1 2 3 CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY 4 SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 5 AIR RESOURCES BOARD 6 7 8 9 10 AMENDED TRANSCRIPT OF PROCEEDINGS 11 Friday, January 28, 2000 12 9:00 A.M. 13 Auditorium 14 21865 East Copley Drive Diamond Bar, California 15 16 17 18 19 20 21 22 REPORTED BY: 23 Lori D. Casillas, CSR No. 9869, RPR 24 Our File No. 1-62275 25 1 2 3 APPEARANCES: 4 5 BOARD MEMBERS: 6 Alan C. Lloyd, Ph.D, Chairman Barbara Riordan, Vice Chair 7 Dr. Friedman Matthew R. McKinnon 8 Dorene D'Adamo Mr. Calhoun 9 Barbara Patrick 10 STAFF: 11 Mr. Kenny 12 Mr. Cackette Bob Cross 13 Bob Jenne Mark Carlock 14 15 16 17 18 19 20 21 22 23 24 25 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 2 AGENDA ITEMS: 3 00-1-3: Public Meeting to Consider Approval of California Emissions Inventory for Off-Road 4 Large Compression-Ignition Engines 5 Introductory remarks by Chairman Lloyd 4 6 Staff Presentation: 7 Mr. Kenny 4 Archana Agrawal 6 8 Public Comment: 9 Jim Fischer 13 10 Michael Block 17 11 12 00-1-4: Public Meeting to Consider Proposed Amendments to the Regulation for Off-Road 13 Diesel Engines 14 Introductory remarks by Chairman Lloyd 22 15 Staff Presentation: 16 Mr. Kenny 22 Jackie Lourenco 23 17 Public Comment: 18 Jim Fischer 32 19 Bruce Bertelsen 36 Michael Block 50 20 Adjournment 54 21 Certificate of Reporter 55 22 23 24 25 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 P R O C E E D I N G S 2 * * * 3 CHAIRMAN LLOYD: We would like to 4 continue the Air Resources Board meeting for February 5 2000. We will continue with Agenda Item 00-1-3. This 6 is a public meeting to consider approval of 7 California's emissions inventory for off-road large 8 compression-ignition engines (greater than 25 9 horsepower) using the new off-road emissions model. 10 The next item on the agenda is an updated 11 emissions inventory for compression-ignition, primarily 12 diesel engines used in off-road applications, including 13 farming and construction. As a prelude to the item 14 we're taking up next amended regulations for the same 15 engine categories. At this point I would like to turn 16 it over to Mr. Kenny to provide the staff presentation. 17 MR. KENNY: Thank you, Chairman Lloyd, 18 and members of the Board. 19 The Air Resources Board is required to 20 inventory emissions from sources of air pollution and 21 has published such inventories and updates for over 25 22 years. Improvements are made periodically to maintain 23 and provide the most complete, accurate and up-to-date 24 inventory as possible. 25 Today the staff will present the revised 4 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 emissions estimates for off-road large 2 compression-ignited engines in the state of California. 3 As noted by Dr. Lloyd, most compression-ignited engines 4 burn diesel fuel and are typically used in 5 agricultural, construction or industrial applications. 6 This includes tractors, combines, pavers and the like. 7 The proposed revisions to the emissions inventory 8 employs the most recent data available. Approval of 9 this inventory is sought prior to considering the 10 regulatory action for this engine class, also on the 11 agenda for this board meeting. 12 The contribution of emissions from 13 off-road mobile sources has increased with respect to 14 their on-road counterparts and have, therefore, grown 15 in importance in terms of the overall air quality 16 problems in the state. In response to this trend, 17 staff was charged with updating the models that 18 underline the off-road inventory estimates. 19 This board item represents the fourth 20 presentation to the board seeking approval of the 21 emissions inventory for specific classes of off-road 22 engines. The board previously approved the emission 23 inventory for a number of off-road engine categories, 24 including small off-road engines less than 25 25 horsepower, large spark-ignited engines over 25 5 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 horsepower, and recreational marine engines. 2 In preparing this update to the 3 inventory, Staff has gathered the latest information 4 and corresponded with industry representatives to 5 resolve any areas of disagreement. This was a process 6 that we believe has resulted in the most accurate 7 inventory available. 8 I would now like to turn the presentation 9 over to Miss Archana Agrawal of the Mobile Source 10 Control Division who will provide you with the overview 11 and the staff's findings and recommendations. 12 Archana. 13 MS. AGRAWAL: Thank you Mr. Kenny. 14 Good morning Mr. Chairman and members of 15 the Board. 16 Today staff will be presenting for you 17 review and approval an update to the exhaust emissions 18 inventory for off-road large compression-ignited or CI 19 engines. 20 During this presentation, I will define 21 the off-road large CI category. Second, I will discuss 22 the various parameters needed to estimate emissions 23 from this category. Third, I will present the proposed 24 baseline inventory followed by a discussion of the 25 comments received during the public review process and 6 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 staff's response to those comments. Next, I will 2 present a comparison between the proposed inventory and 3 the 1994 SIP inventory. In the end, I will summarize 4 staff's recommendations. 5 The off-road large CI engine category 6 consists of all engines greater than or equal to 25 7 horsepower powered by diesel fuel. Off-road large CI 8 engines are utilized in various applications including 9 agricultural, airport ground support, commercial, 10 construction, dredging, industrial, lawn and garden, 11 logging, military tactical support, oil drilling, 12 transport refrigeration units and other miscellaneous 13 portable equipment. 14 Some examples of large CI engine 15 equipment include forklifts, pumps, generators, cranes 16 excavators, combines, dredgers, balers, agricultural 17 tractors and baggage loaders. 18 To estimate the emissions from off-road 19 large CI engines, this is the equation and the 20 information needed. The first term is an emission 21 factor expressed as emissions per unit of work. 22 Included in the emission factor term is a deterioration 23 factor, which accounts for the fact that emissions, in 24 most cases, increase with usage. The units are grams 25 per brake horsepower hour. 7 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 The second term is the average maximum 2 rated horsepower of the engines used. The third term 3 is the load factor, which represents how much of the 4 power compared to maximum rated horsepower is used 5 during typical operation. The fourth term is the 6 activity, which is expressed as hours of operation per 7 year. The final term is total population of the 8 engines concerned. In the next few slides, I will 9 describe various data sources used to estimate various 10 input terms outlined in the equation shown here. 11 The uncontrolled emission factors are 12 based on test data provided by engine manufacturers and 13 test data collected by the US EPA. Emissions factors 14 for those model years where US EPA's or ARB's adopted 15 emissions regulations apply, are based on new engine 16 audit data submitted by engine manufacturers as a part 17 of regulations. 18 The deterioration rate expressed in grams 19 per horsepower-hour square term is the rate at which 20 emissions increase with usage. The deterioration rates 21 are based on observed deterioration of on-highway 22 diesel engines with similar horsepowers. 23 Various sources were used to obtain 24 population estimates. They include: U.S. Department 25 of Agricultural; Power Systems Research, a research 8 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 marketing firm which maintains a database of all 2 engines sold in the U.S.; portable equipment 3 registration database maintained by staff of the ARB 4 under a voluntary registration program for portable 5 equipment; MacKay & Company, a consulting firm hired by 6 construction equipment magazine to survey construction 7 equipment, population and activity; Air Transport 8 Association, an association of major airline companies; 9 Energy and Environmental Analysis, Inc., a contractor 10 for ARB; Booz Allen & Hamilton, a contractor for ARB. 11 The majority of other input factors were 12 obtained from the Power Systems Research database, with 13 a few exceptions listed here. Airport ground support 14 equipment data was obtained from Air Transport 15 Association; forklift data was obtained from Booz 16 Allen & Hamilton; construction activity data was 17 obtained from the MacKay & Company's study where 18 available; oil drilling, dredging, military tactical 19 support and miscellaneous portable equipment data was 20 obtained from ARB's Portable Equipment Registration 21 database. 22 Staff uses 1990 as the base year for the 23 off-road emissions inventory, which is also the base 24 year used in the 1994 SIP. The updated, statewide 25 baseline 1990 off-road large CI engine emissions 9 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 inventory is 90 tons per day of reactive organic gases 2 or ROG and 779 tons per day of oxides of nitrogen or 3 NOx emissions. 4 This slide shows the proposed statewide 5 1990 off-road large CI engine emissions inventory by 6 various applications. As can be seen in this slide, 7 construction and agricultural equipment contribute the 8 most toward ozone forming precursors that is ROG and 9 NOx emissions within this category. 10 Staff provided the methodology and 11 updated inventory for public review and comments by way 12 of a mail-out in June of 1999. Eleven responses to the 13 mail-out were received from the various organizations 14 listed in this slide. Supporting data provided by some 15 were evaluated and utilized if appropriate in modifying 16 the input factors. In response to the issues in the 17 comments received, staff held numerous meetings and 18 phone calls, along with exchanges of written 19 information and data via fax, electronic and standard 20 mail. 21 The changes made to the inventory as a 22 result of additional data made available are as 23 follows: In the agricultural category, agricultural 24 equipment greater than 500 horsepower were removed from 25 the inventory, since comments received indicated that 10 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 this equipment is not used in California. Based on the 2 latest information from U.S. Department of Agriculture, 3 the population estimates of balers, combines and 4 agricultural tractors were revised and resulted in a 5 decrease in the inventory. 6 In the construction category, population, 7 activity and useful life estimates were revised based 8 on more comprehensive and contemporary data obtained 9 from the MacKay & Company's study, resulting in an 10 increase in the emissions inventory. 11 In the industrial category, the 12 population and useful life estimates for forklifts were 13 revised based on data obtained from Booz Allen & 14 Hamilton report. This resulted in a decrease in the 15 emissions inventory. 16 In the airport ground support category, 17 based on data provided by Air Transport Association, 18 population, useful life, average horsepower and 19 activity estimates were revised, which resulted in an 20 increase in the emissions inventory. 21 All of the changes described earlier in 22 this presentation were included in the emissions 23 inventory presented in mail-out No. MSC99-32. This 24 mail-out was made available for public comments on 25 December 27th, 1999. After this mail-out, data showing 11 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 steady conversion of California's agricultural land to 2 urbanized land was made available to staff. Based on 3 this information, growth factors were revised to show a 4 decline in the agricultural equipment population for 5 years beyond 1997. This revision has decreased the 6 statewide 2010 ROG estimates by one tons per day and 7 NOx estimates by 5 tons per day. 8 In comparison with the 1994 SIP, the 9 proposed 1990 off-road large CI engine emissions 10 inventory has a 37 tons per day or 70 percent increase 11 of ROG and 225 tons per day or 41 percent increase of 12 NOx emissions. 13 The main reason for the increase in 14 emissions is an overall increase in the equipment 15 population caused by an addition of 61 new equipment 16 types. Also, the 1994 SIP estimates did not include 17 any equipment greater than 500 horsepower, which are 18 included in the proposed inventory. The rest of the 19 increase is attributable to the inclusion of 20 deterioration rates and updates in emissions factors. 21 Staff believes the updated off-road large 22 CI engine emissions inventory presented today for your 23 approval is based on the best available data, and is 24 adequate to support the proposed regulatory action that 25 follows: We are committed to continually seek new 12 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 information and make further improvements to the 2 inventory, and provide the Board with periodic updates. 3 This concludes my presentation. Thank 4 you. 5 CHAIRMAN LLOYD: Thank you very much. 6 Do we have a statement from the 7 ombudsman? 8 MR. FISCHER: Yes, we do. Jim Fischer, 9 Office of the Ombudsman. 10 Mr. Chairman, members of the Board, the 11 emission inventory report before you was developed by 12 ARB staff between June '99 and the present. 13 On June 14th, ARB staff mailed out a 14 report to over 1,700 stakeholders describing the 15 methodology and input factors used in this inventory. 16 Public comments were solicited at that time. Eleven 17 organizations representing engine manufacturers and 18 operators submitted written responses to this request. 19 Staff worked closely with US EPA and air 20 districts to discuss and coordinate development efforts 21 for this report. Additionally, staff met with farmers' 22 and engine manufacturers' and construction 23 representatives. 24 ARB staff also conducted numerous 25 conference calls and one-on-one phone calls with 13 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 interested parties between June '99 and January of this 2 year to provide additional opportunity for input on the 3 report. 4 On December 27th, ARB staff issued a 5 second draft report to over 2,700 individuals, with the 6 notice of today's hearing. This information was also 7 posted on ARB's website at that time. 8 ARB staff did an excellent job reaching 9 out to appropriate stakeholders and interested parties 10 to involve them in the development of the report before 11 you today. 12 CHAIRMAN LLOYD: Thank you very much. 13 I had one question on the inventory on 14 one of the tables, zero emissions from lawn and garden 15 equipment? 16 MS. AGRAWAL: We have a very small number 17 of equipment in this category. And when you round off, 18 it becomes little. There are few equipment that are in 19 our portable engine registration database and we use 20 those -- that's more like a place where they are in the 21 emissions inventory. As we get more data we will -- 22 CHAIRMAN LLOYD: This is just because 23 it's the diesel -- 24 MR. CROSS: It's diesel and the 25 25 horsepower cut-off combined. So we end up just 14 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 basically squeezing that part of the category down so 2 small that there is not much there. 3 And I'm Bob Cross. Sorry. 4 CHAIRMAN LLOYD: That's what I figured. 5 Thank you. 6 Any questions from the Board members? 7 BOARD MEMBER CALHOUN: Yes, Mr. Chairman. 8 CHAIRMAN LLOYD: Mr. Calhoun. 9 BOARD MEMBER CALHOUN: The emission 10 inventory is a very complex task that the staff had. 11 And I often wondered how staff goes about making these 12 determinations. And you stated that this increase is 13 caused by increase in the inventory equipment as a 14 result of deterioration. 15 Where do you get your data for the 16 deterioration. 17 MR. CARLOCK: Where we have direct test 18 data, we use it. Where we don't, we look for on-road 19 surrogates; we look at on-road deterioration for 20 engines of a similar horsepower. We convert miles or 21 increase as a function of milage into increases the 22 function of hours of use. 23 BOARD MEMBER CALHOUN: Now the idea of 24 the emissions increasing as a result of the inventory 25 increase, is this generally true these two items occur 15 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 in most of the emissions inventory that you've done so 2 far? 3 MR. CARLOCK: As far as it going up or 4 down? 5 BOARD MEMBER CALHOUN: Yes. 6 MR. CARLOCK: In most instances the 7 inventory goes up. 8 BOARD MEMBER CALHOUN: Thank you. 9 BOARD MEMBER PATRICK: Mr. Chairman, I 10 would just like to compliment the staff for working 11 with the folks from the San Joaquin valley On the 12 agricultural piece. I know that there was some 13 concerns initially that were expressed, not to me 14 personally, but just in looking through the materials 15 there in our packet. 16 And it seems as though you've worked very 17 closely in trying to define what I consider to be a 18 pretty nebulous task doing this. You have my 19 compliments that you're willing to even attempt this. 20 I think it's very, very complex. And I appreciate the 21 work that you have done trying to narrow it down in 22 that particular category and take input from the folks 23 in the San Joaquin Valley who are pretty close to being 24 experts in this field. 25 MR. CROSS: Thank you. I would also 16 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 comment on that that I think what has come out of that 2 exchange is a stronger, more cooperative relationship 3 with the folks up there in terms of making sure that 4 our sometimes modeled too far away from reality views 5 of what is happening are accurate. And I think we have 6 some ideas for doing future work with them which I 7 think will make the inventory even better. 8 BOARD MEMBER PATRICK: Great. I'm 9 delighted to hear that. And the fact that Manny Cunha 10 didn't spend the night means he's not unhappy with what 11 you have come up with. He's not here today to make 12 testimony, so we can believe that he's happy with what 13 you've done because if not, we'd sure be hearing about 14 it. 15 CHAIRMAN LLOYD: Well, you are right. In 16 fact, we got a very complimentary letter to both Mark 17 and Bob for their efforts to confirm what you are 18 saying there, Barbara. So, great job. 19 If there are no more questions from the 20 Board, we have one person signed up today, Michael 21 Block, Technical Director with the Engine Manufacturers 22 Association. 23 MR. BLOCK: Good morning. I'm Michael 24 Block. I'm here today on behalf of the Engine 25 Manufacturers Association. 17 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 The Engine Manufacturers Association is 2 the national trade association of worldwide 3 manufacturers of engines. EMA members include 4 Caterpillar, Cummins, Deutz, Detroit Diesel 5 Corporation, Deere, Yanmar, Kubota, and others who 6 manufacture the majority of the compression-ignition 7 engines in non-road applications. EMA's members are 8 aware of the importance of an accurate emissions 9 inventory model as the basis for effective regulation. 10 Indeed, the off-road model being brought before the 11 Board today forms the basis for ARB's 12 compression-ignition regulation, which is the next 13 agenda item at this hearing. 14 EMA appreciates the need for periodic 15 review and, if necessary, revision to emission 16 inventory models as new modeling techniques and new 17 input data becomes available. Towards that end, EMA 18 has participated in the process of developing a model 19 reflective of real-world conditions. That process 20 started with initial comments, provided in response to 21 ARB mail-out No. 99-14, in June of last year. Those 22 comments not only review the model itself, but 23 suggested alternate, more accurate data sources for a 24 number of inputs to the model. These data sources 25 offer more realistic information regarding equipment 18 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 population and growth rates. EMA appreciates ARB's 2 subsequent revision to the model based upon these new 3 data, as published in mail-out 99-32 for this hearing. 4 Finally, while certain characteristics, 5 such as seasonal use and equipment population, are 6 unique to California, other characteristics of 7 emissions inventory models, in particular emission 8 factors, are the same for all these diesel engines and 9 should be identical between ARB's off-road model and 10 EPA's non-road emissions inventory model. It is our 11 understanding that ARB and EPA are continuing to work 12 to ensure this similitude. EMA encourages this 13 dialogue and remains committed to participate in that 14 process, as it has done in the past. 15 And I thank you for an opportunity to 16 comment and I will answer any questions. 17 CHAIRMAN LLOYD: Thank you, Michael. 18 Any questions from the Board? 19 MR. BLOCK: Thanks. 20 CHAIRMAN LLOYD: Thank you very much. 21 Any further comments, Mr. Kenny? I know 22 we have a letter from Mr. Cunha. 23 MR. CROSS: Well, I think we already kind 24 of covered it. 25 CHAIRMAN LLOYD: Yeah, that's fine. 19 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 MR. CROSS: He approached me yesterday 2 and said be sure and mention that he was strongly in 3 support of the adoption of the inventory. 4 CHAIRMAN LLOYD: I appreciate your 5 restraint in not reading out the letter or complement 6 the letter again. 7 MR. CROSS: It's enough. 8 CHAIRMAN LLOYD: Any other comments, 9 Mr. Kenny? 10 MR. CARLOCK: We did receive one other 11 letter from the Equipment Manufacturers Institute, who 12 applaud our effort, but do have an issue with the 13 percent of the construction market that we believe 14 exists in California. They believe that about 5 15 percent of all construction is performed in California. 16 We used a factor of 10 percent, which is consistent 17 with the US EPA's estimate. Although EMI claims to 18 have information to support this, none was provided and 19 we maintain our estimate of 10 percent. They take 20 issue with that and say so. 21 CHAIRMAN LLOYD: Well, yeah, clearly 22 that's going to be very much a function of economic 23 activity and what not. So there is going to be some 24 uncertainty anyway. 25 MR. CARLOCK: Exactly. 20 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 CHAIRMAN LLOYD: Okay. If there is any 2 more discussion from the Board; if not, since this is 3 not a regular item, it is not necessary to officially 4 close the record. But we do have a resolution before 5 us. 6 Do I have a proposal? Do I have a motion 7 then? 8 MR. JENNE: Chairman Lloyd, I believe 9 there is no resolution for this item. 10 CHAIRMAN LLOYD: There is no resolution, 11 you're right. Sorry. 12 MR. JENNE: This is an inventory item. 13 CHAIRMAN LLOYD: So we just accept the 14 inventory? 15 MR. JENNE: Yes, you would just vote to 16 approve the inventory. 17 BOARD MEMBER FRIEDMAN: Moved. 18 CHAIRMAN LLOYD: Second? 19 BOARD MEMBER PATRICK: Second. 20 CHAIRMAN LLOYD: All in favor say, "Aye." 21 BOARD MEMBERS: Aye. 22 CHAIRMAN LLOYD: Negative. 23 (No response.) 24 CHAIRMAN LLOYD: Thank you. 25 Thank you staff. 21 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 The next item, we'll go right into the 2 one on compression-ignition engines. And this is 3 agenda Item 00-1-4, proposed amendments to the state's 4 existing regulation for off-road diesel engines. 5 In 1994, this Board approved a state 6 implementation plan, including measure M-9, which 7 called for reducing NOx emission from off-road diesel 8 engines. I understand this proposal has been developed 9 to implement that measure. 10 Mr. Kenny, would you please introduce the 11 staff presentation. 12 MR. KENNY: Yes, I will. Thank you. 13 Chairman Lloyd and members of the Board. 14 In 1992, this Board approved regulations 15 to control exhaust emissions from heavy-duty off-road 16 compression-ignition engines 175 horsepower and 17 greater. Those regulations became effective in 1996. 18 Due to U.S. Congressional action, the ARB 19 was preempted from regulating farm and construction 20 equipment rated less than 175 horsepower. From an air 21 quality standpoint, this was a significant constraint 22 because farm and construction equipment comprise more 23 than 65 percent of the exhaust emissions within this 24 category. 25 In 1996, a Statement of Principles, or 22 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 SOP, was drafted. The signatories included US EPA, 2 industry, and the ARB. The purpose of SOP was to 3 foster harmonization between the California and federal 4 requirements for these engines, while achieving further 5 emission reductions. 6 EPA adopted their final rule in this 7 matter in 1998. The proposal before the Board today 8 contains amendments to the existing regulations that, 9 if adopted, will enable the ARB to fulfill the goal of 10 the SOP by harmonizing with EPA, while continuing our 11 ability to enforce their requirements. 12 I would now like to turn the presentation 13 over to Mr. Andrew Spencer of the Mobile Source Control 14 Division, who will provide you with an overview of the 15 staff's findings and present the staff's 16 recommendations. 17 Andrew. 18 MS. LOURENCO: Hi, this is Jackie 19 Lourenco. We did a little switch. 20 MR. KENNY: Tricked me. 21 MS. LOURENCO: Yeah, sorry. 22 As I said, I'm Jackie Lourenco. I'm 23 manager of the off-road control section. I will be 24 doing the presentation this morning. 25 Chairman Lloyd, members of the Board, 23 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 good morning. 2 I'll present the Staff proposal, which 3 seeks to amendment the existing heavy-duty off-road 4 diesel cycle engine regulations that were adopted by 5 this Board in 1992. 6 This category includes engines used to 7 power construction, agricultural and industrial 8 equipment. As an example, these engines are used in 9 equipment such as generators, tractors, excavators, 10 airport tows, and transportation refrigeration units. 11 Before discussing the staff's proposal, I 12 would like to point out that instead of using the term 13 diesel, I'll be using compression-ignition, which is 14 the more accurate term for describing these engines. 15 Although these engines typically operate on diesel 16 fuel, alternate fuels may be used. 17 Before discussing staff's proposal to 18 amend the regulations, I will first provide some 19 background information. Following a description of the 20 proposal, I'll then discuss how it effects compliance 21 with our 1994 State Implementation Plan. There will be 22 followed by the proposals, air quality benefits, 23 economic impacts and staff's conclusions. 24 Inventory analysis has determined that 25 off-road compression-ignition engines are one of the 24 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 largest sources of smog forming emissions. In light of 2 this, the Board adopted the regulations for off-road 3 compression-ignition engines, 175 horsepower and 4 greater in 1992. In '94, the Board approved the State 5 Implementation Plan for ozone. In particular, SIP 6 measures M-9 and M-10 called for the ARB and US EPA 7 respectively to adopt more stringent hydrocarbon plus 8 NOx emission standards for new off-road 9 compression-ignition engines beginning in 2005. 10 In 1996, a Statement of Principles was 11 signed by the ARB, US EPA and industry. The Statement 12 of Principles called for harmonization of ARB's and US 13 EPA's regulations for off-road compression-ignition 14 engines. Instead of implementing the SIP standards in 15 2005, the Statement of Principles incorporated a 16 gradual, multi-tiered emission reduction scheme earlier 17 than 2005 that would yield comparable air quality 18 benefits of the SIP. 19 This was then followed in 1998 by the US 20 EPA's adoption of their final rule incorporating the 21 agreements outlined in the Statement of Principles. 22 The proposal before you today represents 23 the incorporation of US EPA's regulatory language into 24 the California regulations. It should be emphasized 25 that this proposal essentially parallels the 25 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 requirements already contained in the federal rule. 2 And therefore, our regulations are fully harmonized 3 with US EPA. In spite of this harmonization, this 4 proposal maintains ARB's authority to certify these 5 engines and enforce the emission requirements in 6 California. 7 The proposed standards are illustrated on 8 the next two slides. This graph demonstrates the 9 staff's proposed exhaust emission standards for 10 nonmethane hydrocarbons and NOx. Because of existing 11 regulations, all engines were currently meeting the 12 Tier 1 levels showed in red there. 13 Implementation of the subsequent tiers 14 occurs in different years for different power 15 categories. Tier 2 levels are proposed to begin in 16 2001 through 2005 with larger engines complying 17 initially. Finally, Tier 3 levels for engines over 37 18 kilowatts are proposed to begin in 2006 through 2008. 19 Unlike the nonmethane hydrocarbon and NOx 20 standards, there are no Tier 3 PM standards. Only 21 Tier 1 and 2 are shown here. As part of the Statement 22 of Principles, the parties agreed to participate in a 23 feasibility review of the standards in 2001. This 24 effort will include a review of the test cycles used to 25 best demonstrate compliance with the standards, as well 26 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 as a review of the available technologies and their 2 effectiveness in reducing emissions. 3 Therefore, based on the findings at the 4 2001 feasibility review, subsequent Tier 3 PM standards 5 will be proposed to this Board for consideration. 6 Moreover, it's anticipated additional findings 7 presented at the 2001 feasibility review will serve to 8 guide the development of future proposals for 9 additional reductions. 10 Blue Sky Series engine is a voluntary 11 program. It is a program that allows manufacturers to 12 certify low-emitting engines to standards that are at 13 least 40 percent below the required standards. In 14 exchange, the engine may be used for emission credit 15 programs. 16 In the spirit of the harmonization with 17 US EPA, the staff proposes California's participation 18 in the federal averaging, banking and trading program. 19 This program provides the engine manufacturers 20 flexibility for transitioning their entire product line 21 to meet the proposed nonmethane hydrocarbon and NOx and 22 PM standards. This program also encourages the early 23 introduction of cleaner engines, thus securing early 24 emission benefits. 25 Staff also proposes flexibility 27 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 provisions for original equipment manufacturers, or 2 OEM's, that install the compression-ignition engines 3 into their products. The provision provides adequate 4 lead time for equipment redesigns needed to accommodate 5 the engine design changes by allowing up to 80 percent 6 of the OEM's product to be equipped with engines that 7 do not meet the Tier 2 emission standards. 8 Additional allowances are provided for 9 small volume OEM's. And in rare instances, for other 10 OEM's that can demonstrate a hardship due to the 11 introduction. 12 Finally, as with other mobile source 13 programs already approved by the Board, the staff 14 proposal proposes enforcement provisions, such as those 15 listed here, to ensure that the engines comply with the 16 applicable standards both when produced and in use. 17 Based on the emission inventory used 18 during the development of the 1994 SIP, the staff's 19 proposal meets the 1994 SIP commitment to achieve 86 20 tons per day of ROG plus NOx reductions in 2010 from 21 the off-road compression-ignition engines in the south 22 coast area basin. 23 Unlike the two 2005 implementation date 24 called for in the SIP, the staff's proposal calls for 25 immediate emission reductions, and therefore, air 28 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 quality benefits will occur earlier. This will benefit 2 areas with 2005 attainment dates such as Sacramento, 3 Ventura, and the San Joaquin air basin. 4 While the '94 SIP inventory must be used 5 as the official guide to provide consistency with the 6 legal obligations of the SIP, the '94 inventory does 7 not reflect the latest information contained in the 8 updated inventory which you just approved. Although we 9 have met our SIP goals for these engines, the updated 10 inventory analysis supports the growing concern that 11 further control of emissions from the off-road 12 compression-ignition engines is necessary in the 13 future. 14 Using the updated emissions inventory, 15 this chart illustrates both the baseline and controlled 16 levels for nonmethane hydrocarbon plus NOx and PM in 17 2010. By 2010 the proposed emission standards combined 18 with those adopted by the US EPA would result in 109 19 tons per day of nonmethane hydrocarbon plus NOx reduced 20 and 9 tons per day of PM reductions in California. 21 Based on the new inventory, this proposal 22 represents a good next step in the effort toward 23 reducing emissions from off-road compression-ignition 24 engines. However, these engines still represent a 25 sizable emission source of ozone precursors and PM. 29 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 Since this proposal is serving to align 2 California's regulations with the existing federal 3 rule, the cost of complying with the proposal standards 4 and regulations in California is not expected to be 5 different from complying with the federal regulations. 6 Therefore, no additional cost is anticipated from the 7 adoption of the proposed regulations for California. 8 The cost effectiveness for aligning with 9 the federal regulations is expected to be similar to 10 the national cost effectiveness. Depending on the 11 model year and the applicable standards, the cost 12 effectiveness of this measure would vary from 15 to 32 13 cents per pound of ozone precursors reduced. 14 Similarly, the cost effectiveness of PM is expected to 15 vary from 35 cents to $1.16 per pound of PM reduced. 16 Both results are well within the cost effectiveness 17 range of other regulations approved by the Board and 18 well below the typical cost effectiveness upper range 19 of $5 a pound. 20 In conclusion, the staff's proposal will 21 achieve both the emission reductions called for in the 22 SIP, as well as provide air quality benefits sooner 23 than anticipated in the SIP. In addition to being very 24 cost effective, it also harmonizes with the US EPA 25 rule. Thus, engine manufacturers, equipment 30 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 manufacturers, and related businesses will not incur 2 significant additional compliance cost. 3 While the staff therefore recommends that 4 the Board approve this proposal, it should be noted 5 that we intend to consider proposing additional 6 standards in 2001. 7 The next steps in this endeavor to reduce 8 emissions from off-road compression-ignition engines, 9 would follow the tiered approach that's before you 10 today. As previously mentioned, feasibility studies 11 are currently underway that will serve to guide in the 12 development of the more stringent Tier 3 standards for 13 PM. More stringent Tier 4 standards for nonmethane 14 hydrocarbon and NOx are also anticipated. Staff 15 expects to have a better idea by 2001 as to the 16 appropriate standards. 17 While not yet determined, these reduced 18 emission standards will more than likely require the 19 use of exhaust after-treatment technology similar to 20 that used currently on on-road compression-ignition 21 engines. It should also be noted that if an 22 after-treatment based emission standards program is to 23 be implemented successfully, it will likely require the 24 use of low sulfur diesel fuel, not just in California, 25 but nationwide as well. Therefore, staff intends to 31 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 work closely with the US EPA to achieve this goal. 2 This concludes my presentation. I'll be 3 happy to answer any questions. Thank you. 4 CHAIRMAN LLOYD: Thank you. 5 Just before -- we got some questions -- 6 Mr. Ombudsman, do you have any comments? 7 MR. FISCHER: Yes, I do. Thank you. 8 Jim Fischer, again. Office of the 9 Ombudsman. 10 Mr. Chairman, members of the Board, the 11 regulations before you are the result of a four-year 12 long process that began in 1996. Their development 13 involved representatives from ARB, US EPA, and engine 14 manufacturers. The regulations closely parallel a 15 similar US EPA rule for off-road CI engines adopted in 16 October 1998. 17 On February 24, 1999, ARB staff held a 18 meeting to discuss its proposed regulations with a 19 group of about 10 engine manufacturers. 20 On October 8th, '99 ARB staff mailed out 21 a draft version of the proposed regulations to about 22 100 individuals including engine manufacturers, 23 automobile and truck manufacturers, the oil industry, 24 environmental groups and other governmental agencies, 25 including the US EPA. The draft was also made 32 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 available at that time on ARB's website. 2 Additional conference calls were held 3 between November '99 and the present with engine 4 manufacturer representatives. Notice of today's 5 hearing was mailed out and posted on ARB's website on 6 November 30th, '99. The final proposed regulations 7 were mailed out and made available on ARB's website on 8 December 10th, '99. 9 The process used in the development of 10 these regulations was complete and included the key 11 interested parties. 12 CHAIRMAN LLOYD: Thank you very much. 13 Any questions from the Board? 14 (No response.) 15 CHAIRMAN LLOYD: I had a question. 16 Why is it essential to have national loss 17 of diesel for the off-road category? 18 MR. CROSS: Because we're headed for 19 after-treatment is the primary reason. 20 CHAIRMAN LLOYD: No, I understand that. 21 But we heard yesterday, you know, increasingly low 22 sulfur diesel may be available through the transit -- 23 MR. CROSS: Let me rephrase it. I think 24 that because the numbers of vehicles and engines in 25 many of these off-road categories are very few having 33 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 special new California models of engines is something 2 that's not cost feasible, which is why we've been 3 working with US EPA and the manufacturers to do an 4 integrated rule all along. 5 I think that it's possible -- and hence, 6 if we're going to push the industry towards 7 after-treatment, it makes sense to push them nationally 8 towards after-treatment with low sulfur fuel. 9 CHAIRMAN LLOYD: Okay. 10 MR. CROSS: If you do retrofits, then I 11 think that you could have California low sulfur fuel. 12 CHAIRMAN LLOYD: Thanks, Bob. 13 MR. CACKETTE: Dr. Lloyd, one other 14 reason is that a lot of the larger equipment is used on 15 an interstate basis. If you have a major construction 16 project, the equipment goes from state to state to 17 wherever the work is. And with after-treatment on it, 18 if it went to Utah and they have high sulfur fuel, when 19 it comes back the catalyst would be dead. 20 CHAIRMAN LLOYD: Good point. Good point. 21 BOARD MEMBER CALHOUN: What efforts are 22 utilized if it goes into Utah -- 23 MR. CACKETTE: If it went to somewhere 24 where there was -- if we had a piece of equipment that 25 had after-treatment for California purposes and then 34 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 they took the equipment to another state for a 2 construction job, the sulfur would poison the catalyst. 3 So when it came back, let's say, again to California to 4 do another construction job, the efficiency of the 5 catalyst would be zero or greatly reduced. So there is 6 a strong need for consistent low sulfur levels, we 7 think, wherever this equipment goes. 8 BOARD MEMBER CALHOUN: Are we doing 9 anything to promote that, you know, in terms of getting 10 low sulfur fuel? 11 MR. CACKETTE: Yes, definitely. We've 12 been working with EPA to try to encourage them to move 13 forward in this effort. We worked with them very 14 closely when their focus was principally on cleaning up 15 gasoline; and we said you've got to do diesel. And 16 they've subsequently come around and are making 17 proposals to do clean on-road diesel. 18 But where they differ from us is the 19 state's -- California's diesel fuel requirements apply 20 to all diesel fuel including on- and off-road, where 21 their's is limited right now to off-road. So the next 22 task that we've been working with them on is to tighten 23 up these standards and do fuels at the same time so 24 it's a consistent package. 25 We're writing a letter to EPA to support 35 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 that. Staff and ALAPCO (sic), the state and local area 2 pollution group held a workshop in Washington a few 3 weeks ago. And all the states that have interest are 4 trying to write and urge Carol Browner, the 5 administrator of EPA to move forward on this very 6 quickly. 7 We are also trying to help EPA with -- 8 they've asked us to help with resources. We're going 9 to fund some work on catalyst demonstration on some 10 cleaner off-road engines down at Southwest Research 11 Institute. And we're trying to help them with some 12 staff work as well, so it's a partnership effort. 13 BOARD MEMBER CALHOUN: Thank you. 14 CHAIRMAN LLOYD: With that we will call 15 the first witness today who has signed to speak, Bruce 16 Bertelsen from MECA. 17 MR. BERTELSEN: Good morning, 18 Chairman Lloyd, members of the Board. I hope you were 19 able to get home at some point last night. You were 20 here when I left and you were here when I came back 21 this morning. 22 For the record, my name is Bruce 23 Bertelsen and I'm the Executive Director of the 24 Manufacturers of the Emissions Controls Association. 25 As I mentioned yesterday, MECA is an association of 36 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 companies that manufacture emission control technology 2 for a wide variety of mobile sources. And in that mix 3 is technology that's available for off-road 4 applications. 5 We believe the adoption of the federal 6 standards is an important first step. And we strongly 7 support the staff's recommendation. Although we also 8 believe that technology exists today that can provide 9 some substantial and additional emission reductions. 10 And with that in mind, we recommend to the Board that 11 it develop a multifaceted program to achieve further 12 significant reductions in the future. 13 And today what I would like do is just 14 very briefly review some of the technologies that are 15 available and suggest some additional elements of a 16 program that ARB could consider. And I was very 17 encouraged to hear that some of things that I'll be 18 talking about are indeed things that are on the list of 19 things to do for the staff. 20 Yesterday ARB came very close to setting 21 very stringent standards for urban buses. And I think 22 when the Board acts on that rule next month, that 23 program will result in significant benefits and 24 certainly will push forward the development of the 25 clean diesel engine. But I think we need to also keep 37 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 in mind, looking at the inventories that were discussed 2 earlier, that off-road engines remain a very, very 3 significant source of hydrocarbons, PM and NOx 4 emissions. 5 And just to give you an illustration, we 6 project ourselves out to 2005; and we are standing in 7 downtown Los Angeles, and a new bus comes by meeting 8 the proposed new 2005 model year bus which meets the 9 proposed 0.01 PM standard and the .5 NOx standards. 10 Operating right next to the bus is a piece of 11 construction equipment with a similar sized engine, 12 also meeting the applicable 2005 standards for off-road 13 engines. 14 Roughly that piece of construction 15 equipment will have NOx emissions that are about eight 16 times higher than the new urban bus; and probably 20 17 times higher with regard to PM. So just as an 18 illustration, it shows that we've got some work to do 19 on non-road engines, even beyond adoption of the 20 federal standards today. 21 Yesterday also we discussed the 22 importance of having low sulfur fuel available to 23 achieve very, very low emissions and to enable the full 24 complement of exhaust control technologies and to 25 enable those technologies really to be maximized for 38 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 the most effective control. And I want to emphasize 2 that that is a critical component. 3 And we're very much in agreement with 4 both the engine manufacturers and the staff that to 5 achieve the goal of a truly clean diesel engine, we 6 need advanced engine technology, advanced exhaust 7 control technology and very low sulfur fuel. So 8 obviously, we were very encouraged by the Board's 9 proposal yesterday. 10 But with that in mind, I think it's also 11 useful to recognize that the level of sulfur fuel used 12 by off-road vehicles in California is about 120 -- has 13 about a sulfur level of about 120 PPM. That's still 14 high, but it's low enough to enable some of the exhaust 15 control technologies that we talked about yesterday to 16 be utilized. Not necessarily going to achieve the same 17 very, very high levels of control that we talked about 18 with regard to the urban bus program. But 19 nevertheless, an opportunity for some additional 20 controls. 21 Application of exhaust control technology 22 to off-road engines isn't new. In fact, the first 23 application of catalyst technology to a mobile source 24 was an off-road engine over 30 years ago. Since that 25 time, roughly 500,000 off-road engines have been 39 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 equipped with catalyst technology, and that includes 2 both compression-ignition engines and spark-ignition 3 engines. 4 Diesel oxidation catalysts, for example, 5 have been used extensively in off-road applications. 6 And they're capable of achieving anywhere from a 20 to 7 a 50 percent reduction in PM depending on the 8 characterization of the exhaust coming out of the 9 engine. They're also capable of reducing hydrocarbons, 10 including toxic hydrocarbons from anywhere from 50, and 11 in some cases up to 90 percent. There is extensive 12 experience with this technology. About one and a half 13 million trucks and buses have been equipped with diesel 14 oxidation catalysts in the U.S., and about 5 million or 15 more light-duty vehicles in Europe. 16 Right now there is a program going on in 17 Massachusetts where a number of highway construction 18 equipment engines are being equipped with diesel 19 oxidation catalysts. 20 Filter technology is another technology 21 that has had some experience in the non-road sector. 22 Worldwide there are approximately 10,000 engines that 23 have been equipped with filters. Primarily in mining 24 applications and material handling applications to 25 protect the workers operating these engines in an 40 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 enclosed environment. 2 SCR technology, as I mentioned yesterday, 3 is a technology that's been on stationary engines since 4 the '80s. It certainly is a technology that could be 5 applied to off-road engines as well. 6 I just wanted to mention some of the 7 program elements that we would encourage the Board to 8 consider. And we recognize that the Board cannot act 9 on all of these today, but what we hope is that the 10 Board will ask the staff to look at some of these 11 issues, engage all of the affected parties. And when 12 you are talking about off-road engines, just from the 13 inventory list you can see there is a whole wide 14 variety of users and equipment, really engage everyone 15 in a discussion to help develop a comprehensive 16 program. 17 Some of the elements that could be 18 considered would be initiatives with incentives that 19 encourage the retrofit of diesel engines, as well as 20 the introduction of new clean engines. And these could 21 be diesel engines with exhaust control technology 22 alternative fuel engines, advanced technology engines. 23 Really to target those engines that are used in urban 24 areas where you can get the maximum benefit for 25 cleaning up the engine. 41 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 The Carl Moyer program I think is an 2 extremely important illustration of that type of 3 program. We're very supportive of that program. We 4 would like to see the funding increased. But probably 5 need to do more to begin to really make a significant 6 impact in reducing emissions from off-road engines. 7 The Blue Sky program that the staff 8 mentioned, which was part of this proposal, I think 9 again is also a useful element. I think that's an area 10 that needs further attention to really make it a 11 useable approach, but we support the concept. 12 Secondly, we would express our support 13 certainly for the staff working with US EPA to develop 14 the yet to be set Tier 3 PM standards. We think this 15 is an important opportunity to achieve some significant 16 additional reductions in PM emissions. And again, very 17 glad to hear that staff is already focusing on the next 18 generation of non-road standards with an eye towards 19 achieving the levels of control comparable to what 20 we're going to have with our highway vehicles. And 21 again, that really will necessitate the availability of 22 low sulfur fuel. 23 But before that happens, I guess the last 24 element of the program we would like to suggest is to 25 explore ways to make low sulfur fuel available for 42 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 non-road applications. We think that if that fuel were 2 made available, some of these technologies that we're 3 talking about for urban bus application, we could begin 4 to implement on construction equipment or other sources 5 in urban areas and really achieve some very, very 6 dramatic emission reductions. 7 For MECA's prospective, we would be very 8 happy to work with the Board and staff on these 9 initiatives, and look forward to working with you as 10 the Board begins to address this issue of emissions 11 from non-road engines. 12 Thank you very much. 13 CHAIRMAN LLOYD: Thank you, Bruce. 14 Mr. Calhoun. 15 BOARD MEMBER CALHOUN: Do you have any -- 16 does MECA have any initiatives that they would like 17 to -- that they're trying to implement in order to 18 effect the presence of low sulfur fuel? 19 MR. BERTELSEN: Well, we're working very 20 closely with the U.S. Environmental Protection Agency 21 to provide them the information -- the technical 22 information they need to understand the impact of 23 sulfur on exhaust control technologies. 24 We have worked with the engine 25 manufacturers and others who support a low sulfur fuel. 43 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 And we're very hopeful that later this year EPA will be 2 proposing a comprehensive program that includes new 3 tighter standards for on-highway vehicles and also a 4 requirement for a low sulfur fuel, a national low 5 sulfur fuel. 6 And we hope it will look very much like 7 the sulfur fuel that was discussed yesterday for urban 8 buses. We think that -- eventually we would like to 9 see sulfur and diesel fuel get very close to zero 10 levels. But with a fuel that has a sulfur level of on 11 average less than 10 PPM, we think that opens up some 12 significant opportunities for exhaust control 13 technologies. 14 So we certainly hope that EPA will follow 15 California's leadership in moving forward with a fuel 16 comparable to what was discussed yesterday. 17 BOARD MEMBER CALHOUN: So, in effect, 18 your role is one of a supporting nature? 19 MR. BERTELSEN: Right. What we're trying 20 to do is educate, as I say, not only EPA, but all the 21 parties who are interested to understand really the 22 tremendous benefits that can be achieved with low 23 sulfur fuel and really the opportunities that are lost 24 if you stay with a high sulfur fuel. 25 BOARD MEMBER CALHOUN: Thank you. 44 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 CHAIRMAN LLOYD: Mr. McKinnon. 2 BOARD MEMBER MCKINNON: I've, over the 3 last several months, been pretty outspoken about trying 4 to figure out ways to get low sulfur fuel to move 5 things. And it's very, very clear to me that it's a 6 national question. And I think when you talk about 7 construction equipment, having one set of rules in 8 California may well put contractors in California, that 9 are California based, that do a lot of work in 10 California at a competitive disadvantage with 11 contractors that are out of state that bring equipment 12 from out of state. 13 And I understand we can enforce rules on 14 the out of state contractors, but we haven't enforced 15 labor laws and other things with out-of-state 16 contractors as yet. It's a tough problem. 17 So I'm very, very clear that it's a 18 national question unless you have a captive fleet. And 19 as we produce -- as we push forward on a national 20 question, I'm not real clear on what the number ought 21 to be. It seems like we've heard 100 parts per 22 million. And then at the low end we heard five parts 23 per million. And I think yesterday I was talking to 24 the Navastar (sic) people and they've gone from five 25 parts per million to saying, well, 15 will work because 45 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 Arco is talking about producing 15. 2 What is that number? What can we live 3 with? And if we're going to move the national 4 question -- I mean, there is a tremendous gain we can 5 make in air quality by dealing with diesel. For people 6 who believe that we can eliminate all diesel next week, 7 it's not going to happen. It would destroy the economy 8 of the state and the country. 9 But to the extent we can start moving 10 clean diesel, I'm real interested in what number we 11 ought to be pushing for in your opinion. 12 MR. BERTELSEN: Okay. I think in a 13 perfect world, we would like to see five or less. But 14 with a 15 cap, which gives you an average that's 15 probably less than 10, we think that's one we can work 16 with. If it gets much higher than that, we're getting 17 into a gray area. But clearly with regard to diesel 18 filter technology that we talked about yesterday, 19 having a sulfur with an average level less than 10, 20 makes that technology very much available. 21 It's going to be a challenge with regard 22 to NOx absorbers, but we think that with the lead time, 23 that puts that technology in play by having a 15 cap 24 and a less than 10 average. We would like to see less, 25 but I think it's energized our companies just the fact 46 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 that California has stepped up and said at least for 2 urban buses, we're going to do it because we hope that 3 EPA will follow the lead. 4 So the answer to your question, if I can 5 make it in two parts. First, we would like to see five 6 or less with a 15 cap less than 10 average, we think we 7 can live with it and get some extremely low emission 8 levels working with the engine manufacturers. 9 CHAIRMAN LLOYD: Thank you very much, 10 Bruce. 11 Could I ask staff a question. Bruce's 12 comment about trying to develop an overall 13 comprehensive plan, is that part of the plan as we move 14 ahead in the next phase of reductions? 15 MR. CACKETTE: Yes, it is. I think the 16 Board started looking at emission control technology 17 and emission standards and fuels as a package a long 18 time ago. And that theme and approach has now embraced 19 itself and is growing well at US EPA as well. And they 20 are looking at everything -- each one of these sectors 21 as a comprehensive package of controls. 22 And further, of course, they have, as we 23 have, you have to look at if you are going to do diesel 24 fuel for off-road, you have to know what implications 25 it has for on-road. You have to know what implications 47 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 it has for gasoline because it all comes from the same 2 barrel of oil. 3 So it's being approached in an integrated 4 way. The reason it's happening staged though is simply 5 that there is emerging technology, it tends to be 6 applied to on-road vehicles before off-road, so there 7 is more questions on off-road. 8 And another one is simply resource 9 limitation. There is just not enough staff at EPA or 10 on your staff to be able to do all these things 11 simultaneously. 12 And just for some of the new Board 13 members, just to remind them, one of the reasons why 14 there needs to be a strong partnership with EPA is not 15 just the fact that national fuels would help make these 16 programs a success, but we're preempted by federal law 17 from controlling a subset of the construction and farm 18 equipment here that's under 175 horsepower and where 19 actually most the emissions are. 20 So we have to have them act successfully 21 if we're going to be successful in getting clean air 22 here. Without their help, it won't work. And I want 23 to give them a very strong compliment, both the on-road 24 controls for on-road trucks and the proposal you just 25 saw here, those were what California needed for its air 48 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 quality. And EPA stepped up and implemented that for 2 the nation. So they have been an excellent partner so 3 far, and we hope that will continue until we do have 4 clean skies here. 5 CHAIRMAN LLOYD: In terms of definition, 6 is the California definition of "off-road" equivalent 7 to EPA's category of "non-road"? 8 MR. CACKETTE: I think they're -- they 9 are either very close or the same. 10 CHAIRMAN LLOYD: Is there any chance of 11 harmonizing the names, though? 12 MR. CACKETTE: We probably should, I 13 guess. That's sort of a fundamental harmonization, 14 isn't it? 15 MR. BERTELSEN: I vote in favor of 16 "off-road," but I do slip into the "non-road" because I 17 deal with EPA a lot. 18 I did, however, want to just respond to a 19 question that Mr. McKinnon raised regarding the low 20 sulfur fuel for construction equipment. 21 Our suggestion -- and by the way, we 22 concur with the staff's approach here. 23 We are encouraging also to look at the 24 possibility of incentives. And that's really what I 25 was talking about with regard to the early introduction 49 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 of low sulfur fuel. Really looking for willing 2 partners to have the fuel made available and have a -- 3 if it was a construction project, have it as a 4 voluntary program really to showcase what can be done. 5 We recognize that there are limits in 6 terms of what can be done through mandatory 7 requirements. And, again, we just encourage the Board 8 and staff to really step out of the box and look for 9 some creative ways to make this happen through 10 incentive programs. 11 Thank you. 12 CHAIRMAN LLOYD: Thank you very much, 13 Bruce. 14 We got another person signed up. 15 Michael, Jed is not here. Are you going to speak on 16 behalf of -- you are? Okay 17 This is Michael Block again on behalf of 18 EMA. And we do have a letter from Jed. 19 MR. BLOCK: Good morning and I am not Jed 20 Mandel, but Michael Block here on behalf of the Engine 21 Manufacturers Association. 22 As you know EMA and its members, the 23 principal manufacturers of compression-ignition engines 24 used in farm, construction, and other off-road 25 equipment, have consistently taken a leadership role in 50 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 working with regulators to promote air quality 2 improvements. In keeping with that role, engine 3 manufacturers have worked closely with ARB and EPA to 4 establish the joint Statement of Principles, which 5 forms the basis of today's rule. The SOP represents an 6 important and effective effort by people who regulate 7 engine emissions and the people who build engines to 8 come together, voluntarily, and commit themselves to a 9 program to cut emissions from off-road equipment 10 engines. 11 By supporting the SOP goals, engine 12 manufacturers have made a major commitment to develop 13 new low emission technologies, which will require an 14 enormous investment in research, development and 15 testing. Such a substantial economic investment could 16 only be feasible with the certainty of known emission 17 goals and stable, nationally harmonized standards. 18 I want to underscore the importance of 19 harmonization. It not only is critical to 20 manufacturers, it also is critical to California. 21 Without harmonization, both California's air quality 22 goals and economic well-being could be adversely 23 affected. 24 The proposed amendments to ARB's program 25 implement the principles of the SOP and achieve the 51 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 desired harmonization. We appreciate the staff's 2 efforts to assure those goals. Of course, we recognize 3 that the adoption of today's proposal is by no means 4 the end of the process. And you also heard statements 5 to that effect earlier too. We know that further 6 emission reductions from off-road equipment engines can 7 and must be achieved. And we remain committed to 8 working with ARB and EPA on the next round of off-road 9 emission and regulations and reductions. 10 If you have any questions, I'll be 11 pleased to answer them. 12 CHAIRMAN LLOYD: I'm delighted to hear 13 that spirit of cooperation with all parties. It's 14 excellent. 15 Comments from the Board? Questions? 16 Yes, Ms. D'Adamo. 17 BOARD MEMBER D'ADAMO: I just want to 18 know about the previous question regarding low sulfur, 19 15 with a cap. 20 MR. BLOCK: We would prefer to see five. 21 We think that five is really the number that would 22 absolutely ensure the implementation of any effective 23 use of after-treatment devices. But certainly the 24 lower the better. We've asked EPA for five across the 25 board. So we would like to see five as well. But 52 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 certainly going down into those reaches is what is 2 necessary nationally 3 CHAIRMAN LLOYD: Do you have any data to 4 support that going from 15 to five makes a significant 5 difference? 6 MR. BLOCK: I don't have any personally. 7 I think that engine manufacturers have put some 8 materials together. And I know that other people have 9 as well. I think our individual members have done 10 that. And I think you can see a significant difference 11 in looking at some of the data. 12 CHAIRMAN LLOYD: Thank you very much, 13 Mr. Block. 14 That finishes the public testimony. 15 Are there any written comments that need 16 to be entered into the record? 17 MR. KENNY: No. 18 CHAIRMAN LLOYD: Any further comments, 19 Mr. Kenny? 20 MR. KENNY: Nothing further. 21 BOARD MEMBER PATRICK: Mr. Chairman, I 22 would move adoption of Resolution 00-3. 23 BOARD MEMBER RIORDAN: Second the motion. 24 CHAIRMAN LLOYD: Any ex-parte before 25 that? Ex-parte communications? No? 53 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 All in favor say, "Aye." 2 BOARD MEMBERS: Aye. 3 CHAIRMAN LLOYD: Against "Nay." 4 (No response.) 5 CHAIRMAN LLOYD: Great. Well, that 6 officially closes the January board meeting. 7 Excellent. Thank you all. 8 (Whereupon the proceedings were adjourned 9 at 10:30 a.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 54 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900 1 STATE OF CALIFORNIA ) ) ss. 2 COUNTY OF LOS ANGELES ) 3 4 5 I, Lori D. Casillas, CSR 9869, a Certified 6 Shorthand Reporter in and for the state of California, 7 do hereby certify: 8 That the foregoing proceeding was taken 9 down by me in shorthand at the time and place named 10 therein and was thereafter reduced to typewriting under 11 my supervision; that this transcript is a true record 12 of the testimony given by the witnesses and contains a 13 full, true and correct report of the proceedings which 14 took place at the time and place set forth in the 15 caption thereto as shown by my original stenographic 16 notes. 17 I further certify that I have no interest 18 in the event of the action. 19 EXECUTED this day of , 20 2000. 21 22 23 24 Lori D. Casillas, CSR, RPR 25 55 BARNEY, UNGERMANN & ASSOCIATES, INC. 888 326-5900