be discussed even further as we go forward over 3 the next couple of years, and that issue is cost. 4 Now, having said a little bit of introductory, let 5 me make a couple of comments regarding the report. 6 First, a couple of moderately humorous one's, the 7 report suggests in the Executive Summary that manufacturers 8 remain nonspecific regarding our plans for 2003 ZEVs. 9 That is 100 percent correct, but I would point out 10 that we are also quite nonspecific about our plans for any 11 vehicle for 2003 at this point in time. 12 Also, the report suggests that Ford's vehicle is 13 the only one for sale, and I would like to clarify that 14 point. 15 Indeed, the Toyota is for sale. We haven't had any 16 consumers opt to buy it, however, because the lease is so 17 much a better deal. 18 One other point, moving off the lighter one's for a 19 second, but still somewhat light, just to emphasize a point 20 that is made in the report, but not made real strongly, that 21 the U.S. ABC commercialization criteria are by the view of 22 the U.S. ABC the minimum requirements that would allow 23 initiation and maintenance of minimal production volumes, the 24 two critical of those two criteria are an energy density of 25 150 watt hours per kilogram and a cost of less than $150 per PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 334 1 kilowatt hour. 2 In the text of the report, there are reported 3 specific energies for four nickel metal hydride batteries 4 available in vehicles, or soon to be available in vehicles, 5 and they range from 59 watt hours per kilogram to 62.3 watt 6 hours per kilogram. 7 Those values, or those packs currently available in 8 the MOA vehicles are a little bit less than the staff's 9 estimate of 71 hours per kilogram in 1998, and they are, at 10 least on a relative basis, substantially less than the 80 11 watt hours per kilogram estimate for 2003 for nickel metal 12 hydride batteries. 13 Now, staff has access to more battery manufacturers 14 than I do, but I'm not sure that nickel metal is going to get 15 80 watt hours per kilogram, so that even if we did, that is 16 still well short of the U.S. ABC commercialization objective, 17 just as a point of information. 18 And although we concur with staff's judgment that 19 battery EVs are the most promising near-term ZEV, any vehicle 20 that is too expensive to sell in volume isn't going to 21 substantially improve our air quality. 22 The staff in the report also suggests that advanced 23 battery powered EVs if offered in 2003 at a reasonable price 24 with reliable and acceptable performance, the ARB believes 25 they'll be a success in the market place, and we concur with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 335 1 that judgment. 2 Given, however, the forecast, somewhat optimistic 3 cost estimates and the energy density estimate that I think 4 at least our technology is not likely to achieve, it's not 5 clear to me how that's possible. 6 One other thing that I just took on the back of an 7 envelope, and maybe staff can straighten me out on this one, 8 staff introduces a new measure, at least one that I haven't 9 seen before, regarding life cycle cost. 10 If I have done the math right, a 30 kilowatt 11 battery package is what most of us are targeting to put on 12 vehicles, would give you something on the order of 100 mile 13 per cycle range, at least to the depth of discharge that most 14 customers would be willing to drive it to, yields a cost per 15 mile of about seven and a half cents for the battery only. 16 If you add the one to two cents per mile for 17 off-peak electricity, this suggests a cost per mile of about 18 nine cents per mile. 19 This compares rather unfavorably with about four 20 cents a mile for gasoline cost for an average vehicle, and 21 maybe you add a penny or two to that for maintenance, and it 22 still doesn't look very optimistic, at least at this point in 23 time. 24 Now perhaps the lithium polymer technology will 25 indeed deliver and be readily available, perhaps not. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 336 1 I don't wish to sound overly negative. I only wish 2 to caution you not to be overly optimistic. 3 CHAIRMAN DUNLAP: Mrs. Riordan. 4 BOARD MEMBER RIORDAN: Just out of curiosity, and 5 maybe it was somewhere and I failed to see it, if I wanted to 6 buy one of your Toyota's, what would the cost be, and if I 7 wanted to lease it, what would the cost be? 8 Just give me an idea. 9 MR. HERMANCE: Okay. I am not from the marketing 10 side. I will give you the numbers that I remember, and they 11 are very close. 12 $42,900 is the manufacturer's suggested retail 13 price. The monthly lease is $457 or $459 a month. 14 There is an option of a one-time lease. Some of 15 the customers, we are dealing primarily with utilities, some 16 of the customers were not configured to lease vehicles, so 17 there was a development called a one-time prepaid lease, that 18 I think is $16,000 and change. 19 CHAIRMAN DUNLAP: For what period of time? 20 MR. HERMANCE: Three years, for the one-time. 21 BOARD MEMBER RIORDAN: Thank you. 22 CHAIRMAN DUNLAP: All right. Thank you, Dave. 23 Thank you for your patience, I know you have been 24 here a while today. 25 Cec, good to see you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 337 1 MS. MARTIN: Good to see you, too. Good afternoon. 2 CHAIRMAN DUNLAP: You have a panel with you. 3 MS. MARTIN: I do, but when we looked at today's 4 schedule, we made a decision to keep our comments very brief, 5 no overheads, no long presentations, but we didn't want to 6 surpass this occasion or overlook this occasion without 7 making some comments about what we have done to support 8 commercialization of electric vehicles. 9 As most of you know, Cal ETC is a business 10 association, and our governing board is made up of the large 11 utilities in California, Sacramento Municipal Utility 12 District, San Diego Gas and Electric Company, Pacific Gas and 13 Electric Company, Southern California Edison and Los Angeles 14 Department of Water and Power. 15 Our broader membership also includes Edison EV, an 16 infrastructure company, Ford Motor Company, General Motors 17 Corporation, Toyota Motor Sales USA, the City of Alameda and 18 Bureau of Electricity, A to C Bus Sales and Cal Start. 19 So, three of our members would like to give some 20 comments today, just to talk about infrastructure investment 21 and the importance of the partnerships that have been 22 developing with auto makers. 23 I would like to introduce them ahead of time and 24 not come up between speakers, so our first speaker will be 25 Mike Wirsch, who is Manager of the Electric Transportation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 338 1 Department of the Sacramento Municipal Utility District. 2 Our second witness is Enid Joffe, who is the 3 Manager in charge of infrastructure for Edison EV, and our 4 third is Howard Levin, who is Environmental and Safety Policy 5 Administrator for the new Sempera Energy Company. 6 CHAIRMAN DUNLAP: As Mr. Wirsch comes forward, you 7 need to know that he lives in Auburn. 8 I think you have the only EV charger in town, don't 9 you? 10 MR. WIRSCH: No, there are one or two others. 11 Thank you, Mr. Chairman and Members of the Board. 12 The California Electric Transportation Coalition applauds the 13 significant progress made today in introducing clean electric 14 drive vehicles to the market. 15 This credit belongs to a number of industry 16 stakeholders, including the government agencies, especially 17 CARB, auto makers, businesses, utilities, public and private 18 fleets and individuals for cooperating and collaborating to 19 make the market work. 20 Many people have worked tirelessly to assure that 21 the early EV market succeeds, and they recognize the cars of 22 the future will use electric drive technology, because it is 23 fuel efficient and emission free. 24 Although only a few electric vehicle models have 25 been available in limited numbers since late 1996, there is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 339 1 significant market interest in electric vehicles. 2 By our count, through the end of June 1998, there 3 are over 850 electric vehicles operating in California, and 4 over half of these have been placed since December. 5 Both the Honda EV Plus and the Toyota REV IV, the 6 two electric vehicles currently available with advanced 7 battery technology, have sold more than these auto makers 8 agreed to produce in 1998. 9 The degree and extent of cooperation involved must 10 not be overlooked. Auto makers and utilities have worked 11 together to identify and meet customers needs on home 12 charging and infrastructure development. 13 Because electric vehicles represent an entirely new 14 technology, a great deal of thought and research has gone 15 into making certain that customers are comfortable with their 16 cars. 17 On a whole, we think that they are very happy. 18 They especially like the convenience of charging at home, or 19 home base, and have stated that public charging in convenient 20 locations has allowed them to feel more comfortable about 21 their decisions to try the new transportation technology. 22 These early adopters and innovators deserve credit 23 for actively participating in the market introduction 24 process. 25 State agencies and local government have provided PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 340 1 key monetary and nonmonetary support for this introduction. 2 They have offered purchase incentives and support 3 public infrastructure development, and they have worked 4 closely with the industry to develop building codes, safety 5 and emergency responder training programs that were mentioned 6 earlier and have incorporated a large number of electric 7 vehicles in their fleets. 8 Throughout California, private industry and public 9 agencies like SMUD have stepped up to install public charging 10 sites at great expense and in recognition that this is 11 required to enhance the customer draw to this new product. 12 Business has also invested in EVs for private fleet 13 use. Working together Californians are demonstrating the 14 willingness to lead the world in this new technology to 15 assure healthier air, a cleaner environment and a brighter 16 economic future. 17 CARB is to be commended for setting the regulatory 18 climate to foster continued progress in this promising 19 industry. 20 Thank you. 21 CHAIRMAN DUNLAP: Thank you. 22 Any questions for Mr. Wirsch? 23 Thank you. Very good. 24 MS. JOFFE: Good afternoon. My name is Enid 25 Joffe, and I'm Manager in charge of the infrastructure for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 341 1 Edison EV. 2 My remarks today will expand on the discussion of 3 EV infrastructure that you have already received. I have to 4 say that Eileen made a very thorough presentation in her 5 staff report and took about half my speech, so I will be very 6 brief then. 7 Edison EV is one of the success stories of the ZEV 8 Program. Our company was formed in January of 1996, 11 9 months before the EV-I was brought to market. 10 Our mission is to provide the link between the 11 manufacturers of EVs, the consumers and the fuel providers. 12 Obviously, our parent company, Edison 13 International, took a risk in forming this company before a 14 market even existed, but we really saw a role that needed to 15 be filled and felt that we were very capable of filling it. 16 We are also the California and Arizona distributor 17 of the inductive charger that's manufactured by General 18 Motors, and it's used with EV-I, the S-10, the Nissan Altra 19 and starting next year, the Toyota RAV4. 20 In addition, we are the North American distributor 21 of the conductive EVI charging device that is used by Ford, 22 Honda and Toyota, currently Toyota. 23 So, we are very aware of this dichotomy between the 24 inductive and conductive charging and have responded to it by 25 sitting squarely on the fence, since we are a very small PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 342 1 business. 2 We are happy to see that the progress that has been 3 made both in combining to one standard on the conductive 4 connector and also the fact that Toyota and GM have reached 5 an agreement for Toyota to use the inductive charging 6 technology. 7 We really think that you are going to see a 8 concerted effort by those two manufacturers over the next 9 couple of years to make that the standard. 10 Another point about our business is that we have 11 created jobs in California. Our company, though small, has 12 about a dozen employees, but in addition, we employ 13 approximately 25 contractors and subcontractors. These 14 are licensed electrical contractors that are trained by 15 Edison EV. 16 EVI also is a California success story. It's a 17 local company and has been hiring workers as they expand 18 their production, so all of that is helping to contribute to 19 the economy. 20 The introduction of electric vehicles to the 21 marketplace in the last couple of years has stimulated the 22 investment of public and private funds in vehicle and 23 infrastructure incentives, as well as the construction of a 24 network of public charging stations. 25 I brought copies of the current charging list, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 343 1 you will see that there are over 230 public charging stations 2 listed on those eight pages, and more if you count the one's 3 that are in Arizona. 4 Just using Edison EV's numbers, we have installed 5 approximately 250 charging stations that are open to the 6 public, plus some 200 to 300 fleet, or workplace charging 7 stations that are not open to the public, and another 400 to 8 500 residential chargers, so that is a pretty substantial 9 number for a new company like us. 10 We estimate that by the end of this year there will 11 be approximately $10-million in public funds available for 12 incentives for vehicles, and approximately $4-million for 13 infrastructure incentives. 14 Just based on our own numbers, we think that the 15 infrastructure investment alone, when you count up 16 residential, public, private, will be about $10 million. 17 Then looking at the breakdown of our customers, and 18 Eileen mentioned some of the larger one's, the top 10 19 customers, and by those I am talking about the Costco's, the 20 Hyatt's, the Hilton's, the Memorial Hospital, the malls, 21 etcetera, those top 10 customers have invested about $600,000 22 to date of their own money, this is over and above and 23 incentives that they have received. 24 In addition to the public and private incentive 25 money that has been available, the auto makers have really PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 344 1 recognized the need for charging infrastructure to the 2 network, and they have stepped up to the plate as well. 3 By the end of the year there will be approximately 4 a million dollars of auto maker investment in charging 5 infrastructure, very often used as matching funds. 6 There have also been a number of innovative 7 programs developed. For example, we are currently working 8 with some of the municipal utilities in Southern California 9 that have public benefit funds as a result of AB 1890. 10 Some of those funds will be going for, like 11 purchase of electric vehicles and installation of public 12 charging infrastructure on a matching basis. 13 For example, we recently completed installation at 14 NBC Studios and are looking forward to doing some other 15 studio installations. 16 Just to kind of give you the report card, Costco 17 leads the pack with 35 sites, and their only regret is that 18 GM is not willing to bring an EV up to Seattle, Washington 19 yet, because they would be buying them if they were. 20 Hilton Hotels has 12 sites, Ralph's Grocery Stores, 21 four sites so far. Scripps Hospital, four sites; Urban 22 Retail Properties, which is a major mall has three sites 23 installed and several others that we are estimating right 24 now; and Talbon Malls, another major property manager, has 25 three malls; and then there are hundreds of individual PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 345 1 locations, malls, airports, entertainment venues and others. 2 The other point that I wanted to mention to support 3 the Loaner Program that was discussed in the staff report is 4 we are just starting construction on the infrastructure in 5 the State garages for the Loaner Program. So, that Program 6 is underway. 7 Those who doubt the market potential of EVs like to 8 point to the low volume of EV leases, but I think a more 9 optimistic view is warranted. 10 Any of you who have seen any of the publicity or 11 driven an EV know that they generate enormous interest from 12 the public. 13 EV drivers get high-five signs, thumbs-ups, waves 14 and smiles as they go by. In fact, if I want attention, I 15 just get into an EV and go driving down the street. 16 They are mobbed wherever they park. Whenever they 17 pull into a parking space, a crowd gathers. 18 People report EV-I sightings, as if it was a news 19 event. 20 I saw an EV-I today! I was driving behind an EV-I! 21 If you really want some entertainment, I recommend 22 that you tap into the E-mail of the EV-I club, because I have 23 never seen a more enthusiastic group of sightings. 24 Another interesting event, I just came from, 25 yesterday, we had the grand opening of the EV charging PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 346 1 station at the Mark Hopkins in San Francisco. 2 We had an excellent turn-out, and we got coverage 3 on, I think, most of the major television stations. Three of 4 the San Francisco Supervisors showed up, made a commitment to 5 build charging stations, and those kinds of events just make 6 everybody feel really good about what they are doing. 7 Like any major technological innovation, the 8 electric vehicle will take time to reach a significant 9 proportion of the population. 10 As you have already heard, there were a lot of 11 enhancements to the batteries and, you know, price reductions 12 that need to happen. 13 The significant public and private investment that 14 is happening tells me that a market is out there. 15 I think the CARB Board deserves credit for 16 initiating the bold policy that has resulted in this level of 17 technological advancement and economic investment. 18 There is a possible down-side to this, because 19 having stimulated this activity, CARB has a responsibility to 20 hold to the steady course. 21 The early adopters that have invested in EV 22 charging infrastructure would be very wary of any other new 23 technology if their faith in the future of electric vehicles 24 is repaid with stranded investments and abandoned chargers. 25 In conclusion, the ZEV Program is alive and well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 347 1 We encourage the Board to be flexible in the details of how 2 ZEVs are introduced to market but unmoving in their support 3 of the ZEV Program and the LEV Program. 4 Just as a final note, I appreciated, I think it was 5 Supervisor Roberts asking the question about what ARB can do 6 to help support the success of the Program, one point that I 7 would make as somebody who has worked long and hard on making 8 incentives available both for cars and infrastructure, I 9 think what we really need is development of a plan that makes 10 sure that there is continuity in the incentives, that it's 11 not fits and starts. 12 Unfortunately, year after year we have to fight the 13 same battles, and then there is always the concern, for 14 example, San Francisco is just about running out of incentive 15 money, so what happens to the 98th driver that wants to buy 16 their EV-I and suddenly the price has gone up to $600 a 17 month? 18 So, that's an issue that I would hope you would to 19 take under consideration and use your considerable influence 20 to help. 21 Thank you. 22 CHAIRMAN DUNLAP: Thank you. 23 Any questions of the witness? 24 All right. Good luck to you. 25 Howard, until a minute ago you were the only person PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 348 1 between us and adjournment, but it appears Janet Hathaway, 2 where is Janet, come on up here, Janet. 3 MR. LEVIN: I am glad the pressure is off me, but I 4 will still keep it brief. Chairman Dunlap, Board Members, I 5 appreciate the opportunity to appear before you. 6 As Cec mentioned, I am Howard Levin, and I am the 7 Environmental Safety Policy Administrator at Sempera Energy, 8 and if you give me about 30 seconds for a commercial, because 9 some of you may be wondering, what is Sempera Energy, because 10 you didn't see it on the list in the staff report. 11 We are only a month old, but our experience goes 12 back a lot further than that. Sempera Energy was created 13 last month by the merger of the parent companies of Southern 14 California Gas Company and Standard Gas and Electric. 15 Sempera Energy is a Fortune 500 Company based in 16 San Diego, and besides those two utility subsidiaries I 17 mentioned, we have six other U.S. based subsidiaries in the 18 energy marketplace, and in California we serve 21 million 19 consumers now. 20 At Sempera Energy, we applaud the significant 21 progress made towards introducing clean electric vehicles 22 into the California marketplace. 23 As other witnesses have mentioned, and in the staff 24 report, the progress really is a result of the Air Resources 25 Board leadership and partnership with many industry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 349 1 stakeholders that were mentioned earlier, including Sempera 2 Energy and its predecessor companies. 3 We have been supporting the efforts of the Air 4 Resources Board in a number of ways. Our shareholders 5 provided the funding toward public charging, which was 6 uncoupled with local San Diego Air Pollution Control District 7 funds and cost sharing by most customers, Enid mentioned some 8 of them, to install 49 public charging facilities in San 9 Diego County. 10 Additionally, our Standard Gas and Electric 11 subsidiary has been actively educating customers about 12 electrical safety, electric liability and energy costs 13 associated with electric vehicles. 14 Additionally, SPG&E is under contract to San Diego 15 Air Pollution Control District as the administrator of their 16 funding for electric vehicle incentives. 17 As noted in the staff's report, SPG&E electric 18 vehicle customers have the option of using several special 19 time of use rates to cut the energy cost down of using the 20 vehicle. 21 Sempera Energy and Standard Gas and Electric also 22 operate electric vehicles in their own fleets. All of these 23 activities have had the positive effect on the local economic 24 environment in San Diego, both in the air quality environment 25 and economy, both with the contractors involved in installing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 350 1 stations and so on. 2 One thing that wasn't mentioned, there might be an 3 indirect beneficiary also, and that would be window cleaner 4 companies, like Windex and people like that, because I know 5 that whenever I drive an EV-I or a RAV4, when you came back 6 from it being parked, there are fingerprints all over the 7 place. 8 I think what the auto makers forgot to tell people 9 about the vehicles is that its an inherent right of everybody 10 else to look in the windows of the vehicle. 11 But seriously, I really want to commend the Air 12 Resource Board for the leadership that you have provided and 13 I emphasize that you continue the leadership and support of 14 ZEVs. It's essential for the continued success of the 15 technology. 16 We have supported and we will continue to support 17 your efforts to encourage the advancement of electric vehicle 18 technology, and we stand ready to support the associated 19 energy needs of the customers that buy those vehicles. 20 The combined efforts of all the stakeholders will 21 help enable a cleaner environment and a bright economic 22 future for California. 23 Thank you for your time. 24 CHAIRMAN DUNLAP: Thank you. 25 Any questions of Howard? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 351 1 Howard, would you send us, not so much a chart, but 2 a list of some of the context in the new company? 3 I know some rules have changed, and we have had a 4 strong presence here before this Board from both of the 5 companies. 6 MR. LEVIN: I will make sure that happens. 7 CHAIRMAN DUNLAP: All right. Cec, so Janet horned 8 in on your group here. 9 MS. MARTIN: Oh, she is very welcome. 10 We just wanted to say thanks again for your time, 11 we know that you have had a busy day, and you saw some of our 12 members. I just want you to know that our members are a 13 wealth of information and resources, and you are really 14 welcome to call us at any time if you have any questions, we 15 can find out what is going on in your particular area or in 16 general throughout the State. 17 CHAIRMAN DUNLAP: Thanks. I wanted to also 18 recognize, we appreciate you staying in close touch with the 19 staff as they develop the LEV II proposal that comes to us, 20 as Ron mentioned, later in the year. 21 Your involvement there is important. 22 Ms. Rakow. 23 BOARD MEMBER RAKOW: I just wanted to ask whether 24 you and the staff had gotten together on some of your 25 additions and clarifications that you mentioned in your July PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 352 1 fifteenth letter? 2 MS. MARTIN: Oh, yes. Thank you. 3 They were very receptive. 4 CHAIRMAN DUNLAP: All right. Janet, you are it, 5 the last one. 6 MS. HATHAWAY: The pressure is on. 7 I just wanted to thank you all. Members of the 8 Board, I am Janet Hathaway, with the Natural Resources 9 Defense Council. 10 I wanted to applaud the staff for the very good 11 review of what has been going on in the battery electric 12 vehicle development, and to also point out that this is a 13 tremendous success when you think about it as the first year 14 of a brand new technology, and there is a lot of customer 15 satisfaction out there, 700 vehicles, these are truly 16 momentous changes from our current vehicles in terms of the 17 emissions reductions. 18 One little note that I want to say both for the 19 Natural Resources Defense Council and also for the Coalition 20 for Clean Air, we think that the estimates of battery cost 21 and the possible energy density is a little bit cautious in 22 the current report, and we are concerned that in trying to 23 project into the future that there be a recognition that 24 there is fast and furious work in the various companies to 25 improve on the cost of manufacturing and that those costs are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 353 1 not going to be easy to predict from this date, you know, 2 when we are looking at the year 2003, it gives us a lot of 3 time for some new breakthroughs, some new cost reductions. 4 So, I hope that people don't walk away from this 5 Board meeting discouraged. I think there is tremendous 6 progress that you have already seen, but we can expect it to 7 continue given the competition that's out there. 8 So, that is our only caveat that we are a little 9 concerned that this is unduly pessimistic future of 10 opportunities for improvement, but we think the staff report 11 is very, very comprehensive about what has happened to date, 12 and we wanted to applaud you and the staff for making this 13 program really something that is a big success in its first 14 year. 15 CHAIRMAN DUNLAP: Thank you. We will just sit here 16 and let those comments wash over us, just for a moment. 17 May we linger, Janet, on that? 18 All right. Thank you. 19 We appreciate that. 20 Mr. Kenny, anything else? 21 Board, any questions or comments? 22 MR. KENNY: Nothing to add. 23 CHAIRMAN DUNLAP: Very good. Staff, thank you, 24 fine report. 25 Supervisor Roberts, right on the money. We need to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 354 1 hear about -- there is also a charging, we did some charging 2 investment, too, there is probably an update that you could 3 do on that project, Bob, to let us know what is going on. 4 MR. KENNY: We will provide you with both. 5 CHAIRMAN DUNLAP: Very good. 6 I think there is nothing else that we need to 7 discuss, is there? 8 Then the July meeting of the California Air 9 Resources Board will now be adjourned. 10 (Thereupon the Air Resources Board meeting was 11 adjourned at 5:50 p.m.) 12 --o0o-- 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 355 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. MEDEIROS, a Certified Shorthand 4 Reporter of the State of California, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, Vicki L. 7 Medeiros, a Certified Shorthand Reporter of the State of 8 California, and thereafter transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said hearing nor in any 11 way interested in the outcome of said hearing. 12 IN WITNESS WHEREOF, I have hereunto set my hand 13 this second day of August, 1998. 14 15 16 VICKI L. MEDEIROS 17 Certified Shorthand Reporter License No. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 356 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, JANET H. NICOL, a Certified Shorthand Reporter 4 of the State of California, do hereby certify that I am a 5 disinterested person herein; that I reported the foregoing 6 meeting in shorthand writing; that I thereafter caused my 7 shorthand writing to be transcribed into typewriting. 8 I further certify that I am not of counsel or 9 attorney for any of the parties to said meeting, or in any 10 way interested in the outcome of said meeting. 11 IN WITNESS WHEREOF, I have hereunto set my hand 12 this 1st day of August 1998. 13 14 15 16 Janet H. Nicol 17 Certified Shorthand Reporter License Number 9764 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345