BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY CENTRAL VALLEY AUDITORIUM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA THURSDAY, OCTOBER 20, 2005 9:07 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Mrs. Barbara Riordan, Acting Chairperson Ms. Sandra Berg Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Mr. Henry Gong, Jr., M.D. Ms. Lydia H. Kennard Mr. Ronald O. Loveridge Supervisor Barbara Patrick Supervisor Ron Roberts STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Tom Jennings, Acting General Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Kathleen Tschogl, Ombudsman Ms. Catherine Witherspoon, Executive Officer Ms. Lori Andreoni, Board Secretary Mr. Robert D. Barham, Ph.D., Assistant Chief, SSD Ms. Barbara Fry, Chief, Measures Assessment Branch, SSD Mr. Jose Gomez, Manager, Technical Development Section, SSD Ms. Annette Hebert, Chief, Heavy-Duty Diesel In-Use Strategies Branch, MSCD Mr. Stephan Lemieux, Manager, On-Road Heavy-Duty Diesel Section PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Ms. Kathleen Mead, Manager, Retrofit Implementation Section, MSCD Mr. Rob Oglesby, Legislative Director, Office of Legislative Affairs ALSO PRESENT Mr. Don Anair, Union of Concerned Scientists Ms. Diane Bailey, NRDC Mr. Todd Campbell, Coalition for Clean Air Mr. Arthur Douwes, VTA Mr. Richard Evans, Inter-Industry Conference on Auto Collision Repair Mr. David Everhart, IdleAire Mr. John Fehrenbach, Winston & Strawn, LLP Mr. Randal Friedman, US Department of Defense Ms. Dawn Friest, EMA Mr. Joshua Goldman, ISE Corp. Transportation for a Clean Plan Mr. Rex Greer, Pony Pack, Inc. Mr. David Grose, Sacramento Metropolitan AQMD Mr. Warner Harris, Coval H2 Partners, LLC Mr. Chuck Harvey, Chief Operating Officer for the San Mateo Transit District Ms. Staci Heaton, CTA Mr. Steve Heminger, MTC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED ALSO PRESENT Ms. Bonnie Holmes-Gen Ms. Rebecca Kaplan, External Affairs Committee, AC Transit Board of Directors Ms. Mary King, AC Transit Mr. Mike Koss, NPCA Ms. Jeanne Krieg, Tri Delta Transit Mr. Rolf Lichtner, Webasto Product North American Mr. Wayne Lorentzen, California National Guard Mr. John Maga Mr. Bill Magavern, Sierra Club of California Mr. Bruce Magnani, California Chamber of Commerce Mr. Marty Mellera, SF Muni Mr. David Modisette, California Electric Transportation Association Mr. George Patterson, DuPont/NPCA Ms. Karen Pierce, Ditching the Dirty Diesel Collaborative Dr. Daniel Pourreau, Lyondell Chemical Ms. Jean Roggenkamp, Bay Area AQMD Mr. Peter Rooney, Pony Pack Ms. Andrea Samulon, Pacific Institute Mr. Will Schaefer, TMA Mr. Kenneth Scheidig, AC Transit Mr. Carl Sedoryk, MST Mr. Jim Sell, National Paint & Coating Association PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED ALSO PRESENT Mr. Joshua Shaw, CTA Mr. Bob Simmons Mr. Peter Spaulding, California Association for Coordinated Transportation Mr. Joe Sparano, WSPA Mr. Mike Tunnell, ATA Ms. Vallerie Turella, representing Assembly Majority Leader Dario Fromer Mr. Jason Vega, CCEEB Mr. Mike Veney, Sherwin-Williams/NPCA Mr. Gene Walker, Golden Gate Transit/CTA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX PAGE Pledge of Allegiance 1 Opening Remarks 2 Item 05-10-1 Acting Chairperson Riordan 12 Staff Presentation 13 Q&A 23 Item 05-10-2 Acting Chairperson Riordan 29 Executive Officer Witherspoon 29 Staff Presentation 31 Ombudsman Tschogl 38 Q&A 40 Ms. Turella 59 Mr. Harvey 60 Mr. Walker 63 Mr. Heminger 66 Mr. Mellera 68 Ms. King 70 Mr. Shaw 73 Mr. Douwes 75 Ms. Kaplan 77 Mr. Scheidig 79 Mr. Shaw 81 Ms. Krieg 84 Mr. Spaulding 85 Mr. Campbell 88 Mr. Anair 92 Ms. Bailey 97 Mr. Magnani 104 Ms. Holmes-Gen 105 Ms. Roggenkamp 109 Mr. Goldman 112 Ms. Friest 112 Mr. Sparano 115 Mr. Eaves 116 Mr. Pratt 122 Mr. Stokes 125 Q&A 127 Ex Partes 158 Motion 164 Vote 173 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX CONTINUED PAGE Item 05-10-3 Acting Chairperson Riordan 173 Executive Officer Witherspoon 174 Staff Presentation 174 Ombudsman Tschogl 198 Q&A 201 Ms. Friest 203 Mr. Schaefer 206 Mr. Tunnell 208 Ms. Heaton 215 Mr. Friedman 219 Mr. Vega 221 Mr. Lichtner 221 Mr. Everhart 225 Mr. Fehrenbach 226 Mr. Modisette 227 Mr. Harris 234 Mr. Greer 236 Mr. Rooney 238 Ms. Samulon 246 Ms. Bailey 247 Ms. Pierce 249 Ms. Holmes-Gen 251 Mr. Anair 253 Mr. Lorentzen 256 Mr. Magavern 256 Ex Parte 258 Motion 260 Vote 261 Item 05-10-4 Acting Chairperson Riordan 262 Executive Officer Witherspoon 263 Staff Presentation 263 Q&A 277 Mr. Sell 278 Mr. Patterson 280 Mr. Veney 283 Mr. Koss 286 Mr. Lawrie 289 Mr. Evans 292 Mr. Grose 296 Dr. Pourreau 299 Q&A 302 Motion 305 Vote 309 Adjournment 310 Reporter's Certificate 311 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 ACTING CHAIRPERSON RIORDAN: Ladies and 3 gentlemen, if you would take your seats, please, we'll get 4 our meeting underway. By way of first apologies to those 5 in the audience for starting a little bit late, because we 6 had a marvelous tour this morning in one of AC Transit's 7 fuel cell buses, which we thought was quite wonderful. 8 And because we had been very much involved with its 9 beginning, we had to see the end product. 10 This is October 20th, and this is the regular 11 Board meeting of the Air Resources Board. And I'm going 12 to call it to order. I would like to ask everyone to rise 13 for the Pledge of Allegiance. 14 And, Ms. Berg, if you'd lead us in the pledge, 15 please. 16 (Thereupon the Pledge of Allegiance was 17 recited in unison.) 18 ACTING CHAIRPERSON RIORDAN: Thank you. 19 Madam Clerk, would you call the roll, please? 20 SECRETARY ANDREONI: Ms. Berg? 21 BOARD MEMBER BERG: Here. 22 SECRETARY ANDREONI: Ms. D'Adamo? 23 BOARD MEMBER D'ADAMO: Here. 24 SECRETARY ANDREONI: Supervisor DeSaulnier? 25 SUPERVISOR DeSAULNIER: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 SECRETARY ANDREONI: Dr. Gong? 2 BOARD MEMBER GONG: Here. 3 SECRETARY ANDREONI: Ms. Kennard? 4 BOARD MEMBER KENNARD: Here. 5 SECRETARY ANDREONI: Mayor Loveridge? 6 Supervisor Patrick? 7 SUPERVISOR PATRICK: Here. 8 SECRETARY ANDREONI: Ms. Pineda? 9 Supervisor Roberts? 10 SUPERVISOR ROBERTS: Here. 11 SECRETARY ANDREONI: Madam Chairman Riordan? 12 ACTING CHAIRPERSON RIORDAN: Here. 13 Thank you very much. 14 Before our regular meeting starts, we have a very 15 special presentation this morning. It is a Board 16 Resolution honoring the first Executive Officer of the Air 17 Resources Board, John Maga. John Maga got all of us 18 started even before it was known as the Air Resources 19 Board back in the 1960s. 20 And, John, you can have a choice. You can either 21 sit in your seat while I read the Resolution, and then if 22 you would come forward to the podium there, we'll present 23 the Resolution. Or you may come to the podium now, 24 whichever is your pleasure. 25 I would like to read the Resolution, because it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 is very colorful and it's filled with wonderful history. 2 "Whereas, the California Air Resources Board 3 was formed in 1967 when the California 4 Legislature enacted the Mulford-Carrell Act, 5 merging the Motor Vehicle Pollution Control Board 6 and the Bureau of Air Sanitation of California's 7 Health Department. 8 "John Maga was born in Forbes, Colorado, in 9 1916 and earned Bachelor's and Master's degrees 10 in civil engineering at U.C. Berkeley and became 11 a registered civil engineer. He served as the 12 first Chief of the Bureau of Air Sanitation 13 establishing the first set of air quality and 14 motor vehicle emissions standards. He was chosen 15 by Governor Ronald Reagan to be ARB's first 16 Executive Officer. He had a thorough 17 understanding of the sciences of air pollution 18 insofar as it was known at the time, and he 19 directed the establishment of California's Air 20 Pollution Control Program in partnership with the 21 State's 58 counties and in cooperation and (more 22 or less) with automotive industry and U.S. EPA. 23 "John and the ARB's first Chairman, Dr. A.J. 24 Haagen-Smit, built the ARB from a fledgling 25 unknown state agency into arguably the world's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 leader in air pollution control, both vehicular 2 and stationary. He was an inspiring 3 administrator and admired by his employees. And 4 he had the ability to bring people together of 5 opposing views. From the industry's naysayers 6 ("it can't be done") to local officials ("stay 7 out of my backyard") to the U.S. EPA ("you'll 8 clean up Los Angeles by 1975 or we'll shut the 9 basin down") to the environmental zealots ("close 10 down the economy, health comes first"); 11 "John led the Board, the staff, to develop an 12 Air Resources Management Plan which became the 13 foundation for enhanced air quality in the entire 14 state. He also -- and air pollution control 15 authority which was recognized worldwide authored 16 many articles and books on air pollution. He 17 left the ARB in 1975 to take a position with the 18 Resources Agency during the Reagan 19 administration. 20 "Now, therefore, be it resolved, that members 21 of the California Air Resources Board take great 22 pleasure, together with those assembled today, in 23 honoring the great work and leadership of John 24 Maga in transforming California's Air Resources 25 Board into a world leading air pollution control PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 agency." 2 And we congratulate you. And I've asked 3 Catherine Witherspoon to present the resolution to you. 4 Congratulations, John. And thank you for all that you've 5 done for California's health and the people who live here. 6 (Applause) 7 MR. MAGA: Well, thank you very much. I'm moved 8 by the Resolution of the Board and appreciate it. 9 The items listed in the whereases bring back a 10 lot of memories, some of which I'd almost forgot really. 11 It was a very, very interesting time and challenging. We 12 had a small staff. They were dedicated. We thought we 13 were doing something useful to society. It was also a 14 very controversial period, of course, but controversy 15 isn't new to the Air Resources Board. 16 The thing that I remember most of all and when I 17 think back is the standard for ozone mandated by the 18 federal government. That really changed the thinking and 19 efforts by the Board and required the Board to expand its 20 activities. This largely followed me, of course. But as 21 the Chairman just said, the state was supposed to develop 22 this implementation plan to meet the standards by 1975. 23 And it was utterly an impossibility. So we submitted a 24 plan that included the things that we had done, the things 25 we were planning to do, and it fell far short. And, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 you know, the Board had been struggling with this ozone 2 standard for a long time. 3 As I reflect after my period, I'm impressed with 4 how much the Board has expanded in its authority and its 5 regulation and its staff. You've done things we would 6 never think about doing when we were there, like recently 7 I was thinking about controlling emissions for lawn 8 mowers. That never was on our list, believe me. 9 In reflecting the good things, I'm glad to see 10 that the Board efforts have done some real good, 11 particularly in the Los Angeles area where smog levels 12 have been reduced in intensity and frequency. When I was 13 there, Los Angeles experienced some really brutal smog 14 attacks with extensive eye irritation, extensive damage to 15 vegetation, remarkable reduction in visibility. So a lot 16 of good has been done. 17 The other thing that I think about a lot is the 18 spectacular success of catalytic converters. In 1975 I 19 think was the year when the first converters were 20 installed on cars in California. This, indeed, was a 21 controversial item, because a lot of people felt they 22 weren't going to work very well. They were concerned. 23 Overheating might damage them. They might not last as 24 long as the life of the car. If there's a big failure in 25 devices here, we've got the whole group of cars who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 wouldn't have emission control at all. They might start 2 fires in grass fields and things of that nature. But the 3 results have just been spectacular in my opinion. They 4 permitted the Board to set standards that virtually 5 eliminate emissions from motor vehicles. 6 So I appreciate what you've done. I hope you 7 have a good future with success in control. Thank you 8 very much. 9 ACTING CHAIRPERSON RIORDAN: Thank you very much. 10 (Applause) 11 ACTING CHAIRPERSON RIORDAN: If we have any 12 success, it's because you've laid the very good foundation 13 for us. And that's so, so important. 14 I don't know if there's a colleague of yours that 15 might like to make a comment or not. I understood there 16 might be one. 17 MR. SIMMONS: He's the one that should be choked 18 up. My name is Bill Simmons. I worked for John. Excuse 19 me. And I followed John as his second Air Pollution 20 Control Officer for the Air Resources Board. 21 I just want to give you some idea of the problems 22 that John and I had. He won't talk about them. But to 23 start things off, we didn't have a wonderful facility like 24 this. We were in a used furniture store. And this store 25 was scheduled to be demolished and has been demolished. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 It stood where the Convention Center is now. So nobody 2 was putting any money into this building. And we were 3 all -- most of us were in a warehouse with no natural 4 light. And not only was the light bad, the air 5 conditioning was bad and the heat was bad. 6 And we got moved up from there across the Capitol 7 to a bottling plant. And that's where we lived in those 8 days. The bottling plant was, indeed, better. But I got 9 lost. There are so many rabbit warrens in that place. 10 He had political problems, which you can imagine, 11 but I will describe to you briefly. There were two types. 12 First of all, he was in the Reagan administration this 13 whole time. And Reagan wasn't known as an 14 environmentalist. In fact, a quote has been attributed to 15 him -- I don't know whether it's true or not -- that if 16 you've seen one tree, you've seen them all. So there were 17 limitations within the administration. Although, on the 18 whole, I have to say the administration let us pretty much 19 proceed as we saw fit. 20 Then he had a 14-member Board that was purely 21 political. It wasn't structured at all like it is today. 22 The Board's gone through a number of structural changes. 23 But at that time, I think it was 14 members, many of them 24 were just contributors to Ronald Reagan, and some of them 25 were department heads within the administration. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 Department of Agriculture sat on the Board. The Chief of 2 the Highway Patrol sat on the Board, and somebody from the 3 Health Department. And some of these people were 4 marvelous. Some didn't really understand the program. 5 And some didn't care. But John managed to pull these 6 people together. He had a great ability to make people 7 work together, as the Resolution said. 8 One of his political problems, or problems I 9 guess -- not really problems, was our famous Chair, Arie 10 J. Haagen-Smit. Haage was a wonderful person. We all 11 loved him. But he kind of had a mean -- an independent 12 streak, not a mean streak. And John would sit down with 13 him before the Board meetings and go over the agenda items 14 in some detail so Haage would move in the right direction. 15 And normally he did, with a couple of exceptions. And one 16 of them ended up as a disaster, and I have to tell you 17 about that disaster. 18 It was at the end of the Reagan administration. 19 The Legislature, believe it or not, had mandated retrofit 20 devices on existing cars, on used cars '66 through '70 21 cars. The oxides of nitrogen needed to be reduced. So 22 the Board was faced with several devices, two of which 23 were very good, and a little more expensive than the third 24 device, which was nothing more than spark advanced 25 disconnect. Cut the hose and put a couple of T's in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 hose so you didn't have any spark advance anymore, and 2 that reduced the oxides of nitrogen. 3 And there were side effects on that device. John 4 knew that that was not the way to go, the side effects 5 would be a disaster. And we thought we had Dr. 6 Haagen-Smit and the Board headed in that direction. But 7 at the Board meeting, for some reason, Dr. Haagen-Smit 8 decided to go with the inexpensive device, and so it was. 9 And Reagan left office. Jerry Brown came in, and the 10 people were screaming. They were screaming about how 11 their fuel economy went up. Their fuel consumption went 12 up, and their performance went way down. And I'm sure 13 Ronald Reagan got a good chuckle out of the disaster he 14 left for Jerry Brown. 15 John's biggest problem was that he had a whole 16 new organization that never existed before. He had staff 17 that came from the -- that remained in L.A. that became 18 part of the ARB at the vehicle lab. And he had some 19 people come over from the Health Department, although he 20 had some struggle getting all the people he needed. And 21 he had a bit of internal controversy with the Health 22 Department over that. 23 But his biggest problem, he had to hire a lot of 24 new people. So they were people who new nothing about air 25 pollution, new nothing about air pollution control. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 some of us, like me, came from the outside. We knew 2 nothing about the ways state government operated. And 3 that's an important factor. 4 So John managed to bring all these disparate 5 people together, get us educated, get us moving in the 6 right direction. He just overcame all these obstacles. 7 It wasn't easy. Your problems are different today. But 8 John just had a magical way of quietly working with people 9 and saying, you know, this is what we ought to do. Here's 10 the reasons why you can't. Here's what we ought. And he 11 was just magical the way he managed to overcome these 12 obstacles to get us all moving in the same direction. 13 So I just wanted you to get some feeling for the 14 way the Air Resources Board started, how different it is 15 today. 16 There's one thing that is not different, of 17 course, is you're always making a judgment call on how far 18 you can push industry and what you can't do and what you 19 can get away with. And that will never change. And John 20 was a master at that. I'm not sure Dr. Haagen-Smit was. 21 But you have to admire John for getting this organization 22 started and up and running and becoming a wonderful strong 23 leader type of organization. 24 Those of us that worked for John love John. We 25 worked hard, and we thank you for the Resolution today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 ACTING CHAIRPERSON RIORDAN: Thank you. 2 (Applause) 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 You know, there's part of every agency where we 5 should get an oral history. And I hope that staff, 6 Ms. Witherspoon, you'll save this tape, because the two 7 who have just spoken are very important, and we should 8 share that with those who are going to follow us. I think 9 that that wonderful bit of history is really very special. 10 It's something I have never heard before. And I've been 11 on this Board a long time. 12 So I thank both of you for coming. And to you, 13 John, again congratulations. And thank you for setting 14 the wonderful foundation that you did for us today and for 15 actually the people in the future. 16 And now as all good Chairmen must do, we must go 17 on with the meeting. So if you need to leave, please feel 18 free to do so, or if you'd like to stay with us for a 19 while. 20 We're going to do our legislative update first. 21 The Governor has taken action on all the bills that 22 reached his desk during the year of 2005 and 2006 session. 23 And to make sure that the Board is aware of new laws that 24 are effecting this body, we have asked Rob Oglesby, our 25 Legislative Director, to give us a brief overview of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 legislative year. So Rob, if you would come forward. 2 LEGISLATIVE DIRECTOR ROBERTS: I'm here, Madam 3 Chair. 4 ACTING CHAIRPERSON RIORDAN: Oh, here you are. 5 (Thereupon an overhead presentation was 6 presented as follows.) 7 LEGISLATIVE DIRECTOR ROBERTS: Thank you very 8 much. Can you believe a year has gone by since the last 9 time I gave an annual report? It doesn't seem possible 10 it's been a year. 11 Madam Chair and members of the Board, 12 Ms. Witherspoon, thank you for the opportunity to provide 13 a brief review of significant air quality legislation of 14 2005. For the benefit of the public listening in, let me 15 begin with a short explanation of the Legislative Office's 16 roll within the ARB and the Administration. 17 The Legislative Office serves as the 18 Administration's principle resource for the analysis of 19 and recommendations on air quality legislation. Bills 20 relating to air quality are identified and analyzed, and 21 our analysis and advise is submitted through the chain of 22 command to the Governor's Office. To ensure that the 23 Administration speaks with one clear and consistant voice, 24 only positions approved by the Governor's Office are made 25 public. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 --o0o-- 2 LEGISLATIVE DIRECTOR ROBERTS: The Legislative 3 Office also helps newly appointed Board members prepare 4 for confirmation by the Senate and generally serves as an 5 informational resource to the Legislature and legislative 6 staff. 7 --o0o-- 8 LEGISLATIVE DIRECTOR ROBERTS: Now let me start 9 with the score card. The 2005-06 legislative session 10 recessed on September 8th. And as you know, the deadline 11 for the Governor to sign or veto bills was midnight on 12 October 8th. Overall, 2,900 bills were introduced, but 13 only 961 made it to the Governor. That's an usually low 14 number of bills that were sent to the Governor, about 15 two-thirds or one-half of historical levels. The Governor 16 ended up signing 729 and vetoing 232. 17 This year, about 145 bills related to air 18 quality. That's about typical. Of these, 34 made it to 19 the Governor's desk; 26 were signed into law; and eight 20 were vetoed. The rest failed passage or remain alive for 21 consideration next year, which is the second of 22 California's two-year legislative session. 23 --o0o-- 24 LEGISLATIVE DIRECTOR ROBERTS: In addition to the 25 usual slate of legislative bills, the Legislature PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 continued the recent trend of convening a relatively large 2 number of special hearings on air quality issues. As you 3 can see, the subjects include the greenhouse gas 4 regulations the Board adopted last year, the Carl Moyer 5 Program, naturally occurring asbestos, goods movements, 6 and other issues. 7 --o0o-- 8 LEGISLATIVE DIRECTOR ROBERTS: Now I'll highlight 9 specific bills and legislative issues beginning with bills 10 related to the state budget. And then I'll briefly review 11 about a half-dozen other significant bills. 12 --o0o-- 13 LEGISLATIVE DIRECTOR ROBERTS: This year, ARB 14 successfully sponsored legislation that will help make the 15 hydrogen highway a reality. As you know, in April 2004, 16 Governor Schwarzenegger signed an Executive Order that 17 called for the designation of California's 21 interstate 18 freeways as the California Hydrogen Highway Network. The 19 Executive Order also launched the creation of fueling 20 infrastructure needed to support the new generation of 21 hydrogen powered vehicles. 22 The ARB sponsored bill was originally introduced 23 as SB 250 by Senator Campbell, but ultimately was amended 24 into a budget trailer bill, SB 76, that won the approval 25 of both Houses, the Legislature, and was signed by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 Governor in July. 2 The bill appropriated $6.5 million for state 3 sponsored hydrogen fueling stations and hydrogen vehicle 4 demonstration projects. Specifically, the funds are to be 5 used to support the development of up to three hydrogen 6 fueling station demonstration projects. The stations must 7 be open and accessible to the public and recognize 8 appropriate buffer zones with respect to sensitive 9 population, such as residents, schools, and hospitals. 10 The bill also funds state leases of up to 12 hydrogen 11 powered vehicles and purchases of up to two hydrogen 12 internal combustion engine vehicles, like shuttle buses. 13 The bill further requires the projects contribute to 14 energy and environmental goals that target the 30 percent 15 reduction in greenhouse gas emission relative to current 16 year vehicles, use at least 33 percent renewable resources 17 and hydrogen production, and not increase toxic or smog 18 forming emissions. 19 --o0o-- 20 LEGISLATIVE DIRECTOR ROBERTS: Another bill 21 linked to the Senate budget appropriated $25 million to 22 replace or retrofit California's oldest school buses. SB 23 77 dedicates 12.5 million to replace pre-1977 buses with 24 new buses that are cleaner and safer. The remaining $12.5 25 million must be used to retrofit in-use diesel school PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 buses. The money will result in the replacement of 2 approximately 100 of the oldest school buses and provide 3 for the retrofit of another 1,000 school buses. 4 The legislative directive in SB 77 requires ARB 5 to consider school bus age and geographical distribution 6 when allocating the new school bus funds. In the past, 7 ARB allocated funds based on population. ARB staff 8 recently held a workshop to explain the budget provisions 9 and to receive input from stakeholders on implementation. 10 Staff plans to bring the funding allocation methodology to 11 the Board at your February Board meeting. 12 --o0o-- 13 LEGISLATIVE DIRECTOR ROBERTS: Let me now move on 14 to highlight a few other significant air quality bills. 15 The Governor approved AB 1007 by Assemblymember 16 Fran Pavley that calls for the qualitative analysis of the 17 environmental impacts of different transportation fuels. 18 The main provisions of the bill require the California 19 Energy Commission and the California Air Resources Board 20 to collaborate on an assessment of the relative 21 environmental and public health benefits of different fuel 22 types and to develop a plan by July 2007 to increase the 23 use of alternative transportation fuels. The plan must 24 establish goals for the years 2012, 2017, and 2022. With 25 this work product in hand, policy makers will be better PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 equipped to reduce California's future dependency on 2 petroleum, reduce global warming gasses, and diversify the 3 state's transportation fuel portfolio. 4 --o0o-- 5 LEGISLATIVE DIRECTOR ROBERTS: A related bill by 6 Assemblymember Joe Nation is intended to empower consumers 7 to choose new cars that emit less global warming 8 pollutants. Smog index labels are already displayed on 9 new cars at auto dealerships. AB 1229 requires ARB to 10 modify the existing smog index label by July 2007 to also 11 include easily understandable information regarding 12 relative global warming emission levels beginning with 13 2009 and later model year vehicles. 14 Now let me move on to a few bills of regional 15 interest. Assemblymember Chan's AB 694 puts the Bay Area 16 Air Quality Management District on an equal footing with 17 other air districts for the use of motor vehicle 18 registration fees. The bill allows private entities to 19 receive incentive funds and modifies the list of eligible 20 projects to include engine repowers and retrofits, fleet 21 modernization, alternative fuels, and advanced technology 22 demonstrations. 23 --o0o-- 24 LEGISLATIVE DIRECTOR ROBERTS: Assemblymember 25 Arambula's AB 841 requires the San Joaquin Valley Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 Pollution Control District to install at least one fine 2 particulate matter monitor on the western side of Fresno 3 County in a low income area. Added monitoring on the west 4 side of the valley will improve air quality information 5 for the San Joaquin Valley. 6 --o0o-- 7 LEGISLATIVE DIRECTOR ROBERTS: Senator Simitian's 8 SB 771 prohibits ocean-going ships from conducting 9 on-board incineration while operating within three miles 10 of California's coast. The bill also regulates the 11 release of gray water, sewage, sewage sludge, oily bilge 12 water, hazardous waste, or other waste from the 13 ocean-going ships. 14 --o0o-- 15 LEGISLATIVE DIRECTOR ROBERTS: Now let's turn to 16 legislation related to growing activity at the state's 17 port and rail facilities. 18 --o0o-- 19 LEGISLATIVE DIRECTOR ROBERTS: This issue is 20 receiving a great deal of attention in multiple venues and 21 at multiple levels of the government. The Governor has 22 made goods movement a top priority of his Administration, 23 and several members of the Legislature also introduced 24 bills on this subject. Add to that the activities by 25 former Mayor Hahn's No Net Increase Task Force and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 California Marine and Intermodal Transportation System 2 Advisory Council as well as others. 3 When reviewing legislation, you can see how 4 important it is to consider the whole playing field on the 5 issue. Also goods movement is a system, and when you push 6 on one element, the effects ripple across all other 7 sectors. There can be significant unintended consequences 8 unless the overall system is kept in mind. 9 So let me begin with a brief overview of the 10 Administration's activities and then turn to legislative 11 development. 12 --o0o-- 13 LEGISLATIVE DIRECTOR ROBERTS: As you know, 14 emissions from ships, locomotives trucks, and heavy 15 equipment used to move goods are growing and will continue 16 to grow unless -- continue to increase unless aggressive 17 actions are taken to turn the trend around. If trade at 18 California ports triples by 2020, as some predict, 19 emissions of nitrogen oxides could rise 40 percent, and 20 particulate matter could increase by 50 percent over 21 today's levels. 22 Business as usual is clearly unacceptable. 23 California needs to reduce trade-related pollution by as 24 much as 50 percent to meet air quality standards and 25 protect public health. Last year, Governor Schwarzenegger PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 formed a Goods Movement Working Group co-chaired by 2 Business, Transportation, and Housing Secretary Sunne 3 Wright McPeak and Cal/EPA Secretary Dr. Alan Lloyd. This 4 group is working to complete a prioritized action plan by 5 mid-December for crucial infrastructure projects, 6 environmental mitigation strategies, and funding options. 7 The air quality goals are to cut port related emissions 8 back to 2001 levels no later than 2010 and to continuously 9 reduce emissions thereafter until ambient air quality 10 standards are met and community impacts are mitigated. 11 The plan will also include strategies to reduce public 12 health risks from port-related diesel emissions 85 percent 13 by 2020. 14 There are related goods movement activities on 15 this subject at the local level, the regional, and federal 16 levels. These developments influence the fate of goods 17 movement legislation this year, and the issue will carry 18 over to next year's legislation and ARB's own activities 19 as a regulatory Board. 20 Senators Perata and Lowenthal, Assemblymembers 21 Oropeza and Karnette are some of the legislators that have 22 made goods movement a priority and will continue to work 23 on the issue next year. And next week you will convene in 24 El Monte to review the Memorandum of Understanding between 25 the ARB and the railroads. One provision of the MOU calls PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 for an evaluation of the use of remote sensing technology 2 to measure locomotive NOx and PM emissions. 3 --o0o-- 4 LEGISLATIVE DIRECTOR ROBERTS: The Governor 5 signed legislation to implement this provision of the MOU. 6 AB 1222 by Assemblymember Jones establishes a 7 locomotive remote sensing pilot program and requires ARB 8 to evaluate the ability of a remote sensing system to 9 reliably measure emissions from locomotives. The bill 10 calls for the creation of an Advisory Committee that 11 includes representatives from the South Coast and 12 Sacramento Air Districts, the rail industry, and community 13 members. The bill also codifies the agreement between the 14 South Coast Air District and the railroads to fund this 15 evaluation. The results must be reported to the 16 Legislature by December 2006. 17 --o0o-- 18 LEGISLATIVE DIRECTOR ROBERTS: ARB opposed a 19 related bill, SB 459 authored by Senate Majority Leader 20 Gloria Romero. That bill would have authorized the South 21 Coast Air District to impose a locomotive emissions impact 22 fee on railroads to mitigate air pollution impacts 23 associated with locomotive operations. That bill did not 24 pass. 25 And ARB opposed that bill for two principle PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 reasons. First, federal law preempts state and local 2 authority to adopt regulations in this area or to impose 3 any other requirements on locomotives which we believe 4 includes these fees. Second, the bill could have the 5 undesirable effect of terminating the 1998 MOU between the 6 ARB and the railroad industry, which would risk 24 tons 7 per day of NOx reductions. 8 --o0o-- 9 LEGISLATIVE DIRECTOR ROBERTS: In closing, I want 10 to draw your attention to our annual legislative summary. 11 You should have this report before you, and copies are 12 available for members of the public. The report can also 13 be accessed online at ARB's website. 14 --o0o-- 15 LEGISLATIVE DIRECTOR ROBERTS: Thank you for your 16 attention on behalf of the entire Legislative Office. I 17 want to thank the Chairman, Ms. Witherspoon, the Executive 18 Office and Program staff for their stedfast support and 19 guidance throughout the year. Thanks. 20 Any questions? 21 ACTING CHAIRPERSON RIORDAN: Thank you, 22 Mr. Oglesby. Another excellent report. And we thank you 23 for the written document as well. 24 Board members, are there any questions for Rob at 25 this time? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 Yes, Ms. Berg. 2 BOARD MEMBER BERG: Good morning. On the goods 3 movement, the 85 percent reduction by 2010 -- or 2020, is 4 that 85 percent of existing or 85 percent of the growth? 5 LEGISLATIVE DIRECTOR ROBERTS: It's 85 of 6 existing. It's based on the diesel risk management plan 7 that the Board had previously adopted, and it kind of 8 folds in nicely with the goal of reducing the diesel 9 emissions from the port and goods movement activities. 10 BOARD MEMBER BERG: So with the growth they're 11 expecting, where will we be in 2020? Where we are today 12 or with a reduction? 13 EXECUTIVE OFFICER WITHERSPOON: With a reduction. 14 The statewide goal for diesel risk reduction is 75 percent 15 by 2010 and 85 percent by 2020. And this was off, I 16 believe, the 1990 baseline. And essentially it means 17 putting particulate traps or something equivalent on 18 virtually every diesel engine out there. And marine 19 vessels are just massive diesel engines. And so are the 20 cargo handling equipment, the locomotives serving the 21 port, et cetera. We'll be having some of those 22 regulations before you later this year, cargo handling on 23 auxiliary engines. And the biggest challenge will be 24 figuring out how to accomplish that for marine vessels. 25 But it's the same goal we set for every other diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 engine, so we're tasking ourselves to attempt it for 2 marine. 3 BOARD MEMBER BERG: So the assumption would be 4 we'd get future credits because the engines would be less 5 polluting? 6 LEGISLATIVE DIRECTOR ROBERTS: The intent is to 7 get the level of diesel down from where it is now. But in 8 order to counteract the growth we expect, it will be an 9 aggressive program. We've already explored through the 10 diesel risk reduction plan and we're pursuing through 11 regulations and other activities now with the goods 12 movement action plan. 13 EXECUTIVE OFFICER WITHERSPOON: I think a better 14 way to think about it -- I know you're concerned about 15 growth or overtaking what we try to do. The 85 percent is 16 on an engine-by-engine basis. So uncontrolled is 17 100 percent of emissions. And we want to knock that back 18 by 85 percent. 19 BOARD MEMBER BERG: Thank you. That really 20 helps. 21 ACTING CHAIRPERSON RIORDAN: Any other questions? 22 Yes. 23 BOARD MEMBER LOVERIDGE: Just a quick -- this 24 booklet identifies the variety of other air quality bills 25 that were introduced during the session and what happened PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 to them? 2 LEGISLATIVE DIRECTOR ROBERTS: That's correct. 3 And the ones that were not vetoed or signed essentially 4 remained eligible for consideration next year. It's a 5 two-year legislative session, so most of the bills carry 6 over. 7 BOARD MEMBER LOVERIDGE: But that's all in here? 8 LEGISLATIVE DIRECTOR ROBERTS: Yes. 9 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge, 10 this document acts as a wonderful resource for us. So if 11 you just put it in your library. You may not need it 12 today, but it's great to look at for future. And if 13 people particularly raise questions, you can just refer to 14 it very quickly. It really is a very nice resource that 15 the staff puts together for us. 16 Any other -- yes, Ms. D'Adamo. 17 BOARD MEMBER D'ADAMO: I see there are two bills 18 that impose deadlines on us in July of '07, the Nation 19 bill and the Pavley bill. Were you able to have input on 20 those deadlines? Are they realistic deadlines? It seems 21 like -- 22 LEGISLATIVE DIRECTOR ROBERTS: The deadlines 23 started off by being even shorter. So we were able to 24 have some input to get them to those deadlines. The 25 Pavley bill is a significant piece of work. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 fortunately we have a partner in doing the work in the 2 Energy Commission. Also fortunately we've done a 3 considerable amount of ground work in doing the 2076 4 report. But the bill is really a substantial piece of 5 work that's going to require coordination from among a 6 number of state agencies and a great deal of activity on 7 the part of the Energy Commission. And we'll move forward 8 in partnership with them. 9 The Nation bill builds on the experience we have 10 doing the smog index label. And also the Board gained by 11 doing the Pavley regulations in AB 1493 last year. We 12 have a great deal of knowledge about how to quantify and 13 compare the relative emissions of greenhouse gasses from 14 motor vehicles. I think the challenge is to make sure 15 that the sticker, the labeling, is useful and 16 understandable to consumers. One of the things that staff 17 hopes to accomplish as they look to implement that bill is 18 finding out what works, what makes an impression on 19 consumers, and what's easily understandable, useful 20 information. 21 BOARD MEMBER D'ADAMO: And are there any two-year 22 bills that you think you should comment on, ones that 23 appear right when the Legislature starts up again that 24 look like they might be moving? 25 LEGISLATIVE DIRECTOR ROBERTS: I'd say the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 two-year issue is goods movement. There are a whole host 2 of bills, and they're listed in this report that we 3 distributed that relate to goods movement. But we're, in 4 a sense, premature there. There are activities going on 5 both in the Administration and elsewhere that cause those 6 bills to pause, and while everyone kind of is getting on 7 the same page. I think the goods movement action plan 8 will have a major influence on determining which bills 9 will become more viable in the second year of the session. 10 BOARD MEMBER D'ADAMO: Thank you. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 Any other questions? 13 Seeing none then, Rob, thank you very much. 14 And we will move on. As we change staff, let me 15 advise everyone about signing up. If you wish to speak on 16 any of the items on the agenda today, our clerk is here 17 and will accept those speaker slips which can be found out 18 in the lobby. 19 Let me remind you -- and you'll look around the 20 room and you'll see a number of people who are here and 21 want to testify. And to be sure that everyone has an 22 equal opportunity, we're going to limit those speakers to 23 three minutes each, so each and every person has adequate 24 time. So if you have a written presentation, please 25 condense that into your own words and give us the essence PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 of it. But we will take the written document and make it 2 part of the public record. So it's not that it won't be 3 part of the public record. It will be. But I am 4 interested in having your succinct thoughts on the points 5 that you wish to make. And I will be timing as usual for 6 the three minutes. 7 Staff, if you're ready, we'll move on to the 8 first item on today's -- the second item on today's 9 agenda, which is 05-10-2. These are proposed changes to 10 the ARB urban bus engine exhaust emission standards and 11 the statewide transit rule. This is a continuation of the 12 transit item discussed last month, but today's hearing 13 focuses on the statewide portion of the proposed 14 amendments as described in the notice. 15 Ms. Witherspoon, would you introduce this item, 16 please? 17 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 18 Chairman and good morning. 19 The California market for new urban buses is 20 small. And as a result, our 2004 and 2007 urban bus NOx 21 standards do not provide enough market pull to stimulate 22 early introduction of ultra-clean diesels, though trapped 23 are being installed for particulate. There are no 24 certified diesel buses that meet our 2004 NOx standard for 25 diesel buses, and manufacturers tell us they will not be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 certifying any diesel urban buses to meet the 2007 NOx 2 standard either. That means our transit rule effectively 3 prohibits the purchase of new diesel buses until 2010, 4 which was not intended at the time it was originally 5 adopted in 2000. 6 Accelerated fleet turnover is key to reducing NOx 7 emissions. But without the option to buy new buses, 8 transit agencies on the diesel path are choosing instead 9 to repower existing buses or keep older buses in service. 10 The result is a loss in emission benefits from fleet 11 turnover. Transit agencies on the diesel path are not 12 choosing to convert to alternative fuels, though that 13 option is also available. 14 Staff thinks the barrier to fleet turnover should 15 be removed and recommends that you change the 2007 16 standard to accomplish that. Specifically, we recommend 17 that the Board align the NOx emission standard for diesel 18 buses in 2007 through 2009 with ARB's diesel truck 19 standard for the same model years. 20 To mitigate the impact of that apparent 21 relaxation, we suggest that you also add a new retrofit 22 requirement whereby any transit agency wishing to purchase 23 a diesel bus that emits more than the current 0.2 grams 24 per brake horsepower hour NOx standard must at the same 25 time retrofit one of its older buses with a verified NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 after-treatment device on a one-for-one basis, one new bus 2 for one retrofitted bus. 3 I will now turn the presentation over to Kathleen 4 Mead of the Mobile Source Control Division who will 5 present staff's recommendation in greater detail. 6 Kathleen. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 10 Good morning, Madam Chairman, members of the Board, ladies 11 and gentlemen. This is a continuation of last month's 12 meeting where you adopted changes to the fleet rule for 13 transit agencies requiring all transit agencies within the 14 South Coast Air Quality Management District to be placed 15 on the alternative fuel path. Today, we'll be discussing 16 the new urban bus engine exhaust emission standards and 17 options for addressing future urban bus purchases 18 statewide. 19 --o0o-- 20 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: As 21 shown here, an urban bus is owned or operated by a public 22 transit agency and is normally powered by a heavy 23 heavy-duty diesel engine that is required to meet the 24 urban bus engine exhaust emission standards. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: In 2 2000, the Air Resources Board in addition to more 3 stringent urban bus engine standards adopted comprehensive 4 in-use fleet requirements to control NOx and diesel PM 5 emissions. The rule requires a transit agency to choose a 6 fuel path, either diesel or alternative fuel. Transit 7 agencies electing the alternative fuel path are required 8 to make 85 percent of their annual bus purchases 9 alternative fuel. The rule also requires other measures 10 to ensure NOx and PM emission reductions. Our focus today 11 is on the transit fuel path selections, their required new 12 bus purchases, and the urban bus engine standards. 13 --o0o-- 14 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 15 This table summarizes the California adopted new engine 16 exhaust emission standards. As you can see in the first 17 row, diesel urban bus engines were required to meet a more 18 stringent NOx emission standard starting in 2004. In 19 2007, the NOx standard for both alternative fuel and 20 diesel-fueled urban buses are the same. Also note that 21 the heavy-duty truck engine standard for NOx adopted more 22 recently is nearly six times higher than the urban bus 23 standard in 2007. They are all the same in 2010. 24 --o0o-- 25 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 For alternative fuel path transit agencies, alternative 2 fuel buses are available and will remain available through 3 2010 and beyond. Two manufacturers have stated that they 4 will provide CNG buses certified to the current 2007 5 California urban bus standard. Therefore, alternative 6 path transit agencies are able to continue to purchase 7 urban buses at the current standard. 8 For diesel path transit agencies, no diesel urban 9 bus engine has been certified meeting the current engine 10 standards since 2004. Engine manufacturers, from comments 11 made at our workshops, have no plans to certify a diesel 12 engine meeting the urban bus engine emission standard 13 until 2010. As a result, diesel path transit agencies are 14 keeping older diesel buses in operation longer, resulting 15 in higher emissions and California not obtaining the 16 emission reductions estimated in the original rulemaking. 17 --o0o-- 18 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 19 This graph depicts the emission reductions that are lost 20 because of the failure of replacing the older dirtier 21 diesel engines between now and the 2009. 22 --o0o-- 23 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: In 24 the Initial Statement of Reasons or staff report, there 25 were three options presented but without a staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 recommendation. During the public comment period, staff 2 received several comments and developed an additional 3 proposal for your consideration today. Now I will review 4 the options for your consideration. 5 --o0o-- 6 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 7 First, Option 1 keeps the urban bus engine standard as it 8 is. As stated previously, emission reductions are lost 9 because no diesel engines are available until 2010. We 10 expect diesel path transit agencies to continue 11 maintaining their older diesels until 2010 and not to 12 purchase alternative fuel engines. Delaying purchases 13 result in higher emissions through 2010. 14 --o0o-- 15 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 16 Option 2 allows for the elimination of the 2007 urban bus 17 standard and aligns it with the less stringent California 18 heavy-duty truck engine NOx standard. Diesel engine 19 manufacturers have stated they will produce engines that 20 will meet the heavy-duty truck engine NOx emission 21 standard for sale starting in 2007, thereby encouraging 22 fleet turnover. As a result, this allows for the older 23 dirtier diesel engines to be replaced by engines up to 80 24 percent cleaner starting in 2007. This will provide for a 25 NOx emission reduction of 1.6 tons per day in 2009 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 compared to Option 1. Mid-term emissions are slightly 2 higher than Option 1 as a result of engines meeting less 3 stringent emission standards between 2007 and 2009 4 compared to the 2010 engine emission standards. 5 --o0o-- 6 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 7 Option 3 keeps the current urban bus engine standard like 8 in Option 1. But it also requires all diesel path transit 9 agencies statewide to switch to the alternative fuel path. 10 Purchases of alternative fuel buses would increase because 11 deferring new bus purchases are no longer an option. 12 Assuming that transit agencies start purchasing 13 buses in 2007, this option provides the lowest emission, 14 reaching about 2.5 tons per day in 2009, although there 15 may be some delays because of the installation of 16 alternative fuel infrastructure. But unlike the first two 17 options, Option 3 has a significant cost. If the Board 18 directs staff to pursue this option, a new rulemaking 19 process will be required for its development. 20 --o0o-- 21 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 22 Here are the emission reductions for the three options 23 proposed in the staff report. 24 Option 2, alignment, shown with the blue line, 25 provides near-term emission benefits and mid-term PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 disbenefits compared to Option 1, no change, shown in the 2 red. 3 Option 3, mandatory alternative fuel path, the 4 green line, provides the most emission benefits but the 5 highest cost if diesel transit agencies begin purchasing 6 alternative fuel buses in 2007. Staff estimates that by 7 2025 the statewide NOx emissions will be equivalent under 8 all three options because all engines remaining in the 9 fleet will meet this 0.2 gram NOx standard. 10 --o0o-- 11 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 12 After receiving comments during the public comment period, 13 staff would like to present an alternative proposal. To 14 maximize the NOx emission reductions while minimizing the 15 fiscal impacts on transit agencies, staff proposes 16 aligning with the California 2007 heavy-duty truck engine 17 standard, which is Option 2. In addition, require for 18 each 2007 through 2009 diesel urban bus purchase that a 19 verified Level 3 diesel emission control strategy with a 20 minimum of 25 percent NOx reduction be installed on an 21 existing bus in the transit agency's fleet. This would 22 only effect transit agencies with fleets with greater than 23 30 buses and would only be required as long as urban buses 24 in their fleet are available for retrofitting. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: 2 Now to summarize the issues remaining. 3 First, diesel path agencies have deferred 4 purchases of diesel urban buses since 2004, and many 5 transit agencies need new buses. Staff's proposal to 6 align allows diesel path agencies to purchase buses in 7 2007. 8 Second, diesel path agencies, especially those in 9 the Bay Area, oppose requiring the switch to the 10 alternative path because of the high cost and no 11 difference in emissions between the alternative and diesel 12 fueled engine after 2010. 13 And last, some alternative fuel engine 14 manufacturers believe that alignment signals a lack of 15 support for alternative fuel by the state. They've 16 invested in producing an engine that meets the current 17 urban bus engine emission standard, and ARB backing off 18 the standard hurts this investment. Staff believes there 19 is still a strong market for alternative fuel urban buses. 20 All the transit agencies in the South Coast Air Quality 21 Management District and more than half of the transit 22 agencies in Sacramento, San Joaquin, and San Diego air 23 basins operating 62 percent of the California urban bus 24 fleet will continue to purchase alternative fuel buses 25 through 2015. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 --o0o-- 2 RETROFIT IMPLEMENTATION SECTION MANAGER MEAD: In 3 conclusion, staff recommends that you adopt staff's new 4 proposal, Option 2, alignment with the 2007 truck engine 5 emission standard with a requirement for fleets greater 6 than 30 to retrofit with a NOx diesel emission control 7 strategy where possible for each new bus purchase at the 8 truck engine emission standard. 9 This concludes staff's presentation. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much, 11 Kathleen. 12 Madam Ombudsman, would you please describe the 13 public participation process that occurred while this item 14 was being developed and share any concerns or comments 15 that you may have with the Board at this time. 16 OMBUDSMAN TSCHOGL: Thank you. 17 Madam Chairman and members of the Board, the 18 urban bus engine rule and fleet rule for transit agencies 19 was developed with input from the South Coast Air Quality 20 Management District, California Air Pollution Control 21 Officers' Association, CalACT, California Transit 22 Association, engine manufacturers, bus manufacturers, 23 transit agencies, natural gas advocates, and environmental 24 organizations. 25 Staff began their efforts to amend the statewide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 regulation in November 2003. To date, they have held six 2 workshops to discuss statewide amendments. Three were 3 held both in Sacramento and in El Monte in December 2003, 4 March 2004, and April 2005. Approximately 50 to 75 people 5 attended each workshop. The Sacramento workshops were 6 webcast for those who could not attend. The attendees 7 included environmental organizations, bus manufacturers, 8 air pollution control districts, cities and counties, 9 transit agencies, Manufacturers of Emission Control 10 Association, Engine Manufacturers Association, California 11 Department of Transportation, California Natural Gas 12 Coalition, CalACT, and California Transit Association. 13 In addition to housing workshops, staff also met 14 with numerous stakeholders to discuss their particular 15 concerns, including the environmental organizations and 16 natural gas advocates and transit agency. They attended 17 and made presentations at the California Transit 18 Association Conference in November 2003 and in 2004 and 19 the California Association for Coordinated Transportation 20 Conferences in April and September 2004 and April 2005, as 21 well as to the CAPCOA Mobile Source Committee meetings in 22 August and September of 2005. The staff report was 23 released July 29th, 2005. The notification was sent 24 electronically to nearly 4,700 subscribers. Hard copies 25 were mailed to about 2,000 individuals and posted on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 ARB's website. 2 This concludes my comments. Thank you. 3 ACTING CHAIRPERSON RIORDAN: Thank you, Madam 4 Ombudsman. 5 Catherine Witherspoon, do you have any comments 6 before I open it up for questions from Board members? 7 EXECUTIVE OFFICER WITHERSPOON: Yes, I do. 8 There's one additional benefit of revising the 2007 NOx 9 standard that we left out of the staff presentation. And 10 that is eligibility for Carl Moyer funds. If you did not 11 amend the rule, natural gas busses would not be eligible 12 for Carl Moyer funds after 2007. But with the alignment 13 we're proposing, the additional reductions achieved by 14 alternative fuel buses would remain surplus to the 15 baseline in the rule. And it could continue to receive 16 Carl Moyer funding from 2007 to 2010. And given that the 17 natural gas buses are going to start becoming a little 18 more expensive with the after-treatment and enhancements 19 that are being added to them, that might be a very 20 important factor in all of the transit districts that are 21 continuing to purchase alternative fuel buses. 22 ACTING CHAIRPERSON RIORDAN: Thank you. 23 Board members, questions? I'll look to my left 24 first. Any questions on this side? 25 To my right? Supervisor DeSaulnier and then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 Member D'Adamo. 2 SUPERVISOR DeSAULNIER: Thank you, Madam Chair. 3 Catherine, can you tell me on Option 2 why you 4 settled on one retrofit for one purchase and what's the 5 magic of the 25 percent? 6 EXECUTIVE OFFICER WITHERSPOON: Our principle 7 goal was to enable transit districts to resume purchases 8 of diesel vehicles. So while we wish to offset that as 9 much as possible, we wanted the offset requirement to be 10 manageable and affordable by transit districts. 11 Otherwise, it would also become a barrier to replacing 12 older diesel buses. 13 And so in our particulate trap retrofit program, 14 we have verified devices now in the 25 percent range, 15 which is the Cleaire device that achieves simultaneous 16 particulate and NOx control. There is a 40 percent 17 control device called the EGRT, which is available for a 18 limited set of diesel engines. And then there's selective 19 catalytic reduction coming that could achieve upwards of 20 80, 90 percent control. But it has with it the added 21 burden of having to replace the urea and new maintenance 22 types of difficulties and differences. 23 Many transit districts are happily buying the 24 Longview devices and have installed hundreds of them. And 25 we didn't want to take that option away from people who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 have already embraced that technology and like it. So 2 requiring a minimum 25 percent control made Longview an 3 option. It does not take away the option of going higher. 4 Longview costs 18,000 a piece. We have a price quote of 5 19,000 for EGRT, though I don't think any of them have 6 been sold to transit districts yet, because they've just 7 become verified. And we don't know what the price quote 8 yet is for SCR, because it hasn't been verified or sold. 9 So that was some of the logic. 10 The other reason we didn't try to do one for one 11 offsets on an emissions equivalency basis is that transit 12 districts have done such a good job of retiring older 13 buses and using retrofit devices that some of them don't 14 have any old buses left to retrofit. So not only is it 15 one for one, affordable retrofit for new diesel bus 16 purchase, but also if you have no buses to retrofit, 17 you're relieved of the requirement. And we have not asked 18 transit districts to go out on the offset market and 19 purchase offsets. We think that could be prohibitively 20 expensive. 21 And we were asked might we require transit 22 agencies to fund the purchase of other NOx reducing 23 activities, for example, retiring old school buses. And 24 our preliminary assessment, which we've since verified 25 with the transit agencies, is that transit revenues must PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 be spent on transit-related activities. So that transfer 2 to other activities is not permissible legally. You'd 3 have to change the law to do that. But the very biggest 4 reason was to make it easy enough to do, reasonable enough 5 to do that transit agencies would start buying new diesel 6 buses again. 7 ACTING CHAIRPERSON RIORDAN: Catherine, on one 8 part of the question and the answer, I'm interested in 9 incentivizing the highest level of traps as possible. So 10 do you feel -- I'm a little concerned the threshold -- 11 without making this too complicated, that the threshold 12 may be too low so that we push the technology on the 13 relatively inexpensive, but in terms of cost differential, 14 for the better traps. So are you comfortable it will 15 continue to push that technology? We'll get as many of 16 the higher, better quality traps as possible? 17 EXECUTIVE OFFICER WITHERSPOON: I doubt that many 18 transit agencies will try the SCR between now and 2010 19 because it's new and unfamiliar, though I think in very 20 innovative transit districts they might. And in transit 21 agencies that have leadership from their local boards who 22 direct them to reach and try it and take on the difficulty 23 of the urea, they might. But I don't think they'll choose 24 it easily. 25 Maybe Tom can comment on that as well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 And it's not verified yet, so the window might 2 close on them before it is. 3 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think 4 Catherine is right in that the Bay Area as a diesel 5 property has really stepped up. And another part of our 6 rule requires all these older engines either be replaced 7 or have particulate filters or like devices put on them. 8 So what the Bay Area has done is they've provided funding 9 so that not only the particulate emissions are reduced, 10 but 1700 buses have NOx reductions that go along with it. 11 And that's more than has happened anywhere else in the 12 state. 13 So given that there are 1700 buses already 14 committed and paid for to have NOx control devices added 15 as well as PM, my sense is that that kind of is the 16 momentum that will carry the day for the remainder of the 17 buses, which I think statewide is only like 400 or so that 18 remain that can be retrofitted that have not been 19 retrofitted. 20 SUPERVISOR DeSAULNIER: Thanks, Tom, for giving 21 the Bay Area a pat on the back so I don't have to pat 22 myself on the back. 23 In terms of the offsets, is it possible that 24 metropolitan planning organizations, for instance, in the 25 Bay Area, that MTC could look for funding that isn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 constrained to look for offsets elsewhere, and could we 2 incorporate some kind of incentive? 3 EXECUTIVE OFFICER WITHERSPOON: They absolutely 4 could spend their CMAQ money doing that, which is 5 congestion, mitigation, and air quality improvements. And 6 there has been new legislation on CMAQ funds which puts a 7 high priority on diesel retrofits which was aimed 8 principally at particulate. But there's no reason it 9 couldn't be used for NOx retrofits. 10 And part what's going on with CMAQ is districts 11 that are becoming attainment are losing their hold on it, 12 because it's devoted principally to non-attainment areas. 13 So, for example, the Monterey area had CMAQ moneys before 14 but will not be eligible in the next round. Bay Area I 15 think is still eligible. I'm not positive about that. 16 But it's fighting to keep its share. Maybe Steve Heminger 17 who's signed up to testify can address that. 18 SUPERVISOR DeSAULNIER: I'll be interested 19 between now and when the hearing ends having some kind of 20 language, if the Board would agree, to do that kind of 21 incentive within the rule, to do some kind of offset or 22 encourage that. I don't want to impose something that I 23 think might work in the Bay Area or I think most of my 24 colleagues would support that might penalize Monterey or 25 some other part of the district or part of the state. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 Thank you, Madam Chair. 2 ACTING CHAIRPERSON RIORDAN: So Supervisor 3 DeSaulnier, you're asking staff to come up with something? 4 SUPERVISOR DeSAULNIER: Well, maybe if there's 5 some thought. That's sort of where I'm thinking for 6 myself. The idea of doing the tradeoff, but also 7 allowing -- at least in our instance I think for the Bay 8 Area that where it's possible, we can actually do more. 9 So we can close the gap on emission between -- 10 ACTING CHAIRPERSON RIORDAN: All right. As long 11 as it doesn't penalize -- 12 SUPERVISOR DeSAULNIER: Right. And I don't want 13 to do that inadvertently for other districts around the 14 state. 15 ACTING CHAIRPERSON RIORDAN: An unintended 16 consequence, you don't want that. 17 SUPERVISOR DeSAULNIER: I'm becoming more 18 familiar with those all the time. 19 EXECUTIVE OFFICER WITHERSPOON: We did receive a 20 letter or information from Monterey/Salinas that they're 21 able to meet the retrofit requirement we've set up here 22 with the leftover CMAQ money they have. It would just be 23 could they reach in around round. 24 SUPERVISOR DeSAULNIER: Good. Thank you. 25 ACTING CHAIRPERSON RIORDAN: Ms. D'Adamo. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 BOARD MEMBER D'ADAMO: The chart that you have 2 showing the emission reductions of the three options, 3 slide number 11, on Option 2, does Option 2 incorporate 4 the most recent staff recommendation? 5 EXECUTIVE OFFICER WITHERSPOON: No. 6 BOARD MEMBER D'ADAMO: Would it be possible to 7 run the numbers, or could you guess what Option 2 would 8 look like if you were to incorporate the mitigation 9 concept? 10 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH CHIEF 11 HEBERT: We did run the numbers. It's about 400 tons over 12 the life. So it would be 400 tons more. It would be 13 slightly lower than Option 2. 14 EXECUTIVE OFFICER WITHERSPOON: But if you're 15 looking at 25 percent NOx control, you can visually bring 16 that line down, you know, a quarter from where it is now. 17 BOARD MEMBER D'ADAMO: And would the change be 18 near-term or through time? It's hard to tell. How long 19 would it take to pick up those 400 buses? 20 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: The 21 change would be more on the near-term side, because these 22 retrofitted buses don't have as long a life as the new 23 bus. So we would see greater benefit under that straight 24 line, the straight red line, and then less effect of 25 adjusting the blue line as it goes out towards 2020. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 BOARD MEMBER D'ADAMO: And then following up on 2 where Supervisor DeSaulnier was going, I agree with him. 3 If there's any way to incorporate further incentives, I'd 4 like to see that. 5 But wondering also if staff considered some way 6 to accelerate the retrofits. If we've got just that 7 requirement of 25 percent, what about something along the 8 lines of 50 percent that could be averaged? So that in 9 districts that choose to go with the 25 percent reduction, 10 they retrofit two buses for a district that may want to 11 just try something perhaps more innovative, they'd go with 12 the greater reduction. The idea being perhaps to 13 incentivize some other -- some of these other technologies 14 and then also to accelerate the retrofit of the 400, 15 getting there sooner. 16 EXECUTIVE OFFICER WITHERSPOON: I think that's an 17 appealing concept. But you have to remember that when 18 traps are verified, they're for specific model years, 19 specific engine families at specific ages. So it's really 20 not possible to mix and match and get an average like 21 that. And so what you would end up doing is telling them 22 they have to retire more buses. And they may or may not 23 be able to retire more buses. And also some transit 24 agencies have no retrofitable buses at all. That's just 25 where they start from. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 And, lastly, SCR is not verified. And the 2 highest verified device for four-engine families at the 3 moment is EGRT, and that's at 40 percent. So not a whole 4 lot -- the NOx numbers are low as it stands. 5 Tom. 6 ACTING CHAIRPERSON RIORDAN: He's working. 7 EXECUTIVE OFFICER WITHERSPOON: He's kibitzing 8 with me, and I want me on the mic. 9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I 10 apologize. I missed the cue there. 11 EXECUTIVE OFFICER WITHERSPOON: He said it's not 12 much different. But I think complexity is the issue we're 13 trying to avoid. So that you know when you place an order 14 for a diesel bus, what it is you need to do with another 15 bus in your fleet. And if we get into averaging, it 16 immediately gets more complex. 17 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think 18 it would be different in the Bay Area if nothing had been 19 done to put NOx retrofits already. But with 1700 already 20 cleaned up, we kind of find ourselves in the position of 21 when we're looking for the NOx offsets they're not that 22 many buses left. It would be easier if they hadn't taken 23 that step. We'd say, oh, there's thousands of buses. And 24 the offsets would be easy to get numerous. But the fact 25 there's only -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH 2 HERBERT: 273 in the Bay Area we estimate. 3 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: And 4 about 400 statewide that are left that can take a retrofit 5 and add NOx to it. Then, you know, there's not that much 6 to go after. So on one hand, we can declare victory they 7 all get retrofitted, they all have lower NOx emissions. 8 On the other hand, there's not that much more to harvest. 9 That's sort of why in part we went with a more simplistic 10 way of approaching this. 11 BOARD MEMBER D'ADAMO: And then my last question 12 on alt fuels. On slide 13, you cite a statistic of 62 13 percent of the fleet with alternative fuel path. Is that 14 62 percent statewide, or are there agencies that do a mix? 15 They didn't choose the alt path, but chose to purchase 16 some? 17 EXECUTIVE OFFICER WITHERSPOON: Sixty-two percent 18 is the number of buses that are running on alternative 19 fuels. It's a fewer number of transit companies, because 20 only about a third of the transit companies in California 21 are alternative fuel districts. But they have more buses 22 because they're very large. 23 BOARD MEMBER D'ADAMO: And then you may not be 24 able to answer this, and perhaps some of the witnesses 25 can. I've heard a lot within the last week or so about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 some improvements that have been made and perhaps some of 2 the stakeholders thinking that the marketing is going to 3 improve for CNG. And just wondering if there are some 4 agencies that maybe experimented and what you're hearing 5 out there. If they experimented with one or two CNG 6 buses, are they showing interest in going further -- 7 staying on diesel, but maybe going further with some of 8 the alt fuels? 9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think 10 the situation is that when the Board asked for the 11 agencies to declare their path, which I believe they had 12 to declare in 2001, it pretty much set them on the course 13 of action that they're on now, which is if you're on the 14 natural gas, you've got lots of them in the fleet. And 15 everything that you're buying new is going to be natural 16 gas or other alternative fuels. If you've been on the 17 diesel, you're committed to diesel. So probably most of 18 them are not playing around with a few things here and 19 there. 20 They are experimenting with other technologies 21 like hybrid diesel, electric buses. Some of the alt fuel 22 path agencies are looking at non-natural gas vehicles like 23 gasoline hybrids and the hydrogen bus we had outside 24 today. So there is still interest in pursuing new 25 technologies. But as the divide between diesel and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 alternative fuels, I think it's become a very clear divide 2 and bright line for the agencies. 3 BOARD MEMBER D'ADAMO: Thank you. 4 ACTING CHAIRPERSON RIORDAN: Thank you. 5 Yes, Ms. Berg. 6 BOARD MEMBER BERG: Can I ask one quick question? 7 On slide number 4, where you review the engine NOx 8 standard and we have the -- am I understanding this slide 9 correctly that in 2004 the diesel was at .5, where alt 10 fuel was at 2.2? 11 EXECUTIVE OFFICER WITHERSPOON: That's correct. 12 And the reason for that, Ms. Berg, is that at the time the 13 Board adopted the transit bus standard, natural gas had 14 had an advantage for several years. And also although 15 standards are as high as represented on this slide, they 16 were coming in well below on the level of 1.4 -- 1.8, 17 excuse me. So there was an excess compliance margin. And 18 the rough equivalence between the two paths was meant to 19 reward early low emission performance by natural gas buses 20 and then to squeeze down hard on the transit bus side so 21 they caught up with cumulative emissions over the 20-year 22 period of the rule. 23 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: 24 Actually, if I can put another spin on that. When the 25 Board was doing this, there was considerable consideration PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 to the fact that the natural gas market was still small 2 and emerging. And so what we tried to structure was one 3 where the natural gas engines could not have the standard 4 change every three years, for example. So they were 5 cleaner at the time the Board made the adoption. We left 6 the standards stable for six years, which got us to 2006. 7 And we made the diesel engines clean up. So 8 diesel was dirtier for three years. It was cleaner, which 9 is the .5 you see for three years. It kind of averaged 10 out and gave some stability to the natural gas people to 11 help them establish a market in California. So that was 12 kind of the reason why we had these different approaches. 13 But now, of course, in 2007, the standard that we 14 adopted back then requires everybody be on the same level. 15 And that's what's caused the dilemma that's is having us 16 suggest that standard be revised now. 17 BOARD MEMBER BERG: It seems that we have 18 established a concept to look at what each engine type is 19 capable of being stretched to. And that maybe what we're 20 looking at today isn't unlike what you looked at in 2000. 21 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I think 22 that's true, because one of the other factors was the EPA 23 national rule for 2007 was not final. It was going 24 through its rulemaking process when the Board addressed 25 the buses. And in setting the 2007 standard, we pretty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 mush said, okay, we think we know what they're going to 2 do. So why not for buses, which we've identified as an 3 area that should be in the leadership position of clean 4 air, why not go ahead and adopt this for the state, this 5 proposed EPA rule. 6 It turned out the EPA did it somewhat differently 7 and we're not going to have the low NOx diesel buses 8 available. So we did push. And I wouldn't say we made a 9 mistake. But it didn't turn out the way we had expected 10 it to, and that's why we got in the dilemma there. 11 The other dilemma was the half-gram standard for 12 the '04 to '06, is the engine manufacturers just choose -- 13 the diesel engine manufacturers just choose not to make 14 any engines. Said it wasn't worth their time. They were 15 focused on '07 and beyond. And for this market, they 16 weren't willing to produce engines for us. So it causes 17 no engines to buy, was the outcome of that. 18 BOARD MEMBER BERG: Just as a final comment. I 19 think that when fleets take a proactive stance like the 20 Bay Area has done and has done greater than what was 21 expected of them, I would like to make sure that we give 22 them credit for that and that we don't penalize because 23 they were better than they should have been. I think 24 that, you know, sometimes we lose sight of that. 25 ACTING CHAIRPERSON RIORDAN: Thank you, Member PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 Berg. And you're right. 2 Dr. Gong. 3 BOARD MEMBER GONG: Just clarification again on 4 slide 11, the emission reductions of the three options. 5 That's tons per day of NOx; correct? 6 EXECUTIVE OFFICER WITHERSPOON: Yes. 7 BOARD MEMBER GONG: And the numbers reflect 8 reductions. So when we were talking previously about the 9 NOx retrofit and its effect on Option 2, where would that 10 line go? Above the current line or below it? 11 EXECUTIVE OFFICER WITHERSPOON: Well, it's 12 emissions. As Mr. Cackette indicated, the blue line 13 between '06 and 2010 comes down closer to the green line. 14 BOARD MEMBER GONG: So there was less reduction? 15 EXECUTIVE OFFICER WITHERSPOON: No. There's more 16 reduction. 17 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: First 18 of all, the emissions are -- the axis is emissions, not 19 reductions. The reductions are the differences between 20 the lines. 21 BOARD MEMBER GONG: The title is misleading then. 22 So it gets better? 23 EXECUTIVE OFFICER WITHERSPOON: Yes. 24 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: It 25 shows in blue we get better emissions for a four-year PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 period or three-year period and get higher emissions for 2 the post-2010 time period. 3 BOARD MEMBER GONG: That's very good. I wanted 4 to clarify that, because I was getting confused as to 5 which direction we're going in. 6 And I think, for me, this is a pivotal slide that 7 many of the commentors can comment on. 8 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: The 9 downward trends are because the fleets are turning over 10 and the new buses are way, way cleaner than the old buses, 11 and that's why everything is on the downward trend towards 12 2020. 13 EXECUTIVE OFFICER WITHERSPOON: But the reason 14 blue is not as good as red and green in out years is 15 because you have the cumulative effect of buying 1.2 gram 16 NOx buses, as opposed to if you made the transit agencies 17 sit on their hands until 2010 and buy only .2 thereafter. 18 And the reason that we think you should make the 19 change is that the near-term assault to lungs and health 20 is very important. And you do get a significant benefit 21 between now and 2010 and then an easing in the out years. 22 BOARD MEMBER GONG: Thank you. 23 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 24 BOARD MEMBER LOVERIDGE: A very quick question on 25 the issue of hybrid buses. There is this concept of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 emission reductions is technology enforcing. I guess tell 2 me a little bit about hybrid diesels and what they do and 3 their attractiveness. 4 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Well, 5 the first attractiveness of hybrid diesels is that they 6 are more efficient. So they reduce fuel costs. They 7 would have lower greenhouse gas emissions, for example. 8 That's a major attraction for transit agencies to explore 9 those. 10 Number two is, if you're sort of whetted to 11 diesel, then they're still diesel. So the infrastructure 12 is the same. You're still working on the diesel engine. 13 Your mechanics know how to do it and things like that. 14 That's a second draw for them. 15 And, third, if they're designed well, they could 16 have lower emissions, particularly of NOx, because the 17 greater efficiency of the overall hybrid design can reduce 18 the amount of NOx emitted. And, of course, the down side 19 is that they are more expensive than a traditional. 20 BOARD MEMBER LOVERIDGE: How much difference in 21 cost are they? 22 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH 23 HERBERT: I think it's about $100,000 difference. 24 EXECUTIVE OFFICER WITHERSPOON: A typical diesel 25 transit bus is on the order of 350,000. And there have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 been price quotes upwards -- Tom was remembering in excess 2 of 500,000 for some of the hybrids. It kind of depends on 3 who's bidding and what price they're willing to pay. 4 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Staff 5 is saying 100,000. 6 EXECUTIVE OFFICER WITHERSPOON: We have a 7 separate issue in California that the diesel hybrid 8 providers have not been willing to go through a rigorous 9 certification process. We've had an interim protocol that 10 says we will give you 25 percent presumed reduction in 11 emissions for the electrical aspect of the operation. And 12 they think they're entitled to more. And we'd be happy to 13 give it to them if they'd put the buses on dynamometers 14 and proved out the durability and ran them through various 15 urban bus cycles. 16 And we haven't been able to entice manufacturers 17 to have one person, one company stand behind their 18 product, because the engine's made by one. The chassis is 19 made by another. The electric transmission is made by a 20 third. And they're still sorting out amongst themselves 21 who will carry the warranty, who will stand behind the 22 product. So while we have this interim protocol, in '07 23 it goes away. And unless they come forward and prove that 24 they have a hybrid bus and verify it officially, they 25 won't be available for sale in California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 BOARD MEMBER LOVERIDGE: Thank you. 2 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I want 3 to say that's part of the growing pains of the new 4 technology. If they see the marketplace, they will 5 certify like a normal transit bus drivetrain and should be 6 able to market their product in the non-alternative fuel 7 properties. 8 ACTING CHAIRPERSON RIORDAN: Okay. All right, 9 Board members. I think we're going to go to those who 10 have signed up to testify. We have some 25 people who 11 would like to testify on this item. So we're going to 12 hold to three minutes, please. 13 And I'm going to give several people -- if you'd 14 move forward and be ready to come to the microphone. 15 Vallerie Turella, you're going to be the first speaker, so 16 if you'd come down first. Chuck Harvey, Gene Walker, and 17 Steve Heminger, you're going to follow Vallerie. 18 Chuck, you're the first. So if you'd sit in that 19 front row. 20 And, Vallerie, no. You just say right there. 21 We're going to start. And if you would give your name, 22 please, for the record and who you represent. 23 MS. TURELLA: Thank you, Madam Chair, Board 24 members. My name is Vallerie Turella. I'm here 25 representing Assembly Majority Leader Dario Fromer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 I'm here to respectfully oppose any changes to 2 the 2007 standard. While the staff proposal is 3 appreciated to continue bus turnover and mitigations 4 through retrofitting, the policy we feel could be achieved 5 by keeping the 2007 standard on the books. Rolling back 6 the 2007 standard we feel is the wrong message for 7 California to send to all the engine manufacturers. And 8 it undermines California's reputation for setting 9 standards that typically beat the federal EPA standards. 10 So just in summary, respectfully oppose any 11 changes to take those 2007 standards off the books. Thank 12 you. 13 ACTING CHAIRPERSON RIORDAN: Thank you very much 14 for your testimony. And appreciate it. 15 Just for my clarification, what area does the 16 Assemblymen represent? 17 MS. TURELLA: Oh, yes. He represents in 18 Los Angeles County the cities of Burbank, Glendale, part 19 of Los Angeles. 20 ACTING CHAIRPERSON RIORDAN: Thank you. Thank 21 you very much. 22 The next speaker, Chuck Harvey. 23 MR. HARVEY: Good morning. Chuck Harvey, Chief 24 Operating Officer for the San Mateo Transit District. 25 Thank you, Board, for the opportunity to speak to you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 today. We'll be making a consensus presentation among a 2 number of transit properties this morning with a small 3 number of speakers. 4 We strongly support the staff recommendation to 5 maintain fuel choice in the regulation. And in our 6 presentation, we're going to demonstrate how the 7 regulation has been working since its inception and 8 describe some of the challenges we would face if the fuel 9 choice is eliminated and some flexibility in bus purchases 10 in 2710 isn't considered. 11 I'd like to go back in history first and remind 12 the Board that although transit buses make up less than 1 13 percent of all on-road emissions, we recognize the local 14 impact of our emissions. We recognized our responsibility 15 to protect public health, and we partnered with ARB to 16 support the transit bus fleet rule. It was unprecedented 17 regulations that required us to choose a technology path, 18 required us to invest in several sums of money, required 19 us to test advanced technology. We pioneered the use of 20 ultra-low sulfur fuel, and we opened the door for zero bus 21 emissions testing programs, one of which you rode this 22 morning. We all decided and committed to a 15-year 23 marriage with you. That's longer than mine. We became 24 your partners. 25 What you're going to hear from the other speakers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 is the current regulation is working. Significant 2 reductions have been achieved and will continue to be 3 achieved. On my fleets, for example, PM will be reduced 4 94 percent and NOx 50 percent by '07 from our baselines. 5 In fact, transit has continued to meet and will exceed the 6 regulations as you heard this morning. Significant 7 investments have been made based on our fuel path choice. 8 In my example, over $20 million for 137 engine retrofits 9 and 264 Cleaire devices. 10 The choice of the diesel path allowed the ZEV 11 program testing to begin. In my case, $9 million invested 12 and spent to date to test zero emissions bus technology. 13 There are many challenges that you will hear about if a 14 fuel choice is eliminated against small properties, the 15 funding shortfalls that you've heard about, some of the 16 problems with the color of our money, the impacts on our 17 service on the street, and the impacts if an alignment 18 mitigation strategy isn't adopted. 19 You're going to hear how dual path technology 20 encourages forced development in emissions reductions. 21 This is your path to the other vocations. Even though 22 we're just 1 percent, you're going to take what you 23 learned from us and apply it to the other on-road and 24 off-road applications to reduce emissions in the state. 25 And we're your partner to help you do that. You're going PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 to hear our summary recommendations from Josh Shaw, who's 2 our Executive Director of the California Transit 3 Association. 4 And, finally, you're going to hear us reaffirm 5 our partnership to you. We want to be leaders. We want 6 to pioneer emissions reductions on on-road fleets. We 7 want to work with you and your staff to make the course 8 corrections that are necessary when we have these 9 long-term 15-year regulations. We thank you for your 10 attention and for your leadership on this issue. 11 ACTING CHAIRPERSON RIORDAN: Thank you. And 12 thank you for staying within your time limit. 13 Gene Walker, Steve Heminger, Marty Mellera, and 14 Mary King. That's the order we will be following next. 15 MR. WALKER: Madam Chair, Board members, and 16 staff, good morning. My name is Gene Walker. I'm the 17 Maintenance Manager at Golden Gate Transit and also the 18 Chairperson of the California Transit Association 19 Maintenance Committee. 20 The current regulation is working. Starting in 21 1998, the public transit industry worked with CARB staff 22 and the Board as well as the supplier industry to develop 23 a balanced regulation that allowed flexibility in fuel 24 choice and encouraged rapid roll out of new technology. 25 Transit properties agreed to select the path for 15 years, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 and we are still early in that regulation. 2 Transit properties have program capital 3 investments, fleet replacement, and emission upgrades 4 based on the regulations time frame. Significant 5 reductions in fleet emissions have been achieved on both 6 paths as contemplated by the regulation. Both NOx and PM 7 emission reductions are documented and reported to CARB in 8 annual reports. In fact, California transit properties 9 are meeting and exceeding the regulations. Here are some 10 examples how. The regulations require diesel path 11 agencies to convert to the use of ultra-low sulfur diesel 12 fuel by July 1st, 2002. Santa Clara Valley Transit 13 completed the conversion in April 2001; AC Transit, 14 December 2001; San Francisco Muni Golden Gate Transit, 15 January 2002. 16 The regulation required diesel paths to bring 17 their fleets into a 4.8 gram NOx fleet average by October 18 of 2002. Thirty-five percent of the agencies reporting 19 complied in January 2001. Another 47 percent were 20 compliant by August of 2001. The regulation required PM 21 reductions of 40 percent by 2004; 60 percent by 2005; AC 22 Transit, 79 percent reduction January '05; Golden Gate 23 Transit Central Contra Costa, 87 percent reduction in 24 January '05; city of Modesto, 92 percent reduction in 25 2004. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 The agencies have installed hundreds of PM and 2 NOx emission reduction kits. Hundreds of older engines 3 have been replaced and the buses repowered. Some 4 examples: San Trans 137 1993-buses repowered with 2002 5 engines; Santa Clara Valley, 90 1992-buses repowered 2002 6 engines; AC Transit, 62 1993-buses with 2002 engines; 7 Golden Gate, 35 1991-buses with 2003 engines. 8 Advanced NOx technology has been tested by 9 California transit agencies. ZEV programs have been 10 launched are in revenue service testing. And response to 11 concerns of regulations have been adjusted to ensure 12 continued equivalent emissions reductions of both paths 13 over time. How has this been accomplished? There have 14 been many meetings and workshops with CARB and CARB staff 15 since 2001. CARB staff compliance presentations at annual 16 CTA conferences of what is required in the current year in 17 the next year. An open dialogue has been maintained 18 between transit and CARB on successes and opportunities 19 for more emission reductions. 20 In closing, our track record speaks for itself. 21 Is it fair to change to a fuel specific regulation after 22 transit agreed to partner with CARB, made significant 23 investments to reduce emissions, demonstrated advanced 24 technology, and launched zero emission bus programs? No. 25 And a deal is a deal. The ZEV bus is right out in front. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 Thank you. 2 ACTING CHAIRPERSON RIORDAN: Thank you very much. 3 Appreciate the comments and again staying within the time. 4 Steve Heminger. 5 MR. HEMINGER: Good morning, Madam Chair and 6 Board members. My name is Steve Heminger. I'm Executive 7 Director of the Metropolitan Transportation Comission. 8 And although we are not a public transit operator, we buy 9 all the buses in the San Francisco Bay Area. So we have a 10 strong interest in what you do today, just as we had a 11 strong interest in what you did in 2000. And we think you 12 made the right choice in 2000 by offering transit agencies 13 a choice to pass eventually to get to the same goal, which 14 is zero emissions in 2010. 15 I have prepared a fax sheet for you about the Bay 16 Area. It looks like this. I hope you have it at your 17 places. And I would draw your attention to the bar charts 18 in the lower left-hand corner of it, which is a little 19 before and after snapshot of what our fleet looked like in 20 the Bay Area when you adopted the rule and what it looks 21 like today. And what that shows is that we've reduced PM 22 and NOx emissions by about 50 percent throughout the fleet 23 over only five years. That's a significant success. You 24 deserve a lot of credit for it. Our transit agencies 25 deserve a lot of credit for it. And we look forward to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 continued progress under the same rule. 2 As your staff has indicated, we've, in fact, gone 3 beyond the requirements of your regulation in the Bay 4 Area. We've invested about $300 million since you adopted 5 it on various strategies to clean up our diesel fleet. As 6 you know, most of our agencies have chosen the diesel 7 path. Not all of them, but most of them. 8 Of that 300 million, 100 million, about a third 9 of it, is in excess of your requirements. And we list in 10 the fact sheet the kinds of things that we've spent this 11 money on, whether it's diesel electric hybrids or the 12 Longview devices, zero emission technologies, and other 13 kinds of testing. I think that shows our good faith. 14 And as the prior speaker indicated, another 15 indication of that good faith was the thing you took the 16 ride on this morning. And I know it's a very sweet ride, 17 but it's not cheap either. That one is about 3 million a 18 copy. We certainly need to bring down that price to make 19 them viable statewide. But we're committed to doing so, 20 and in fact have invested about 33 million on the fuel 21 cell requirements that the diesel operators uniquely 22 shared. 23 And that I think returns me to where I began. 24 The two paths that you laid out eventually converge into 25 zero emission. And we're happy to be blazing that trail PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 with our fuel cell demonstrations, not only at AC Transit, 2 but also at the VTA in Silicone Valley. And we, I think, 3 have shown you, my testimony, the testimony that will 4 follow, that we have kept the faith with the CARB rule. 5 In fact, we've exceeded it. And what we're here today is 6 to ask you to keep the faith with us and maintain fuel 7 choice for the transit agencies in my region and 8 throughout the state. Thank you. 9 ACTING CHAIRPERSON RIORDAN: Thank you very much, 10 Mr. Heminger. 11 Any questions? 12 This is an excellent handout. Thank you. 13 Appreciate that. 14 I don't see any, so we'll move on to Marty 15 Mellera, followed by Mary King and Carl Sedoryk and Arthur 16 Douwes and Rebecca Kaplan. 17 MR. MELLERA: Good morning. Marty Mellera, City 18 of San Francisco. I'm also the Chair of the Regional 19 Transit Association in the Bay Area. 20 What I want to talk to you about this morning is 21 two of the options that are in front of you. One of them 22 is to completely eliminate the diesel path. The other one 23 does this indirectly. 24 As we already heard, about two-thirds of the 25 state would be effected by this. And my point to you is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 it's simply not possible to go with one technology like 2 natural gas statewide. San Francisco Muni is an example 3 of this. We did purchase two natural gas buses, tested 4 them for two years, and they simply didn't work in 5 San Francisco due to crush loads and hills. And these are 6 all issues that we detailed to you last year in June 2004 7 when the Board unanimously voted to allow diesel electric 8 hybrids for those reasons. 9 Obviously, lowest emissions possible is the 10 driver. That's why we're all here. But that's not the 11 only issue. An example of that is electric trolley buses. 12 Zero emissions. They're available today. You can buy 13 them. They work extremely successful. They're just not 14 appropriate for every situation. In fact, it's difficult 15 to think of a situation outside of San Francisco where 16 this cleanest bus in the country can function. Natural 17 gas is in that same category of not being able to work 18 everywhere. 19 Small transit agencies would be probably most 20 effected by this, just because funding that is available 21 in large regions would not be available for them. Natural 22 gas is not even available in its correct form to many of 23 these agencies. And what would these agencies do if the 24 diesel option were not available to them? Probably 25 nothing. That's the problem. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 The other thing that I want to put out there is, 2 again, in San Francisco we have large supplies of diesel 3 fuel that are used as emergency contingency fuel for, you 4 know, the fire department, law enforcement. We're seeing 5 headlines every day about natural disasters, 6 unfortunately. And San Francisco is certainly the west 7 coast example of where it can happen again. And so it's 8 important to include a pallet of selections so that we can 9 paint our picture with more than just one color. 10 Thank you. Any questions? 11 ACTING CHAIRPERSON RIORDAN: Yes. Are there any 12 questions, Board members, for this speaker? I don't see 13 any. And we thank you very much for your testimony. 14 Mary King. 15 MS. KING: Good morning, Madam Chair and members 16 of the Board. First, I want to seriously thank the staff 17 for the careful consideration that they gave to the issues 18 and concerns raised by operators over the last couple of 19 months and for the thoughtful recommendation you brought 20 to the Board today. 21 AC Transit is the third largest transit agency in 22 California and the largest bus-only public system in the 23 United States. We operate a fleet of approximately 700 24 vehicles. We provide service to 17 cities in Alameda and 25 Contra Costa Counties. Our daily weekday ridership is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 215,000, served by nearly 7,000 bus stops on more than 100 2 bus lines. During the school year, we provide 3 approximately 60,000 home-to-school trips per day. 4 Any conversion to an alternative fuel path would 5 require funds be diverted from transit services in order 6 to install infrastructure, purchase vehicles, and pay for 7 higher operating costs associated with maintenance. For 8 us, the capital outlay to modify our maintenance 9 facilities would be $62.5 million, and there would be 10 additional annual operating costs in excess of 25 million. 11 No backfill is available to fund services on the 12 streets. This would result in service cuts effecting the 13 poor and transit dependant, youth, seniors, and disabled 14 populations. 15 We've already had to cut service. We recently 16 raised our fares in order to operate within our budget. 17 At $1.75 per fare rate, it's one of the highest in the 18 region. We can go no further at the fare box. Forty-nine 19 percent of our riders are considered extremely low income. 20 Twenty-three percent are very low income. And the 28 21 percent remaining who are moderate or high income riders 22 would return to their automobiles, thus effectively 23 thwarting efforts to reduce auto emissions and traffic 24 congestion while placing the burden disproportionately on 25 those least able to pay. I believe that flies in the face PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 of the direction that your Board has been successfully 2 committed to in the past. 3 What I've tried to do today is explain the 4 dilemma presented to transit operators if an alternative 5 fuel path were to be mandated at this time. I hope I've 6 also put a face on the rider of public transit. These 7 people are the reason we operate. They are our mission. 8 But if I failed to do so from a factual, humanitarian, and 9 good government point of view, please be aware this 10 constituency is well able, prepared, and has in the past 11 made themselves seen and heard. Further cuts in services 12 will undoubtedly provoke more vocal reactions from our bus 13 riders unions and could ultimately lead to costly and 14 time-consuming social justice and civil rights litigation. 15 All of this is unnecessary and avoidable if you follow the 16 staff's recommendation today and allow us to stay the 17 current course. Thank you. 18 ACTING CHAIRPERSON RIORDAN: Thank you very much 19 for your testimony. 20 Are there any questions for this speaker? 21 Supervisor DeSaulnier. 22 SUPERVISOR DeSAULNIER: Not a question. Just I 23 can't not take the opportunity to thank Mary for being 24 here. Mary is a former colleague who was on the Alameda 25 County Board of Supervisors for many years. Was also a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 colleague on MTC where perhaps her greatest moment in my 2 relationship with her was as Chair of a Committee for the 3 replacement of the eastern span of the Bay Bridge, which 4 in those times I think was supposed to be finished right 5 about now, right? 6 MS. KING: Now they'll disregard my testimony. 7 Thank you. 8 SUPERVISOR DeSAULNIER: Anyways, thank you, Mary. 9 ACTING CHAIRPERSON RIORDAN: That was a 10 challenge. In terms of -- we think of air quality as a 11 challenge. I'm sure locating the Bay Bridge was an even 12 greater challenge. 13 SUPERVISOR DeSAULNIER: You have no idea. Mary 14 once described it to the press as likening it to a Three 15 Stooges movie. 16 ACTING CHAIRPERSON RIORDAN: Carl Sedoryk, Arthur 17 Douwes, Rebecca Kaplan, if you'd come forward, Kenneth 18 Scheidig -- I apologize for how I'm pronouncing your name 19 -- and Joshua Shaw. 20 MR. SEDORYK: You got my name just right. My 21 name's Carl Sedoryk. I'm the general manager and CEO for 22 Monterey-Salinas Transit in Monterey, California. 23 I'm here speaking to issues effecting I think all 24 transit operators, but my take is more of the smaller 25 operator. We operate 78 buses, six trolley-style vehicles PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 throughout Monterey County and into and through three 2 adjacent counties, a huge service area serving central 3 Salinas Valley-Monterey Peninsula. 4 You have been presented with the option also to 5 do nothing. However, doing nothing has unintended 6 consequences as well as has been discussed. By making no 7 changes to the current regulation, many agencies will not 8 be able to buy new buses in 2007 and beyond. Smaller 9 agencies as well are faced with diminishing sources of 10 funding. Oftentimes do not have local sales tax support. 11 So we'll be doing more with less, or maybe in some cases 12 not being able to do anything at all. 13 As engine manufacturers, we'll not be able to 14 deliver a production diesel engine that meets our emission 15 levels. We have nothing left to upgrade. The California 16 transit market will need over 1,000 buses for the period 17 2007 to 2009. These purchases -- this significant number 18 will likely be deferred unless alignment or harmonization 19 is allowed. 20 The CARB staff has stated, and we think that they 21 are accurate, that the emission benefits will occur in the 22 near-term if these standards are aligned in 2007-2009, 23 because there's no viable alternative for our agencies to 24 put into place. Otherwise, we'll just continue to operate 25 older, less efficient diesel engines that will create more PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 emissions and actually be more costly to run and could 2 have the inadvertent effect of decreasing the amount of 3 transit service that we're able to provide because we just 4 can't afford to continue operating some of these older 5 vehicles. 6 Thank you. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much. 8 Thank you for staying to your time limit. 9 Arthur Douwes. 10 MR. DOUWES: Good morning, Madam Chair and 11 members of the Board. My name is Arthur Douwes with the 12 Santa Clara Valley Transportation Authority. 13 And the dual path recognizes CARB's 14 responsibility to regulate emissions levels and not fuel 15 types. Maintaining both paths keep fuel and technology 16 honest and open competition for market share. Although 17 transit accounts for less than 1 percent of emissions, 18 transit fleets have been a prime factor in the development 19 and testing of emission control reduction technology. 20 These are now applied to other vocations, including the 21 trucking industry. 22 Transit fleets have been a prime factor in 23 testing NOx reductions such as the Cleaire Longview 24 devices, the STC, or EGRT technology that we now see has 25 been verified by ARB. And we are presently testing at VTA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 the selective catalytic reduction systems, presently not 2 verified, but has looked very promising. 3 In addition to that, the VTA as well as AC 4 Transit is testing the zero emissions to fuel cell 5 technology in buses. VTA has operated three fuel cell 6 buses in transit service starting in February of this 7 year. Reports have been submitted to ARB staff 8 accordingly. 9 The dual path also has provided some other 10 benefits in terms of what the agencies have done so for. 11 You've heard already that many agencies have repowered 12 transit buses with newer engines. Many agencies have gone 13 and applied ultra-low sulfur diesel fuel at an earlier 14 stage than was required. Pure NOx is also being tested at 15 different properties. And, again, we have hybrid buses 16 now under test and will be testing further. So transit 17 agencies have been a prime factor in testing and the 18 development of emission reductions. 19 And we want to continue to be in partnership with 20 ARB staff as we have been. So VTA recommends that the 21 Board accepts staff's recommendation. Thank you. 22 ACTING CHAIRPERSON RIORDAN: Thank you, 23 Mr. Douwes. 24 Any questions? 25 Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 Rebecca Kaplan, followed by Kenneth Scheidig. 2 MS. KAPLAN: Thank you very much. Good morning, 3 Madam Chair, members of the Board. My name is Rebecca 4 Kaplan, and I'm the Chair of the External Affairs 5 Committee of the AC Transit Board of Directors. 6 I sit in a seat where I have 1.5 million 7 constituents. And it's an elected position where I have 8 to make happy both very dense inner city areas as well as 9 more suburban areas and more widely spaced areas. And 10 through all of these regions, we're trying to provide 11 transit service dealing with an amazing array of problems: 12 Welfare-to-work recipients trying to get to nighttime 13 shift jobs who don't own cars; senior citizens who have 14 driven their whole life and have been told they can't 15 renew their driver's license because they didn't pass the 16 eye test. And they're feeling very unhappy about this and 17 calling us for service and trying to grapple with the fear 18 of losing freedom in their lives. 19 And one of the things that I've learned is that 20 we do actually need a range of solutions. And some people 21 have said that policy is like making sausage. That it's a 22 disgusting process. And I actually disagree. I think 23 that making effective policy is more like a really 24 successful potluck dinner where, you know, one person 25 brings the cranberry sauce and one person brings the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 turkey and it works out all together. 2 And one of the things that I've learned is that 3 we sometimes need different solutions in different 4 situations. Sometimes we need different kinds of buses 5 for different terrain, different situations. And I think 6 as Californians, we all need to breathe the air. And it's 7 great being able to talk about a nonpartisan issue. And 8 Gena Davis doesn't have to be the only nonpartisan person 9 seen doing policy. Because everybody needs to breathe the 10 air. And we do have different conditions throughout this 11 state. 12 And I actually think that what unites us is 13 stronger than what divides us. And there are areas where 14 natural gas is an excellent idea. And I have no 15 opposition to natural gas being supported and promoted and 16 encouraged for those who are pursuing it and where it can 17 really work. And I think it's essential, especially with 18 all the stories we've seen about shortages coming up, that 19 we really embrace this as a time for innovation. 20 The last thing the people who have already 21 invested in that infrastructure need is competition to buy 22 the natural gas that would drive the price up for them, 23 and for those who have already invested in other 24 alternative infrastructure. And we are working on a 25 hybrid program as well. So I'll let our technical staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 talk to you about that another time. But we are also 2 working on hybrids. 3 This is a time to encourage innovation, to have 4 the humility to admit that we don't know what the dominant 5 fuel will be 20 years from now. But I imagine I'll be 6 somewhere having to deal with whatever it is, and I would 7 love for the next generation that we encourage this 8 opportunity to have the different agencies pursue 9 different possibilities and report back the data, learn 10 what the best practices are, what's good for what 11 conditions. We're being strongly encouraged to explore 12 biodiesel also as a potential future option. And having 13 diesel buses allows us to experiment with that as a 14 potential future fuel as well. 15 So I would encourage you to adopt the staff 16 recommendation. And thank you all so much for your hard 17 work and your time. 18 ACTING CHAIRPERSON RIORDAN: Any questions, 19 Members? 20 Seeing none, we'll move on to Kenneth -- please 21 help me. 22 MR. SCHEIDIG: Scheidig, as if it was 23 S-h-y-d-i-g. 24 Yes. How do you do? Madam Chair and members of 25 the Board, staff, my name is Kenneth Scheidig. I'm PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 general counsel for AC Transit. And I believe you 2 received a copy of my communication of yesterday to you 3 which expressed some concerns that AC Transit had, should 4 you have gone with the mandated statewide alternative fuel 5 path arrangement. And I leave that to your reading. I'm 6 trying to be very short and sweet on this, if that's 7 possible for an attorney. 8 I direct your attention -- I presume you all have 9 that; correct? Okay. 10 I direct your attention to the exhibits that are 11 set forth there that show you what have been done by AC 12 Transit for purposes of reducing PM, NOx. What we have 13 done voluntarily to make certain that we reduce air 14 quality impacts in the area that we serve and also to 15 indicate the cost it would be to AC Transit should you 16 adopt the statewide mandate. We would disagree with your 17 staff that there is a minimal cost to agencies should this 18 occur. As you can see from our analysis, it would cost us 19 $62.5 million for infrastructure improvements, and that 20 assumes we have room on our divisions to do this. And 21 that's one of the issues I raised in my letter to you. 22 But you have the letter in front of you. You can see all 23 those things. 24 We just are appreciative of the fact the staff 25 has recommended the approach today, certainly support that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 approach. And we recognize that if you were going to go 2 the alternative means, that you would recognize that there 3 are environmental issues there that would have to be 4 addressed that have not been adequately addressed today. 5 With that, we support the alternative that is 6 being proposed to you today by your staff. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much 8 for your testimony. 9 Are there any questions for this speaker? I see 10 none. 11 Next will be Joshua Shaw, followed by Jeanne 12 Krieg, followed by Peter Spaulding. Then I'm going take a 13 bit of a break. I think we've gone about halfway. 14 MR. SHAW: Good morning. I'm Josh Shaw, 15 Executive Director of the California Transit Association. 16 And on behalf of our diesel path agencies and alternative 17 fuel agencies, I'll summarize our recommendations this 18 morning. 19 Our guiding principle since 1998 when the CARB 20 first considered mandating natural gas statewide for all 21 agencies has been and continues to be maintain fuel 22 choice. Of course, any changes to the rule at this time 23 should consider maximum air quality benefits available, 24 but we think it should also recognize previous investments 25 and air quality gains already attained, while PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 acknowledging the state of the U.S. transit engine 2 manufacturing market and balancing the cost effectiveness 3 of the fuel and engine technologies already chosen under 4 your rule versus the problems inherit in forcing new fuels 5 and technologies in mid-stream. 6 Therefore, we are happy to report your staff's 7 recommendation this morning. And we, too, recommend that 8 you continue to allow transit operators to choose the fuel 9 path that makes sense for them. The obvious way to do 10 that now is, in fact, staff's recommendation. Especially 11 in light of the engine manufacturers' ability to meet the 12 U.S. EPA's diesel engine standards for the other 49 states 13 in 2007. Therefore, you should align your transit bus 14 engine standards with U.S. EPA's and your own heavy-duty 15 truck standards in those years. In that way, engine 16 manufacturers will be able to produce and sell the 17 cleanest possible engines to meet transit needs in 18 California, and transit agencies won't have to delay fleet 19 turnover, which would produce emission disbenefits in the 20 short term. 21 We know some of you are concerned about relaxing 22 even for a few short years your existing standards. 23 That's why many of our members are prepared to take the 24 additional steps necessary to mitigate any air quality 25 deficiencies created by our recommendations or the staff. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 On the other hand, while most operators, as 2 you've heard, especially in the Bay Area have replaced 3 their oldest buses, repowered engines, or installed 4 after-treatments devices early, there are some smaller 5 agencies usually in the rural or central coast areas of 6 California that need new buses during this period but 7 can't fund mitigation measures. Therefore, we are asking 8 you to adopt the exemption provisions recommended by 9 staff. Allowing these operators to still procure a 10 limited number of new vehicles will not only improve 11 emissions by retiring older buses and replacing them with 12 the most recent clean diesel technology, but will also 13 facilitate greater service reliability and reduce 14 maintenance costs. 15 I'm standing here this morning with many in the 16 audience representing transit agencies who will not speak 17 today, but who are equally supportive of the 18 recommendations I've made and of your staff 19 recommendations. I'd ask them all to stand. If they 20 haven't given you a speaker card, let's see all the 21 agencies who are here that support your recommendations. 22 I want to thank your Board, your staff, and your 23 friends in the environmental community, particularly Todd, 24 Catherine, and Bonnie who have consistently kept your feet 25 to the clean air fire. We want to thank you and them for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 working with us to maintain air quality while also 2 allowing us to provide high quality public transit 3 service. 4 Thank you. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 And thank you who are in the audience who have come today. 7 We appreciate that. 8 Let me go on to Jeanne Krieg. 9 MS. KRIEG: Good morning. My name is Jeanne 10 Krieg. I'm the Chief Executive Officer of Eastern Contra 11 Costa Transit Authority in Antioch, and I'm here today to 12 support the staff proposal, because it's the right thing 13 to do, and also it takes what we've all learned since this 14 program began and makes the whole program better. 15 When the fleet bus rule was first adopted, 16 transit agencies focused on CARB's intent. We developed 17 long-term strategies to reduce emissions, recognizing the 18 significant investments required based on our path 19 choices. 20 As you've heard, we've willingly made those 21 investments and selected the technology path that best 22 suits our local situations. Our focus has been on 23 complying and in some cases exceeding the goals of the 24 regulation. Since this program began, transit agency 25 representatives and our own California Transit Association PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 staff has been meeting on numerous occasions with both the 2 Board members as well as the CARB staff. We've reviewed 3 the status of our progress. We've reported about new 4 technologies that are becoming available. And also we've 5 discussed new opportunities that we have, such as testing 6 diesel hybrid buses. 7 We've learned a great deal since the beginning of 8 this program and look forward to continuing. We want to 9 remain your partner to reduce emissions in California. We 10 also want to provide CARB the opportunity to leverage what 11 we've learned and what we will learn to other diesel users 12 that have the potential to obtain even larger emission 13 benefits. 14 Thank you very much. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 Move on to Peter Spaulding. 17 MR. SPAULDING: Madam Chair, members of the 18 Board, thank you for the opportunity to offer a comment on 19 this item today. My name is Peter Spaulding. I'm the 20 Executive Director for the California Association for 21 Coordinated Transportation. We're a nonprofit association 22 of 247 transit, power transit, and other providers of 23 equipment and transportation services to seniors, people 24 with disabilities, low income, as well as the general 25 public. We have about 60 or 70 members in common with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 California Transit Association. 2 I'd like to reinforce some of the points that 3 were expressed very comprehensively by their members this 4 morning. Overall, CalACT supports maintaining fuel 5 neutrality in all aspects of the ARB transit fleet rules 6 and engine regulations and permitting acquisition of 2007 7 to '09 model year vehicles with urban bus engines that 8 meet both the California truck engine standard and the 9 federal U.S. EPA standard, and if necessary, permitting 10 mitigation exception or exemption criteria to reduce 11 emission levels to California standards. 12 I just wanted to focus on two points to reinforce 13 that were mentioned earlier, those being fuel availability 14 and the situation from the operators of vehicles of fleets 15 with fewer vehicles. There are still areas of the state 16 where alternative fuels are not available, including the 17 central coast, north coast, and sierra foothills. Some 18 operators are 50 to 100 miles away from a major pipeline. 19 In the central coast area, the natural gas components 20 include butane and propane in amounts that make it 21 unsuitable for operation in buses and automobiles. Any 22 conversion to an alternative fuel path would require funds 23 to be diverted from transit service to install 24 infrastructure and fleet replacement. Operators simply do 25 not have the resourses to do this. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 Operators with fewer vehicles in their fleets, 2 even the smaller fleets, are doing everything that they 3 can to reduce emissions, just like the larger operators 4 are doing in the Bay Area. Vehicles are being repowered. 5 Older vehicles are being used less frequently and removed 6 from service whenever possible and removed from the active 7 fleet whenever possible. Some operators have sought 8 Congressional earmarks on multiple occasions to try to 9 find an alternative fueling facility. Unfortunately, they 10 were not successful. Some operators have driven as much 11 as 40 extra miles a day, over 20,000 miles in a year, 12 simply to purchase the ultra-low sulfur diesel fuel after 13 the suppliers they had backed out of agreements to provide 14 the fuel. So the operators are working hard, even the 15 smaller operators, to comply with the rules. 16 We urge you to keep the rule as the staff has 17 recommended. That will help us get older buses off the 18 road earlier. And that way we can continue to purchase 19 newer vehicles in 2007 and not have to wait until 2010. 20 Thank you very much, and we look forward to continuing to 21 work with you and your staff. Thank you. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 Any questions for this speaker? 24 Seeing none, thank you. All right. 25 I'm going to go by the clock in the back of this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 room. It's about seven after, perhaps. And I would like 2 to take a break until about 11:15 for us and for our court 3 reporter. And let me tell who's going to be on deck when 4 we come back, and I want them in the front row. And we'll 5 begin with Todd Campbell, Don Anair, Diane Bailey, Bruce 6 Magnani and Bonnie Holmes-Gen, if you would all be in the 7 front row ready to go at 11:15, I'll be back. Thank you. 8 (Thereupon a recess was taken.) 9 ACTING CHAIRPERSON RIORDAN: Ladies and 10 gentlemen, if you would take your seats, please. And 11 those people starting with Todd Campbell, if you'd come 12 down, please. 13 Was it your city that had the rushing water down 14 the burn area, or was that Glendale? 15 MR. CAMPBELL: We had the mud slides. We just 16 had a fire, and the rain came too late and got the mud, 17 too. So now we just need snow. 18 ACTING CHAIRPERSON RIORDAN: Or a hurricane. 19 Everybody, if we could, please, we're going to go 20 back into session. And, Mr. Campbell, if you would lead 21 off, please. 22 MR. CAMPBELL: Thank you, Madam Chair. My name 23 is Todd Campbell. I'm the Policy and Science Director for 24 the Coalition for Clean Air. And I'm here to urge you to 25 uphold the standard to the 2007 standard as originally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 proposed. And I'm arguing for this because there are 2 already three options in the marketplace that can bring 3 you into compliance. There's the gasoline hybrid 4 electronic option, and also two natural gas vehicle 5 options that will be not only meeting the 2007 standard, 6 but actually the 2010 heavy-duty standard. 7 I also think there's other ways that you can 8 achieve the standard in the diesel path by buying diesel. 9 And that's by further retrofitting and doing further fleet 10 averaging. 11 I also have to correct one point that was made. 12 I do not believe if you uphold the standard the Carl Moyer 13 funding will be in jeopardy for anyone, particularly if 14 you're buying .2 gram engines because the standard is .5. 15 And, therefore, you would have an advantage and be able to 16 use those funding. So I don't really understand that 17 argument. 18 But what I want to talk to you is about equity. 19 The transit agencies that chose to do the alt fuel path 20 have been paying a premium for protecting public health 21 for five years since this rule was adopted. And I would 22 argue that it's sort of ironic that the agency staff would 23 argue that we should fear diesel transit agencies not 24 purchasing vehicles for the next three years and actually 25 quantify health benefits from rolling back our public PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 health standard. When are we starting to undermine our 2 own standards to roll back standards that we believe in 3 and we think are capable of being achieved? 4 Particularly what I think is also ironic is that 5 the zero emission bus requirement was required by this 6 path. The hydrogen vehicles would have been much more 7 expensive, and that would have been a much drastic change 8 in terms of fuel type. 9 So I guess what I'm saying is I'm sort of 10 dismayed and very troubled in terms of what kind of 11 message we're sending, not just to the manufacturers that 12 have failed to comply with the standard and chose not to 13 comply with the standard, but to the manufacturers who 14 actually invest in the R&D to bring you 2007 standards in 15 2007. 16 I think we have to figure out how willing are we 17 to rely on the diesel industry in 2010. And I'm hearing 18 contradictory arguments. I'm hearing that transit 19 agencies may not feel comfortable using SCR between those 20 years. I'm also hearing these agencies are the ones that 21 pioneer and push for technology so we can achieve these 22 standards. But I'm also hearing the 2010 standards are 23 near certainty there is no emission reduction benefits 24 between these two engine types. And I would argue, as 25 I've always argued, there is a tremendous benefit and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 advantage between the two fuel types. And the reason why 2 the South Coast has pushed so far or hard with the alt 3 fuel path is because we need that competitive drive to 4 bring the diesel industry to the table. And, again, I 5 feel like we're falling short. 6 Clean transit is critical. It's critical because 7 it's carrying people. If you look at Dr. Arthur Winer 8 studies inside the bus, the in-vehicle studies with school 9 buses, I think it's very telling that after-treatment and 10 engines matter when it comes to emissions and exposure to 11 the ridership. And I would argue that the bus riders 12 unions in our area with the largest transit agency -- 13 second largest in the country not only want more buses, 14 but they want clean buses and they demand the cleanest. 15 So with that, I know I'm running out of time. I 16 see that, Madam Chair. 17 ACTING CHAIRPERSON RIORDAN: You've run out. Not 18 running; run. One last concluding remark. 19 MR. CAMPBELL: I would ask you not to fall for 20 the false choices. The choice Option 3 to go to a natural 21 gas option only is a false choice. You'd have to redo the 22 rule. We never asked you to do that. All we asked for is 23 for the public health standard to be maintained and for 24 you to require the transit agencies to meet it. 25 ACTING CHAIRPERSON RIORDAN: Thank you, Todd. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 Catherine Witherspoon, could you just enumerate a 2 little bit on the Carl Moyer again? 3 EXECUTIVE OFFICER WITHERSPOON: Sure. The 4 standard in 2007 goes to .2 for both technologies for 5 diesel and for natural gas. And at that time, natural gas 6 becomes ineligible for Carl Moyer funding unless you 7 adjust the standard. 8 And Todd was correct in indicating that currently 9 and until '07 they can still qualify. But that will no 10 longer be the case after '07. 11 ACTING CHAIRPERSON RIORDAN: Okay. Thank you 12 very much. 13 The next speaker is Don Anair. 14 MR. ANAIR: Good morning, Madam Chair, members of 15 the Board. My name is Don Anair. I'm a vehicles engineer 16 with the Union of Concerned Scientists. And I'll keep my 17 comments brief. 18 I want to support staff's proposal for the 19 retrofits in turn for buying buses that don't meet the 20 current standard. I think this provides flexibility in 21 the rule that allows transit agencies that need to 22 purchase diesel buses the option to do so and also 23 maintains some of the benefits that we expected from the 24 engine standards that are currently on the books. 25 But I don't believe that we have to roll back the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 standards to make this option work. I think maintaining 2 the standards as they are currently is important for a 3 number of reasons. One, California Air Resources Board 4 has set numerous standards over the year and has been a 5 leader in establishing engine standards and creating clean 6 air for Californians. 7 One of the issues with rolling back the standards 8 is that even though the diesel engine manufacturers have 9 said they won't meet it, others have. Natural gas engine 10 manufacturers have said they can meet it. And there's 11 also the possibility of gasoline hybrid buses meeting the 12 standard. By rolling back the standard, you remove the 13 requirement for these technologies to actually meet any 14 standard. And we think that's a detriment. As staff 15 said, over 60 percent of the transits are on the 16 alternative fuel path. They deserve to be able to get the 17 cleanest buses available. And by rolling back the 18 standard, it's possible those buses won't be available. 19 And by keeping the standards on the books, we can 20 make sure that the diesel transit paths also purchase the 21 cleanest diesel bus available and make sure that there is 22 still progress moving forward in getting these cleaner 23 diesel engines on the road. 24 So in conclusion, I think we can keep the 25 standards on the books, provide flexibility for the diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 transit paths to purchase new buses, require retrofits of 2 older buses to achieve NOx emission reductions that we 3 expected from the engine standards and preserve clean air 4 for California. 5 Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much. 7 Diane Bailey, followed by Bruce Magnani, followed 8 by Bonnie Holmes-Gen, and then Jean Roggenkamp, Joshua 9 Goldman, and Dawn Friest. 10 SUPERVISOR DeSAULNIER: Madam Chair. 11 ACTING CHAIRPERSON RIORDAN: I'm sorry. 12 SUPERVISOR DeSAULNIER: That's quite all right. 13 I'm trying to be good here, but it's really painful for 14 me. 15 ACTING CHAIRPERSON RIORDAN: Supervisor 16 DeSaulnier. 17 SUPERVISOR DeSAULNIER: I want to ask staff if 18 they can respond to the suggestion, because it seems to 19 me -- and Catherine and I had a little bit of this 20 discussion yesterday, it would be my preference to 21 maintain -- may just be a question of semantics. But it 22 seems more than that to me that you maintain the standard 23 but provide for exemptions. I think that was what Don was 24 suggesting. 25 EXECUTIVE OFFICER WITHERSPOON: Don did suggest PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 that, as have other environmental representatives, that 2 there's symbolic importance in keeping the standard on the 3 books. 4 It's important to us that we understand 5 substantively what you want to accomplish, because we 6 haven't drafted the regulatory language yet. We'll do 7 that in the 15-day change process following this 8 proceeding. It is simpler to make it plain English and 9 say we're aligning and then to put the NOx retrofit 10 requirement in the provision of the rule that is about 11 fleet averaging. But staff has made a commitment to the 12 environmental community that we will try to write it the 13 other way and see if it makes sense and passes normal sort 14 of legal standards about clarity and understandability to 15 the people being regulated. Because we don't want it to 16 bounce back from the Office of Administrative Law for 17 being too tortured. But we will try. 18 And the only thing -- 19 SUPERVISOR DeSAULNIER: That's a high standard. 20 EXECUTIVE OFFICER WITHERSPOON: The only thing -- 21 SUPERVISOR DeSAULNIER: Referring to legal 22 clarity. 23 EXECUTIVE OFFICER WITHERSPOON: But we want to 24 make sure we understand if you ask us to write it that 25 way, you still are seeking the same outcome that staff is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 seeking, which is you're allowed to buy a diesel bus that 2 emits more than .2 and you're required when you do so, if 3 you're able, to retrofit one of your own buses with NOx 4 after-treatment. And we're very clear on what the Board 5 is directing us to do. We have some flexibility which 6 will explore to the utmost on how we actually write it. 7 SUPERVISOR DeSAULNIER: It's doable. You just 8 have to work on it? 9 EXECUTIVE OFFICER WITHERSPOON: We don't know if 10 it's doable yet. We haven't been able to construct it 11 that way yet. But we're going to keep trying. And we 12 have the 15-day change process to try to write it that 13 way. 14 SUPERVISOR DeSAULNIER: Thank you. 15 ACTING CHAIRPERSON RIORDAN: Sort of like moving 16 the Bay Bridge. 17 SUPERVISOR DeSAULNIER: No, we don't want to use 18 that analogy. 19 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 20 BOARD MEMBER LOVERIDGE: Catherine, one more 21 time, the if-available retrofit, what is the formula? 22 What is the rule when you say "if available"? 23 EXECUTIVE OFFICER WITHERSPOON: What it means is 24 that within the transit company itself, they have buses 25 that NOx retrofit devices are verified for that haven't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 already been retrofitted or taken out of service. And so 2 if they wish to purchase ten buses and they only have 3 eight retrofitable bus, they must do eight retrofits. But 4 they may then buy a ninth diesel bus and a tenth diesel 5 bus, because they would have exhausted the amount of 6 available retrofits within their own transit property. 7 So we're looking to have every single bus in 8 California that's available to be retrofitted be 9 retrofitted, but not force transit companies to go outside 10 the boundaries of their own operation to come up with NOx 11 mitigation. Because that starts to become too onerous and 12 complicated and will inhibit diesel bus turnover, we 13 believe. 14 ACTING CHAIRPERSON RIORDAN: Thank you very much, 15 staff. 16 Diane Bailey. 17 MS. BAILEY: Good morning. Thank you for the 18 opportunity to comment. My name is Diane Bailey, and I'm 19 a scientist with the Natural Resources Defense Council. 20 Today, I'm here to urge you to preserve the 21 current 2007 transit bus standards. It is extremely 22 important for this agency to stand strongly behind its 23 standards to protect public health. And staff's proposal 24 to align the standards is in truth a roll back, as you 25 already heard, of diesel standard. And that sends the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 wrong message to an industry that has repeatedly attempted 2 to strong-arm this Board into watering down its rules. 3 And we've seen that recently with chip reflash where we 4 ended up with a voluntary program that simply didn't work. 5 And they didn't meet up to the program. And we also saw 6 that with the 2004 transit bus standards. Another 7 disappointment. They refused to meet those standards. 8 We have been working with staff for over a year 9 and a half trying to forge a reasonable compromise in lieu 10 of rolling back the 2007 standards. And we certainly 11 would not want transit agencies to hold on to dirtier old 12 buses longer or cut their services, as I think we can all 13 agree to. However, there are many ways to preserve the 14 current standards without these negative consequences 15 through the added flexibility that we've asked for in our 16 written comments. 17 And the staff proposal today really falls far 18 short of that. We just heard talk now of a possibility of 19 changing the language so that the standards would be 20 preserved, but the language we saw here today really 21 doesn't mention that. So I think that's really vague. 22 And what we're asking for is a commitment to preserve 23 those standards here today. 24 So what we're asking for is a hybrid of Option 1 25 and 2, because we like hybrids. We're proposing that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 2007 transit bus standards be preserved with the following 2 flexibility. One, that small transits with fewer than 30 3 buses are exempt from the California standards. And I 4 think we've already agreed to that. But most importantly, 5 that the large diesel fuel path transits can also have the 6 exemption as long as they purchase the cleanest available 7 diesel buses and as long as they retrofit an existing bus 8 in their fleet with the best available NOx control device 9 for every new bus purchased. And I urge you to consider 10 these very important aspects for these reasons. 11 As far as preserving the standards, let's not 12 reward belligerence on the part of the diesel industry. 13 Adding flexibility yet requiring only the cleanest 14 available diesel buses be purchased is also important. 15 For example, if the diesel industry did come out with a .5 16 gram NOx standard bus, why allow other transit agencies to 17 purchase dirty buses at twice those levels? We should be 18 incentivizing the purchase of the cleanest available 19 buses. 20 And finally with the NOx controls, we think it 21 makes sense to require transit agencies to use the best 22 available NOx controls. For example, SCR, which achieves 23 over 80 percent of NOx reductions, is already being 24 demonstrated by one transit agency in California. And it 25 should soon be verified. Additionally, this is the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 technology that we expect a lot of engines to employ to 2 meet the 2010 standards, so it would be nice to have some 3 experience with that here in California. 4 ACTING CHAIRPERSON RIORDAN: Diane, do you want 5 to -- you're out of time, so I need a conclusion. 6 MS. BAILEY: So we urge you to preserve this 7 important diesel standard. We urge you to protect the 8 public health benefits of this rule. And please continue 9 moving forward on diesel standards instead of backwards. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 EXECUTIVE OFFICER WITHERSPOON: Madam Chair, 12 Mr. Cackette reminded me after I answered your question 13 before about keeping the .2 standards on the books, that 14 if we do that, Carl Moyer eligibility for natural gas will 15 end in 2007. 16 And we've talked to the environmentalists about 17 that issue and are still surprised that that doesn't 18 concern them. I think it will concern natural gas transit 19 companies, because they are using Carl Moyer funds to 20 offset the incremental costs of the purchases they're 21 making right now. And they will lose that eligibility if 22 we write the reg the way the last two witnesses asked us 23 to do. 24 ACTING CHAIRPERSON RIORDAN: Okay. Mayor 25 Loveridge. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 BOARD MEMBER LOVERIDGE: Catherine, could you 2 respond to the point of buying the cleanest available 3 diesel? 4 EXECUTIVE OFFICER WITHERSPOON: Yes. We did 5 discuss that at length with environmental groups, and our 6 concern first is that SCR is not verified yet. And we 7 wanted it to be clear to the diesel transit districts as 8 they start procurement, which is now for '07, what it is 9 we're asking them to do so they can make their capital 10 investments. 11 EGRT is available and gets added NOx benefit, but 12 the transit companies have less experience with it. It's 13 a different supplier. There might be apprehensions about 14 durability and the rest. So it's been through our 15 verification and should hold up in the field. So I think 16 EGRT is going to be competitive at 40 percent NOx control 17 at only $1,000 more than Cleaire, but that will sort of 18 play itself out with the transit agencies procurement 19 cycles. And, again, the reason we did not seek SCR is 20 that it's not verified, difficulty with managing the urea 21 might have the effect of inhibiting diesel turnover if 22 that was the requirement. And we want to get back to 23 getting rid of the old buses. So it's sort of a 24 reasonableness test. You know, how far can you push the 25 transit agencies before they sit on their hands like they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 have been since 2004? 2 ACTING CHAIRPERSON RIORDAN: Member D'Adamo. 3 BOARD MEMBER D'ADAMO: I just don't see how a 4 thousand dollar difference -- setting all other concerns 5 aside, $1,000 isn't going to cause them to sit on their 6 hands -- 7 EXECUTIVE OFFICER WITHERSPOON: Not for EGRT. 8 The way the tiers are, the Cummins Longview device gets 25 9 percent NOx control at an $18,000 purchase price. The 10 EGRT is verified for 40 percent, though it's available for 11 a limited number of engines and models years. 12 And, Annette, can you tell me for whom that 13 device is verified? 14 HEAVY-DUTY DIESEL IN-USE STRATEGIES BRANCH 15 HERBERT: The EGRT engines? I don't know off the top of 16 my clear. It's a smaller amount than the Cleaire's. They 17 have a more broad application than the EGRT does at this 18 time. They are looking at expanding -- 19 BOARD MEMBER D'ADAMO: But if we incorporated 20 this requirement that Ms. Bailey is suggesting, it would 21 only be considered best available technology for those 22 buses that could utilize it. 23 EXECUTIVE OFFICER WITHERSPOON: It would be. But 24 part of our balance point was there's been so much 25 enthusiasm for Longview and thus with the vast majority of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 purchases have been in the Bay Area. And so we asked 2 ourselves, should we take away the ability of the Bay Area 3 transit districts to complete their fleets with Longview, 4 which is 25 percent control, or make them go the EGRT now. 5 And on balance, we thought it's a marginal difference for 6 a limited amount of time. And if they choose to keep 7 using Longview, they may, instead of us compelling them to 8 change to EGRT. But you may feel differently about that 9 balance point. That was staff's consideration. And SCR 10 we thought would push them the other way into not 11 replacing the diesel buses. And it's not verified yet, 12 and we don't know for whom it will be verified. 13 BOARD MEMBER D'ADAMO: We would require it be 14 verified as part of the reg. 15 EXECUTIVE OFFICER WITHERSPOON: Well, of course 16 we can. But it hasn't been verified. The purchase cycle 17 now is for '07 buses, and we want to know now what to 18 start buying retrofits for. Because you want the 19 retrofits to go on immediately, because you get the most 20 benefit from starting the retrofits today. And if we just 21 keep holding out, holding out, we might get some SCR at 22 the end of this whole run before 2010, but we wanted to 23 tell people it's okay to go ahead and put in an order for 24 a diesel bus and put in an order for some additional 25 Longviews, and that will satisfy this regulation. Or you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 can step up to EGRT, and if you're willing, you could step 2 all the way up to SCR once it's verified. But we weren't 3 making it a requirement. 4 ACTING CHAIRPERSON RIORDAN: Again, some 5 unintended consequences if you begin to -- because of the 6 cycle of purchasing. And you really have to get in there 7 to know what a cycle of purchasing is for a transit 8 agency. It isn't just done over night. 9 Moving right along, Bruce Magnani followed by 10 Bonnie Holmes-Gen, Jean Roggenkamp, Joshua Goldman, Dawn 11 Friest, and Joe Sparano. 12 MR. MAGNANI: Yes, Madam Chair and members, I'm 13 Bruce Magnani with the California Chamber of Commerce. 14 Thank you for the opportunity to speak today. 15 I'm here representing Californians for a Sound 16 Fuel Strategy, which is a Chamber-led coalition of 17 transportation industry leaders and businesses. And we're 18 here to express our support for alignment of the 19 standards. 20 I think this is an opportunity to gain meaningful 21 emissions reductions. By aligning the 2007 NOx standard 22 with the federal standard, it will enable transit agencies 23 currently on the diesel path to purchase new engines 24 sooner. I think staff is correct in their analysis, in 25 that if you stay the course, that you will see transit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 agencies putting off purchases until the 2010 standard and 2 you miss the opportunity to gain or to take these 3 emissions off the table. 4 And I think the other important aspect is there 5 are no additional costs for making this change. And 6 rather than be concerned about sending wrong messages, I 7 think staff is correct and they're more concerned about 8 cleaning the air. Therefore, we support the alignment. 9 Thank you. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 Bonnie Holmes-Gen, you're not in my front row. 12 MS. HOLMES-GEN: I'm sorry. I failed to be in 13 the front row. 14 Bonnie Holmes-Gen with the American Lung 15 Association of California. And we're here to basically 16 support a transit bus regulation that will maintain as 17 much as possible the emission benefits and public health 18 benefits that were projected for the rule. And we think 19 there's a win-win way to do that. And part of that has 20 been captured in the mitigation proposal that's been 21 presented by staff, but we still think we need to go a 22 step further. 23 The transit bus rule is an important public 24 health measure. It's been very successful. But we need 25 to continue to capture those public health benefits and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 drive the technology. We also met with the CARB staff in 2 an effort to negotiate a compromise solution and to stop 3 the roll-back that was proposed, and we thought we had 4 gotten very close. And today I think we're getting to the 5 crux of the matter here. Is the Board going to adopt a 6 roll-back with a mitigation strategy, or is the Board 7 going to maintain the transit bus standard that was put on 8 the books earlier that the engine manufacturers have been 9 on notice for many years would be the standard on the 10 books? And, you know, we believe that you need to keep 11 that standard on the books. 12 The one-to-one mitigation strategy we think is an 13 important way to provide an alternative pathway for those 14 transit agencies that cannot purchase diesel buses right 15 now. But we think that, as you've explored in the past 16 few minutes, that you can actually write this in a way 17 that keeps the standard on the books, that maintains a 18 strong signal to manufacturers, to the public, and just to 19 everybody in California that the Air Board is going to 20 stand strong on a standard you've adopted. We don't want 21 you to take the pressure off the engine manufacturers of 22 both diesel and alternative fuel buses to produce cleaner 23 engines. And for that reason, you need to keep the 24 standards on the books. 25 There's been a lot raised about Carl Moyer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 eligibility, and I know the staff keeps raising that as a 2 concern. But from all the investigation that we have 3 done, and I think you probably need to ask a few more 4 questions as you have some more folks testify, it does not 5 appear that Carl Moyer eligibility is a big issue here or 6 big concern here. Unfortunately, the Carl Moyer 7 eligibility is already very limited in this sector. And 8 if you keep the standard the same, it's not going to 9 substantially effect transit agencies buying alternative 10 fuel buses with Carl Moyer funding. That's our 11 understanding. Unfortunately, there's just not enough of 12 that money available because of the current threshold for 13 eligibility and the cost effectiveness requirements. 14 So we are asking you to keep the standard on the 15 books, with the one-to-one mitigation as an alternative 16 pathway or an exception or however the staff can figure 17 out to write it for those transit agencies that cannot 18 purchase complying buses until 2010. 19 We would also like to see you do everything 20 possible to promote additional NOx reduction beyond the 21 one-to-one. Because as you know, even that one-to-one 22 mitigation is not going to get us all the emission 23 reductions that we were supposed to get from the transit 24 bus rule. 25 We also want to see you write into the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 regulation -- and I don't think this has had a lot of 2 discussion yet -- a requirement that transits that are on 3 the diesel path that cannot buy complying buses and do go 4 ahead and buy non-complying diesel technology buses, they 5 buy the cleanest diesel bus that's available. I know 6 you've had a discussion of the retrofit -- 7 ACTING CHAIRPERSON RIORDAN: Time, Bonnie. 8 MS. HOLMES-GEN: We appreciate the movement shown 9 by staff imposing the one-to-one mitigation strategy, but 10 you need to do more. And, please, keep the 2007 standard 11 on the books. Keep the pressure on the manufacturers. 12 And send the public the message we have to maintain those 13 emission reductions. 14 ACTING CHAIRPERSON RIORDAN: Thank you. 15 EXECUTIVE OFFICER WITHERSPOON: Madam Chair, I 16 would like to ask our general counsel, Tom Jennings, to 17 address this issue about whether it's possible to draft 18 this rule in this manner. Because another subject has 19 come up about what standard are vehicles certifying to, 20 which effects what's legally available for purchase. 21 ACTING CHAIRPERSON RIORDAN: Mr. Jennings. 22 GENERAL COUNSEL JENNINGS: One of the things we 23 would need to make sure that we do is that we have a 24 standard that the bus manufacturers or heavy-duty engine 25 manufacturers could certify to, because you obviously PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 can't sell the engines in California unless they're 2 certificated. 3 So what we would have to try to do is provide 4 that under the circumstance that some of the commentors 5 have identified. They could certify engines to the 6 2007-2009 non-urban bus standard. 7 I guess what I'm really trying to say is that we 8 may be able to do it, but I can't guarantee right now that 9 we could. 10 EXECUTIVE OFFICER WITHERSPOON: And the other 11 thing that's implicit in that is we would be keeping the 12 .2 standards on the books on one section and adding a 1.2 13 section elsewhere. So we could have competing standards 14 just to accomplish what it is we're trying to do in the 15 first instance. So we're playing with symbolism and not 16 really with practical straightforward regulatory language. 17 GENERAL COUNSEL JENNINGS: That's correct. 18 ACTING CHAIRPERSON RIORDAN: Thank you. 19 Jean Roggenkamp followed by Joshua Goldman, Dawn 20 Friest, Joe Sparano, and then Michael Eaves, Mitchell 21 Pratt and Brian Stokes, all of you please come down to the 22 front. 23 Okay, Jean. 24 MS. ROGGENKAMP: Good morning, Madam Chair and 25 members of the ARB Board. I'm Jean Roggenkamp, Deputy Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 Pollution Control Officer for the Bay Area Air Quality 2 Management District. 3 I'm pleased to be here with you this morning. 4 And first off, I want to express the Air District's 5 appreciation for the CARB Board and the CARB staff for 6 adopting this regulation in the first place and working 7 with the transit agencies and the interested stakeholders 8 through its revisions over the years. And then appreciate 9 the opportunity to be here today. 10 The current regulation has been working very well 11 in the Bay Area, as you've already heard. There's been a 12 significant decrease in emissions in the Bay Area from 13 this rule from the urban transit bus fleet. Indeed, the 14 requirements of the regulation have actually created 15 opportunities as you've heard for additional emissions 16 reductions beyond those required in the rule through 17 cooperative regional actions between the Metropolitan 18 Transportation Commission, the Bay Area Air Quality 19 Management District, and the transit operators to install 20 these Cleaire devices above and beyond what is required. 21 I'd like to take this opportunity to just mention 22 a few other joint regional efforts to clean the air in the 23 Bay Area. One is between the Bay Area Air District and 24 MTC and the transit operators. This past summer, we had 25 free transit on Spare the Air Days. And you only had one PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 Spare the Air Day, and we did offer free transit and it 2 went very well. 3 We've also cooperated with MTC to enhance our 4 light-duty scrappage program. And also MTC and the Air 5 District have worked together to go beyond the 6 requirements for the solid waste collection vehicle rule. 7 So there is a very strong commitment in the Bay Area to 8 clean the area and to work on this in a regional fashion. 9 So as you've heard, our local transit operators have 10 really worked very hard and aggressively to move forward 11 on a number of emission reduction initiatives. And they 12 have appreciated the local choice in terms of the 13 technology and fuel. And I think they have done well with 14 that and that should be recognized. 15 We believe this option that's been presented most 16 recently about maintaining the standards as they are but 17 mitigating for those transit operators that do need to 18 purchase diesel buses is really something worth exploring. 19 It is disappointing that the diesel technology companies 20 have not been able to meet the standard. But there are 21 engine manufacturers that have been able to meet that 22 standard and are expecting to meet it, and it's important 23 to recognize that. But we understand in some 24 circumstances transit operators will not be able to 25 purchase natural gas, or the cost may be really PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 prohibitive and not cost effective. So we do encourage 2 this idea of exploring the idea of keeping the standard as 3 it is, but mitigating for those operators that need to 4 purchase diesel buses. Thank you. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 Are there any questions for this speaker? 7 Thank you. 8 Joshua Goldman. 9 MR. GOLDMAN: Good morning, Madam Chair, Board 10 members, and CARB staff. I want to say that ISE, a 11 San Diego company, holds a fuel neutral but emissions 12 positive policy relative to urban bus emissions. We 13 continue to produce ultra-low emissions urban bus engines 14 with our hybrid electric drive systems on hydrogen, 15 gasoline and diesel and natural gas. We will continue to 16 meet whatever standards are set from now through 2010. 17 That's all. 18 ACTING CHAIRPERSON RIORDAN: We appreciate your 19 comments. And we also have your written comments, and 20 they'll be made part of the record. Thank you very much. 21 Dawn Friest. 22 MS. FRIEST: Good morning. My name is Dawn 23 Friest, and I'm here today representing the Engine 24 Manufacturers Association. 25 EMA's members include the principle manufacturers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 of diesel fueled and alternative fueled engines used in 2 urban buses. EMA and its members have been active 3 participants throughout the development of ARB's urban bus 4 program. And as you know, the program has been reviewed 5 by the Board on a number of occasions. Throughout the 6 process, there have been several constants. The Board 7 consistently has recognized the role and importance of 8 maintaining a diesel option. Engine manufacturers have 9 consistently called for alignment of the 2007 emission 10 standards for both diesel and CNG engines, and the staff 11 has consistently indicated its intent to provide 12 alignment. 13 The Board's previous decisions to provide and 14 maintain the diesel path were based on careful 15 consideration and balance of all the issues. 16 Significantly, the diesel path imposed substantial 17 additional requirements on transit agencies choosing that 18 path. Underpinning those requirements was and is the 19 expectation that diesel path fleets would have the ability 20 to purchase new diesel engines in 2007. Not because .2 21 gram NOx engines would be available, but because ARB would 22 follow through on its commitment to align. The .2 gram 23 NOx standard effectively eliminates new clean diesel 24 engine technology from the California urban bus market for 25 2007 to 2009, stranding transit agencies that relied upon, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 committed to, and complied with regulatory options based 2 on the staff's expressed intent to align. 3 And it must be underscored again that there's 4 nothing new about the lack of engines meeting a .2 gram 5 NOx standard in 2007 to the 2009. We have consistently 6 told the Board since the inception of this rule that EPA 7 was providing a different NOx compliance option for 2007 8 to 2009. And that option had not been finalized when ARB 9 initially adopted its rule, which is how that .2 NOx 10 standard got on the books in the first place. It is those 11 advanced NOx controls engines that will be available in 12 2007. The staff always intended to align with EPA. We 13 support the staff recommendations and ask the Board to 14 adopt the staff proposal. 15 If you have any questions, I'd be pleased to 16 answer them. 17 ACTING CHAIRPERSON RIORDAN: Board members, are 18 there any questions at this time for this speaker? 19 Yes, Ms. Berg. 20 BOARD MEMBER BERG: Do the engine manufacturers 21 intend on complying in 2010? Or are you going to go to 22 EPA for an extension? 23 MS. FRIEST: The manufacturers have every intent 24 to comply to manufacture engines to the standards. 25 BOARD MEMBER BERG: In 2010? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 MS. FRIEST: Correct. 2 Thank you. 3 ACTING CHAIRPERSON RIORDAN: Any questions? 4 Thank you very much. 5 Next speaker is Joe Sparano. 6 MR. SPARANO: Good morning, Madam Chair, members 7 of the Board. My name is Joe Sparano, and I'm President 8 of the Western States Petroleum Association, or WSPA. 9 WSPA is a non-profit trade organization representing 26 10 companies that explore for, produce, refine, transport, 11 and market petroleum, petroleum products, and natural gas 12 in California and five other western states. 13 The urban transit buses that are the subject of 14 the rule before you today will likely be powered by one or 15 more of the fuels produced by our members. As a result, 16 WSPA has an interest in the outcome of this hearing, and 17 we recommend the Board adopt policy Option Number 2. We 18 support this option, because it maintains CARB's 19 long-standing policy of fuel neutrality and because it 20 ensures retention of the dual fuel path that this state 21 committed to several years ago. 22 Secondly, adopting this policy option will 23 continue to ensure that transit agencies maintain their 24 flexibility in how they comply with state regulations 25 while also ensuring that investments already made are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 preserved. It also allows the next generation of clean 2 engine technology to develop over the next few years. 3 Finally, as noted in the executive summary of the 4 initial Statement of Reasons, adopting the second policy 5 option will allow transit agencies to switch to new 6 cleaner buses, which will result in an increased emission 7 benefit sooner in the most economic manner possible. 8 In closing, WSPA supports the staff's policy 9 Option Number 2, and we urge the Board to adopt it. Thank 10 you. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 Any there any questions for this speaker? 13 Seeing none, then we'll move on to our next 14 speaker, Michael Eaves. 15 MR. EAVES: Good morning, Madam Chairman and 16 Board members. My name is Mike Eaves. I'm with the 17 California Natural Gas Vehicle Coalition. 18 The natural gas industry urges CARB to keep the 19 integrity of their rules and keep the .2 gram standard in 20 place for 2007. We also think that you need to require 21 transit properties offset the emissions of non-compliant 22 engines. And we recognize that non-compliant engines are 23 the ones that are going to be available. 24 CARB's proposal to roll back the standard is 25 inconsistent with the action CARB took last year when it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 retained the .5 gram standard on the book and required 2 offsets for non-compliant engines. The natural gas 3 industry is not asking CARB, and never has, to adopt an 4 all alternative fuel regulation for transit properties in 5 California. 6 CARB is reluctant to require transit properties 7 to offset emissions one to one. CARB is trying to 8 orchestrate the solution instead of allowing the market to 9 development market-based solutions. CARB is sending the 10 wrong message to the marketplace. CARB's commitment to 11 the existing rules and transit's need for offsets would 12 stimulate the market response from appropriate emission 13 control manufacturers. And just as manufacturers 14 responded to the diesel retrofit rule for the refuse 15 market, they could mobilize and do the same for the 16 transit market. 17 It was mentioned earlier that the 25 percent 18 reduction seemed to be too lenient when there seemed to be 19 other alternatives. One of the options that CARB does not 20 seem to want to consider is repowering of diesel-to-diesel 21 repowers using the newest diesel technology. If you had 22 something like that in 2007, and you purchased a 1.2 gram 23 engine and retrofitted it into a bus that had a four-gram 24 engine in it, you could make substantially larger emission 25 reductions than you have with any other retrofit devices. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 CARB has encouraged natural gas engine 2 manufacturers to comply with existing rules. It has 3 monitored manufacturer development programs and progress. 4 It has verified manufacturers' capability to deliver 5 products to market on time. And now it turns around and 6 tries to roll back the standard for diesel engines. 7 This is unacceptable to the natural gas industry. 8 Natural gas engine manufacturers have spent millions of 9 dollars to comply with CARB regulations, and they're 10 hard-pressed to make that happen with the 2007 time frame. 11 Don't punish them for showing up at your party. 12 Staff says the roll back of the standard would be 13 good for the natural gas industry because natural gas 14 engines at .2 grams would qualify for Moyer Program 15 funding. The Moyer guidelines -- CARB'S guidelines for 16 transit industry qualify them for 8- to $9,000 per bus of 17 a 30- to 40,000 differential cost. And while 18 transportation properties in Southern California have 19 taken Moyer money, it is not part of their decision 20 process. 21 In fact, with the new federal regulations that 22 were passed by -- 23 SUPERVISOR DeSAULNIER: Are you getting a phone 24 call from Todd? 25 MR. EAVES: I think so. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 So compliance with Moyer and Moyer moneys are not 2 needed. With the new federal regulations, there are going 3 to be $32,000 incentives per vehicle for heavy duty from 4 the federal government. And that's four times or five 5 times what Moyer is going to offer in the future. 6 ACTING CHAIRPERSON RIORDAN: Mr. Eaves, I need a 7 concluding statement. 8 MR. EAVES: In conclusion, we ask you to preserve 9 your integrity and the integrity of the rules by keeping 10 the .2 gram standard in place. We urge you to require the 11 one-to-one offsets. And we urge you to also look, if 12 you're concerned about old dirty diesel engines, to look 13 at a retirement schedule for the old dirtiest engines, 14 instead of trying to change a new purchase rule. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 Any questions for this speaker? 17 Questions for staff? 18 Supervisor Roberts. 19 SUPERVISOR ROBERTS: For our staff. 20 ACTING CHAIRPERSON RIORDAN: Yes. 21 It's not for you. I'm sorry, Mr. Eaves. 22 SUPERVISOR ROBERTS: Help me here. We're talking 23 about retrofitting to the point at which buses are 24 available. But while buses might be available in the 25 aggregate, a particular district might not have them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 And, yet, you're saying there's some complexity in going 2 beyond that. And while it seems pretty easy to me and 3 obvious that they should be able to go beyond that and if 4 the goal were to have everything retrofitted rather than 5 leaving some in some areas and having some districts that 6 don't retrofit, what is the big obstacle to having a 7 program that if the district doesn't have a bus to 8 retrofit, have them retrofit a bus in a different 9 district. 10 EXECUTIVE OFFICER WITHERSPOON: Well, we think 11 the number of diesel buses that transit districts 12 collectively want to buy between now and 2010 is 1,000. 13 and the number of retrofitable buses is 400. So they will 14 all be retrofit. AND if I understood your suggestion, it 15 was if a single transit property didn't have a 16 retrofittable bus, they should pay another transit 17 property to retrofit one of theirs. They would be chasing 18 all the same buses around. Because at the end of the day, 19 the 400 retrofitable buses will be retrofit. 20 BOARD MEMBER ROBERTS: If you're confident that 21 will happen, I'm okay. My concern is -- 22 EXECUTIVE OFFICER WITHERSPOON: It will be 23 somewhat reliant on budget availability to buy new buses 24 and what's going on with cutbacks. 25 SUPERVISOR ROBERTS: It's conceivable we could PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 end up with districts who aren't buying enough to retrofit 2 all their own. 3 EXECUTIVE OFFICER WITHERSPOON: Probably not. 4 Probably not. Well, if you don't buy a bus, you don't 5 have to retrofit anything, and you haven't made an 6 emissions impact either. You haven't bought a 1.2 gram 7 new diesel bus. You're just riding your old ones around. 8 So we already had a NOx retrofit requirement in the 9 existing rule, and this is an added retrofit requirement 10 to offset a purchase. If you're not purchasing, there 11 wouldn't be an obligation to retrofit more. 12 SUPERVISOR ROBERTS: You're fairly confident 13 they'll all be retrofitted? 14 EXECUTIVE OFFICER WITHERSPOON: I think so. If 15 they buy buses, they certainly will. If they don't buy 16 buses, they would have some without NOx retrofits. That's 17 correct. 18 And then the other issue this witness raised was 19 about repowering. In lieu of retrofits, what if they 20 dropped the engine in the old bus chassis? And there are 21 restrictions in federal financing requirements that buses 22 have to have a twelve-year life before you can change the 23 engine out. And so that also restricts the number that 24 would be eligible for that kind of an action. And it's a 25 $50,000 job versus a roughly $20,000 job on a retrofit. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 SUPERVISOR ROBERTS: Okay. Thank you. 2 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge, do 3 you have a question? No. 4 Any other questions? 5 Mitchell Pratt. 6 MR. PRATT: Thank you, Madam Chair, Members of 7 the Board. My name is Mitchell Pratt. I'm Vice President 8 of Public Affairs and Business Development for Clean 9 Energy with over 20 years of experience in the energy and 10 transportation industry. Part of my job is to interface 11 and interact with natural gas and other transit properties 12 throughout North America. 13 I'd like to point out just a few things that 14 seemed to get missed along the way here. The engine 15 manufacturers were at the table in setting those 16 standards. They haven't complied with the 2004 17 half-a-gram engine. They haven't now been able to meet 18 the 2007 standard, but they promise that they're going to 19 be at the 2010. I think they will be at the 2010, but 20 likely not in 2010. You are jumping upon another train 21 here that says, "Oh, well, let's trust them once again 22 because they haven't delivered anywhere along the way so 23 far." So I ask you to consider that as you look at 24 rolling back this rule or opening it up. 25 Now, as for transit properties, the previous PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 speaker, Michael Eaves, just pointed out that Carl Moyer 2 fundings are a very minimal effect on the movement forward 3 on offsetting incremental costs. Diesel engines for 2007 4 are going up in expense. Natural gas is going up at a 5 much smaller incremental addition. And the new energy 6 bill and highway bills that were adopted in this past 7 August will provide significant up to $32,000 offsets for 8 the incremental costs for natural gas. The amount of Carl 9 Moyer support that's needed at this point is very 10 inconsequential. 11 I'd also point out that these transit properties 12 are the same ones that promised to lead the way to the 13 hydrogen future. Some of them have. And I give those 14 like AC Transit some real credit. But many have not used 15 our taxpayer dollars to lead that way. Today, they don't 16 even want to accept or embrace gasoline hybrids or the 17 other hybrids or natural gas technology, which in fact 18 we're building a natural gas hydrogen blend station that 19 can be implemented today with very, very low emissions, 20 near zero. 21 These transit properties ought to be the ones 22 that are embracing this technology. And, in fact, these 23 are the same upgrades and the cost that have been alluded 24 to for them embracing natural gas are the same costs that 25 they'll have to do for hydrogen: Upgrading facilities; PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 putting in infrastructure. For those that have embraced 2 the public/private partnership, we build the station using 3 our capital. We will work with them on getting funding. 4 And now we've been offering a fixed price fuel agreement 5 for many of these properties. And some of them, like 6 Foothill Transit, are enjoying $1.50 a gallon right now 7 for natural gas, whereas diesel is choking them out. 8 Their reduction in service, their challenges are now being 9 brought about because of the cost of diesel, not because 10 of the cost of natural gas. 11 I would just like to leave for you that softening 12 this rule is bad public policy. I know that you're 13 conflicted with wanting to do something for those transit 14 properties. But, frankly, I think that staff is offering 15 a direction that weakens the policy for you, that lessens 16 CARB's credibility, and erodes CARB's being a "world 17 leader" we heard in the Resolution earlier today. A 18 reversal or weakening of the rules frankly encourages a 19 lack of action, and these natural gas engine manufacturers 20 that have stepped up to the table to build engines have 21 other heavier-duty engines on the books to be built for 22 Class 8, port trucking, and other trucks. What in God's 23 green earth is going to make them want to do anything more 24 than the barest minimum if you roll back this rule? 25 ACTING CHAIRPERSON RIORDAN: I need a conclusion. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 MR. PRATT: A lack of action today fosters 2 litigation, fosters poor product development. And it 3 doesn't support those that have stepped up to support your 4 efforts in introducing the cleanest available technology 5 early. Don't do a bait and switch on these companies. 6 Thank you. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much. 8 Brian Stokes. 9 MR. STOKES: Madam Chair, Board, thank you for 10 this opportunity. 11 PG&E represents a position of retaining the .2 12 gram standard. And for a lot of the reasons already 13 expressed by previous speakers, we agree with those. And 14 I want to really focus on an area where it might be useful 15 to consider other options that haven't been proposed by 16 staff or discussed. 17 In keeping the standard in place, we also support 18 the notion that the transit properties should have an 19 exemption option. We agree that that exemption should 20 include a one-for-one tradeoff. The exception with our 21 proposal, though, is that the tradeoff might be provided 22 by other fleets, not transit fleets necessarily, but 23 refuse fleets, for example, who operate in the same area 24 and have similar duty cycles and are constrained by 25 technology, their own operating cycles, from taking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 advantage -- as much advantage as transit properties have 2 to date. 3 We think this is a good way to deal with the 4 issue of just say no. We won't produce. We don't buy, 5 that I think you're stuck on today. And it looks more 6 like a fee bait approach. We're suggesting the engine 7 manufacturers who decide not to make the investments 8 should be responsible for making this investment. Not the 9 transit properties. Have the engine manufacturers put 10 funds into the pot, make those funds available for fleets 11 who elect to clean the air in the same communities. And 12 eliminate the buildup of tons of emissions that your 13 constituents, our customers, are going to be subject to. 14 As a corporate leader in the environmental area, 15 we want to join hands with the Board and do what we can. 16 We've got a fleet of 13,000 vehicles. We are facing a 17 public fleet and utility fleet rule. We're making 18 decisions today on our next five-year purchases. 19 Undermining where you're headed in policy sends a 20 signal to the manufacturers we're working with today we 21 want to make products available with that that's not a 22 priority. We may not have the opportunity to buy the 23 products that we need and we want. And we think the other 24 99 percent of the marketplace that the transit properties 25 don't represent are watching what you do here. And the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 speciality engine manufacturers, if this works, why isn't 2 it going to work in other applications? You have to ask 3 yourself that question. 4 So thank you for your time. We've provided the 5 Board and staff with an economic analysis provided by 6 experts that we have employed to look at the future of 7 diesel versus natural gas. And I think a lot of what the 8 staff has put together talks about where we've been. It 9 also talks about the uncertainty of pricing. And if you'd 10 like, I can answer some questions about gas supply. I 11 represent California Gas Transmission in our company, and 12 I know a little bit about that. 13 So I think you need to be a little informed of 14 what that picture might look like. And I volunteer to 15 provide that education. Thank you for your time. 16 ACTING CHAIRPERSON RIORDAN: Thank you very much. 17 Questions? Mayor Loveridge and then Supervisor 18 Roberts. 19 BOARD MEMBER LOVERIDGE: Your best recommendation 20 that's different than what's been put before us, can you 21 repeat that again? 22 MR. STOKES: What we're proposing is we 23 understand the transit properties have chosen a path. 24 They've made a long-term commitment. And they've relied 25 on the promises of the manufacturers to be able to deliver PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 on that. It's not their fault the products aren't there. 2 I believe they would have those products in place and 3 they're doing what they can to make up the difference. 4 But the reality is the manufacturers don't want to produce 5 the product. They told that you in 2004, and they're 6 saying now. And I believe in Washington there may be 7 problems with ultra-low sulfur supply and so on. So 8 they're already sending signals maybe they're not going to 9 make the 2010 in time. So right now we have -- I want to 10 go over three points about the -- 11 BOARD MEMBER LOVERIDGE: Real quickly. 12 MR. STOKES: Why the refuse fleet works. 13 One, the NOx emissions aren't regulated -- on a 14 schedule to reduce like the transit properties. So we can 15 create something like that. 16 Two, the duty cycle for refuse trucks in the 17 areas that they operate -- similar areas are similar to 18 transit. And have the same -- in the same communities. 19 And, third, importantly while the refuse 20 operators are required to install best available 21 technology, which by the way could include a dual fuel 22 natural gas diesel engine with diesel efficiency, to 23 reduce PM incrementally each year until 2009, their 24 exhausts are too cool to really provide high efficiency 25 after-treatments. So they're only getting 25 percent. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 With this approach, we can get three grams NOx 2 reduction per vehicle instead of one. That's a huge 3 savings. We can do that at a cost two times what the 4 diesel replacement costs would be, but getting four times 5 the NOx reduction benefit. And we can take 130 to 200 6 tons of NOx out of the Bay Area market today. 7 BOARD MEMBER LOVERIDGE: I wonder if staff could 8 respond to that proposal. 9 EXECUTIVE OFFICER WITHERSPOON: Well, the 10 gentleman's initial testimony, I thought he said that 11 transit districts should be required if they didn't have 12 offsets on site to spend their dollars elsewhere 13 accomplishing those NOx reductions. And then when he 14 answered your follow-up question, he incessantly said they 15 should be required to buy alt fuel vehicles and the 16 relative benefits of alt fuel versus diesel. So he gave 17 two different answers. 18 MR. STOKES: No, I didn't. Excuse me. I was 19 talking about the refuse fleets and the best available 20 technology requirement that could be met with a dual fuel 21 path. I did not say that transit properties would do 22 anything differently. What I'm saying is if they can't 23 provide the offsets, which you have said they can't, then 24 perhaps a fund provided by the manufacturers can be 25 available to provide those offsets with refuse or other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 fleets. 2 EXECUTIVE OFFICER WITHERSPOON: A couple things. 3 There are statutory and other constraints on how transit 4 districts may expend the funds given to them by the 5 federal government, the state government -- 6 MR. STOKES: I'm not talking about that. 7 EXECUTIVE OFFICER WITHERSPOON: Sir, would you 8 please -- 9 ACTING CHAIRPERSON RIORDAN: I think -- yes. Why 10 don't you just have a seat for a moment. 11 EXECUTIVE OFFICER WITHERSPOON: I think the 12 Board's interested in both how transit districts spend 13 their funds and how we might cause engine manufacturers to 14 provide additional funds. So I want to answer the 15 question more broadly. 16 With respect to the transit agencies' own 17 revenues, they operate under multiple constraints of how 18 they may expend those funds. And mostly devoted to the 19 transit services they are providing. So I don't think 20 they can without statutory change, Congressional 21 authority, et cetera, take them off their property so to 22 speak. 23 That being said, the Surface Transportation Act 24 has now made it permissible to use Congestion, Mitigation, 25 and Air Quality funds, to the extent any transit district PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 receives those, to be spent on diesel retrofits and 2 establishes a priority for doing so both on- and off-road 3 diesel sources. 4 If we tried to impose some sort of fee on engine 5 manufacturers to go into a pool, that would be a separate 6 regulation than is here before you today. But what would 7 happen is the diesel engine manufacturers would pass those 8 costs on to the transit agencies in the form of higher 9 prices for the diesel buses most likely. And so the 10 transit agencies would end up paying for them all the 11 same. And it's not like a new source of revenue without 12 consequences. Though if you wanted us to explore that, we 13 could in some separate proceeding. But it's not -- within 14 the notice today, we're talking about the transit rule 15 today, not requirements upon engine manufacturers and what 16 they must do in the California market. 17 ACTING CHAIRPERSON RIORDAN: Supervisor Roberts. 18 SUPERVISOR ROBERTS: Yeah. I'm getting more 19 uncomfortable with this by the moment. And this is really 20 a continuation of what I was asking about a minute ago. 21 Initially, if a transit district wants to by one 22 of these, they're going to have to spend an additional sum 23 of money to retrofit one of their own buses. So there's a 24 cost there over and above the cost of that new diesel bus. 25 And we're accepting that's okay. What we're saying, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 though, once they exhaust their supply, then any 2 expenditures beyond that somehow is going to cripple them 3 financially. I'm exaggerating, but that's kind of what 4 you're using an excuse that they've got money for transit 5 and it's finite and all this. But let me -- it seems to 6 me that we ought to get at a way if they've exhausted 7 their own supply that something gets mitigated for those 8 additional buses they're going to buy beyond what the 9 number that they have that can be mitigated. 10 And I think what this gentleman just spoke to is 11 a good idea. Because within their own air districts, they 12 can basically continue to clean up the air and mitigate 13 the fact they're buying buses that aren't meeting the 14 standard. And it seems to me rather than coming up with 15 reasons why we can't do this, we ought to figure a way to 16 do this beyond the limited number of buses that each and 17 every transit district might have to mitigate on their 18 own. 19 EXECUTIVE OFFICER WITHERSPOON: I think the way 20 of doing it was suggested by Supervisor DeSaulnier earlier 21 in the hearing in trying to find a way to obtain and 22 incentivize the use of CMAQ funds for this purpose. 23 Because there is a constraint on how transit agencies may 24 spend their funds. I didn't mean to say or imply it would 25 cripple them. I think there are legal barriers on what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 can go off property, which is why we've made it an 2 in-property requirement, that you offset the buses you 3 have, but not that you give dollars to another entity, 4 which might be legally problematic. But we could 5 certainly -- this Board could certainly urge metropolitan 6 planning organizations and recipients of CMAQ funds to 7 prioritize expenditures on achieving additional NOx 8 reductions in whatever fashion, because the CMAQ dollars 9 are not constrained in the same way that fare box revenues 10 might be or other -- 11 SUPERVISOR ROBERTS: You know, the CMAQ dollars 12 are finite and are going to get spent. You know, what 13 you're doing is saying let's get some of this money that's 14 already oversubscribed and you're not accomplishing 15 anything. You're not accomplishing the additional benefit 16 that we should be getting out of specifically related to 17 these new buses that aren't meeting a standard to get a 18 mitigation that ties into those. And you're relying on a 19 fund -- I can tell you in San Diego I know where those 20 CMAQ dollars are going to be going forever. And all of a 21 sudden say -- and we have one of our transit agencies 22 that's diesel that's going to probably have this quandary. 23 But I like the idea. And I'm not saying -- 24 you're saying there's a legal reason why maybe a transit 25 agency could do it. And the suggestion was maybe you can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 build it in to the cost of the bus and the manufacturer 2 who's not meeting the standard could handle the mitigation 3 in some other way. I guess I'm looking for other options 4 rather than the CMAQ option and rather than just saying 5 forget it. 6 ACTING CHAIRPERSON RIORDAN: No. We're going to 7 wait a minute. 8 EXECUTIVE OFFICER WITHERSPOON: Supervisor 9 Roberts, could I suggest that we take a break in order for 10 staff to confer with some other legal experts both on what 11 is possible to do visive the manufacturers of the engines 12 and within the funding structures of the transit agencies. 13 And then after the lunch hour, give you some feedback 14 on -- if we can do that today, or if we need to continue 15 that later. 16 ACTING CHAIRPERSON RIORDAN: Okay. I think that 17 would clarify for others, because I think one attorney is 18 still in the room hopefully from the transit agencies. Am 19 I right? Yes. Right there. And I'm going to hope that 20 you understand the financing of transit agencies, I pray. 21 And if you don't, you find somebody that does. And I 22 think then staff can wisely take a moment to then talk. 23 And I'm going to put you in that category, too, 24 Mr. Stokes. 25 MR. STOKES: Can I make one clarifying point? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 I'm not sure -- 2 ACTING CHAIRPERSON RIORDAN: The shortest 3 clarifying point that you've ever made. 4 MR. STOKES: All right. This is it. The 5 notion -- and I just said it in a general way that I 6 agreed with the previous speakers, but I want to say it 7 explicitly, was that if a manufacturer sells a less than 8 targeted NOx emitting engine, then they can be looked at 9 as non-compliance penalty. I think there's a statute that 10 we can work with there that creates this fund. I may be 11 wrong, and I guess your staff is going to have to -- 12 ACTING CHAIRPERSON RIORDAN: And staff will work 13 on that. 14 But so to staff, we'll give you that amount of 15 time. Probably is an hour's worth of time. Because, as I 16 understand, Ms. Witherspoon, that we have some 17 demonstration projects out on the side of the building 18 where the bus was for people to see. You'll have lunch. 19 And then I think you can consult with those people that 20 you need to consult with in this magic time of an hour. 21 Would that work for you? Okay. 22 Yes, Ms. D'Adamo. 23 BOARD MEMBER D'ADAMO: Well, if I could, I'd like 24 to maybe add a couple of additional requests, because 25 there have been a few other ideas talked about today. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 I think we need a little more information on the Carl 2 Moyer issue. I don't know if you can get to the bottom of 3 that or not. But I'm interested in keeping it on the 4 books if possible but -- 5 ACTING CHAIRPERSON RIORDAN: No. You can ask 6 just about Carl Moyer, not whether you can keep it on the 7 books or not. I think they need clear direction to find 8 out about Carl Moyer. 9 BOARD MEMBER D'ADAMO: Right. 10 And then the third issue that I would like some 11 additional clarification on is the issue that I raised 12 earlier about the best available technology for retrofits 13 and the concern that staff raised regarding the purchasing 14 cycle, and if there would be some way to mechanically 15 require the best available technology without interfering 16 with those purchasing cycles. 17 EXECUTIVE OFFICER WITHERSPOON: Could I ask you a 18 question. If we're able to figure out what Supervisor 19 Roberts said, which is 100 percent offset on an emissions 20 basis, we would do that in lieu of best available. If 21 we're not able to do that, we come back to your idea of 22 getting the greatest NOx control. And failing that, we go 23 down to staff's recommendation. But that's the sort of 24 tiering you have in mind? 25 BOARD MEMBER D'ADAMO: Yes. Thanks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 ACTING CHAIRPERSON RIORDAN: Ms. Berg. And then, 2 Supervisor DeSaulnier, if you have a question. 3 BOARD MEMBER BERG: In looking at this fee idea, 4 I wonder if we were to look at it as not a structured fee 5 program, but as you had just indicated, an offset, but 6 there was something that allowed if they want to sell -- 7 they, meaning the manufacturers, want to sell diesel buses 8 that do not meet the standard, and they want to give a 9 discount or figure out a way to sell those buses because 10 it is going to be more expensive, there should be 11 something in the regulation that allows them either to 12 retrofit something existing or something on another 13 property. And I wonder if we can do it more market 14 driven, but get Supervisor Roberts' intended result 15 without collecting fees from the manufacturers. So just a 16 thought. 17 EXECUTIVE OFFICER WITHERSPOON: I understand 18 that. You make the offsetting their responsibility, 19 rather than running the money through transit agency. 20 BOARD MEMBER BERG: With verification of course, 21 but -- 22 EXECUTIVE OFFICER WITHERSPOON: Just another 23 little complexity. 24 BOARD MEMBER BERG: Unfortunately, regulation is 25 very complex. And the verification is necessary, because PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 we just know from history that it is. But to try to leave 2 it within the market forces as best we can and not over 3 complicate. Because as we all know, the more we try to 4 define regulation, the more unintended consequences that 5 do come along. It's just the nature of the beast. 6 SUPERVISOR DeSAULNIER: This goes back to one of 7 the speaker's comments about sausage making. For me, at 8 least I think all of the comments are good. And I do 9 think it's important we've had this discussion, because I 10 think we're really close to declaring victory. And I know 11 our staff will do it in the next hour. 12 But from my perspective, we're looking at ways to 13 maintain the standard. We're looking at ways to make sure 14 if somebody goes with the exemptions as stated, they buy 15 the best diesel bus available on the market and the best 16 available technology on the retrofit, with the ability of 17 doing further NOx reductions outside of the rule; is that 18 pretty much it? 19 Let's go have lunch. 20 ACTING CHAIRPERSON RIORDAN: Just all you want is 21 a miracle. It is 12:30 -- I'm sorry, Supervisor Patrick. 22 SUPERVISOR PATRICK: That's okay. You kind of 23 looked down here, and I didn't have anything to say. But 24 the farther this goes on, I do have something to say. 25 That is this. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 When we're talking about this and when you all 2 are figuring out, you know, how to try to make this 3 sausage of what we're hearing today, the reason that 4 Option 2 has been revised as I understand it is because 5 folks are afraid that the transit agencies that chose the 6 diesel path are not going to buy buses until 2010. The 7 more sausage we make, the more requirements we put on, the 8 more money this costs, are we going to kill the goose that 9 lays the golden egg? That's what I'm going to want some 10 input on, in addition to all of this. Thank you. 11 ACTING CHAIRPERSON RIORDAN: Okay. It is 12:30. 12 We'll reconvene at 1:30. 13 (Thereupon a lunch recess was taken.) 14 ACTING CHAIRPERSON RIORDAN: I'm going to call 15 the meeting back to order as soon as I see my senior 16 staff. 17 We concluded the speaker slips. We have asked 18 our staff to do some analysis, along with some of those 19 who have testified today on this particular item. So I 20 would ask staff to provide a report. 21 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 22 Chairman. We did have a very constructive lunch hour. 23 ACTING CHAIRPERSON RIORDAN: I doubt that you got 24 much lunch, but you had a constructive hour. 25 EXECUTIVE OFFICER WITHERSPOON: I hope the people PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 we were speaking with also got to eat some lunch. 2 And we made some headway, but I'd like to start 3 by going over just a little bit of background and then 4 also what we clarified quickly was off the table. And 5 then Tom Cackette will walk you through what we think we 6 might be able to do or can do going forward and some of 7 the consequences of that. 8 First of all, the transit companies have asked us 9 to remind you about them being budget-limited agencies in 10 general and that the consequences of higher cost 11 mitigation is reduction in transit service. And that that 12 needs to be kept in mind. 13 Also we had an opportunity to calculate the 14 emission benefit of the advanced compliance that has been 15 achieved, particularly in the Bay Area with their very 16 large purchases of Longview devices and installation which 17 is underway right now. And the aggregate benefit of their 18 advanced compliance is equivalent to one ton per day, 19 which is 100 percent offset of any diesel buses they would 20 want to buy in the future, because that's the difference 21 between the various options we showed you, one ton by 22 2020. So they have been doing an extraordinary job. 23 The one option that we very quickly took off the 24 table was imposing any kind of fee on engine 25 manufacturers. Our lawyers concluded that that would be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 construed as non-compliance penalty and it is not 2 statutorily authorized. It used to be authorized and the 3 law sunsetted in 1999 and has not been reinstated. And so 4 we left that option out of our discussions, and we focused 5 on what the transit properties themselves could do, what 6 was legal within their funding authorities and would not 7 be so burdensome as to inhibit them from purchasing new 8 diesel buses. 9 And now I'll turn it over to Tom to walk you 10 through that discussion. 11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: What we 12 did was first we tried to pick up on Supervisor 13 DeSaulnier's summary, which I think covered many of the 14 comments that other Board members made, including 15 Supervisor Roberts, about going beyond the offsets -- 16 finding other offsets if necessary, rather than just the 17 buses. And so there were four things that -- if I 18 captured Supervisor DeSaulnier's remarks correctly, there 19 were four issues on the table. 20 One was to maintain the standard versus the 21 staff's proposal of just eliminating the bus standard and 22 dropping back to the truck standard. That was one. 23 Another one was buy the best available diesel. 24 The concept being if there was one diesel bus engine that 25 is cleaner than another one, then you should buy the best PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 one if we're going to provide an exemption to buy diesel 2 at all. 3 And the next one was to buy the best retrofits. 4 So if there's one that's more effective reducing NOx than 5 another one, you should buy the better one. 6 And the final one was in doing the one-to-one 7 offsets if you run out of buses to retrofit and that sort 8 of falls short of what your obligation would have been, 9 then try to get the offsets somewhere else. 10 So those were I think the four items. And I can 11 go over those, what our suggestion is and what we learned 12 at lunch. And then if there's other ones that we missed, 13 please let us know. 14 The first one was maintain the standard. We had 15 some discussion of uncertainty about whether we could keep 16 the bus standard and provide an exemption to allow people 17 an option to let people buy the higher emitting truck 18 engines. And we've concluded we can do that. It will 19 mean some work, but we'll figure out how to do that. So 20 that's one possible option for your consideration. 21 Catherine reminds me it will cause Carl Moyer 22 funds not to be available for bus purchases and that there 23 are Carl Moyer funding applications pending right now. So 24 that shows you that people have been able to construct a 25 project where they could get state money, and this would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 not happen if we did that, if we left the standards on the 2 book at .2. 3 The second point was buy the best available 4 diesel. And we concluded that that one was not a workable 5 option. First, we don't expect the diesel standards to be 6 too far different. There's not going to be a diesel at .3 7 and a diesel at 1.2. They're going to be fairly close 8 together. 9 But more importantly, the buses that people buy 10 are becoming more and more that they have an engine that 11 goes with that bus, a certain brand. And they're not 12 swapable on the spot. If one manufacturer came in and say 13 you're using a Cummins engine in a Gillig bus and all of a 14 sudden someone certifies another engine at a tenth of a 15 gram more stringent, now the transit property would have 16 to tell Gillig, "I want the Detroit Diesel bus engine, 17 because it's the cleaner one. And that would cause a 18 large amount of engineering resources to occur to 19 re-engineer that Detroit Diesel bus in the Gillig transit 20 coach. 21 And given that the cleanest diesel could change 22 at any one time, it could change every year. And given 23 there's a multiple-year process to buy a new bus, I just 24 don't think this really works out, given we're only 25 dealing with a time period of three years where this sort PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 of exemption or option to buy a dirtier engine will occur. 2 So we just didn't think that's going to work. And that 3 was confirmed very strongly by the transit properties. We 4 thought that one is probably not a good one to pursue. 5 Regarding the best available retrofit, should you 6 buy the dirtier bus and have to retrofit an engine, we had 7 proposed any NOx device, certified or verified device 8 above 25 percent, because that's what our current 9 verification rule says, and we pointed out there's one at 10 40 now and one at 25. So we think that you could 11 structure this so it's the best available one that's 40 12 percent or better. And if that's not available, drop back 13 to the 25. 14 There was resistance to the idea of making it 15 just the best available, because quite frankly, the SCR 16 technology is more of a different thing and therefore a 17 challenge to these agencies to provide, for example, urea 18 infrastructure for what once again may only be a 19 three-year period. And some of them said they wouldn't 20 buy if they had to do that. That may be a quick reaction. 21 But that was the flavor of the discussion. So we think we 22 can definitely elevate it up to the 40 percent, assuming 23 that kind of technology is available. 24 And you should know that right now the 25 verification of the 40 percent device does not cover all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 the engines. So other ones would be 25 percent because 2 that would be all that's available for those engines. 3 And then the final concept was going beyond just 4 retrofitting the buses, especially if you run out of 5 retrofitable buses. And the idea that we came -- we 6 talked about ideas of going beyond the property, having 7 one transit district pay for the retrofit of another, 8 going on the trash trucks as was discussed by the PG&E 9 representative. But in general, those raised some legal 10 questions. How you could do that is different by urban 11 area. Maybe more flexible in the Bay Area and less 12 flexible in another transit agency or agencies that are 13 within a different urban area. And there may be -- in 14 some of them, there may be just one urban area where they 15 don't have any option of sending their money around to 16 another property. 17 So on that one, what we did come up with, though, 18 is that you did pass a rule that requires particulate 19 retrofits of the other kinds of diesel vehicles that 20 transit properties have. And they do have other vehicles, 21 including some trucks, some smaller buses, that run on 22 diesel engines. 23 And you passed a rule that says they must put 24 particulate filters or modernize those engines on those 25 types of vehicles. We call them non-urban buses. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 there seemed to be a general agreement that they would be 2 willing to look at those types of vehicles and add a NOx 3 retrofit if available to those, expanding the opportunity 4 for achieving more of the full offset that I think 5 Supervisor Roberts was referring to. So while that 6 doesn't go as far as guaranteeing that everyone would have 7 to spend the amount of money if they had enough 8 retrofitable buses, that it does expand the universe. 9 And I would add in the Bay Area where most of the 10 buses we're talking about are, we had projected how many 11 buses would be purchased based on historical trends, how 12 many are bought per year typically, and that was a fairly 13 large number, like 680 buses. And that threatened to have 14 not enough older buses to retrofit. But we were told in 15 the meeting that the actual projection of buses being 16 purchased is far, far smaller than that. And so there's I 17 think a higher odds there will be an adequate number of 18 buses available to apply NOx retrofits to get the offset 19 in the Bay Area that we had thought. 20 And the Bay Area also can bubble more because of 21 the way their funding is. They can shift moneys around 22 within the transit agencies, although I'm not sure how 23 we'd write that into the rule. But they seem to be 24 willing to do that. 25 So I think three of the four we have some kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 a solution. And it's up to you whether that's adequate or 2 not. But that's what we were able to accomplish at the 3 lunch break. 4 ACTING CHAIRPERSON RIORDAN: I think you did a 5 very good job, considering the time constraints. 6 It would occur to me that if there were 7 absolutely no non -- well, what do you call them? They're 8 non-urban buses. If they have nothing left to retrofit, 9 that perhaps they could appeal to the Executive Officer 10 for some sort of a variance. And that I think would 11 accommodate those who truly were up against a wall. 12 Because to expend their transit moneys outside of their 13 transit district I think is a real serious problem. 14 Yes, Ms. Kennard. 15 BOARD MEMBER KENNARD: I have a question as to 16 whether or not staff had contemplated in particular Option 17 3 and 4 in advance of the meeting. And if so -- if not, 18 then does that change your staff recommendation? 19 EXECUTIVE OFFICER WITHERSPOON: Can you explain 20 what you mean by Option 3 and 4? 21 BOARD MEMBER KENNARD: The third option, which is 22 the best retrofit and the one for one. 23 EXECUTIVE OFFICER WITHERSPOON: Yes, we had 24 contemplated it. And we were concerned about taking away 25 the Longview opportunity and pushing to 40 where people PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 were very comfortable with the device. But it's well 2 within the realm of what we're proposing. And this is all 3 subject to the 15-day change requirement anyway. So it 4 will go back out for public notice. But we're comfortable 5 going up to the 40, especially because the transit 6 districts are comfortable with that. 7 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: And the 8 fourth option, I think was going beyond just retrofitting 9 buses. And as we described earlier, you know, we were 10 influenced in part by simplicity. And the recognition if 11 we made them work too hard, that translates into spending 12 too much money. We're possibly sacrificing the 13 opportunity to buy a new bus for an area and we didn't 14 want to go that far. What we proposed was not going 15 beyond the property or not expanding too much the solution 16 that we're offering here. The option expands it a little 17 bit, but not all the way. 18 EXECUTIVE OFFICER WITHERSPOON: One more answer 19 to your question. We have in staff's proposal an 20 exemption for transit properties with 30 buses and below 21 which would go out for 15-day comment. And we heard over 22 the lunch hour that there are transit agencies slightly 23 above that threshold that have problems as well. And we 24 were asked, are you open to considering slightly different 25 thresholds, slightly different criteria? And we said, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 yes, we are. Please submit us comments and we'll look at 2 them. 3 And I take by your question that's some of the 4 concern you have, and also by Chairman Riordan's about 5 appeals to the Executive Officer if transit agencies just 6 feel they absolutely cannot do these retrofits that they 7 could. Some of that we'll figure out generically, and 8 some of it we'll figure out case by case, is what I'm 9 thinking. 10 ACTING CHAIRPERSON RIORDAN: Supervisor Roberts, 11 questions to staff? 12 SUPERVISOR ROBERTS: I like what I'm hearing. If 13 I have it right, the first priority would be retrofit 14 their other buses. In some instances there are plenty of 15 those. 16 Secondly, there would be an opportunity to 17 retrofit or to spend comparable dollars within their own 18 agencies so that there are mitigations in terms of air 19 quality issues on everything from other types of buses to 20 other vehicles or to maybe even non-vehicle improvements; 21 is that correct? 22 EXECUTIVE OFFICER WITHERSPOON: Well, whatever is 23 owned by the transit property. The non-urban buses -- 24 SUPERVISOR ROBERTS: Which could be a whole host 25 of things. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 And, thirdly, if there is literally nothing at 2 the end of the day, they would make some kind of an appeal 3 to the Executive Director? 4 EXECUTIVE OFFICER WITHERSPOON: Right. We might 5 set some of that forth generically in the rule so that 6 it's obvious when they run out of choices they just stop. 7 Or if we need to verify they are, in fact, out of choices, 8 they come and talk to us, and we'll go over what their 9 options are. 10 SUPERVISOR ROBERTS: I feel comfortable with 11 that, because I think it meets the intent of where we're 12 trying to go. 13 The question I have for you is regarding the Carl 14 Moyer, because it sounds like -- what are the implications 15 of that? Are you recommending -- or maybe not as strong 16 as recommending. Are you cautioning us maybe there's a 17 better solution there? 18 EXECUTIVE OFFICER WITHERSPOON: Well, I think we 19 heard a lot of testimony saying where Carl Moyer might 20 have mattered a great deal previously, it matters less now 21 because the federal incentives have changed so 22 dramatically that there are other pots of money. But what 23 we do want you to be aware of is not every transit 24 district gets all of those different pots of money and can 25 use all those incentives. So we still see and we still PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 anticipate parties coming to us with requests for Carl 2 Moyer funds. 3 Also, had we changed the standard and aligned it 4 in '07, the natural gas projects would be more competitive 5 for Carl Moyer funds than they've been so far, because the 6 gap between the amended standard and .2 is larger than the 7 gap between the two current standards, because they get to 8 claim the surplus. They get 20 times that gap in the 9 calculations. 10 So that opportunity will be gone. I guess I'm 11 sort of ambivalent about it myself. It's mitigated by the 12 fact there are these new federal incentives. It just 13 means we'll be devoting state incentives in other 14 directions than toward supporting natural gas buses. 15 They'll go into -- 16 SUPERVISOR ROBERTS: What would be the option? 17 What if -- 18 EXECUTIVE OFFICER WITHERSPOON: The other option 19 is to numerically change the standard to 1.2 and that Carl 20 Moyer applies to anything cleaner than that. And natural 21 gas is expected to come in at .2. So they're six times 22 cleaner and they can claim all of that as a surplus 23 reduction. 24 SUPERVISOR ROBERTS: Well, why would we not want 25 to do that, give them the opportunity to qualify for those PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 dollars? 2 EXECUTIVE OFFICER WITHERSPOON: Because there's 3 other options to find other dollars now. You heard a lot 4 of testimony to keep the standard on the books. 5 SUPERVISOR ROBERTS: The more dollars you can 6 make available, it seems to me the more opportunity to get 7 for that. 8 EXECUTIVE OFFICER WITHERSPOON: One other 9 consequence we thought of over the lunch hour is that it's 10 conceivable a natural gas engine could show up not at .2 11 and be a higher emitting bus and knock these very advanced 12 technologies, the ones that the natural gas vehicle guys 13 talked about that they spent dollars on to provide and 14 they wouldn't capture even the natural gas market. The 15 very best natural gas buses. So it's a tough one. 16 SUPERVISOR ROBERTS: Okay. I guess the jury is 17 still out on that component. Everything else I feel 18 pretty good about. 19 ACTING CHAIRPERSON RIORDAN: Any other questions 20 for staff? 21 BOARD MEMBER LOVERIDGE: I was going to ask the 22 Chair what is the process. 23 ACTING CHAIRPERSON RIORDAN: The process will be 24 I need to close the record in a moment when all the 25 questions are asked of staff on staff's research. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 then I'll take the ex parte. And then there will be a 2 discussion and hopefully a motion and we'll move on. But 3 I have to close the record appropriately. 4 EXECUTIVE OFFICER WITHERSPOON: It would be an 5 amended staff recommendation to -- well, it depends on 6 what you tell us about aligning the standard or not. But 7 to go to 40 percent retrofit to have the non-urban bus 8 offset as well as the urban bus offset. 9 ACTING CHAIRPERSON RIORDAN: But at this moment, 10 that isn't part of the discussion. We're simply asking of 11 staff clarification and questions and whatever. Then once 12 I close the record, we do the ex parte, then it is 13 appropriate for discussion and a motion. 14 So questions of staff? Supervisor DeSaulnier. 15 SUPERVISOR DeSAULNIER: Thank you. 16 On the first part that Ron was talking about, do 17 we get a sense of -- is this a zero-sum game? It's just a 18 color of money issue? Are you fairly confident that if we 19 keep the standard, the Carl Moyer funds won't be there? 20 But you're alluding to new funds, federal funds. 21 EXECUTIVE OFFICER WITHERSPOON: I think it's 22 different money. It's greater potential of funding on the 23 federal side, but it's different money. If you somehow 24 don't get on the federal gravy train for whatever reason, 25 then Carl Moyer money might be your last recourse. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 SUPERVISOR DeSAULNIER: But for a transit agency 2 who's looking at that funds, there's still -- 3 EXECUTIVE OFFICER WITHERSPOON: They could put 4 them all together. 5 SUPERVISOR DeSAULNIER: For those of us that deal 6 with transportation, it's a question of the different 7 sources. So what you're suggesting is there's more money 8 available. 9 EXECUTIVE OFFICER WITHERSPOON: If we keep Carl 10 Moyer eligibility, there's more money available overall to 11 transit agencies. If we don't, they won't suffer 12 completely, because they still have access to federal 13 funds, which are larger than they used to be. But if we 14 kept Carl Moyer, that's the best of all worlds for 15 acquiring dollars. 16 SUPERVISOR DeSAULNIER: What I'm trying to get at 17 is how close is it to a zero-sum game for those people who 18 are in that line? What you're suggesting -- and I know 19 you can't get it exactly. But, Catherine, what you were 20 suggesting, and maybe you were thinking this is just what 21 some of us wanted to hear was, it was okay to do this 22 because Carl Moyer funds could be supplanted, 23 understanding you'd rather have everything. And then -- 24 EXECUTIVE OFFICER WITHERSPOON: Everything in 25 this subject is complicated. We subtract their federal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 funding before we make a Carl Moyer grant. That's why the 2 Carl Moyer grants have been so small to date, on the order 3 7- to 8,000 that I think Mike Eaves testified to. But in 4 '07 when the gap between the required standard and .2 5 could be much larger, there is a possibility there will be 6 a bigger residual they would qualify for Carl Moyer 7 funding. 8 SUPERVISOR DeSAULNIER: It's 78,00 now? 9 EXECUTIVE OFFICER WITHERSPOON: Seven to 8,000 10 now. About 20 percent of the incremental cost over a 11 diesel bus, and it could be larger in the future. 12 SUPERVISOR DeSAULNERI: All right. And then on 13 number two, best available diesel bus. We still have the 14 threshold, though. We're suggesting if they go for the 15 exemption, it's still the 1.2 threshold they would have to 16 purchase that. 17 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Well, 18 the way it would work is they have to buy a truck engine. 19 So the standard for truck engines is 1.2, but it's not -- 20 every engine isn't the same. There's an averaging program 21 for flexibility. So some can be a little higher. Some 22 can be a little lower. 23 SUPERVISOR DeSAULNIER: What would happen if you 24 changed that? If we suggested it come up to a higher 25 standard, but not all the way up to the standard you're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 maintaining. If you, say, went to .5? 2 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: We'd 3 have to say you have an option of buying a truck engine, 4 provided the truck engine was certified to a level at or 5 below some cap, 1.2 for example. That might eliminate a 6 1.3 engine that came in just a little high, but it was 7 offset by a truck engine at 1.1. 8 SUPERVISOR DeSAULNIER: I'd rather go watch 9 sausage being made at this point. I get the general gist 10 of the problem. 11 I think staff has done a wonderful job, and I 12 think the only question I sort of have is I think we can 13 give you general direction under number four. And I think 14 in the Bay Area we're going to continue to try to over 15 mitigate and look for other sources with CMAQ funds. So 16 when the appropriate time comes, I'd be happy to put some 17 sort of general language to pursue that. 18 My only question is back to Ron's question. I 19 think D.D. has the same problem. I don't want to -- it's 20 a tradeoff between keeping the standard and how much we're 21 losing and it's hard to quantify that, it sounds like 22 here. 23 Thank you, Madam Chair. 24 SUPERVISOR ROBERTS: I can appreciate their 25 quandary, because it doesn't sound like it's just a simple PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 one-to-one tradeoff. 2 ACTING CHAIRPERSON RIORDAN: It isn't. In 3 different transit districts, you have more latitude in the 4 Bay Area. And yet, you know, I'm concerned about others 5 who may not have the latitude that you do. 6 Ms. D'Adamo, did you have a question? No. 7 Ms. Berg. 8 BOARD MEMBER BERG: I'm concerned over the Carl 9 Moyer, because we didn't have that on the table, and we 10 don't have any testimony from people who are, in fact, 11 using it. So I just don't know quite how to reconcile 12 that and what the tradeoff is, is to keep the standard to 13 tell the engine manufacturers that we're serious. I think 14 we are serious, period. Versus giving up the Carl Moyer 15 funding. And I want to be careful we're not giving up 16 important funding just for the show of -- not a trade-in 17 for something real. 18 ACTING CHAIRPERSON RIORDAN: Staff, do you want 19 to respond? I mean, what would your bottom line 20 recommendation be? 21 EXECUTIVE OFFICER WITHERSPOON: Our 22 recommendation has always been to change the standard. 23 It's simpler and more straightforward, and we were trying 24 to do it the other way to make more people happy. But 25 it's a lot easier to write, and it doesn't have the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 unintended consequence of hurting the Carl Moyer 2 eligibility. 3 ACTING CHAIRPERSON RIORDAN: Okay. Any other 4 questions for staff? 5 SUPERVISOR ROBERTS: No, but I think I'd like it 6 that way. I'd like to do what they recommended. 7 ACTING CHAIRPERSON RIORDAN: Let me take care of 8 the business side of this, which is I'd like to close the 9 record on this agenda item. However, the record will be 10 reopened when the 15-day Notice of Public Availability is 11 issued. Written or oral comments received after this 12 hearing date but before the 15-day notice is issued will 13 not be accepted as part of the official record on this 14 agenda item. When the record is reopened for the 15-day 15 comment period, the public may submit written comments on 16 the proposed changes which will be considered and 17 responded to in the final Statement of Reasons for the 18 regulation. 19 And now I need to move on to ex parte. This is 20 just a reminder to our Board members of our policy of ex 21 parte communications. While we may communicate off the 22 record with outside persons regarding Board rulemaking, we 23 must disclose the names of our contacts and the nature of 24 the contents on the record. And this requirement applies 25 specifically to communications that take place after the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 Notice of Board Hearing has been published. 2 Are there any communications to disclose? I'll 3 start with my right, Supervisor DeSaulnier. 4 SUPERVISOR DeSAULNIER: Thank you, Madam Chair. 5 I'm told I need to start with a meeting on July 6 29th that I had here in this building with former Chair 7 Cindy Tuck, also with Tom Cackette and Steve Heminger from 8 MTC, Jack Broadband, and Jean Roggenkamp from the Bay Area 9 Air Quality Management District. The discussion was 10 consistent with both Jean and Steve's testimony today. 11 On August 18th, I met with AC Transit 12 representatives in my office in Concord, Rich Fernandez 13 and Mary King, again consistent with AC's testimony today. 14 On September 7th, I met with representatives from 15 the Engine Manufacturers of America, Jim Mattesich and Jed 16 Mandel, consistent with the Engine Manufacturers testimony 17 here today. 18 On September 8th, I met with Mike Eaves and 19 representatives of the California Natural Gas Coalition, 20 consistent with Mike's testimony today. 21 On October 17th, I had a phone conversation with 22 Bonnie Holmes-Gen and Don Anair, again consistent with 23 their individual testimonies today. 24 On October 17th, I had a phone conversation with 25 representatives from Pacific Gas and Electric, including PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 Brian Stokes and Sam Altschuler, again consistent with the 2 testimony today from PG&E. 3 And I also had a phone conversation on October 4 19th with West Port Innovations, including John Demers and 5 Mike Gallagher. 6 And then today I also had conversations with 7 Diane Bailey, Bonnie Holmes-Gen, Don Anair, and Todd 8 Campbell, all consistent with the testimony and discussion 9 today. And that's it. 10 ACTING CHAIRPERSON RIORDAN: Thank you. 11 Ms. Berg. 12 BOARD MEMBER BERG: On September 8th, I met with 13 the Engine Manufacturers at LS Paint Company and Jim 14 Mattesich and Jed Mandel. 15 On September 8th, I met with 14 members of the 16 California Transit Association led by Joshua Shaw. 17 On September 8th, I met with the National 18 Association of Fleet Administrators by telephone 19 conversation. 20 On September 11th, I also had a telephone 21 conference with Diane Bailey and Don Anair. 22 And on October 17th, I had a phone conference 23 with Pacific Gas and Electric with Brian Stokes and Sam 24 Altschuler. 25 And on October 18th, I had a telephone conference PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 with Westport Innovations with David Demers, Mike 2 Gallagher, and Charlie Ker. 3 ACTING CHAIRPERSON RIORDAN: Ms. D'Adamo. 4 BOARD MEMBER D'ADAMO: On July 28th, I met with 5 representatives from International Truck and Engine: 6 David Rodriguez, Gretchen Knudsen, and Rick Zber. 7 On September 13th, in Modesto I met with 8 representatives from AC Transit: Mary King and Rick 9 Fernandez. 10 On September 15th, I had a phone call with Bonnie 11 Holmes-Gen from the American Lung Association. 12 On October 18th, a conference call with 13 representatives from Westport Innovations: Mike 14 Gallagher, David Demers, and Charlie Ker. 15 On October 18th, a conference call with 16 representatives from PG&E: Brian Stokes, Sam Altschuler, 17 and Lorraine Paskett. 18 On October 18th, a conference call with Bonnie 19 Holmes-Gen representing the American Lung Association. 20 And then today a conversation with Frederick 21 Cavanah with the city of Modesto. 22 And all of these conversations were consistent 23 with the testimony given today. 24 ACTING CHAIRPERSON RIORDAN: Thank you. 25 Dr. Gong. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 BOARD MEMBER GONG: Yes. On August 22, I met 2 with Mike Eaves in my office. He represents the 3 California Natural Gas Coalition. 4 On September 8th, I met with James Halloran of 5 Caterpillar and Jed Mandel of EMA in my office, Engine 6 Manufacturers of America. 7 On October 6th, I had a telephone conversation 8 with Bonnie Holmes-Gen, the American Lung Association; 9 Diane Bailey, NRDC; and Don Anair, Union of Concerned 10 Scientists. 11 And on October 18th, a telephone conversation 12 with Brian Strokes and Sam Altschuler. All these 13 discussions mirrored their presentations today. 14 ACTING CHAIRPERSON RIORDAN: Thank you. 15 Let me read mine. My meetings all took place in 16 the El Monte offices at the ARB. 17 I met with the California Transportation 18 Association. I have a number of people that I met with 19 from that organization, and I'll make that list available 20 for the record. 21 The National Association of Fleet Administrators, 22 and I will make that list available. 23 I met with the Engine Manufacturers, Jim 24 Mattesich and Jed Mandel, and I will make -- their 25 comments, of course, mirrored in all cases exactly what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 was testified to today. 2 I met with Michael Eaves and Mitchell Pratt in 3 the El Monte offices, and their testimony mirrored much of 4 the conversation that we had. 5 Ms. Kennard. No. 6 Supervisor Patrick. 7 SUPERVISOR PATRICK: On August 29th, I met with 8 Mike Eaves and two other representatives of California 9 Natural Gas Coalition in my office. 10 On October 13th, I had a phone conversation with 11 Bonnie Holmes-Gen, Diane Bailey, and Don Anair. 12 And then yesterday, October 19th, conversation 13 with Brian Strokes and Lorraine Paskett from PG&E. And 14 all of the discussion was consistent with testimony that's 15 been given today by the various individuals. 16 ACTING CHAIRPERSON RIORDAN: Thank you. 17 Supervisor Roberts. 18 SUPERVISOR ROBERTS: Nothing to report. 19 ACTING CHAIRPERSON RIORDAN: Thank you. All 20 right. Board members, it is now time to come to 21 discussion and hopefully a motion. My suggestion is that 22 it might be wise for someone to make a motion. It narrows 23 the discussion or makes the discussion I think easier. So 24 depending upon your -- whatever you would like to do, but 25 the Chair would entertain a motion so the discussion is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 little clearer. 2 Supervisor Roberts. 3 SUPERVISOR ROBERTS: Well, I'm going to try. We 4 can add to it, but it seems to me that the staff 5 recommendation, if you start with that and add in the fact 6 that there would be provisions for retrofit of other 7 non-bus transit equipment to mitigate. And failing that, 8 there would be a process of appeal to the Executive 9 Director. And also I think we change the standard. 10 EXECUTIVE OFFICER WITHERSPOON: A minimum of 40 11 percent retrofit is the one change we made, if available. 12 SUPERVISOR ROBERTS: Say that again. 13 EXECUTIVE OFFICER WITHERSPOON: Minimum 40 14 percent NOx control for the NOx retrofit where available. 15 SUPERVISOR ROBERTS: When available, okay. 16 And then it seems to me the other important 17 element here would be to modify the standards so that we 18 do -- we are eligible to use the Carl Moyer dollars. 19 EXECUTIVE OFFICER WITHERSPOON: And that was part 20 of the original staff recommendation. 21 ACTING CHAIRPERSON RIORDAN: Okay. Thank you, 22 Supervisor Roberts. 23 Is there a second? 24 BOARD MEMBER D'ADAMO: Second. 25 ACTING CHAIRPERSON RIORDAN: Seconded by Ms. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 D'Adamo. 2 Discussion? Any discussion on the motion? 3 Supervisor DeSaulnier, and then I'll come back to this 4 side. 5 SUPERVISOR DeSAULNIER: Just to be clear, we're 6 back to where we started with the changes of the 40 parts 7 and -- 8 EXECUTIVE OFFICER WITHERSPOON: The 40 and 9 non-urban bus offsets. 10 SUPERVISOR DeSAULNIER: Well, it's hard for all 11 of us, because it's hard to measure what we're trading off 12 in the absence of that knowledge. I think the standard is 13 really important. I don't know whether there's some 14 possibility to pursue in the next 15 days, maybe there's 15 some miracle language out there that would be able to do 16 both of what Ron's trying to accomplish and what I would 17 like to see. But absent that, I'm struggling with -- 18 EXECUTIVE OFFICER WITHERSPOON: You mean keep the 19 standard and keep Carl Moyer, is what you're talking 20 about? That we can't do. 21 SUPERVISOR DeSAULNIER: The third possibility 22 is -- I'm having a hard time figuring out what the damage 23 is done in a quantified way in terms of dollars. So if 24 it's seven or $8,000, if it's a quarter of a million 25 statewide, I think that's worth keeping the standard. If PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 it's multiple of that, obviously I'd have a different 2 opinion. 3 EXECUTIVE OFFICER WITHERSPOON: We can 4 investigate that and communicate back to you as quickly as 5 possible what we believe the impact would be to Carl Moyer 6 and financing eligibility. 7 SUPERVISOR DeSAULNIER: I'm looking at the 8 implications to the transit. If there's new funding 9 coming from the federal sources so it's close to a 10 zero-sum game, keep the standard. But obviously if you're 11 putting a huge burden on transit operators, that's what 12 you're measuring for. So maybe as just a friendly 13 amendment, you just give some direction if it's possible, 14 you know. I'm searching for something, is what I'm 15 saying. 16 And then lastly just in terms of the last thing, 17 maybe some language that staff will continue to try to 18 promote new NOx reductions in those metropolitan areas 19 where there is funding. Because, for us, I think there 20 will be funding that will go to outside of the retrofit. 21 EXECUTIVE OFFICER WITHERSPOON: Could I suggest 22 something? We'll look into what we think the effect on 23 transit agencies is monetarily with all the funding 24 sources available to them. And if it is significant, and 25 we can discuss what that is, we will proceed with what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 we've proposed, the alignment. And if it's insignificant, 2 assuming this is the will of the Board, we could proceed 3 with the language that keeps the standards on the books 4 and does all the other things we're talking about. 5 SUPERVISOR DeSAULNIER: That would be meaningful. 6 EXECUTIVE OFFICER WITHERSPOON: But significance 7 is in the eye of the beholder. 8 ACTING CHAIRPERSON RIORDAN: This is a little 9 complicated, and it's complicated in the fact that I think 10 if -- I'm thinking now as a local government official. 11 What you would do is simply pass the motion as is, but 12 we'd ask staff to come back and we might take it up again. 13 We probably don't have that latitude here. So it makes it 14 very difficult. And I think that gets complicating to the 15 staff. I'm a little troubled. 16 I don't know, Supervisor DeSaulnier, if you can 17 have your cake and eat it too. It's really difficult. 18 I'm sorry. 19 SUPERVISOR DeSAULNIER: It's always worth trying, 20 Madam Chair. 21 ACTING CHAIRPERSON RIORDAN: We'll see. 22 I think I saw somebody -- 23 BOARD MEMBER KENNARD: This is really difficult 24 for me, because I fundamentally believe in rules. And I 25 think once you set the rules, it creates predictability PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 and stability. In a change in the rules, you really 2 disincentivize those who went forward in good faith and 3 tried to comply with the rules. So that's troubling. 4 However, I do appreciate the fact that staff has 5 now hit upon some unanticipated circumstances. So I'm 6 going to support this. But I want to be continually weary 7 of the fact if we continue to change rules, we lose 8 credibility in our decisions. 9 ACTING CHAIRPERSON RIORDAN: Thank you. 10 Ms. D'Adamo. 11 BOARD MEMBER D'ADAMO: The only thing I would add 12 to the discussion that Supervisor DeSaulnier kind of 13 kicked off here on maybe encouraging staff to give it 14 another shot. I think this is a new issue that has just 15 come up. And I trust that staff can figure it out. 16 They'll be able to draw the line between significant and 17 insignificant. I think if they had more time to work on 18 this issue, it probably would have been incorporated in 19 the staff suggestion to begin with. So I'm comfortable 20 with turning it over to them. I agree with Supervisor 21 DeSaulnier. It would be great if it can be accomplished, 22 and I think you can figure out what that cost is going to 23 be and whether or not it's significant. 24 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 25 BOARD MEMBER LOVERIDGE: I need to exit shortly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 But I want to say I support keeping the standard until we 2 have information otherwise, so I'll be voting against the 3 motion. 4 ACTING CHAIRPERSON RIORDAN: Any further 5 discussion? 6 Yes, Supervisor DeSaulnier. 7 SUPERVISOR DeSAULNIER: I agree with Ron. I 8 think you set the standard. And then you change it when 9 you have the information. But I appreciate staff will 10 pursue, and maybe it will come back to us. 11 ACTING CHAIRPERSON RIORDAN: Board members, I 12 think we're ready to vote. 13 BOARD MEMBER BERG: I'm confused as to what we're 14 voting on. 15 ACTING CHAIRPERSON RIORDAN: It's Supervisor 16 Roberts' motion, and it is -- Supervisor Roberts. 17 SUPERVISOR ROBERTS: I'm not in disagreement with 18 what I'm hearing, and I think it's a question of what we 19 do first. What you're suggesting is leave the standard 20 and come back at a later date. I don't have a problem 21 with that. 22 ACTING CHAIRPERSON RIORDAN: But that isn't your 23 motion, though. 24 SUPERVISOR ROBERTS: I know that's not the 25 motion. I'm listening carefully here, because I think we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 are all on the same page. And it's -- 2 EXECUTIVE OFFICER WITHERSPOON: I have a 3 wonderful idea. I think that you should go ahead and vote 4 on the motion, because it contains all of staff's 5 recommendations with the enhancements we accomplished over 6 the lunch. And we can report back to you one week from 7 today at our next Board meeting on what we think the Carl 8 Moyer consequences are. And if you need to, you can 9 direct us to write the rule a different way at that time. 10 But we will assume the vote is to align and do the 40 11 percent NOx retrofit. 12 SUPERVISOR ROBERTS: That was what I was going 13 toward, because I didn't -- 14 ACTING CHAIRPERSON RIORDAN: I've got a shaking 15 legal head here. 16 SUPERVISOR ROBERTS: Can we do it -- 17 ACTING CHAIRPERSON RIORDAN: I have two shaking 18 legal heads. 19 SUPERVISOR ROBERTS: Can we do it the opposite 20 way? 21 GENERAL COUNSEL JENNINGS: I think we can do it, 22 Diane. We'll continue this meeting until next week for 23 that limited purpose. But you would go ahead and vote. 24 And I think there's some lack of clarity as to whether the 25 motion is to change the standard and go back if we tell PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 you something, which Supervisor Roberts is saying, or 2 start out with keeping the standard and change that, as 3 Mayor Loveridge and Mr. DeSaulnier -- 4 SUPERVISOR ROBERTS: I'm comfortable with keeping 5 the standard and reviewing it next week, if we can make 6 the adjustment based on how it's going to effect the Carl 7 Moyer. 8 ACTING CHAIRPERSON RIORDAN: You're going to 9 adjust your motion. Is that acceptable to the seconder? 10 BOARD MEMBER D'ADAMO: Second, yes. 11 ACTING CHAIRPERSON RIORDAN: Okay. 12 SUPERVISOR ROBERTS: I think we're all on the 13 same place with it -- 14 ACTING CHAIRPERSON RIORDAN: Everybody clear with 15 that? We're keeping the standard. We're going to 16 continue the item for a limited report. 17 GENERAL COUNSEL JENNINGS: You would vote on the 18 motion now. And then you would continue the item until 19 next week for report on the consequences of that on Carl 20 Moyer. 21 ACTING CHAIRPERSON RIORDAN: But can we narrow it 22 to the very specific item of the alignment or 23 non-alignment? 24 GENERAL COUNSEL JENNINGS: Absolutely. 25 ACTING CHAIRPERSON RIORDAN: That's my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 recommendation. 2 SUPERVISOR ROBERTS: That's clear, and that's 3 what I would like. 4 GENERAL COUNSEL JENNINGS: If I could just 5 clarify two more things. I want to make sure it's clear 6 that the motion includes that the mitigation only applies 7 to districts that are 30 or larger. Correct? 8 ACTING CHAIRPERSON RIORDAN: Correct. 9 GENERAL COUNSEL JENNINGS: And that the Executive 10 Officer would be directed to make appropriate changes to 11 the Resolution to reflect the action of the Board. In 12 other words, if we need to change some findings to support 13 what you're doing, we would do that. 14 SUPERVISOR ROBERTS: That's fine. 15 ACTING CHAIRPERSON RIORDAN: Right. And then the 16 appeal to the Executive Officer is included. I mean, 17 everything else of your motion is included. Okay. 18 Real clear now, Ms. Berg? 19 BOARD MEMBER BERG: No. Question. I'm sorry. 20 I'm not trying to belabor this, but I want to make sure 21 what I'm voting on. 22 ACTING CHAIRPERSON RIORDAN: It's very convoluted 23 at times. 24 BOARD MEMBER BERG: The motion now is to retain 25 the standard and to direct staff to create an exemption. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 And the exemption would then allow them to offset. 2 EXECUTIVE OFFICER WITHERSPOON: Yes. 3 BOARD MEMBER BERG: One-for-one, along with 4 expanding the universe of the vehicles and the 40 percent 5 on the retrofit. 6 EXECUTIVE OFFICER WITHERSPOON: Contingent on a 7 report back on how retaining the standard effects Carl 8 Moyer funding eligibility and transit districts. And so 9 at your next meeting a week from today, you may choose to 10 align, or say, "No, we were right last Thursday. Go ahead 11 with that." 12 ACTING CHAIRPERSON RIORDAN: Everybody 13 comfortable? Okay. 14 All those in favor of the motion signify by 15 saying aye. 16 (Ayes) 17 ACTING CHAIRPERSON RIORDAN: Opposed, no. 18 Motion carries. 19 Thank you, staff. That was a challenge. 20 I'm take a moment while we change staff, and 21 we're going to move on with our next item. 22 This is Agenda Item 05-10-3, on Proposed 23 Requirements to Reduce Idling Emissions from New and 24 Existing Diesel Trucks. 25 Last July, the Board approved a five-minute PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 idling limit for diesel trucks and buses. Previously, in 2 2002, the Board adopted a rule to limit idling at and near 3 schools. However, we asked the staff to do some 4 additional work on trucks equipped with sleeper cabs, 5 because the issue is a little more complicated. The staff 6 has now finished that work and has brought us a proposal 7 for a regulation to address sleeper cabs. 8 And Ms. Witherspoon, would you like to introduce 9 this item, please? 10 EXECUTIVE OFFICER WITHERSPOON: Yes. And thank 11 you, Madam Chairman. 12 ARB's five-minute idling rule became effective 13 February 1st, and we have been working with local 14 districts and other agencies since then to educate 15 affected owners and operators about the rule and enforce 16 the five-minute limit. However, the current rule does not 17 apply to sleeper cabs, even though those trucks are the 18 largest contributors to statewide idling emissions -- I 19 should say those operations. During the 2004 hearing, we 20 expressed our intent to come back to the Board with a 21 comprehensive proposal to address this source. And 22 Stephan Lemieux from the Mobile Source Control Division 23 will now make staff's presentation. 24 (Thereupon an overhead presentation was 25 presented as follows.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 2 LEMIEUX: Good afternoon, Madam Chair and members of the 3 Board. Today's presentation will summarize -- 4 --o0o-- 5 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 6 LEMIEUX: -- staff's proposal to reduce idling emissions 7 from new and in-use diesel trucks beginning in 2008. In 8 particular, the proposal primarily focuses on emissions 9 from extended idling on trucks equipped with sleeper cabs. 10 --o0o-- 11 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 12 LEMIEUX: Today's presentation will first provide 13 background information related to the proposal. This will 14 be followed by a discussion on the regulatory requirements 15 of the proposal, the impacts this regulation will have on 16 owners and operators of diesel trucks, the benefits 17 associated with this proposal, and the issues brought by 18 stakeholders. I will conclude with a summary and staff's 19 recommendation. 20 --o0o-- 21 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 22 LEMIEUX: Truck operators idle truck engines for various 23 reasons. Some idle the truck engine to perform work or to 24 operate auxiliary equipment known as power take-off 25 devices, or PTOs. Examples of trucks with power take-off PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 equipment include concrete mixers, fire trucks, trash 2 trucks, mobile cranes, and vehicles with conveyors or 3 other loading and unloading devices. 4 Idling of the engine is also commonly used to 5 provide cooling or heating for the cab of the sleeper 6 berth while the truck operator waits to load and unload 7 freight or during extended rest periods. Truck idling can 8 be used to provide electrical power to operate on-board 9 accessories, such as televisions, microwaves, and 10 computers. It is also a common practice to idle the main 11 engine to keep the engine warm in cold weather. 12 Idling the truck's large diesel engine is an 13 inefficient way to generate power for climate control and 14 running accessories or to keep the engine warm. Staff 15 proposal focuses on reducing this type of engine idling 16 since it can be substituted using more efficient and less 17 polluting means. 18 --o0o-- 19 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 20 LEMIEUX: In 2010, total statewide idling emissions from 21 both in-state and out-of-state trucks are estimated to be 22 approximately 53 tons per day of oxides of nitrogen; 4.6 23 tons per day of hydrocarbons; and 7/10s of a ton a day of 24 particulate matter. In addition to producing smog-forming 25 emissions, idling trucks also produce greenhouse gas PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 emissions such as carbon dioxide. It is estimated that in 2 2010 sleeper trucks will emit approximately 1.1 mega tons 3 of greenhouse gas emissions per year statewide. Idling 4 trucks typically consume approximately one gallon per hour 5 of diesel fuel. This translated into approximately 2100 6 gallons per year of a truck that idles an average of 7 six hours per day representing a significant cost for idle 8 operation. Also, idling an engine increases the cost of 9 maintenance. 10 --o0o-- 11 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 12 LEMIEUX: To fulfill in part the requirements in the 13 Diesel Risk Reduction Plan and the State Implementation 14 Plan, or SIP, the Board in December of 2002 adopted the 15 school bus idling air toxic control measure, or ATCM. 16 This regulation limits idling of school buses, commercial 17 buses, and trucks at or near schools. Subsequently, in 18 July of 2004, the Board adopted a diesel truck idling ATCM 19 that limits unnecessary idling of diesel trucks and 20 commercial buses to no more than five minutes. 21 However, this rule as it exists now exempts 22 sleeper trucks. At the time the rule was adopted, the 23 Board deferred consideration of sleeper trucks and 24 directed staff to come back with a comprehensive proposal 25 that considers idling emission requirements for new diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 engines and emission performance requirements for 2 technologies used as alternatives to truck engine idling. 3 Staff's current proposal addresses these issues. 4 --o0o-- 5 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 6 LEMIEUX: Staff's proposal consists of two major 7 components: In-use requirements, and new diesel engine 8 requirements. The proposed in-use requirements amends the 9 current commercial vehicle idling requirement to include 10 sleeper trucks which would require all diesel trucks 11 statewide to shut down the main engine within five 12 minutes. 13 The proposed new diesel engine requirements would 14 reduce idling emissions from new engines and vehicles. 15 Specifically, staff's proposal would require manufacturers 16 to equip new diesel engines with an automatic engine shut 17 down system that shuts down the engine after five minutes 18 of idling. Or as an alternative to the engine shut down 19 system, certifies engines to a low NOx idling emission 20 standard. 21 The proposed regulation also addresses emission 22 performance of technologies used as an alternative to 23 truck engine idling. Specifically, emission performance 24 requirements are proposed to ensure that emissions from 25 operating these technologies do not exceed those from an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 idling diesel truck. Staff proposed in-use and new diesel 2 engine requirements will take effect beginning in 2008. 3 --o0o-- 4 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 5 LEMIEUX: The proposed new diesel engine requirements 6 apply to California certified diesel-fueled engines 7 installed on trucks with a gross vehicle weight rating 8 greater than 14,000 pounds. These requirements would 9 begin starting in the 2008 model year. These engines are 10 typically used in a variety of vehicles, such as inner 11 city delivery trucks, utility trucks, trash trucks, bulk 12 hauling trucks, tankers, construction trucks, in-line haul 13 trucks. The new diesel engine requirements do not apply 14 to motor homes and buses. 15 --o0o-- 16 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 17 LEMIEUX: As previously mentioned, the proposed new engine 18 requirements would require engine manufacturers to equip 19 new California certified 2008 and subsequent model diesel 20 engines with an engine shut down system that automatically 21 shuts down the engine after five minutes of continuous 22 idling. The shut down system must be non-adjustable and 23 tamper resistant. Similar systems currently exist as a 24 programmable standard feature in modern electronically 25 controlled diesel engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 As an alternative to the engine shut down system, 2 a manufacturer may elect to control engine emissions 3 during extended idling by certifying engines to a low NOx 4 emission standard of 30 grams per hour. Engine 5 manufacturers could likely meet this standard in 2010 and 6 later years when NOx after-treatment devices will be used 7 to meet the stringent 2010 NOx emission standards. 8 --o0o-- 9 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 10 LEMIEUX: Staff's proposal would require the engine shut 11 down system to automatically activate when the vehicle 12 stops, the transmission is set in the neutral or park 13 position, and the parking brake is engaged. The engine 14 would then shut down after five minutes of continuous 15 idling. 16 The proposal also includes provisions that would 17 enable the driver to manually reset the engine shut down 18 timer before engine shut down and override the engine shut 19 down system when the engine is operating a power take-off 20 device. The system can also be overridden to warm up the 21 engine during engine start-up under cold ambient 22 conditions. 23 --o0o-- 24 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 25 LEMIEUX: With an automatic engine shut down system, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 compliance with the proposed idling regulation will be 2 assured. This is because without such a system, 3 compliance would depend on the assistance of the operator 4 and an effective enforcement program. The automatic shut 5 down system not only ensures compliance with sleeper 6 trucks, but non-sleepers as well, especially since 7 non-sleepers typically can idle at essentially any 8 location throughout the state, making it difficult to 9 effectively enforce the idle restriction. 10 Since the engine shuts down after five minutes of 11 idling, this would encourage operators of sleeper trucks 12 to use a cleaner alternative technology to provide cab 13 comfort and power. As a result, the expected emission 14 reductions from staff's proposal can be achieved. 15 --o0o-- 16 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 17 LEMIEUX: As an alternative to the automatic shut down 18 system, staff proposal also provides manufacturers the 19 option to certify engines to a low NOx idling emission 20 standard of 30 grams per hour. During the development of 21 the proposed regulation, some engine manufacturers request 22 that an option to certify engines to a new NOx idling 23 emission standard in lieu of an engine shut down system, 24 siting that NOx after-treatment devices may to some degree 25 reduce NOx emissions during extended idling operation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 This low idling emission option is proposed to accommodate 2 the engine manufacturers' request. 3 A truck equipped with a diesel engine certified 4 to the low NOx idling standards would allow the operator 5 to continue to idle the main engine for more than five 6 minutes and not require the operator to install 7 alternative cab comfort devices. Thus, the truck operator 8 would not be effected in any way with this option. 9 However, it is not yet clear whether the low NOx 10 idling engine is technically feasible. This is because 11 NOx after-treatment devices, such as NOx absorbers, 12 typically operate most efficiently when exhaust 13 temperatures are above 200 degrees Celsius, while exhaust 14 temperatures during extended idling reach no more than 150 15 degrees Celsius. 16 --o0o-- 17 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 18 LEMIEUX: Having discussed the new engine requirements, 19 now we'll discuss the proposed amendments to the in-use 20 idling ATCM that will effect all sleeper trucks, including 21 those registered out of state. 22 The in-use idling restriction requirements has 23 two components: One that directly affects idling of 24 sleeper trucks; and the second that affects technologies 25 used as alternatives to main engine idling. As discussed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 earlier, the existing in-use idling ATCM allows sleeper 2 trucks to idle continuously. Staff's proposal would 3 sunset this proposal for sleeper trucks and require them 4 to shut down their engines beginning in 2008. Thus, the 5 operator of sleeper trucks would be required to manually 6 shut off the main engine after five minutes of 7 continuously idling. 8 The existing in-use idling ATCM includes a number 9 of exemptions where idling of the main engine for more 10 than five minutes is allowed. Listed are a few examples 11 of the exemptions such as idling in traffic or during 12 repairs or performing work. 13 Staff is also proposing emission performance 14 requirements for alternative cab comfort devices depending 15 on the standard the main engine was certified to. For 16 diesel engines certified to the more stringent 2007 and 17 subsequent heavy-duty diesel regulation, the alternative 18 technologies used will need to be as clean or cleaner than 19 the main engine operating at idle. 20 --o0o-- 21 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 22 LEMIEUX: When the proposed idling restriction 23 requirements take effect in 2008, truck operators that 24 want to rest in their trucks during layover hours in 25 California will need an alternative cab comfort device to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 provide cab cooling or heating and power for on-board 2 accessories during rest periods. Staff proposal allows 3 the use of such alternative cab comfort devices. 4 This slide will list some of the options that the 5 operators can use to provide cab comfort and power. 6 Traditionally, an auxiliary powered system, or APS, uses a 7 small off-road diesel engine to provide heating, cooling, 8 and electrical power. Battery powered APSs have very 9 recently entered into the market and used batteries to 10 provide heating, cooling, and electric power. 11 Fuel-fired heaters is a small device that uses 12 diesel fuel from the truck's fuel tank to provide heat. 13 Thermal storage devices are also a recent introduction and 14 store cooling energy when the truck is being driven, which 15 is later discharged to cool the sleeper cab when the 16 vehicle is stopped and the driver is resting. 17 Other options include plug-in electrified parking 18 spaces to provide 110 volts to operate an 19 electrically-driven air conditioning system and on-board 20 accessories. Or an operator may choose to stay at a truck 21 stop that provides off-board power, heating, cooling, such 22 as provided by IdleAire technology. This technology works 23 with any truck and does not require the installation of 24 additional devices. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 2 LEMIEUX: As mentioned earlier, staff's proposal includes 3 emission performance requirements for alternative 4 technologies that produce emissions. Staff identified the 5 diesel fueled APS as the most predominantly alternative 6 technology used today. Based on whether the diesel APU is 7 installed in a 2007 or newer truck or a 2008 and older 8 truck, staff's proposal requires the following emission 9 performance requirements. 10 If a diesel fueled APS is installed in a pre-2007 11 truck, the APS must meet current new diesel off-road 12 emission standards. NOx emissions from the APS are much 13 cleaner than idling the main engine, but particulate 14 matter and hydrocarbon emissions from APS would be 15 comparable to or lower than that of the truck's main 16 engine while idling. And, thus, no additional controls 17 would be necessary. 18 However, if the diesel fueled APS is installed in 19 a 2007 and newer truck, the APS must have its particulate 20 matter emissions controlled, because the main engine will 21 be equipped with a PM filter that will reduce PM emissions 22 by 90 percent. In APS, PM emissions must be controlled by 23 either broadening the APS exhaust through the PM filter of 24 the truck engine or retrofitting the APS with the verified 25 Level 3 PM control device that must reduce engine-out PM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 emissions by at least 85 percent. Without this 2 requirement, diesel APS installed on 2007 and newer trucks 3 will produce more particulate matter emissions than the 4 idling truck engine. Note that this requirement is a 5 major issue with the Engine Manufacturers Association, and 6 it will be discussed later when we discuss issues raised 7 by stakeholders. 8 --o0o-- 9 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 10 LEMIEUX: Another alternative cab and engine heating 11 technology commonly used today is the diesel fuel-fired 12 heater. Staff's proposal also sets emission performance 13 requirements for these devices. Operators of pre-2007 14 trucks could install any commercially available fuel-fired 15 heater. However, fuel-fired heaters installed on 2007 and 16 newer trucks will be required to meet the fuel-fired 17 heater standards specified in the low emission vehicle 18 program for light-duty vehicles. Specifically, fuel-fired 19 heaters on 2007 and newer trucks must meet the ultra-low 20 emission vehicle, or ULEV, standards. Several 21 manufacturers already currently produce fuel-fired heaters 22 that meet the ULEV standards. 23 --o0o-- 24 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 25 LEMIEUX: Most electronically controlled engines today are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 equipped with engine shut down devices which are 2 software-based idle limit controls. However, the current 3 engine shut down devices are programmed and usually not 4 activated when the engine is sold. Setting the idle time 5 is left to the truck operator, and they can easily be 6 overridden to allow the engine to idle continuously. 7 Therefore, staff expects engine manufacturers will comply 8 with this request to a change in the programming and 9 electronic engine software. As a result, staff expects 10 that engine manufacturers will not incur any significant 11 cost in developing the engine shut down technology to 12 comply with the proposed requirements. 13 However, since the proposed requirement is a 14 California-only requirement, it is projected to have a 15 minimal cost impact on engine manufacturers. Staff cost 16 estimate includes changes to the engine software and 17 additional administrative costs related to tracking those 18 engines destined for sale in California from those in the 19 other 49 states. 20 These costs may be further reduced should engine 21 manufacturers elect to incorporate California's engine 22 shut down requirements and engines destined for sale in 23 other 49 states. Staff estimates a price increase of $100 24 per engine to cover the additional administrative costs 25 and minimal engine shut down reprogramming costs. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 --o0o-- 2 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 3 LEMIEUX: Some engine manufacturers are currently 4 developing fully integrated truck engine APS systems. 5 Such systems are expected to significantly minimize a 6 perceived APS drawback associated with the high initial 7 cost and shorter maintenance intervals. 8 The trucks' heating and air conditioning system 9 are fully integrated with the APS system to provide a 10 reliable and low cost power supply. The APS engine 11 consumes less fuel and produces significantly less 12 emissions. However, unless controlled, particulate matter 13 emissions will be more than those from the truck engine if 14 the truck engine has a 2007 or newer model. Two of the 15 manufacturers developing such a system are Caterpillar and 16 Cummins. 17 --o0o-- 18 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 19 LEMIEUX: Traditional diesel fueled APSs are stand-alone 20 truck-mounted systems that provide climate control to the 21 cab, heat the engine for cold weather starting, electrical 22 power to charge the batteries and operate on-board 23 accessories. They were usually an aftermarket purchase. 24 A diesel-fueled APS typically uses fuel from the 25 truck's fuel system and consumes much less fuel than PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 idling the truck engine. It provides significant 2 reduction in oxides of nitrogen, hydrocarbon, carbon 3 monoxide, and greenhouse gas emissions. As discussed 4 earlier, particulate matter emissions reductions depends 5 on the model year of the truck engine on which the APS is 6 mounted. Depending on the APS engine type and the 7 capacity of the climate control system, the cost of the 8 diesel fuel APSs including installation range between 9 6,000 and $8500. 10 Because APS is installed on 2007 and later 11 trucks, we'll need to further control PM emissions used in 12 Level 3 verified PM reduction device. Staff has also 13 included the estimated cost of APSs with a verified PM 14 trap, which increases the overall cost of the APS slide by 15 $2,000. The pictures show a few of the currently 16 commercially available diesel-fueled APSs. 17 --o0o-- 18 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 19 LEMIEUX: Fuel-fired heaters are used to provide heat to 20 the sleeper cab and also to the engine block for easy 21 engine start-up during cold weather. They can operate 20 22 or more hours on a gallon of diesel fuel and typically use 23 the fuel from the truck's fuel tank. They are relatively 24 small and inexpensive. The cost of these devices range 25 between 1,000 to $3,000 installed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 --o0o-- 2 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 3 LEMIEUX: Battery electric APSs include a battery pack and 4 independent electrically-driven heating and air 5 conditioning system and inverter charger to provide 110 6 volts of electricity for on-board accessories. They are 7 capable of providing more than ten hours of continuous cab 8 comforts between charges. They require two to six hours 9 of charge time, which occurs during normal truck 10 operation. The cost of such systems range between 4,000 11 and $10,000 installed. The higher amount corresponds to 12 an advanced battery system, a heavy-duty alternator, a 13 high capacity heating, and cooling system and an inverter 14 charger. 15 --o0o-- 16 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 17 LEMIEUX: Thermal storage systems are on-board systems 18 that utilize the truck's air conditioning system to store 19 cooling energy when the truck is operated. The cooling 20 energy is later used to cool the sleeper cab when the 21 truck is stopped and the operator is resting. As with 22 battery electric APSs, these systems require four to six 23 hours of truck operation for recharging. 24 The thermal energy storage system provides only 25 cooling. The cost of a commercially-available energy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 storage system including installation is approximately 2 $3600. The system can be integrated with a fuel-fired 3 heater to provide both heating and cooling. A currently 4 commercially available system that includes a fuel-fired 5 heater costs approximately $4600 installed. 6 --o0o-- 7 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 8 LEMIEUX: Another alternative to truck engine idling is 9 the development of an electrical infrastructure at truck 10 stops and other locations. Shore power with on-board 11 truck equipment involves the electrification of truck 12 parking spaces at truck stops or other locations to 13 provide trucks with 110 volts of electric power to operate 14 the sleeper cab climate control and on-board accessories. 15 It requires the parking spaces to be equipped with 16 electrical outlets, and trucks need to be equipped with 17 inverter chargers, electrical power connections, and 18 electrically-driven heating and air condition system. 19 The power infrastructure costs range between 3500 20 and $6,000 per truck parking space. The cost for add-on 21 parts to the truck, which includes the electric air 22 conditioning unit and an inverter charger and electrical 23 connection, is approximately $4,000 installed. 24 --o0o-- 25 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 LEMIEUX: An alternative to typical shore power is the 2 off-board power infrastructure being developed by IdleAire 3 Technologies. This technology provides 110 volts of 4 electrical power for on-board accessories, an externally 5 installed heating and air conditioning system, and 6 hook-ups for telephone and internet and television 7 services at each parking space. The unit is connected to 8 the window through a console placed in the truck window. 9 Currently, the cost for basic services that provide only 10 climate control ranges between $1.60 and $1.88 per hour. 11 The infrastructure costs at truck stops or other locations 12 range between 12,000 and $20,000 per parking space. 13 --o0o-- 14 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 15 LEMIEUX: This table shows the costs and the payback 16 periods of alternative technologies. As you can see from 17 the table, the pay-back period from fuel savings alone 18 ranges between seven months for an inverter charger with 19 and electrically heated heating and air conditioning 20 system to be a little more than two years for the Thermo 21 King APS with a verified PM trap. 22 These estimates are based on the truck idling 23 2,100 hours per year and fuel costs of $3.05 per gallon 24 and does not include savings from reduced maintenance 25 costs for the main engine. Staff expects that when the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 proposed regulation takes effect in 2008, the payback 2 periods will be much lower than what is shown in this 3 table. Because it is expected that diesel fuel prices 4 will be higher in 2008, while the cost of the alternative 5 technologies will go down due to reduced production costs 6 with the expected increase in sales volume. 7 --o0o-- 8 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 9 LEMIEUX: Staff's proposal will also effect Carl Moyer 10 Program funding for auxiliary powered systems. If staff 11 proposed requirements are adopted starting in 2008, 12 funding for alternative technologies may be possible for 13 technologies that goes beyond the proposed requirement: 14 That is, technologies that are cleaner than a diesel APS. 15 Such technologies may include battery electric APSs, 16 thermal storage systems and truck on-board equipment for 17 use with on-shore power. Systems qualifying for the Carl 18 Moyer program will result in less cost for the owner and 19 will significantly reduce the payback period for the 20 device. 21 Under the proposed guidelines, staff will return 22 to the Board next month to revise the Carl Moyer Program 23 funding guidelines, including funding for technologies 24 that provide benefits beyond staff's idling proposal. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 2 LEMIEUX: Now I'll cover the emission benefits expected 3 from this proposal. This table displays a projected 4 statewide emission reduction from both California and 5 out-of-state sleeper trucks in 2010. It is projected 6 there will be over 75,000 sleeper trucks in 2010 on a 7 daily basis in California. Assuming full compliance with 8 the proposed regulation, statewide emissions will be 9 reduced by approximately 46 tons per day of oxides of 10 nitrogen, 4.2 tons per day of hydrocarbon, and 4/10 of a 11 ton per day of particulate matter, and approximately 1,930 12 tons per day of greenhouse gas emissions. 13 --o0o-- 14 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 15 LEMIEUX: In addition to the emission benefits, staff's 16 proposal will fulfill in part the requirements specified 17 in the SIP and the Diesel Risk Reduction Plan. Consistent 18 with the Board's environmental justice policy, the 19 proposal will result in significant emission reductions in 20 locations disproportionately impacted by air pollution 21 from other sources, such as truck stops, ports, 22 distribution centers, and warehouses. 23 In addition, staff's proposal is consistent with 24 the Governor's Executive Order to reduce greenhouse gas 25 emissions. Staff's proposal reduces greenhouse gas PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 emissions by approximately one megaton per year in 2010. 2 Staff's proposals is consistent with the ARB and 3 California Energy Commission's policy recommendations to 4 reduce the demand of petroleum use through anti-idling 5 measures. Assuming full compliance, staff proposal would 6 result in reduced fuel consumption of approximately 160 7 million gallons of diesel fuel per year in 2010 in 8 California. 9 --o0o-- 10 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 11 LEMIEUX: The Engine Manufacturers Association, or EMA, 12 has raised several issues related to staff's proposed 13 requirements. The EMA has stated that staff's proposed 14 requirements change the current agreed upon practices of 15 fully aligning and harmonizing the recently adopted Tier 4 16 off-road standards with those adopted by the U.S. EPA. In 17 addition, EMA has stated that the proposed new NOx idling 18 standard may not be technologically feasible and that it 19 violates the lead time and stability requirements as 20 required by federal law. 21 In response to EMA's comments, staff believes 22 that this proposal does not violate any agreement made 23 with engine manufacturers. Staff proposal safeguards the 24 already adopted 2007 heavy-duty diesel engine standards by 25 requiring APSs to have PM emissions that are at least as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 clean. Thus, staff's proposal provides an opportunity for 2 diesel-fueled APSs to compete in this market. More 3 importantly, it should be emphasized that the requirement 4 to install a particulate filter would likely not even 5 apply to the engine manufacturer. The engine manufacturer 6 could continue to produce and sell Tier 4 compliant 7 engines in California. The truck operator would be 8 responsible for having the particulate filter installed. 9 With regard to the new engine requirement, staff 10 proposal only requires a non-adjustable automatic engine 11 shutoff device. The optional low NOx idling standard was 12 proposed to accommodate several engine manufacturers' 13 request to have the option of certifying their engines to 14 a low NOx idling standard as an alternative to an engine 15 shut down requirement. 16 --o0o-- 17 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 18 LEMIEUX: The American Trucking Association, or ATA, and 19 the California Trucking Association, or CTA, also raised 20 issues stating that more lead time is needed for truck 21 operators and owners to adjust to the proposed 22 requirements. Furthermore, they raise the issue that the 23 inconsistent patterns of states and local idling 24 restriction laws nationwide make it difficult for truck 25 operators to understand and comply with the laws and thus PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 would prefer a nationwide requirement working in 2 coordination with the U.S. EPA. They state that this 3 approach would provide consistency for truck operators. 4 Staff does not believe this implementation date 5 or the proposed requirement should be delayed. First, 6 emissions from idling trucks are significant and need to 7 be addressed today. Second, cost effective alternative 8 technologies with a payback period of less than two years 9 are already commercially available. Finally, the U.S. EPA 10 currently does not have any plans for adopting a 11 nationwide idling requirement. 12 --o0o-- 13 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 14 LEMIEUX: Staff has reviewed comments submitted by the 15 public regarding this proposal during the 45-day notice 16 process. Based on those comments, staff is proposing 17 15-day changes to the regulation language for the new 18 engine requirements related to one of the PTO override 19 provisions to address safety concerns. 20 Also, staff is proposing two modifications to the 21 amendments to the in-use idling ATCM requirements. The 22 first will allow battery electric infrastructure or 23 technologies related to the usage of electric shore power 24 to offer these technologies as alternatives without prior 25 Executive Officer approval. The second will clarify PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 language regarding electric shore power availability as a 2 compliance option. 3 --o0o-- 4 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 5 LEMIEUX: In summary, staff's proposed regulation is a 6 necessary measure to help reduce emissions and health risk 7 from idling sleeper trucks in all areas of the state. As 8 already stated, it fulfills in part the requirements in 9 the SIP and the Diesel Risk Reduction Plan. It also 10 provides significant emission reductions at locations such 11 as truck stops, ports, distribution centers, and 12 warehouses, and therefore helps achieve the Board's 13 environmental justice policy. It is consistent with 14 achieving the Governor's greenhouse gas emission reduction 15 goals and ARB and California Energy Commission's fossil 16 fuel consumption reduction goals. Alternatives are 17 technologically feasible, and the payback periods are less 18 than two years. 19 Staff, therefore, recommends that the Board 20 approve this proposal. Thank you. This concludes my 21 presentation. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 Madam Ombudsman. 24 OMBUDSMAN TSCHOGL: Thank you. 25 Madam Chairman and members of the Board, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 Engine Manufacturers Association, Truck Manufacturers 2 Association, California Trucking Association, American 3 Trucking Association, Manufacturers of Emission Controls 4 Association, engine dealers, manufacturers of alternative 5 technologies, and the U.S. EPA provided input and comments 6 to staff's current proposal as well as to staff's proposal 7 during the development of the in-use airborne toxic 8 control measure adopted in July of 2004. 9 The regulatory process to develop this rule began 10 in 2002 to fulfill ARB's responsibilities in the Diesel 11 Risk Reduction Plan and in the State Implementation Plan. 12 Staff held two public workshops to discuss 13 proposed actions and to solicit ideas and feedback from 14 stakeholders. The first workshop was held on June 4th, 15 2003, and the second on March 23th, 2005, both in El 16 Monte. The public workshops were also accessible by 17 teleconference and with the ability to ask questions and 18 receive responses. Approximately 40 persons attended each 19 of the two workshops. Attendees included the 20 representatives from the groups previously mentioned plus 21 members of the public. 22 Staff held six conference calls with EMA and its 23 members on September 23rd, 2003; December 18th, 2003; 24 April 2nd, 2004; December 2nd, 2004; February 28th, 2005; 25 and September 29th, 2005. Staff also held one in-person PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 meeting and two conference calls with the Truck 2 Manufacturers Association and its members. The meeting 3 was held on December 17th, 2003, in El Monte. And the two 4 conference calls were held on August 26th, 2003, and March 5 16th, 2005. 6 On April 25th, 2005, staff conducted a conference 7 call with both the CTA and the American Trucking 8 Association. Additionally, staff held conference calls 9 with staff of the U.S. EPA on March 24, 2005, and July 10 21st, 2005, with staff, before it was released along with 11 proposed regulatory amendments on September 2nd, 2005. 12 Only the Notice of Rulemaking was physically mailed to 13 stakeholders. The staff report was made available as a 14 web document only. Hard copies of the staff report and 15 the proposed regulatory amendments are made available to 16 the Sacramento Public Information Office on September 2nd, 17 2005. The Notice was mailed to a total of 1,770 18 subscribers. The list serve dedicated to the current 19 proposal, the truck idling list serve, has 790 20 subscribers. In addition, the Notice of Rulemaking was 21 sent to subscribers of the list serves for the mobile 22 source programs, in-use idling, airborne toxic control 23 measure, and the school bus idling ATCM. These lists have 24 1,013, 802, and 6,295 subscribers respectively. 25 This concludes my comments. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 ACTING CHAIRPERSON RIORDAN: Thank you, Madam 2 Ombudsman. 3 Board members, any questions for staff? 4 Dr. Gong. 5 BOARD MEMBER GONG: Just a quick question about 6 the U.S. EPA. I was a little surprised to see there's no 7 EPA position on this idling business, this process. 8 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 9 LEMIEUX: When we initiated this process back in 2001, we 10 did contact U.S. EPA to find out if they wanted to work 11 together on an idling rule. They had already been working 12 on a program where it was sort of a voluntary program 13 where they were trying to encourage fleets and 14 stakeholders to go toward that direction. And it had been 15 working for several years. But from what we can see when 16 we were working with them, they weren't getting very much 17 progress. It wasn't progressing very fast in terms of 18 getting technology on these trucks. So at that time they 19 were not interested in pursuing any kind of regulatory 20 action for diesel idling. And to this date, they do not 21 have any plans to do such. 22 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, I would 23 say the federal rulemaking process is far more arduous 24 than ours. And their resources are completely tapped with 25 both their on-road rulemaking, their off-road rulemaking, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 and the Tier 3 rulemaking that's underway right now for 2 locomotives and marine vessels. So it was lower on their 3 priority list. Not that they are against having idling 4 regulations, they just don't have time to develop them. 5 And they instead had other staff working on smart way 6 transportation for greenhouse gas reductions actually. 7 But it will be a while before they get around to it on the 8 regulatory side. 9 ACTING CHAIRPERSON RIORDAN: Ms. Kennard. 10 BOARD MEMBER KENNARD: First of all, staff, this 11 was an excellent presentation, very, very well organized. 12 So thank you. 13 I had one quick question, this acronym that I was 14 not familiar with on page 15, PTO. 15 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 16 LEMIEUX: That means power take off devices. It's the 17 work that an engine does besides the propulsion of the 18 vehicle. Like a cement mixer needs to run the mixer. It 19 uses the engine to operate that piece of equipment. 20 BOARD MEMBER KENNARD: Thank you. 21 ACTING CHAIRPERSON RIORDAN: Any further 22 questions? 23 We've got quite a list in front of us, so here's 24 what we're doing. Again, three minutes. If you have 25 written testimony, we'll make that part of the record, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 please put in your own succinct words what your position 2 is. 3 Dawn Friest, Will Schaefer, Mike Tunnell, Staci 4 Heaton, Randal Friedman, Jason Vega, and Rolf Lichtner, 5 all in the front row, please. We're going to start with 6 Dawn. And let's go. 7 MS. FRIEST: Good afternoon. My name is Dawn 8 Friest. I'm here today representing the Engine 9 Manufacturers Association. As you know, EMA's members 10 include the manufacturers of diesel fueled engines used in 11 heavy-duty on-highway trucks and the small non-road diesel 12 engines which power APS units, both of which are subject 13 to this rulemaking. 14 EMA has been an active stakeholder in this 15 process proposing an alternative to the staff's approach 16 that would phase out the sleeper berth exemption, 17 implement engines, shut down technology on all new 18 heavy-duty on-highway truck engines nationwide and address 19 APS emissions in a manner consistent with ARB's prior 20 rules and rulemaking commitments. 21 However, ARB staff have rejected EMA's proposal 22 and instead have proposed an invalid, infeasible, and 23 fundamentally unfair rule that is strongly opposed by EMA. 24 ARB's proposal is not only technologically infeasible and 25 in violation of the lead time and stability requirement of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 the Federal Clean Air Act, but is also a direct breach of 2 ARB's repeated commitments to maintain full alignment with 3 EPA's non-road Tier 4 rule. 4 EMA's concerns are more fully explained in our 5 written comments. And I'm going to focus on our most 6 significant objections to the pending rulemaking proposal. 7 ARB's proposed APS standards represent a blatant 8 breach of the repeated commitments and assurances that ARB 9 staff made to EMA and its members pledging that ARB would 10 maintain harmonization with EPA's Tier 4 non-road engine 11 standard. ARB's pledge was key to our unprecedented 12 support of the Tier 4 non-road rules. A critical element 13 of those rules, which this Board approved and adopted so 14 recently, is the conclusion that after-treatment forcing 15 PM standards are not cost effective or technically 16 feasible and should not be mandated for non-road engines 17 in the less than 25 horsepower range, the engines used in 18 APS units. 19 Indeed, the non-road rule as agreed to and 20 adopted by ARB explicitly acknowledges that the continued 21 appropriateness of the decision not to proceed with 22 after-treatment forcing PM standards will be reviewed as 23 part of the 2007 technology review. Nothing has changed 24 since the Board's approval of the Tier 4 standards. PM 25 after-treatment technology is still inappropriate for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 small off-road engines that power APS units. 2 Despite all this, ARB staff is proposing here 3 today to ignore the relevant facts while also reneging on 4 their own determinations and assurances regarding this 5 issue. It is difficult to image a more fundamental and 6 egregious breach of trust and even more difficult to 7 ignore the impact that this breach will have on future 8 collaborative efforts with ARB, including those pertaining 9 to the ARB's pending Tier 4 rule. 10 Beyond ARB's breach of trust, the simple reality 11 is that APS units equipped with PM after-treatment systems 12 are not feasible and so will not be available as of 2008, 13 nor are the new engine idle shut down standards and low 14 NOx idling emission standards feasible as proposed by ARB 15 staff. Moreover, those standards are in clear violation 16 of the Clean Air Act's lead time and stability 17 requirements and so are invalid as a matter of law. 18 The net result is that the operators of sleeper 19 trucks faced with the mandatory shut down of their 20 vehicles are likely to have no available cost effective 21 option to heat, cool, and otherwise maintain the 22 environment within their cabs to allow for adequate rest 23 and safe alert operation of those vehicles. 24 ACTING CHAIRPERSON RIORDAN: And I need a 25 concluding. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 MS. FRIEST: The Board should not adopt the 2 pending proposal, but instead should direct staff to work 3 with interested stakeholders to develop fair and feasible 4 alternative requirements to control idling emissions. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 And we've made your other comments part of the record. 7 Any questions for this speaker? I see none at 8 this time. 9 Staff, any response that you'd like to make at 10 this time? No. 11 Okay. We'll move on. Will Schaefer. 12 MR. SCHAEFER: Good afternoon, Madam Chairman and 13 members of the Board, CARB staff. My name is Will 14 Schaefer. I'm with the Truck Manufacturers Association. 15 The Truck Manufacturers Association, or TMA, represents 16 the major Northern American manufacturers of Class 6, 7, 17 and 8 medium and heavy-duty trucks. 18 Over the past two years, we have appreciated the 19 opportunity to work directly with CARB staff during the 20 development of CARB's current operator engine shut down 21 requirements and subsequently this idle reduction 22 equipment proposal. We support the policy that whenever 23 practicable, trucks ought not be left idling for extended 24 time periods. We also believe that requiring truck 25 operators to take reasonable and easily accomplished steps PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 to achieve this objective is the most effective way to 2 reduce unnecessary idling. 3 Since last year, in the face of increased fuel 4 prices, we've seen an appreciable increase in the 5 market-driven interest and demand for a variety of systems 6 that enable truck operators to safely and comfortably stay 7 in their sleeper berth equipped trucks without having to 8 idle the vehicle's prime engine. For the first time, 9 truck equipment manufacturers are offering such systems as 10 integrated options. We view this as a positive trend that 11 should be encouraged and financially incentivized, as 12 California and other state and local governments are 13 doing. 14 We do not believe that CARB has allowed 15 sufficient time for market forces to take effect. Since 16 demand is up and incentives are proving effective, we 17 strongly encourage the ARB to reconsider implementing this 18 proposal. Alternatively, if ARB does proceed, we 19 recommend the sleeper berth exemption be phased out over 20 time, allowing the much lower emitting newer model year 21 vehicles a longer exemption period beyond the 2008 22 effective date in the proposal. 23 On a detailed level, the labeling requirements 24 proposed are too restrictive in terms of the detailed 25 design and size of the levels and the proposed location on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 the vehicle. If labelling becomes necessary, smaller 2 labels located under and/or behind the driver's side door 3 are more acceptable. 4 Also, we noted the proposal appears to allow 5 battery based and stop systems, but the method and 6 requirements for obtaining ARB approval are not clear. We 7 assume that truck OEMs and autonomous suppliers will be 8 able to seek this approval. We trust ARB will work with 9 us on these two issues to find mutually acceptable 10 solutions. 11 In summary, we continue to believe the current 12 combination of operator focus requirements and financial 13 incentives is the most effective way to move the industry 14 to adapt and solve this issue. Soaring fuel costs are 15 certain to expedite the shift. 16 Thank you, Madam Chairman and members of this 17 Board. 18 ACTING CHAIRPERSON RIORDAN: Thank you very much. 19 Thank you for staying within your time limit. I 20 appreciate that. 21 Next speaker is Mike Tunnell. 22 MR. TUNNELL: Good afternoon, Madam Chair and 23 members of the Board. My name is Mike Tunnell. I 24 represent the American Trucking Association. 25 I believe everyone in the room supports efforts PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 to reduce unnecessary idling and ultimately work towards 2 reducing sleeper berth idling in order to save fuel and 3 reduce emissions. ATA supports these goals as well as 4 evidenced by our involvement in a number of idling 5 reduction initiatives including the U.S. EPA's smart way 6 transport partnership and the recently passed energy bill. 7 The proposed changes to the state's idling 8 regulation raised three primary concerns among ATA 9 members. These concerns include, one, the ability of 10 fleets to test and evaluate proposed compliance options 11 prior to widespread deployment. Two, the availability of 12 the enormous amount of capital required for compliance. 13 And three, the need to ensure a safe, comfortable resting 14 environment for drivers. 15 One of the main lessons learned from the 18-month 16 pull ahead of the 2004 federal engine emissions standard 17 was fleets need adequate lead time to test and evaluate 18 the deployment of new expensive emission control 19 technologies. Ideally, fleets would like two-years lead 20 time to test and evaluate equipment, two summers and two 21 winters. Since APS manufacturers will just have over 22 two years to develop compliant equipment, if feasible, 23 fleets will not have adequate time to test and prove the 24 reliability of 2007-plus APS technologies in over-the-road 25 operations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 Secondly, we believe that trucking businesses 2 will need to spend billions of dollars over the next 3 two years to comply with the proposed regulation. Like 4 other businesses and consumers throughout America, the 5 trucking industry is facing unprecedented increases in 6 operating expenses as a result of higher energy prices. 7 Combined with federal regulations effecting diesel fuel 8 engines as well as state regulations effecting 9 refrigerator trailers, forklifts, yard spotters and idling 10 regulations, the financial well being of some businesses, 11 especially small businesses, will be strained. 12 Lastly, for some trucking businesses, their only 13 compliance will be to shut down their trucks while 14 sleeping in the state. Given the temperature extremes 15 found in California, this option has the potential of 16 compromising the quality of driver rest and vehicle 17 security. Drivers and public safety need to be considered 18 as part of this rulemaking. 19 For these reasons, ATA requests the Board to 20 delay action on the proposed idling regulation until a 21 safer more workable program can be developed to reduce 22 sleeper berth idling. ATA believes the initial efforts 23 must ensure adequate funding to offset some portion of the 24 high capital cost of this equipment. In addition, a more 25 reasonable implementation schedule is needed to ensure the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 proper development and fleet testing of the advanced idle 2 reduction technologies envisioned by CARB. And, lastly, 3 ATA requests CARB to join the efforts of the U.S. 4 Environmental Protection Agency to develop a consistent, 5 long-term solution that addresses the issue on a national 6 basis. And I apologize for running over. 7 ACTING CHAIRPERSON RIORDAN: You didn't. You 8 were very close. Very good. Thank you very much. 9 Any questions? 10 Ms. Berg. 11 BOARD MEMBER BERG: Maybe you can clarify for me. 12 In your written testimony, you have that the trucking 13 industry is spending 85 billion on fuel this year, 23 14 billion more spent than last year. And so what about 15 reducing the idling and the cost that you'll save in fuel? 16 How does that work with the 19 billion that you're saying 17 that this is going to cost you? 18 MR. TUNNELL: Well, see, it's kind of, you know, 19 a two-way street here. Your staff has pointed out that 20 these -- in the long run, you can save fuel. But you 21 still have to -- much like putting in energy efficient 22 windows and solar panels to reduce your energy bill, you 23 have to get a capital cost to get that equipment on your 24 truck before you can gain any savings from it. 25 BOARD MEMBER BERG: But the capital costs they're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 looking at, are you in disagreement it's going to cost 2 between 3- to I think $10,000, and their recouping can be 3 from seven months to two years depending on what system 4 you choose? 5 MR. TUNNELL: Well, I would agree that the cost 6 can be upwards in the $10,000 area. 7 Now, in terms of their payback time, some fleets, 8 it depends on how much you idle. In some fleets, it would 9 take them very aggressive measures to already reduce 10 idling. So their payback time may be much longer than 11 what staff anticipates. 12 But, you know, to be honest with you, fleets are 13 really looking hard at this technology and it is getting 14 deployed today. I think the main problem with this 15 proposal is that expedited time frame you're being asked 16 to phase this in. In the next two years, I just cannot 17 envision all of -- 18 BOARD MEMBER BERG: How much time do you need? 19 MR. TUNNELL: Well, like we say in our comments, 20 ideally we would like two years of time to evaluate this 21 technology. And for -- 22 BOARD MEMBER BERG: When do you want it 23 implemented? 24 MR. TUNNELL: When do I want to implement it? 25 Okay. What we need is two things. One is the technology PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 to be available to be evaluated. 2 BOARD MEMBER BERG: How many years? 3 MR. TUNNELL: Two years after that. 4 BOARD MEMBER BERG: So four years is what you're 5 asking for? 6 MR. TUNNELL: You'd have to check with the 7 manufacturers when they believe this technology can be put 8 in place on on-the-road trucks. And then give us 9 two years after that. And while we're doing that, let's 10 find the funding source to help offset some of this 11 capital costs so that we can minimize -- 12 BOARD MEMBER BERG: The funding source, sir, as a 13 business is going to come through the savings of the 14 diesel, I think. 15 MR. TUNNELL: Right. But you need the money up 16 front to get into it. 17 To be honest with you, I get calls all the time 18 that fleets are saying, you know, "Gosh, we've gotten some 19 of our fleet into this technology. We would love to do 20 more. But the cash flow isn't there." 21 So anything we can do to bring this technology 22 forward in the sense of additional funding would be very 23 beneficial. 24 BOARD MEMBER BERG: Thank you very much. 25 ACTING CHAIRPERSON RIORDAN: Any other questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 Dr. Gong. 2 BOARD MEMBER GONG: My understanding is that some 3 of this technology is available. I mean, I'm not sure how 4 in terms of scale. But I think some of these technologies 5 are well along the way. Perhaps some of the speakers who 6 will follow you will discuss that. But I'm sure many of 7 these that -- and we saw demonstrations of them today. 8 They're here now, I guess. 9 MR. TUNNELL: And I think the important thing to 10 remember there, if I may, is, you know, there is 11 technology out there today. Now, you're implementing some 12 new standards on this technology in a couple years. And 13 as I understand it, there really is no peer review science 14 of whether this really works in this application. So 15 that's kind of what I'm looking for, is let's get peer 16 reviewed science and make sure this technology works. And 17 then once we know it works, let's get -- that's generally 18 done in labs that don't have over-the-road conditions on a 19 daily basis and get beat up in truck operations. 20 Give us two years from that date to give our 21 fleets adequate time to -- because, you know, if you think 22 about it, if you need to buy 50 VCRs and you didn't have 23 Consumers Reports, what would you do? You wouldn't go out 24 and buy 50 of them. Maybe you'd talk to your 25 neighborhoods. You need time to evaluate what you're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 buying, especially in the quantities you're being asked to 2 buy this. 3 ACTING CHAIRPERSON RIORDAN: I think that's fine. 4 Moving right along, Staci Heaton. 5 MS. HEATON: Good afternoon, Madam Chair and 6 members of the Board. My name is Staci Heaton. I'm the 7 Director of Environmental Affairs for the California 8 Trucking Association, and our members really wanted to 9 support this. They really did. And we really talked a 10 lot and really worked a lot with your staff. And we did 11 support the time limit regulation that was adopted last 12 year in July of '04, the five-minute idling limit. 13 Unfortunately, we come before you with an opposed 14 position today. Drivers of hauling over-the-road and 15 interstate freight, they are subject to federal hours of 16 service laws. They have 14 on-duty hours, 11 of those can 17 be spent driving. Once those hours are done, they're 18 done. They have to be off duty for ten solid hours. 19 Unfortunately, because of delays, because of things like 20 traffic conditions and delays at the terminals where 21 they're making their deliveries, they cannot always plan 22 when and where they're going to stop what. What that 23 means is that really the only feasible method by which 24 this regulation can be complied with is through APS units. 25 As Mike has already said, that's going to be a significant PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 capital outlay cost to an industry that makes a 1 to 2 2 percent profit margin. 3 And we're under extreme competitive environments 4 in the trucking industry. Companies will hire the 5 trucking companies that are cheapest, bottom line. So 6 that means the ones that don't comply and charge less will 7 be the ones that get hired. And the ones that do comply 8 would be the ones that go out of business. 9 What this regulation also does is effectively 10 puts a stop to the progress that has been made by 11 technologies like IdleAire and shore power, because a 12 truck driver cannot always make it to a truck stop before 13 he runs out of hours of service. Therefore, APS is the 14 only way for a truck owner to make sure his driver is 15 protected and can rest whenever he needs to stop. 16 We also are opposing the shutoff device. And the 17 main reason we're opposing the shutoff device in 2008 and 18 model year trucks is because they will be on all trucks, 19 including those that don't have sleeper cabs. And, again, 20 a driver does not know when they're going to run into 21 weather conditions or other conditions under which they're 22 going to have to stop. If there's an emergency situation, 23 a driver of a regular truck won't be able to override that 24 shut down device and won't be able to run their air 25 conditioner or heater if they need to. A truck driver PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 cannot leave their truck if they want their cargo to be 2 there when they get back. 3 So you know under those circumstances, we must 4 also oppose this regulation today and ask that staff 5 continue to work with industry on more feasible 6 alternatives to this regulation. Thank you. 7 ACTING CHAIRPERSON RIORDAN: Thank you, Staci. 8 Question. 9 BOARD MEMBER GONG: What about the battery 10 electric cold storage alternatives? You don't have to be 11 in any particular place to run those. 12 MS. HEATON: Right. And that's what I mean. 13 Some kind of an on-board electrification unit is what's 14 going to be necessary to comply with this regulation. 15 That means a trucking company can't rely on shore power, 16 can't rely on IdleAire and would have to equip every 17 single truck, whether it was a sleeper or not, with this 18 type of technology. And it's very expensive. 19 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 20 BOARD MEMBER BERG: Yes. I understood in the 21 staff report that the automatic shut-off did have some 22 overriding capability. 23 ON-ROAD HEAVY-DUTY DIESEL SECTION MANAGER 24 LEMIEUX: Yes. If somebody is in the truck, you can 25 override the shut-down mechanism by touching the gas PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 peddle, touching the brake peddle, the clutch peddle and 2 continue that operation. So in a situation if you're in a 3 severe weather condition and you're stuck in you truck, 4 you can keep your engine operating indefinitely. It's 5 just when the operator jumps out of his truck and is 6 running around doing errands and typical behavior, is to 7 leave their truck idling, there will be a warning sound in 8 the truck. And if they don't touch the brake or the gas 9 peddle, they'll shut down within that five-minute period. 10 BOARD MEMBER BERG: Thank you. So would you 11 agree that solves that problem? 12 MS. HEATON: No, it doesn't. Because if you're 13 stuck for several hours, it means that a driver is stuck 14 sitting in his driver's seat pushing the brake peddle for 15 however long he's stuck. That doesn't along him to rest 16 or to stop or to do anything like that. 17 BOARD MEMBER BERG: But the example you gave was 18 in the case they were stuck in weather. So they better be 19 behind the wheel if they're stuck in weather. 20 MS. HEATON: That's if the -- they're in traffic 21 or something like that. But if they're struck in weather 22 where they have to pull off the road for several hours, 23 that does mean they're going to have to continue to touch 24 that brake peddle. 25 ACTING CHAIRPERSON RIORDAN: Okay. I think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 that's all. Thank you. 2 MS. HEATON: Thank you. 3 ACTING CHAIRPERSON RIORDAN: Yes, Supervisor 4 Roberts. 5 SUPERVISOR ROBERTS: If they're stuck for several 6 hours, that's precisely when you want them to shut it off. 7 MS. HEATON: Right. Exactly. 8 SUPERVISOR ROBERTS: So what's the problem? 9 MS. HEATON: Well, if they're shutting the truck 10 off, they can't run their heater or air conditioner 11 without an APS system. If they're not in a sleeper cab 12 with an equipped APS, that means they have to just have 13 their truck shut off or continue to tap the brake peddle. 14 ACTING CHAIRPERSON RIORDAN: Thank you. 15 Randal Friedman, Jason Vega. And let me just 16 tell the next group, David Everhart, John Fehrenbach, 17 David Modisette, Warner Harris, come on down to the front 18 row, please. 19 Thank you, Mr. Friedman. 20 MR. FRIEDMAN: Madam Chair, members of the Board, 21 my name is Randal Friedman from Navy region southwest. 22 I'm here representing the military services in California. 23 I have just a couple of very quick items regarding the 24 shutoff. 25 We would like to seek clarification that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 automatic shutoff would not apply to military tactical 2 vehicles operating in California after 2008. I've already 3 talked with your staff about this, and they informed me 4 that was never the intent. But it's not listed in the 5 exceptions in the current regulation. 6 Second, this is going back to the original idling 7 rule where we came to you at the hearing. You did add an 8 exception for military training. While you could broadly 9 consider military training to include most anything in 10 this go-round, we would ask you to be a little more 11 specific to include both training, testing, and deployment 12 to make it clear that it's not just training, but the 13 other main aspects of military use of tactical vehicles. 14 Thank you. I'm available for questions. 15 ACTING CHAIRPERSON RIORDAN: Staff, can you 16 respond to the two requests? 17 EMISSION RESEARCH AND REGULATORY DEVELOPMENT 18 BRANCH CHIEF CARTER: Yes, I can. He's correct. I did 19 speak to that gentleman before today, and I assured him we 20 will work that out with them in the 15-day process. It 21 was our intent to exclude the military tactical vehicles 22 as he mentioned. So we will work it out. 23 ACTING CHAIRPERSON RIORDAN: And then to 24 doublecheck if you would take his name and be sure he gets 25 a clarification. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 EMISSION RESEARCH AND REGULATORY DEVELOPMENT 2 BRANCH CHIEF CARTER: Yes. We have that. 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 Jason Vega. 5 MR. VEGA: Good afternoon, Madam Chair and 6 members of the Board. My name is Jason Vega. I'm 7 representing the California Council for Environmental and 8 Economic Balance. CCEEB is neutral on this rule. But I 9 want to take this opportunity to make two brief 10 statements. 11 The first is, we fully support the idea that 12 incentive programs such as Carl Moyer is integrated into 13 rules and other regulations that are adopted. 14 The second is regarding the time line, the start 15 date for the rule. Since it's still not clear about the 16 availability of diesel APS manufacturers to be able to 17 meet the rule of the Level 3 PM control, we think it might 18 be prudent to revisit the start date issue at a later 19 date. That's all. Thank you very much. 20 ACTING CHAIRPERSON RIORDAN: Thank you very much. 21 Appreciate your comments. 22 Rolf Lichtner. 23 MR. LICHTNER: Good afternoon, Madam Chair, Board 24 members, CARB staff, ladies and gentlemen. My name is 25 Rolf Lichtner. I'm representing Webasto Product North PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 America. 2 For over 100 years, Webasto has gone from being a 3 metal components manufacturer to a global partner of the 4 transportation industry. The driving force then as well 5 as now is the quest for innovative solutions that best 6 serve our customers' needs. 7 Today, Webasto has over 6,260 employees in 45 8 countries and is operating in North America for over 30 9 years. The annual total revenue is close the $2 billion. 10 Webasto is still family-owned, and the majority of profits 11 are being invested in new research and development. 12 Only this tremendous commitment made it possible 13 to invent, for example, our new Blue Cool Truck parking 14 cooler and to have it commercially available today, as you 15 could see during lunch. 16 Webasto applauds staff's effort to regulate 17 idling. Idling contributes significantly to the overall 18 emission inventory. Idling wastes precious energy. 19 Idling costs the country billions of dollars. And idling 20 makes us even more dependent on foreign oil. 21 Our fuel operated heaters are available as a 22 factory option for all major truck manufacturers, and they 23 can be retrofitted as well. These heaters provide 24 comfortable temperatures in the truck cabin without idling 25 of any engine. Webasto realized that especially in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 California heating only was not sufficient. Consequently, 2 Webasto developed a new revolutionary technology called 3 Blue Cool Truck. Blue Cool Truck was first introduced at 4 Mid America Truck Show in April of this year and is 5 commercially available since. 6 Large fleets are currently evaluating Blue Cool 7 Truck with very positive preliminary results. They have 8 about 50 units in the field today. We also have serious 9 inquiries from truck manufacturers for Blue Cool Truck as 10 a factory option. This technology utilizes a cold storage 11 device to provide engine-off bunk air conditioning for up 12 to 10 hours and ambient temperatures above 90 degrees 13 Fahrenheit. The recharging takes about four to six hours 14 of over-the-road driving. During the rest period, the 15 driver shuts the engine off. 16 Blue Cool Truck is self contained and does not 17 require any significant energy to cool the bunk. No extra 18 batteries that need to be recycled or diesel fuel is 19 needed. Best of all, Blue Cool Truck operates very 20 quietly and has absolutely zero emissions during the 21 discharge mode. Blue Cool Truck combined with our heater 22 provides a total engine-off climate comfort solution at 23 any ambient temperature. At the current fuel price, the 24 entire system will be paid for within 30 weeks or less. 25 Best of all, Webasto's heaters and Blue Cool PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 Truck systems are commercially available today. This 2 winning combination retails for approximately $4,200 plus 3 installation. Installation time is about four to 4 six hours. And the total system weighs approximately 300 5 pounds. 6 I would also like to take this opportunity to 7 share with you one of our most exciting current projects. 8 A large dedicated team of scientists and specialists at 9 Webasto is in the process of developing a very 10 sophisticated fuel cell operated axillary power system. 11 First working prototypes of this system are already on the 12 road, and full production capability is scheduled for the 13 year 2010. These auxiliary power systems are currently 14 producing between one and five kilowatts of electrical 15 energy that can be installed in passenger cars, trucks, 16 buses, RV, and marine vessels. Stationary applications, 17 for example, for a single family home are possible as 18 well. Webasto is also researching applications up to 30 19 kilowatts for load refrigeration. 20 ACTING CHAIRPERSON RIORDAN: Mr. Lichtner, a 21 concluding statement. 22 MR. LICHTNER: I have some brochures about the 23 fuel cell. I would like to thank the Board for this 24 opportunity. And we hope this presentation underlines the 25 feasibility of staff's proposal. We, therefore, urge you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 to vote in favor of the proposal today. Thank you very 2 much. 3 ACTING CHAIRPERSON RIORDAN: I'm going to ask you 4 to put on the record what I asked you as I looked at 5 your -- that this is available in California. That by the 6 end of the year that there are going to be a number of 7 people trained in the process and can install it or 8 service it. Is that correct? 9 MR. LICHTNER: Yes. And I will let you know the 10 exact number of authorized installers in the state within 11 a week. 12 ACTING CHAIRPERSON RIORDAN: Thank you very much. 13 Any further questions? Thank you very much. 14 David Everhart. 15 MR. EVERHART: Madam Chairman and Board, I want 16 to thank all the members here. It's been a pleasure to 17 work with the CARB group over the last few years. We've 18 been deploying our technology for the last five years. 19 And we've enjoyed a tremendous success with the truckers 20 and the fleets and the travel centers around the nation. 21 We intend to expand our services in the state of 22 California about three to four times the amount of 23 equipment we have in the state today. When we looked at 24 this rule, we were a little bit concerned because it looks 25 like we were leaning toward -- it looked like it might be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 favoring one technology over another. But I understand 2 there's language adjustments in the rule today that will 3 adjust that. And we appreciate everyone's effort to be 4 fair in this procedure. 5 We're a little concerned about when this rule is 6 going to actually come into effect. We'd like to see it 7 held off until 2009 so we can get more technology deployed 8 in the field. I was a little surprised to see in the 9 report -- it was a great report, by the way. But it 10 didn't show the payback or return for using the IdleAire 11 system on the trucks. And, of course, there is no -- the 12 payback is just the first night. So I thought we might 13 want to make that adjustment. 14 I want to say thank you very much. It's great to 15 work with you guys. And we look forward to installing a 16 lot more equipment and providing a lot more emission 17 reduction across the state. 18 ACTING CHAIRPERSON RIORDAN: Thank you very much. 19 And now that's on the record, payback is the first night. 20 All right. Any questions for the speaker? 21 Seeing none, we'll go on to John Fehrenbach and 22 followed by David Modisette, followed by Warner Harris, 23 followed by Rex Greer, followed by Peter Rooney. 24 MR. FEHRENBACH: Thank you. Thank you, everyone. 25 And thank you to the Board and the staff. As somebody who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 breathes air, I appreciate your efforts. I like clean 2 air, too. 3 I'm here on behalf of IdleAire. I'll add one 4 clarification to what David Everhart just said, and that 5 is we understand based on the staff presentation today 6 there's going to be some attempt to clarify in the rule 7 that, among other things, shore power is an acceptable 8 alternative to idling. I think that's probably the better 9 way to put it. I just want to make sure the IdleAire 10 technology is included within the scope of what that was 11 about. And I think that's true. 12 ACTING CHAIRPERSON RIORDAN: Staff, are we 13 respond -- I see these nodding heads, but -- 14 MOBILE SOURCE DIVISION CONTROL CHIEF CROSS: That 15 was in that list -- 16 EMISSION RESEARCH AND REGULATORY DEVELOPMENT 17 BRANCH CHIEF CARTER: We've talked to him as well and 18 that's part of the 15-day changes. We'll include that. 19 MR. FEHRENBACH: And I'll take no more of your 20 time. Thank you very much. 21 ACTING CHAIRPERSON RIORDAN: Thank you very much. 22 We appreciate your testimony. 23 David Modisette. 24 (Thereupon an overhead presentation was 25 presented as follows.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 MR. MODISETTE: Yes, thank you, Madam Chair and 2 members of the Board. I did provide a hard copy of my 3 presentation. It's going to be extremely brief. 4 Truck idling is a major air quality problem. We 5 very much appreciate your efforts. We come before you 6 today in support of this rule, although we are going to 7 ask for a couple of regulatory changes and a couple of 8 additional efforts on the part of staff. 9 --o0o-- 10 MR. MODISETTE: You've already seen these 11 technologies in the staff presentation. We are working on 12 three separate technologies. The first one is the 13 off-board IdleAire technology. 14 --o0o-- 15 MR. MODISETTE: The second one is shore power 16 technology, which uses a combination of on-board and 17 off-board systems. 18 --o0o-- 19 MR. MODISETTE: And third is the battery APU. 20 --o0o-- 21 MR. MODISETTE: I think our overall concern is 22 the staff proposal assumes the truckers will comply by 23 purchasing a diesel APU. Electric technologies are a 24 better option as I'm going to explain to you in just a 25 second. It is going to take time and effort to develop PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 the necessary infrastructure for them to be a viable 2 option. So our overall concern with the proposal is that 3 it may prematurely force people into an option which is 4 not in the best interest of California. 5 --o0o-- 6 MR. MODISETTE: Electric idle reduction 7 technologies actually provide more emission reduction than 8 that projected in the proposed rule. And we ran a couple 9 of scenarios using the staff's number just to show you the 10 magnitude of those reductions. You can see of 25 percent 11 -- only 25 percent of the idle hours were done using 12 electricity, rather than the diesel APU, which is the 13 compliance option in the staff proposal. You can get an 14 additional 3.6 tons per day of the high side of NOx and 15 1100 tons of CO2. If we can get 50 percent of those hours 16 using electric, we can obviously double those numbers. 17 --o0o-- 18 MR. MODISETTE: We think electric technologies 19 are a win-win-win for California. They provide more 20 options to the trucker at less cost to the trucker with 21 more emission reductions. 22 What does the ARB do to achieve this? We have 23 four recommendations. 24 --o0o-- 25 MR. MODISETTE: ARB should convene a truck stop PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 electrification working group of stakeholders, state, 2 federal, and local agencies, to accelerate truck stop 3 electrification installations and technology. And here I 4 would note other states are much, much, further ahead of 5 this. Much further ahead in California on this. They are 6 being extremely aggressive, including some of our 7 neighboring states. 8 --o0o-- 9 MR. MODISETTE: Work on incentives for TSE. I 10 guess we need to better integrate regulatory rulemakings 11 with incentive programs. One thing I want the Board to 12 understand is that if you adopt this rule today, you're 13 going to drastically cut Moyer incentives for these 14 cleaner technologies. How much? We don't know, because 15 the staff proposal doesn't contain that. And you don't 16 know. 17 So we think you should be very concerned that 18 you're going to vote on a rule today which has 19 implications for incentives for these technologies. But 20 yet you don't know what those implications are. We're 21 very concerned about that, and we think you should be, 22 too. 23 --o0o-- 24 MR. MODISETTE: Recommendation 3 has been already 25 addressed by staff in the 15-day language. And our last PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 recommendation -- 2 --o0o-- 3 MR. MODISETTE: -- is to provide more time for 4 truck stop electrification to develop as a significant 5 option. We did note the ATCM last year had a sleeper 6 berth starting in 2009. We were very surprised to see 7 when this came out with an '08 start date. We would like 8 you to give us as much time as possible to develop these 9 technologies and make a viable option. 10 We think the result will be in 2010 you'll 11 actually have more emission reductions in 2010 than you 12 would under the staff proposal. Thank you very much. 13 ACTING CHAIRPERSON RIORDAN: Thank you very much. 14 Any questions? 15 BOARD MEMBER GONG: Perhaps staff could respond 16 about the Carl Moyer funding for this. Looks like from 17 one of the slides it's up again in November, or for 18 discussion again. 19 EXECUTIVE OFFICER WITHERSPOON: There are two 20 issues about Carl Moyer funding. One of them is based on 21 additional technical work we did for this rule, what is 22 our understanding now of the amount of idling, the 23 activity going on, and the extent to which it could be 24 avoided through electrification. So what is the excess 25 emissions today. And those calculations are changing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 every time the inventory gets more precise. 2 The second Carl Moyer issue is once the 3 regulation goes into effect, what will the compliance 4 scenario be assumed to be such that anything going beyond 5 that is surplus. And as we indicated in the staff 6 presentation, we're presuming a very high use of diesel 7 powered APUs, and that is the compliance threshold. 8 And we indicated to Mr. Modisette, we will 9 clarify in our protocol discussions with him and other 10 stakeholders how the math works out. And we're trying to 11 accelerate that as fast as we can, because IdleAire is 12 seeking public funds today and sort of needs to know for 13 their business plan how much they need to do with private 14 capital and how much might be available to them through 15 public incentive programs. So that's what we're doing. 16 But it's not like the last item where we 17 discussed, you know, in or out, off or on, that kind of a 18 switch. Here it is specific emission calculations based 19 on the precision of the inventory and the compliance 20 choices that truck operators make. 21 BOARD MEMBER GONG: Does the Carl Moyer funding 22 effect the Board's vote today? 23 EXECUTIVE OFFICER WITHERSPOON: No. 24 ACTING CHAIRPERSON RIORDAN: Aren't you pleased? 25 Yes, Ms. Berg. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 BOARD MEMBER BERG: Could you comment on the 2 request for a postponement of one year when we looked at 3 this rulemaking, making it effective in 2008 versus 2009? 4 EXECUTIVE OFFICER WITHERSPOON: Yes. Staff's 5 opposed to a postponement, because we think the best way 6 for the IdleAire product and products like it to capture 7 the market is to get out there early and with a lot 8 density. 9 But even once IdleAire is installed, there's 10 still going to be a very high reliance on APUs for 11 truckers who are pulling off between IdleAire stops or not 12 getting anywhere near them at all. And so there's 13 probably a natural limit on how much of the market they 14 might be able to capture. But they'll do better with 15 aggressive front loading than asking us to delay the 16 emission control so they can race against the APUs. 17 BOARD MEMBER BERG: And you're pretty comfortable 18 with the fact the engine manufacturers have also asked us 19 to delay? 20 EXECUTIVE OFFICER WITHERSPOON: We're very 21 comfortable with technological feasibility. We don't see 22 any reason for a delay on those grounds. 23 BOARD MEMBER BERG: Thank you. 24 ACTING CHAIRPERSON RIORDAN: Warner Harris. 25 And while you're coming up to the microphone, let PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 me indicate to Andrea Samulon, Diane Bailey, and Karen 2 Pierce, please come down to this front row, and Bonnie 3 Holmes-Gen. 4 Mr. Harris. 5 MR. HARRIS: Madam Chair, Board members, thank 6 you for the opportunity to comment to you. My name is 7 Warner Harris. I'm representing both Idling Solutions and 8 Coval Partners, a California company. We make a product 9 that would install at the curbside that can fit both Class 10 7 and Class 8 trucks and provide temperature control air 11 for the cap during the mandatory shut down up to ten 12 hours, can supply electrical power for the hotel 13 appliances, and it uses a zero emission battery 14 technology. It was developed in response to CARB's 15 mandate in 1998 for the introduction of the zero emission 16 automobile. So it has a history. 17 It has flexible configurations. It can provide 18 two different systems self-contained that will stand alone 19 to operate the HV&A system using the idling air system 20 that had been shown to the Board in 2004 and a battery 21 powered DC drive system, HV&AC that you saw today at the 22 curb. It's a bolt-on system that requires no 23 modifications except installation of brackets on points in 24 the truck. Nothing else is changed. The interior of the 25 cabin is able to use the existing controls so the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 operator, the truck driver, it's transparent to him, this 2 operation. It can go ten hours also. 3 It's available now. It uses standard parts that 4 have a long history in its operation. It reduces idling 5 by 96 percent. And there are 250 systems in the 6 stand-alone systems that are operating now in the trucking 7 industry. 8 The pricing complies with the recommendation of 9 the Board and less than $10,000, just less than the 10 suggested retail price. As a comment, nobody has ever 11 paid that yet. A fleet has a better opportunity, and most 12 of these will be in that situation. There are leasing 13 options available as well. 14 At the consumption rate of $3 per gallon, and a 15 rate of one to one-and-a-half gallons per hour for idling 16 and a 96 percent reduction, we estimate the payback period 17 for either system to be just less than 12 months. 18 With that, I would like to thank you for this 19 opportunity of showing you the equipment and explaining 20 it. 21 ACTING CHAIRPERSON RIORDAN: Thank you very much. 22 We appreciated the opportunity. And we do thank you. 23 Board members, any questions for this speaker? 24 Thank you very much. 25 Rex Greer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 MR. GREER: Thank you, Madam Chairman and members 2 of the Board. I think we've been in and out of here quite 3 a few times over the last 20 years when I first started 4 the idea. 5 One thing I want to bring out, a good amount of 6 money has been put in the energy bill through some of the 7 simultaneous efforts of some of the people in this room. 8 Should help fund some technology. I am totally in favor 9 of reducing emissions as much as possible. That was one 10 of the things that bothered me sitting in a truck stop out 11 here over the weekend and all the smoke 20 years ago. 12 I'm concerned about no data and the effect to the 13 engines that we're talking about putting particulate traps 14 on. These little engines are naturally aspirated and 15 they're not electronic. There's no means to monitor the 16 air fuel ratios. And anything that has been put on the 17 intake or the exhaust has seemed to cause problems with 18 the engine life. 19 We're totally in favor of cleaning it up. We're 20 in the process of working on a start-stop system for the 21 little engines to where it can be running 20, 30, 40, 22 percent, 50 percent instead of continuous. 23 I've also got another project we're working on to 24 include a third option. Right now, we run the existing 25 factory on-board system built in the truck by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 manufacturer with an alternative engine. The next option 2 I'm working on right now is an option to be able to use 3 electricity to run the systems as a third alternative. 4 But the thing I see a problem with is I've spent 5 a lot of time out here for the first 25 years I was old 6 enough to work. And many times I've been stuck for two or 7 three days and had to run something. I've been out in the 8 field waiting on produce to be picked and packed and 9 cooled where they had portable equipment to cool and pack 10 the harvest, and it was there two or three weeks and moved 11 again. You might be scheduled to load on Monday evening 12 and get loaded Wednesday morning by the time they got it 13 ready. 14 Anything we can do to help reduce wasted energy 15 and wasted fuel, warn out equipment prematurely from 16 sitting in the parking lots idling, and reducing emissions 17 is great. But I think we need to postpone this project 18 until we've got tested, certified, viable equipment and 19 all the details are worked out. I think the proposed Tier 20 2 and Tier 4 standards that have been worked out already 21 by CARB and EPA and signed off on by everybody in the 22 industry just, what, a year ago, I think there's a 23 reevaluation date set in there. 24 I think we need to make sure what we're doing 25 before we knock some of the most oldest viable tested PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 technology out of the picture. I'd love to have a nice 2 clean engine. If we had alternate fuel supplies, I could 3 have gone to a compressed natural gas or some other type 4 of engine a long time ago. But the infrastructure doesn't 5 exist for an over-the-road truck to have this available. 6 ACTING CHAIRPERSON RIORDAN: We're at the end of 7 your testimony, so if you'd like to make a concluding 8 remark. 9 MR. GREER: I believe we have submitted some 10 written requests to postpone this project. 11 ACTING CHAIRPERSON RIORDAN: And that will be 12 part of the record. Thank you. 13 Peter Rooney. 14 MR. ROONEY: Madam Chairman, members of the 15 Board, it always nice to be in this room. I think you're 16 making good use of it. 17 One of the most profound things I think I heard 18 today -- and I'm speaking today on behalf Mr. Greer's 19 firm, Pony Pack. And you notice we do have a written 20 submission. One of the most profound things was by Member 21 Kennard. And that is that if you keep changing the rules, 22 you lose credibility. And you may say and you think this 23 discussion today is not changing the rules, but in reality 24 it's only ten months since this very Board sat in this 25 very room and adopted harmonization with U.S. EPA. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 that harmonization was about Tier 4 off-road engines. 2 Now today we're talking about Tier 4 off-road 3 engines. And ten months ago you laid out the race track. 4 You laid out the timetable how those are to be used. And 5 today you're saying the very thing you did ten months ago 6 can't be used starting January 1, 2008, on one little 7 particular use. 8 And that kind of brings us back to what the first 9 gentlemen of the day said about how this Air Board has 10 conducted its affairs over the year. Two things. One, 11 regulation can drive technology. And I would 12 wholeheartedly subscribe to that. The years I was here, I 13 agree. The problem here is you've asked the tail to wag 14 the dog. You just got through talking about Tier 4 15 engines and the scenario 2007, review; 2008, the new 16 standards; 2011, for the next size bigger engine; 2013, a 17 whole new look at it. And here we're back trying to push 18 the technology on this small segment. 19 Folks, this isn't the automobile industry. This 20 is the APU industry. And Kubota isn't even -- somebody 21 earlier today said, "Well, the engine manufacturers won't 22 have to do this. The trucker will have to do this." Wait 23 a minute. You buy Dinex's device, it may work fine. And 24 we hope you can verify it soon. Because if you do, we'll 25 start using it. But if we put Dinex's device on Kubota's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 engine and Kubota's engine stops running, guess who's 2 going to pay for the new engine? It's not going to be 3 Kubota. You have a lot of things you have to work out 4 yet. 5 I think would suggest your better course of 6 action is to table this particular portion of the 7 after-treatment requirement to some certain date in the 8 future. We can talk about -- and you mentioned four 9 years. Whatever the year is. We already have the time 10 frame. Table that today. Then start working with the 11 engine manufacturers, emission control people, and get a 12 verified technology that will work for this purpose. As 13 Mr. Greer said, he spent the last 25 years of his life 14 trying to clean up emissions, and he has no reason to 15 change that now. 16 So when you verify an after-treatment device that 17 works on a small engine, he can adopt it rather quickly. 18 Now the truckers are rightly saying maybe it will take 19 them two years after that, when Mr. Greer can put it on 20 the market, truckers are going to need a while to make up 21 their minds whether they want to invest in 600 units or 22 something. 23 But the way it's set now, nobody knows where it's 24 going to go. May work out very fine. If Dinex finishes 25 their tests in the next eight months and it comes to you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 and you verify their device and they work out the warranty 2 issues, maybe it's going to work. But you're really 3 asking the poor manufacturers to take and -- I say 4 manufacturers, in reality men like Mr. Greer are 5 assemblers. They assemble products that are off the shelf 6 that other people create. So while he wants to do the 7 best thing he can, he can't do magic. He has to be able 8 to do what's feasible. 9 So I would just suggest again, in summary, table 10 it for some reasonable period of time and the issue will 11 be solved. 12 ACTING CHAIRPERSON RIORDAN: Thank you, 13 Mr. Rooney. 14 Staff, any comments to the request? 15 EXECUTIVE OFFICER WITHERSPOON: We have a bunch 16 of comments. 17 Well, first, on the whole subject of the Tier 4 18 rulemaking and why that should or shouldn't be considered 19 here today, we certainly do have regulations that 20 harmonize nationally in general on off-road engines in 21 general. But well before your action to align the 22 standards, the Board also adopted a Diesel Risk Reduction 23 Program, which this regulation is aimed at, to reduce 24 diesel particulate on in-use vehicles. 25 And also last year the same time that you were PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 doing the Tier 4 off-road standard, you brought up an 2 idling rule or adopted an idling rule and split it in two 3 parts. You did a five-minute limit for general idling and 4 directed us to come back this year with sleeper cab. So 5 the idea that somehow the Tier 4 rulemaking knocked out 6 all those other activities is just not accurate. You had 7 multiple regulatory efforts underway. 8 Now with respect to is it feasible or not and 9 does feasibility require a delay, I'm going to ask Mr. 10 Cackette and staff to comment on that. 11 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: We do 12 not think there is any feasibility issues here. And, you 13 know, it's perhaps -- we may have done it ourselves to say 14 that the reg effects the trucker. The reg says the 15 trucker can't idle his engine, and he has to go find a 16 solution -- some alternative solution if he wants to idle 17 with air conditioning comfort all night long. That's what 18 the reg says. That's why we talk about it applying to the 19 trucker here. 20 We're not expecting individual truckers to go out 21 and decide to find a particulate filter to bolt something 22 on. As you've heard today, these technologies that you've 23 seen out on the street and some of them in presentations 24 are available. You know, they're warranted products. 25 They have a price. They have a service network. They're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 able to take care of the equipment if it needs a service. 2 These are things that are expected to work on trucks. 3 And so the real choice is, do I have to expend 4 money to buy one of these technologies so I can have a 5 cool cabin at night instead of idling? And if I don't 6 want to spend that money, can I adjust my schedule to find 7 IdleAire? And where can you for $10 have a template that 8 goes in your window and get air conditioning and 9 electricity and everything at a dollar per hour basis? 10 For the low capital people, people that come here 11 just once in a while, have the option of these no-capital 12 approaches. And for those who want to use these idle and 13 stay overnight a lot in California, they have these 14 technologies solutions. And we think these solutions are 15 here. A number of them said they're available. Within 16 this two-year period, there will be more of them that will 17 become commercially available, and people will be able to 18 choose and use them. We expect on the newer trucks that 19 newer trucks will come with this feature on it as well. 20 Because, you know, the economics are so startling. Spend 21 $3 an hour to idle your engine, or you can spend a fifth 22 of that for an APU. That saves up a lot of money real 23 fast. That's why those payback times are so attractive. 24 EXECUTIVE OFFICER WITHERSPOON: I'm just giving 25 you a cue to add some more. The one innovation here is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 the particulate trap on the APU. And if Mr. Cackette 2 would address why we think the particulate trap would also 3 work. 4 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Of 5 course, we have installed thousands of particulate filters 6 on trash trucks, on buses, on all kind of trucks. We 7 continue to bring you regulations that require the 8 retrofit filters on to existing diesel engines. 9 This is pretty much the same thing. Here, we 10 have a small diesel engine, and there's commercial people 11 as you saw out there developing particulate filters for 12 the size for these small commercial engines. And we fully 13 expect they will be verified in time that someone can 14 package it together, whether it be Pony Pack or one of the 15 other diesel APU producers, such that on 2007 and newer 16 engines when you use this, it will clean up the air and 17 not make the air dirtier. That's what we think will 18 happen. 19 And I'm going to ask someone in the back row here 20 if they want to briefly comment on why we think the 21 filters will work on this cycle of application, but we 22 know they work on other types of applications. 23 ON-ROAD HEAVY-DUTY SECTION MANAGER LEMIEUX: It's 24 a simpler application because of the type of operation. 25 They typically operate under a certain steady state PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 condition. However, the challenge that they have is the 2 temperature of the exhaust. And so that requires them to 3 have active trap systems. On the bigger trucks, there are 4 already some manufacturers verifying active trap systems. 5 And we expect that, like you saw out in the front there, 6 there are other manufacturers that are going to be coming 7 online with the smaller traps, less expensive traps for 8 this application. And the plan is -- at least the comment 9 was made six months for the plan to come forward going for 10 verification. So we believe that it will work because the 11 basic technology of how a trap works and how it 12 regenerates is consistant on a bigger truck where you 13 collect PM emissions and regenerate. 14 Also, just a comment. When we approach the 15 solution for trucks, we tried to be technologically 16 neutral. And we considered a ban on APUs all together, 17 because there was so much movement in the alternative 18 technologies, like battery electrics and other available 19 cleaner technologies that we did seriously consider just 20 banning APSs. But we looked at what was coming down the 21 pipe in terms of PM technology, and we looked at the 22 industry using APUs -- diesel APUs right now, and we 23 decided to sort of strike a line in making an even playing 24 field for all technologies. I think that's what you have 25 here before you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 ACTING CHAIRPERSON RIORDAN: Okay. Any questions 2 for staff at this time? 3 Let's move right along, Andrea Samulon. 4 MS. SAMULON: My name is Andrea Samulon, and I'm 5 a research associate with the Pacific Institute in 6 Oakland. Thank you for this opportunity to comment. 7 Today, you have an opportunity to close a 8 loophole in California's diesel idling laws. The current 9 laws that limit idling of diesel trucks and buses to five 10 minutes are an important step in the right direction. 11 However, over half of the pollution from idling diesel 12 trucks comes from sleeper cabs who typically idle all 13 night long. In a single year, truck drivers can save more 14 than $5,000 by not idling overnight. This figure is based 15 on current cost of fuel. 16 We know that diesel pollution for idling trucks 17 and buses pollutes our communities and poses a severe 18 public health threat. The exhaust from diesel fuel is the 19 number one toxic air contaminant in California, 20 contributing to 70 percent of all airborne cancer risk. 21 Diesel soot not only causes cancer, but it exacerbates 22 asthma and is linked to heart disease and premature death. 23 Of great concern, diesel remains a source of pollution and 24 disproportionately impacts lower income communities and 25 communities of color. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 Pacific Institute studies in West Oakland and 2 West Contra Costa County have shown higher diesel 3 emissions per square mile than their respective county or 4 state averages. In West Oakland, residents face 90 times 5 more diesel emissions per square mile than the state 6 average. Some communities, like Bayview Hunters Point in 7 West Oakland, have asthma hospitalization rates as much as 8 ten times higher than neighboring communities. 9 Fighting diesel idling has become central to the 10 agenda of many community-based organizations, health 11 effected groups, environmental organizations, and trucking 12 associations. This week, over 20 groups came together in 13 the Bay Area to kick off a broad anti-idling campaign, 14 very successfully, I might add. In keeping with CARB's 15 commitment to environmental justice and clean air for all 16 Californians, we urge you to close the loophole and limit 17 engine idling by the existing fleet of in-use heavy-duty 18 trucks. 19 Thank you. 20 ACTING CHAIRPERSON RIORDAN: Thank you very much. 21 Diane Bailey. 22 MS. BAILEY: Good afternoon. Ny name is Diane 23 Bailey. I'm with the Natural Resources Defense Council. 24 I'm happy to say I'm in strong support of the rule as 25 staff proposed. I'll make this very short. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 Last year, as you heard from Catherine, this 2 Board adopted a five-minute truck idling rule. But at the 3 last minute, the sleeper cab idling limit was taken out of 4 the rule at the request of industry amidst concerns that 5 the technology and the costs required for that rule were 6 really uncertain and more work needed to be done. 7 While staff agreed to do more research, and 8 they've done exactly that, we really thank them for their 9 hard work and efforts on this. We are greatful they were 10 able to bring the rule back in a year, as they said they 11 would. 12 This rule is important for so many reasons. 13 Namely, that it will achieve significant diesel emission 14 reductions, and also that there is a potential reduction 15 in diesel fuel use in California on the order of 3 16 percent, which is huge, from a single rule. 17 I also want to note this rule is already listed 18 as one of the strategies to reduce greenhouse gasses in 19 the Governor's climate action plan. And the state is 20 really counting on rules like this to meet the greenhouse 21 gas reduction goals. 22 Finally, this rule is technologically feasible, 23 highly cost effective, and health protective. And for 24 these reasons, we urge you to adopt this important rule as 25 staff proposed it. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 ACTING CHAIRPERSON RIORDAN: Thank you very much. 2 Karen Pierce. 3 MS. PIERCE: Good afternoon, members of the 4 Board. And I thank you also for the opportunity to speak 5 to you. 6 I'm a resident of Bayview Hunters Point in San 7 Francisco. And I'm here today representing the Ditching 8 Dirty Diesel Collaborative, which is a collaboration of 9 over 20 organizations in the San Francisco Bay Area. We 10 also have over 100 organizations on our list serve. 11 On Tuesday morning, we launched our anti-idling 12 campaign called, "Don't sit idle." We provided 13 information about existing idling rules in San Francisco, 14 Oakland, Richmond, San Leandro, and Sonoma. Each one of 15 those is in a different county, so we covered five 16 counties. 17 We did this in areas that are directly effected 18 by high diesel emissions and that also have excessively 19 high rates for hospitalizations for asthma incidents. We 20 were joined in our effort not only by the air district -- 21 which supported us and provided us with the funding to 22 present the information. We used door hangers. These are 23 the residential door hangers. We used door hangers for 24 truckers and hung them on the mirrors of the -- on the 25 trucks and buses. We were also joined by a number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 businesses that rely on trucking. The Longshore Union was 2 one of our supporters, and San Francisco Port was one of 3 our supporters. They actually went out and hung our door 4 hangers for us. 5 We support the staff recommendation to close this 6 idling loophole and help us to protect the residents who 7 live near industries that rely on trucking. My 8 understanding from sitting here today and listening is 9 that the technology is available and will both lessen the 10 impact on air quality and be cost effective for truck 11 owners as well. It seems like a no-brainer to me. I 12 don't understand why we need to wait any longer to do 13 something that not only will clean up our air, but has 14 proven that it will protect the drivers, our children, our 15 elderly, and ourselves. 16 Thank you. 17 ACTING CHAIRPERSON RIORDAN: Would you mind 18 making the door hanger available to us? 19 MS. PIERCE: We will. And we'll send you some 20 copies. We have a longer-term program and we also have a 21 wonderful brochure. We'll send you that also. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 Bonnie Holmes-Gen, followed by Don Anair, if 24 you'd come forward, please. Wayne Lorentzen, Bill 25 Magavern, and Todd Campbell, all please come down to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 front low. 2 MS. HOLMES-GEN: Good afternoon. I'm Bonnie 3 Holmes-Gen with the American Lung Association of 4 California. And we are pleased to be here today to 5 strongly support this regulation as an important step 6 forward for public health and the environment. This is a 7 win-win situation for the breathers and for the truckers. 8 Because as you've heard, these regulations not only 9 substantially reduce toxic diesel fumes and greenhouse 10 gasses and reduce petroleum consumption, but also pay for 11 themselves in reduced fuel use in a very short time. 12 Why is it so important that you take action today 13 to approve this important regulation? Because this is 14 critical to public health. You're very well aware of 15 diesel health impacts, but just a quick reminder that 16 we're talking about diesel soot linked to asthma attacks, 17 increased respiratory infections, increasing evidence 18 about cardiac illnesses and hospitalizations, concern 19 about slow lung growth in childrn, lung cancer, and 20 premature deaths. And CARB has linked direct exposure to 21 diesel particulate to 3,000 premature deaths every year 22 and thousands of hospital admissions for causes. 23 There's also been recent research that has shown 24 that we're actually experiencing even more premature 25 deaths, more chronic health effects from pollution than PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 previously believed. Over two to three times greater 2 numbers of premature deaths than previously believed. 3 We're very concerned about that. This is also a situation 4 where you have alternative technologies that are readily 5 available and will actually save money. 6 We appreciate the Board's strong focus on diesel 7 pollution control. The diesel risk reduction goal, 85 8 percent, is very aggressive. We appreciate that. And of 9 course, this is an important step forward to achieve that 10 aggressive goal. 11 We strongly support electrification alternatives 12 and want to see a strong focus on electrification in the 13 compliance measures. But while we do support 14 electrification, we can't support -- we cannot support a 15 delay in the regulation, because we do feel like it's so 16 important to capture those emission reductions as quickly 17 as possible, and clearly technologies to automatically 18 stop diesel idling are now available. We think we need to 19 move forward quickly, and we ask you to do that. 20 We urge to you strongly support this regulation, 21 to reject the arguments of the Engine Manufacturers 22 Association and the American Trucking Association to 23 delay. And we urge you to do whatever you can to further 24 incentivize and support the use of electric power options 25 in this regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 The bottom line is that by approving this 2 regulation, you are having a real impact on communities 3 throughout the state, as you've just heard in terms of 4 reducing the range of diesel health effects. And you are 5 at the same time supporting important statewide policies 6 to reduce greenhouse gas emissions, reduce petroleum 7 consumption, and to reduce our risk from diesel 8 particulate exposure. 9 Thank you for your consideration. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much, 11 Bonnie. 12 Don Anair. 13 MR. ANAIR: My name is Don Anair. I'm with the 14 Union of Concerned Scientists. Thank you for the 15 opportunity to comment. 16 My comments are pretty much in line with the last 17 four speakers. I've also submitted written comments on 18 behalf of over 20 organizations throughout California 19 across the state that are supportive of staff's proposal 20 today. These organizations consist of environmental 21 organizations, public health advocates, asthma groups, 22 community organizations, physicians, and concerned 23 residents. 24 The most important short- and long-term benefit 25 of this rule is cleaner air and improved public health. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 Idling trucks are responsible for over 8 percent of 2 on-road diesel pollution in the state. Sleeper idling 3 accounts for over half of these emissions. In staff's 4 report for this additional measure today, they did not 5 estimate the number of premature deaths that could be 6 avoided through this rule. However, I took the liberty of 7 using staff's methodology in calculating that number, and 8 that result is substantial. Over 36 premature deaths per 9 year could be avoided, assuming that the average pollution 10 from these trucks -- the pollution from these sleeper 11 trucks has the same exposure as the average diesel source 12 in the state. As we've heard today, obviously communities 13 are facing diesel trucks, and it is a big problem for 14 them. 15 Just to make a comparison about the magnitude of 16 the emissions reductions -- this could be a little 17 dangerous, but I wanted to do this. The PM emission 18 reductions -- the annual PM emission reductions expected 19 from the idling measure that is in front of you today 20 would be the equivalent of replacing every diesel transit 21 bus with the zero emission bus three times over. So just 22 to give you a sense of how big this rule is in terms of 23 public health benefit and reducing PM emissions, I think 24 that highlights the significance of this. 25 Also as Diane Bailey from NRDC mentioned, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 fuel savings are enormous. With one regulation today, you 2 could reduce more than 3 percent of the demand for on-road 3 diesel fuel in California. 4 Another thing I just wanted to mention and point 5 out, the greenhouse gas emission reductions from this 6 regulation are very significant. In 2010, the greenhouse 7 gas emission reductions expected from this rule are on the 8 same order of magnitude as the emission reductions of 9 greenhouse gasses from the regulation you passed last year 10 for cars and trucks. So those emissions will start in 11 2008. So very significant in terms of global warming 12 emissions. 13 We are also supportive of incentives for the best 14 available technology that's out there, including 15 electrical equipment, and we support using incentive funds 16 to promote that technology. 17 ACTING CHAIRPERSON RIORDAN: Do you have a 18 concluding -- 19 MR. ANAIR: I do. This is a win-win for 20 California's public health and for the economy. And I ask 21 that you support the regulation. Thank you. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 Wayne Lorentzen, Bill Magavern, and Todd Campbell. 24 MR. LORENTZEN: Good afternoon, Madam Chair, 25 members of the Board, esteemed staff. My name is Wayne PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 Lorentzen. I represent the California National Guard 2 today. And I'm basically mirroring Mr. Freidman's 3 statements with regard to the military tactical vehicles. 4 We request language be added to the exemptions to include 5 military tactical vehicles as exempted vehicles. 6 Thank you. 7 ACTING CHAIRPERSON RIORDAN: Okay. I think 8 that's hopefully accomplished. But we'll stay in touch 9 with you. 10 Bill. 11 MR. MAGAVERN: Good afternoon. My name is Bill 12 Magavern. I'm representing the 200,000 Sierra Club 13 members in California. And a number of our members have 14 contacted me in support of this proposed rule. I want to 15 thank the staff for an excellent proposal. This makes so 16 much sense that we hope the Board will adopt it today, put 17 it in place without delay, and make sure that it is 18 enforced fully. 19 The reductions in emissions of NOx, hydrocarbons, 20 particulate matter, and carbon dioxide, which of course is 21 the major greenhouse gas, are all very impressive. And 22 these will particularly benefit those low income 23 communities and communities of color that are 24 disproportionately impacted by diesel emissions. Diesel 25 emissions have become increasingly known as being as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 harmful as they are. And this Board has rightfully made 2 it a priority to reduce those emissions. 3 We saw that the technology to make this rule work 4 is available. It was demonstrated right outside. And the 5 payback periods are really remarkably good. 6 It's important to put this into effect also to 7 allow for the kind of mixed use development that is the 8 smartest way for California to grow. Because if we're 9 going to have commercial activity happening alongside of 10 residential life, as we should, that we need to make sure 11 that the people in those houses are not having to breathe 12 the diesel exhaust from idling trucks. 13 The fuel savings is really impressive from this 14 rule. It's amazing to me that in a country that is as oil 15 dependant as we are and when we've seen so frequently in 16 recent years the effects of that oil dependence that we're 17 allowing fuel to be wasted in idling. 18 Finally, the in-action of U.S. EPA in this area I 19 think is pathetic. And the fact that the federal 20 government has not been willing to go forward is hardly a 21 reason why California should also remain stagnant. On the 22 contrary, it's a reason why California needs to move ahead 23 with our own rule, the one that's before you today. 24 Thank you very much. 25 ACTING CHAIRPERSON RIORDAN: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 Todd Campbell, I think is probably gone. 2 Thank you very much. I think that concludes our 3 list of speakers. 4 And, staff, do you have any further comments? 5 EXECUTIVE OFFICER WITHERSPOON: Nothing further. 6 ACTING CHAIRPERSON RIORDAN: All right. Close 7 the record now, since all testimony and written 8 submissions and staff comments for the item have been 9 entered into the record. The Board has not granted an 10 extension of the comment period. I'm officially closing 11 the record on this portion of the agenda item, 05-10-3. 12 Written or oral comments received after the comment period 13 has closed will not be accepted as part of the official 14 record on this agenda item. Or if there is a 15-day 15 change -- and which there is, correct, Ms. Witherspoon? I 16 will now close the record on this agenda item. However, 17 the record will be reopened when the 15-day Notice of 18 Public Availability is issued. Written or oral comments 19 received after this hearing date but before the 15-day 20 period is issued will not be accepted, which I'm just 21 re-reading, as part of the official record on this agenda 22 item. When the record is reopened for a 15-day comment 23 period, the public may submit written comments on the 24 proposed changes, which will be considered and responded 25 to in the Final Statement of Reasons for this regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 This requires ex parte disclosure, beginning with 2 Supervisor DeSaulnier. 3 SUPERVISOR DeSAULNIER: None. 4 ACTING CHAIRPERSON RIORDAN: Ms. Berg? 5 BOARD MEMBER BERG: Yes. I had two telephone 6 conference calls, one was on October 11th with Diane 7 Bailey and Don Anair. And that was consistent with their 8 testimony today. The second phone call was on October 9 18th with IdleAire Technology, David Everhart and John 10 Ferhenbach. And that was also consistent with their 11 testimony today. 12 ACTING CHAIRPERSON RIORDAN: Dr. Gong. 13 BOARD MEMBER GONG: Thank you. I've had two 14 telephone conversations; one on October 6th with Bonnie 15 Holmes-Gen, Diane Bailey, and Don Anair. And then on 16 October 17th, I had a telephone conversation with the 17 IdleAire people, John Fehrenbach and David Eberhart. And 18 the content was consistent with their discussion today. 19 ACTING CHAIRPERSON RIORDAN: I have none to 20 disclose. 21 Yes, Supervisor Patrick. 22 SUPERVISOR PATRICK: Thank you. 23 On October 13th, I had a phone conference with 24 Bonnie Holmes-Gen, Diane Bailey, and Don Anair; and then 25 on October 17th, with Dave Modisette. And the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 conversations were consistent with their testimony today. 2 ACTING CHAIRPERSON RIORDAN: Supervisor Roberts. 3 SUPERVISOR ROBERTS: After being in China for a 4 month, I don't have any to disclose. 5 ACTING CHAIRPERSON RIORDAN: That's right. That 6 does solve that problem, doesn't it? 7 Board members, are there any questions of staff 8 at this time? There is a Resolution before us, and -- 9 SUPERVISOR PATRICK: Madam Chair, I would move on 10 Resolution 05-55, and also direct staff to work with the 11 military folks to make sure that their concerns are 12 accommodated. 13 BOARD MEMBER GONG: I second. 14 ACTING CHAIRPERSON RIORDAN: Any further 15 discussion? 16 Hearing none, I'll ask for the vote. 17 BOARD MEMBER KENNARD: I just had one comment. 18 ACTING CHAIRPERSON RIORDAN: Ms. Kennard. 19 BOARD MEMBER KENNARD: I'm delightfully proud 20 that I was characterized as having made a profound 21 statement. I'm going to keep this tape and play it back 22 to my children so maybe they'll understand how profound I 23 am. 24 But I do want to clarify that I do not see a 25 connectivity between changing the rules in this situation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 and not. So I just wanted to make that comment. 2 ACTING CHAIRPERSON RIORDAN: Thank you. 3 All those in favor of the motion signify by 4 saying aye. 5 (Ayes) 6 ACTING CHAIRPERSON RIORDAN: Opposed, no. 7 The motion carries. 8 Just one little comment. The door hanger is 9 wonderful and a great way to get out information. But as 10 an educator, I just have one comment, Supervisor 11 DeSaulnier, which is, there are probably truck drivers 12 that would like more information. And I would think maybe 13 the Bay Area Management District might put their phone 14 number for more information on something. I realize this 15 probably goes to the Bay Area, your numbers to report. 16 But with somebody wanting to do something or trying to 17 understand what to do, it might be a smart thing to do. 18 SUPERVISOR DeSAULNIER: I will claim ignorance, 19 which I know people always feel that's truthful. But I'd 20 be happy to look at it. 21 ACTING CHAIRPERSON RIORDAN: Great idea. Great 22 idea. It would be great in rural areas where people often 23 park their trucks and start them and idle them. That's 24 another area. But that doesn't apply to the Bay Area. 25 You don't have any rural areas. I think we'll move on, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 but maybe give our reporter a bit of a break. How about a 2 five-minute break? I think that's a good idea. 3 (Thereupon a recess was taken.) 4 ACTING CHAIRPERSON RIORDAN: Now, this is the 5 last agenda item for our consideration. It's 05-10-4, a 6 suggested control measure for automotive coatings. As we 7 begin the next round of the State Implementation Plan, we 8 need to work closely with local air districts to identify 9 achievable control measures for ozone and particulate. 10 And we are considering today an important measure for 11 districts to consider in their SIP development process. I 12 understand that the local air districts as well as the 13 automotive coating manufacturers and the National Paint 14 and Coating Associations actively participated in this 15 effort. And I thank them for their involvement. 16 Before we begin, Ms. Berg, would you like to make 17 a statement? 18 BOARD MEMBER BERG: Yes. I am President and CEO 19 of LS Paint Company, who is a manufacturer of automotive 20 refinish coatings. And, therefore, I will be recusing 21 myself from this proceeding. 22 ACTING CHAIRPERSON RIORDAN: Very good. Thank 23 you. 24 Ms. Witherspoon, would you like to begin the 25 staff presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 2 Chairman. ARB developed suggested control measures for 3 certain emission sources under local district rather than 4 ARB control. The SCMs provide a model for districts to 5 reduce volatile organic compound emissions and simplify 6 local rulemaking. Automotive coatings accounted for 21 7 tons per day of emissions in 2001. Staff believes we 8 could cut that number by 60 percent to just eight tons per 9 day if the SCM we're about to present were adopted 10 statewide. Mr. Jose Gomez of the Stationary Source 11 Control Division will make the staff presentation. 12 (Thereupon an overhead presentation was 13 presented as follows.) 14 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 15 Thank you, Ms. Witherspoon. Good afternoon, Madam 16 Chairman, members of the Board. 17 Today, I will present to you the proposed 18 suggested control measure for automotive coatings, or SCM. 19 I will try to go through this presentation as quickly as 20 we can, in light of today's schedule. 21 I will be presenting some background information 22 on automotive coatings, the reasons and process we use for 23 developing the SCM. I will describe the provisions of the 24 SCM, the benefits and impacts. And, finally, I will 25 present the staff's recommendation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 --o0o-- 2 --o0o-- 3 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 4 First, I will define automotive coatings. Automotive 5 coatings are coatings used in motor vehicle or mobile 6 equipment refinishing, repair, or restoration. Automotive 7 coatings do not include aerosol coatings or 8 factory-applied original equipment manufacturer coatings. 9 --o0o-- 10 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 11 Automotive coatings consist of three basic components: 12 Solvents, resins, and pigments. 13 Solvents affect the application and drying 14 properties of the coatings. Solvents usually contain 15 VOCs. However, some solvents are not considered VOCs, 16 because they form very little ozone. And we refer to 17 these as exempts. Water is also used in some coatings. 18 Resins determine the type of coating and other 19 properties such as adhesion and durability. And pigments 20 provide color, weathering properties, and resistance to 21 corrosion. Coatings used in automotive refinishing 22 include three general categories: Primers, colors, and 23 clears. The color and clear coatings are refered to as 24 top coats. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 2 There are two types of color coating: Single-stage and 3 multi-stage. 4 Single-stage coatings are an older technology 5 that does not require a clear coating. The single-stage 6 coatings are used almost exclusively by fleet vehicles 7 such as UPS trucks and by production shops like Maacos 8 which paint the entire vehicle. 9 Multi-stage systems have a color coating that 10 requires the subsequent clear coating. Multi-stage 11 coatings are a newer technology that provides better 12 performance. The collision repair industry uses 13 multi-stage coating almost exclusively because new car 14 manufacturers stopped using single-stage coatings in the 15 mid-1980s. 16 --o0o-- 17 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 18 automotive coating industry includes manufacturers, 19 distributors, and refinishing facilities. Most of the 20 manufacturers sell to a network of distributors who in 21 turn sell to the refinishing facilities. Some 22 manufacturers also sell directly to the refinishing 23 facilities through company-owned stores. 24 --o0o-- 25 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 refinishing industry consists of over 4,000 facilities 2 statewide. Most of these facilities are small businesses. 3 Over 70 percent have fewer than ten employees. The 4 industry can be divided into three groups: The collision 5 repair shops, the shops that do fleets, and the production 6 shops like the Maacos. 7 --o0o-- 8 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: Air 9 districts are primarily responsible for controlling 10 emissions from automotive coatings. The U.S. EPA also 11 regulates automotive coatings. The ARB has oversight 12 authority, and we provide technical support to the air 13 districts. 14 --o0o-- 15 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 16 Currently, 20 of the 35 air districts in California have 17 automotive coating rules. These account for approximately 18 95 percent of the state's population. The U.S. EPA, as I 19 mentioned, also adopted a coatings rule that regulates the 20 VOC limits. Generally, the district rules are 21 significantly more stringent than the national rule. 22 I should point out that the South Coast Air 23 Quality Management District Board will consider rule 24 amendments based on the proposed SCM at its December 2005 25 Board hearing. The San Joaquin Valley Air Pollution PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 Control District staff has indicated they intend to 2 propose amendments to their rule based on the SCM in 2006. 3 --o0o-- 4 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: Now 5 I'll just describe briefly the reasons for the SCM. 6 --o0o-- 7 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 8 first objective is to reduce VOC emissions. As I 9 mentioned, most solvents used in automotive coatings are 10 VOCs, and these VOCs are precursors to both ozone and PM 11 formation. Both PM and ozone are the most serious air 12 quality problems for California. 13 --o0o-- 14 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 15 second objective, of course, is to promote consistency and 16 uniformity among district rules. The proposed ACM will 17 improve enforceability of the rules. This will ease 18 compliance by industry. The SCM will achieve significant 19 emission reductions from this category. Many of these 20 facilities are in or near residential areas and can create 21 disproportionate impacts to neighborhoods. Reducing these 22 emissions is consistant with ARB's environmental justice 23 policies and goals. 24 --o0o-- 25 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 Next I will discuss the process for developing the SCM. 2 --o0o-- 3 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: We 4 conducted a survey in 2002 of the coating manufacturers 5 and collected extensive data on those coatings. We 6 conducted six public workshops throughout the state to 7 discuss a proposed SCM. Throughout this process, we held 8 numerous meetings with the working group, the district 9 working group, and the industry working group. We also 10 met individually with manufacturers and body shops. 11 --o0o-- 12 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 13 2002 automotive survey collected detailed data on products 14 sold in 2001. This information was collected by coating 15 category and provided complete coating formulations. The 16 survey was used along with other information to develop 17 the proposed SCM before you today. 18 --o0o-- 19 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 20 This slide briefly summarizes key findings of the survey. 21 Seventeen manufacturers reported selling coatings in 22 California. They account for approximately 96 percent of 23 the entire coatings market. They sold approximately 3.7 24 million gallons of coatings. Seven manufacturers account 25 for about 97 percent of the volume. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 --o0o-- 2 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: I 3 will now discuss the provisions. 4 --o0o-- 5 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 6 proposed SCM would establish the same VOC limits for cars 7 and large vehicles. Currently, rules have higher VOC 8 limits for passenger cars than for large vehicles such as 9 fleet vehicles. The SCM would also establish specific 10 limits for color coatings and clear coatings. This would 11 eliminate the composite VOC limit for color and clear 12 coatings in current rules. These changes would improve 13 enforceability and simplify recordkeeping. 14 The SCM would also combine and simplify existing 15 coating categories establishing VOC limits for twelve 16 coating categories. I will discuss the proposed limits 17 shortly. 18 Finally, the proposed SCM would eliminate the 19 specialty coating category and replace it with the 20 specific category limits. 21 --o0o-- 22 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: In 23 all but one case, the VOC limits in the proposed SCM are 24 based on currently available technology. The SCM also 25 establishes a provision of possession of products that do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 not comply with the proposed limits. This will enhance 2 the district's ability to enforce their rules. 3 The SCM would also extend the existing South 4 Coast limit for cleaning solvents to the rest of the state 5 and makes several other changes to the existing rules that 6 would enhance both enforceability and uniformity. 7 --o0o-- 8 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 9 This table shows the proposed VOC limits effective on 10 January 1, 2009. As I mentioned, all but one of the 11 proposed limits can be met with products currently on the 12 market. The adhesion promoter category is the only one 13 without compliant products on the market today. However, 14 manufacturers have indicated that a compliant product for 15 this category will be on the market in 2006. 16 Thus, the proposed limits are technically 17 feasible. It should be noted that none of the proposed 18 limits rely on the use of TBAC. TBAC is also proposed to 19 be accepted. I should have mentioned that in the previous 20 slide. We will conduct a technical assessment in 2008 for 21 those categories for which the proposed limit is more 22 stringent than any district limit in current rules. 23 --o0o-- 24 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 25 This table shows the number of companies that currently PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 have compliant products on the market. As you can see, 2 several companies, including several major manufacturers, 3 have compliant products for the main coating categories. 4 --o0o-- 5 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: As 6 mentioned, we're also proposing to extend the existing 7 South Coast limit for cleaning solvents of 25 gram per 8 liter to the rest of the state. This limit is currently 9 being met with products. 10 --o0o-- 11 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 12 Next, I will summarize key issues raised by stakeholders. 13 --o0o-- 14 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 15 SCM proposes to exempt TBAC. And as I mentioned, although 16 none of the proposed limits rely on the use of the TBAC, 17 the staff is proposing to exempt it from the VOC 18 definition, because it would provide compliance 19 flexibility photochemically reactive. 20 The U.S. EPA has exempted TBAC from the federal 21 VOC definition. Some stakeholders have expressed concern 22 about exempting TBAC from the VOC definition because of 23 studies suggesting health impacts. ARB staff conducted a 24 health risk assessment because of concerns regarding the 25 potential carcinogenicity of TBAC metabolite, tertiary PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 butyl alcohol. 2 Since the release of the staff report, we learned 3 that the risk assessment underestimated the risk, because 4 the facilities -- there facilities are larger than 5 previously estimated. Based on this new information, we 6 revised our estimate of potential cancer risk. And our 7 revised estimate shows that use of TBAC could result in an 8 increased cancer risk of up to eight potential cancer 9 cases per million for receptors located near a facility 10 using 3,000 gallons of coatings per year. As you point 11 out, there are only a few facilities that we know of that 12 are that large. 13 Districts are encouraged to do a more detailed 14 category-specific analysis if they have concerns regarding 15 the potential impact of exempting TBAC. 16 --o0o-- 17 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 18 Another issue industry has expressed concern about is the 19 primer sealers. Industry has stated that sealers meeting 20 the VOC limit for primers are not acceptable for collision 21 repair. In response, staff evaluated the available data 22 on primer sealers and determined there are compliant 23 primer sealers on the market today intended for what the 24 collision repair and fleet use. And the formulations of 25 primer sealers that meet the proposed limit are very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 similar to those of VOC products. They use the same resin 2 types. They have similar solids content. Therefore, we 3 expect the performance of the primer sealers meeting the 4 250 gram per liter proposed limit to be similar to the 5 higher VOC products. 6 --o0o-- 7 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 8 Another issue that industry has raised is the single-stage 9 metallic colors need a higher VOC limit for collision 10 repair. Again, in response to their concerns, we 11 evaluated the available data on single-stage metallic 12 coatings and determined that single-stage metallic 13 coatings are primarily used by fleets and production shops 14 where they paint the entire vehicle. Most body shops use 15 a color coat followed by a clear coat for collision 16 repairs, because as I mentioned, new vehicle manufacturers 17 stopped using single-stage coating in the mid-1980s. The 18 demand for single-stage metallic coatings in the collision 19 repair market is minimal. 20 Single-stage metallic colors are available for 21 the fleet market and the formulations of the single-stage 22 metallic colors that meet the proposed limit are similar 23 to those of higher VOC products. 24 --o0o-- 25 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 Next I will discuss the benefits and impacts of the 2 proposal. 3 --o0o-- 4 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: The 5 SCM if implemented statewide would result in significant 6 emission reductions. We estimate the total emissions to 7 be 20.7 tons per day based on our survey. If all 8 districts adopt the proposed SCM, we estimate that about 9 13 tons per day of VOC emissions would be reduced from 10 coatings. This would be over a 60 percent reduction in 11 emissions. The estimated VOC emissions from cleaning 12 solvents is about three times per day outside of the South 13 Coast District. Lowering the VOC limit to 25 grams per 14 liter would reduce this by about 80 percent, or 2.4 tons 15 per day. 16 --o0o-- 17 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 18 This slide shows that we are getting -- our greatest 19 emission reductions are coming from the color coating, the 20 single-stage coating, and the clear coating, as well as 21 the primer. 22 --o0o-- 23 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 24 Under the proposed SCM, facilities would be required to 25 use compliant coatings beginning in 2009. Since the VOC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 limit for color coatings will likely be met with 2 water-borne products, refinishing facilities will likely 3 need air movement equipment and in some cases heat to help 4 them maintain current production levels. Using compliant 5 products may also require some retraining of the painting 6 technicians. If VOC limits are met by using exempt 7 solvents, there would be no need for equipment upgrades. 8 --o0o-- 9 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: We 10 perform a cost analysis to assess the impacts on the 11 affected businesses. We estimate the total cost to comply 12 with the proposed SCM is $14 million per year. The 13 average annualized cost to manufacturers is estimated at 14 $320,000 per year. And the average annualized cost to 15 refinishing facilities is $3,400. This figure assumes 16 that manufacturers pass all their costs on to the 17 refinishing facilities, and then the color coatings will 18 be water-borne. 19 This measure compares favorably with other 20 control measures that you approved in the past. The cost 21 effectiveness is $1.43 per pound of VOC emission reduced. 22 The architectural coatings SCM approved by the Board in 23 2000 was estimated at $3 per pound of VOC reduced. 24 --o0o-- 25 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 also estimated the cost to consumers. There are 2 approximately 1.3 million repairs done annually. The 3 average cost of a typical repair is $2,200. If the 4 refinishing facility recovers their cost by raising the 5 price of their services, the average repair cost would 6 increase by about $11, or less than half a percent. 7 --o0o-- 8 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: In 9 summary, the proposed SCM reduces VOC emissions and 10 therefore public exposure to ozone and particulate matter. 11 The SCM is technically feasible and cost effective. The 12 SCM improves consistency among district rules and would 13 make them more enforceable. And the SCM is consistent 14 with ARB's environmental justice goals by reducing VOC 15 emissions in neighborhoods. 16 --o0o-- 17 TECHNICAL DEVELOPMENT SECTION MANAGER GOMEZ: 18 Staff recommends that the Board approve the proposed SCM. 19 We also recommend that the Board direct staff to work with 20 the districts to expeditiously revise or adopt district 21 rules based on the SCM. 22 This concludes my presentation. Thank you. 23 ACTING CHAIRPERSON RIORDAN: Thank you very much. 24 Bored members, I'll ask if you have any 25 questions. But before that, let me tell Jim Sell, George PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 Patterson, Mike Veney, Mike Koss, Richard Lawrie, Richard 2 Evans, David Grose, Daniel Pourreau, all of you please 3 come down to this front row. I want you ready to testify. 4 And, Jim, you just stand right there at the microphone. 5 Now, Board members, questions? 6 Dr. Gong. 7 BOARD MEMBER GONG: Just clarification. Am I to 8 understand that should this SCM be passed, that each of 9 the separate air districts can decide whether or not to 10 implement all of it or some of it? 11 MEASURES ASSESSMENT BRANCH CHIEF FRY: That's 12 correct. 13 BOARD MEMBER GONG: Okay. We're just giving them 14 an enabling -- 15 MEASURES ASSESSMENT BRANCH CHIEF FRY: Correct. 16 We're giving them a guidance model rule. 17 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Our goal is 18 to work with the districts and get all of those that are 19 regulating the source via the regulations to adopt this 20 measure or something that is extremely close and 21 compatible with it. 22 ACTING CHAIRPERSON RIORDAN: All right. Jim 23 Sell. 24 MR. SELL: Thank you, Madam Chairman. Good 25 afternoon, Board members. My name is Jim Sell. I'm PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 Senior Counsel with the National Paint Coating 2 Association. Our companies make, as staff indicated, over 3 95 percent of the refinish coatings sold in California and 4 the United States. 5 The SCM will essentially require the use of 6 water-borne coatings in one of the most important coatings 7 categories for the automotive refinishing industry in its 8 shops, the tens of thousands of base coat color systems 9 that must match all OEM original colors and finishes. A 10 GM service bulletin, which I sent in, states the high 11 standards expected of shops here. In quotes, "The 12 customer expects a repair to match the showroom finish." 13 If this expectation is not met, the shop loses money, 14 customers, and warranty work from the OEM manufacturers, 15 dealerships. Effective color coats are essential for this 16 function. 17 The move to water-borne is a sea change, a sea 18 change from what the shops now are using. We want to be 19 clear about this. We don't oppose water-borne technology. 20 Rather, we are only asking that some of the other limits 21 be deferred for a year so we can concentrate on the 22 water-borne coatings technology and a compatible 23 solvent-borne top coat for the year 2009. 24 My members have spent literally tens of millions 25 of dollars developing water-borne color coats and are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 anxious to commercialize them quickly. But we see 2 problems with the three-year lead time given that has to 3 be done. Tens of thousands of water-borne color coats 4 have to be translated from European coatings colors where 5 they were originally introduced into U.S. colors. In this 6 sense, I think you have to be careful in understanding 7 what the staff means by available. That's what they 8 consider to be available. A color coat system that is in 9 use in Europe but still has not had its colors translated 10 for U.S. systems. 11 An effective low VOC solvent-borne top coat that 12 is compatible with these water-borne base coats has to be 13 developed as well. Again, the term availability is used 14 about that system. In Europe, for example, the clear 15 coats that are going onto water-borne systems over there 16 are solvent-borne systems that are a 3.5. They're much 17 higher than the limits being specified here. 18 Other important low VOC coatings must also be 19 developed, the sealer which they mentioned, the 20 single-stage automotive finish, and certain specialty 21 coatings. These new systems then require time for 22 exposure testing, et cetera, to be certified by the OEM 23 manufacturers for their warranty work. 24 And, finally, the new coating systems must be 25 introduced to the shops, painters trained on them well PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 before the January 1st, 2009, compliance date to ensure 2 that the shops can effectively use them by that date. 3 They have to learn how to use the coatings, and they have 4 to get used to them. And that's a very tough process, 5 particularly when you're moving to an entirely new 6 coatings technology. 7 Therefore, we request the sealer and single-stage 8 limits be deferred until January 1st, 2010, to allow 9 concentration on the base coat colors and the compatible 10 clear top coats to ensure effective implementation of 11 these limits by January 1st of 2009. This means that 90 12 percent of emissions expected from the rule will be 13 achieved in 2009, while the small sliver associated with 14 the sealer and single-stages will be deferred from only 15 one year. 16 Representatives from some of my member companies 17 will now provide more details on the points I've raised. 18 Thank you for your kind attention. 19 ACTING CHAIRPERSON RIORDAN: Thank you. And 20 thank you for staying within your time limit. I 21 appreciate that. 22 George Patterson. 23 MR. PATTERSON: Madam Chairman, Board members, 24 thank you for the opportunity to comment. My name is 25 George Patterson. I'm with the DuPont Performance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 Coatings. We are members of the NPCA and are going to 2 comment further. 3 Some of my colleagues will be commenting on the 4 single-stage and sealer category and the whole issue of an 5 OEM certification. So in the interest of brevity, I'll 6 say nothing about that and confine my comments to the 7 color coat. 8 As both Jim and Jose indicated, the bulk of the 9 reduction opportunities lie in the color coat, maybe as 10 much as 90 percent. The 3.5 limit in SCM is a drastic 11 reduction from the current level. Most of the current 12 color coats are as high as 6.2. 13 We think that water-borne is an ideal way to get 14 to this new 3.5 limit. As Jim said, water-borne is a 15 technology we've invested a great deal in. It's now being 16 commercialized in Europe, and we look forward to 17 commercializing it here in California. 18 With the reservations I'm about to express, 19 please don't misconstrue my comments. We're very bullish 20 on water-borne, and we think it will be a very effective 21 system. Having said that, it is a significant departure 22 from solvent-borne. And there is a lot of work to do to 23 make it viable here in the state of California. 24 Now let me start with color matching. Even given 25 that we have a number of color matches that were developed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 in Europe, we're still looking at probably more than 4,000 2 colors that need to be developed here in the U.S. The 3 color matching process typically involves a computer model 4 as a starting point. But that is usually not an exact 5 match. The technician has to work further. And typically 6 it takes on average between three and six hits to get the 7 exact color formula. So it's very difficult for a 8 technician to develop more than one color a day. So when 9 we're talking about 4,000 colors, we're talking about a 10 couple years' worth of work. 11 Further, the color coat is not in itself a 12 stand-alone thing. It has to work as part of a system. 13 And as has been mentioned, you know, the water-borne color 14 coats have never before been used over a 2.1 sealer, and 15 they've never been used under a 2.1 clear. And what the 16 impact of that will be out in the real world is impossible 17 to predict in a laboratory. And we're going to need 18 extensive fuel testing to make sure this whole thing works 19 as a system. 20 Having said all that, we're committed to the 21 color coat. And we're anticipating we'd be in a position 22 to launch as early as January 2008. But then I think we 23 run into difficulty. I don't think it's a case that may 24 be training is needed. I'm absolutely sure there's going 25 to be training needed. The water-borne does not apply at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 all like the solvent-borne systems that the shops are used 2 to. It's much less forgiving. And adjusting it for the 3 problems that come up during real life application is 4 something the shops are going to have to be trained on. 5 So I guess I'm running out of time -- 6 ACTING CHAIRPERSON RIORDAN: We need a concluding 7 remark. 8 MR. PATTERSON: Okay. Concluding remark. 9 We're going to need I think more than one year to 10 train people. I think we would prefer to January 1st, 11 2010, implementation date. But water-borne is a great 12 system. We hate to see it get a black eye from 13 implementation that outpaces our ability to train people 14 to use it properly. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 Mike Veney. 17 MR. VENEY: Thank you, ladies and gentlemen of 18 the Board. I'm Mike Veney. I'm the Regulator Affairs 19 Manager for Sherwin-Williams. We're also a member of the 20 National Paint and Coating Association. And I stand 21 together with the other manufacturers today. 22 I'm going to limit my time today to talk about 23 the sealers and the single-stage application. The 24 proposed SCM combines the primer surfacer and primer 25 sealer category into one category. While from a logical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 and intuitive sense that makes a lot of sense, but those 2 two coatings are used for vastly different reasons and 3 have vastly different characteristics. 4 The primer surfacer is used to fill 5 imperfections, create a bond between the substrate and the 6 subsequent coating, assist in corrosion protection, and 7 provide a barrier coat from the old system that was on 8 there to the new solvent so penetration doesn't happen. 9 On the other hand, a primer sealer is used to 10 create a smooth uniform finish that allows for the color 11 coat to easily adhere, to provide color uniformity, and to 12 assist in blending. 13 The chemistry between a surfacer and sealer, as 14 Jose said, are very similar. But the pigment grind and 15 lower solids of a primer sealer require different 16 treatment. To account for these differences, we either 17 suggest the Board adopt a regulation where primer sealers 18 currently are in the South Coast, 250 grams per liter -- 19 excuse me -- 340 grams per liter or to extend the time 20 limit out for a year away from the base coat to give us 21 time to develop these sealers. 22 It is true there are a limited number of primer 23 sealer products on the market today that meet the limit. 24 They are generally used either in a fleet application or 25 what we would consider a commodity market. Sealers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 designed for the fleet market have vastly different 2 performance characteristics. And commodity sealers are 3 not required to meet the stringent testing requirements of 4 the OEM certified products, and they do not come with any 5 kind of warrantee or guarantee that the premium systems 6 must offer. 7 There are also some water-borne sealers that are 8 currently being used in Europe at the 250 gram per liter. 9 Sherwin-Williams' experience with those is that they are 10 about 20 percent less productive than the current sealers 11 being used in the South Coast today. A 20 percent 12 reduction in productivity is -- I don't know if we have 13 anybody from a body shop here, but they can tell you it's 14 a linear process. If you take one step of that and reduce 15 its productivity, it hurts the whole system. In the staff 16 report, it says that the average body shop is about 17 $500,000 per year. If you take 20 percent of that away, 18 that's $100,000 a year to an industry that's already cash 19 strapped. So for these reasons, again, we suggest the 20 primer sealer category be split out. We either be given 21 more time to develop these or get a higher limit on them. 22 I'm going to move to the single-stage top coat. 23 A 340 gram per liter single-stage metallic coating for the 24 automotive market is very difficult to achieve. There are 25 some metallic systems available today that are for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 fleet market. They have a much lower quality in 2 appearance than what we need for a Maaco, the production 3 shop that does the majority of single-stage work in the 4 automotive market. The nature of their business for Maaco 5 does not require a color match, but it still requires they 6 deliver an OEM appearance to their customer. 7 ACTING CHAIRPERSON RIORDAN: If you'll look, 8 you've kind of run out of your time. So I need a 9 conclusion. 10 MR. PATTERSON: A conclusion is that we need more 11 time to be able to hit the marks they've asked for. And 12 the metallics, we really need those to be at 340 grams per 13 liter. 14 ACTING CHAIRPERSON RIORDAN: Thank you very much. 15 Mike Koss. 16 MR. KOSS: Madam Chair, Board members, thank you 17 for the opportunity. I'm Mike Koss from PPG and NPCA. 18 I have a bone to pick with Jose in his statement 19 that there were SCM proposals, systems that were found to 20 be compliant in the survey and there was no issue. My 21 point here is that though there may be systems that in 22 effect meet the description of sealer or surfacer or any 23 number of the other categories, there are issues with the 24 OEM performance qualities of those systems. 25 You know, in the last 12 to 14 years, meeting OE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 performance requirements has become one of the major 2 factors influencing refinish formulators, along with VOC 3 regs. At present, all of the major OE manufacturers 4 demand refinish systems meet their high standards. 5 Smaller Asian manufacturers are expected to follow as soon 6 as they pick up in market share. 7 For PPG, product offerings in medium- and 8 high-end shops, roughly 80 percent of these products meet 9 these OE warrantee specifications. OE approved systems 10 are used in warrantee repairs and dealerships, coating 11 service parts for aftermarket suppliers, OE recalls on 12 occasion for repairs, coating defects on original 13 equipment finishes, and OE plant end-of-line repairs. 14 OE warrantee standards are the highest most 15 stringent that our technical groups to have deal with. 16 However, refinish shops do not have the benefits that 17 controlled environments that OE manufacturing sites do 18 with control, temperature, and humidity and high bakes 19 they offer, and in the case of primers, the eco bathes. 20 We have to apply systems in air dry situations with 21 ambient cure, or at the best, a low bake 140, 160 degree 22 bake at 20 to 30 minutes. 23 We still to have meet the OE tests that are 24 performed on these OE finishes. That would include 25 appearance, gloss, DOI hardness, four- to ten-day humidity PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 testing where a panel would be placed in a humidity 2 chamber at 100 degrees Fahrenheit, 100 percent humidity, 3 galvanometer chip, stain and gas resistance, accelerator 4 weather and cold cycle, thermal shock where a panel would 5 be scribed, frozen, and then blasted with a steam jet, and 6 there would be an expectation of no change in the finish. 7 Finally, for these OE specs, we're expected to 8 put systems on the fence, so to speak, in Florida for a 9 minimum of 12 months, preferably 24 months for new 10 systems, and then follow that up after they're approved 11 for a total of five to seven years. 12 We see a number of changes proposed in the SCM 13 that would call for a major reformulation to accommodate 14 these OE warrantee repairs. Any new formulations would 15 expect to meet the new VOC limits supplied by CARB, 16 customer expectations for appearance and application, and 17 these OE warrantee requirements. New technology systems 18 we would be expected to develop would have to be on the 19 fence in Florida by the end of next year to get their 20 two-year minimum testing. 21 ACTING CHAIRPERSON RIORDAN: You've kind of run 22 out of your time, so I need a conclusion. 23 MR. KOSS: The recent NPCA paper that was 24 submitted to CARB reviews all categories with a pragmatic 25 eye toward delivering maximum VOC gains, while allowing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 technical labs to reach attainable formulating targets. 2 ACTING CHAIRPERSON RIORDAN: Thank you. 3 MR. KOSS: The paper also requests return of the 4 elasto american flat and finishes in specialty coatings 5 categories at modestly higher limits. Even with NPCA 6 proposed limits, we would be pushing the envelope to 7 deliver compliant acceptable products within the time 8 frame. And the limits that we're asking for, the higher 9 limits on the paper, would marginally effect the VOC 10 gains, perhaps 5 to 7 percent. We can do the calculations 11 with Dave, if you want to go through that. 12 ACTING CHAIRPERSON RIORDAN: Thank you, Mr. Koss. 13 Richard Lawrie, followed by Richard Evans. 14 MR. LAWRIE: Thanks for the opportunity. My name 15 is Richard Lawrie. I'm with Akzo Nobel Coatings. Akzo 16 Nobel is probably the largest coatings company in the 17 world and a leader in water-borne technologies. 18 If you read the staff report, the SCM, if you 19 look at it, there are two groups that I want to talk about 20 briefly. There is what I call a big ticket item and 21 several small ticket items. 22 The big ticket item is, of course, the major 23 reduction that's going to come from water-borne base coat. 24 In principle, we agree with water-borne base coats. And 25 we agree with it in the time frame allotted, which is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 about three years, the first of 2009. 2 The small ticket items is where I want to kind of 3 hone in on here. There are really four that have already 4 been talked about. I'm going to pick one. There's a 2.8 5 single-stage. There's a 2.1 sealer. There's a 4.5 6 adhesion promoter, and there's a 25 gram per liter 7 cleaner, all of which I think asking us to do and achieve 8 those in the same time allotment is pushing our resources 9 beyond what we can do. 10 I want to just choose one of those, which is the 11 2.1 sealer suggestion. In this year's rounds of public 12 workshops, one thing that I've discovered is when you come 13 to these meetings, you better have facts. So I'm going to 14 try to give you some facts. 15 There was a thing that came from an Air Resources 16 Board person this week. I know you can't see this, but it 17 looks like this. Basically states there are two 18 manufacturers that currently have a 2.1 sealer. Actual 19 fact, there are three manufacturers. One of those 20 manufacturers provides a complete system, so I'm not going 21 to address that. The other two manufacturers provide only 22 a sealer with no top coat to go on it to provide a full 23 system. 24 What I did, and I realize you can't see this, 25 this is an Akzo Nobel system. It has a 2.8 sealer. It PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 was applied to this panel, and a standard ASTM test for 2 adhesion was placed on this panel. It passed. 3 This is a panel that has a current 2.1 sealer 4 applied. And because the use of the sealer won't have 5 this manufacturers' top coat, because it doesn't exist, 6 would apply anybody else's top coat. In this case, I 7 applied ours. As you can see, this is a standard test. 8 It failed. 9 The same was applied. Our sealer versus the 10 second manufacturers'. Again it failed. 11 Back up a little bit. The performance of the 12 technology of sealer exists -- the performance that we're 13 looking for exists in national products. They sit about 14 4.8 pounds per gallon. The 2.8 sealer we have now is 15 certainly that technology let down, washed out, with 16 exempt solvents, as it's own PCBTF. And those solvents 17 are limiting. What SCM is asking for is for us to take 18 that already compromised product and wash it down further 19 with acetone and PCBTF and have it perform like a 4.8 20 sealer in a national rule. Well, acetone is very fussy of 21 operating solvent. Above 70 degrees, it's pretty much 22 useless. So let me get to my point. 23 ACTING CHAIRPERSON RIORDAN: You need to get to 24 your concluding point. 25 MR. LAWRIE: This is my concluding point right PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 here. In principle, three years for base coat, 2 water-borne base coat, we agree with. What I'm asking for 3 is for a second time allotment to begin after 2009 for 4 these small ticket items that I talked about. 5 ACTING CHAIRPERSON RIORDAN: Okay. Thank you 6 very much. 7 Next speaker is Richard Evans. 8 MR. EVANS: Richard Evans. I owned and operated 9 a small auto body repair for 25 years. I'm in the process 10 of opening a new one. I'm a consultant for the industry 11 and taught refinishing and hazardous material. And I 12 teach it currently. For the past 15 years, I've been 13 teaching it. 14 It would help me very much with my presentation 15 before you start the clock to make sure that the Board 16 received the written comments that I provided Mr. Gomez 17 when I came here and met with him and at the meeting in 18 Oakland. I was told it would be in the staff report and 19 it would be in your packet. I addressed it to Cindy Tuck. 20 But that was on the website as -- 21 ACTING CHAIRPERSON RIORDAN: That's not a 22 problem. It would still go there. I'm just looking 23 through here. 24 Board members, I want to be sure. I've stopped 25 the clock while I'm looking for this. So you're not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 losing your time. 2 MR. EVANS: I couldn't find it in the packet. 3 MEASURES ASSESSMENT BRANCH CHIEF FRY: We do have 4 a copy. It wasn't submitted during the formal comment 5 period, but we do have a copy of it. 6 ACTING CHAIRPERSON RIORDAN: What we would ask is 7 that perhaps while he's making his presentation and the 8 last two speakers, maybe somebody can copy it for us, and 9 we'll make it part of the record. 10 MR. EVANS: Appreciate it. Because when I went 11 to Oakland, I was told -- we had some concerns, and we 12 were told that would be incorporated. And then I was 13 asked after that meeting to come to this location, which I 14 did, spent the time with Mr. Gomez and staff, gave him a 15 written presentation. He called me the next day and said 16 he didn't see why he should include it in the staff 17 report, because you guys wouldn't read it anyway. So I 18 said well, just include the one cover page. And he 19 assured me that would be done. So -- 20 ACTING CHAIRPERSON RIORDAN: We're going to do it 21 right now. So that's not an issue. 22 MR. EVANS: Thank you. 23 Okay. I'll start by the staff held a workshop 24 and notified approximately 400 of the 7,000 businesses to 25 be effected in Oakland. The workshop had at least 55 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 business owners attend, some of which came on buses from 2 Sacramento. 3 At the Oakland meeting, the major concern was 4 misinformation, improper notification, failure to record 5 minutes or take minutes of the meeting, and the amount of 6 small businesses that would be forced out of business. 7 The staff report was based on a 2002 -- actually, 8 2001 study done by the Air Resources Board. The study is 9 wrong and outdated. The staff should have read SB 1916 10 Advisory Committee May 21st, '03, Auto Body Paint Project 11 Feasibility Report. In 2003 it identified 2,357 12 businesses under the SIC Code; 1,300 statewide with an EPA 13 number. And they cannot to this date tell us how many 14 body shops are registered or in the state of California. 15 Of the 35,000 body and paint in the U.S., 95 16 percent were small shops employing less than 20 people. 17 These shops employed over two-hundred nine-thousand people 18 and had an annual payroll of 5,910,000-plus, and 77 19 percent are family owned. 20 Waste generated and volume was an average one ton 21 per year per reporting. The new paint formulation case 22 study support a huge reduction in VOCs, up to 300 percent, 23 and a reduction in manifest waste up to 40 percent. New 24 equipment and paint application processes that took place 25 after the study was done that are in place now. Case PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 studies support reduction in amount of materials sprayed 2 up to 40 percent. 3 I met with staff per their request, and I was 4 shocked by their research. They used the outdated 2002 5 study and not the SB 1916 report information. I asked 6 staff if they took into consideration the 25 percent of 7 waste hauled away by the shops. They should deduct this 8 from the total sales, because it wasn't applied. It was 9 disposed of. Their answer was no. 10 I asked staff if they took into consideration 15 11 percent or more of the unopened inventory the shops have 12 on hand as a backup or on their mixing machines. They 13 said no. 14 I asked staff to subtract the 40 percent 15 reduction of VOCs, the 25 percent of the waste hauled away 16 and the 15 percent inventory to get a true figure to 17 report to the Board. The answer was no. 18 Staff felt my percentages were way off. I asked 19 why didn't they have the reporting information that is 20 given to them by us yearly. We pay and report to you 21 yearly this information. Answer, the state database 22 doesn't talk to each other. So they can't get this 23 information. 24 I found all this information that I'm giving you, 25 and I've got copies here obtained and came from the State PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 of California Department of Toxic Substances Control 2 website. I will gladly come tomorrow and show them how to 3 use it. It breaks it down by shop, tonnage, waste. It 4 breaks down and lists all the shops in California that you 5 regulate. 6 But the real problem with this whole rule is how 7 staff compiled it is they took the total sales and they 8 divided it by the legal businesses that they think are out 9 there, instead of the total businesses. So the ones that 10 aren't registered that aren't legal and are using it don't 11 count, and we're penalized for it. They need to take the 12 total amount and divide it. Thank you. 13 ACTING CHAIRPERSON RIORDAN: I appreciate your 14 comments. 15 David Grose. 16 MR. GROSE: Good afternoon, Madam Chair and 17 members of the Board. My name is David Grose, and I'm 18 Stationary Source Division Manager at the Sacramento 19 Metropolitan Air Quality Management District. I'm also a 20 member of the CAPCOA Enforcement Managers Committee, a 21 former Chair of that Committee. I'm here today to testify 22 in support of the automotive coating refinishing suggested 23 control measure. 24 A little background and history is warranted. In 25 2001, the CAPCOA Enforcement Managers Committee recognized PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 that existing local rules regulating volatile organic 2 compound emissions from auto body refinishing coatings 3 were obsolete and did not adequately represent the common 4 usage of such coatings. They set out to analyze the rules 5 used by most districts to control emissions from those 6 sources. The result of continued use of those rules fell 7 short of achieving the adequate reduction and control of 8 emissions from the coating of those automobiles and other 9 mobile equipment. 10 The enforcement managers then set out to attempt 11 to use the experience of having inspected thousands of 12 sources in this category to derive a more effective 13 regulatory framework based upon observations of real 14 practices in the field, a framework that will be able to 15 achieve the desired reductions as well as be 16 understandable by the regulated community. In other 17 words, more simple. 18 This SCM is the direct descendant of that work 19 product of the CAPCOA enforcement managers. The 20 California Air Resources Board staff took that draft and 21 developed it into the SCM that you are considering today. 22 As such, it has strong support of local regulators 23 statewide. ARB has done a wonderful job of providing the 24 necessary technical research in support of the elements of 25 this SCM and have found it both technologically and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 economically feasible. 2 The Air Resources Board staff has also found that 3 similar requirements are, in fact, in place in parts of 4 Europe now and have been achieved in practice there. The 5 extensive survey of coating manufacturers conducted by the 6 Air Resources Board staff have helped determine the 7 appropriate VOC limits in the SCM. 8 This SCM is better than existing local rules in 9 many ways. It is simpler by virtue of eliminating many 10 coating categories which no longer have practical 11 applicability. It controls coating VOCs at the source and 12 at manufacture and is more verifiable by inspection. It 13 eliminates a composite VOC limit for a multi-stage coating 14 and replaces specialty coating categories with specific 15 categories. It simplifies recordkeeping and labeling and 16 eliminates potential use of non-compliant coatings by 17 prohibiting their sale and possession. All of these 18 elements of the SCM will result in ease of use by both the 19 regulator and the regulated. 20 The emission reductions in ozone precursors from 21 this SCM are significant. The Sacramento Metropolitan Air 22 Quality Management District which is non-attainment for 23 both the Federal and State Ozone Standards use the 24 reductions expected from the promulgation of local use 25 rules based upon the SCM as necessary and a priority in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 our plan to obtain. We feel that the standards are 2 essentially achievable today, but support the 3 implementation schedule as proposed in the SCM in 4 recognition of the possible acquisition of equipment by 5 the users to comply with the usage parameters of new 6 coatings as well as the training in their use. 7 ACTING CHAIRPERSON RIORDAN: Do you want to have 8 a concluding statement? 9 MR. GROSE: I'm on my last page and paragraph. 10 The Sacramento Air Quality Management District 11 expects to consider adopting a local rule based on this 12 SCM as soon as practical after your Board's anticipated 13 adoption today. I strongly urge your Board to adopt this 14 SCM as written. Thank you. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 Dr. Daniel -- and you're going to have to 17 pronounce that last name. 18 DR. POURREAU: You got it correctly. It's 19 Pourreau. Good afternoon and thank you. My name is Dan 20 Pourreau. I represent Lyondell Chemical, the developer 21 and producer of TBAC. Appreciate the opportunity to 22 comment on the proposed SCM. 23 First, we support the SCM recommendation that the 24 districts exempt TBAC, but we have three issues with 25 CARB's statements about TBAC's toxicity. First, it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 appears that CARB staff is attempting to regulate the 2 solvent based on supposed toxicity without proper legal 3 and scientific justification. 4 Second, it is clear that TBAC and Lyondell are 5 being held to a different standard than previously exempt 6 compounds and their suppliers. 7 And, third, this partial ban on TBAC will result 8 in increased use of acetone and PCBTF, which will increase 9 the cost of compliance for everyone, create unnecessary 10 regulatory burden and complexity, and have negative 11 environmental impacts on unknown health effects. 12 I don't have much time, so let me focus on the 13 issues which should be of most concern to you. When CARB 14 exempted PCBTF in '99, there were no chronic studies on 15 the solvent and none are available to date. The 16 sub-chronic data that were available showed that it causes 17 the same effect in laboratory animals as tertiary butyl, 18 the TBAC metabolite of concern to OEHHA. NTB concluded 19 that PCBTF would likely cause cancer in rats. We also 20 know that PCBTF is more environmentally persistent than 21 TBAC and can bio-cummulate, whereas TBAC cannot. Yet, 22 OEHHA did not raise any concerns about PCBTF, and CARB did 23 not conduct an environmental impact on this solvent before 24 exempting it. 25 In fact, CARB has yet to consider the effect of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 increased use of acetone and PCBTF on human health and the 2 environment. Acetone produces twice as much ozone as TBAC 3 and is significantly more flammable and volatile. PCBTF 4 on the other hand is more expensive, denser, and less 5 effective as solvent than TBAC. So limiting the 6 availability of TBAC will result in higher solvent 7 emissions, greater ozone formation than if you were to 8 broadly exempt it as you have these other solvents. 9 CARB has also stated the automotive industry does 10 not need TBAC to comply with the proposed VOC regulations. 11 That is a risky assumption. PBCTF has been put on the HBV 12 orphan chemicals list because its foreign producers have 13 not agreed to conduct additional toxicity testing. 14 Consequently, the EPA will issue 8A and 8D rules on PCBTF 15 next month. And if the producers do not provide the 16 request to toxicity and emission information, they could 17 be fined $30,000 a day, and the product could be 18 eventually banned. 19 In contrast, Lyondell is voluntarily conducting 20 additional sub-chronic studies on TBAC to try to address 21 OEMHH's stated concerns. These results will be available 22 next year, which is unfortunately probably too late to 23 make TBAC broadly available to the automotive coating 24 industry and potentially other industries as well in 25 California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 We ask again that OEHHA and CARB hold TBAC and 2 Lyondell to the same reasonable standards that they have 3 other solvents and suppliers. CARB and OEHHA should 4 consider the economic health and environmental impacts of 5 increased acetone and PCBTF use if TBAC is not broadly 6 exempted. This is the likely outcome of CARB's current 7 statements about TBA's potential toxicity in the 8 automotive SCM and in the draft environmental impact 9 assessment. 10 We urge OEHHA and CARB to finally act on our 11 comments and give TBAC a chance to do what it was 12 developed for, to provide regulatory relief and cleaner 13 air. Thank you for the opportunity. 14 ACTING CHAIRPERSON RIORDAN: Thank you very much. 15 Thank you for your statements. 16 Staff, let me ask you if you have any comments. 17 And I purposely did not ask for comments in between 18 speakers. But do you have any at this point? And then 19 I'm going to turn it over to the Board for questions. No. 20 Okay. Board members, are there any questions for 21 staff on this particular item? Seeing none, then let me 22 close the record. Since all of the testimony -- I'm 23 sorry, Supervisor. 24 SUPERVISOR ROBERTS: You can still close the 25 record, and I can still ask questions, can't I? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 ACTING CHAIRPERSON RIORDAN: Sure. Go on record. 2 SUPERVISOR ROBERTS: I just want to comment on 3 this. There seems to be a pretty strong concern about 4 another year's time on some of these products, and I guess 5 I'm somewhat sympathetic to that. And I'd like to hear 6 staff's response. 7 MEASURES ASSESSMENT BRANCH CHIEF FRY: For all of 8 the proposed categories, there are currently compliant 9 products on the market except for one. And that's the 10 adhesion promoter category. And a major manufacturer has 11 developed a product that meets our proposed limit, and 12 they plan to release it to the California market in 2006. 13 So we don't think it's necessary to extend the effective 14 date for any of the proposed limits. 15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And to be 16 fair to the industry, I think what you heard was we're 17 actually pretty close on most of the rule. What they 18 asked for was some additional time for several categories 19 that provide emission benefits, but provide a much smaller 20 amount of emission benefits than the others. So I think 21 it's a judgment call. We think if we push them, we can 22 get the emission reductions in the time frame that we 23 needed. If the Board decides to accommodate the request 24 for more time, it's not a big change from the staff 25 proposal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 1 SUPERVISOR ROBERTS: It struck me as a modest 2 request. I found the testimony compelling. 3 ACTING CHAIRPERSON RIORDAN: When we get there, 4 that would be good. 5 Are there any other questions for staff? 6 As I say, I'm going to close now, since all the 7 testimony and written submissions and staff comments for 8 this item have been entered into the record. The Board 9 has not granted an extension of the comment period. I'm 10 officially closing the record on this portion of the 11 Agenda Item 05-10-4. Written or oral comments received 12 after the comment period is closed will not be accepted as 13 part of the official record on this agenda item. 14 Now, Mr. Counsel, we have ex partes on this, even 15 though it's a suggested -- 16 GENERAL COUNSEL JENNINGS: Yes. 17 ACTING CHAIRPERSON RIORDAN: Any ex parte on 18 behalf of the Board? No. 19 There is a Resolution before us. And the Chair 20 would entertain a motion. And if there are some suggested 21 accommodations, that would be appropriate to include it in 22 the motion. 23 SUPERVISOR ROBERTS: Everybody is looking down 24 here. 25 ACTING CHAIRPERSON RIORDAN: Well, I'm hopeful, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 1 guess. 2 SUPERVISOR ROBERTS: I would like to make the 3 motion, but I'd like to extend for the twelve months for 4 those products that would be affected. 5 ACTING CHAIRPERSON RIORDAN: So essentially your 6 motion would be to support the staff recommendation and 7 with an addition of additional time that could be given to 8 the particular items that were of concern, the smaller 9 items. 10 SUPERVISOR ROBERTS: That's correct. 11 SUPERVISOR PATRICK: And I'll second that. 12 ACTING CHAIRPERSON RIORDAN: We have a motion for 13 discussion. 14 Ms. Kennard. 15 BOARD MEMBER KENNARD: Yes. I have a question 16 regarding any risk other than obviously not obtaining the 17 reduction if we were to extend it for an additional year. 18 Are there any additional risks? 19 MEASURES ASSESSMENT BRANCH CHIEF FRY: It could 20 impact the enforceability of the rule. And it would delay 21 reduction of 1.7 tons per day for the single stage for 22 another year. 23 EXECUTIVE OFFICER WITHERSPOON: This measure is 24 also part of the state's SIP commitment for the South 25 Coast Air District. And we have to go back and check PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 1 whether it's part of the settlement language, though we 2 found the litigants to be fairly amenable to one year 3 delays where it was necessary to accomplish our goals. 4 ACTING CHAIRPERSON RIORDAN: And I'm also 5 understanding this is for a small portion of the bigger -- 6 EXECUTIVE OFFICER WITHERSPOON: For the small 7 ticket items is what I understood the motion to be. 8 ACTING CHAIRPERSON RIORDAN: Dr. Gong. 9 BOARD MEMBER GONG: Just real quick. Maybe 10 because the hour is late and I'm getting tired, but the 11 TBAC thing, how controversial is this chemical? 12 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, it's 13 controversial because it has the potential to be used in a 14 number of different areas to substitute for existing 15 compounds that clearly cause ozone. And, therefore, if 16 it's exempted, the air quality regulations could result in 17 substantial additional use. And we did an assessment of 18 what might the outcome of that be, and we pretty well 19 convinced ourselves that on net in general the reductions 20 in ozone would provide many times the health benefits that 21 the increase in its potential toxic effect may have. With 22 the one caveat that it's possible that if there's a very 23 large substitution at a shop that does a lot of business 24 that you could have increase in nearby neighborhood risk. 25 So that kind of issue is out there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 1 And it's also complicated by the fact that -- 2 this is in this case of many things. The science behind 3 this is not as well as defined as we would like it. It's 4 actually a metabolite of the TBAC once it's inhaled that 5 poses the risk, and that's somewhat speculative. We're 6 using the best analysis we can do in trying to be 7 straightforward with it. So the issue carries forth as it 8 looks pretty good. 9 But we have to be careful with how we make our 10 decision. The EPA has gone ahead and said it's not 11 photochemically reactive. We know it's okay for ozone, 12 but we want to be very careful before we do something that 13 ends up with a secondary toxic problem. We're being 14 cautious, and I think the industry that makes this would 15 hope we would be less cautious and is trying to give us 16 information to convince us that's a safe way to go. 17 BOARD MEMBER GONG: And, again, some air 18 districts may not agree with that; correct? 19 DEPUTY EXECUTIVE OFFICER SCHEIBLE: That's 20 correct. Or they may simply say it's fine that you use 21 it. But if you use more than this amount of paint, you 22 have to show us you're not using so much of it that it 23 could potentially result in a neighborhood problem. We 24 think in most applications in small shops it won't pose 25 that type of -- there's not enough of it to create a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 1 problem in nearby neighborhoods. 2 BOARD MEMBER GONG: Thank you. 3 ACTING CHAIRPERSON RIORDAN: Any other questions 4 for staff? 5 ASSISTANT CHIEF BARHAM: Just one question to 6 clarify the motion. That would be a one-year extension on 7 the primer sealers and the single-stage coatings. 8 MEASURES ASSESSMENT BRANCH CHIEF FRY: Only for 9 the non-fleet. 10 EXECUTIVE OFFICER WITHERSPOON: The small ticket 11 items, however you interpret that. 12 ACTING CHAIRPERSON RIORDAN: There are four. 13 It's in the testimony. 14 DEPUTY EXECUTIVE OFFICER SCHEIBLE: One 15 complicating factor will be districts that are pushed for 16 time may opt to accelerate the implementation of the 17 district. That's going to be their option. 18 ACTING CHAIRPERSON RIORDAN: That's their option. 19 And I'm sure that the industry will be there to plead 20 their case. 21 DEPUTY EXECUTIVE OFFICER SCHEIBLE: But in other 22 areas, the additional type would be available for more 23 training and that type of thing. 24 ACTING CHAIRPERSON RIORDAN: For whatever is 25 necessary. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 1 Board members, any further discussion? Then I'm 2 going to ask all those in favor of the motion signify by 3 saying aye. 4 (Ayes) 5 ACTING CHAIRPERSON RIORDAN: Opposed, no. 6 Motion carries. 7 Thank you very much. And for those of you who 8 said have stayed until this late hour, I appreciate that 9 fact. 10 Board members, thank you for your cooperation 11 today. We had a number of witnesses that I'm not sure I 12 anticipated. And so I appreciate the fact that you stayed 13 for this late hour. And we will adjourn and we will 14 reconvene in El Monte. 15 EXECUTIVE OFFICER WITHERSPOON: We will reconvene 16 at 2:00 p.m. next Thursday in El Monte. 17 GENERAL COUNSEL JENNINGS: I'm sorry, Ms. 18 Kennard. You were asking whether we need to have the open 19 session at the end. 20 BOARD MEMBER KENNARD: Yes. 21 GENERAL COUNSEL JENNINGS: Yes. You are 22 absolutely correct. 23 EXECUTIVE OFFICER WITHERSPOON: I believe no one 24 has signed up to speak in open session this evening. 25 ACTING CHAIRPERSON RIORDAN: That's my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 1 assumption. Usually we are presented with a document that 2 says there's somebody wishing to speak. 3 MS. KENNARD: I just want to reserve our right -- 4 I want to make sure we preserved our rights. 5 ACTING CHAIRPERSON RIORDAN: She's preserving her 6 rights not on open comment but on the alignment. 7 GENERAL COUNSEL JENNINGS: Absolutely. 8 EXECUTIVE OFFICER WITHERSPOON: And we will take 9 that up first thing next Thursday at the beginning of the 10 meeting with a report back on the Carl Moyer implications. 11 (Thereupon the California Air Resources Board 12 recessed at 5:39 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 1st day of November, 2005. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345