MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM CALIFORNIA AIR RESOURCES BOARD 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, OCTOBER 26, 1995 9:38 A.M. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Eugene A. Boston, M.D. Joseph C. Calhoun Lynne T. Edgerton M. Patricia Hilligoss John S. Lagarias Jack C. Parnell Barbara Riordan Ron Roberts James W. Silva Doug Vagim Staff: Jim Boyd, Executive Officer Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Mike Kenny, Chief Counsel Terry McGuire, Chief, Technical Support Division Peter Rooney, Executive Director, State Board of Food and Agriculture Don McNerny, Chief, Modeling and Meteorology Branch, TSD Jeff Wright, Associate Meteorologist, TSD Arndt Lorenzen, Manager, Meteorology Section, TSD Leslie Krinsk, Staff Counsel, Office of Legal Affairs Bob Cross, Assistant Chief, Mobile Source Division Bill Lovelace, Manager, Regulatory Section, MSD Kirk Oliver, Staff Counsel, Office of Legal Affairs Tom Jennings, Staff Counsel, Office of Legal Affairs Bill Loscutoff, Chief, Monitoring and Laboratory Division Jim Shikiya, Chief, Southern Laboratory Branch Annette Hebert, Manager, Inorganic Analysis Section, MSD Paul Rieger, Inorganic Analysis Section, MSD Kathleen Walsh, Staff Counsel, Office of Legal Affairs Pat Hutchens, Board Secretary Wendy Grandchamp, Secretary Bill Valdez, Administrative Services Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X PAGE Proceedings 1 Call to Order and Roll Call 1, 2 Pledge of Allegiance Led by Supervisor Riordan 2 Opening Remarks by Chairman Dunlap 2 AGENDA ITEMS: 95-10-1 Continuation of Public Meeting to Consider the First Biennial Report to Legislature on the Connelly-Areias- Chandler Rice Straw Burning Reduction Act of 1991 Introductory Remarks by Chairman Dunlap 2 Staff Presentation: Jim Boyd Executive Officer 3 Arndt Lorenzen Manager Meteorology Section Technical Support Division 4 Questions/Comments 8 Motion by Parnell to Approve the Report to Legislature 12 Discussion 12 (Suggestion to Staff) 13 Further Discussion 13 Roll Call Vote 29, 30 (Direction to Staff by Chairman) 30 Presentation of Award from MECA 31 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX, continued. . . PAGE Presentation of Award from Association of Energy Engineers 35 AGENDA ITEMS: 95-11-1 Public Meeting to Consider Approval of Guidelines for Generation of Mobile Source Emission Reduction Credits Through the Purchase of New, Reduced Emission Heavy-Duty Vehicles Introductory Remarks by Chairman Dunlap 38 Staff Presentation: Jim Boyd Executive Officer 39 Bill Lovelace Manager Regulatory Section, MSD 40 Questions/Comments 57 Motion by Calhoun to Approve Resolution 95-44 87 Entry into Record of Written Comments 87 Questions/Comments 89 (Direction to Staff) 89 Roll Call Vote 90, 91 95-11-2 Public Hearing to Consider Amending the Test Methods Designated for Determining the Benzene, Aromatic Hydrocarbon, Olefin, and Sulfur Content of Phase 2 Gasoline Introductory Remarks by Chairman Dunlap 91 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v INDEX, continued. . . PAGE AGENDA ITEMS: 95-11-2 Staff Presentation: Jim Boyd Executive Officer 92 Paul Rieger Inorganic Analysis Section Monitoring and Laboratory Division 94 Written Comments Entered into Record 101 Questions/Comments 105 PUBLIC COMMENTS: Donald Bea WSPA 106 Questions/Comments 108 Continued Comments by Mr. Bea 110 Questions/Comments 111 Continued Comments by Mr. Bea 112 Record of Item 95-11-2 officially closed, awaiting notice of 15-day comment period 113 Disclosure of Ex Parte Communications 114 Motion by Lagarias to Approve Resolution 95-45 114 Roll Call Vote 115, 116 Luncheon Recess 116 Afternoon Session 117 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX, continued. . . PAGE AGENDA ITEMS: 95-11-3 Public Meeting to Update Board on Technological Progress of Zero-Emission Vehicles Introductory Remarks by Chairman Dunlap 117 Staff Presentation: Jim Boyd Executive Officer 118 Bob Cross Assistant Chief Mobile Source Division 119 Questions/Comments 135 Fritz Kalhammer Co-Chairman Battery Technology Advisory Panel 142 Questions/Comments 171 PUBLIC COMMENTS: Jan Dunbar Division Chief Sacramento Fire Department 192 Questions/Comments 197 Joe Moore Sacramento Fire Department 198 Questions/Comments 199 Bill Somers Battalion Chief Stockton Fire Department 203 Questions/Comments 205 Darlene Skelton NIEVS 217 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX, continued. . . PAGE AGENDA ITEMS: 95-11-3 Questions/Comments 227 Terry Scortt Captain California Firefighters Association 238 Ralph Craven NIEVS 242 Questions/Comments 244 Direction to Staff 245, 246 Questions/Comments 246 Directions to Staff 251 Questions/Comments 252 Adjournment 260 Certificate of Reporter 261 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: Will the October California Air 4 Resources Board meeting please come to order? Madam 5 Secretary, if I could get you to call the roll? 6 MS. HUTCHENS: Boston? 7 DR. BOSTON: Here. 8 MS. HUTCHENS: Calhoun? 9 Edgerton? 10 MS. EDGERTON: Here. 11 MS. HUTCHENS: Hilligoss? 12 MAYOR HILLIGOSS: Here. 13 MS. HUTCHENS: Lagarias? 14 MR. LAGARIAS: Here. 15 MS. HUTCHENS: Parnell? 16 MR. PARNELL: Here. 17 MS. HUTCHENS: Riordan? 18 SUPERVISOR RIORDAN: Here. 19 MS. HUTCHENS: Roberts? 20 SUPERVISOR ROBERTS: Here. 21 MS. HUTCHENS: Silva? 22 SUPERVISOR SILVA: Here. 23 MS. HUTCHENS: Vagim? 24 SUPERVISOR VAGIM: Here. 25 MS. HUTCHENS: Chairman Dunlap. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 CHAIRMAN DUNLAP: Here. 2 I'd like to ask Supervisor Riordan to lead us in 3 the Pledge of Allegiance. So, will you all please rise? 4 SUPERVISOR RIORDAN: If you'd rise, please, and 5 join me in the pledge to our flag. 6 (Thereupon, all in the hearing room joined 7 in the Pledge of Allegiance.) 8 CHAIRMAN DUNLAP: Thank you. 9 I would like to remind those of you in the 10 audience who would like to present testimony to the Board on 11 any of today's agenda items to please sign up with the Board 12 Secretary to our left. And if you have written statements, 13 please be sure to give her 20 copies. 14 The first item on the agenda today is 95-10-1, a 15 continuation of a public meeting to consider the first 16 biennial report to the Legislature on the Connelly-Areias- 17 Chandler Rice Straw Burning Reduction Act of 1991. 18 This item is the continuation of the Board's 19 consideration of the draft report to the Legislature on the 20 progress to date of the implementation of this Burning 21 Reduction Act. 22 The law phases down the burning of rice straw in 23 the Sacramento Valley. Last month, the staff explained the 24 draft report, and the Board heard comments on that report 25 from 27 people. At the end of last month's meeting, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Board closed the session for oral comments and agreed to 2 accept written comments for a period of 10 days, and 3 postponed the discussion and decision on the draft report 4 until today's meeting. 5 Additional written comments not heard at the 6 September Board meeting have been provided to each of the 7 Board members. Although Board members, Silva, Roberts, and 8 Lagarias were not present last month to hear this item, I'm 9 advised that they have since reviewed the meeting's 10 transcript and they are prepared to participate in the 11 decision today. 12 I appreciate the efforts of those who have offered 13 comments on the matter and for the time that went into their 14 preparation and attendance here at this meeting and last 15 month's meeting. 16 The Board today will hear staff's summary of the 17 additional comments received, discuss the issue, and make a 18 decision. So, why don't we begin by asking Mr. Boyd to tell 19 us if he has any additional information for the Board. 20 MR. BOYD: Thank you, Mr. Chairman. A couple of 21 items. First, I would like to once again welcome Peter 22 Rooney of the Department of Food and Agriculture, who's 23 joined us at the staff table. As you recall, he was 24 introduced at our last meeting, and they at the Department, 25 and Peter in particular, played a very significant role in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 working on this subject, working with the affected 2 communities, and working with the staff of the Air Resources 3 Board. And we're grateful to Peter for the work that he's 4 done and for his being with us here today. 5 Secondly, staff has received 33 additional comment 6 letters, and we'll be summarizing them for the Board. And 7 also, the staff will give us a synopsis of the proposal that 8 the staff has put before the Board. 9 With that brief introduction, I would like to turn 10 the microphone over to Mr. Arndt Lorenzen, who's manager of 11 the Meteorology Section in our Technical Support Division, 12 who will provide us a synopsis of the letters and a synopsis 13 of our recommendation. 14 Mr. Lorenzen? 15 MR. LORENZEN: Thank you, Mr. Boyd. 16 Good morning, Chairman Dunlap and members of the 17 Board. As Mr. Boyd said, I will summarize the comment 18 letters we received in response to the final draft report to 19 the Legislature on the progress of the phase-down of rice 20 straw burning in the Sacramento Valley. 21 First, though, I would like to recall the report's 22 three principal recommendations regarding changes to the 23 Connelly-Areias-Chandler Rice Straw Burning Reduction Act of 24 1991. 25 The first recommendation would pause the annual PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 phase-down schedule on September 1st, 1996, to allow 50 2 percent of acres planted to be burned each year for an 3 additional three years. The phase-down scheduled would be 4 resumed on September 1st in the year 2000. 5 The second recommendation would retain the current 6 phase-down schedule for the critical fall burning period. 7 Under this recommendation, no more than 25 percent of the 8 rice straw could be burned during the fall after 1997.. 9 During the year 2003 and thereafter, burning would 10 be allowed only where disease was found to cause a 11 significant reduction in yield as provided by the current 12 law. 13 This recommendation would preserve nearly all of 14 the present Act's fall benefits and cause impacts of the 15 three-year pause to occur during the spring when smoke 16 problems are rare. 17 The third recommendation would establish a 18 mitigation fee for a five-year period, during which growers 19 would be allowed to burn 25 percent more acres than allowed 20 by the annual phase-down schedule if they pay a fee equal to 21 the average cost of incorporating straw into the soil. 22 The revenue generated from these fees would be 23 used to research and develop alternative uses of rice straw. 24 After hearing oral comments from 27 people at last month's 25 meeting, the Board closed the record for oral comments and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 allowed an additional 10 days for the submittal of written 2 comments. 3 Between the release of the final draft report and 4 the end of the 10-day comment period, the staff received 31 5 comment letter from persons who did not speak to the Board 6 at the September meeting. 7 Twenty-seven of the 31 letters are from citizens 8 who are concerned about the health consequences of rice 9 straw burning, and urge the Board to not accept the staff's 10 recommendation of a three-year pause. 11 These comments typically express concern that the 12 ARB was sacrificing the health and well-being of Valley 13 residents for a small increment in the rice growers' 14 profits. 15 A letter was received from Professor Bryan Jenkins 16 from the University of California at Davis, Department of 17 Biological and Agricultural Engineering. Professor Jenkins 18 discusses apparent flaws in AB 1378, such as not limiting 19 other agricultural burning in the Valley, and stresses the 20 need for a concerted effort to develop alternative uses for 21 agricultural wastes during the three-year pause. 22 Two letters were from the Boards of Supervisors of 23 Trinity and Amador Counties supporting the Colusa County 24 Board of Supervisors' resolution asking the Board to roll 25 back or halt the phase-down schedule. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 A letter from Senator Maurice Johannessen was 2 summarized in the Board Book, but was unclear. He supports 3 an annual phase-down pause, but not in the fall. 4 In addition to the 31 letters from people who did 5 not provide oral testimony last month, Ed Romano, Air 6 Pollution Control Officer of Glenn County, and Joe 7 Carrancho, a rice grower, each sent a letter subsequent to 8 speaking at last September's Board meeting. 9 Mr. Romano's letter stated that the draft report 10 was a step in the right direction. He stated that 11 phase-down limits in excess of 50 percent should apply only 12 during the fall, even after the year 2000, and that burning 13 for disease management be allowed during the spring without 14 approval from an agricultural commissioner. 15 Mr. Carrancho's letter requested that the phase- 16 down be rolled back to 30 percent for the 1995-96 burn year 17 and remain at that level until viable alternatives to rice 18 straw burning are available. 19 Ten additional letters were received after the 20 comment period closed. All of them opposed the pause and 21 the phase-down of rice straw burning. 22 This concludes the staff's summary of the written 23 reports -- correction -- the written comments received in 24 response to the draft report. 25 In addition, the staff intends to make five PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 nonsubstantive editorial changes to the final draft report. 2 This concludes my statement. 3 MR. SCHEIBLE: I'd just like to add a 4 clarification in response to the letter received from 5 Senator Johannessen. The staff's summary of the letter in 6 the Board's summary was somewhat unclear and, so, we wanted 7 to clarify that. The Senator's letter was not unclear. 8 CHAIRMAN DUNLAP: Okay. Thank you. 9 MR. BOYD: Mr. Chairman, just one closing comment. 10 I might note for the benefit of the Board and audience that 11 today is a no-burn day. So, if you look out there and see a 12 little haze on the horizon, it has nothing to do with 13 burning anything in the region. 14 CHAIRMAN DUNLAP: All right. Thanks, Mr. Boyd. 15 Do any of the Board members have any questions of 16 staff on the matter? Any clarification needed? 17 Supervisor Roberts? 18 SUPERVISOR ROBERTS: Thank you, Mr. Chairman. You 19 already stated, but I wanted to acknowledge, that we did 20 receive and I did read this rather lengthy report. I wanted 21 to compliment Nadine for the thoroughness of the testimony. 22 There was quite a bit to get through here. 23 CHAIRMAN DUNLAP: Thank you for being diligent. 24 And, Nadine, thank you for an accurate record. 25 Any other questions, comments? Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 Mr. Boyd, do you have anything else to add? 2 MR. BOYD: No, Mr. Chairman, other than to say our 3 position remains, as it was in the initial meeting, to 4 recommend the staff proposal, which has been worked out 5 cooperatively with the Department of Food & Agriculture. 6 And, admittedly, there are people on both sides of 7 the issue, and we have striven to do our best to protect and 8 to continue to protect the public's health. That is our 9 number one concern. But we, as always, have a concern for 10 the viability of the air quality program in this State. And 11 it depends a lot on the viability of the economy. A healthy 12 economy and a healthy environment have historically gone 13 hand in glove. And this agency has pioneered everything 14 that's done in that context. 15 Our concern here is beyond just pure economics. 16 It is a matter of very complicated issues of soil science 17 and what have you relative to continuing the incorporation 18 trend, and it also is a product of the inability of anyone 19 today to provide a viable alternative use. 20 And to stimulate the many uses that have been 21 identified for rice straw in other commercial enterprises, I 22 believe if some notoriety and attention can be given to that 23 subject -- there was one outspoken, but courageous, 24 gentleman here last month pointing out that he's trying to 25 find a niche in this arena. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 I think if some effort -- and perhaps the Food and 2 Ag Department and Committee that advises all on the subject 3 can get some additional help in stimulating that use, we can 4 solve multiple problems in this region in terms of the 5 economy, the use of an allegedly waste product, and continue 6 then to have the engine produce revenue that will allow us 7 to find continued programs to clean up the air in the area. 8 CHAIRMAN DUNLAP: Thank you. 9 I'd like to make a brief statement before we get 10 into taking action on this item. 11 This is an extremely difficult and emotional issue 12 for many people. These are really real life issues. The 13 Board is extremely cognizant of the impacts of rice straw 14 burning on public health and our goal, of course, is to 15 protect public health. 16 But the goal of environmental regulations is not 17 to close down a business or to destroy a way of life. 18 Sacramento Valley is home to more than 2500 rice farmers who 19 produce 90 percent of the rice grown in California. We have 20 to recognize that they face a very real threat to their 21 livelihood here if alternatives are not found, and if we 22 continue to phase out rice straw burning as dictated by the 23 Rice Straw Act. 24 We simply have to find a balance. Our challenge 25 is to protect the heart of the Rice Straw Act by preserving PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 the benefits to public health. We now recognize that the 2 spring months provide the kind of weather conditions that 3 readily disperse the rice straw smoke, and that the fall is 4 the time of year when there's the greatest threat to public 5 health. 6 The Connelly Act is an annual program. It doesn't 7 make that distinction between spring and the fall and the 8 relative impacts on public health. The recommendation in 9 the report protects the heart of the law by continuing to 10 phase down rice straw burning in the fall; that's when the 11 risk to public health is the greatest. 12 If we can find real solutions to the problems that 13 rice growers face, we will achieve the kind of feasible and 14 cost-effective alternatives to rice straw burning that the 15 Rice Straw Act requires us to search for. But we need time 16 to do that. 17 The goal of the Act was to find the alternatives 18 necessary to make rice straw burning a thing of the past and 19 to protect public health. This recommendation buys us the 20 time to realize that goal while continuing to protect public 21 health. 22 So, with that, I would like to open up any Board 23 discussion. And I'd certainly be looking for a motion on 24 this item. 25 MR. PARNELL: Mr. Chairman? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 CHAIRMAN DUNLAP: Mr. Parnell. 2 MR. PARNELL: If I may, I guess this is a great 3 opportunity to make a speech, which I will forego. But I 4 think Mr. Boyd summed up my thoughts without question, and 5 that is: Hand in hand go environmental quality and the 6 economy of a region. 7 And certainly, my compliments to the staff for 8 having done what I consider to be outstanding work in trying 9 to measure and to weigh all of the competing interests and 10 to try to not walk down the center line, but rather do what 11 is absolutely right in this instance. 12 And so, with that, I will make the motion to 13 submit the report as submitted to us by the staff. 14 CHAIRMAN DUNLAP: Okay. We have a motion. Do we 15 have a second? 16 SUPERVISOR VAGIM: Mr. Chairman, second. 17 CHAIRMAN DUNLAP: Okay. Any discussion? 18 MR. LAGARIAS: Mr. Chairman? 19 CHAIRMAN DUNLAP: Mr. Lagarias. 20 MR. LAGARIAS: I was unable to attend the meeting 21 but, like Supervisor Roberts, I've gone through the 22 transcript of the meeting and read the reports. So, my 23 questions are still pretty much answered. I do have a 24 couple comments before you work on this. 25 CHAIRMAN DUNLAP: Sure, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 MR. LAGARIAS: I think the burning of the rice 2 straw might be improved. The plan, as I understand it, is 3 the Sacramento Valley has a program, in which the ARB 4 participates with the growers, in determining when there 5 should be a burn or no-burn day and how it should be done. 6 I think there might be improvements in that plan. 7 And I would like to see our staff work more vigorously to 8 see if we can't prevent infrequent occurrences that result 9 in greater pollution than we have now. And if we can get a 10 more rigorous program of when burn and no-burn can occur and 11 how large it should be, we may be able, at least for now, to 12 reduce the magnitude of the problem. 13 CHAIRMAN DUNLAP: I would echo that and say that 14 we certainly need to tie down our predictive capabilities so 15 that we're as protective of human exposure as possible. I 16 think that's a good point, Mr. Lagarias. 17 Ms. Edgerton. 18 MS. EDGERTON: The testimony at the last meeting 19 was very moving and of tremendous concern to me. It was 20 quite dramatic. Those of you who were here will recall 21 children with gas masks appearing before us, and that was 22 very, very poignant. 23 It doesn't change the fact, though, that the law 24 that was passed by the Legislature, in my view, contemplated 25 finding alternatives which would be effective to make a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 transition. And those alternatives have not appeared as 2 rapidly as we had hoped. That is critical to the success of 3 the legislation. 4 So, I would ask those of you who came bringing 5 your children and your hearts to -- not to walk away from 6 this meeting upset with us, but to come closer to us and 7 help us find those alternatives so that we can achieve a 8 sustainable program for rice growing here in Sacramento. 9 Stay with us, please. 10 CHAIRMAN DUNLAP: Thank you. Any other? 11 Supervisor Roberts. 12 SUPERVISOR ROBERTS: Thank you, Mr. Chairman. As 13 I read this, I had two concerns, and I think Mr. Lagarias 14 has perhaps touched on one, and that was the -- what seemed 15 to be a rather disastrous day last year, and I think it was 16 November 1st that was referred to in the testimony. 17 My first concern would be to do whatever we could 18 to see that that type of thing doesn't occur as in the past. 19 And I think that's what his comment was addressed to. 20 CHAIRMAN DUNLAP: Sure. 21 SUPERVISOR ROBERTS: The second thing that 22 concerned me, as I read this, was the way that the law has 23 developed, which has a percentage as a basis, which, as it 24 presently stands, could allow a subsequent year to provide 25 for more burning than a prior year because of the amount of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 acreage that would be planted. 2 Somehow that doesn't -- it seems to me that that 3 is a flaw, especially if we're going to be talking about a 4 pause. It would disappoint me to see a pause, where we 5 actually then have more burning in a second year than we 6 have in a first year. 7 And I would like to offer up a suggestion that our 8 recommendation include language that in no event will the 9 total acreage available in any year -- the total acreage 10 available to burn in any year exceed the acreage available 11 in any prior year; so that we know, in fact, irrespective of 12 how those years may spike up and down, with respect to the 13 burning, we're not going to see an increase in lands 14 available. And I think that's as it should be. 15 CHAIRMAN DUNLAP: On that point, if I could ask, 16 Mr. Scheible and your team, if you'd address that point 17 about possible or likely increases in total acreage burned. 18 And also, Mr. Rooney, if you have a perspective there, we'd 19 like to hear it. 20 MR. SCHEIBLE: We believe that what we saw at the 21 beginning of the Act, which was, as the phase-down came into 22 effect for the 10 and 20 percent level, what we saw was an 23 increase in acreage planted of about that magnitude in the 24 first two years really that the Act prevented acres from 25 being burned that would have otherwise been burned, but did PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 not reduce it over the base. 2 As we go forth and we go to the 40 and 50 percent 3 phase-down level, that is not expected to happen; that we 4 are pretty close in the past year to the top acreage that 5 would be expected to be planted. 6 However, the way the law is designed now, if you 7 did have a low-planting year at the 50 percent level 8 followed by a higher planting year, more acreage would be 9 allowed, so that it is possible for the acres during a pause 10 to be higher in a subsequent year than they were in the 11 previous. 12 That was, evidently, the intent of the Legislature 13 not to limit the absolute acreage, but to tie it to a 14 percentage. 15 CHAIRMAN DUNLAP: Mr. Rooney, is it likely that 16 that could occur? 17 MR. ROONEY: It's conceivable. If you look back 18 at the cycle that's reproduced on page 3-2, the rice 19 industry does reflect market conditions. And last year, we 20 did have 484,000 acres planted; this year, we have 450. 21 Conceivably, in that three-year cycle, the cycle might turn 22 again. 23 It looks like we're going down and that during the 24 phase-out of the moratorium years, it's conceivable by the 25 last year of that, that the downward trend may be reversed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 and Supervisor Roberts' point is well taken. 2 If you look at the structure of the Act, the 3 Legislature tried to build into the Act the concern that is 4 raised, and that is that an overall cap of around 500,000 5 acres seems to be the number that's implied in the 6 legislation. Because, if you look -- starting in the year 7 l9-- of the year 2000, growers would be -- the maximum they 8 could burn would be 25 percent of the planted acreage or a 9 maximum of 125,000 acres. 10 Multiplying that out, the Legislature came up with 11 the number of 500,000 as a maximum cap. So, you know, in my 12 discussions with people who were familiar with the 13 legislative debate, they say that the number was settled on 14 after much discourse; that a portion of the debate wanted a 15 number higher, the actual historic high of the industry. 16 Others felt, just as Supervisor Roberts' point, if we're 17 going to make headway in reducing it, that we have to have a 18 realistic number. And 500,000 was the number that the 19 Legislature came up with. 20 Now, the industry has not grown 500,000 acres 21 since 1981-82. The highest prior to that time was last year 22 at 484,000. And we think now that statewide, there's 23 450,000 acres this year; let's assume that 15,000 of it's in 24 the San Joaquin Valley. So, we're around 435,000 in the 25 Sacramento Valley. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 So, the point is, yes, it is a cyclical business. 2 I did have just one question, Supervisor. The language you 3 used was that of the actual acreage burnt the prior year or 4 the actual acreage available to burn? 5 SUPERVISOR ROBERTS: I was speaking of the acreage 6 available, and for this reason: In some years, they don't 7 burn the total acreage available, and I would like not to 8 set up a situation where we created a disincentive for them 9 to burn less in a given year, feeling they've got to burn it 10 to the limit in order to maintain that number. 11 So, I think if we worked off the base -- what 12 really assures that in every year, the acreage available 13 will continue to go down or, at the very worst, be equal to 14 what it was in prior years. Because I think that's really 15 what we're trying to do. Yet the way that it stands right 16 now, it can go up. And I think that's a mistake in terms of 17 what we're trying to achieve. 18 Now, we're talking about a pause. We're talking 19 about something that's different from the original 20 legislation, and we're talking about making a recommendation 21 that will be fair to the farmers and at least give the 22 assurance to the people of the community that this thing is 23 going to continue on a course downward. And I think this 24 would do it. 25 CHAIRMAN DUNLAP: I think the intent, though, is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 the pause will allow the alternatives to emerge or be more 2 successfully developed so they can be utilized; so, we'll 3 ultimately end up with much less burning anyway. 4 Supervisor Silva, and then Jack, if you had 5 anything? 6 SUPERVISOR SILVA: Thank you. I think the public 7 health issue is the primary issue of the entire society, not 8 just the people that live in the Sacramento Valley Air 9 Basin. 10 And basically, this is where the tire meets the 11 road -- economics versus health or human exposure. And I 12 have spoken with some of the local citizens up here, and 13 I've tried to get as much input as I can from the people who 14 are actually affected by this, as well as spending time with 15 our staff. 16 There are other States, also there are other 17 countries, that produce large rice crops. How do they 18 handle the elimination of the straw and preventing the rot? 19 MR. ROONEY: It's our understanding that in the 20 South -- Arkansas is a major rice producer and Louisiana -- 21 and because of the humid conditions there, decomposition of 22 the rice straw is a rather rapid process as opposed to our 23 basically arid condition here, where the only decomposition 24 that's going to occur is to the extent the straw is 25 reintroduced to the soil early enough in the season and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 water applied to it, so that decomposition can take place 2 while there's still some warmth in the soil. 3 As we get into the winter, the cold winter, 4 basically, the decomposition process is significantly 5 retarded. And so, it presents a different problem here than 6 it does in Arkansas. And that's the major distinction. 7 Some of the other countries -- certainly, I've 8 landed in Bangkok and was amazed to see burnt fields, field 9 where rice was being transplanted into the fields, and other 10 fields where the rice was ready to harvest. So, it's just a 11 totally culture of growing rice. And, of course, Thailand 12 is the world's leader in rice production. 13 I think in Japan, where you have rice paddies of, 14 you know, one hectare or so in size, where rice is gathered 15 up in full stalks and taken to a central threshing point, 16 the straw isn't still in the field. It's mechanically 17 removed, taken off to a processing plant for entirely 18 different reasons than the type of commercial agriculture 19 that we have here. 20 So, those are some of the problems that lead to 21 it. And I know Jack Parnell -- certainly, his experience 22 with USDA -- probably saw a lot of that himself. 23 CHAIRMAN DUNLAP: Mr. Parnell. 24 MR. PARNELL: I did. And let me just say that I 25 don't wish to elongate the discussion. But if Supervisor PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 Roberts' comments are intended to raise issues of concern 2 that we might ponder as this moves forward into the real 3 debate, which will occur in the Legislature, you know, I 4 accept those as constructive. 5 If the intent is to change the report, I don't 6 accept that. And I guess I would argue that it's a 7 complicated formula that will have potentially some 8 undesired effects. And I would like to have time to look at 9 it very carefully if that was the intent. 10 But I would also like to say that, if you look at 11 this in the context of what's going on nationally in the 12 federal budget and what the rice growers are going to have 13 to be looking forward to, and the flexibility that will be 14 granted them, acreage is a function somewhat of those 15 programs that have been placed in place by the Federal 16 Government and partially market-driven as well. 17 But we have a situation now where the pressures on 18 the federal budget are going to dictate that those programs 19 may disappear entirely over a period of a few years. I 20 suspect that that will lead to a substantial reduction in 21 rice growing, not an increase in rice acreage. 22 So, I only say that in support of recognizing, 23 Supervisor Roberts, that there is a concern -- it is a 24 legitimate concern -- that, as to changing this report at 25 this point without complete and thorough debate, I would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 have to be opposed to that kind of an amendment if that was 2 your intent. 3 CHAIRMAN DUNLAP: Okay. 4 MR. BOYD: Mr. Chairman, might I address a 5 question -- perhaps to Peter. Maybe he can help me here. 6 In listening to this discussion, I know from the 7 experience of working in this arena for a long time, that 8 one of the crises -- I guess many crises -- facing 9 California agriculture, one of them is the pressure on 10 available land -- I mean the incredible population growth 11 and the spread of development. 12 And I just had a question as to whether that 13 dilemma is also facing the land availability in the region 14 where rice is grown -- 15 MR. PARNELL: Absolutely. 16 MR. BOYD: -- and whether that pressure alone 17 might prohibit in and of itself much expansion of available 18 acreage to be grown, and thus eligible to be burned. But I 19 frankly don't know the answer to that in this region. I 20 know the answer in other regions in this State, because I 21 know many people, ourselves included, have been address this 22 loss of agricultural land. 23 MR. ROONEY: I think the points well taken. Just 24 yesterday, the American Farm Land Trust released their 25 report on growth in the entire Central Valley, and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 amount of land that will be converted by, you know, a 2 relatively short time to urban uses. 3 And if we look at Sacramento, Sutter County 4 certainly, the Natomas area -- obviously it's a situation 5 where the expansion of Sacramento in a relatively short time 6 is going to make farming, you know, a thing of the past. 7 And if we get into Sutter County, we have a situation of 8 Sutter Bay development, New Town right in the heart of the 9 rice country. It's bound to occur. 10 And, as we get up farther into the Valley, there's 11 probably even less pressure; but, nonetheless, as people 12 move from the coastal areas into the Valley, it's bound to 13 just continue to eat up the land. 14 And interestingly enough, in the long-term 15 perspective, it might be the best solution to convert some 16 of the less productive land from the bigger picture, which 17 is rice land, as opposed to the more fertile soils in the 18 various river bottoms. 19 And I'm not about to -- you folks that are in 20 local government and see the land planning issues are far 21 more knowledgeable than I. But, as from the Agriculture 22 Department's point of view, given the choice of converting 23 marginal farm lands versus Class One, the highest soils, we 24 would rather see urban growth on the more marginal soils. 25 And rice -- and that's part of the problem of why PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 we have this problem of rice on rice, on rice, on rice, on 2 rice every year is because the land doesn't lend itself to 3 rotations and to a whole mix of crops. 4 CHAIRMAN DUNLAP: Mr. Lagarias, then Supervisor 5 Silva. 6 MR. LAGARIAS: Mr. Chairman, I think that the 7 comments being made today might very well be suited in a 8 transmittal letter with the report -- 9 CHAIRMAN DUNLAP: Good point. 10 MR. LAGARIAS: -- presuming that it goes forward. 11 But I was particularly struck by the Advisory 12 Committee on Alternatives to Rice Burning, and the 13 suggestions Ms. Edgerton presented on finding economic 14 alternatives to rice burning. 15 I think they are probably down the road apiece and 16 do not address the time issues that we're facing. But I was 17 struck with the fact that, when we burn rice, we destroy it 18 in a matter of hours. When we incorporate rice straw into 19 the soil, it's destroyed in a matter of months or longer. 20 And we get the benefits of air pollution reduction as a 21 result. 22 I always look for a compromise. And I would like 23 to see some oxidation process encouraged using microbes that 24 would destroy the rice in a matter of weeks. In other 25 words, instead of a back yard incinerator, you have a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 compost pile. 2 And I would encourage the professors to look and 3 see if there can't be accelerated ways of destroying the 4 rice straw without burning it and still oxidizing it. 5 CHAIRMAN DUNLAP: Good point. I think great care 6 should be taken after our action relative to the transmittal 7 of our recommendations. 8 Okay. Supervisor Silva. 9 SUPERVISOR SILVA: Just real quick. After reading 10 the material that was presented to me, I feel that the staff 11 recommendation is fair. I'm sure there are people on both 12 sides that probably would be in disagreement. But I am 13 prepared to support the recommendation. 14 CHAIRMAN DUNLAP: Okay. Very good. Dr. Boston. 15 DR. BOSTON: It's been a very difficult item for 16 me. I would certainly like to see burning stopped all 17 together. I think it's very clear that the acute health 18 effects at least are very real. I think that the testimony 19 we had is accurate, it's believable, and I think the people 20 were very sincere. 21 I think the long-term effects, however, are less 22 clear, and the thing that really probably turned it for me 23 was the fact that we were guaranteed that there be no 24 further burning during the fall season when the season is 25 the worst for the movement of the smoke. So, as a health PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 person, I would certainly like to see the smoke stopped all 2 together. Coming from a farming family, I can see the other 3 side. 4 And with the assurance that there will be no 5 worsening of the smoke in the fall season, I'm going to vote 6 for the item. 7 CHAIRMAN DUNLAP: Okay. Very well. If there are 8 no other comments or questions, I guess we'll call the 9 question. 10 SUPERVISOR ROBERTS: Mr. Chairman? 11 CHAIRMAN DUNLAP: Sure, Supervisor Roberts. 12 SUPERVISOR ROBERTS: I remain concerned with the 13 point I made, and I'm not sure what "ponder" means and I"m 14 not sure what a "letter of transmittal" means. 15 Perhaps some of you veterans on this Board would 16 share with me what does that relegate that to? Because I 17 feel uncomfortable right now. 18 CHAIRMAN DUNLAP: Well, two points. I'll let Jack 19 interpret part of that if he needs to. But when the Board 20 takes action, we will transmit our recommendation and the 21 report, the form the report is in, to the Legislature. 22 That transmittal letter and what is said in it is 23 of import to us, in that the Legislature would be 24 considering the recommendations in this report and may have 25 legislation in mind. They may want to make some changes to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 the Act as a result of it. 2 So, we want to be particularly sensitive and 3 careful in what we say and how we say it as it relates to 4 what you would suggested about possible changes to the 5 report. 6 As I heard Mr. Parnell, he is not willing to 7 accept it as part of the recommendations at this point for 8 his motion. So, we'll call the question. If the motion 9 fails, then we'll turn the time back to you -- 10 SUPERVISOR ROBERTS: Are you talking about that in 11 the transmittal letter, that that issue which I raised will 12 be mentioned or it won't be mentioned? It's not clear to me 13 what you're saying. 14 CHAIRMAN DUNLAP: It is possible for us to add 15 that in a transmittal letter. 16 SUPERVISOR ROBERTS: Okay. I guess I'm asking for 17 clarification whether it will be in the transmittal letter 18 or it won't be in the transmittal letter. 19 Because I will tell you that what I hear is that 20 everybody is kind of dancing around this thing and saying 21 it's very likely that this is what's going to occur, but 22 nobody wants to ensure that that is what's going to occur. 23 And that leaves me with some level of discomfort. 24 CHAIRMAN DUNLAP: I will be happy to direct staff 25 after we take action, as we ready the transmittal letter, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 make sure that the full -- to the extent we can in a letter, 2 cover the full sense and interest of the Board. So, Ron, 3 we'll find a way to include that concern in it. 4 SUPERVISOR ROBERTS: Thank you. 5 MS. EDGERTON: I would like to agree with 6 Supervisor Roberts that -- if I understood you correctly -- 7 I did not think that the report highlighted sufficiently the 8 effect -- what had happened in terms of whether there was a 9 real net reduction each year in the burning. 10 And it seemed to me that in the report -- I found 11 it, and it's been discussed here, but it didn't seem to me 12 that it was as clear as it might have been that this was 13 potentially a tremendous limitation in that Act if the 14 Legislature is sincere about having a reduction every year 15 in the smoke -- in the burning. 16 So, I would very much like -- that is something 17 that if -- I don't want to stop the report at this point. 18 But I do -- I would feel more comfortable with assurance 19 that there would be a transmittal letter that would, you 20 know, clearly state that we recognize and discussed that the 21 legislation, as now drafted, does not -- has not delivered 22 the net reductions that one might have expected from a piece 23 of legislation with its title. 24 CHAIRMAN DUNLAP: Good point. We will -- I will 25 ensure that great care is taken as we develop this letter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 after we take the action. 2 But, at this point, unless there's anything else, 3 I would like to ask the Board Secretary to call the roll. 4 MS. HUTCHENS: Boston? 5 DR. BOSTON: Yes. 6 MS. HUTCHENS: Calhoun? 7 MR. CALHOUN: Aye. 8 MS. HUTCHENS: Edgerton? 9 MS. EDGERTON: Yes. 10 MS. HUTCHENS: Hilligoss? 11 MAYOR HILLIGOSS: Aye. 12 MS. HUTCHENS: Lagarias? 13 MR. LAGARIAS: Yes. 14 MS. HUTCHENS: Parnell? 15 MR. PARNELL: Aye. 16 MS. HUTCHENS: Riordan? 17 SUPERVISOR RIORDAN: Aye. 18 MS. HUTCHENS: Roberts? 19 SUPERVISOR ROBERTS: Aye. 20 MS. HUTCHENS: Silva? 21 SUPERVISOR SILVA: Aye. 22 MS. HUTCHENS: Vagim? 23 SUPERVISOR VAGIM: Aye. 24 MS. HUTCHENS: Chairman Dunlap. 25 CHAIRMAN DUNLAP: Aye. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 MS. HUTCHENS: The motion passes 11 to 0. 2 CHAIRMAN DUNLAP: Very well. Thank you. Mr. 3 Boyd, as we craft the transmittal letter on this report, I 4 would like for you to give great care in the development of 5 this letter. I would like for you to seek input from my 6 colleagues on the Board and make sure that it represents the 7 sentiments of the Board members here and the discussion that 8 we've had this day on this item. Okay? 9 MR. BOYD: Yes, Mr. Chairman. We'll take that 10 into account. 11 CHAIRMAN DUNLAP: All right. Very good. Thank 12 you. And I'd like to recognize the Advisory Committee, Mr. 13 Forest, that he chaired, and the efforts of Food and Ag and 14 others working closely together to bring this item to us. 15 Thank you very much. 16 Okay. Before we continue with the next agenda 17 item this morning, I'd like to take a few moments for a 18 couple of awards to be presented to the Board. As the 19 members of the Board know, the ARB is a world leader in its 20 commitment to clean air and the efforts that it carries out 21 to manage air quality issues. It has been the recipient of 22 numerous awards on a variety of fronts related to air 23 quality and public health protection. 24 First, I'd like to introduce Mr. Bruce Bertelsen, 25 the Executive Director of the Manufacturers of Emission PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 Controls Association, or MECA. 2 In September, MECA held in reception in 3 Washington, D.C. celebrating the 20th anniversary of the 4 automotive catalyst, and honoring individuals and 5 institutions who have made extraordinary contributions to 6 clean air. 7 The ARB was one of the honorees, but was not able 8 to send a representative to receive the award at that time. 9 I think that was our Board meeting day as I recall. 10 So, I've asked Mr. Bertelsen to attend our Board 11 meeting today to present the award to the Board. And since 12 Mr. Roberts is closest to you, Mr. Bertelsen, I'll ask him 13 to stand to your side and you can make the presentation to 14 him on our behalf. 15 Good morning. 16 MR. BERTELSEN: Thank you very much, Chairman 17 Dunlap, members of the Board. It's certainly a pleasure to 18 be here today. 19 And on the occasion of the 20th anniversary of the 20 automotive catalyst, MECA is pleased to honor the Air 21 Resources Board for its pioneering efforts in establishing 22 and expanding the California motor vehicle emission control 23 program. 24 The California program created the regulatory 25 incentive which helped lead to the development, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 commercialization, and continued evolution on the automotive 2 catalyst. 3 California was the first jurisdiction worldwide to 4 establish a control problem to control exhaust emissions 5 from new motor vehicles. The program has contributed 6 significantly to the enormous progress that has been 7 achieved in improving California's air quality over the past 8 three decades. 9 The California program has also served as a model 10 for the U.S. motor vehicle program, and a growing number of 11 countries around the world look to California in developing 12 their motor vehicle control programs. 13 The technological cornerstone to the California 14 and U.S. motor vehicle program was, of course, the 15 automotive catalyst, which was introduced on 1975 model 16 year's automobiles nationwide. 17 Today's catalyst-equipped vehicles emit a small 18 fraction of the pollution compared to the 1960s vintage 19 automobile. Indeed, since 1970, emissions from motor 20 vehicles have been cut by over 1.5 billion tons in the U.S., 21 and the catalytic converter has made a critical role in this 22 achievement. 23 The important technological development of the 24 catalytic converter simply would not have occurred without 25 the leadership and vision of the Air Resources Board. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 California program, established in 1960, not only led to the 2 introduction of the automotive catalyst, but later 3 refinements to the program led to further significant 4 developments. 5 One very good example of that was in the 1970s, 6 when the Air Resources Board established a tight oxides of 7 nitrogen standard, which resulted in the introduction of the 8 three-way catalytic converter. 9 More recently, the creation of the low-emission 10 vehicle program in 1990, has resulted in further 11 evolutionary breakthroughs in catalyst technology. And, as 12 California continues to strengthen its motor vehicle program 13 in the future, no doubt, further technological developments 14 will occur as well. 15 We commend the Board for its enormous 16 accomplishments in helping to clean up the air for the 17 residents of California and for its continuing leadership in 18 developing and implementing the California motor vehicle 19 emission control program. 20 In recognition of the Board's contribution to 21 clean air, we're pleased to make a contribution to the 22 University of Southern California's School of Engineering 23 Geoffrey A. Calhoun Memorial Scholarship. 24 We also would like to present a small remembrance 25 of this occasion. Again, I'd like to thank members of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 Board, the staff, and former members of the Board and staff 2 for your enormous contribution over the years. You've 3 really made a difference, not only in California, but 4 throughout this country and, today, throughout the world. 5 Thank you very, very much. 6 CHAIRMAN DUNLAP: Thank you, Mr. Bertelsen, 7 appreciate it. 8 Joe, would you go help Ron carry the trophy back 9 here? 10 (Applause.) 11 Would you mind saying a word or two about the 12 donation to the scholarship fund? 13 MR. BERTELSEN: Right. We are making a 14 contribution to USC's School of Engineering Geoffrey A. 15 Calhoun Memorial Scholarship Fund. We thought that was an 16 appropriate way to express our appreciation and will, in a 17 small way, hopefully encourage others to get into the field 18 and continue the fine work that has gone on in automotive 19 technology, and we thought it would be an appropriate way to 20 honor the Board members. 21 CHAIRMAN DUNLAP: Thank you. Thank you for that 22 generous donation as well. 23 Thanks, gentlemen. Jim, will you find a place of 24 honor for our trophy somewhere in our building? 25 MR. BOYD: Indeed, Mr. Chairman, it will be a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 great pleasure. 2 CHAIRMAN DUNLAP: Very good. Thank you. 3 MR. CALHOUN: Mr. Chairman? 4 CHAIRMAN DUNLAP: Mr. Calhoun. 5 MR. CALHOUN: Obviously, I am moved by this 6 generous donation from MECA. I'd like to thank you very 7 much, and I hope that you will convey my thanks to the 8 member companies of your association. 9 Thank you very much. 10 MR. BERTELSEN: Thank you very much, Joe. 11 CHAIRMAN DUNLAP: Also here today to present the 12 ARB with an environmental project of the year award for its 13 low-emission vehicle/clean fuels program is Mr. Mike Broso 14 of the Association of Energy Engineers, AEE. Mr. Broso is 15 the City of Roseville's Electric Resources Manager and the 16 awards chairman. 17 Thank you for joining us today. We appreciate 18 your presence. 19 MR. BROSO: Thank you very much, Mr. Chairman and 20 members of the Board. 21 As you indicated, my name is Mike Broso. I'm Vice 22 President Sierra-Sacramento Chapter of the Association of 23 Energy Engineers. 24 And I'm here today to recognize the efforts of the 25 California Air Resources Board and its staff for the low- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 emission vehicles/clean fuels program. 2 As you are aware, this program will reduce vehicle 3 emissions by about 50 percent below previous standards and, 4 clearly, it's a dramatic step forward in controlling air 5 pollution in the region and in the State of California. 6 The program will also lead to an infrastructure 7 for alternative fuels as well as zero-emission vehicles, 8 which will further reduce pollution and, even more 9 importantly perhaps, promote innovative technologies within 10 the State of California. 11 The low-emission/clean fuels program we believe 12 has established a benchmark for the rest of the nation and 13 deserves recognition. As a result and as a representative 14 of the Association of Energy Engineers, I would like to 15 present to the California Air Resources Board the West Coast 16 Regional Award for Environmental Project of the Year. 17 CHAIRMAN DUNLAP: Thank you very much. 18 MR. BROSO: (Speaking to Supervisor Roberts) Do 19 you get the award, also? 20 CHAIRMAN DUNLAP: No, we'll have Supervisor Vagim 21 grab this hardware. 22 MR. BROSO: I was going to say he's the lucky guy 23 for sitting there. 24 SUPERVISOR VAGIM: Thank you very much. 25 CHAIRMAN DUNLAP: Thank you for your generous PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 recognition. We appreciate it. 2 MR. BROSO: Thank you very much for your efforts. 3 (Applause.) 4 CHAIRMAN DUNLAP: All right. Mr. Boyd, I suppose 5 we should congratulate you as well for working with these 6 organizations. Good job to you and your team. 7 MR. BOYD: Thank you, Mr. Chairman. If I might 8 just say another word. I was a little emotional in the 9 previous award, and it was difficult for me to say anything 10 as I'm sure it is for Joe. I'd just like to say that it's a 11 particular pleasure to receive that award. As you know, Joe 12 was a long-time member of this staff -- 13 CHAIRMAN DUNLAP: Right. 14 MR. BOYD: -- of the Air Resources Board, as well 15 as working in the automotive industry, and sitting with your 16 Board. And we have great pride in the receipt of this 17 award, and we have particular pride in the way MECA directed 18 the award. And it just pleases us beyond words to have this 19 tribute to Joe and his family to be received in this way. 20 And I just want to say, Joe, for the staff, you 21 know, we've shared with you for a long, long time the 22 pleasures and the difficulties of working together, and 23 we're certainly with you during those moments and these 24 moments. And it is indeed a great pleasure. 25 CHAIRMAN DUNLAP: Well said, Jim. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 The second item on the agenda today is 95-11-1, a 2 public meeting to consider the approval of guidelines for 3 the generation of mobile source emission reduction credits 4 through the purchase of new, reduced emission heavy-duty 5 vehicles. 6 This item is the consideration of additions to the 7 previously approved mobile source emission reduction credit 8 guidelines. 9 In February of '93, the staff presented to this 10 Board guidelines for district use in developing rules for 11 generating emission reductions credits on based on mobile 12 source emission reductions. 13 At that meeting, we approved the guidelines for 14 use by the districts. In November of '93, the Board 15 approved additional guidelines to be included in the 16 original document. We continue to support the concept of 17 mobile source emission reduction credit programs as a useful 18 tool in meeting our air quality goals. 19 The guidelines being presented for our 20 consideration today are further additions to the previously 21 approved guidelines. They address an additional new 22 approach to credit generation that increases district 23 flexibility in developing such programs. 24 At this point, I'd like to ask Mr. Boyd to 25 introduce the item and begin the staff's presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 Jim? 2 MR. BOYD: Thank you, Mr. Chairman, members. 3 The guidelines presented today identify additional 4 procedures that the Board would recommend to districts that 5 choose to implement a mobile source emission reduction 6 credit program. 7 In developing these additional guidelines, we held 8 a workshop, received numerous verbal and written comments. 9 We considered all comments received in the formulation of 10 the additions to our guidelines. In particular, these 11 guidelines address the procedures for generating credits 12 through the purchase of new, reduced emission heavy-duty 13 vehicles. 14 The guidelines are an extension of those 15 previously approved by your Board for the generation of 16 credits through the purchase of new low-emission urban 17 transit buses. Specifically, they discuss hardware 18 certification, credit calculations and life, enforcement, 19 and the types of vehicles and engines that are eligible. 20 Districts, vehicle operators, and industry have 21 shown significant interest in generating credits through 22 this type of approach. Such credits may be used to meet the 23 need for emission offsets for new and expanding commercial 24 and industrial facilities, or to meet air quality goals and 25 their regulations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 Adding these guidelines for new heavy-duty vehicle 2 purchase credits to the mobile source emission reduction 3 credit guidelines will provide an additional opportunity for 4 industry to meet air quality requirements. By using these 5 guidelines to develop mobile source credit rules, the 6 districts will help ensure that their rules are approved by 7 this Board. 8 Today's staff presentation will provide an 9 overview of the guidelines proposed for generating these 10 credits from vehicle retrofits. 11 And with that, I'd like to introduce Mr. Bill 12 Lovelace of the Mobile Source Division, who will present the 13 proposed guidelines. Bill? 14 MR. LOVELACE: Thank you, Mr. Boyd, Mr. Chairman, 15 and members of the Board. 16 There are two objectives to today's presentation. 17 The first is to brief the Board on the proposed heavy-duty 18 vehicle credits guidelines. The second is to ask for the 19 Board's approval for addition of these specific guidelines 20 into the previously approved mobile source credits 21 guidelines document. 22 These are the major topics in the presentation. 23 First, I'll give a brief background on the subject of mobile 24 source credits, then I'll present the proposed guidelines 25 for generating credits from the purchase of new heavy-duty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 vehicles. Next, I'll discuss the previously approved 2 optional certification standards used in the guidelines, 3 along with a simple credit calculation. 4 Finally, I'll discuss the issues related to this 5 topic and then close with a summary and recommendation. 6 As background, I'll give a brief description and 7 history of ARB's mobile source credits efforts. The credit 8 cards shown on the slide are not facetious. Emission 9 reduction credits are used as credit and used to make up a 10 debit. It is an appropriate analogy and I'll explain how 11 the process works. 12 Emission reduction credits are a way of 13 transferring the effect of emission reductions from one 14 source to another. If a source's emissions are reduced 15 below the level it is otherwise required to meet, that extra 16 reduction could be credited to another emission source, such 17 that the second source may exceed its required level by the 18 amount of the credit. 19 The main idea is that there is no net increase in 20 emissions from the two sources. 21 Mobile source emission reduction credits are 22 simply credits generated by reducing the emissions from 23 mobile sources. Note that credit programs provide no direct 24 air quality benefit unless part of the credit is 25 deliberately set aside for that purpose. Otherwise, a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 credit of a particular amount is used to make up a debit of 2 the same amount. 3 Accurate credit accounting is important to ensure 4 the credit programs work as intended. From this follow the 5 three necessary criteria that must be met for an emission 6 reduction to be used as a credit. 7 First, the reduction must be surplus; that is, it 8 must be in excess of any Federal, State, or local 9 requirements, or to emission levels already occurring. 10 Second, this reduction must be real and 11 significant, not the result of creative bookkeeping or of 12 just recalibrating an engine such that some small, minor 13 reduction that may or may not be permanent takes place. 14 Finally, the reduction must be readily 15 quantifiable so that planning and regulatory agencies can 16 accurately account for the emissions trading and protect air 17 quality. 18 The Board has taken a nonregulatory approach to 19 mobile source credits. Specifically, this has been done by 20 approving and issuing guidelines to the local air quality 21 districts for their use in developing mobile source credit 22 rules and programs. 23 This slide and the next provide a short history of 24 the guidelines that the Board has approved to date. The 25 original set of mobile source emission reduction credit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 guidelines was approved by the Board in February, 1993. 2 That first set of guidelines covered three methods of 3 generating these credits -- accelerated vehicle retirement, 4 sometimes known as car scrapping; purchase of low-emission 5 urban transit buses instead of conventional buses; and 6 purchase of zero-emission vehicles before any requirements 7 for ZEVs. 8 Each of these scenarios has its own chapter in the 9 guidelines document. 10 In November, 1993, the Board approved the addition 11 of two more chapters to the guidelines. These covered the 12 generation of credits through the retrofit of existing 13 vehicles to low-emission configurations. 14 One chapter applied to the retrofit of light- and 15 medium-duty vehicles and the other to the retrofit of heavy- 16 duty vehicles. 17 How are credits calculated? It depends on the 18 specific category. For early retirement programs, the 19 emission reduction is equal to the difference between the 20 average emission for the vehicles of the model year of the 21 retired vehicle and the average emissions of the statewide 22 fleet at the time of retirement. 23 New bus purchase credits are based on the 24 difference between the mandatory standard as applied to the 25 bus that would otherwise have been procured and the optional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 certification standard of the new reduced emission bus and 2 engine. 3 For credits based on the purchase of a ZEV, the 4 emission reduction to be used is based on the difference 5 between the emissions of the typical vehicle which would 6 otherwise have been purchased and the emissions of the ZEV, 7 which are, of course, zero. 8 ZEV-based credits must be in excess of any 9 regulatory ZEV requirement. 10 A retrofit credit reduction is based on the 11 difference between the emission standard to which the 12 vehicle or engine was originally certified and the standard 13 to which the retrofit kit is certified. 14 Once the emission reduction has been determined, 15 it is assumed to occur over the appropriate expected 16 lifetime vehicle mileage. This allows the determination of 17 the lifetime vehicle emission reduction credit and the 18 length of the credit life. 19 Now, I'll talk about the proposed new guidelines, 20 the reason that we are here today. 21 The graphic on this title slide illustrates a 22 point that I made earlier -- that credit programs do not 23 have an air quality benefit. They involve transfers from 24 one source type to another, with a gain in one being a loss 25 in another, and an overall balancing out. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 The principles apply to the additions to the 2 guidelines we are proposing today. 3 These pie charts show the large amounts of NOx 4 produced by heavy-duty vehicles compared to other on-road 5 vehicles and in comparison to their numbers and total 6 vehicle miles traveled. 7 Because of the large per-vehicle emissions, 8 reducing emissions from just a few vehicles could generate a 9 significant quantity of emission reduction credits. The 10 proposed new heavy-duty vehicle credit guidelines are 11 extensions of the new low-emission bus credit guidelines 12 that the Board has already approved. A credit generating 13 heavy-duty vehicle uses an engine certified to an optional 14 NOx standard instead of the mandatory standard. 15 It is presumed that the conventional vehicle and 16 engine that would have been bought, if a reduced-emission 17 vehicle had not been chosen, would have been certified to 18 the mandatory standard in effect at the time of the 19 purchase. 20 The credit is calculated based on the difference 21 between the mandatory standard in effect at the time of 22 purchase and the optional certification standard of the new 23 reduced-emission vehicle and engine. 24 Heavy-duty engine emission standards are measured 25 in pollutant mass per unit off engine work provided; in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 case, grams per brake horsepower hour. This is compared to 2 light- and medium-duty vehicle standards that are expressed 3 in terms of grams per mile. The difference in the mandatory 4 standard and optional standards for heavy-duty engines must 5 be multiplied by a conversion factor which accounts for the 6 amount of work required to move the vehicle a certain 7 distance over its operating cycle. 8 The credit applicant has the opportunity to 9 provide the expected value of the conversion factor, subject 10 to review by the district and the ARB. 11 In addition, the expected life of the vehicle is 12 also the expected life of the credit. The credit applicant 13 should provide reasonable values for the conversion factor 14 and vehicle lifetime based on known data and previous 15 experience. 16 Of course, the operator is also expected to 17 maintain the reduced emission operating condition of the 18 vehicle. I want to emphasize that the heavy-duty vehicle 19 credit program, like the new urban bus program, is strictly 20 voluntary and that NOx is the only pollutant for which 21 credits can be granted. 22 Important components of the new heavy-duty vehicle 23 credit program are the optional certification standards as 24 previously adopted by the Board. These standards are the 25 measuring sticks by which credit amounts are calculated. By PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 way of background, this table shows the recent history of 2 new heavy-duty truck and bus engine mandatory NOx standards, 3 both California and Federal. 4 I want to call your attention to the change in the 5 truck NOx standard from five grams per brake horsepower hour 6 to four beginning in 1998. 7 This change in standard was adopted by the Board 8 at the end of June this year. 9 Optional certification standards for reduced 10 emission engines allows certification to emission levels 11 lower than the mandatory values. The optional standards, 12 also adopted by the Board in June, are then used to 13 calculate the amount which emissions are reduced below the 14 required levels from a particular engine or vehicle. 15 Such reductions would then be available for use in 16 mobile source credit programs of the sort being considered 17 here today. 18 This approach to using optional standards for 19 credit certification and calculation is the same as that 20 used in the urban bus credit guidelines previously approved 21 by the Board. I want to reiterate here that certification 22 to optional standards is strictly voluntary on the part of 23 the particular engine manufacturer and is only necessary to 24 take advantage of credit programs. 25 This table presents the optional certification PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 standards for new heavy-duty diesel engines. As I 2 mentioned, were approved by the Board at the June, 1995, 3 Board hearing. 4 For vehicles of model years 1995 through 1997, the 5 standards range from 3.5 grams down to 0.5 grams per brake 6 horsepower hour, inclusive, in 0.5 gram increments. 7 For 1998 and later model years, they range from 8 2.5 grams down to a half-gram in half-gram increments. 9 The maximum optional credit level is reduced in 10 1998 to correspond with the reduction in the mandatory 11 standard in that year. These levels are identical to those 12 previously adopted for urban bus use. 13 They were chosen to provide the manufacturers with 14 the maximum flexibility possible, while still meeting the 15 requirement that the subsequent emission reductions are 16 indeed surplus, real, and quantifiable. 17 There is no zero-emission optional standard 18 included in this table. This is because the engine 19 standards include test procedures specific to that type; 20 that is, a diesel or gasoline engine. However, zero- 21 emission heavy-duty vehicles would be eligible to generate 22 emission reduction credits. The value of zero would be used 23 rather than one of the values that you see here. 24 Some existing gasoline heavy-duty engines already 25 have NOx emission levels that are significantly lower than PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 the current mandatory standard. The Otto cycle here refers 2 to gasoline engines 3 Although there is a large amount of variability 4 between engine families, since the engines providing such 5 reductions are already commonly in use, the reductions would 6 not be eligible for use as credits, because they clearly are 7 not surplus. This concern dictates that lower maximum 8 optional standards be used for gasoline engines relative to 9 diesel engines to ensure the surplus nature of emission 10 reductions to be used for credit. 11 This also has the added effect of eliminating 12 incentives for simply switching from existing diesel engines 13 to existing gasoline engines, which would also violate the 14 surplus criterion. 15 This table presents the specific values for the 16 optional standards for heavy-duty gasoline engines. As done 17 for the diesel optional standards, the gasoline standards 18 were chosen to provide the manufacturers with the maximum 19 flexibility possible, while meeting the requirements of 20 surplus, real, and quantifiable. 21 This table clearly shows that the highest optional 22 credit levels are reduced in 1998 to correspond with the 23 reduction in the mandatory standard that would go into 24 effect in that year. 25 The next two slides will show how these optional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 standards are used to calculate the total emission 2 reductions and, thus, the total amount of credit to be 3 generated. 4 First, the conversion factor, which is the CF in 5 the slide, must be determined. The conventional way of 6 calculating this quantity is by dividing fuel density by 7 engine brake specific fuel consumption and by the vehicle 8 fuel mileage. 9 Assuming some typical values for these quantities, 10 as shown, results in a value of 2.1 brake horsepower hour 11 per mile for this particular case. 12 The credit proponent is requested to coordinate 13 the calculation of this value with the ARB staff to ensure 14 that reasonable values are generated. The proponent also is 15 free to submit other appropriately determined values. 16 Continuing with this example, consider the case of 17 a heavy-duty truck operator who purchases a reduced-emission 18 truck with an engine certified to, say, 2 grams per brake 19 horsepower hour of NOx. 20 Assuming the operator otherwise would have bought 21 a truck certified only to the current mandatory NOx standard 22 of 5 grams per brake horsepower hour, the operator is then 23 eligible to generate a NOx credit based on a reduction for 24 the difference of 3 grams per brake horsepower hour. 25 Making reasonable assumptions about the conversion PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 factor relating the engine work with miles traveled and 2 about the lifetime vehicle mileage accumulation, the total 3 credit amount is calculated to be more than 5 tons over the 4 life of the truck. 5 Four major issues have been brought up with 6 respect to these proposed guidelines. Several of these 7 issues were discussed at length during the June Board 8 meeting when the Board adopted the optional standards. 9 Engine manufacturer representatives have requested 10 that the increment size between the optional standard values 11 be reduced to provide more closely spaced values. This 12 table shows the half-gram increment size under discussion. 13 These representatives have made this request of the Board in 14 the past, mostly recently in June of this year when the 15 optional certification standards were presented to the 16 Board. 17 They have requested increment sizes ranging down 18 to 0.1 grams per brake horsepower hour down to a continuous 19 scale. They point out that this adjustment to the standards 20 would provide easier certification of engines and a closer 21 match between actual emissions and the certification 22 standard. 23 However, the staff is concerned that smaller 24 increments would encourage shaving of compliance margins, 25 resulting in reduced protection against measurement PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 uncertainty and engine-to-engine variability in emissions 2 performance. 3 The staff believes that the adopted structure 4 using half-gram increments adequately addresses this concern 5 and also is consistent with the urban bus optional standards 6 previously adopted by the Board. 7 The Board discussed this issue extensively at the 8 June Board meeting and directed the staff to reevaluate the 9 appropriateness of the present increment size once 10 sufficient related experience and data have been obtained. 11 We remain committed to doing just that. 12 This issue is a companion to the previous one and 13 it, too, was discussed extensively at the June Board 14 meeting. The manufacturer representatives requested that 15 the maximum optional standards, as shown in this table, are 16 too low and should be increased to bring them closer to the 17 mandatory standards. 18 They claim that this would also allow more engines 19 to be certified to optional standards. Again, this is a 20 request that has been made of the Board on previous 21 occasions. Again, the staff is concerned about the 22 incentive to shave compliance margins and the resulting 23 impact on the surplus, real, and quantifiable credit 24 requirements previously described. 25 Since compliance margins already exist, they do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 not meet the surplus criterion for use as mobile source 2 emission reduction credits. 3 The maximum optional standards shown are those 4 adopted by the Board four months ago and, as the Board 5 directed, we will also reexamine this issue. 6 This issue involves requests to allow credits for 7 engine replacement in existing vehicles, known as 8 "repowering," as opposed to purchasing a complete new 9 vehicle. The requesters suggest that the ceiling standards 10 for such repowering credits be the original engine 11 certification standard when it was new. This would result 12 in higher calculated emission reductions than would be 13 obtained by using the current mandatory standard as the 14 ceiling. 15 The staff is concerned that this scenario would 16 result in credits being given away for routine engine 17 replacement which would have occurred anyway. Such emission 18 reductions could not be considered surplus and, therefore, 19 cannot be used as a basis for generating credits. Instead, 20 the draft guidelines provide for repowering credits if the 21 replacement engine is certified to an optional standard 22 significantly cleaner than the current mandatory standard. 23 The ceiling standard used in the credit 24 calculations would be the current mandatory standard and not 25 the original engine certification standard regardless of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 age. 2 Requests have been made that the Board consider 3 credit guidelines for pollutants other than NOx. Proponents 4 suggest that credits for hydrocarbon, carbon monoxide, and 5 particulate matter would provide additional incentive for 6 increased development of equipment for controlling the 7 emissions of these other pollutants. 8 However, the staff notes that the level of 9 hydrocarbon and CO emissions from existing heavy-duty 10 engines -- both diesel and Otto cycle, or gasoline -- varies 11 significantly between engine families. And some engine 12 families, especially diesel engines, already emit these 13 pollutants at very low levels. 14 Such preexisting reductions are not surplus. And 15 ensuring that any further reductions would be truly surplus 16 would require standards too low to be practical. 17 There is another issue, and I don't have a slide 18 for this one. This relates to in-use testing, and I believe 19 that you will hear from one of the witnesses today present 20 some comments (sic). 21 Our proposed guidelines call for districts to 22 establish in-use testing programs to ensure emissions remain 23 where they are supposed to be, including during the useful 24 life of 290,000 miles, and after that lifetime when the 25 engine may be rebuilt. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 We've asked for this to make sure that air quality 2 is not adversely affected if the emissions exceed more than 3 one would expect. 4 Now, we received a comment from The Gas Company, 5 otherwise known as SoCal Gas, that because the ARB is 6 responsible for ensuring that engines are certified to a 7 particular standard, are durable regarding emissions, that 8 an in-use testing program is unnecessary. While not 9 disagreeing with this, that some testing is needed after the 10 useful life is up, the Engine Manufacturers Association also 11 has written comments along the same line, and I'll summarize 12 those comments at the appropriate time. 13 The staff believes that testing programs should be 14 instituted on a case-by-case basis. For example, if a 15 particular engine design were such that it could invite 16 tampering, that might be a case where we'd like to see some 17 tests to make sure that the engine that received credits is 18 performing as it was supposed to. 19 And we are not talking about a massive test 20 program here. We don't want to have an onerous test program 21 or emission testing every engine and vehicle. A program 22 like that would strain the resources of the credit 23 generator, the districts, and the ARB. 24 We envision working with project proponents and 25 the districts to determine what is appropriate, but we don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 want to completely eliminate the need for testing where it 2 is appropriate. 3 To summarize, the staff has developed guidelines 4 for the generation of mobile source credits through the 5 purchase of new reduced emission heavy-duty vehicles in lieu 6 of purchasing conventional heavy-duty vehicles. 7 These proposed new guidelines are patterned after 8 the previously approved guidelines for low-emission bus 9 credit generation. The guidelines are intended to cover a 10 broad range of cases, so they leave it to the credit 11 proponent to provide some of the necessary detailed data, 12 such as conversion factors and expected vehicle life. 13 The optional certification standards needed to 14 demonstrate a vehicle's reduced emission status have already 15 been adopted by the Board. 16 It should be remembered that this credit program, 17 like those previously approved by the Board, is strictly 18 voluntary and no one is required to participate in it. 19 The staff recommends that the Board approve the 20 proposed guidelines and direct the staff to include them in 21 the existing guidelines document, and forward that document 22 to the State's local air quality districts for use in the 23 development of their mobile source credit programs and 24 rules. 25 And that concludes my presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 CHAIRMAN DUNLAP: Thank you, Mr. Lovelace. 2 Any questions of staff by any of the Board 3 members? Mr. Calhoun. 4 MR. CALHOUN: I wish the staff would explain the 5 rationale for arriving at the trigger level, and the 6 rationale used to arrive at the various increments for 7 granting of credits. 8 MR. LOVELACE: Those maximum optional standards 9 and the increments are 30 percent basically, 30 percent 10 below the certification standard, the required certification 11 standard. 12 The original proposal for bus engines, when this 13 was first broached with the Board several years ago, was set 14 at 1 gram. That was the staff proposal at that time, that 15 the increment be 1 gram. 16 After considerable discussion by the Board, the 17 Board directed the staff to modify that increment to be a 18 one-half increment. The 30 percent is a level that we felt 19 was -- provided a substantial reduction and, as I mentioned, 20 rather than having a higher value, such that it might be 21 subject to -- I don't want to say "abuse," but it might be 22 used in a way that would not provide the real emission 23 reduction that one would expect. 24 MR. CALHOUN: Obviously, we're going to hear some 25 testimony in this regard later. But I guess the next PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 question I would have is the -- you mentioned something 2 about the staff proposal imposes the requirement on the 3 local districts to decide -- to establish some type of 4 in-use test program. 5 MR. LOVELACE: Yes. We request that the districts 6 implement an in-use test program for the reasons I provided. 7 When the ARB certifies an engine, it is our responsibility 8 to make sure that that engine performs as required. But 9 there also certain maintenance considerations taken in 10 there, and malmaintenance or tampering of a vehicle's 11 emission control system is really not within the purview of 12 the engine manufacturers. 13 So, in cases where, for example, air-fuel ratios 14 could be adjusted, we want to make sure that that kind of 15 abuse is not occurring. 16 On the other hand, a program for testing would be 17 done on a case-by-case basis, depending on the type of 18 engine and what its emission control system was. For 19 example, if we felt that an emissions control system was 20 bulletproof, did not allow for tampering, that kind of 21 thing, we might have very minimal testing requirements. 22 MR. CALHOUN: I guess I'm somewhat bothered by 23 this, because of the fact that we're asking the local 24 districts to impose a test program on the applicant. And 25 the Board certifies these engines and are certainly more PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 knowledgeable, I would think, than the local districts. And 2 it would seem to me as though the Board ought to be involved 3 in establishing what kind of a test program that's going to 4 be used in deciding whether or not these vehicles do, in 5 fact, meet the emission standards at whatever mileage we 6 suggest. 7 MR. LOVELACE: Yes, indeed. And we've left the 8 language in the guidelines somewhat open. And the reason is 9 that we want to work with the districts and the project 10 proponents to develop a test program that would be 11 acceptable. 12 True, the ARB has the expertise in the area of 13 testing and certification, and we would definitely want to 14 be part of that process, not to fob it off on the district. 15 MR. CALHOUN: Does the ARB intend to have to sign 16 off on the test or approve it before -- I just don't -- I 17 just have difficulty with us imposing this on the local 18 districts when the expertise is here. 19 And it seems to me as though, if there's going to 20 be a test program, the support ought to be -- in addition to 21 being involved, you ought to sign off on it. 22 MR. LOVELACE: These are guidelines, and we're not 23 imposing something on the districts. We do want assurance 24 through some testing that the emission reductions are real. 25 But we're -- the district does not have to pass a regulation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 requiring testing, but they do have the authority to grant 2 or not grant those credits. 3 MR. CALHOUN: I understand that. But this Board 4 is being asked to approve guidelines for granting of 5 credits. And it seems to me, if we're going to issue some 6 guidelines, they ought to have some real good basis for it, 7 you know, something that, as you talked about, is 8 quantifiable. 9 MR. CROSS: The problem with this is that the 10 range of proposals that we're -- that we've seen 11 historically, and I think that we expect to see, is quite 12 broad, ranging from retrofitting the vehicles to another 13 fuel, for example, or even a highly modified engine, which 14 nobody has a lot of experience with, to an OEM developed, 15 highly tested engine which we think -- we fairly confident 16 will be durable in use. 17 And so, the range of likely in-use testing 18 requirements is quite broad. In other words, we certify the 19 OEM engine. We can be pretty sure that with sort of a few 20 tests, we'll be sure it's all right. 21 Whereas, with a more bizarre program, we can 22 certify it based on the data which the proponent provides. 23 In other words, they could, you know, show that the emission 24 levels are achieved. But we really may not have the 25 confidence in the durability that we would with the OEM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 And, in that case, we'd want to work with the district and 2 the proponent to develop a program that's sort of -- that 3 takes care of it without overly burning them. 4 So, with that broad range of examples, I think 5 we're trying to give flexibility through the language, so we 6 can really respond to what the proponents want to do. When 7 we start getting detailed, then I think we can hang 8 ourselves up in terms of the guidance we give ourselves. 9 CHAIRMAN DUNLAP: Go ahead. Ms. Edgerton. 10 MS. EDGERTON: Well, correct me if I am wrong, but 11 it's my understanding that we are giving -- I mean it's the 12 districts that award the credits, is it not? 13 MR. LOVELACE: That's correct. 14 MS. EDGERTON: And they have the option to put the 15 program into place or not. And they must ultimately feel 16 comfortable with the credits that they award for these 17 reductions. 18 And so, it does make sense to me, since they have 19 the responsibility for the award, that they should be 20 prepared to assure that they're real and quantifiable. And 21 they don't have to have a program where they put these 22 credits in at all. Do they? 23 MR. LOVELACE: that's correct. 24 MS. EDGERTON: But if they do have one, then they 25 need to have it be an excellent one, where we know that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 credits that they're getting are real, quantifiable, and 2 surplus. 3 And there's really no reason in my view to have 4 one of these programs if that's not what we're getting. 5 So, I find -- with these some of these new things, 6 I think it would be -- border on irresponsible if there 7 wasn't some sort of testing to make sure we're getting what 8 they say we're getting. 9 So, that's my understanding. 10 CHAIRMAN DUNLAP: Well, we have one witness on 11 this item. Mr. Vlasek, why don't you come forward, and 12 let's hear from you now. 13 While we're all revved up, we want to put you on 14 the stand. 15 MR. VLASEK: Good morning, Chairman and Board 16 members. I am Greg Vlasek, the promised witness. 17 The dialogue here has covered many of the issues 18 that the Natural Gas Vehicle industry in particular had 19 intended to make here this morning. 20 Our concern generally I think was addressed by Mr. 21 Lovelace's presentation with regards to the need to look at 22 these things on a case-by-case basis, and to allow some 23 flexibility to the local districts with some oversight by 24 the Air Resources Board staff. 25 It might be helpful to cite an example that might PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 some of these things into perspective. There is a third 2 generation natural gas engine that will be out in 1996, a 3 Cummins 10-liter engine. It's a heavy-duty engine for big 4 trucks and buses. 5 We hope that that will be certified to one of 6 these optional standards, and one that would certainly -- 7 hopefully be a part of one of these credit programs. That's 8 an OEM engine and has electronic controls. So, it's not the 9 type of engine that we think that ARB would need to have 10 particular tampering concerns with. It's a very much 11 state-of-the-art engine. 12 That engine, under current ARB regulations, has to 13 have a certain durability life and is subject to in-use 14 compliance testing. And the manufacturer's on the hook for 15 guaranteeing those emissions if, in fact, it's certified to 16 an optional standard. 17 In that case, we don't see any particular reason 18 why the end user, either the generator or the user of the 19 emissions credits, should be in any way responsible or on 20 the hook for, you know, either the testing cost -- which is 21 substantial -- or the loss of credits if, in fact, the, you 22 know, the engine doesn't prove out to be fully durable. 23 Now, given where we are in the evolution of this 24 marketplace, that's more the exception than the rule. There 25 are engines out there that are not fully certified to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 optional standard or do not have electronic controls and may 2 be, you know, could be subject to maintenance problems in 3 use that are not necessarily the responsibility of OEM. 4 What we're really asking for, from our point of 5 view, is the recognition, one, that this emissions testing 6 that's specified in here -- the engine dyno testing, or 7 excuse me, the chassis dyno testing for heavy-duty vehicles 8 is very expensive. And for fleets that are, you know, are 9 kind of on the edge as to whether or not they're going to, 10 you know, stick their neck out with a lower emission 11 technology and a natural gas or other type of low-emission 12 engine, they're going to be, I think, in many cases averse 13 to any additional risk that they have to spend, you know, 14 20, 30, $50,000 to test vehicles. So, that needs to be 15 taken into account. 16 And the other thing is -- really, it just boils 17 down to flexibility, leaving them the opportunity to kind of 18 look at these things and appeal to ARB staff if they feel 19 they need help, but do so on a case-by-case basis. 20 CHAIRMAN DUNLAP: But you would recommend the 21 emphasis be more on OEM testing rather than those -- 22 MR. VLASEK: (Interjecting) Well, to the extent 23 that OEM testing's already required, then there should not 24 be kind of a double-jeopardy that's placed on the users or 25 the generators of the credits. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 CHAIRMAN DUNLAP: So they have to test again. 2 MR. VLASEK: Right. Right. To the extent that 3 it's not guaranteed, as Ms. Edgerton pointed out, there 4 needs to be some level of screening -- 5 CHAIRMAN DUNLAP: Right. 6 MR. VLASEK: -- or assurance provided. 7 CHAIRMAN DUNLAP: But you are -- 8 MR. VLASEK: (Interjecting) It might not have to 9 be -- excuse me. It might not have to be -- in the future, 10 it may not have to be a chassis dyno test. There may be 11 other less expensive screening-type tests. 12 CHAIRMAN DUNLAP: Right. 13 MR. VLASEK: And I know some of those are under 14 development now, and they're being reviewed by the trucking 15 industry to try, you know, provide that assurance without 16 having to go into the MTA engine dyno lab and spend $40,000 17 per vehicle. 18 CHAIRMAN DUNLAP: Right. But you are supportive 19 of the staff proposal with those concerns noted, correct? 20 MR. VLASEK: Yeah. There's actually one statement 21 that I'd like to call your attention to. It's in the first 22 paragraph of page A-8 of the guidelines. 23 It says, "At a minimum, it will be necessary for a 24 small number of vehicles to be made available for chassis 25 dynamometer emissions tests." So, that's pretty specific. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 It says they "will" be made available. And based 2 on my experience with the districts, they're going to take 3 that pretty much at the face of what it is, and they're 4 going to expect that there will be some testing required. 5 We would prefer to see a "may" in there, or 6 something that reflects based on a case-by-case need as 7 determined by the district experts with the assistance of 8 the ARB staff. 9 CHAIRMAN DUNLAP: Where is that specifically on 10 that page? 11 MR. VLASEK: Line 7, starts at line 7 on page A-8 12 of the version I have. 13 CHAIRMAN DUNLAP: You would prefer it to say, "It 14 'may' be necessary"? 15 MR. VLASEK: Yes. 16 CHAIRMAN DUNLAP: Okay. How would staff feel 17 about that? Is that acceptable? 18 MR. CROSS: That's fine with us. 19 CHAIRMAN DUNLAP: Okay. Supervisor Vagim. 20 SUPERVISOR VAGIM: I want to follow up on what Mr. 21 Calhoun was talking about. 22 Do I read this correctly and understand that the 23 districts then will be responsible for almost a 24 recertification of what these vehicles are emitting to 25 establish the real credits? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 Are we going to have a redundant testing program 2 throughout every district in California? 3 MR. CALHOUN: I'm sorry, Supervisor, could you 4 repeat the question? 5 SUPERVISOR VAGIM: Well, I mean, I just want to 6 make sure I understand. Is the certification requirements 7 or responsibility that is going to be inherited by the 8 districts, so they want to implement this credit program, is 9 that going to create their need to have a recertification -- 10 MR. CROSS: No. 11 SUPERVISOR VAGIM: -- method or methodology or 12 testing program that emulates what CARB is already doing? 13 MR. CROSS: No. The certification is done by 14 CARB, period. Basically, the testing requirement that we're 15 discussing is one of where certification is granted for 16 somewhat marginal hardware. In other words, we're not -- 17 you know, the proponent doesn't have the wealth of 18 durability testing, let's say, that Cummins does on its 19 engines. 20 We want to reserve with the district the 21 discretion to be able to go in and ask them to test a few of 22 those vehicles in use and monitor their performance. 23 And clearly, if you had a program like that in 24 South Coast, you wouldn't run the same program in Ventura, 25 and another one in Sacramento, and another one in San PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 Francisco for the same retrofit. 2 In other words, it would be, quote, "the first" of 3 a particular technical approach to doing it. 4 SUPERVISOR VAGIM: Okay. 5 MR. CROSS: Does that answer it? 6 SUPERVISOR VAGIM: Well, it does, but I just want 7 to make further clarification for myself. And that is, 8 there are going to be some vehicles that you are totally 9 going to certify, and the credits can be taken as they are 10 purchased from the showroom floor so to speak. No one has 11 to go through recertification -- is that correct -- at the 12 district? You're going to say, "This has been certified, 13 durability, and everything else." 14 MR. CROSS: Right. 15 SUPERVISOR VAGIM: Those others that are 16 conversions and that type of stuff, which we at one time 17 were going -- we contemplated certifying durability on all 18 those. Now we've backed off a bit on those; is that 19 correct? 20 MR. CROSS: Well, we've always certified 21 conversions and sort've assumed that they would be durable. 22 But the conversions have never previously been used for 23 credit generation. In other words, it would usually 24 basically certifying that the emissions would not go up. 25 And I think that, when you start saying that you're going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 use retrofit hardware to bring the emissions down, you need 2 to remember you're letting a factory emit more for doing it. 3 You need to be a little bit more careful in terms 4 of ascertaining whether or not there's an in-use problem. 5 SUPERVISOR VAGIM: Some of these are going to 6 have gone through CARB's certification program; isn't that 7 correct? 8 MR. CROSS: But the durability testing that's 9 required of these to get through CARB's certification is far 10 less than the durability testing which a Cummins or a DDC 11 would do. 12 SUPERVISOR VAGIM: Okay. But if CARB feels 13 satisfied that these meet the durability test case by case, 14 will the district ask CARB if they feel that way, or will 15 they have to just automatically do it? 16 Will CARB call them up and say, "We think you 17 ought to do a durability test on this"? 18 MR. CROSS: We would work with them. Since the 19 proponents have to go through our certification at the 20 beginning to get certified in the lower credit standards 21 before they ever go to the districts with a program, we're 22 already kind of in the driver's seat in terms of interacting 23 with the manufacturer while they're certifying. 24 SUPERVISOR VAGIM: So, you know who they are. 25 MR. CROSS: Yeah. And we would be talking to them PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 and saying, "Hey, you know, we're certifying this, but we're 2 going to be working with you and the district to demonstrate 3 durability, because we all agree that it wasn't tested as 4 much as maybe needed to be." 5 SUPERVISOR VAGIM: So, I guess then, the issue 6 becomes, if the scale is 80 percent of the field is being 7 asked to -- at least of these particular cases -- are being 8 asked to go through durability, what's the difference 9 between CARB just doing them all versus having the districts 10 do them? 11 Or if it's, of course, down lower, to 10 percent 12 or something, then that makes more sense where you're going 13 to do it on a selective case-by-case basis. 14 MR. CROSS: I think the problem we run into is 15 that a lot of times the hardware developers don't have the 16 wherewithal to do very, very high-cost durability 17 demonstrations of a number of vehicles. And what they're 18 basically asking us to do is, based on good engineering, 19 give them a certificate which says, "Yeah, we kind of all 20 agree this'll probably be durable," without them having to 21 run engines for hundreds of thousands of miles, with the 22 condition that will verify that they are, in fact, durable 23 in the field. 24 SUPERVISOR VAGIM: So, the durability's be in the 25 field, and you want a monitoring system -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 MR. CROSS: Right. 2 SUPERVISOR VAGIM: -- but by the district, to keep 3 coming back with reports on where the emissions are in that 4 vehicle; is that right? 5 MR. CROSS: So, it becomes a way of basically 6 letting sort of entrepreneurial type ventures which have 7 something to offer, based on their test data, to actually 8 get out and do something. 9 Whereas, if we required them to do all the work 10 that Cummins and DDC did, most of them would never get off 11 the ground, because it costs too much. 12 SUPERVISOR VAGIM: But there's going to be some 13 cost to this durability testing and monitoring. 14 MR. CROSS: Certainly. 15 SUPERVISOR VAGIM: Who picks that tab up? 16 MR. CROSS: It would be the proponent essentially. 17 In other words, the folks who make the deal, if you will, to 18 generate the emissions credit. 19 SUPERVISOR VAGIM: Yeah. Not a lot of places in 20 California for heavy-duty certification. Where does one do 21 with them? 22 MR. CROSS: But I think that there are -- 23 remember, we're just trying to verify whether or not the 24 system is durable or not. 25 There are lots of dynos which can do sort of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 steady-state or elaborate steady-state tests in California. 2 Many heavy-duty facilities have those. And what one could 3 do would be -- follow up the certification test of one of 4 these retrofit systems with some sort of steady-state test, 5 where you would baseline it, knowing what it emits on the 6 official test. And then what you could do is monitor it 7 with these cheaper steady-state tests through its life 8 without ever having to run the expensive test again. 9 And, as long as the monitoring shows that things 10 aren't changing, you're probably okay. 11 SUPERVISOR VAGIM: And again, what one established 12 in one district through that program would qualify for the 13 rest of the districts. 14 MR. CROSS: Right. 15 SUPERVISOR VAGIM: They would not have to go 16 through it again. 17 MR. CROSS: Right. But typically, one of these 18 proponents would be marketing in multiple deals, if you 19 will. They would be working it out at the beginning while 20 you're certifying them. 21 SUPERVISOR VAGIM: Right. But why would you want 22 to take one district, or two districts, or three districts 23 through the same program, when one district putting that 24 same vehicle through the program would be -- 25 MR. CROSS: You wouldn't. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 SUPERVISOR VAGIM: So, who makes that decision? 2 Where's the clearinghouse going to be? 3 MR. CROSS: That would be -- 4 SUPERVISOR VAGIM: If five districts call you up 5 and say, "Okay, we all have it," who's going to -- 6 MR. CROSS: We'd sit down with the proponent, with 7 the developer of the system, which is who is basically 8 using, who is marketing it to stationary sources. 9 SUPERVISOR VAGIM: What happens if none of the 10 districts wanted to do it? 11 MR. CROSS: We all sit. 12 SUPERVISOR VAGIM: Huh? 13 MR. CROSS: We all sit. Doesn't go anywhere. 14 SUPERVISOR VAGIM: So, they're all going to wait 15 for one guy to step up and say -- 16 MR. CROSS: Well, districts aren't doing it. The 17 people who pay for -- 18 SUPERVISOR VAGIM: But they have -- the districts 19 have to monitor it, though. They have to kind of enforce 20 it. Don't they have to put it in place? 21 MR. CROSS: Yes. Well, they have to monitor it, 22 but the districts don't pay for it. 23 SUPERVISOR VAGIM: It will pass the cost through. 24 MR. CROSS: Yeah. The folks who actually want to 25 do the emissions trade are the ones who pay for it. And I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 see that as the barrier as opposed to the district. 2 SUPERVISOR VAGIM: The obvious is where these 3 facilities are for heavy-duty testing and stuff is more 4 likely where this is going to happen versus in remote 5 districts that don't have these type of stuff. 6 You probably won't have that kind of 7 entrepreneurialship in those districts. And that does have 8 some kind of, like say, dissuading part for some of these 9 folks in the rural parts of our -- 10 MR. CROSS: You'd be surprised -- 11 SUPERVISOR VAGIM: -- State. 12 MR. CROSS: -- at how many chassis dynos there are 13 out there for heavy-duty engines. 14 SUPERVISOR VAGIM: I just don't run into them on 15 an everyday basis, I guess. 16 MR. CROSS: You have Stockton, for example. 17 There's, you know, MTA in Southern California has one. 18 There are a lot of -- 19 CHAIRMAN DUNLAP: Bob, if I may -- 20 MR. CROSS: That's fine. 21 CHAIRMAN DUNLAP: -- kind of hop in. The 22 sentiment of the Board, it seems to me, is that redundant 23 testing or testing requirements that are difficult or 24 impossible to achieve, and that a clearinghouse function is 25 necessary for this to be successful. Those seem to be all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 priorities for us. 2 So, I guess, with the feeling that we want to move 3 this item, I think I would be prepared to give some 4 direction to you after we take our action; that is, to 5 staff, Mr. Boyd, to send some very clear signals relative to 6 this clearinghouse function, and making lists of testing 7 facilities made available, perhaps make this modification of 8 changing the word here about "may," and just making sure 9 that we do -- we provide a high level of technical 10 assistance to the districts. That is essential in order for 11 this to work, it seems to me, well. 12 MR. BOYD: Mr. Chairman, if I might, I've been 13 holding back here. But my personal sentiments are in total 14 agreement with what Mr. Calhoun said, and then with what Ms. 15 Edgerton said earlier. 16 And the dilemma we have is that we, the staff, 17 find ourselves on the horns of a dilemma, in that the 18 legislation asked us to do guidance. 19 CHAIRMAN DUNLAP: Right. 20 MR. BOYD: And we've been doing guidance 21 historically to districts, and guidance is just that. It is 22 only guidance. And so, with this program, districts have 23 the option or not of going into a credits program. 24 And what is bothersome to me -- and Mr. Calhoun 25 picked it up -- is they have the option or not, if they do a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 credits program, of doing testing. And I'm personally quite 2 bothered by the idea that there would be a credits program 3 without some verification. Because we're not dealing with 4 the routine certification of engines at the standard 5 established for all. 6 We're dealing with an extraordinary level that is 7 more difficult to achieve and will be on a much more limited 8 basis, and not necessarily just by OEMs. 9 CHAIRMAN DUNLAP: Understood. But people need to 10 be able to avail themselves of this extraordinary credit or 11 recognition. And there's infrastructure limitations, 12 there's also certainly some leader -- and we do this 13 routinely, Jim, as you know. We share information and 14 publicize it. 15 All of those things need to happen in order for 16 this to work well, so that we don't disadvantage some of the 17 more rural districts in our State in particular. 18 That seems to me to be the -- 19 MR. BOYD: I agree with that, and I was going to 20 solicit direction -- 21 CHAIRMAN DUNLAP: Sure. 22 MR. BOYD: -- from the Board, as I'm quite open to 23 direction from the Board to deal, subsequent to the release 24 of this -- 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 MR. BOYD: -- initial guidelines to deal with this 2 testing issue, to look for surrogate types of testing that 3 are more economical, to look for the most efficient ways of 4 doing this and to, as a minimum, have the State prescribe 5 standards and guidelines on how you do this to a maximum of 6 working out the arrangements for exactly how it would be 7 done on a contractual basis with some types of organizations 8 that we're aware of that perhaps locals aren't, to be funded 9 through the revenues derived by the program and what have 10 you. 11 I think there's another tier, echelon, round of -- 12 CHAIRMAN DUNLAP: Okay. 13 MR. BOYD: -- technical discussion needed here on 14 that point. 15 CHAIRMAN DUNLAP: Okay. Good. I appreciate that. 16 I think you're getting clearly where the Board's coming from 17 on this. 18 Mr. Silva, did you want to say something? Then, 19 maybe we can call -- do we have anything else for Mr. 20 Vlasek? I notice his posture is suffering standing there so 21 long. 22 MR. VLASEK: I'm fine. I actually had a couple of 23 quick points in addition to the ones -- 24 CHAIRMAN DUNLAP: Sure. 25 MR. VLASEK: -- I've already made. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 CHAIRMAN DUNLAP: Will you yield to our witness, 2 Mr. Silva? 3 SUPERVISOR SILVA: Please. 4 CHAIRMAN DUNLAP: Okay. 5 MR. VLASEK: One was partially in response to 6 Supervisor Vagim's question regarding -- are there going to 7 be programs coming in, and are the districts really going to 8 be looking for this sort of guidance? 9 I noted that California Trucking Association has 10 submitted written comments on this item. And from what I 11 can gather, they are basically very supportive of the 12 program, but have the same concern about the cost of testing 13 and whether or not an extremely expensive testing program 14 would inhibit or limit the success of emissions credit 15 trading. 16 I think they're very, very serious. And we've had 17 an ongoing, very positive discussion with them about natural 18 gas engines and how we might get more of them into the 19 California fleet. 20 And I think that, you know, as long as there's 21 this sort of willingness to work together between the 22 proponents of the credits, and the ARB, and the local 23 district, that we're going to be able to work out some good 24 credit programs. 25 The final point was with regards to the non-NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 emissions credit trading. And our industry -- obviously, 2 we're in a position where we can -- we're very strongly 3 supportive of anything that can provide opportunities for 4 reduction of PM, because we have a very low particulate 5 matter fuel. 6 We think it's painting this whole mobile source 7 emission credit opportunity with too broad of a brush to 8 just say, well, you know, we're not going to get that much. 9 The particulate matter emissions that we're talking about 10 are toxic. We know they're very toxic, maybe carcinogens. 11 Natural gas engines are well below 50 percent or 12 well above 50 percent cleaner than the diesel technologies 13 out there today. I haven't seen any studies that show that 14 that deteriorates over time because of the nature of the 15 fuel. 16 So, we would urge the ARB now to preclude local 17 districts from developing some sort of PM credit mechanism 18 if they feel that that's an important part of their PM 19 attainment goals. And, as currently written, the heavy-duty 20 guidelines do preclude other types of credit programs. 21 CHAIRMAN DUNLAP: Okay. All right. 22 SUPERVISOR VAGIM: Mr. Chairman, I just wanted to 23 reiterate. I think that's an excellent point. And I would 24 hope we could incorporate that in the future -- 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 SUPERVISOR VAGIM: -- embellishment of that. 2 CHAIRMAN DUNLAP: Thank you, Mr. Vlasek. You are 3 our only witness according to what the Board Secretary's 4 provided me. So, we'll close the public testimony portion 5 on this item. 6 Supervisor Silva. 7 SUPERVISOR SILVA: Yes. I have a lot of respect 8 for the staff. I think the integrity of the staff reports 9 have been great. This is just, you know, finishing up my 10 first year. But I do know that there are times when we have 11 philosophical disagreements. And I feel that the credit 12 program, I do have a little bit of a problem with. 13 In addition to being a Supervisor in Orange 14 County, I'm also on the Orange County Transit Authority's 15 Board. And Orange County was able to solve their bankruptcy 16 problem with basically everybody in the county getting a 17 haircut. 18 And the OCTA received approximately a 20 percent 19 reduction in their revenue to help the county restructure 20 their investment pool. 21 And I'm talking about the bus situation, where an 22 engine life can be anywhere from 200 to 400,000 miles, some 23 cases even more. And the chassis life can be triple that. 24 A rebuilt engine is cheaper than a new engine, 25 oftentimes as much as 50 percent. And the question is, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 should we rebuild engines or should we buy new engines for 2 old chassis? 3 With the tight economy, maybe Vance Packard's 4 book, The Waste Makers, may be holding true, that we're 5 going to have to look at ways to cut back that we've never 6 looked at before. 7 And I think that, in addition to the OCTA, I think 8 many businesses that have large fleets will be rebuilding 9 their engines rather than buying new engines. And this 10 could be a reality as well as a fact of life. And I feel 11 that the emission reduction credits should be given. I may 12 be in the minority here, but I would like to hear from the 13 staff on this. 14 CHAIRMAN DUNLAP: On that point, I'd certainly 15 like to have staff respond, because it gets at a core issue. 16 If I might, though, Jim, maybe make a comment. 17 One of the things that I've found over the years in this 18 business is you want to recognize people that go the extra 19 mile. Jim I think said it well about extraordinary efforts, 20 extraordinary credit. 21 The problem that we face is we need to get every 22 gram, every pound, every ton of air pollution reduction we 23 can. So, if we recognize too much, if we give too many 24 people organizations that mean well too much credit, we will 25 never move forward towards attainment of those clean air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 goals. 2 So, all I would say to you, while I appreciate the 3 philosophy behind asking that question -- I think you're 4 right -- but I want to caution you, over time, as you look 5 at it in perspective, to make sure that we don't reach out 6 too far and recognize too much, and end up falling short of 7 our ultimate goal, as you said in that last item about 8 protecting public health. 9 So, contextually, there's an issue here. And, 10 Tom, I know you're an expert in this area. You want to say 11 a few words? 12 MR. CACKETTE: Mr. Chairman, you captured, I 13 think, our viewpoint very well. The success of the motor 14 vehicle control program in California has been essentially 15 the turnover of older, high-emitting vehicles to newer, 16 lower emitting vehicles, and that occurs when people 17 purchase vehicles, new ones in particular. 18 And in the case of buses -- actually, this 19 proposal here is dealing with heavy-duty trucks; we dealt 20 with the bus issue, but it's a direct analog to -- 21 CHAIRMAN DUNLAP: Right. 22 MR. CACKETTE: -- it previously, and this wasn't 23 made at that time, but certainly it's the same principle 24 involved. 25 The concern the staff has is that they had to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 balance what could be a substantial slow-down in the 2 turnover to cleaner vehicles and, thus, lower emissions 3 versus a situation where we might be inadvertently or 4 inappropriately incentivizing people to rebuild old engines 5 rather than repower with new engines in existing coaches. 6 And our feeling is that the incentives for putting 7 new engines into existing vehicles or buying entirely new 8 vehicles with low-emission engines is driven by a number of 9 factors, most of which are not environmentally related, but 10 have to do with the reliability of the vehicle and, in 11 particular, the much improved fuel economy of these new 12 engines, which are typically double what some of the older 13 engines are. 14 Our concern was that, as people choose to repower, 15 because -- particularly in buses, the coaches sometimes can 16 be remanufactured to last 30 or 40 years. As people would 17 choose to repower, the net effect would be, they'd be 18 selling emission credits, which would cause another -- allow 19 another source to pollute. And we would be slowing down 20 through that process the natural turnover to low-emission 21 engines. 22 We thought that threat of that occurring is much 23 greater than the possible disincentive of a few people 24 deciding to rebuild rather than repower or buy a new 25 vehicle. And so, it was a weighing or balancing act where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 we didn't want to see the program get a bad eye, and we 2 didn't want to see emissions substantially increase by 3 people being able to sell credits or make -- you know, use 4 credits, when in fact they were just doing what they were 5 going to do. 6 And we had an analogy the staff developed, which 7 is, many of you probably regularly buy a new car to replace 8 your old car. A brand new one. And I would think the Board 9 would agree unanimously that, if you buy a new car, you 10 probably shouldn't get an emission credit that you can sell. 11 In other words, the breathers need to take advantage of the 12 fact that you've got a nice, new, clean car. 13 But I probably wouldn't use myself, because I have 14 bought one new car. But let's say I'd never bought a new 15 car in my life. And I'd say, "Look it. I've had all of 16 these used cars. I keep buying these used cars, but now I'm 17 going to go forward and make the choice to buy a new car." 18 And I'm going to do it based on the fact that I want to get 19 an emission credit for it. 20 That emission credit made me change my mind on 21 what we're going to do. Arguably, we should be 22 incentivizing that. But also, arguably, we're opening up 23 the door for every person, including all of you who buy new 24 cars, to get a marketable emission credit when you do what 25 you otherwise would be doing anyway. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 And that's what we're trying to protect against. 2 And I don't see any other way of doing it, other than by 3 picking the balance that the staff did. 4 If we went with the idea of repowering getting 5 credits, I think we'd be opening the door to a slowdown in 6 the improvement of air quality in this area. 7 CHAIRMAN DUNLAP: Sure. Okay, Tom. 8 MR. CACKETTE: So, I guess it's philosophical to 9 some degree, and it's not a black-and-white issue. But 10 that's sort of the logic of how we came out where we did. 11 CHAIRMAN DUNLAP: And, Supervisor, for my part, I 12 think you brought up an excellent issue and a good point. 13 And I know some of the spokespersons for that very point 14 have very strong feelings about it and are, you know, 15 honorable people trying to do the right thing. And I 16 respect that position. 17 MS. EDGERTON: Well, if I understand it correctly, 18 it's not a question of how much -- I mean it's not a 19 question -- I'll just put it this way. 20 It's a question of how much the credit would be, 21 whether the credit -- if you put in a newer engine, whether 22 it's from the existing mandatory standard to the optional 23 standard versus whether it's the old certification of that 24 individual vehicle versus the optional standard -- if 25 they've put in the optional standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 But it's how much credit they get. It's not that 2 the changeover isn't incentivized. Indeed, it is still 3 incentivized from the mandatory standard forward. 4 So, you know, I think that's -- I'm glad that 5 you're shaking your head that I understand it correctly. 6 You know, as I studied that, I said, well, you 7 know, this incentive is still there; it's just a question of 8 how much, whether you're incentivizing from the mandatory 9 forward or whether you're incentivizing from, you know, ten 10 years ago standard. 11 MR. CACKETTE: Right. 12 MS. EDGERTON: And I'm comfortable with the 13 staff's recommendation. 14 MR. CACKETTE: I think that -- just to be clear on 15 it, that is correct, and it was a necessary clarification 16 there. 17 What some people are proposing, if you have an 18 existing dirty 10-gram engine and you buy a standard engine 19 off the shelf to repower, which is a five gram engine, 20 they're arguing you should get five grams worth of credit. 21 And what Ms. Edgerton is saying is -- and what staff is 22 saying is, no, we don't think that's the case. But you 23 still are incentivized that, if you buy an optional two-gram 24 engine, you would get three grams -- and repower with it, 25 you'd get three grams worth of credit. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 So, there is an incentive to go lower. It's just 2 that the incentive would not be as big as going from ten to 3 five. 4 CHAIRMAN DUNLAP: Okay. I think the dialogue is 5 important and necessary. How's our court reporter doing? 6 You need a moment? You haven't cried uncle today. 7 SUPERVISOR RIORDAN: We're going slow. 8 CHAIRMAN DUNLAP: We're going slow. So, I'd like 9 to wind up the dialogue. But if there's something 10 meaningful we need to cover, let's do it. 11 Joe, did you have anything you wanted to -- 12 MR. CALHOUN: Mr. Chairman, with the understanding 13 that the staff will incorporate the sentiments of the Board 14 at some of the subsequent hearings, I'm ready to move the 15 adoption of Resolution 95-44. 16 SUPERVISOR RIORDAN: I'll second the motion. 17 CHAIRMAN DUNLAP: We have a motion and a second, 18 but I wasn't on the ball enough to get you ahead of that. 19 We have a few written comments we need to summarize. 20 Can we do that briefly? I think Mr. Vlasek took 21 care of at least some of CTA's issue, but we need to do it 22 ourselves. 23 Will you cover that quickly, and then we'll 24 discuss it. Bob or Bill? 25 MR. LOVELACE: Yes, Mr. Chairman. Engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 manufacturers submitted written comments. All of their 2 issues we covered today -- the level of the optional 3 standards, increments, the in-use testing requirements were 4 already covered. 5 They also brought up a question about the 6 conversion factors that are included in the presentation. 7 We want to provide maximum flexibility to the project 8 proponents, in that they would supply their own data based 9 on their own fleets and their own historical experience. 10 EMA proposes a very broad-brush average approach 11 that we don't believe is appropriate. 12 The Gas Company, the Vlasek covered the comments 13 there. They support the program. They prefer the "may" 14 rather than "will," also. 15 And Mr. Vlasek also touched on CTA's comments. 16 They support the program. They had the same concerns about 17 the in-use testing, and then they have some extremely -- how 18 shall I say -- broad comments regarding application of the 19 program's statewide credit banking system that is really 20 beyond the scope of what we're doing today, including cross- 21 pollutant trading and some other things. So -- 22 CHAIRMAN DUNLAP: Okay. 23 MR. LOVELACE: So, generally, they support our 24 approach. 25 CHAIRMAN DUNLAP: Okay. Yes, Ms. Edgerton. Thank PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 you, Mr. Lovelace. 2 MS. EDGERTON: Just a point of information. Mr. 3 Calhoun, is your motion with "may"? Just a point of 4 clarification. Have you -- let's just make sure we know 5 what we're doing in terms of what we're voting for. 6 Are we voting for the change with the "may"? 7 CHAIRMAN DUNLAP: On page A-8. 8 MS. EDGERTON: Or as -- 9 CHAIRMAN DUNLAP: I have it in front of me. Joe, 10 is your motion -- 11 MR. CALHOUN: Chairman Dunlap summarized what he 12 thought the sentiments of the Board were. 13 CHAIRMAN DUNLAP: I will do it again if you'd 14 like. 15 MR. CALHOUN: And that included -- 16 CHAIRMAN DUNLAP: On page A-8, we'll change the 17 guidance document to read rather than it "will" be 18 necessary, it "may" be necessary. 19 We'll direct staff to aggressively undertake 20 this clearinghouse idea, making the information about these 21 testing facilities available for people. I don't know 22 whether that's a list you do every six months on a mailing 23 list or whatever. And also, perhaps, to have some training 24 or meetings with the local districts to let them know, you 25 know, how to put this into place, those that have expressed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 an interest and want to do it. And just provide that high 2 level of customer and technical assistance that Mr. Boyd has 3 committed to throughout his career and did a few moments ago 4 as well. 5 Does that capture it? 6 MS. EDGERTON: Yes, it does. 7 CHAIRMAN DUNLAP: Okay. Supervisor Vagim? Are 8 you comfortable with that? 9 SUPERVISOR VAGIM: Very much so. 10 CHAIRMAN DUNLAP: Okay. With that, if there's no 11 further discussion, I'll ask the Board Secretary to call the 12 question. 13 MS. HUTCHENS: Boston? 14 DR. BOSTON: Yes. 15 MS. HUTCHENS: Calhoun? 16 MR. CALHOUN: Aye. 17 MS. HUTCHENS: Edgerton? 18 MS. EDGERTON: Yes. 19 MS. HUTCHENS: Hilligoss? 20 MAYOR HILLIGOSS: Aye. 21 MS. HUTCHENS: Lagarias? 22 MR. LAGARIAS: Yes. 23 MS. HUTCHENS: Parnell? 24 MR. PARNELL: Yes. 25 MS. HUTCHENS: Riordan? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 SUPERVISOR RIORDAN: Aye. 2 MS. HUTCHENS: Roberts? 3 SUPERVISOR ROBERTS: Aye. 4 MS. HUTCHENS: Silva? 5 SUPERVISOR SILVA: Aye. 6 MS. HUTCHENS: Vagim? 7 SUPERVISOR VAGIM: Aye. 8 MS. HUTCHENS: Chairman Dunlap. 9 CHAIRMAN DUNLAP: Aye. 10 MS. HUTCHENS: Resolution 95-44 passes 11-0. 11 CHAIRMAN DUNLAP: Right. And that was, of course, 12 for the resolution that we have before us. Thank you. 13 All right. Our next item is 95-11-2. We'll 14 cover that. Does staff need to adjust their positions here? 15 Again, I'd like to remind those in the audience 16 who wish to testify to please check in with the Board 17 Secretary. If you have written comments, please give her 20 18 copies. 19 The third item is 95-11-2, public hearing to 20 consider amending the test methods designated for 21 determining the benzene, aromatic hydrocarbon, olefin, and 22 sulfur content of Phase 2 gasoline. 23 These test methods are used to determine if 24 California gasoline complies with the requirements specified 25 in our reformulated gasoline regulations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 When California reformulated gasoline reaches the 2 pumps next spring, it will be the world's cleanest burning 3 gasoline and will lead to a dramatic reduction in air 4 pollution. 5 The use of California RFG will reduce smog-forming 6 pollutants by 15 percent and reduce human cancer risk 7 exposure by 30 to 40 percent. 8 As with many other aspects of this regulatory 9 program, the development of improved test methods has been a 10 cooperative effort between industry and the Air Resources 11 Board staff. I really think an unprecedented spirit of 12 cooperation exists surrounding this program, and that is 13 seen not only by myself, but Board Members Calhoun and 14 Lagarias, who are actually involved with the committees 15 bringing this program forward. 16 At this point, I'd like to ask Mr. Boyd to 17 introduce the item and begin the staff's presentation. 18 But first, Nadine needs a break. 19 (Thereupon, there was a pause in the 20 proceedings to allow the reporter to 21 replenish her stenograph paper.) 22 CHAIRMAN DUNLAP: Nadine, how are you doing? You 23 ready? Okay, Mr. Boyd. 24 MR. BOYD: Thank you, Mr. Chairman. Well, as you 25 indicated and the Board knows, the Board approved the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 reformulated gasoline regulations in November of 1991, and, 2 as indicated, these regulations established a very 3 comprehensive set of specifications for commercial gasoline 4 to be sold in California beginning in the spring of 1996. 5 In addition to those specifications, the Board 6 also adopted test methods that would be used to measure the 7 regulated components of this same gasoline. While the test 8 methods adopted in 1991 were the best methods available at 9 the time, it was recognized by the affected industries, and 10 certainly by ourselves, that improvements in the test 11 methods were needed and were likely. 12 Accordingly, the Board, in approving the 13 regulations, specifically directed the staff to work with 14 the industry to identify and improve test procedures. 15 Heeding that directive, we have met regularly with 16 the members of the oil industry, the Western States 17 Petroleum Association, to discuss test methods and 18 developments, and have participated in interlaboratory 19 studies of test method precision carried by the American 20 Society of Testing and Materials. 21 In developing our recommendations, we have relied 22 on in-house evaluations of test methods and on the input 23 provided from instrument manufacturers and, of course, from 24 representatives of the oil companies and oil industry. 25 As a result of this comprehensive process, we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 identified and we're proposing updated test methods for the 2 measurement of the benzene, aromatic hydrocarbon, olefin, 3 and sulfur content of gasoline. 4 The proposed test methods we believe are more 5 precise and, in some cases, more accurate than the current 6 methods designated by the Air Resources Board. 7 With that brief introduction, I'll now ask Mr. 8 Paul Rieger of our Monitoring and Laboratory Division to 9 give you the staff presentation. 10 Mr. Rieger. 11 MR. RIEGER: Thank you, Mr. Boyd. 12 Good morning, Chairman Dunlap and members of the 13 Board. 14 As was stated earlier, we're here to consider 15 amending the test methods designated for determining the 16 benzene, aromatic hydrocarbon, olefin, and sulfur content of 17 Phase 2, or California reformulated gasoline. 18 California reformulated gasoline regulations 19 specify eight properties of commercial gasoline to be sold 20 beginning March 1, 1996. 21 The specifications for the eight gasoline 22 properties are shown on the screen. We're proposing test 23 method changes for measuring the specifications highlighted 24 in yellow. 25 The specific test method changes are shown on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 following screen. Our proposed test methods were developed 2 in cooperation with the Western States Petroleum Association 3 and the American Society of Testing and Materials, or ASTM. 4 The last two digits of an ASTM test method 5 represent the last year of approval of the method. The 9x 6 designation refers to the most recent draft of a method. 7 We will discuss our proposed test method changes 8 in the order that they appear on the screen. 9 For the measurement of benzene and aromatic 10 hydrocarbons, we're proposing to replace ASTM D3606-87 and 11 MLD 116 with ASTM D5580-9x. Both currently adopted methods 12 have been shown to have potential interferences when applied 13 to California reformulated gasoline. 14 We're recommending ASTM D5580-9x for two reasons: 15 First of all, D5580 does not have any interferences from 16 oxygenated compounds as is the case with the currently 17 adopted methods and, secondly, D5580 is highly reproducible 18 as will be discussed later. 19 Several alternative methods were evaluated by ARB 20 staff. The most promising of these were gas chromatography 21 coupled with Fourier transform infrared detection, or 22 GC/FTIR, and gas chromatography coupled with mass selective 23 detection, or GC/MS. 24 Both methods utilize a detector that is selective 25 for aromatic compounds. Detector selectivity is useful, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 because it reduces the possibility of interference. 2 ASTM D1319, an old method based on column 3 chromatography, was also considered. 4 We did not select these methods for the following 5 reasons: For both selective methods, the instrumentation 6 is relatively expensive, and the instrument calibration is 7 more complex and time-consuming. 8 For GC/FTIR, continued vendor support is 9 uncertain. And for the GC/MS method, work is being -- the 10 method is being subjected to retesting due to technical 11 deficiencies. 12 ASTM D1319 has several disadvantages. It is 13 highly nonreproducible. It is very labor intensive, and it 14 cannot be used for benzene determination. 15 The reproducibilities of the proposed and several 16 alternative methods are shown on the display. 17 Reproducibility is a measure of the variability in results 18 when the identical sample is measured by different 19 laboratories. 20 A lower reproducibility value indicates a lower 21 degree of uncertainty in the result. 22 As can be seen from the table, for the measurement 23 of benzene, ASTM D5580-9x is more reproducible than ASTM 24 D3606, but not as reproducible as GC/MS and GC/FTIR. 25 For the determination of aromatic hydrocarbons, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 ASTM D5580-9x is the most reproducible of all the methods 2 tested. 3 In summary, we're proposing the adoption of ASTM 4 D5580-9x, because it does not have interferences from 5 oxygenated compounds and is relatively reproducible. 6 Furthermore, relative to the selective methods, it is more 7 cost-effective and practical. 8 Olefin determination: For the determination of 9 olefins, we're proposing the adoption of ASTM D13-9x (sic) 10 in place of ASTM D13-89 (sic). 11 Operationally, the proposed method is identical to 12 the adopted method. However, the proposed method expands 13 the scope to include oxygenated gasolines and includes 14 calculation equations for determining olefins in gasoline 15 when oxygenates are present. 16 ASTM D1319-9x contains updated reproducibility 17 data which is stated as an equation as shown on the screen. 18 Due to the averaging provisions in the RFG 19 regulations, it is highly likely that reformulated gasolines 20 will be produced with olefin content before four volume 21 percent, the lower limit of the reproducibility statement as 22 currently published. 23 In the absence of reproducibility data below the 24 four percent level, staff is proposing to extend the range 25 of applicability of this equation by extrapolation to 0.3 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 volume percent, which is the lower limit of applicability of 2 the method. 3 Sulfur determination -- For the determination of 4 sulfur, we're proposing several changes as follows: First 5 of all, replacing the currently adopted method, ASTM 6 D2622-87 with ASTM D2622-94. 7 ASTM D2622-94 contains editorial changes which 8 clarify the method. 9 Secondly, we propose updating the calibration 10 procedure and reproducibility statement of D2622-94. 11 And, finally, we propose adopting ASTM D5453-93 as 12 an alternate method to ASTM D2622-94. 13 We're proposing to update the calibration 14 procedure because the current procedure is not suitable for 15 California RFG. Concentration levels of the calibration 16 standard do not extend to the specified levels, and the 17 calibration matrix is very different from gasoline. 18 In addition to revising the calibration procedure, 19 we're also proposing to update the published reproducibility 20 of D2622-94. The currently published reproducibility 21 statement does not reflect modern instrumentation and is 22 based on an unsuitable calibration procedure. 23 WSPA and ARB staff collaborated on several 24 interlaboratory studies to update the reproducibility data, 25 In the first study, D2622 was retested using modern PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 instrumentation but the ASTM calibration procedure. 2 In the latest interlaboratory study, the updated 3 calibration procedure was incorporated and parallel tests 4 were run on a second method, ASTM D5453. 5 The preliminary results of the study showed an 6 improvement in reproducibility relative to the values 7 published by ASTM. The results from preliminary 8 calculations are shown on the screen. 9 The WSPA/ARB study also verified that ASTM 10 D2622-94, even with the calibration modification, becomes 11 highly nonreproducible below 10 parts per million and, 12 therefore, is inadequate when applied to low sulfur 13 averaging gasoline batches. 14 Staff is therefore proposing the adoption of ASTM 15 D5453-93 for the measurement of sulfur below 10 ppm. 16 ASTM D5453 is relatively reproducible in a range 17 of concentrations from to 1 to 8,000 ppm. In order to 18 provide flexibility to industry laboratories, staff is also 19 proposing that this method be allowed as an alternate method 20 to D2622 for measuring higher concentrations of sulfur. 21 Since we are allowing the use of two methods for 22 the measurement of sulfur, it is important that any bias 23 between the methods be determined. For this reason, the 24 recent interlaboratory studies included both methods. 25 The results, as shown on this screen, indicate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 that no significant bias exists between the two proposed 2 methods. 3 Staff has also reviewed three alternative methods 4 for measurement of sulfur. We did not recommend these 5 methods because all are poorer in reproducibility than the 6 adopted methods, or the proposed methods. 7 15-day changes -- Staff has made several changes 8 to the original proposals based on data recently made 9 available. These changes will be included in the 15-day 10 change package and will include the following. 11 For benzene and aromatic hydrocarbon 12 determination, we anticipate a change in the designation of 13 the method from D5580-9x to D5580-95. 14 For the olefin determination, we've extended the 15 limit of applicability of the method from four volume 16 percent to 0.3 volume percent. 17 15-day changes continued -- For the measurement of 18 sulfur, we're proposing to allow ASTM D2622-94, as modified, 19 to be used for measurement of concentrations down to 10 20 parts per million, which is -- which is down from the 30 21 parts per million proposed earlier. 22 We're replacing the reproducibility statement 23 originally proposed with one that is based on the most 24 recent testing. Preliminary data was presented today. A 25 final table will be included in the 15-day package. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 Finally, our original proposal for a bias 2 correction for ASTM D5453 is no longer required. 3 Because of the averaging provisions in the 4 regulation, some gasoline batches may have component 5 concentrations below the scope or useful range of the 6 method. Industry has asked staff to clarify how they may 7 report values below the scope of the method. 8 Staff has agreed to work with industry to define 9 these lower limits based on future interlaboratory testing. 10 Until the study is completed, staff is proposing to set the 11 reporting limit at the lower limit of the method's scope. 12 Staff has not identified any air quality or 13 environmental impacts. The stringency of the regulation is 14 not affected by the proposed changes. 15 The economic impacts of the proposed changes are 16 expected to be minimal. The instrumentation required to 17 carry out the proposed methods is similar in cost to the 18 instrumentation required to carry out the currently adopted 19 methods. 20 This ends our formal presentation, but we've 21 received industry comments, which we would like to address 22 at this time. 23 In a letter to the Board dated October 23, 1995, 24 Union Oil Company submitted several comments regarding our 25 test method proposals. I will briefly summarize the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 comments and provide a response. 2 The first comment: Unocal suggests that the ARB 3 provide for a phase-in period of up to two years for new 4 test methods when there is the need for a large investment 5 in equipment and personnel training. 6 Unocal recognizes, however, that the test methods 7 being proposed at this Board hearing do not entail such an 8 investment, and is making the suggestion for potential 9 future test method changes. 10 Our response is that we believe that the WSPA/ARB 11 working group on test methods provides an adequate forum for 12 providing advance notification of test method changes, and 13 we are prepared to work with this forum on considering 14 changes on a case-by-case basis. 15 The second comment: Unocal requests that the ARB 16 adopt a formal protocol to determine minimum detection or 17 quantitation limits for its test methods. 18 We agree that the quantitation limits for the test 19 methods need to be determined, and we've proposed a protocol 20 for their determination. 21 The lower limit of the method is being proposed as 22 a reporting limit until such time that detection limits are 23 determined. 24 Their third comment: Unocal feels that it is 25 inappropriate to designate the lower limit of the scope of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 the method as the reporting limit, and requests that values 2 below the lower limit be permitted for reporting purposes. 3 We have already taken steps at this rulemaking to 4 reduce the reporting limit of the designated test methods. 5 For sulfur measurement, we have adopted an alternate test 6 method which reduces the reporting limit from 10 ppm to 1 7 ppm sulfur. 8 For olefin determination, we extended the 9 reporting limit from 4 percent to 0.3 volume percent. 10 We're also participating with industry in the 11 testing of an olefin method with lower limits of 12 applicability. We're prepared to continue to work with 13 industry to find ways of reducing limits of applicability -- 14 or detection limits as they are called -- and to develop 15 alternate methods with inherently lower limits of detection. 16 Finally, Unocal -- our fourth response. Unocal 17 suggests that ASTM D5453 -- the reproducibilities, as stated 18 in the ASTM method be revised based on the recent ARB/WSPA 19 round-robin testing. 20 The purpose of the WSPA/ARB testing was to revise 21 the reproducibility of ASTM D2622-94 in view of the revised 22 calibration procedure. ASTM D5453 was included in this 23 study only for the purpose of determining the bias between 24 the methods. Therefore, changing the reproducibility would 25 go beyond the scope of the study. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 The loss in reproducibility shown in the recent 2 WSPA/ARB study suggests that the quality control procedures 3 for this test must -- need to be reviewed and, if necessary, 4 tightened. Staff is prepared to work with industry on this 5 problem. 6 We've also received -- that ends the comments from 7 Unocal. 8 We've also received a letter from Valero Refining 9 and Marketing Company in Houston, Texas, dated October 24, 10 1995. 11 In general, the comments are supportive of our 12 proposals. There was a comment regarding the benzene 13 determination, our proposal using ASTM D5580. Valero 14 suggested that there was a bias in the determination of 15 benzene. 16 We are not aware of such a bias. The current 17 method, D5580 and the ASTM D3606, as well as the two 18 selective methods that we mention in our presentation, were 19 all subjected to parallel testing, and no bias for benzene 20 analysis was determined. 21 There was also a comment from Valero regarding our 22 proposal regarding total aromatics, and I believe there was 23 a misunderstanding of our proposal, and we will be in 24 contact with Valero to clarify that. 25 And that ends the comments and our presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 CHAIRMAN DUNLAP: Thank you very much. Appreciate 2 that overview. 3 Any questions of staff? 4 Mr. Calhoun. 5 MR. CALHOUN: Yes. I have one question concerning 6 one of the viewgraphs that shows the correlation between 7 D2622 and D5453. What are the units on the graph? 8 MR. RIEGER: Those are parts per million, both 9 axes. Parts per million sulfur. 10 MR. CALHOUN: Okay. That's fine. 11 CHAIRMAN DUNLAP: Okay. Any other questions? 12 Mr. Lagarias. 13 MR. LAGARIAS: Will you refresh my memory? As I 14 recall, the ASTM, that's the American Society for Testing 15 and Materials. 16 MR. RIEGER: That's correct. 17 MR. LAGARIAS: And that's a nonprofit 18 organization. And the way they usually run their tests, 19 they use round-robins, they send a reference sample to a 20 number of different laboratories to see how they get their 21 reproducibility, and how they report the results? 22 MR. RIEGER: That's correct. They send out a test 23 method -- a proposed test method, very detailed, and with 24 instructions. 25 MR. LAGARIAS: So, they get input from a number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 laboratories? 2 MR. RIEGER: Right. They usually have a 3 requirement of six laboratories at the minimum, and 15 4 samples. 5 MR. LAGARIAS: And it usually takes a number of 6 years before they ever get around to making a test, and even 7 longer to revise it. 8 MR. RIEGER: That's correct. And that's why we 9 went the route of proposing the calibration change ahead of 10 the ASTM. We expect ASTM will make this change eventually. 11 MR. LAGARIAS: Well, we strongly endorse the 12 policy of using ASTM methods rather than cobbling up our 13 own. And I think this is a good way to go. 14 CHAIRMAN DUNLAP: Yes. Thank you. Anything else? 15 Okay. We have one witness from WSPA, Donald Bea. 16 Is this the only witness, Pat? 17 MS. HUTCHENS: Yes. 18 CHAIRMAN DUNLAP: Okay. Very good. Good 19 afternoon. It's one minute past noon, I think. 20 MR. BEA: It is afternoon. I was going to say 21 "good morning." 22 I think you may have a copy of my testimony, and a 23 lot of it's been addressed already. So, I think I'm just 24 going to skip through lots of it -- 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 MR. BEA: -- and just hit the salient parts. 2 CHAIRMAN DUNLAP: Thank you. 3 MR. BEA: One thing I would like to comment is 4 that we've had an excellent working relationship with staff 5 on this issue, and it's probably the best that we've -- that 6 I've experienced anyhow, and we've sort of worked out our 7 issues beforehand rather than after the fact or in meetings 8 like this. 9 The one point that I would like to reiterate that 10 we would like to see a little difference on is -- concerns 11 reproducibility of the D5453 for sulfur. Staff has talked 12 about changing the reproducibility for the X-ray method, 13 which is the 2622, and we feel that there's also a need for 14 changing of the 5453, and this is again based upon the work 15 that was done in the WSPA/ARB recent round-robin. 16 And our justification for that was that this 17 round-robin was a lot more thorough and more representative 18 than similar type round-robins that were done under ASTM. 19 This round-robin consisted of not only research 20 labs, which generally were used in ASTM work, but refinery 21 labs, and commercial labs, as well as CARB's lab. And this 22 is also one that will -- specifically made fuels that were 23 like CARB Phase 2 gasoline, so they were looking for low 24 sulfurs, both in the finished product and as well as to the 25 blend components. And so, this is really the only one that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 really addresses these low sulfur levels. 2 And that was our justification for making this 3 recommendation. 4 And what we propose to do is use the WSPA 5 reproducibility for the interim, but then propose to the 6 ASTM that they update their precision statement for this 7 test method, and that'll probably lead to another 8 round-robin, where it was originated by the ASTM to go 9 through this whole cycle again. 10 And, as Mr. Lagarias said, that sometimes takes a 11 while. And so, we're trying to get this into something 12 that's more representative of what we really think is really 13 out -- going to happen out there in the real world. 14 CHAIRMAN DUNLAP: I think Mr. Lagarias said six 15 years or something. 16 MR. BEA: Well, that's probably extreme. But it 17 does -- sometimes it seems like six years. 18 CHAIRMAN DUNLAP: All right. 19 MR. BEA: Sometimes it seems like infinite. 20 CHAIRMAN DUNLAP: Well, I guess I would say, if 21 there's anything we can do to nudge that process along -- 22 maybe we're already doing that -- we'd be willing. 23 MR. BEA: Yeah. What we'd like, again, is for the 24 interim to use the latest reproducibilities we got out of 25 this recent test, and then go through the process of getting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 that revised officially through the ASTM process. 2 CHAIRMAN DUNLAP: Okay. Let me ask staff, if I 3 may. May interrupt you at this point? 4 MR. BEA: You may. 5 CHAIRMAN DUNLAP: How does staff feel about that? 6 MR. RIEGER: Well, this data came in just last 7 week. 8 CHAIRMAN DUNLAP: Okay. 9 MR. RIEGER: But also, the scope of this test 10 method did not include this round-robin, did not include 11 revising 5453. We did not identify any deficiencies with 12 5453 as we did with 2622. 13 CHAIRMAN DUNLAP: Okay. All right. 14 MR. BEA: But we did run it as the -- as it 15 currently is stated, and this is the reproducibility it got, 16 and it was, as I said, a large number of labs of different 17 types, a lot bigger mix than normal. 18 CHAIRMAN DUNLAP: Okay. 19 MR. BEA: And so, that's why we feel pretty 20 strongly on that. 21 CHAIRMAN DUNLAP: So, what would you have us do? 22 MR. BEA: Well, what I propose is that you adopt 23 for the interim the current reproducibilities that we got 24 from the latest WSPA/CARB round-robin test program, and then 25 officially petition ASTM to update their precision statement PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 and go through the official process, and get that adopted. 2 And when that's adopted, that becomes the official 3 method. 4 MR. RIEGER: Well, I think we'd like to discuss 5 this maybe with the WSPA working group before we make that 6 change. But we can try to make that change in the 15-day 7 period. 8 CHAIRMAN DUNLAP: Okay. 9 MR. RIEGER: After we have that discussion. 10 CHAIRMAN DUNLAP: Mr. Kenny, is that -- 11 MR. KENNY: If I could have one moment? 12 CHAIRMAN DUNLAP: Sure. 13 MR. KENNY: That's not a problem. 14 CHAIRMAN DUNLAP: Okay. Very good. 15 MR. BEA: The last thing I'd like to mention is a 16 couple of things that were also mentioned in the staff 17 presentation. They had to do with the detection limits 18 question, which they talked about working with us to get 19 that resolved. That's an issue that is becoming more 20 important, now that everybody's started to look seriously 21 how they're going to make their Phase 2 gasoline. 22 A year ago, that was not something that we really 23 thought much about now when you look -- particularly with a 24 predictive model, some particular parameters, you start to 25 run -- try to run as low as possible. That's become a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 bigger issue than before, and so we need to probably to get 2 that resolved. 3 And we sort of propose to try to get that done by 4 the end of January. 5 The other one had to do with the phase-in of new 6 test methods, and they've also addressed that question. I 7 don't think I have anything new. 8 CHAIRMAN DUNLAP: So, these other two items, thus 9 far, staff's worked with you on, and you feel comfortable 10 with where we're at? 11 MR. BEA: Yeah. We feel comfortable, and we just 12 need to -- particularly the detection limit, try to get that 13 resolved as quickly as we can, because we'd like to have 14 that done -- known before we start into actual production of 15 Phase 2 gasoline. 16 CHAIRMAN DUNLAP: Okay. Understood. 17 Staff, we're going to move that forward? 18 (There were affirmative nods by the staff.) 19 CHAIRMAN DUNLAP: Okay. 20 Do either of those two areas that he suggested -- 21 I'm seeing heads nodding. We're okay with it. Processwise, 22 we can do that? 23 MR. RIEGER: Yes, I believe so. 24 CHAIRMAN DUNLAP: Okay. You have enough 25 flexibility to do that. All right. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 MR. BEA: The other -- just a couple other minor 2 things I want to mention is that in our work with CARB, 3 we've discovered what looks like a small bias on the 4 aromatics procedure that's caused by heavy paraffin 5 compounds. 6 We don't really know what that is, why it's 7 causing that, or what the correction will be, but we're 8 going to be continuing to work with staff to try to resolve 9 that issue. 10 And also, they talked about the new precision 11 statement for olefins at the low levels. And we accept the 12 position that they're proposing currently, but we want to 13 continue to work with that to see whether or not that's 14 really right or wrong. 15 CHAIRMAN DUNLAP: And that can be done 16 administratively without any change. 17 MR. BEA: I don't think that needs to -- at this 18 stage, we don't have anything to propose new, so I don't see 19 anything different on it. 20 And that's all. The rest of the comments you 21 have, and they're pretty much supportive of what staff has. 22 CHAIRMAN DUNLAP: Okay. 23 MR. BEA: You know, I sort of had to guess what 24 was going to happen ahead of time, so. . . 25 CHAIRMAN DUNLAP: Thank you for your preparation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 and your willingness to work with us on this. Appreciate it 2 very much. 3 Tell your colleagues -- 4 MR. BEA: (Interjecting) If there are additional 5 questions, I'll be willing to answer. 6 CHAIRMAN DUNLAP: Please tell your colleagues at 7 WSPA how seriously we're taking this program, and how 8 important it is for us to work together with you on this 9 program. 10 Okay. Any questions of our witness? Okay. Very 11 well. 12 Mr. Boyd, anything else you'd like to add? 13 MR. BOYD: No, Mr. Chairman. No further comments 14 form the staff. 15 CHAIRMAN DUNLAP: Okay. I remembered the 16 resolution that we have before us this time, 95-45. I guess 17 I need to close the record. We've heard the written 18 comments already summarized. 19 The record will be reopened when the 15-day notice 20 of public availability is issued. Written or oral comments 21 received after this hearing date but before the 15-day 22 notice period is issued will not be accepted as part of the 23 official record of this agenda item. 24 When the record is reopened for a 15-day comment 25 period, the public may submit written comments on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 proposed changes, which will be considered and responded to 2 in the final statement of reasons for the regulation. 3 Just a reminder to the Board concerning ex parte 4 communications. While we may communicate off the record 5 with outside persons regarding Board rulemaking, we must 6 disclose the names of our contacts and the nature of the 7 contents on the record. This requirement applies 8 specifically to communications which take place after the 9 notice of a Board hearing has been published. 10 Are there any communications which need to be 11 disclosed at this point? 12 MAYOR HILLIGOSS: I attended the Chevron tour a 13 week ago Friday. 14 CHAIRMAN DUNLAP: Okay. 15 MAYOR HILLIGOSS: And they did mention RFG, but 16 not any of the testing or anything. 17 CHAIRMAN DUNLAP: Okay. Very good. 18 Anything else? All right. We have the resolution 19 before us. It seem we've been able to work out some of the 20 issues. Staff has done, it seems, a fine job working with 21 the industry group on this. 22 Any concerns? If we don't have any, I would 23 certainly entertain a motion. 24 MR. LAGARIAS: I move adoption of Resolution 25 95-45. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 SUPERVISOR ROBERTS: Second. 2 CHAIRMAN DUNLAP: Was there a second? Mr. Vagim, 3 I think I heard -- 4 SUPERVISOR VAGIM: No, it was Mr. Roberts. 5 CHAIRMAN DUNLAP: Supervisor Roberts. Thank you. 6 Any other comments or issues need to be discussed 7 surrounding this resolution? 8 All right. Will the Board Secretary please call 9 the roll for a vote on Resolution 95-45. 10 MS. HUTCHENS: Boston? 11 DR. BOSTON: Yes. 12 MS. HUTCHENS: Calhoun? 13 MR. CALHOUN: Aye. 14 MS. HUTCHENS: Edgerton? 15 MS. EDGERTON: Yes. 16 MS. HUTCHENS: Hilligoss? 17 MAYOR HILLIGOSS: Aye. 18 MS. HUTCHENS: Lagarias? 19 MR. LAGARIAS: Yes. 20 MS. HUTCHENS: Parnell? 21 MR. PARNELL: Aye. 22 MS. HUTCHENS: Riordan? 23 SUPERVISOR RIORDAN: Aye. 24 MS. HUTCHENS: Roberts? 25 SUPERVISOR ROBERTS: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 MS. HUTCHENS: Silva? 2 SUPERVISOR SILVA: Aye. 3 MS. HUTCHENS: Vagim? 4 SUPERVISOR VAGIM: Aye. 5 MS. HUTCHENS: Chairman Dunlap. 6 CHAIRMAN DUNLAP: Aye. 7 MS. HUTCHENS: Resolution passes 11-0. 8 CHAIRMAN DUNLAP: Okay. 9 At this juncture, I would like to propose that we 10 take a break for about an hour, an hour and 15 minutes, come 11 back about 1:30. 12 Board members, there's some food awaiting us in 13 our upstairs conference room, which I'll tell you about in a 14 moment. And for the audience, you won't see us again till 15 about 1:30. 16 So, we'll take the break. Thank you. 17 (Thereupon, the luncheon recess was taken.) 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 AFTERNOON SESSION 2 3 --o0o-- 4 CHAIRMAN DUNLAP: We'll reconvene. While we're 5 taking our seats, I'd like to make a standard announcement. 6 Those of you that wish to testify on this item, please check 7 in with the Board Secretary to our left. Those of you that 8 wish to provide us with written comments, we remind you to 9 please provide us with 20 copies, and also check in with the 10 Board Secretary. 11 The next item on today's agenda is 95-11-3, a 12 public meeting to update the Board on the technological 13 progress of zero-emission vehicles. 14 As you know, staff at my direction has held a 15 series of forums to gather information on the zero-emission 16 vehicle development process and issues surrounding it. 17 These forums have been well attended, including 18 attendance by the Board members. We've had three or four 19 Board members at each of the seven or so forums we've had to 20 date. 21 I thought it timely to ask staff to brief the full 22 Board on key issues raised at the forums, and to give us a 23 sense of what was said and positions brought forward. 24 Some of you may be wondering about the final forum 25 on costs and benefits that is scheduled for November 8th. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 The staff will summarize comments from this forum at our 2 November 16th Board meeting. So, this Board will hear 3 about what went on from the staff in total on all of these 4 forums. 5 At this point, I'd like to introduce Mr. Boyd and 6 ask him to kick off this presentation. And it's my 7 understanding that it'll take about an hour or so for the 8 two portions of the presentation. 9 Mr. Boyd. 10 MR. BOYD: Thank you, Mr. Chairman. I'll try to 11 be brief, because Bob Cross, who has moderated these forums, 12 will be giving the summary of the forums to date for you. 13 But I'd like to build on your comments on the attendance and 14 participation at these forums, which basically have been 15 taking place on a monthly basis since the month of May. 16 I know I speak for the staff. We've been pleased 17 to see such a high level of active participation among so 18 many interested parties concerning the California zero- 19 emission vehicle program. We, of course, have heard from 20 many representatives of the auto industries, the battery 21 industry, the California auto dealers, the electric 22 utilities, various California business partnerships, small 23 business entities, environmental groups, representatives 24 from our universities, industry associations, various 25 government agencies, and hosts of private citizens. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 Participation at these forums, in essence, 2 captures the essence of our public rulemaking process and 3 what it's all about. This organization has not and does not 4 promulgate air quality regulations control strategies in a 5 vacuum and without total knowledge of the technical 6 capabilities of the world's industries to meet our needs. 7 Soliciting input from these many outside groups 8 helps ensure that we do not overlook any important concerns, 9 and that we ultimately end up with workable programs. With 10 that, I'd like to, as I say, introduce Bob Cross, who has 11 moderated each of the forums and done, from my perspective, 12 an outstanding job and probably deserves a Purple Heart by 13 now for it. He's going to summarize the comments that have 14 been received at the forums. 15 And then, following his presentation, at the 16 Chairman's request, Dr. Kalhammer, who is a member of the 17 Battery Technical Advisory Panel, will be addressing the 18 Board with the findings of the Battery Panel this date. 19 With that, I'll call upon Mr. Cross to begin the 20 presentation. 21 MR. CROSS: Good afternoon, all. It's a pleasure 22 and an honor to be before this group this afternoon. I'm 23 standing at the podium here so my staff can see when I 24 change overheads, so this will come off as more or less 25 coordinated. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 Essentially, what I'm going to do with my 2 presentation is give a very quick one-slide background ZEV 3 requirements, then I'll jump right to the forums. I'll try 4 and compress six long days of testimony into a few major 5 points. 6 As I told everyone when I gave many of these 7 comments a couple days ago, because of the volume of 8 testimony, what I've tried to do is capture themes as 9 opposed to represent every detail that came out in the 10 workshops. 11 Following that, I'm going to talk about some of 12 the more obvious but I think important conclusions that came 13 out of the workshops. And, then, as Mr. Boyd mentioned, 14 I'll turn the microphone over to Fritz Kalhammer, who will 15 talk about the Battery Panel's findings. 16 ZEV requirements were adopted in 1990 as part of 17 the low-emission vehicle regulations. They require the 18 seven largest volume manufacturers to introduce EVs in the 19 percentages shown up there. The manufacturers are Honda, 20 Nissan, Toyota, Mazda, Chrysler, Ford, and GM. 21 The requirement to introduce and sell at the 22 volumes shown up there and the years shown up there are 23 enforceable under the Health & Safety Code, Section 43211, 24 which has a $5,000 fine associated -- per vehicle associated 25 with noncompliance. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 I might add that the '98 through 2000 requirement 2 of 2 percent would end up with about 60,000 vehicles total 3 being sold in the State; and by 2010, implementing the 4 requirements as shown up there, we'd end up with a fleet of 5 about 1.1 million electric vehicles in California. 6 Jumping right into the forums this shows the 7 schedule of the forums. I'm going to change the order a 8 little bit and talk about the hybrid vehicles shown for May 9 9th, a little bit later in the forum, because there were 10 actually two forums on hybrids, and I want to combine them. 11 The forums were well-attended as Mr. Boyd noted. 12 And I think that's a sign of the level of interest in this 13 program. 14 The last forum is the November 8th forum, which 15 will be in a couple of weeks. 16 Major stakeholders represented at the forums can 17 kind of be grouped. Obviously, we have folks who are 18 concerned about public and environment. We have the next 19 four -- manufacturers, dealers, battery manufacturers, and 20 start-up businesses, all who are potential electric vehicle 21 suppliers. Utilities and the oil industry are the energy 22 suppliers which stand to gain and lose business through the 23 implementation of electric vehicles. 24 And then, obviously, consumers are concerned about 25 the impact of all of this on them. And so, you have folks PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 who were interested because they're potential purchasers, 2 and then also people who are concerned about their utility 3 bills and things like, for example. 4 The first forum, marketability: In each of these 5 forums, I'm going to introduce them with a slide like this, 6 which essentially conveys the theme. And for the 7 marketability theme, the -- I think the real question that 8 needed to be answered and needs to be answered is whether or 9 not there will be sufficient demand for 1998 ZEVs to support 10 the level of two percent of product; in other words, 20,000 11 vehicles in that first year. 12 Most affected stakeholders is fairly obvious. All 13 of the suppliers of technology and then also the folks who 14 might end up seeing these vehicles on the showroom floors 15 As I said before, the two percent requirement is 16 equal to about 20,000 vehicles per year, and estimated sales 17 that we got at the workshop ranged from 3500 to 98,000 in 18 '98. 19 In the following two slides, I'm going to talk a 20 little bit more about each of those. 21 On the low end of the estimates are automobile 22 manufacturer surveys. Obviously, the auto manufacturers, 23 being interested in selling electric vehicles, have done 24 extensive market research on this through focus groups and 25 other studies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 Toyota, at the workshop, estimated EV sales in '98 2 at 5800. GM estimated '98 sales at 3500, but then also 3 noted that the sales could rise to 10,000 if additional 4 incentives and infrastructure were available. 5 So, we have the car manufacturers coming in below 6 the 20,000 per year that we were talking about a moment ago. 7 Contrasted to that, the University of California 8 at Davis did a study for the Air Resources Board, where they 9 surveyed California households and essentially came up with 10 the concept that the household of now and the future is one 11 which has different vehicles for different purposes. In 12 other words, people typically have a vehicle that they use 13 for kind of hopping around town and another one that they 14 use for long trips. 15 And because of that, the survey found that many of 16 these multiple vehicle households would, in fact, be 17 interested in owning an electric vehicle for the shorter 18 range trips that they do all the time. 19 Davis estimated the market at between 7 and 15 20 percent, and that is based on assuming equivalent prices to 21 internal combustion engine vehicles. Ranges between 60 and 22 150 miles were examined. 23 Okay. Now, we're back to the major issues, and 24 we've talked about whether or not the 20,000 would be 25 possible in the demand estimate. There was a large group of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 consumers at the forum that were very excited about EVs. 2 These were folks who had had an opportunity to preview the 3 GM Impact, folks that had experience with Ecostars, people 4 who had converted their own vehicles. And all of these 5 people have very, very positive things to say about their 6 readiness, if you will, to purchase EVs when they are 7 available on the market. 8 Contrasted to that, there were comments by 9 manufacturers and dealers noting that consumers would be 10 doing comparisons between electric vehicles and other kinds 11 of vehicles that folks could purchase. And clearly, range 12 and purchase price are major factors in that kind of 13 decision. 14 Moreover, I think the staff came away from this 15 discussion concerned that it's important that the first 16 vehicles that are put out by the big manufacturers be good 17 ones. In other words, you don't want to have a situation 18 where you introduce vehicles onto the market which don't do 19 what they're purported to do and, therefore, turn off the 20 consumer market. 21 And the example that I use for this is the Olds 22 diesel that was introduced a few years ago, which created a 23 great deal of excitement on the market and then had horrible 24 reliability problems and, really, in my view, almost 25 poisoned the market for diesel passenger cars in America. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 And I don't think we want to see that repeated 2 with electric vehicles. 3 Okay. We're to the next forum. The theme is 4 clearly, will the necessary infrastructure be in place in 5 1998? Most affected stakeholders would be the electric 6 utilities, who are infrastructure providers; manufacturers 7 and dealers, who are concerned about marketing their 8 vehicles in the back light of how much infrastructure is out 9 there; and then, consumers and fleets, who would be making 10 purchase decisions based on the availability of 11 infrastructure. 12 Major issues: Clearly, home charger installations 13 must be timely. I think the dealers made the point that to 14 be able to sell a vehicle, you need to be able to tell the 15 purchaser that they can have a charger installed efficiently 16 and quickly in their home. 17 Public charging is needed in the early market. As 18 people become accustomed to these vehicles, they're going to 19 be a little nervous about how far they can go on a charge 20 when they first start out with them. I think they learn 21 fairly quickly just based on experience. But to get over 22 that barrier, it's important that they have some confidence 23 that, should they get stuck someplace, that charging is 24 available. 25 And there are already something like 400 public PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 charging outlets out there. But I think this needs to be 2 addressed further. 3 EV fuel costs about half of what gasoline does for 4 a comparable vehicle based on some calculations that we 5 made. And the assumptions behind that are comparable 6 vehicle efficiencies. We used sort of a Ford Escort type 7 vehicle, which corresponds with the Ford Ecostar electric 8 vehicle, for our estimates. 9 And we assumed off-peak charging rate that's been 10 proposed by the utilities, which is about a nickel a 11 kilowatt hour. The on-peak rate currently being charged in 12 Southern California is 13 or 14 cents a kilowatt hour. The 13 break-even point between gas and electricity is about a 14 dime. 15 So, at the proposed rate, fuel cost is half as 16 much; at the current rate you pay for on-peak, it's about 30 17 percent more than it would be for gasoline. 18 It's important to train emergency response 19 personnel. And this is occurring. I think there'll be some 20 additional discussion about that later on, but we've already 21 had a number of meetings with emergency response folks. 22 There's training going on up here, which staff will probably 23 be able to talk about later. 24 There's a video. We're coordinating with the 25 State Fire Marshal. I think this is a controllable issue, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 but it's clearly also an important one. 2 Also, another theme that came out of that workshop 3 was that there are -- there are a lot of different ways to 4 introduce electric vehicles into the marketplace, and one or 5 two witnesses suggested that, if you control the 6 introduction -- in other words, put the vehicles in fleets 7 or put them in specific locations; in other words, cities, 8 or something like that -- where there's a concentration of 9 infrastructure and knowledge about the vehicles, it may be 10 easier for folks to have a positive experience with the 11 vehicle rather than having them all scattered out all over 12 the place. 13 So, it's just an idea, but I think it was an 14 interesting idea that was floated at the workshop. 15 One other theme that was discussed very briefly at 16 the infrastructure forum was a Carnegie-Mellon study done on 17 the environmental impacts of lead-acid batteries. And 18 essentially, it was a very one-sided discussion. CMU did 19 not attend the workshop, and the -- essentially, the sense 20 of the testimony was that CMU had grossly overestimated the 21 environmental hazards associated with lead-acid batteries, 22 because they had treated all lead emissions -- whether they 23 be solid or air -- as air. 24 And it turns out that most of the emissions of 25 lead associated by various processes are solid; they're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 slag, which doesn't ever end up in the air. 2 There were several subsequent exchanges of written 3 comments between CMU and ARB staff. I don't think that 4 we'll ever fully agree with CMU. They haven't entirely 5 moved off their position, and we're confident we're right. 6 So, I don't think that the debate is going anywhere. 7 Okay. The next workshop, the theme is one of 8 whether or not the ZEV standards, as they currently are 9 configured, are too narrow in defining a ZEV. And what we 10 really mean by that is basically ZEVs do have power plant 11 emissions. And then the question that comes to mind is, 12 well, shouldn't other vehicles which also have power plant 13 emissions qualify under a ZEV program? 14 Most affected stakeholders are lead-acid battery 15 manufacturers and hybrid vehicle technology developers and 16 auto manufacturers. The first two see a potential market 17 for short-range vehicles, hybrid vehicles, which should be 18 also very low emissions, and basically wanted to become 19 players in the ZEV program. 20 The auto manufacturers were involved more to see 21 whether or not this was a short-term option for them instead 22 of complying with sort of the electric vehicle spirit of the 23 mandate. And we can talk a little bit more about that in a 24 moment. 25 Concepts presented at the forum were full ZEV PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 credit to vehicles meeting power plant emission levels and 2 partial ZEV credit for hybrids with significant all-electric 3 range. 4 These proposals, particularly the first one, are 5 technology neutral and resolve that question about vehicles 6 with power plant emissions also qualifying. It provides 7 long-term flexibility for industry. 8 Neither concept, though, provides alternatives for 9 the auto industry in the near term. And it's mostly because 10 there would not be sufficient leadtime to develop some other 11 technology that emits at power plant levels in time for 12 1998. 13 The auto industry also was concerned that the 14 hybrid proposal could cause confusion, which would shift 15 resources from electric vehicle programs to other programs. 16 And I think that was clarified in the discussion at the 17 workshops. So, I think they understand now that the 18 proposal was never intended to be a near-term proposal, but 19 more of a fix to the program so that it was technologically 20 fair. 21 And then last, there was concern about the 22 certainty of emission benefits of these vehicles which would 23 come in at power plant emissions, because those vehicles 24 would have engines on them, which would have emission 25 control systems, which have in-use emissions deterioration PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 problems, which is analogous to our regular cars. 2 Fleet forum: The theme is clearly fleets as early 3 adopters of electric vehicles. The most affected 4 stakeholders are obviously fleet operators and the folks who 5 would supply vehicles, and energy, and subsidies to them as 6 shown here. 7 Major issues: Lead-acid vehicles were found to 8 perform well in short range and stop-and-go applications; 9 for example, post office applications is one that comes to 10 mind, local delivery, local sales routes, repetitive routes, 11 any short-range stop-and-go route where a fleet vehicle is 12 used for sort of 30, 40, 50 miles per day, and it's 13 predictable. 14 Higher range requirements for some fleets may 15 limit the potential market. An example of that, one obvious 16 example, would be taxis, some rental cars, depending on the 17 purpose that the renter is intending to put the car to, and 18 longer delivery routes. 19 Fleet managers are cost conscious. They're 20 concerned about the cost that they pay for the vehicle, its 21 resale. Subsidies, we think, will be required to place 22 early electric vehicles in fleets. They're also concerned 23 about operating costs, obviously. In other words, fleet 24 managers compare their total costs with different vehicle 25 options. So, they would be comparing electric vehicle PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 lifetime for them costs to any other vehicle options that 2 they're looking at. 3 Technology forum: When will advanced vehicles and 4 batteries be market ready? I think the major focus on this 5 was between '98 and 2002, which is kind of where our crystal 6 ball is the clearest, although it's not super clear. 7 Most affected stakeholders are battery 8 manufacturers, auto manufacturers, and small start-up 9 businesses. And on the start-up business one, I might add 10 there's been a whole lot of entrepreneurial activity that's 11 gone on around electric vehicles, with folks starting up 12 small companies to provide components and, in fact, 13 conversion vehicles and even complete vehicles. 14 I think a lot of these businesses are depending on 15 staying the course for their marketing plans to work out. 16 At the technology forum, the Battery Panel presented its 17 preliminary results, and that will follow my presentation. 18 It was clear at the workshop that the ZEV 19 requirement has substantially accelerated investment and 20 progress in EV development. 21 Small businesses are offering conversion EVs with 22 lead-acid batteries right now. And OEM lead-acid vehicles 23 should be available in 1998. Non-OEM purpose-built vehicles 24 will also be -- can also be available in 1998. In other 25 words, they're on the drawing Boards or in the test phases PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 now. And we had one on display built by Solectria at the 2 technology workshop. 3 Also advanced batteries are on the immediate 4 horizon. And that was a conclusion that was reached, not 5 only by the battery panel, but by the U.S. ABC, and a number 6 of battery companies which spoke at the workshop. 7 So, I would say that that is a consensus. And 8 immediate horizon means production quantities by 2001. 9 Key steps to getting there are pilot scale 10 production of advanced batteries and fleet testing. And by 11 pilot production, I mean producing hundreds of batteries, 12 several hundred batteries per battery company per year at an 13 assembly cost of about a thousand dollars per kilowatt hour, 14 which means one battery pack costs maybe 15 to $30,000, 15 depending on its energy capacity. 16 And the reason they need to go through this step 17 is to be able to pilot some of the critical steps that 18 they're going to be using to mass produce the batteries. 19 But the batteries still have a lot of handwork in assembling 20 them, which is why they're so expensive. 21 When I say hundreds of batteries per manufacturer, 22 if you run that out -- if you assume that five manufacturers 23 jump into it in '98, with pilot production plans, that would 24 mean, if they did -- each did a couple of hundred, that 25 would mean you'd get about a thousand batteries per year for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 three years between '98 and 2000 essentially. 2 So, overall, we're talking about several thousand 3 batteries during the '98 to 2,000 timeframe being piloted in 4 various places. 5 Vehicle and battery safety must also be addressed 6 during this piloting phase also. I think it needs to be 7 addressed ahead of that in terms of the design steps. But, 8 obviously, you have some time while you're piloting this 9 stuff to do additional work. 10 This is the workshop which will be -- forum which 11 will be coming up in November. And its theme is the 12 benefits and costs of ZEVs. Most affected stakeholders I 13 project, since we haven't seen who's going to testify yet, 14 are obviously public health representatives, 15 environmentalists, consumers who are concerned about the 16 cost of purchasing vehicles, ratepayers as consumers, also, 17 who are concerned about how much it's going to cost for 18 electricity, and then, obviously, vehicle suppliers -- 19 automobile manufacturers, and dealers. And, as I said, 20 that's coming up on November 8th. 21 We're now at the sort of final of the three parts 22 of the discussion. These are some very general things that 23 the staff has drawn from these forums. First of all, we 24 think lead-acid batteries are the primary high-volume option 25 for 1998 electric vehicles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 And demand is uncertain, because, based on what we 2 talked about having to do with marketability, and then 3 infrastructure needs to be in place in order for the market 4 to properly accept these vehicles. 5 Some advance batteries will be available in 1998, 6 as we've discussed; in other words, in order to get these 7 pilot programs going, there has to be some advanced 8 batteries out there. 9 And, also, advanced lead-acid will be available, 10 although that's still lead-acid, and possibly some nickel- 11 cadmium batteries, which are already available on the 12 market. 13 And I think Ovonic in its presentation indicated 14 that it wanted to get quite a few batteries onto the market 15 in '98. 16 Advanced batteries in high production volumes with 17 enhanced range and lifetime are expected by 2001. Realizing 18 that promise requires that the demonstration programs 19 between '98 and 2000 that I mentioned ago -- at the level of 20 a couple of thousand batteries over that period (sic). 21 And then, I think the last conclusion is that the 22 ZEV requirement could be more responsive to these issues. 23 And I think that the forums have unearthed a lot of issues, 24 as we've discussed here, which could be responded to with 25 improvements to the ZEV requirement as its currently framed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 That concludes my remarks, and I guess I can 2 answer questions, and then I'll turn it over to Dr. 3 Kalhammer. 4 CHAIRMAN DUNLAP: Mr. Parnell. 5 MR. PARNELL: Thank you. You talked about 6 infrastructure. Since the developing technology is more or 7 less known, but more or less unknown in terms of the 8 spectrum of batteries that we think will be out there, is 9 the infrastructure need for all of those batteries the same, 10 or will it be different, depending upon which battery 11 emerges as the battery of choice? 12 MR. CROSS: For charging, I think the 13 infrastructure needed is pretty much the same. In other 14 words, we already have 220 in our house, and I think 15 everybody's sort of headed for using a 30 or 40 amp service 16 to do it. 17 So, that's taken care of. 18 And I think that -- and they're standardized 19 connectors and things that are already in the works. And in 20 many vehicles, the charger is onboard the vehicle, so the 21 intelligence which converts the 220 to what the vehicle 22 needs is already on the car. 23 I think in other areas, such as service, 24 maintenance, safety, and things like that, which we may talk 25 about later on, each of these batteries has its own sort of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 unique set of issues associated with it, but none of them 2 are, in my view, particularly problematic. 3 It' just a matter of sort of getting the word out 4 to everybody. 5 MR. PARNELL: Thanks. 6 MR. CROSS: Uh-huh. 7 CHAIRMAN DUNLAP: Supervisor Vagim. 8 SUPERVISOR VAGIM: Thank you, Mr. Chairman. 9 Bob, I just wanted to get a couple of points 10 straight first. You mentioned that two percent would be 11 60,000 vehicles approximately; is that correct? 12 MR. CROSS: Over the three years. 13 SUPERVISOR VAGIM: Over three years. Okay. And 14 the 10 percent -- by the time it hits the 10 percent, there 15 should be 1.1 million vehicles? 16 MR. CROSS: By 2010. So, that's all of the entire 17 requirement cumulatively run out till 2010. 18 SUPERVISOR VAGIM: Okay. And then in the 19 information overview, it said 20,000 vehicles per year. 20 That's cumulative of all -- 21 MR. CROSS: (Interjecting) The 20,000 per year is 22 equivalent to two percent of sales. 23 SUPERVISOR VAGIM: Of all -- 24 MR. CROSS: Yeah, in other words, they sell a 25 million vehicles per year and, so, two percent per year is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 20,000. 2 SUPERVISOR VAGIM: That's all the ones who qualify 3 over the threshold. All right. 4 The area of cost, you mentioned that the break- 5 even point between gasoline and a ZEV would be about 10 6 percent -- 10 cents a kilowatt hour; is that correct? 7 MR. CROSS: Right. 8 SUPERVISOR VAGIM: And the off-peak hours, which 9 is anticipated where most of this will be happening, is five 10 cents per kilowatt hour? 11 MR. CROSS: A little less, I think. 12 SUPERVISOR VAGIM: Does that five cents include 13 the sales tax, the gasoline tax, all the other taxes on a 14 gallon of gasoline? 15 MR. CROSS: The way I did the calculation was to 16 reduce the price of gasoline to a dollar, which is -- I 17 think they're about 35 cents of road taxes and other taxes 18 other than sales tax on gasoline. So, typically, you pay a 19 dollar, you know. For mid-grade, you pay about a $1.30, 20 $1.35 a gallon for gas. 21 So, I subtracted them from the gasoline price. 22 For the electricity price, I believe a nickel includes some 23 of the electricity taxes, but I wasn't sure what they were. 24 So, if anything, I pulled gasoline down a little bit and 25 wasn't sure what to do with electricity. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 SUPERVISOR VAGIM: But you excluded sales tax in 2 both cases. 3 MR. CROSS: Yes. 4 SUPERVISOR VAGIM: Okay. 5 MR. CROSS: I excluded road taxes. 6 SUPERVISOR VAGIM: You excluded road taxes in both 7 cases. 8 Isn't there a Federal and a State side of the road 9 tax; in other words, for example, the State has its vehicle 10 in lieu of charge, and that type of stuff, which is embedded 11 in some of the gasoline charges in addition Federal excise 12 tax. All of that is embedded in their use -- that's only 13 35 cents? 14 MR. CROSS: That's what I've been informed, yes. 15 But even if I was wrong, say I was a nickel or a dime 16 wrong on the price there, I think it's still within 17 reasonable bounds to say it's about half. 18 In other words, if you go to your Unocal station 19 that charges, you know, a buck and a half a gallon for 20 premium, you're still okay. If you go to your Arco and 21 spend a dollar-twenty or something for their lowest grade, 22 then obviously you pull it down. I think you just have to 23 calibrate it based on what you typically pay for gas. And 24 about 35 cents of that is the various road taxes. 25 SUPERVISOR VAGIM: Okay. So, on that scenario, if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 you're not paying $1.35, but you're paying $1.10, what 2 happens? 3 MR. CROSS: Well, that would reduce it from a 4 dollar -- from my assumption of a dollar to 90 cents. So, 5 that would make it ten percent off of a half. In other 6 words, if it were five percent off of a half, it would make 7 45 percent. 8 SUPERVISOR VAGIM: So, the cheaper the gasoline 9 runs, the more you're -- 10 MR. CROSS: Sure. 11 SUPERVISOR VAGIM: -- you get close to that 12 threshold, huh? 13 MR. CROSS: Sure. And the same for electricity, 14 too. 15 SUPERVISOR VAGIM: Okay. The question then 16 becomes, in the transfer, how much will be transferred? 17 Obviously something has to be transferred to electricity, 18 because we've got to keep paving our roads. 19 MR. CROSS: Right. 20 SUPERVISOR VAGIM: And that's back to the 21 infrastructure question, and all the other things that go 22 along with it. 23 How much of that is being discussed? Who is going 24 to pony up to the bar at the Legislature and say, "We're 25 going to do that transfer"? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 And who and what is it going to include? Is it 2 going to include a differential rate only when you're 3 charging, or is it going to include when we're reading 4 books? 5 MR. CROSS: Oh, the charge. In order to get the 6 off-peak rate, they put a separate meter on the house. 7 SUPERVISOR VAGIM: So, how do we guarantee that 8 someone's not going to pirate around that meter? 9 MR. CROSS: That's always possible. It's possible 10 to pirate around the meter on your house now if you want to. 11 But I think -- 12 SUPERVISOR VAGIM: Except PG&E knows I'm doing 13 that, because they know the whole flow that's around it. 14 But they don't know the flow that I could be just turning on 15 a 300 watt bulb or a 3,000 watt bulb. 16 MR. CROSS: I think that the utility -- first of 17 all, the utility is the one which would typically be doing 18 the installation for most consumers. 19 In other words, if a utility comes in and they put 20 the extra meter in and wire the stuff. So, I think the 21 temptation to pirate would be reduced somewhat by the 22 utility's having control of how this is done. 23 I think, also, that if there was a substantial 24 mount of pirating, it would show up on the kilowatt hours 25 that are used. I mean, you basically can kind of estimate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 how much an electric vehicle could, as a practical matter, 2 use during the day and recharge. 3 And if you're using substantially more than that, 4 then somebody's running a welder, or an air conditioner, or 5 something like that with that meter on. I think they could 6 come back and get it, get the consumer. 7 So, if it's a little -- you know, if they're 8 running a light with it, I don't think that it's a problem. 9 But if they're pirating a significant amount of electricity, 10 the utility can -- 11 SUPERVISOR VAGIM: Well, that's -- I guess that's 12 if you tell them you have a ZEV. And if you don't tell them 13 you have a ZEV, and the bill goes up on your utility bill, I 14 haven't heard utility companies bellyache about that at all. 15 MR. CROSS: Oh, no. The only way you can get the 16 rate brought down from 14 cents to a nickel per kilowatt is 17 to call the utility, say you have a ZEV, get the special 18 meter installed, and then use that to charge your ZEV. 19 So, you don't get the rate otherwise. And so, the 20 issue is one of -- 21 SUPERVISOR VAGIM: So, you're talking about 22 transferring the off-peak hour energy adjustment of the 23 commercial folks can get in a special circumstance, where 24 they can apply for the off-peak hourly rate. 25 MR. CROSS: With the time-of-day rate essentially. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 SUPERVISOR VAGIM: Okay. All right. Thank you. 2 MR. CROSS: Uh-huh. 3 CHAIRMAN DUNLAP: I have to rib the Supervisor for 4 a minute. I know why they're asking so many questions about 5 the fuel tax, because you're not paying it because you're 6 getting that demonstration fuel in your car, aren't you? 7 SUPERVISOR VAGIM: Well, wait till I demonstrate a 8 ZEV. 9 (Laughter.) 10 CHAIRMAN DUNLAP: All right. Any other questions 11 of Bob before we hear from Dr. Kalhammer? 12 All right. Bob, we reserve the right to bring you 13 back. So, don't go far. 14 All right. Dr. Kalhammer and Dr. Moyer, good to 15 see you. 16 DR. KALHAMMER: Good afternoon, Mr. Chairman, 17 members of the Board. I'd be very happy to give you a 18 progress report on a rather intensive study that our panel 19 conducted, at the behest of the Air Resources Board, with 20 the project management from Mr. Cross. 21 I stress that this is a progress report. We 22 covered a lot of ground both physically and technically, and 23 we are still refining some of our information. 24 But I don't think that this impacts the major 25 conclusions that we have come up with, and I'd like to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 summarize for you briefly how we approached our job, what we 2 investigated, our major results -- technical results, and 3 then the conclusions that we think we can draw from this. 4 I want to briefly acknowledge my co-panelists. 5 You see them here on the slide. Dr. Moyer is right here. 6 He's been co-chairing this effort with me. The other two 7 are battery experts who are right now in their home bases, 8 one in Japan and one on the East coast. 9 Here you can see the presentation outline of what 10 we have done. I'll briefly talk about our approach here, 11 then tell you some of the key findings on the battery 12 performance, which was one of the questions posed to us: 13 What is the performance likely to be of these advanced 14 batteries? Is this adequate for electric vehicle 15 propulsion? 16 And then, I will talk a little bit about the 17 answer to the other question: Are these batteries going to 18 be available, which depends in large measure on the 19 development and commercialization schedules, which we also 20 studied. 21 And then I will have some final remarks. 22 On the outline, following with the charter that we 23 were given -- and these are a lot of words, so let me cut 24 this short for you perhaps. One key point was that our 25 study was worldwide. We certainly did not limit it to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 U.S., but we spent time in Europe as well, and also a short 2 trip in Japan. And these were all, I think, visits that 3 gave us a lot of good information. And I must stress here 4 that the organizations that we contacted, both battery 5 manufacturers and vehicle manufacturers, were extremely 6 forthcoming in helping us, and being very open in where they 7 were and how they saw the future. 8 As a result, we really think that we got cogent 9 information. 10 Here, in the rest of these words, really speak 11 primarily to the two questions that we were addressing. 12 What's the technical status of these advanced batteries? 13 Are they really coming up to the kind of performance that's 14 needed to propel electric vehicles over practical distances 15 and with practical performance, number one; and number two, 16 are they going to be available in the five years of the ZEV 17 regulation, '98 to 2003, or possibly thereafter. 18 I think I can be very brief about this slide, too. 19 We obviously had to collect the information directly from 20 the sources, because what you can read in publications, and 21 books, and handbooks is certainly always superseded by these 22 development efforts, which are very dynamic. There's a fair 23 amount of money spent around the world these days, and 24 progress -- as you will hear me say later -- has really been 25 quite impressive. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 We did, in order to make the information 2 comparable that we were obtaining, create a questionnaire, 3 rather detailed, asking for a lot of technical data as well 4 as a lot of qualitative information on key issues and 5 development schedules. And, again, we were gratified that 6 almost all the organizations that we contacted and visited, 7 about half of them, were responding to this questionnaire. 8 So, we have a really very good database from which to draw 9 our results and conclusions. 10 Next one. 11 The topics that we were interested in ranged 12 really from very technical questions that would allow us to 13 tell where the individual technologies were and whether they 14 have a chance to make it into practical development of 15 batteries within a reasonable period of time. 16 We wanted to not only know, of course, whether 17 these concepts have been demonstrated in the laboratory, but 18 whether the technology had been reduced to full size cells, 19 and packages of cells which are called modules and, of 20 course, also batteries; whether these batteries had already 21 been tested in vehicles; whether the batteries that were 22 tested in vehicles already represented the state of the art 23 that was expected for the next five years, or whether we 24 could expect major improvements that would give these 25 batteries yet another boost and the vehicles greater range PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 and performance. 2 We were very much interested in the development 3 schedules. Bob Cross already mentioned the importance off 4 going through an orderly process of first prototype 5 batteries and pilot line batteries in order to really 6 understand the behavior of the technology, also with respect 7 to safety on the levels that count and on the levels that 8 are going to be critical for car manufacturers to make 9 decisions -- whether they really want to use batteries like 10 this eventually in production vehicles. 11 It was therefore also very important for us not 12 only to talk to battery developers, but to see the 13 viewpoints and the activities of the vehicle developers and 14 manufacturers, because it's their actions in the last 15 analysis that are going to bring the batteries into viable 16 electric vehicles. 17 I want to just take a moment here to cover a few 18 of the electric vehicle terminology points, talk about 19 electric vehicle characteristics, and some of the technical 20 goals for batteries, so that you can, when I talk about the 21 results in a moment, understand what these results mean. 22 As you undoubtedly know and I'm sure have heard 23 many times, the key characteristic for a battery is really 24 the specific energy expressed in watt hours per kilogram, 25 simply means how much energy is a particular battery capable PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 to store per unit. 2 We all know that the limitation or at least the 3 most serious limitation of batteries for electric vehicles 4 is how much energy you can cram in these packages and how 5 much of that you can put on a car. So, this is the key 6 characteristic, and that tends to be typical for the various 7 battery systems. 8 All the other characteristics in this table here, 9 the peak power that this battery can deliver, the life, how 10 often you can cycle it, and the cost tend to be derived 11 quantities. They depend in large measure on how the 12 battery's engineered. They are very important, but they are 13 not quite as fundamental as the specific energy where you 14 really in large measure deal with nature. 15 Now, the specific energy, the amount of energy on 16 the vehicle, obviously translates directly into how far you 17 can drive a vehicle on a single charge. The peak power 18 determines the rate of acceleration or hill climbing. The 19 cycle life obviously has an immediate impact on how much the 20 battery will cost an owner, and the cost of the battery 21 itself is the other factor that determines the ownership 22 cost. 23 Let's just look for a moment at some of the 24 targets for these various characteristics of batteries that 25 have been established. And I'm showing here the numbers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 that have been put forward by the United States Advanced 2 Battery Consortium, where a number of car companies have 3 come together and worked pretty hard to try to understand 4 what these parameters had to be in order to get certain 5 vehicle performance. 6 So, in order to get about a hundred miles on a 7 single charge, single battery charge with a vehicle on one 8 cycle, on one discharge of the battery, the U.S. ABC feels, 9 and I think they have a lot of data to back this up, that 10 you need a specific energy of 80 to 100 watt hours per 11 kilogram. 12 In order to have reasonable acceleration, 0 to 60 13 in maybe 15 or perhaps 18 seconds, you need a peak power of 14 about 150 watts per kilogram. 15 In order to get a five-year life out of a battery, 16 it probably needs to last about 600 cycles at least. And if 17 the battery can be developed and produced to cost less than 18 150 watt hours -- excuse me -- dollars per kilowatt hour, 19 then you probably have a device that you can economically 20 use in an electric vehicle. 21 Some of these numbers, 80 to 100, here 150, 600 22 cycles, $150 per kilowatt hour, you ought to keep in mind 23 when I'm going to present some of the results. 24 What I want to do first, though, is just spend a 25 few minutes in giving you a perspective on the type of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 batteries that are candidates for electric vehicle 2 propulsion. And I'm not sure that you can see this here. I 3 hope I can explain sufficiently well so that you don't 4 necessarily have to see the writing here. 5 Where we are plotting here is specific energy, the 6 theoretical specific energy. That's the absolute maximum 7 that a battery can have in theory if it consisted out of 8 nothing except the materials that react in the battery -- no 9 cases, no conductors, no anything. So, that's the absolute 10 maximum. 11 And the scale here reaches from 0 to about 1400. 12 And now let's look at the various. The highest is actually 13 the zinc-air battery. And the reason is that you don't have 14 to carry the air on the vehicle, so it doesn't weigh in the 15 battery. That's the main reason why the value here is so 16 high. 17 On the other end of the scale, you see some pretty 18 low values for nickel cadmium and lead-acid. These are the 19 two battery types that, as was pointed out before, are 20 available today. And now you must remember that the value 21 that we wanted in practice is about 80 to 100, and here 22 their theoretical maximum is around 200. And a good rule of 23 thumb is that, in practice, a battery can realize between a 24 quarter and a third of the maximum theoretical value. 25 So, if you've got a lead-acid battery at about 170 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 or so, you can say, all right, a third of that would be 55, 2 and that's really pushing it. 55 is a lot less than 80 to 3 100, and that's one of the issues with the lead-acid 4 battery. 5 Similar, with nickel cadmium, a little better, but 6 not much. But if you now get to the other batteries -- and 7 I've talked about zinc-air; I'll have more to say on that in 8 a moment -- you talk about the other batteries that today 9 are talked about, zebra, which is the sodium nickel 10 chloride, sodium sulfur, lithium-ion, and over here the 11 other dark one, the nickel metal hydride, they all are 12 significantly or, in fact, a lot better than lead-acid. And 13 that's where we have to look for the candidates. 14 There's also the zinc bromine battery in here, and 15 I'll talk a little bit more about this later. 16 But I want to focus the discussion here on those 17 shown dark -- zebra, sodium sulfur, lithium-ion, and nickel 18 metal hydride -- because these are the batteries that are 19 not only well-qualified from a theoretical point of view, 20 but are receiving the bulk of the development efforts 21 worldwide today. 22 These are the systems that battery developers 23 really are concentrating on and vehicle manufacturers are 24 looking to. 25 This is just a visual impression for you of our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 sources of information. We visited about ten major 2 organizations of battery developers worldwide, and we 3 collected information via primarily our questionnaire from 4 another 12, and the list is actually still growing slowly. 5 There are a few more visits, a few more requests for 6 information. But this is essentially the bulk of our 7 information sources here. 8 And over here, you see the various batteries that 9 they are covering -- lead-acid, nickel cadmium, nickel metal 10 hydride, lithium-ion, and so on. And what you can see here 11 that there are some systems -- lead-acid, of course, to a 12 lesser extent nickel cadmium, but also nickel metal hydride 13 and lithium-ion -- where a whole lot of organizations are 14 working on. So, we have multiple information sources. 15 There are multiple programs going on on these systems. 16 On the other hand, there are some very interesting 17 systems, one of them being sodium sulfur, the other one the 18 so-called zebra battery, where there's really only one 19 developer each. And this is also pretty well true, for 20 example, for zinc-air and zinc bromine. 21 It tends to be -- let me make a generalization 22 here, but I think one that's quite valuable -- the classical 23 battery manufacturers tend to focus on these advanced 24 systems -- nickel metal hydride and lithium-ion -- because 25 they are somewhat similar, at least in general principals, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 to systems that are well known like nickel cadmium. 2 On the other hand, these high temperature systems, 3 sodium sulfur and zebra, are really a very different 4 technology, and the organizations developing them are really 5 not your classical battery manufacturers. 6 Let's move on. 7 Now, for some of the results. And the first one I 8 want to focus on is the specific energy that's so important. 9 Here now, we're talking about the practically achieved or 10 near-term projected specific energy of these batteries. 11 And just to remind you here, these horizontal 12 lines are at 80 and 100, these are the USABC midterm goals. 13 This is what's necessary in the view of USABC, and I would 14 certainly concur to that, to give a vehicle at least a 15 hundred mile range in an urban/suburban duty cycle. 16 So, that's a practical value, and what you can see 17 is that the systems that we investigated -- these four most 18 of all -- are either already at this criterion, they can 19 meet this criterion or, in the case of nickel metal hydride, 20 projected to be there within a few years. 21 It is also true that none of these systems is 22 projected even ten years down the road to make the long-term 23 goals of USABC, which will give a car maybe 200 to 250 24 miles. 25 So, that's something to remember, also. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 Nevertheless, I think it's very encouraging that all of 2 these systems do appear to be capable to meet the midterm 3 specific energy goals. I've already mentioned lead-acid and 4 nickel cadmium. They are projected to improve somewhat, but 5 they are likely to fall; in fact, they are just about 6 certain to fall short of these midterm goals. 7 Next one. 8 The next characterization I want to look at is the 9 power. The problem with electric vehicles in the past has 10 been that most of them have been very sluggish; in fact, 11 most them that you can drive today -- not all of them -- 12 will still be pretty sluggish. That's because they are 13 often limited by the specific power of the battery. The 14 USABC goal is about 150, the horizontal line, to 200. And, 15 as you can see, the situation is quite good here. 16 The systems that we investigated, including nickel 17 cadmium here, can already in their current configurations 18 meet the power -- specific power requirements. And some of 19 them are projected to actually go well above these levels. 20 The lead-acid battery is interesting, in that 21 what's established firmly is well below what's required to 22 have enough power and therefore acceleration, but the system 23 is actually capable of being engineered in something with 24 much more power. So, this is probably a rather believable 25 number up here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 So, all of these systems are likely to give enough 2 power. 3 Next one. 4 The cycle life is obviously very important, and 5 the owners of electric vehicles that have old style SLI 6 lead-acid type batteries usually tell you a tale of woe, 7 that the batteries don't last very much more than 100 or 8 maybe 200 cycles. And obviously, with the battery not being 9 cheap, the replacement cost becomes a large part of the 10 ownership cost of an electric vehicle. 11 So, we need to do better, and the USABC felt that 12 600 cycles is kind of a minimum for economic practicality. 13 And in the long run, they feel that a thousand cycles is 14 what's needed here. 15 Now, parenthetically, if you have a battery that 16 has a lot of specific energy in the package, much more than 17 another battery, then obviously if you drive a certain 18 distance, you will discharge such a battery only in part. 19 You don't need all the energy in it. So, the cycle life 20 that we're talking about here is total cycles, deep cycles, 21 at least 80 percent. 22 When you have a battery with a lot of energy in 23 it, you probably don't ever fully discharge it, so these 24 batteries with a lot of specific energy don't really need 25 all that much cycle life, because they will have a lot of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 energy that you don't use every day. So, you might have 2 only a cycle every three days, 100 cycles a year. So, 600 3 cycles might be six years. 4 And, indeed, 600 cycles is considered equivalent 5 to a five-year life of the battery. 6 All right. Now, the story here also is very 7 encouraging, in that you can see that almost every one of 8 the systems here really exceed not only the 600 cycles, but 9 already exceeds or is projected to exceed, where you see 10 these arrows, to exceed a thousand cycles. 11 So, that's a very encouraging situation. I think 12 cycle life is definitely not going to be the major problem 13 of these advanced batteries. And even the lead-acid 14 battery's projected to become a lot better. 15 NOw, I'm going to talk about the next two slides 16 very quickly, because we are getting into technical detail. 17 We asked these developers what technical issues they were 18 still struggling with, either to make the specific energy 19 higher or the power, or to make the life longer, or to 20 reduce the cost, and there were still issues in front of all 21 of these efforts. 22 But I think it's fair to say that for all of these 23 issues, they have technical approaches that are already 24 well-advanced and that look like they will lead to success 25 in all those that could be show stoppers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 That's true for the systems that I mentioned and 2 that we investigated in the greatest depth. This does not 3 include the zinc systems, because they do have some major 4 problems with short cycle life and also with low power. 5 So, we did not spend a whole lot of time on the 6 zinc systems. I have to state this quite clearly. 7 These issues are being tackled I think very 8 successfully right now, as we are here, and in parallel with 9 the engineering of these batteries. And I think there is a 10 very good probability that all of these are going to be 11 overcome. 12 I'll pick out two or three that you may have heard 13 about simply to give you a somewhat better feel. 14 For the nickel metal hydride, one of the issues 15 that has been mentioned and that the developer is struggling 16 with is cost. The materials in these batteries are 17 relatively costly. So, it's important to squeeze every 18 little bit of energy out of the materials that are being 19 used. And we have seen, I think, from the developer some 20 very encouraging indications that advanced materials will be 21 available of which you need less and which may even be 22 cheaper, so that even the nickel metal hydride battery has, 23 I think, a reasonable chance to make the cost goal. 24 We also have heard from at least one developer 25 that they have come up with new materials that are going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 give the nickel metal hydride considerably greater specific 2 energy than what I showed you even. This isn't quite as far 3 along and, so, we have discounted this a little bit. But 4 there is real promise I think in the nickel metal hydride 5 system. 6 Lithium-ion, very exciting, has been announced by 7 Sony only a few weeks ago; is being worked on by several 8 organizations, including Europe and the U.S., looks very 9 promising. But there is right now a material, cobalt oxide, 10 that seems to be important for long life and good 11 performance. And the cobalt oxide must go. It's too 12 expensive. There are substitutes, and it looks like this is 13 going to be successful. But there is still some uncertainty 14 on this system. 15 The other two systems that we studied in most 16 detail sodium sulfur and the zebra battery, both are high 17 temperature batteries. This is viewed by a lot of people as 18 a handicap, because these batteries tend to cool. No matter 19 how well you insulate, there's always a certain amount of 20 heat lost. And if you would let them stand, say for a 21 month, they would freeze up and so you would have to rethaw 22 the materials. And that is certainly an issue. 23 But, on the other hand, both systems have shown 24 that they can be thawed, if you will, and both of them are 25 now such that, even without keeping them warm electrically, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 they can probably stand there between a week and two without 2 really freezing up. 3 So, I think this issue is probably not as 4 important. Safety issue in both cases has been advanced as 5 a problem. I think the battery designs that we've seen 6 literally on the bench and had explained to us look to us 7 like they have designed-in safety. So, I'm not too 8 concerned about this, although, as Bob Cross said, the proof 9 of the pudding, if you will, really is the testing of these 10 batteries in vehicles, the crashing of vehicles, and so on. 11 And that has to happen over the next several years 12 in all of these cases. 13 Both of these systems still have relatively high 14 cost, but the materials in them are very inexpensive or 15 quite inexpensive. And so, the cost reduction there is 16 manufacturing development, and a lot of money's spent on 17 this right now. 18 Let's move on. 19 So, let me get to one bottom line here, and this 20 is: What kind of driving range might we get from all of 21 these batteries in an urban/suburban, not-too-demanding duty 22 cycle? But it's not the kind of constant 30 miles an hour. 23 It's realistic driving in a relatively easy duty cycle. 24 And here, you can see on top, the longest range on 25 that basis would be provided by the sodium sulfur, which PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 already has demonstrated 110 watt hours per kilogram, and 2 this would translate into this cycle to about 140 miles. 3 For a battery that only weighs 250 kilograms, and if you 4 went to a 500 kilogram battery, which, of course, would then 5 be roughly twice as expensive, you could get well over 200 6 miles. 7 So, the light bars are the heavy batteries and the 8 dark bars are the light batteries. And I'm not sure why the 9 draftsman did that. But the lithium-ion battery has a 10 comparable potential, already having achieved 110 watt hours 11 per kilogram. The zebra battery is a little bit behind, not 12 much. Then the nickel metal hydride again is projected to 13 have 90, and if you want to believe some of the laboratory 14 data from one developer, might be also 110 or even 120. So, 15 all of these will give vehicles driving ranges over 100 16 miles with a battery weighing only 250 kilograms, a little 17 over 500 pounds. 18 Pretty attractive. 19 Zinc-air would be the champion here, but the 20 problem is that these batteries simply haven't shown the 21 kind of cycle life or the power density that you're going to 22 need in a practical vehicle. 23 Let me briefly speak to my other point, and I can 24 be, I think, fairly brief on that, particularly since Bob 25 Cross has already said most of the important things here, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 and that's the time that it's going to take until these 2 systems are going to be available in practical, commercially 3 viable electric vehicles. 4 Their performance I think is going to be there. 5 When are the batteries going to be there in vehicles, fully 6 integrated? And there's just no way to get around certain 7 steps that are critical in the development of batteries 8 from, let's say, the point where the concept is already 9 established to the point where a manufacturer will put these 10 batteries in a vehicle that they're willing to sell. 11 This is the schedule for the batteries. Battery 12 development in the upper half, and I don't really want to go 13 through this, except to say if, at this point, you have 14 decided what your technology, you've frozen the design of 15 the cell, which is the key unit in the battery, and now you 16 build prototype batteries, which you then have evaluated in 17 a parallel schedule where the vehicle developer is beginning 18 to get his or her hands on the battery, then you've got to 19 go through a period that's about two years here, and about 20 one to two years here, and only then will you have the 21 confidence to say, I'm going to build a pilot-plant that is 22 going to make the hundred or two hundred batteries per year 23 that Bob Cross talked about. 24 And then, these pilot-plant batteries have to go 25 into vehicles that now begin to resemble the real thing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 The batteries are not yet mass-produced, but they resemble 2 the commercial item, which has to be fully shaken down in a 3 vehicle with respect to performance and safety. And there's 4 just no way around it. 5 This conceptual schedule is the result of perhaps 6 10 conversations that we've had with battery developers and 7 vehicle developers, and all of them are showing schedules 8 that are roughly similar. 9 So, I think there's a lot of validity in these 10 long times. It's perhaps not something for impatient 11 people, but it's the reality. 12 And only after the pilot level batteries have been 13 validated in vehicles and fully integrated in vehicles will 14 it be possible for a car manufacturer to say, "This 15 technology is ready to go in vehicles." And, at this point, 16 he can send a signal to the battery developer and say, "I'm 17 going to buy these vehicles (sic) if the price is right." 18 And at that point, the battery developer will 19 build a factory and will take about a year, and will take 20 another year before the factory runs properly and the 21 batteries really are representative of the commercial 22 product. And only then can they go in vehicles that will be 23 delivered to customers. 24 Now, with all of this in mind, we tried to put the 25 various systems that we investigated on this chart. And you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 see that down here. And, again, it's difficult to read, but 2 the front runners, not surprisingly, of course, are the 3 lead-acid and nickel cadmium batteries, which are basically 4 available now. 5 But, as I said earlier, they give vehicle ranges 6 that are well less than 100 miles in realistic driving 7 conditions. 8 The advanced lead-acid battery is probably two 9 years behind, but progress is being made and it seems quite 10 clear. But even the advanced lead-acid batteries are not 11 going to give electric vehicles the magic 100 mile range 12 under realistic driving conditions. 13 However, they probably will give vehicles enough 14 range and cycle life, which is very important for niche 15 markets. 16 Then next, we are having here the high temperature 17 batteries, zebra and sodium-sulfur, and nickel metal 18 hydride, which are probably about five years away from being 19 a commercial product that can be put in vehicles. And the 20 lithium-ion battery is not far behind. The length of the 21 bar, incidentally, is the variation in the estimates that we 22 got. The longer the bar there the more is there difference 23 of opinion among our sources of information. 24 Okay. Next one. 25 So, what does all of this mean for availability of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 these advanced batteries? And incidentally, also the 2 advanced lead-acid and nickel cadmium batteries, both of 3 which have to be sealed, and that's a step forward in 4 technology over the old SLI batteries, and over the old 5 nickel cadmium batteries that are used since many years as 6 standby power sources and so on. 7 Well, pilot-scale battery production for lead-acid 8 and nickel cadmium I think can start -- in fact, is starting 9 this year. We saw that in France, for instance, for nickel 10 cadmium. And it will take about two years or so for volume 11 production of commercial batteries. In both cases, this 12 period is a little shorter for these batteries, because the 13 technology is so well understood, including manufacturing 14 technology. 15 Now, when you get to the advanced batteries, all 16 of them -- and I don't really want to quibble about a year 17 here certainly -- all of them I think are going to be 18 available in these pilot-scale quantities of some hundreds 19 per year in the 1997, let's say, to 1999 period. 20 Bob Cross referred to that. And I think one of 21 the critical questions or issues confronting those who want 22 to see zero-emission vehicles is how you get through this 23 pilot phase, which is going to be expensive. Because 24 without going through that, you're not going to come home 25 with the commercial product, which could -- if everything PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 goes well, if all the decisions are made at the earliest 2 period of time, if there isn't any sudden discovery of a 3 major issue, a safety issue, or whatever, or a materials 4 issue that hadn't been anticipated -- if that doesn't 5 happen, and if the car makers make the commitments at the 6 earliest possible time to actually buy these advanced 7 batteries, these are the times in which you can expect the 8 advanced batteries to be produced in commercial quantities 9 at costs that are beginning to be close to the ultimate 10 mass-production costs. 11 And if you show the next one, then you see the 12 same slide once more, except now I have included some costs. 13 We did ask the question of what these batteries would cost, 14 not so much because we were going to do a detailed 15 engineering cost analysis, but because reduction of cost is 16 driving a lot of the efforts that are ongoing right now. 17 Whether they are still on the level of materials selection, 18 whether they are in manufacturing development, cost is 19 driving a lot of the efforts that are going on now. Because 20 none of these batteries is going to be cheaper than the 21 lead-acid battery. I think that's safe to say. 22 And it's probably also safe to say that all of 23 them have to struggle mightily to get down to the levels of 24 the lead-acid battery. 25 Now, when you remember that their life, their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 cycle life is going to be very likely substantially longer 2 than that of the lead-acid battery -- it's probably safe to 3 say at least twice as long and maybe longer -- then, that 4 cost issue is not quite as daunting as it might strike you 5 first. 6 Well, Bob Cross mentioned that in this pilot-scale 7 phase that we are looking at for the next few years, costs, 8 with the exception of lead-acid, are going to be pretty 9 high, fairly consistently a thousand to two thousand dollars 10 per kilowatt hour, which means a 30 kilowatt hour battery 11 would cost $30,000. That's an issue obviously. 12 On the other hand, we did enough talking and 13 understanding of manufacturing development to see and 14 appreciate that the costs of all these systems can go down 15 to considerably lower levels. And I've shown here the 16 levels that we think are likely to be available at the time 17 when these batteries are first produced on a large scale. 18 And by large scale, we mean maybe 20,000 batteries per year. 19 20 That would be large scale in that sense. At that 21 level, the cost is beginning to flatten as a function of 22 production volume. If you went to 200,000 a year, the costs 23 would still drop, but not as much as between let's say 2,000 24 and 20,000 a year. That's where the big drop is. 25 So, you've got to get to these levels. Here, I'm PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 saying 10 to 40,000 pear year before you can approach these 2 costs. And these are costs that I think are going, together 3 with long cycle life, are going to make these batteries 4 economically feasible. 5 There is, as shown here in parentheses, with these 6 arrows, potential in every case for even lower costs in one 7 of two cases -- if you go to real mass production, as I just 8 mentioned, or if you learn how to substitute some of the 9 more expensive materials. 10 So, there is ultimately potential to get down to, 11 I would say close to the lead-acid battery, but probably not 12 less. 13 Now, what does all of this mean? We have gone 14 through the effort to write a number of specific 15 conclusions, which I believe all of you have in front of 16 you, at least members of the Board. So, I want to go 17 through them rather quickly. 18 But I believe that, together, these conclusions 19 tell a fairly clear story. 20 Lead-acid batteries will be available in 1998. 21 But it was certainly clear that the automobile manufacturers 22 felt that vehicles with lead-acid batteries were not going 23 to capture really large markets. There's a lot of argument 24 what the market is. We did not do a market study, so I want 25 to here demur and not speak on how many vehicles might be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 commercially viable with lead-acid batteries. It's 2 certainly going to be limited. 3 It's also clear from what we did and what we saw 4 that these very capable, very intense, and highly funded 5 development efforts that we've seen on three continents have 6 brought about major progress in advanced batteries. 7 I've been in batteries for a long time, and I've 8 never seen the rate of progress before that I've seen in the 9 last five years. It's truly impressive, and it can really 10 make you optimistic about what will be possible early next 11 century. 12 And this is true despite the fact that, 13 electrochemically, these are quite different systems, and 14 they pose different problems. But these problems have been 15 tackled by a combination of modern science, modern 16 technology, modern materials knowledge, modern electronics 17 that simply wasn't available in the past. So, we are seeing 18 here, I think, something rather remarkable. 19 Now, I already made this point before, so I can be 20 brief. It's just a reality that the manufacturers of 21 vehicles will not put batteries in their commercial product 22 that would compromise either safety or reliability. And so, 23 we have to go through these systematic steps of both battery 24 development and then evaluation of these batteries in 25 vehicles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 There really isn't a short-cut. And if you try a 2 short-cut, I think you probably have to pay for that with 3 frustration and disappointment. And there's lots of 4 examples in the past where this has happened in other 5 programs. 6 Next one. 7 The problem that I mentioned, of course, and that 8 you could derive from just recollecting the numbers of 2,000 9 or $1,000 per kilowatt our of battery is that these pilot- 10 phases are going to be expensive. If we have a 30 kilowatt 11 hour, $30,000 batteries, and we have 200 per manufacturer, 12 so you have $6 million, for example, for the batteries just 13 from one manufacturer. 14 And it will be difficult, if not impossible, for 15 commercial organizations or individual users to pay for 16 these batteries. 17 So, there is no question that the key step that we 18 have to go through -- and that's going to be expensive -- 19 needs to be catalyzed in some way. And while the panel has 20 not tried to be clever about how to do this or how to come 21 up with regulation -- that wasn't our job -- there were a 22 lot of, I thought, very intelligent statements that were 23 made to us by the developers of batteries. 24 They felt they had to go through this orderly 25 process, that incentives were needed to help them go through PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 this process. They also need, if you will, some assurance 2 that, in the end, there's going to be a market. So, they 3 felt that some form of mandate or regulation was still 4 important. But they also felt that the regulation really 5 ought to favor those battery systems that are ultimately 6 going to give electric vehicles the kind of range and 7 performance that's going to make them competitive. 8 So, there has to be some level of selectivity 9 here. And that was a unanimous view of the advanced battery 10 manufacturers. Of course, the lead-acid and nickel cadmium 11 battery manufacturers had a somewhat different opinion as 12 you can guess. 13 If you put on the last slide here, maybe the most 14 important point that I should have made before and Bob Cross 15 had made it -- I think very clearly -- so let me just 16 restate it. 17 It was the unanimous view of the battery 18 developers that the zero-emission regulation has catalyzed 19 and stimulated a good part of this very intense development 20 effort that we've seen over the last three, four years in 21 particular. 22 They all felt that without that, it was unlikely 23 that they were going to have these programs funded by their 24 own organizations and other stakeholders that are putting 25 down their money here. And so, they were quite anxious that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 the Air Resources Board recognize this and find a way to 2 continue creating some kind of drivers that will keep the 3 money flowing in these major efforts that are really unique 4 and have not -- have no counterpart in the past. 5 The bottom line from everything that we did is 6 that, yes, in a complete success scenario where all the 7 decisions are being made at the earliest point where we 8 don't have any show stoppers, no major problems, good 9 cooperation between battery developers and vehicle 10 manufacturers, then we might see these advanced batteries 11 that I think lead to very competent electric vehicles early 12 next century, maybe 2001, as Bob mentioned. If it were one 13 or two years later, I don't think I would be totally 14 surprised because there's a lot of pressure on these 15 organizations to succeed. 16 All these people who spend money there want to see 17 it resolved. And so that does tend to lead to, if you will, 18 optimistic estimates. 19 But we've looked into this enough to say, yes, in 20 a complete success scenario, maybe we have some or maybe all 21 of these advanced batteries in around 2001. 22 Thank you very much for your attention. I'll be 23 happy to answer questions. 24 CHAIRMAN DUNLAP: Thank you, Dr. Kalhammer. I 25 appreciate it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 I want to also recognize Dr. Moyer, who's with us 2 as well, over there, your colleague. 3 I know there's questions. Supervisor Vagim, do 4 you want to kick it off? 5 SUPERVISOR VAGIM: Yes. Thank you, Mr. Chairman. 6 CHAIRMAN DUNLAP: Then, Supervisor Roberts, we'll 7 have you follow up. 8 SUPERVISOR VAGIM: Doctor, I have just a few 9 questions. At what point is a cycle considered to be a 10 cycle? I mean, if you go through half the deposition or 11 discharge, or a quarter, and you charge it back up full, is 12 that a cycle? 13 DR. KALHAMMER: That's an excellent question. 14 What normally is used to define a cycle is to take out 80 15 percent of the maximum amount of energy that you could take 16 out. 17 SUPERVISOR VAGIM: In a nickel cadmium, we're all 18 used to the memory that they get, going down a quarter and 19 charging them back up, and they tell you to charge them all 20 the way down, and I'll always make that mistake of letting 21 them go dead, because I never know when they're halfway out 22 or not. 23 So, they've introduced discharge chargers that 24 discharge and then charge them back up again, just so you 25 know you've got a full tank and they don't get a memory. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 DR. KALHAMMER: Yes. 2 SUPERVISOR VAGIM: Do you have that same problem 3 with the automobile nickel cadmium technology? 4 DR. KALHAMMER: The answer to that -- and we 5 raised this question. And the answer that we got was, no, 6 if you treat the battery properly. There are actually three 7 types of memory effects. They all have different 8 electrochemical causes, and all three of them you can avoid 9 if you properly manage the charge and the battery. 10 That gives me a chance to just make one comment 11 that I perhaps should have made before. All of these 12 systems either call for or benefit greatly from an accurate 13 electric management of charge, the recharging and how you do 14 it, particularly how you finish it, how you overcharge or 15 don't overcharge, but also how you might limit the depth of 16 discharge. 17 All of this today can be done electrically with a 18 level of sophistication and accuracy that is economically 19 feasible, and that's enormously beneficial to the safety and 20 the life of these batteries. 21 In fact, they go so far that some batteries, like 22 the lithium-ion battery, because of the specific 23 electrochemical properties that it has, has to be charged 24 and probably even discharged in a way that you control the 25 current through each cell, not through a string of cells PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 that are strung together to give you the necessary voltage. 2 But each single cell can have a different current flowing 3 through it during charge and discharge. 4 And this is possible today. And that, in fact, is 5 essential for the lithium-ion battery. The same technique 6 is likely to be applied to the other systems as well 7 ultimately, and it will greatly increase the safety and very 8 likely the life of these batteries. 9 Some people talk about gentle charging or the 10 gentle treatment of batteries. That today is feasible; was 11 not feasible even five years ago. 12 SUPERVISOR VAGIM: So, so two 40s make an 80 in a 13 cycle? Two 40 percent drawdowns -- 14 DR. KALHAMMER: In that, yes. And it's typically 15 true, not always, but typically true that if you can get 16 more than twice the number of 40 percent cycles then 80 17 percent cycles. 18 SUPERVISOR VAGIM: So that is mathematically -- 19 holds true then in actuality? 20 DR. KALHAMMER: In actuality, you can say, if I 21 characterize a battery, and say this battery gets a thousand 22 cycles on a hundred percent depth of discharge, if I now do 23 the equivalent of these thousand total cycles, as let's say, 24 10,000 10 percent cycles, it'll last much longer actually. 25 SUPERVISOR VAGIM: Okay. As far as the reverse to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 that then, let's say I have a trip to just -- I end up 2 coasting into my driveway, which is an absolute drawdown, is 3 there -- have they come this far to forgive that particular 4 event? 5 I know that lead-acid was the only one for a 6 while. 7 DR. KALHAMMER: The lead-acid is probably one of 8 the less forgiving systems when you totally exhaust the 9 batteries. Most of the other batteries will be more 10 forgiving and you will pay less of a penalty in life if you 11 draw the battery down that far. 12 SUPERVISOR VAGIM: I thought the nickel metal had 13 a problem with that one on total deposition. 14 DR. KALHAMMER: No. 15 SUPERVISOR VAGIM: As far as the ability to quick 16 charge, is there any particular technology that is more 17 accepting of a quick charge? And when I say "quick charge," 18 super high, kVA, just dump it in there -- 19 DR. KALHAMMER: Yes. They are not all equal with 20 respect to quick charge. But, as I said earlier, the power 21 capability, which, of course, is also related not only to 22 power out but also power in, is in good measure an 23 engineering characteristic. For example, lead-acid 24 batteries can now be engineered to accept a very high level 25 of powering even more than in the past. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 Nickel cadmium is certainly a good candidate for 2 quick charging. Nickel metal hydride is. Lithium-ion is if 3 you do the kind of control that I just talked about. 4 I think the high temperature batteries are 5 probably less amenable to really very quick charging, but 6 even they today, after redesign that they've seen, probably 7 could be charged, oh, if you will, three-quarters in maybe 8 an hour or so. 9 SUPERVISOR VAGIM: Okay. And finally, Mr. 10 Chairman, an esoteric question if I may. 11 We all watched the computer industry go from 12 vacuum to transistors to solid state. At what point do you 13 think we are in batteries if the old lead-acid was a vacuum 14 tube? 15 DR. KALHAMMER: I think we are at a solid state 16 level now. 17 SUPERVISOR VAGIM: With these technologies you 18 showed up here? 19 DR. KALHAMMER: Yes. 20 SUPERVISOR VAGIM: That far ahead? 21 DR. KALHAMMER: Yeah. 22 SUPERVISOR VAGIM: Because -- 23 DR. KALHAMMER: Particularly if you add to it the 24 management, both electrical and thermal management with all 25 the levels that we can do today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 SUPERVISOR VAGIM: And these managements you're 2 talking about -- 3 DR. KALHAMMER: Yes. 4 SUPERVISOR VAGIM: -- this is operator involved or 5 are these -- 6 DR. KALHAMMER: No. That's going to be all 7 reduced to programs. 8 SUPERVISOR VAGIM: Very good. Thank you. Thank 9 you, Mr. Chairman. 10 CHAIRMAN DUNLAP: All right. Do you yield to your 11 colleague from San Diego County? 12 Go ahead, Ron. 13 SUPERVISOR ROBERTS: I have a question, Doctor, 14 and it came up earlier today, and it came up in a discussion 15 during a visit to the Calstart program, meetings I attended 16 recently. 17 And it had to do with the infrastructure we might 18 be building. And you've described quite a range of 19 different battery types that, in the very short future, are 20 going to be out there and in production. 21 In your talking about the life cycle and a lot of 22 different sensitive issues relating to how those are 23 recharged, and the question came up earlier today regarding 24 the infrastructure, did the infrastructure have to be 25 different, considering what's here and what's coming, and it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 seems to me that there's some pretty strong implications of 2 changes and differences that are needed. 3 But could you tell us a little bit about that, and 4 I guess I'm wondering if what we might build today for the 5 lead-acid batteries, how would that have to be modified in 6 the future? 7 DR. KALHAMMER: It's not a question that we 8 specifically examined as a panel. 9 SUPERVISOR ROBERTS: I understand. 10 DR. KALHAMMER: So, I'm going to just give you my 11 opinion from what I know technically. But I imagine the 12 staff probably is very capable to answer you more 13 specifically. 14 I think, again, with modern power electronics, 15 which underlies all of these chargers, you -- it's easy to 16 get almost any charging profile that you basically would 17 then in the modern charger -- I'm not saying that they 18 necessarily exist yet -- but there certainly would -- it 19 wouldn't be a miracle to design and build them. 20 These modern chargers, you could have a variety of 21 programs, and you basically push a button when you have a 22 battery with nickel metal hydride, then you push a different 23 button if you drive up and you want to charge a lead-acid 24 battery. 25 That's certainly my view of it. This isn't the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 same as saying that that's what you would build your 2 infrastructure right away. I mean you would have to do some 3 very careful tradeoff thinking of what you're really trying 4 to accomplish with your infrastructure. 5 SUPERVISOR ROBERTS: So, it might be a second 6 generation of charging units that's out there. 7 DR. KALHAMMER: For example, but I think I'm at 8 this point out of my depth, and maybe the staff ought to 9 answer that question. 10 CHAIRMAN DUNLAP: Ms. Edgerton. 11 SUPERVISOR ROBERTS: Before we move on, I didn't 12 know if any of the staff might want to add to that. 13 MR. CROSS: If I can comment very briefly. 14 CHAIRMAN DUNLAP: Sure. 15 MR. CROSS: In the vein of the modern power 16 electronics, it's also very analogous to the answer I gave 17 earlier, but it's very easy to put the power electronics on 18 the vehicle which does the charging. You've already got a 19 whole lot of power electronics on there to turn what comes 20 out of the batteries to -- 21 SUPERVISOR ROBERTS: So, there's something in the 22 car that tells the charger -- 23 MR. CROSS: You can either tell a charger what you 24 have or else you can use the modern power electronics to 25 take the 220 off of 110 or 220 that you would get from maybe PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 an outlet, to turn that into what the battery needs. So, 2 those are kind of the two approaches. 3 The vehicle I've been using lately basically it 4 doesn't matter. You plug into 220 and it figures out what 5 to do. You plug it into 110 and it figures out what to do. 6 CHAIRMAN DUNLAP: Okay. Anything else, Ron? I 7 might mention before Ms. Edgerton asks her question, that 8 the reason she has the balloon affixed to her chair is it's 9 her birthday. I didn't want anyone to get the wrong idea 10 about that. 11 And we've hooked it in such a way where she can't 12 get it off. So, if you're wondering why it's there, that's 13 why. Lynne? 14 MS. EDGERTON: Thank you. This is my thirtieth 15 birthday. 16 (Laughter.) 17 MS. EDGERTON: Occasionally, there are -- there's 18 a convergence of events that enables us to see that we have 19 a tremendous potential to choose one future or another. And 20 I want to thank you, Dr. Kalhammer, Dr. Moyer, and your 21 Committee for your contributions to this choice, which is 22 the responsibility -- the privilege of the responsibility of 23 us here. 24 If I understand what has been reported, there -- I 25 jut want to go over it -- there are ten companies which are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 at the gate or running down the lanes of this horse race, 2 which could deliver the USABC midterm battery to us. Four 3 nickel metal hydride, is it Ovonic, Varta -- 4 DR. KALHAMMER: SAFT. 5 MS. EDGERTON: SAFT. 6 DR. KALHAMMER: Matsushita. 7 MS. EDGERTON: And Matsushita. 8 DR. KALHAMMER: And others. 9 MS. EDGERTON: And others. But four leading, four 10 in this heat. 11 DR. KALHAMMER: Four serious players. 12 MS. EDGERTON: Four serious players in heat 13 number, first heat, fastest heat. 14 DR. KALHAMMER: At least four, I'd say. 15 MS. EDGERTON: At least four. 16 DR. KALHAMMER: Yes. 17 MS. EDGERTON: In the nickel metal hydride. 18 DR. KALHAMMER: Yes. 19 MS. EDGERTON: Then, in the lithium-ion, we have 20 two up there with the nickel metal hydride. We have the 21 Sony, and we have -- 22 DR. KALHAMMER: Varta. 23 MS. EDGERTON: Varta. 24 DR. KALHAMMER: And there are others. 25 MS. EDGERTON: And there are others, but those are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 the two. That makes six. 2 We have sodium-sulfur. 3 DR. KALHAMMER: One. 4 MS. EDGERTON: One with Silent Power? 5 DR. KALHAMMER: Correct. 6 MS. EDGERTON: We have AEG making the zebra 7 battery; that's eight. Now, where are the other two? Maybe 8 it's eight. 9 DR. KALHAMMER: Oh, there are really one or two 10 others in both lithium-ion and nickel metal hydride, and if 11 you -- 12 MS. EDGERTON: Oh, did we say Ovonics (sic)? 13 DR. KALHAMMER: Yes, you did. But there are 14 really more than four. 15 MS. EDGERTON: There are really more than four. 16 DR. KALHAMMER: Yeah. I said ten. And even there 17 I would get disagreement, because the people who are 18 developing the zinc bromine battery, for instance, would 19 consider themselves a serious player. And even the 20 developers of zinc-air, although I think they're a little 21 further behind, want to also be considered serious players. 22 And that's just what we covered. And I wouldn't, 23 you know, lay very high odds that we might not have missed 24 one or two in some other country. 25 We also have not yet included in the list that you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 just mentioned a couple organizations that are directly 2 funded by USABC. One is 3M and other one is Grace. And 3 both of these are working on so-called lithium polymer 4 systems, which are closely related to lithium-ion. 5 So, there are a lot of players. 6 MS. EDGERTON: Strong companies with lots of -- 7 DR. KALHAMMER: That's right. 8 MS. EDGERTON: -- resources. AEG is huge. 9 DR. KALHAMMER: That's an absolute key point, 10 yeah. 11 MS. EDGERTON: Well, with tremendous resources 12 pouring into this effort worldwide. 13 I remember -- I think Westinghouse also had a 14 lithium-ion battery, but you didn't get to them. 15 DR. KALHAMMER: I don't think they are, you know, 16 as far as advanced. But they also work on some other 17 batteries. So, there's a lot more going on. But just these 18 big efforts are impressive both technically and with respect 19 to the resources that they command. 20 MS. EDGERTON: It's a tremendously exciting report 21 that you give. 22 Forgive me for a couple of things I don't -- a 23 couple things I would like clarification on, which I don't 24 quite understand. 25 There was a slide here -- I want to make sure I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 have the right slide. It had to do with the -- how far the 2 batteries could go, and the range. 3 DR. KALHAMMER: The bar graph you mean? 4 MS. EDGERTON: Yeah, the bar graph. 5 DR. KALHAMMER: The horizontal bar graph? 6 MS. EDGERTON: Would that be -- just bear with me 7 a minute. Oh, I see. The specific energy slide with 8 achieved and projected batteries. 9 Do you have that in front of you? 10 DR. KALHAMMER: Yes. 11 MS. EDGERTON: Okay. It was the one with the 12 kilograms, not with the -- 13 DR. KALHAMMER: Right. 14 MS. EDGERTON: You indicated -- one of the things 15 that confused me on this was that reports have indicated 16 that, for example, the nickel metal hydride can get up to 17 150 miles per charge. But this doesn't seem to reflect 18 that. 19 DR. KALHAMMER: Yes. 20 MS. EDGERTON: And none of them seem to reflect 21 the 200 miles per charge that the Sunrise -- 22 DR. KALHAMMER: Yes. 23 MS. EDGERTON: -- Solectria got. So, what is 24 there in the way that you approach it that has discounted 25 those? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 DR. KALHAMMER: These are excellent questions. 2 And there are really two factors involved. The basic 3 assumption in the range graph, in this horizontal bar graph, 4 you may recall was that the battery weighed either 250 5 kilograms or 500 kilograms. And I suspect that the 6 batteries in Selectria weighed more than 250 kilograms. So, 7 it had more energy in it. 8 Yeah, you have to normalize this in order to 9 compare the batteries. And the rational way to do that is 10 to say same weight, right? Because, ultimately, you're 11 going to be limited by how much weight you can pack on a 12 vehicle. 13 So, that's one explanation. But there is also 14 usually another explanation in addition. And that is that 15 the vehicles can be driven in very different ways. And if 16 somebody sets out to prove that you are going to get, you 17 know, great range, they usually pick conditions, including 18 the way the vehicle is driven, that are reasonably 19 favorable. 20 Now, for instance, in some cases, they will say 21 driven at a constant 40 miles an hour, or whatever, or 60 22 miles an hour. So, you really have to look at the 23 conditions under which the vehicle is driven before you can 24 make a statement. 25 However, the situation is really quite easy in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 that sense, that for different modes of driving a vehicle, 2 it's normally known how much energy you need to drive that 3 vehicle a mile, let's say. Okay? For a certain cycle, 4 there will be so many watt hours per ton mile. That's a 5 characteristic. 6 And then, all you need to know is how many 7 kilowatt hours you have on the battery, which you decide. 8 And then, you will know what the range is. 9 So, you have to be really very careful when you 10 hear all of these enormous claims for long distances driven. 11 In the limit, you might have a thousand pound battery on the 12 vehicle or even more. And that's not all that realistic. 13 MS. EDGERTON: That's very helpful. Thank you. 14 CHAIRMAN DUNLAP: Okay. Mr. Lagarias. 15 MR. LAGARIAS: Dr. Kalhammer, I agree with Ms. 16 Edgerton that this, indeed, is a very useful and far- 17 reaching report that you're presenting to us. 18 In your estimate of the costs of the pilot program 19 and the production program, it would seem that it might be 20 appropriate to see that four or five of the most promising 21 programs would go through the pilot-plant stage so we could 22 get the batteries on the road and get the testing done to 23 evaluate it. 24 And then, there should be -- if things follow 25 normal practices -- a fallout, and only one or two of those PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 battery types would ever go into full production. So, we 2 don't add up all the costs of full production of all these 3 processes. 4 So, we're concerned with the cost and the time 5 and, of course, the results. Would you agree with that? 6 DR. KALHAMMER: Yeah. That, of course, is totally 7 rational, economically rational, and it is a principle that 8 is very wise. 9 The other side of the coin is that there's still 10 risks in each one of these, and also these batteries have 11 somewhat different characteristics. 12 Some of them, for instance, would work best if 13 they saw more or less complete charge/discharge every day in 14 a vehicle that really works a lot. And that, of course, in 15 a sense, is a vehicle that would contribute most to the 16 reduction of pollution, because it produces the most miles 17 per day. 18 And some systems would be better for that and some 19 systems would be better for somewhat different duty cycles. 20 So, right now, I think it would be a little early to decide 21 which the winning horse is. 22 MR. LAGARIAS: Well, that I think would be the 23 reason for going through a number of pilot programs. 24 DR. KALHAMMER: Yes, exactly. 25 MR. LAGARIAS: To screen out those that are -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 DR. KALHAMMER: And then the market will take over 2 at some point. 3 MR. LAGARIAS: Hopefully. I hope Sony does better 4 with the lithium battery than they did with their Beta VCR. 5 On another point, I assume you're using a common 6 platform, a weight platform, or a normalizing to determine 7 the mileage range for these batteries. Wouldn't it seem 8 appropriate that battery technology would be the one that 9 would most benefit from reduction in weight, going from less 10 heavy materials in the vehicle to do more aerodynamic 11 streamlining, because it would be much more important there 12 than it would be with a gasoline powered car? 13 DR. KALHAMMER: Absolutely. 14 MR. LAGARIAS: And that could literally -- taking 15 a number out of the air -- double the mileage that you're 16 now projecting if you used a different platform for 17 consideration. 18 DR. KALHAMMER: Yes, absolutely. Already today's 19 electric vehicles are, as a vehicle, quite aside from the 20 battery, as a vehicle, much more efficient than they used to 21 be. 22 The other point that's often forgotten, but has 23 been very important is that the drive train itself, the 24 electrical conversion from the DC that comes from the 25 battery to what eventually goes to the motor, that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 efficiency of this system has been greatly improved. 2 So, I can tell you that 15, 20 years ago, say a 3 van -- the General Motors electric van, which was very heavy 4 with lead-acid battery, needed something like 2.4 kilowatt 5 hours per mile. The G-Van that was developed with help of 6 my organization, the Electric Power Research Institute, had 7 a vehicle then that was almost identical to this earlier 8 vehicle that used 1 kilowatt per mile. 9 And the Chrysler T-Van is using more like half a 10 kilowatt hour. So, a factor of five improvement just in the 11 vehicle. And, of course, as you say, this has enormous 12 benefits for electric vehicles, the increase in efficiency. 13 MR. LAGARIAS: Well, I think these improvements 14 are essential for the electric vehicle. 15 DR. KALHAMMER: Yes. 16 MR. LAGARIAS: But they could also be useful in 17 going back into the gasoline-powered vehicle. 18 DR. KALHAMMER: Absolutely. Yes, so the electric 19 vehicle does something useful for efficiency in general. 20 MR. LAGARIAS: Thank you. 21 CHAIRMAN DUNLAP: Dr. Kalhammer, I have a 22 question. Could you just take a moment and share with us 23 how you were received when you went out and talked to these 24 experts, particularly the automakers subject to this ZEV 25 requirement. Was cooperation good? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 DR. KALHAMMER: It was outstanding. And I really 2 think all of these organizations recognize, you know, the 3 importance of the regulation and the beneficial impact that 4 the regulation has made. And they were very open, really. 5 Now, of course, in many cases, the staff was able 6 to just introduce us, basically saying what the purpose was 7 of our investigation, and that really did open the doors. 8 CHAIRMAN DUNLAP: Okay. Good. What I'd like to 9 suggest -- Dr. Kalhammer, will you be able to be with us for 10 another hour or so? 11 DR. KALHAMMER: Certainly. And I'm sure that you 12 will probably also have questions for Carl Moyer as well. 13 CHAIRMAN DUNLAP: Right. Well, I've mentioned his 14 name a couple of times. I haven't seen him jump up to the 15 podium yet. But we'll get back to him. 16 If it's okay, I'd ask my Board member colleagues 17 to allow us to let Dr. Kalhammer sit down for a few moments, 18 and let's get to these witnesses, and then we can come back. 19 Sure. As he's transitioning to the table over 20 there, Ms. Edgerton wants one last question. So, it's fine 21 if you wish to take it sitting. 22 MS. EDGERTON: Well, thank you. I wanted to ask 23 you -- there are a lot of chemicals in these batteries. 24 What approach did you take in evaluating possible emissions 25 from the new batteries as well as the lead-acid batteries? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 Did your analysis cover that, and what did you 2 find? 3 DR. KALHAMMER: I would say that we certainly 4 heard quite a few things about recycling of batteries, and 5 it was not the point that we stressed in our investigation. 6 But particularly, also in Europe and Japan, the 7 consciousness, you know, of the need to completely close the 8 loop of these materials is very high. And so, all of these 9 organizations have schemes for recycling these batteries. 10 But if you ask me technical detail, how are they 11 all going to do that, I couldn't answer that. And, in any 12 case, this is different in each case. But I think it's an 13 issue that has to be solved. There's just no way today to 14 work with something that might get in the environment that'd 15 be toxic. 16 MS. EDGERTON: I thought I heard at the workshop 17 that each of the companies working on this had as a specific 18 objective and goal to have a closed-loop system. Did I hear 19 that correctly or? 20 DR. KALHAMMER: Yes. 21 MS. EDGERTON: Thank you. 22 DR. KALHAMMER: You know, let me just add here, 23 gratuitously, we did make one visit to a lead-acid battery 24 recycling plant. And that was driven in large measure 25 because of this alarming Carnegie-Mellon study that I'm sure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 everybody has heard about. 2 And so, we got quite a presentation, and we got an 3 information package. And it seems quite clear to us -- Carl 4 Moyer is much more expert in this field than I am -- but it 5 seems quite clear to us that Carnegie-Mellon's study worked 6 with data that are either not applicable anymore -- since, 7 historic from precontrol days, or downright wrong. And 8 generally speaking, it's off by a factor of a thousand. 9 CHAIRMAN DUNLAP: Thank you. 10 DR. MOYER: May I add one remark -- 11 CHAIRMAN DUNLAP: Sure. 12 DR. MOYER: -- there about battery recycling. ARB 13 is sponsoring a very complete battery recycling assessment, 14 looking at life cycle emissions of batteries of all the 15 major types. And that report is partly complete and partly 16 not yet complete, but will be complete in a couple of 17 months. 18 I have myself seen the results -- preliminary 19 results of what you call a population risk assessment for 20 the different battery types. All the advance batteries in a 21 proper recycling context score actually better than a lead- 22 acid battery does when you're talking about melting forms of 23 recycling in the case of lead-acid. And we have a very good 24 model in the Vernon plant in L.A. So, we should be moving 25 forward, luckily, in reduced environmental implications with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 the advanced batteries compared with lead-acid batteries. 2 CHAIRMAN DUNLAP: Okay. Thank you. What I'd like 3 to do, our court reporter's going to need to take a break in 4 a moment. So, what I would like to do is call one witness 5 and then we'll continue through the stream. 6 We have six witnesses signed up. I'd like to 7 start off with Division Chief Jan Dunbar of the Sacramento 8 Fire Department. And then I'll call up the others as soon 9 as we hear from him. And then, we'll give the court 10 reporter a break. 11 MR. DUNBAR: Good afternoon, members of the Board. 12 Thank you for these few moments. 13 Ladies and gentlemen of the Board, my name is Jan 14 Dunbar. I am a Division Chief with the City of Sacramento 15 Fire Department, Division of Hazardous Materials. 16 I would like to start off first by saying -- and I 17 also included this in my typewritten notes to myself -- that 18 the purpose of electric cars in California perhaps is a good 19 thing. I'm not here to criticize that, or throw stones, or 20 anything with regard to the concept of electric cars in 21 California. 22 For that matter, perhaps in a few years, what you 23 might see go by in the streets up here will be an electric 24 fire truck, at least you'll see it; you won't hear it. 25 But who knows? Batteries will probably have to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 pretty big for that vehicle. 2 What I had put together in the way of some notes, 3 and I'm going to diverse (sic) from my notes purposely, is 4 that I have been involved in collecting a lot of information 5 for the past 16 years, 18 months on this issue, so has a 6 colleague of mine, one of my captains, who has actually been 7 more deeply involved than I have and has become quite 8 expertise at what information was available. 9 I would also say that up to and including last 10 night, there appears to be a shortcoming of information 11 based on what was brought to my attention by my captain and 12 by other members of the fire service community in 13 California. 14 Today, I think that I perhaps should say a few 15 other words. In some arenas, there is still some 16 insufficient information with respect to the concerns of the 17 fire service. On the other hand, the last six or seven 18 hours today has also been very educational. We have learned 19 a few more things. 20 What is interesting is that, in the few cases, 21 though, perhaps that information having been available was 22 not made available when we were looking for it. 23 Our concern in the fire service -- I think I don't 24 need to go into a great deal of detail with respect to the 25 dangers of a new enterprise. This is not the same as the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 day when we mandated new seat belts or airbags. We were the 2 first in the nation to do so. That didn't affect the fire 3 service so much. 4 But this does. I want you people to understand 5 that the fire service and I want to be very sincere with you 6 when we bring up questions with regards to technology. It's 7 okay to go forward. It's okay to go forward fast. I, 8 myself, am on four NFPA committees where we do write 9 standards. I know what technology is. And I know what the 10 repercussions are with respect to stating a mandated date. 11 I am here to say to you that I am concerned with 12 regards to your ability, this Board, and in association with 13 the manufacturers and the research that they're bringing 14 before this Board, to meet that date and to meet that date 15 according to your wishes, but also to the fire service 16 concerns. 17 True, it is not much of your concern about what 18 our concerns are. I'm asking you, though, not to disregard 19 them. I want you to pay attention that, when we have 20 questions, we obviously are not getting the accurate 21 answers about the batteries, about the acids, about how 22 these batteries will automatically disengage themselves in 23 an accident. 24 Is it foolproof? 25 Above and beyond what safety features are being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 designed into these vehicles for the protection of the 2 consumer, what protection has been designed into these 3 vehicles for the protection of the emergency worker -- the 4 firefighter? When they arrive on the scene under the duress 5 of an unpredictable emergency, it is one thing to be told 6 that these batteries will not collapse when I know 7 otherwise. 8 I've witnessed research and participated in 9 research with NASA, with the Racing Institute; fuel cells 10 for our race cars rupture. You see it on television. And 11 yet the manufacturer will say, well, that wasn't supposed to 12 happen. 13 Pretty soon, by 1998, we're going to start with 14 60,000 vehicles and thereafter many, many more. You are 15 going to witness -- it's a matter of happenstance -- major 16 accidents in California. 17 Are we addressing all issues? The attention that 18 I had intended to draw before this Board with my statement, 19 making a few statements, perhaps strongly worded, was not to 20 put anybody on the point, but to bring attention to you 21 people, that here at least in the Sacramento City Fire 22 Department, the lead fire department I believe in the State 23 that began asking questions before anybody else, and we were 24 not getting answers; that there are still a lot of open 25 holes left. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 So, I would like to perhaps close by just saying 2 this, with conversations and many of which I've had in the 3 last 20 minutes in the hallway, there has been an agreement, 4 and I will put forth this offer that, if the California Air 5 Resources Board will work with the Sacramento Fire 6 Department to address these issues, to put together training 7 programs in conjunction with a grant from the State Fire 8 Marshal's Office -- which I think you people have already 9 approached them for -- that we, too, will work with them; 10 that we will use the 1998 target date to resolve these 11 issues accurately; that I would, in turn, promise to the Air 12 Resources Board the full resources of the Sacramento Fire 13 Department. 14 And, as we approach the 1998 date, and there are 15 some issues that left -- that are left to be resolved that 16 have not been resolved, that perhaps then would be an 17 appropriate time to reexamine the institution of that date, 18 and it would be premature to do so now. 19 But by all means, though, that does not mean that 20 everything is of concern of the fire service is being 21 resolved today. There is too much to be done. 22 I would like to thank everybody, including members 23 of this Board, for listening to me, and the manufacturers 24 who will be in response to our inquiries in the future, and 25 to cooperate with the fire service of California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 And I thank you very much. 2 CHAIRMAN DUNLAP: Thank you. If I could ask a 3 question or two of you. When you say you've contacted the 4 Board, is it the Board you're talking about, for information 5 and we haven't -- staff hasn't been forthcoming to provide 6 you information? Or are you talking about automakers? 7 Who's been reluctant to give the fire service, as you put 8 it, the information about vehicles and whatever it is you're 9 seeking? 10 MR. DUNBAR: The information that we have 11 solicited has been issued to various automakers. One has 12 replied, and replied quite well, and perhaps I should 13 mention them. And that is Ford Motor Company. 14 So, the other manufacturers did not reply. 15 CHAIRMAN DUNLAP: Okay. So, you approached the 16 automakers and they haven't given you information on vehicle 17 types and the like? 18 MR. DUNBAR: Or even they were not prepared to 19 send us anything. We did not receive any information. 20 CHAIRMAN DUNLAP: Have we? Have you asked 21 anything of us, of the Board? 22 MR. DUNBAR: I personally have not. I do know 23 that my captain has been contact on numerous occasions, 24 which also included -- 25 CHAIRMAN DUNLAP: Is he here by the way? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 MR. DUNBAR: Yes, he is. He's in the audience. 2 Joe Moore. 3 CHAIRMAN DUNLAP: Sir, could I get you to come 4 forward for a minute? 5 Have you contacted the staff and we've been 6 reluctant -- staff's been reluctant to provide you 7 information? 8 MR. MOORE: My contact -- I'm Captain Joe Moore. 9 I'm involved in training in Sacramento City Fire Department. 10 I've been working -- initially , about a year and 11 a half ago, one of Cal-EPA's representatives, E. D. Chang, 12 came in with a Ford representative, Ed Stannick. And they 13 were -- wanted to present some information. 14 The information we got at that time I didn't feel 15 was accurate or complete. It was supposed to be a 20-minute 16 meeting. It turned out to be about a two-and-a-half-hour 17 meeting, with an understanding there was a lot of things 18 lacking; that they would get back. 19 I requested at the time some training, a vehicle, 20 more information. Just recently, some of the other Cal- 21 EPA/ARB employees -- Chuck Owens and Robert Ianni -- came 22 over and just finished up some training session with our 23 department. And we invited a few other departments to 24 participate. 25 We got West Sac and a couple of representatives PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 from other departments. 2 CHAIRMAN DUNLAP: So, you've had contacts and 3 meetings, and you just haven't gotten all the information 4 you'd like to have at this point. 5 MR. MOORE: Yeah. 6 CHAIRMAN DUNLAP: Okay. 7 MR. MOORE: Some of the information created more 8 questions. It was incomplete. Some of the information that 9 we got, we couldn't operate like that in California. We 10 would be in trouble if we did what initially they required 11 us or they wanted us to do. 12 CHAIRMAN DUNLAP: Okay. Thank you. I just wanted 13 get a sense. We'll make sure that the coordination is more 14 tightly done. 15 Mr. Dunbar, you mentioned that you sit on these 16 national advisory committees and come up with standards and 17 what not. 18 What kind of leadtime do you have when you do 19 that, generally speaking? How many years out before 20 programs are implemented? 21 MR. DUNBAR: The initiation process starts with a 22 five-year deadline. 23 CHAIRMAN DUNLAP: Okay. 24 MR. DUNBAR: And with Cal-OSHA, I've even done a 25 little bit of writing, though it's been some time, with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 firefighter protective clothing and breathing apparatus. 2 In fact, that's an interesting point. With our 3 breathing apparatus, when we in the fire service want what 4 we call positive pressure, pressure demand breathing 5 apparatus, an arbitrary date was set. I think it was 1976. 6 As 1976 approached, it was obvious to Cal-OSHA 7 that the manufacturers still were not ready. And so that 8 date had to be pushed back. 9 CHAIRMAN DUNLAP: I guess what I'm saying is that 10 I want to get a sense of how many years in advance of a 11 program's implementation or being required do you normally 12 get involved and start working on standards and 13 familiarizing -- 14 MR. DUNBAR: With the NFPA standards, it's five 15 years. 16 CHAIRMAN DUNLAP: Five years, okay. All right. 17 Very good. Any of the Board members have any questions of 18 Mr. Dunbar? 19 Sure, Lynne? 20 MS. EDGERTON: I'm trying to understand, Mr. 21 Dunbar -- thank you for coming. I have your testimony in 22 front of me. It's different from what you've said. 23 MR. DUNBAR: Yes. And I purposely digressed from 24 it. 25 MS. EDGERTON: Well, let me see if I understand. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 Then, you are retracting this testimony, and you're not -- 2 MR. DUNBAR: I've modified it. 3 MS. EDGERTON: You've modified it. So this -- you 4 don't -- you are not calling on us to delay or rescind the 5 electric car program. 6 MR. DUNBAR: No, and it would not have been my 7 suggestion to do so. It would and it is my recommendation 8 that if these mandates with these concerns can be met by 9 1998, and at least that you also listen to the concerns of 10 the fire service, why that's just fine. If that cannot be 11 done, then we have a problem. 12 (Thereupon, there was a pause in the 13 proceedings to allow the reporter to 14 replenish her stenograph paper.) 15 MS. EDGERTON: Yes. I just want to respond to 16 your comment that the concerns of the fire department may 17 not be our concerns, and just say that they are. Your 18 concerns are very much our concerns. We very much want to 19 hear those. We are very concerned about the firefighters. 20 We have tremendous respect for the firefighters. 21 We thank you for what you do for us, and we -- in 22 my view, this program is a very ambitious program, a very 23 important one, and it's tremendously important that you be 24 involved. And I'm delighted to hear that you worked it out 25 so that you can be involved, because you're tremendously PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 important to it. And that's just the truth of it. 2 Thank you. 3 CHAIRMAN DUNLAP: Okay. Thank you very much. 4 MR. PARNELL: Can I? I'll just take one moment. 5 I was struck by some of the statements that were made in 6 your written testimony, and it's my understanding that when 7 this mandate was set down, that it was very clearly 8 understood that battery technology was not there; that this 9 was a technology forcing mandate. I think the desired 10 effect that you heard testified to today has been felt. 11 But we committed ourselves to regular reviews of 12 the issues as they were available for us to review. That's 13 the process that's going on. And I don't wish to be 14 argumentative, but in your statement, I would have preferred 15 that you said you were going to rescind your written 16 statement in preference to your verbal statement. 17 But you made the statement that the California Air 18 Resources Board does not want and is not willing to deal 19 with these problems, when the whole process that was set 20 down at the very onset was to deal with these problems 21 fairly. 22 And so, I'm not looking for a response 23 necessarily, other than to say that this is an ongoing 24 process. And to the extent if, in fact, it's been the case 25 that we haven't been responsive to your needs, then we will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 be. 2 But these kinds of allegations sometimes tend to 3 exacerbate problems rather than solve them. 4 MR. DUNBAR: I understand that, and that is why I 5 did digress from my printed statement. 6 CHAIRMAN DUNLAP: Okay. Thank you. What I think 7 I'd like to do is move on with the witnesses, if we could. 8 Thanks. 9 CHAIRMAN DUNLAP: Okay. Why don't we take a five- 10 minute break, and we'll come back. 11 (Thereupon, there was a brief recess 12 taken.) 13 CHAIRMAN DUNLAP: If you'll take your seats, we'll 14 begin. I'm going to call the next witnesses now. I'd like 15 to call Battalion Chief Bill Somers from the Stockton Fire 16 Department, followed by Darlene Skelton. Good afternoon. 17 MR. SOMERS: Good afternoon, Mr. Chairman, Board 18 members. 19 My name is Bill Somers. I'm the Battalion Chief 20 of the City of Stockton Fire Department. My duties require 21 me to respond to accidents involving automobile accidents. 22 I would like to say at this time that we're all 23 very appreciative of your acts in the past, the actions that 24 you've taken. You've done an excellent job in cleaning up 25 the air in California. I want to thank you for that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 The industries that we're dealing with here are 2 transportation systems, transportation industries. These 3 are very dynamic moving and uncontrollable type situations 4 once you release a product out into that stream. And what 5 we're saying is that once it's released, then you have no 6 control over its use, application, et cetera, et cetera, et 7 cetera. So, therefore, all the engineered uses can come to 8 naught. 9 I want to change my oral presentation somewhat 10 different from my written presentation that you have to a 11 much less technical thing. 12 I'm sure that you've been inundated with technical 13 data and stuff like this. And I'm going to talk to you 14 primarily about occupant safety. As far as the exemptions 15 for occupant safety standards that are being exempted, I 16 hope we keep in mind that these standards were purchased by 17 the tremendous price in the past by citizens experiencing 18 unfortunate incidents in motor vehicle accidents. 19 And almost all of the standards that exist today 20 are based on someone's tragedy, perhaps thousands and tens 21 of thousands of tragedies. 22 And before we exempt these occupant safety 23 standards, we should think well upon the prices that were 24 paid for those standards. Also keep in mind that billions, 25 untold billions, have been spent on medical care and legal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 costs that are associated with those standards. 2 We should also keep in mind that these exemptions, 3 based on our past experience, documented experience, that 4 they can represent a clear and present danger to the 5 occupant safety of these vehicles. 6 And I understand, and I'm sure that you're aware 7 of the magnitude of the impacts of the decision that you'll 8 be making here on this Board. 9 I hope that in your decision-making process you'll 10 keep in mind that the decisions you make will have a strong 11 impact, perhaps a life-and-death impact upon the families 12 who place their trust in the product you approved for use. 13 I'm sure you take these responsibilities 14 sincerely, and I'm just asking that occupant safety, 15 passenger safety, be given a very strong consideration, 16 perhaps a primary consideration in releasing this product 17 into the market where no one has control of their use. 18 Thank you. 19 SUPERVISOR RIORDAN: Thank you, Chief Somers. 20 Maybe there are questions from the Board before you leave 21 the podium. 22 Any of the Board members have any questions for 23 the Chief? You do? Ms. Edgerton, and then Supervisor 24 Roberts. 25 MS. EDGERTON: Chief, thank you for coming today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 I understand there was a press conference earlier this 2 morning. When you present at that? 3 MR. SOMERS: Yes, ma'am, I was. 4 MS. EDGERTON: And did you release the testimony 5 that we have before us at that? 6 MR. SOMERS: Yes, I did. 7 MS. EDGERTON: Because your testimony is -- what 8 you just said is not exactly the same thing what you said in 9 your testimony. 10 MR. SOMERS: I believe I cleared that up earlier. 11 Yes, ma'am. 12 MS. EDGERTON: Did you attend the -- have you read 13 any of the materials put out by the Air Resources Board on 14 zero-emission vehicles and their safety? 15 MR. SOMERS: No, I have not. 16 MS. EDGERTON: Did you read the 1994 ZEV staff 17 report? 18 MR. SOMERS: No, ma'am, I have not. 19 MS. EDGERTON: Did you attend any of the workshops 20 that we have held in the last year on infrastructure and 21 safety for zero-emission vehicles? 22 MR. SOMERS: No, I have not. 23 MS. EDGERTON: To your knowledge, did any of the 24 people who went to any of the -- any of the other chiefs who 25 went to the press conference attend the infrastructure -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 MR. SOMERS: I don't know that. 2 MS. EDGERTON: Have you ever approached any of the 3 utilities with respect to the safety efforts that they're 4 making for recharging and infrastructure for electric 5 vehicles? 6 MR. SOMERS: No, I haven't. 7 MS. EDGERTON: You commented about the exemptions. 8 Are you aware of the difference between an exemption for an 9 experimental vehicle or prototype vehicle and an exemption 10 for a broad-based consumer sales for vehicles? 11 MR. SOMERS: Technically, no, but, yes, I do 12 understand the concept. 13 MS. EDGERTON: Have you reviewed this sheet with 14 these exemptions that is before me that -- 15 MR. SOMERS: I briefly looked over it, yes. 16 MS. EDGERTON: Is this what you're referring to 17 when you say you thought we shouldn't have exemptions for 18 electric vehicles? 19 MR. SOMERS: I think that, if you allow 20 exemptions, you should weigh heavily the impact it may have 21 on passenger safety, yes. 22 MS. EDGERTON: I see here that one, two, three 23 four, five, six, seven of them had to do with windshield 24 defrosting for electric vehicles, and a number of these 25 others -- I don't know whether you have checked into them, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 but there -- it may be just 14 cars. Because I do know that 2 that is how prototype vehicles get tested. 3 Does that concern you just as much if it's an 4 exemption so they can test a prototype electric vehicle as 5 opposed to being offered generally for sale to consumers? 6 MR. SOMERS: As I understand, the issue at this 7 point is that -- I am not aware that the Air Resources Board 8 is going to vary their waivers on passenger safety 9 requirements. I don't know how many prototype vehicles 10 there's going to be out there in the public. Are there 11 going to be 15 or 20, or are there going to be 20,000? 12 MS. EDGERTON: Well, you know, there's quite a 13 difference here. For example, at the moment, I'm not aware 14 of any of the seven automobile manufacturers who are covered 15 by the ZEV program in 1998 -- I'm not aware that any of 16 them, not one of them, is currently offering an electric 17 vehicle for sale. I can't buy one. 18 MR. SOMERS: Well, I understand that. And so long 19 as they're granted waivers, they're not going to offer you 20 one. 21 MS. EDGERTON: I beg your pardon? 22 MR. SOMERS: I understand that the manufacturer is 23 not going to produce something they're not required to 24 produce. I think if we go back and look at that, the reason 25 that we have these exemptions, a lot of them are related to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 weight and efficiency things, and passenger safety may have 2 been violated in the effort to make the vehicle marketable, 3 more efficient, long-range, more acceleration, et cetera, et 4 cetera. 5 I don't know those things. But they seem to play 6 a part in these issues. And all I'm asking the Board to do 7 is to, number one, ensure that the occupant safety of an 8 electric car is no less than it is in a regular standard 9 car. 10 MS. EDGERTON: Oh, well, sir, I guess maybe 11 there's confusion here. We haven't granted any exemptions. 12 These are exemptions by the Federal Motor Vehicle Safety 13 Standards folks to companies that are testing out vehicles. 14 They are not exemptions granted by the Air Resources Board. 15 It's not a safety exemption that we have put out. And it's 16 not something that jeopardizes the public in any way, 17 because it's for prototype experimental vehicles. They're 18 not for vehicles that are generally for sale yet. 19 This is 1995. And so, I guess my -- the drift of 20 my comments is to reassure you that these are not -- these 21 are not exemptions for vehicles that are currently offered 22 for sale or, to my knowledge, for vehicles that have been 23 proposed to be offered to the general consumer market. It's 24 just not something that you need to -- it's not applicable 25 to your safety concerns, except with respect to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 occasional EV currently that might be on the road as an 2 experiment, an experimental vehicle. 3 MR. SOMERS: Well, pardon me. As I understand it, 4 there's one vehicle that's a three-wheeler that has no 5 passenger safety consideration whatsoever. I don't know if 6 that's going to be a prototype or if that's going to be a 7 production model, because if a vehicle is rated as a 8 motorcycle versus a passenger vehicle, then, of course, 9 there's no standards by which it has to address passenger 10 safety, other than that of what a motorcycle might have. 11 MS. EDGERTON: Well, let me get back to this -- 12 maybe someone else can address the -- one of the staff can 13 address the three-wheel vehicle. Is that something that 14 gets ZEV credit? 15 It's not governed under our program for ZEV 16 credit? 17 No, that's not us. 18 MR. SOMERS: Again, my main concern is, as a field 19 responder, I respond to accidents as they occur on our 20 highways and byways. And I'm only addressing the Board 21 here. And my concern's based on my experience on passenger 22 safety. 23 And so, if the Board doesn't have an involvement 24 in that or if the Board can't influence passenger safety, 25 then that's a moot issue at this Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 MS. EDGERTON: Well, sir, we are very interested 2 in that, and I notice here on a technical issue, you didn't 3 want to talk about the technical issues, but we are very 4 interested in the technical issues. That's precisely what 5 we are interested in. And, in your comments that your 6 comments that you released to the Press, you mentioned 7 caustic liquid spills from batteries. Is that correct? 8 MR. SOMERS: Yes. That's correct. 9 MS. EDGERTON: And where did you get your 10 information that the batteries in the electric vehicles are 11 going to have liquid spills? 12 MR. SOMERS: As you've heard earlier today, they 13 talk about these lead-acid batteries, and they do definitely 14 contain sulfuric acid. And we experience them right now in 15 the field. 16 MS. EDGERTON: What I think would be helpful would 17 be if I could ask Mr. Cackette to address -- my 18 understanding is that there is not going to be -- there is 19 not liquid in these batteries; that it's a gel that's being 20 used. Can you address a couple of these technical issues 21 that the Captain has brought up? 22 MR. CACKETTE: Yes, I believe that is the case. 23 Most of the manufacturers of lead-acid batteries for the '98 24 time frame are envisioning vehicles -- batteries which do 25 not have a liquid sulfuric acid in them as does the starting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 battery of your car today. 2 And so, if they crack, you will not have a flow of 3 gallons of sulfuric acid out onto the pavement. The gel 4 will basically stay with the battery. 5 MR. SOMERS: Well, if I may, our concern with that 6 particular issue isn't necessarily a crack and it running 7 out on the ground. Our concern would be that the impact and 8 the crushing of the battery in a very rapid sequence causing 9 these gel sacs to erupt and then you'd have a situation 10 again -- this is not the forum for this, but you'd have a 11 situation where you'd have -- let's say a glob of hot tar on 12 your skin versus a liquid that would run off you could wash 13 off easily. 14 There's many technical things, like you say, to 15 consider. But again, all I'm asking is passenger safety 16 should have -- and I'm sure that it has -- a high priority 17 in the design of a passenger compartment. 18 MS. EDGERTON: Well, sir, I'm going to yield to my 19 colleague, Mr. Calhoun, but I will say that it is very 20 troubling, because this is the forum. We would prefer for 21 you to bring these concerns here rather than calling a press 22 conference with a lot of data, which is incorrect in my 23 view, and in the view of our staff and the battery 24 manufacturers, and the automobile manufacturers. I would be 25 interested in what they have told you as well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 However, they are ultimately liable. Thank you. 2 CHAIRMAN DUNLAP: Mr. Calhoun. 3 MR. CALHOUN: Mr. Chairman, if I didn't know 4 better, I would think that the impression that is being 5 given here is that the auto manufacturers don't pay any 6 attention to product safety. And if they're paying 7 attention to anything, they pay attention to product safety. 8 They're very concerned about product liability. 9 They get sued every day because of allegations, claims made 10 about product safety. And before they can sell any vehicles 11 on the market, they have to meet the standards set by the 12 National Highway and Traffic Safety Administration. 13 And I would hate the people are given or even 14 believe that no effort is put forth to try and assure that 15 the vehicles are, in fact, safe. The auto manufacturers 16 aren't about to release those vehicles out there without 17 some assurance that they are, in fact, safe. They will go 18 through every possible failure mode that they can think of 19 at this particular time. 20 And even so, they will still miss something. Just 21 like you see vehicles that are involved in accidents that 22 catch fire -- but I wouldn't want the impression created 23 before this audience or before this country that the 24 automobile industry does not pay attention to product 25 safety, but that's simply not the truth. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 MR. SOMERS: I agree with that. And all I'm 2 saying is that the occupant safety standards that are in 3 place are there, and that a high price was paid for those 4 standards, and we should pay close attention to those, and 5 then handle them with a great amount of care based on, let's 6 say, past experience. 7 MR. CALHOUN: And I'm sure that the auto 8 manufacturers are thinking as much as they possibly can as 9 to possible difficulties that may be encountered, and are 10 going to put forth every effort to try and build safety into 11 that particular vehicle, because, as I said before, they 12 don't like these product liability suits, and they happen 13 every day. 14 CHAIRMAN DUNLAP: Mr. Lagarias. 15 MR. LAGARIAS: Chief Somers, can you give me an 16 estimate of the relative risk of crash of an electric 17 vehicle versus vehicles powered by gasoline? 18 MR. SOMERS: Well, I would -- again, I'm not 19 familiar with the design. I've seen pictures, mostly is 20 what I've seen of most electric cars. I've seen a couple 21 sitting over in the parking garage downtown today. 22 I would say that the electric car would suffer a 23 tremendous, much more damage than, let's say, a standard 24 car. I would say it has a good -- a good possibility of 25 being totally overran by the opposing vehicle. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 MR. LAGARIAS: Is that because of size? 2 MR. SOMERS: Size and weight, yes, and height. 3 MR. LAGARIAS: But those are not the issues that 4 we are hearing about. We're talking about the battery, and 5 is that where your risk was centered on? 6 MR. SOMERS: My primary concern is the passenger 7 safety, and the battery, of course, will play a big role in 8 that safety. 9 MR. LAGARIAS: Vis-a-vis gasoline, which are the 10 fuels we're talking about? 11 MR. SOMERS: Well, basically, if gasoline gets 12 into the passenger compartment, you have a problem. And if 13 the contents of the battery gets into the passenger 14 compartment, you can have a problem. 15 And all we're saying is the passenger compartment 16 needs to be designed, and I'm sure we have the technology 17 and the brains out there to do it, to give the maximum 18 amount of protection to the -- 19 MR. LAGARIAS: We'll see that that message gets 20 back to the automobile manufacturers. 21 SUPERVISOR VAGIM: You can put a 500 kilogram 22 battery, and it will roll over anything. 23 MR. SOMERS: But it's very low to the ground, so 24 the other higher vehicles will pass over it. 25 CHAIRMAN DUNLAP: Thank you, sir. Appreciate your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 time and attention. 2 SUPERVISOR ROBERTS: Mr. Chairman? 3 CHAIRMAN DUNLAP: Yes, Ron, I'm sorry. 4 SUPERVISOR ROBERTS: Some of what I had to say I 5 think -- at least the substance of it was covered. But I 6 think there's another aspect here, and I think the -- for 7 the fire captain and others in his profession that are here, 8 I think there's another aspect. And it sounds like 9 everybody's been sort of orchestrated to look at accidents. 10 CHAIRMAN DUNLAP: Right. 11 SUPERVISOR ROBERTS: But let me just call your 12 attention to the fact that my visit that I mentioned earlier 13 to Calstart, we had a discussion on building codes and 14 reviews by the building inspectors and the fire department 15 with respect to some changes that are going to be needed t o 16 accommodate recharging and other issues that come up. 17 And I hope that rather than guessing what's out 18 there and throwing up your hands and saying, we've got to 19 stop everything because we haven't seen it yet, we can get 20 you involved in this process. I was an architect before I 21 got into this business, and have quite a bit of experience 22 in that area. And there is a significant role for you 23 fellows to play. But if you get your information in the way 24 you've gotten your information so far, you're not going to 25 be of any help to the people in your community. And I think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 that would be unfortunate. 2 So, I think you've got some homework to do. And I 3 think -- and I hope, to the extent that our staff and others 4 can get you involved in this, that it can be successfully 5 done. 6 MR. SOMERS: Mr. Chairman and Board members, I can 7 assure this, this meeting has had a significant impact upon 8 public safety responders, industry, trainers, the whole 9 thing. And from this meeting today, I believe that there's 10 going to be a tremendous amount of exchanges in the future 11 regarding this issue. And I would just like to thank you 12 for that. 13 CHAIRMAN DUNLAP: Thank you. Well said, Ron. 14 Appreciate it. 15 Darlene Skelton, followed by Captain Terry Scortt. 16 Ms. Skelton's with the National Institute of Emergency 17 Vehicle Safety. And Captain Terry Scortt is with the 18 California Firefighters Association. 19 MS. SKELTON: My name is Darlene Skelton. I'm 20 president of the National Institute of Emergency Vehicle 21 Safety. I'm a founding member of EVS, and I have been 22 concerned about federal motor vehicle safety standards to an 23 extensive level, as how they relate to emergency vehicle 24 safety. 25 EVS is a nonprofit organization whose primary PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 focus is vehicle safety for emergency responders. 2 The Federal Motor Vehicle Safety Standards for 3 conventionally fueled cars were first promulgated by the 4 National Traffic and Motor Vehicle Safety Act of 1966. 5 These standards have now enjoyed over 20 years of success in 6 protecting the public. 7 At this point, I'd like to interject that the 8 concerns that I'm about to express and review are based on 9 research and conversations that we have had. The concerns 10 that we are expressing are no more than what the National 11 Highway Traffic Safety Administration expressed in their 12 request for public comment of September 30th, 1994, which 13 addresses the same safety issues that I'm about to express. 14 We've also had discussions with NHTSA officials. 15 We have been told that they have conducted several crash 16 tests. They are concerned about substantial acid spillage. 17 So, we know that it's happening. We have evidence from 18 reports with them. 19 We have also reviewed a videotape that NHTSA 20 conducted a crash test, and we also know that the new car 21 assessment program, which is sponsored by the National 22 Highway Traffic Safety Administration, has absolutely no 23 plans to involve electric vehicles in their crash-testing 24 program for consumer protection. 25 Consumers today instinctively believe that when PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 they purchase a vehicle, that that vehicle has met certain 2 occupant safety protection criteria. However, we feel that 3 with electric cars, buyers must beware. Government records 4 indicate that out of 12 requests by electric car 5 manufacturers for exemptions from occupant restraint and 6 crash protection standards, 11 of those requests were 7 granted, as well as two requests for electric cars to be 8 exempt from roof crush resistance standards. 9 According to staffers with the National Highway 10 and Traffic Safety Administration, no vehicle standards 11 currently exist for hazards unique to electric vehicles. No 12 standards for electric shock, electrolyte spillage, and 13 hydrogen gas. Although NHTSA has issued a request for 14 comment regarding safety issues in electric vehicles, their 15 rulemaking process is currently on hold. The Society of 16 Automotive Engineers is attempting to develop standards for 17 electric shock and electrolyte spillage by the end of this 18 year. 19 However, NHTSA staffers expressed skepticism that 20 SAE would be able to meet that deadline. Further, SAE 21 standards are voluntary and NHTSA would be forced to 22 initiate a complete and formal rulemaking process before it 23 promulgated binding standards, which normally takes five to 24 seven years. 25 EVS certainly does not anticipate that NHTSA will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 have complete finding standards for the unique risks posed 2 by electric vehicles regarding shock -- electric shock and 3 electrolyte spillage in time to meet your mandate for the 4 1998 year. 5 We're further concerned that there seems to be no 6 process at all within SAE or NHTSA regarding what could be 7 the most hazardous aspect of electric vehicles -- the 8 generation of hydrogen gas by electric vehicles under a 9 stressed environment, such as overcharging, overdischarging, 10 or in the event of a vehicle collision, short circuit, or 11 fire. 12 For example, if you're a firefighter extricating 13 me from an incident in an electric vehicle, you have no 14 guarantee that those battery cables are not routed in an 15 area where you are about to cut in order to extricate me 16 from that vehicle -- in the door, in the roof, in the 17 support system, or in the frame structure. Or if I'm 18 extricating you, and you have to wait for a battery bleed- 19 down time for two minutes, you could be dead before I could 20 reach you. 21 We believe that these are realities for the 22 consumer and the emergency responder. Without specific 23 regulatory standards, anything is in the realm of 24 possibility. I speak that from personal experience and what 25 we have seen through the National Institute of Emergency PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 Vehicle Safety, when there are not specific standards 2 addressing issues, because the fire service is so prone to 3 having small numbers of vehicles by small manufacturers and 4 producing custom vehicles. 5 According to NHTSA staffers, all electric vehicles 6 on the road today, every single one, has either been 7 exempted from federal vehicle safety standards or has 8 slipped through the loophole in federal standards. 9 I have a partial list, which is included with my 10 written testimony citing almost 50 different exemptions and 11 requests for exemptions from federal vehicle safety 12 standards from December, 1991 through March, 1994. 13 We don't know when they'll end. We don't know how 14 long these exemptions will continue. The exemptions cover 15 almost every safety standard under the sun, from occupant 16 protection to brake systems and hoses to steering control 17 and rearward displacement. All of the requests for safety 18 standard exemptions that were made from 1991 to 1994, only 19 two requests were denied. 20 Most disturbing, uniform exemptions for crash 21 controls and brake system safety standards were granted or 22 proposed for all electric vehicles. Currently, we are not 23 aware of any plans to replace those standards, which there 24 has been a proposed exemption for. 25 These electric vehicles are advertised to be able PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 to reach speeds up to 70 miles per hour with a supposed 2 range of 100 miles. Couple these claims made by the 3 electric car salesmen with unpublicized exemptions or the 4 complete lack of safety standards regarding some hazards, 5 and we believe that consumers are unknowingly left with a 6 tremendous false sense of security. 7 The companies requesting exemptions include the 8 big three car manufacturers and familiar names that we've 9 heard throughout these workshops, such as Selectria and 10 Calstart -- affiliated battery company -- company Battery 11 Automated Technology, or BAT. 12 While it may be standard practice to grant 13 exemptions for prototype vehicles, all of the smaller 14 electric car procedures, like Selectria and BAT, claim to be 15 on the verge of large-scale production. We have no 16 guarantee that these exemptions will stop by 1998. We are 17 very concerned that the safety -- current safety standard 18 exemptions, which have been granted so far, will continue to 19 apply as these companies produce greater numbers of electric 20 cars for consumer use. 21 Further, many electric cars have slipped through 22 the loopholes in motor vehicle safety standards. Mr. Somers 23 mentioned a three-wheeled vehicle. And personally, that's 24 one that totally frightens me. We have an article -- this 25 is not included in my testimony -- we have an article where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 a company out of the State of Washington was interviewed, 2 and they were ecstatic over the mandate in California in 3 1998, because they felt that they were at the right place at 4 the right time. 5 These are three-wheeled vehicles. The author of 6 the article test drove this vehicle. He indicated that an 7 individual that was six-feet tall would have difficulties 8 getting in it. His knees were against the dashboard. And 9 you would have difficulty getting the keys into the 10 ignition. 11 He also stated in the article that, when driving 12 this vehicle and decelerating from highway speeds, the front 13 end floated over the highway. 14 So, we're concerned that these three-wheeled 15 electric vehicles that are currently on the market right now 16 will slip into this mandate and find a market niche for 17 themselves. 18 Although these vehicles are commonly referred to 19 as cars, they are carefully -- they are fully enclosed, the 20 wheelers -- the three-wheelers are only required to meet 21 motorcycle standards which offer little or no occupant 22 protection. 23 Further, we know that the three-wheel all terrain 24 vehicle was deemed inherently unsafe and subject to high 25 rollover propensity as well as assorted handling and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 steering problems. 2 Vehicles with high rollover risk, such as the 3 Samurai and CJ5, have already been taken out of the 4 marketplace. We ask why are we opening up the market 5 through a mandate for more unsafe vehicles like these three- 6 wheeled electric cars? 7 Again, without specific standards for electric 8 vehicles, anything is in the realm of possibility. We 9 believe that the average consumer will probably not be able 10 to afford the extra l0 to $30,000 additional purchase 11 expense required to buy an electric car. We believe, 12 instead, the public and private fleets, already struggling 13 to meet existing purchase mandates for alternative-fueled 14 vehicles, will be targeted for further purchase mandates for 15 electric vehicles. A number of municipalities, even if not 16 compelled by State or Federal mandate, will probably assume 17 local mandates of their own given past history. That's 18 based on a personal experience that we've had with EVS, that 19 after an executive order by the President of the United 20 States encouraging recycled materials, that there were 21 literally local mandates requiring emergency response 22 agencies to run recycled or retreaded tires on their 23 vehicles. 24 So, we see that with a mandate, we can expect that 25 local jurisdictions will also adopt similar mandates in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 order to carry their share of the burden. 2 Municipalities are often required by law to take 3 the lowest bidder. From our experience with EVS, we see 4 what kind of interesting vehicles end up in fire 5 departments. Coupled with the FMVSS exemptions, 6 municipalities will be diverting scarce funds to expensive 7 electric vehicles that will not offer the same range as 8 conventional vehicles, and which do not meet thee federal 9 safety standards. 10 Not only will the mandate be creating greater 11 problems for local public safety agencies, but the mandate 12 will be taking money, we feel, directly from the pockets of 13 the fire department, police officers, and other emergency 14 responders. 15 We've heard testimony two weeks ago in L.A. where 16 the auto manufacturers was calling for -- and I believe we 17 heard it again today -- that municipal governments need to 18 pull together to meet this mandate and put these electric 19 vehicles in their fleet. 20 There is no perfect material and there is no 21 perfect design. And we recognize that the National Highway 22 Traffic Safety Administration provides exemptions for 23 federal standards to encourage the development of new 24 technologies. However, as I previously stated, the electric 25 vehicles on the roads today are exempted from the federal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 standards. 2 And those standards exist for safety issues unique 3 to the electric cars; specifically, the electric shock, 4 electrolyte spillage, and hydrogen gas. 5 There will not be binding safety standards for 6 electric cars in the foreseeable future. With current 7 exemptions from the standards, the lack of standards for 8 safety hazards unique to electric vehicles, plus the mandate 9 of 20 to 30,0000 cars to be put on California's roads by 10 1988 (sic), we believe and anticipate that a situation where 11 consumers, fire department, public safety personnel and 12 citizen alike -- citizens alike will not have any protection 13 against these issues. 14 At the very least, we as that you rescind the 15 mandate until such time that the National Highway Traffic 16 Safety Administration, the federal regulatory agency, has 17 had sufficient time to apply current federal safety 18 standards to all electric vehicles, and promulgate new 19 standards for safety hazards unique to electric vehicles. 20 We're here today in hopes that you will hear and 21 listen to our concerns. The National Institute of Emergency 22 Vehicle Safety has been a national leader in addressing 23 vehicle safety issues for emergency responders nationwide 24 for the last four and a half years. 25 We hope that you've heard our voice and that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 you're willing to work with EVS to resolve these issues. 2 Thank you for your time today. 3 CHAIRMAN DUNLAP: We have and we are -- heard your 4 voice. Any other questions of our witness? Ms. Edgerton. 5 MS. EDGERTON: Thank you for coming today. 6 Ms. Skelton, could you give me a little 7 information on the size of your staff and -- I see here that 8 you're in Reno. 9 MS. SKELTON: That's correct. 10 MS. EDGERTON: Is that your only office? 11 MS. SKELTON: Yes. We were located in Castro 12 Valley, California until the beginning of June this year. 13 MS. EDGERTON: And then you're moving to Reno? 14 MS. SKELTON: We already moved. 15 MS. EDGERTON: Wait. I'm confused. 16 MS. SKELTON: We were in Castro Valley, California 17 until June of this year. We moved to Reno. 18 MS. EDGERTON: So, you're not a California 19 institute. 20 MS. SKELTON: No, we're a national institute. 21 MS. EDGERTON: How many staff members, paid staff 22 members do you have? 23 MS. SKELTON: We currently have two paid staff 24 members, and approximately three to four nearly fulltime 25 volunteers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 MS. EDGERTON: And the two staff members, what are 2 their positions? 3 MS. SKELTON: It's myself as president, and we 4 have an executive assistant and an office manager. 5 MS. EDGERTON: And what is your educational 6 background with respect to safety? 7 MS. SKELTON: One of a concerned citizen, one of a 8 concerned person who has been in the fire service and 9 understands the dangers and the threats that emergency 10 responders have to work with, specifically when vehicle 11 issues are put in front of them that they are not prepared 12 to deal with, and specific issues have not been addressed. 13 MS. EDGERTON: What's your annual budget? 14 MS. SKELTON: Our annual budget is about $100,000. 15 We budget more but, unfortunately, we don't meet it. 16 MS. EDGERTON: It's true of a lot of nonprofits. 17 Who are the primary -- are you a 501C-3? 18 MS. SKELTON: Yes, we are. 19 MS. EDGERTON: MS. EDGERTON: Where do you get 20 most of your funding? 21 MS. SKELTON: Most of our funding comes from about 22 150 members across the country, of which about 70 to 80 are 23 in the State of California. We also conduct training 24 classes and provide vehicle analysis, failure analysis, 25 fleet analysis, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 Our training classes involve anything having to do 2 with hazards of vehicles and dealing with them, on how to 3 spec them and get the best safe vehicle for the fire 4 department, best utilization of their funds. 5 So, it's a combination. Currently, we do not, 6 unfortunately, have not received any large grants, 7 donations, federal grants, and literally it threatens our 8 existence that we're unable to get the support that we need. 9 MS. EDGERTON: Do you have an annual report? 10 MS. SKELTON: We issue a newsletter every other 11 month. We have not yet issued annual reports. We give 12 reports to our board members. 13 MS. EDGERTON: And I guess you file with the 14 Internal Revenue Service -- 15 MS. SKELTON: Yes. 16 MS. EDGERTON: -- your list of donors? 17 Is this a specific focus? I mean it's interesting 18 to me that you're here today. Do you have a specific 19 project on electric vehicles? 20 MS. SKELTON: We first got involved with this 21 issue when the FIP/SIP came around. At that point, 22 initially, we were told that there were no exemptions for 23 fire departments. We became very active. This is really a 24 rollover from the FIP/SIP issue. 25 We see that the electric vehicles are something PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 that the fire departments are going to have to deal with. 2 Because we look and deal with the federal motor vehicle 3 safety standards on a daily basis and how they apply to 4 emergency vehicles, we fully understand that without the 5 specific standards that we're asking for, that anything is 6 in the realm of possibility. We are not as concerned with 7 the more responsible auto manufacturers. We know what 8 happens when doors are opened and there's no specific 9 standard to address an issue. 10 We have worked on cases before where there were 11 definite safety issues and we could not get them looked at 12 because there was just no standard for it. So, we see these 13 as serious issues that we would like to see in place under 14 the federal motor vehicle safety standards before there's 15 any kind of mandate. 16 If NHTSA can push them through in two years, that 17 would be great. I just don't believe that they can or that 18 they will. 19 MS. EDGERTON: Who funded your FIP/SIP work? 20 MS. SKELTON: The FIP/SIP work, we did. 21 MS. EDGERTON: From your general revenues? 22 MS. SKELTON: Yes. 23 MS. EDGERTON: Who funds your safety work and 24 coming out here today. 25 MS. SKELTON: Coming here today, in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 particular issue, because our budget funds have been very, 2 very scarce, we have joined with the Coalition of 3 Californians Against Hidden Taxes. They have paid our 4 travel expenses here. We have -- I'm sure maybe your next 5 question, or there's a number of people wondering, have we 6 received any money from auto manufacturers or the oil 7 industry, and the answer to that is, no. They're involved 8 in the coalition and support the coalition. I don't know to 9 what degree. 10 Our expenses here today, both for me and Mr. 11 Craven, who'll be speaking later, is probably less than 12 $200. We specifically, even a year ago, applied for a grant 13 to Exxon, not even having anything to do with this issue, 14 talking about the kind of safety programs that we have and 15 the concerns, and even how it improves safety for their own 16 fire departments. And we received a flat rejection in less 17 than seven days. 18 So, we do not receive, not one penny from the oil 19 industry or the auto manufacturers. We do have a small, 20 probably less than a half a dozen, of fire and ambulance 21 manufacturers who are members of our organization, because 22 they are as equally concerned about emergency vehicle safety 23 as we are. 24 MS. EDGERTON: So, if I understand you, your 25 funding to get here today and to have a presence on this is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 from the Californians -- the Coalition Against Hidden Taxes? 2 MS. SKELTON: Yes. 3 MS. EDGERTON: Which, as you have said, if I 4 understood you, you said, of course, they have gotten money 5 also from the oil companies? 6 MS. SKELTON: I'm not sure. I'm not an official 7 in that organization. I do not know to what degree they get 8 support. 9 MS. EDGERTON: Okay. Let me try to see if we 10 can't some answers to a couple of the questions that you -- 11 you've made some pretty serious charges. Electric shock, 12 let's see if we can discuss your concerns about electric 13 shock. I don't know what kind of electric shock standards 14 you are talking about. 15 MS. SKELTON: Okay. As the example I used, if I 16 was an occupant of an emergency vehicle -- excuse me -- EV, 17 emergency vehicle/electric vehicle, I interchange them 18 sometimes. 19 Electric vehicles, if I'm in an electric vehicle 20 that's involved in a severe crash and you are a firefighter 21 that needs to extricate me, extrication many times involves 22 cutting off doors, cutting off roofs. Currently, because 23 there's no standard, you, as a firefighter, have no 24 guarantee that if you use that jaws of life to cut the 25 support system to the roof or to cut into that door that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 there's no battery cables routed through that system. 2 We've heard a lot of talk about the a little bit 3 off of the issue of electric shock. But the current -- the 4 training video that was made available indicates that the 5 emergency shut-off switch is located under the driver's 6 seat. If you are the driver/occupant of that electric 7 vehicle and I need to get to you, then the only way I can 8 reach that emergency shut-off switch is to remove you. 9 So, I have no guarantee that there's no electric 10 charge in that vehicle until I shut off that emergency 11 switch. Without a standard that's saying the emergency 12 shut-off switch must be accessible at a specific place, you 13 have no guarantees where any of these small car 14 manufacturers, who see this as a wonderful opportunity, will 15 place it. 16 MS. EDGERTON: And what is your concern about 17 electrolyte spillage? 18 MS. SKELTON: The acid spillage, we have heard 19 figures from the National Highway Traffic Safety 20 Administration of gallons of acid spillage based on the 21 tests that they have conducted. They qualified it as 22 substantial spillage. Not only does that in itself create 23 an environmental hazard to have to clean up, but it also is 24 a safety issue that the occupants of the vehicle, as well as 25 emergency responders, have to deal with. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 MS. EDGERTON: May I ask, do you all want to 2 respond to either the spillage issue or the electric shock 3 issue? I know we -- this is not the forum where we can an 4 elaborate discussion. Frankly, I'm kind of impressed by the 5 ambitiousness of your effort, in that there are many, many 6 other folks obviously all around the world working on all of 7 these issues to ensure that the electric vehicles are safe. 8 But, Mr. Cackette, would you? 9 MR. CACKETTE: Well, I think I addressed the 10 spillage of sulfuric acid on a lead-acid batteries, where 11 the cars that would be affected by our ZEV program 12 requirements in 1998, and there won't be any. They're all 13 planning on using gel-type batteries. So, even if the case 14 of the battery cracks, nothing's going to come pouring out. 15 On the safety issue, as she said, they all have a 16 safety disconnect. Many of the manufacturers are planning 17 for a situation where there's an accident, that there'll be 18 an automatic disconnect of the battery from the electrical 19 system, much like, you know, an airbag that was triggered by 20 a sensor, the same kind of thing would happen. 21 And if it's a serious enough accident and traps 22 somebody inside a car, then that's going to happen. And 23 that's even on some of the prototypes that we've seen 24 already today. 25 So, the power's immediately cut off, and it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 doesn't matter where you cut the vehicle. If you cut 2 through a line, you will not be cutting into 300 volts of 3 battery power. 4 I think the fundamental disconnect in this 5 testimony is that, on one hand, Ms. Skelton is pointing out 6 that there are cars on the road today that are electric 7 powered that do not meet the federal safety standards. And, 8 essentially, a lot of these, especially the examples about 9 the three-wheels, are basically like kit cars, you know, 10 things that have been built in relatively low volume, almost 11 in the back yard or in the garage type of a situation. 12 You can build yourself a Cobra replica, you can 13 build yourself all kinds of different cars today that don't 14 meet federal safety standards of any type. And that's not 15 being driven by this regulatory program nor is it relevant 16 to 1998. 17 What's relevant to 1998, I think the impact of 18 this program, is that those vehicles which do lack 19 demonstrated safety through the FMVSS will change by 1998. 20 Because we're dealing with volumes, because we're 21 dealing with full-fledged auto manufacturers who will be 22 producing these cars, these vehicles will all be FMVSS 23 safety certified. 24 And the Federal Government is working to go 25 through all of the regulations, and either identify the need PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 for new ones or the need -- the nonapplicability of other 2 ones -- for example, ones that might apply to gas tanks and 3 locations of gas tanks, which are obviously not relevant to 4 an electric vehicle. 5 So, the net effect of the regulation and this 6 general effort will be that there will be safety standards 7 established, and these vehicles will meet safety standards. 8 And GM, and Ford, and Toyota are not going to sell cars that 9 are not FMVSS safety certified. That's the bottom line. 10 MS. EDGERTON: Just one question more, Mr. 11 Cackette. The witness is concerned about the time line on 12 those federal safety standards, whether these will be out-- 13 MR. CACKETTE: I can't respond, because I don't 14 know. 15 MS. EDGERTON: We don't control them obviously. 16 MR. CACKETTE: But we will certainly follow up -- 17 MS. EDGERTON: To try to speed that on. 18 MR. CACKETTE: -- and try to understand what that 19 is, and make sure -- to the extent we can, that it's 20 responsive to the State's needs. But, again, you know, it's 21 not the auto manufacturers are going to say, well, the FMVSS 22 standard isn't quite, you know, defined or fully -- we're 23 going to ignore it and build an unsafe car. 24 I think they are concerned about their product 25 liability, and they know how too make these cars safe. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 MS. EDGERTON: Could you make one final comment on 2 the hydrogen issue? I know that's something that you're 3 well aware of, and it seems to be very overblown in this 4 context. 5 MR. CACKETTE: All the batteries, as well as being 6 gel batteries, are sealed batteries. So, any gases that are 7 formed inside these batteries are contained so they're not 8 normally accessible to some kind of spark that could cause 9 them to go off. 10 On the GM Impact, for example, the one electric 11 vehicle that's gotten a lot of mileage, they have a sensor. 12 And if the hydrogen within the sealed battery gets anywhere 13 within a fraction of the combustible limit, the car shuts 14 down. And it doesn't do that because only of extreme 15 conditions or malfunction conditions, would that occur. 16 The manufacturers, even on these early prototypes, 17 are fully aware of what kind of problems there are, and 18 they're thinking about the solutions. EVs present new 19 safety issues. There is no doubt about that. But, in our 20 view, they're all solvable by common sense safety practices. 21 CHAIRMAN DUNLAP: We have two remaining witnesses. 22 I'd like to move along. Thank you, Ms. Skelton. 23 MS. SKELTON: If I could just say one last 24 comment. EVS, National Institute of Emergency Vehicle 25 Safety, our primary goal is to improve vehicle safety for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 the fire service. Many fire departments are not equipped, 2 have the staff to monitor these kind of issues. Most of 3 them don't even know what the federal motor vehicle safety 4 standards are. Most of them don't even know when they have 5 a safety related defect. That's why we organized EVS. 6 And that is why we focus on national issues. We 7 work very hard to get defective vehicles recalled, and 8 that's how we have a personal knowledge of how the federal 9 motor vehicle safety standards operate and how they can 10 impede on the public safety if certain standards aren't in 11 place. 12 Thank you. 13 CHAIRMAN DUNLAP: Thank you. Captain Terry 14 Scortt, followed by Ralph Craven. Good afternoon. 15 MR. SCORTT: Good afternoon. Thank you, Chairman 16 and the Board for your time. 17 I know we talked about the fact that good morning 18 was almost afternoon, and now it's almost good evening. 19 A lot of what I have to say has already been 20 discussed with the previous people. So, I will try to go 21 through this in an expedient fashion here. 22 Good afternoon, my name is Terry Scortt, and I'm 23 a Captain with the Orange County Fire Authority. I'm here 24 today representing the California State Firefighters 25 Association. I serve as a member of the hazardous materials PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 committee. 2 We respond to emergency calls all the time, many 3 of which involve automobile accidents. A lot of those are 4 critical situations where a few seconds can mean the 5 difference between life and death. 6 Firefighters are trained to react reflectively in 7 those instances. We don't have the luxury of being able to 8 stop and assess what variables might exist with respect to 9 the type of equipment involved in an accident. 10 It is absolutely imperative that our firefighters 11 and other emergency personnel know exactly what to expect 12 when going in. As stated previously by Darlene, in case of 13 conventionally fueled vehicles, we know exactly what we're 14 looking at. Federal motor vehicle standards for those cars 15 have been in place since the 1960s. 16 The standards are routinely upgraded to 17 accommodate advances in technology; firefighters and other 18 emergency workers participate in ongoing, continuing 19 education programs to ensure that there is always trained 20 people to resolve the emergencies as quickly and successful 21 as possible. 22 As stated earlier, the National Institute of 23 Vehicle Safety stated that virtually there's no meaningful 24 safety standards for the electric cars, which are expected 25 to hit the roads here in just a few short months. That PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 means that if the emergency personnel and drivers and 2 passengers of electric cars could be exposed to some unique 3 and potential lethal consequences that don't appear to have 4 been seriously addressed by this agency. 5 As was just previously discussed, the much vaunted 6 automatic disconnect mechanism, which is supposed to prevent 7 severe electric shock in a collision, has inconsistently 8 been located and the variable bleed-down times, which make 9 immediate emergency rescue activities dangerous for vehicle 10 occupants and emergency workers alike. 11 Now, some electric car promoters like to talk 12 about the fact that there are already some EVs on the road, 13 implying that those cars couldn't be out there if they 14 weren't safe. 15 but the fact of the matter is that those cars are 16 exempt from the type of stringent safety standards that your 17 conventional gasoline powered car must meet. 18 It's not unusual for experimental prototypes to be 19 let off the hook when it comes to limited numbers 20 introduced for research purposes. But with the 21 implementation of the electric vehicle mandate, we're 22 looking at tens of thousands of these cars being purchased 23 by consumers who may not realize that the level of safety 24 they've come to depend upon in cars that they've bought in 25 the past just might not be there this time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 The firefighters and emergency personnel who 2 respond to their calls for help in the event of a collision 3 or other emergency situations may not have sufficient 4 information and training to enable them to effect a safe and 5 quick response. 6 That type of scenario can turn tragic in a matter 7 of moments. California's firefighters and emergency workers 8 give a hundred percent. We're committed to doing the best 9 job that we can, and we certainly are not afraid of new 10 technology. 11 What we are afraid of is technology that's been 12 put out there without first undergoing extensive research 13 and safety testing, and of not being adequately informed and 14 trained on how to deal with the circumstances particular to 15 that new technology. 16 So, in closing, I think we've all learned a lot 17 today. I know the group of people that I'm with today have, 18 and hopefully you folks have, too. 19 Hopefully, there'll be a better dialogue between 20 us and some of these safety issues can be raised and 21 addressed all in a timely fashion. 22 CHAIRMAN DUNLAP: Thank you. You represent the 23 Firefighters Association? 24 MR. SCORTT: Yes, sir. 25 CHAIRMAN DUNLAP: Okay. Very well. Any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 questions? Thank you. Let's call the last witness. Mr. 2 Crave, I'm going to ask your indulgence. We have your six- 3 page written testimony before us. Much has been covered. 4 Sir, is there any way you could maybe just run through the 5 highlights for us? 6 MR. CRAVEN: Well, basically, I'll break it down, 7 since it's three minutes to 5:00. I know you want to go 8 home. 9 The four issues is -- the gentleman referred to 10 the sealed battery and it's not going to offload hydrogen. 11 Well, we found that not to be the case. West Hartford, 12 Connecticut, you're all familiar with the jaws of life. 13 Curtis Wright Power Hawk Company built an electric power 14 tool, which I thought was great, because it's about one- 15 third the size of the Hurst tool, weighs about one-third the 16 weight. And it was electric. Thought it was great, 17 outstanding; in fact, I tested and used the prototype. 18 Because, in my lifetime, I teach auto extrication, and I've 19 probably literally torn apart about a thousand cars. 20 So, in the West Hartford, Connecticut, they were 21 using the tool, also, and they discharged it and they 22 charged it overnight. And when they went to turn it on the 23 next morning, the sealed battery offloaded hydrogen gas into 24 the case, and the case blew up and it seriously injured six 25 firefighters, one very seriously -- has hearing loss, vision PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 loss, memory loss. He's probably never work again. 2 And I would have to compliment to Curtis Wright on 3 that issue, because they were under the assumption that a 4 sealed battery means sealed. Well, they found out it wasn't 5 sealed. They're going to change the name of the battery, 6 pressure-vented now, or relief vented battery. It still 7 offloads the hydrogen gas, and what they've had to do is 8 take that battery and put it in a separate case with a 9 separate switch, and then they have to plug the two cases 10 in. 11 So, to me, when you say it's a sealed battery and 12 it's not going to offload hydrogen gas, I would argue with 13 you. 14 In my course of my duties, 30 years as a 15 firefighter, I've seen a lot of things. I won't use the 16 slang term, but it does happen, and we have to deal with it. 17 And what we're seeing to you in all sincerity is before this 18 mandate goes through, we'd like several things looked. 19 How are we going to deal with a car in a river? 20 How are we going to deal with a car in a creek, especially 21 if it's running at 180 to 330 volts. The American Coalition 22 of Traffic Safety put that video out. I reviewed it. 23 Firefighters in Washington reviewed it. I raised more 24 questions in our minds than it answered. 25 The scenario where we have to open up the driver's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 door, tilt the driver -- tilt the driver's seat forward, 2 slide the driver's seat forward, then reach in and get and 3 remove a panel to hit the battery disconnect, that's totally 4 ludicrous. 5 If you're familiar with the race care industry, I 6 don't care whose car it is -- Roger Penske's car, 7 Granitelli's car, I don't care. When one of those hits the 8 wall, I have friends who work on those crash crews, they 9 know where those switches are. They know where those fuel 10 shutoffs are, because there's a standard for them. 11 And that's all we're asking. We're also asking 12 that you utilize some of your AB 2766 funds to deal with 13 these issues, these training issues we're asking you to look 14 at. The fire service in California does not have the funds 15 to develop these programs. They just don't. 16 And this is new. We're moving at a very rapid 17 pace, and they're on the road, and we're having to deal with 18 them. 19 So, you have my six pages of testimony. And in 20 deference to the Chairman, I did it in three minutes. 21 CHAIRMAN DUNLAP: Well done. 22 Yes, Mr. Lagarias. 23 MR. LAGARIAS: Mr. Craven, the gist of what I get 24 from you is you're concerned about the safety issues that 25 are unique to electric vehicles, particularly as they may PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 impact the firefighting industry. 2 MR. CRAVEN: Well, emergency responders. 3 MR. LAGARIAS: Emergency responders. That 4 includes the battery manufacturers and the automobile 5 manufacturers. We will be sure that that message gets back 6 to them. 7 MR. CRAVEN: Well, I would -- when we went through 8 the airbag issue, when airbags came in the cars, I mean 9 there was all kinds of rumors associated with the airbag 10 issues, tremendous amount of rumors. And the firefighters 11 in the State of California went to the automobile 12 manufacturers and said, hey, we've got some questions. So, 13 all of a sudden, we started getting inundated with training 14 tapes and automobile manufacturers came out and put aside 15 some of our rumors. 16 They discovered some of the things that were 17 raising with them were, in fact, true. And they had to go 18 back and rewrite and look at these issues in a different 19 way. 20 MR. LAGARIAS: Well, I'm aware that our staff has 21 been addressing these safety issues and communicating to the 22 extent feasible their state of knowledge and what can be 23 done as we get the information ourselves. 24 MR. CRAVEN: Thank you. 25 CHAIRMAN DUNLAP: What I would like to do is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 propose something that's certainly in my authority to do, 2 and I would like the support of my colleagues on the Board. 3 And that is I'd like to direct Mr. Boyd and your team, your 4 ZEV team, to put together some type of working group, some 5 standing working group with the firefighters, and the 6 National Institute of Emergency Vehicle Safety, and others. 7 It can be an ad hoc group. I'd like to have a meeting set 8 up within the next 30 days, where we could get some common 9 issues on the table and start to work through them and 10 dispel myths and misinformation, and start finding areas of 11 common interest and concern. 12 Would that be acceptable to the parties that 13 testified on this item? Okay. 14 All right. Very good. 15 SUPERVISOR RIORDAN: Mr. Chairman, if I might, I 16 might ask that you include -- because you have, I think, 17 through the Fire Marshal's Office, which seems to be 18 merging, or has it merged -- 19 CHAIRMAN DUNLAP: It's part of CDF, yes. 20 SUPERVISOR RIORDAN: Right. So, and those 21 individuals that are involved and can reach out to a whole 22 host of fire departments, while I'm not sure the membership, 23 and I couldn't tell exactly by the testimony of one of the 24 previous speakers, I think we need to reach much further 25 than what the Institute may actually reach. So, I would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 want to be sure that we're involving more. 2 Now, somebody like the California Firefighters 3 Association certainly might be one, but let's reach a little 4 bit further. 5 And I would support you in that effort. I would 6 also caution -- and having been a former member of the State 7 Fire Services Board, I think I can speak to those of you who 8 are sitting in the audience, who are part of the fire 9 services, I think you need to be dedicated to your issues 10 and not necessarily to issues that perhaps are others'. 11 I sense in the background here a push from maybe 12 other than firefighters and emergency responders. And that 13 concerns me. Don't let happen to you. I would say to you, 14 be very sure of what your issues are, and bring those to the 15 table rather than somebody else's. I caught that a little 16 bit in some of that testimony, and definitely within the 17 articles that I see before me. 18 CHAIRMAN DUNLAP: Thank you. Do we have support, 19 consensus on the Board, to have staff go ahead and set that 20 up? 21 Okay. Just perhaps a closing point for me at 22 least. I appreciate the time and attention you spent on 23 this issue. I think it's true we both learned some things 24 today. 25 We, and I think as you work with the staff in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 particular -- and I wish you could have watched some of the 2 Board meetings over the last few months -- in particular, 3 you would see that this Board regularly gets complimented by 4 those that it regulates for being open, and willing to work 5 with people, and being inclusive in the regulatory process. 6 That's what we pride ourselves on. 7 Looking at Press releases and other things that 8 have come our way today, you know, we've been here since 9 9:33; we didn't get a chance to attend any press 10 conferences. We're trying to attend to the people's 11 business as it relates to protecting public health. We're a 12 bit troubled to see press releases and things saying that 13 we're not interested in public safety issues. 14 And I was in particular, because that simply is 15 not true, and I hope we've passed muster with you all that 16 we are interested and do want to learn more and work, not 17 just as a Board -- that is the 11 folks sitting up here -- 18 but the staff as well. 19 So, we'll extend the hand of fellowship to you to 20 work on this issue, but ask that you sift through those 21 issues and determine what's truly most important to you, and 22 we'll work on them together. 23 Any other comments? Supervisor Roberts. 24 SUPERVISOR ROBERTS: Well, I was wondering, in 25 addition to the committee you're setting up, it seems to me PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 when you're talking about reaching out, there maybe needs to 2 be a targeted information packet put together to maybe send 3 out to all of the emergency responders. 4 I think we've got a little bit of a problem here. 5 I see it in the testimony, even of those people who maybe 6 should know better. We're talking about the mandate, which 7 applies to all the larger -- in fact, only to the larger car 8 companies, and we're using all these examples of, you know, 9 everybody that builds a car in their garage as though that 10 were some kind of standard. 11 They're not subject to the mandate. They don't 12 have anything to do with us, and yet we're seeing all the 13 questions raised relative to those things, which are going 14 to continue to be out there. There's not anything we're 15 going to be able to do about it. And they don't have 16 anything to do with the mandate, but you can see that, you 17 know, some of the people who are studying this issue have 18 failed to recognize maybe that distinction. So, I think -- 19 and I know for some of the emergency responders in my own 20 area, I'd like it if there was some kind of packet, if 21 there's a way for us to help in getting that word out there. 22 I'd be glad to do it. 23 MR. BOYD: Mr. Chairman, might I respond to 24 Supervisor Roberts? 25 CHAIRMAN DUNLAP: Yes, Mr. Boyd. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 MR. BOYD: I'm glad to hear the testimony we've 2 heard today with regard to the concerns, and I think the 3 points been well made that the Board and its staff are 4 equally concerned. I would point out that we have been 5 working with the State Fire Marshal on this issue, and that 6 the approach that we made to the Sacramento Fire Department 7 was a very early preliminary approach. We've probably had 8 200 firefighters in this area in this session from about 23 9 stations scattered throughout the area to talk about this 10 issue of developing appropriate training programs. And I 11 welcome the opportunity to -- in hand with the State Fire 12 Marshal and now the Department of Forestry and Fire 13 Protection -- to approach the Firefighters Association as 14 well as the representatives of the individual 15 municipalities, and develop the kind of training program 16 that they would like to see. 17 So, indeed, we can reach out to all the 18 municipalities who would have this concern, and maybe for 19 the first and unique time to address their concerns about 20 being approached well after the fact, as has occurred with 21 other types of program developments. Maybe we can have this 22 all in place when the electric vehicles that are going to be 23 a product of this program, which is much different than the 24 three-wheelers that have been referenced, do hit the roads 25 in 1998. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 So, we welcome the opportunity to work with these 2 people, and I'm impressed with the attitude of the testimony 3 we've heard today vis-a-vis the press releases and the other 4 things. A lot of people have learned a lot today. 5 CHAIRMAN DUNLAP: That would be terrific. I would 6 also ask, Jim, that you get out a briefing to the Board, a 7 memo, or some communication outlining the work that Mr. 8 Jacobs has done thus far. He's sitting in the second row 9 there. He's done some outreach to emergency response 10 personnel thus far in this region. And also, Supervisors 11 Roberts and Riordan suggested a different thing today about 12 having this package of information, educational package. 13 I'd like to ask you, Jim, to put your team on starting to 14 develop that. 15 And then, maybe as an outgrowth of this ad hoc 16 committee that we put together, we can run it by them and 17 see if it is answering more questions. 18 Also, one other point that Mr. Calhoun made that 19 was very, very well made, Joe, about the interest that the 20 automakers have and others surrounding development of these 21 vehicles to ensure that people are educated and know about 22 their commitment to safety and consistency and all of that. 23 I think they need to be woven into the process -- perhaps we 24 ask them for information that goes into the packet as well. 25 Ms. Edgerton, you have a point? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 MS. EDGERTON: Yes. I'm moving off of the safety 2 and firefighters. I had a couple of questions I wanted to 3 ask Dr. Moyer and Dr. Kalhammer, who are still here, and who 4 are extraordinary resources to this Board. 5 You all were not commissioned, as I understand, to 6 report too us with respect -- I think you told me a couple 7 times that you're not in charge of the regulation or the 8 encouragement; that this Board is in charge of it. 9 But I did hear you say that you got the message 10 pretty clearly from people you interviewed that it was 11 critical to continue a stable program of encouragement for 12 realization of the 2000 and 2001 opportunity. 13 I wanted to be sure and give you each an 14 opportunity to share with us your personal views if you have 15 suggestions about how that might be accomplished in this 16 setting. 17 I know Dr. Moyer is very -- has a very fertile 18 mind. I'm sure that he has some thoughts. He may not want 19 to share them right now. But I didn't want to lose the 20 opportunity to hear from you. 21 DR. MOYER: I think from our work a number of 22 themes emerged that you will want to pay attention to. And 23 you are asking us to speak beyond the scope of our work with 24 the Battery Panel a little bit, I would say the following: 25 One is continuity in program is very important. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 Many of these battery development efforts are into their 2 program. Many tens of millions of dollars, as Dr. Kalhammer 3 described, they're now in a position of having to invest in 4 pilot production and work very closely with automobile 5 manufacturers on a rather expensive fleet testing phase, 6 which is going to be many more tens of millions of dollars. 7 That kind of commitment probably will depend on California 8 making a statement that they are continuing with their 9 program in one form or another. 10 I think, to be really blunt about it, if 11 California was deciding to slip the entire schedule as one 12 mechanism for responding to the slow appearance of advanced 13 batteries, that that would have an extremely negative effect 14 on development schedules of events in batteries. 15 So, what would need to be done -- let me back up a 16 minute. 17 It is also clear that lead-acid batteries are a 18 player in this game, and the problem that confronts you is 19 perhaps not one that was exactly foreseen in 1990. And that 20 is you have some vehicles that would be available with a 21 battery with fairly limited performance, which the car 22 makers are warning you will not gain very much market 23 acceptance. Some disagree. 24 But the people whose job it is to make and sell 25 cars are telling you and us in very clear terms that they're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 not confident that the market is big enough to support the 2 two percent mandate. 3 You also have succeeded -- we have all succeeded 4 in calling forth the investment that the regulation was 5 designed to call forth in these advanced technologies. The 6 time scale is not quite right, however. We're still in a 7 period of hundreds of batteries not tens of thousands of 8 batteries. So, to me, the art of the design of the 9 regulation is going to be to find some mixed mode, in which 10 lead-acid batteries can find where they belong in the 11 marketplace, recognizing that that might be a lot less than 12 20,000 vehicles a year, and that the advanced batteries also 13 have their field to play at a level which is probably 14 hundreds of batteries a year. 15 And your question perhaps speaks to the fact that 16 there are many proposals that have been floated informally 17 for how to have two things happening at the same time. And 18 I'm sure a lot of people have ideas on how to make that 19 happen. 20 Bob Cross' presentation mentioned this point 21 somewhat obliquely that some consideration to the fact that 22 we're dealing with two different worlds is probably going to 23 have to be given. But I think there are probably many 24 excellent ways of doing that which have proposed already, 25 and they will require very careful thought of how to balance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 the two. 2 But, in general, I think you would have to say 3 that the California regulation has been quite successful in 4 drawing forth exactly what we wished it to do. Now there's 5 some detail to be solved for the next three years that 6 you'll have to get busy on exactly how to do that. 7 I hope that helps somewhat. I could go one more 8 step explicit, I suppose, if you want. 9 MS. EDGERTON: I'd like for you to do that. 10 DR. MOYER: Well, a common suggestion that we have 11 heard from the suppliers of advanced batteries is that if, 12 in the next -- in the years '98, '99, and 2000, that 13 vehicles with those batteries could somehow in the 14 regulatory structure count for more. ARB has already used 15 this concept in the case of hybrid vehicles, where the 16 vehicle counts more if it's more electrically capable than 17 combustion capable. 18 As its electric capability increases, it counts 19 for more against your requirement. 20 Similar ideas have been suggested for the EV 21 mandate itself; that the truly capable vehicles somehow 22 count for more in the regulation. That would construct a 23 field in which both technologies could play, and they could 24 sort themselves out, and you would not be squashing the 25 opportunity for the advanced batteries to appear, and you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 would not be overencouraging -- if that's possible -- and 2 somebody will think it is. You would not be overstressing 3 the lead-acid field. 4 CHAIRMAN DUNLAP: Anything else before we close 5 after a long day? 6 Mr. Boyd or Mr. Cackette? 7 MR. BOYD: Mr. Chairman, I have no further 8 comments. Thank you. 9 CHAIRMAN DUNLAP: Dr. Boston. 10 DR. BOSTON: Dr. Moyer, there's been an awful lot 11 of adverse propaganda against electric vehicles coming from 12 many sources. We're all inundated with letters and so forth 13 in our respective offices. 14 And my concern has been that maybe all this 15 publicity has slowed down the progress of the development of 16 these batteries. Have you noted that at all? Has that been 17 mentioned to you, that maybe the California Air Resources 18 Board is going to back off; they're getting flooded with 19 requests to back off, and maybe we ought to slow down our 20 development? 21 Does that come across to you? 22 DR. MOYER: I'm not sure exactly how to answer 23 that, other than -- I would say not so far. Dr. Kalhammer 24 would perhaps be better to answer specifically on the 25 battery development efforts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 I think the battery development efforts have been 2 proceeding quite vigorously, as he described in our 3 presentation. They are aware of t he significance of what 4 is going to happen in the next two, three, four, five months 5 here in California. And they are extremely interested about 6 it, and even worried about it, because they know the crunch 7 is coming here and it's time to make a decision so that they 8 know whether to proceed or not proceed, or how fast to 9 proceed. So, I guess my brief answer to that is not yet, 10 but you will certainly see it; that is, whatever decisions 11 are made in the next few months are likely to have a very 12 significant effect on the pace of development of advanced 13 batteries. 14 DR. BOSTON: Thank you. 15 MR. BOYD: Mr. Chair? 16 CHAIRMAN DUNLAP: Sure. 17 MR. BOYD: If you would indulge me. I was so 18 distracted, if not distressed, by some of the testimony of 19 late on the safety issues that I forgot a technical issue 20 that I made a note about earlier in the day that Dr. 21 Kalhammer reminded me about. 22 And it's kind of a personal observation, but I 23 know it's shared by members of the staff, because we talked 24 about it. 25 Dr. Kalhammer talked and made reference to battery PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 management on several occasions. And I think something 2 that's impressed me very significantly, having been here 3 since the conception and birthing of this program, and the 4 huge emphasis on battery technology and battery development, 5 one of the things that's impressed me in the past several 6 months and particularly brought to home by the work of the 7 Battery Panel, is this issue of battery management and 8 management of the operation of the battery and its charging 9 and discharging, and what have you. 10 And what I have seen, as somewhat of a layperson, 11 here is tremendous development in both knowledge and 12 technology relative to that issue, such that because of 13 changes in that practice and different approaches and 14 procedures, even taking a battery at a point in time, there 15 is an ability to get far more power, and range, and life out 16 of that battery by optimizing the management of that system. 17 And so, as we couple that with the advancing 18 technology, I'm impressed that there are even greater 19 opportunities or awfully good opportunities to see this 20 technology furthered. And this is kind of to me a spillover 21 benefit that we're learning more and more about, and we've 22 seen some of the -- I mean, in the beginning, it was a long 23 time to charge certain types of batteries, and now we've 24 seen battery management systems and studies of how to do 25 that work. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 As already indicated, you get very rapid battery 2 recharging possibilities, without the detrimental concerns 3 in effect in the past. And if that continues, I'm extremely 4 optimistic about what the future holds with regard to the 5 ability of this technology to take the niche in the 6 California fleet that we saw years ago that it needs to take 7 in order to meet our public health driven air quality 8 standards. 9 So, just that comment. 10 CHAIRMAN DUNLAP: One final comment from Mr. 11 Lagarias. 12 MR. LAGARIAS: Mr. Boyd, you've just identified 13 the next research project, OBBC-1, on-board battery 14 controls. 15 (Laughter.) 16 CHAIRMAN DUNLAP: Short point. 17 MS. EDGERTON: I'll make a short point, but I want 18 to respond to Dr. Boston. I think your comment's well 19 taken. If I read the paper correctly, I believe the 20 gentleman from the University of Chicago just won a Nobel 21 Prize for identifying the principle that capital investment 22 responds to anticipated regulatory action. 23 (Laughter.) 24 MS. EDGERTON: Thank you. 25 CHAIRMAN DUNLAP: One final thought from me, very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 brief. Again, I'd like to thank Dr. Kalhammer and Dr. Moyer 2 for being here, and for Bob Cross for shepherding the 3 process thus far, and for Tom Cackette and his team. Well 4 done. We're very appreciate of the work that the Battery 5 Panel has done. You've traveled the world for us. You've 6 been honest brokers, and we appreciate it and are grateful 7 for your time and your attention and your expertise. 8 If there's nothing else, we will adjourn this, the 9 October meeting of the California Air Resources Board. 10 (Thereupon, the meeting was adjourned 11 at 5:25 p.m.) 12 --o0o-- 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 4 I, Nadine J. Parks, a shorthand reporter of the 5 State of California, do hereby certify that I am a 6 disinterested person herein; that the foregoing meeting was 7 reported by me in shorthand writing, and thereafter 8 transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said meeting, nor am I 11 interested in the outcome of said meeting. 12 In witness whereof, I have hereunto set my hand 13 this 4th day of November , 1995. 14 15 16 Nadine J. Parks 17 Shorthand Reporter 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345