1 BOARD MEETING 2 STATE OF CALIFORNIA 3 AIR RESOURCES BOARD 4 5 6 7 CALIFORNIA AIR RESOURCES BOARD AUDITORIUM 8 9530 TELSTAR AVENUE EL MONTE, CALIFORNIA 9 10 11 12 13 14 THURSDAY, OCTOBER 24, 2002 9:35 A.M. 15 16 17 18 19 20 21 22 23 24 Reported by: NEALY KENDRICK, CSR No. 11265 25 Job No.: 02-24169 1 1 APPEARANCES 2 BOARD MEMBERS Alan C. Lloyd, Ph.D., Chairman 3 Dr. William A. Burke Joseph C. Calhoun, P.E. 4 C. Hugh Friedman William F. Friedman, M.D. 5 Matthew R. McKinnon Supervisor Barbara Patrick 6 Mrs. Barbara Riordan Supervisor Ron Roberts 7 STAFF MEMBERS 8 Michael Kenny, Executive Officer Tom Cackette, Deputy Executive Officer 9 Michael Scheible, Deputy Executive Officer Lynn Terry, Deputy Executive Officer 10 Kathleen Walsh, Chief Counsel Kathleen Tschogl, Ombudsperson 11 02-8-1 12 Dr. Ira Tager, UC Berkeley, School of Public Health Richard D. Bode, Chief, Health and Exposure 13 Assessment Branch Barbara L. Weller, Ph.D., Manager, Population Studies 14 Section Tracy Hysong, Populations Studies Section 15 02-8-2 16 Annette Hebert, Chief, Heavy-Duty Diesel In-Use Strategies Branch 17 Jack Kitowski, Chief, On-Road Control Regulation Branch 18 Nancy Steele, Manager, Retrofit Implementation Section 19 Lucina Negrete, Air Pollution Specialist, MSCD 20 02-8-3 Robert Cross, Chief, MSCD 21 Alex Wang, Staff Counsel, Office of Legal Affairs David Salardino, Staff, Off-Road Controls Section 22 Michael Carter, Chief, Emission Research and Regulatory Development Branch 23 Jackie Lourenco, Manager Off-Road Controls Section Jeff Lowry, Air Pollution Specialist 24 02-8-4 25 Robert P. Oglesby, Legislative Director 2 1 I N D E X PAGE 2 Roll Call 5 3 Item 02-8-1 Public Hearing to Provide the Board with the 4 Status on the Fresno Asthmatic Children's Environmental Study (FACES) 5 Chairman Lloyd 6 Executive Officer Kenny 7 6 Presentation: Dr. Tager 8 7 Questions and Discussion 15 8 Item 02-8-2 with Resolution 02-30 Public Hearing to Consider Proposed 9 Modifications to the Public Transit Fleet Rule and Interim Certification Procedures for Hybrid- 10 Electric Urban Transit Buses Chairman Lloyd 29 11 Executive Officer Kenny 30 Presentation: 12 Ms. Negrete 33 Public Participation: 13 Ms. Tschogl 54 Questions and Discussion 56 14 Break 77 15 Witnesses: 16 Henry Hogo, SCAQMD 78 Questions and Discussion 79 17 Joshua Shaw, California Transit Association 81 Questions and Discussion 86 18 Arthur Douwes, VTA 90 Questions and Discussion 93 19 Gene Walker, Golden Gate Transit 93 Edward Bass, Allison Transmission 98 20 Questions and Discussion 103 Tom Balon, M.J. Bradley and Associates 112 21 Questions and Discussion 120 Joshua Goldman, ISE Research 121 22 Questions and Discussion 125 Dr. Joseph Kubsh, MECA 128 23 Bonnie Holmes-Gen, American Lung Association 133 Questions and Discussion 135 & 138 24 Richard McPherson Dipetane Combustion Technologies 142 25 Questions and Discussion 144 3 1 I N D E X (continued) PAGE 2 Closing the Record on Item Number 02-30 146 3 Ex Parte Statements Chairman Lloyd 147 4 Vote for Adoption of Resolution 02-30 149 & 157 5 Lunch Break 157 6 Item 02-8-3 7 Public Meeting to Review the Status of the Off-Road Emissions Control Programs for Spark- 8 Ignition and Compression-Ignition Engines. Chairman Lloyd 158 9 Executive Officer Kenny 159 Presentation: 10 Mr. Salardino 160 Questions and Discussion 185 11 Item 02-8-4 12 Public Meeting to Review Air Quality Legislation for 2002 13 Chairman Lloyd 189 Executive Officer Kenny 190 14 Presentation: Mr. Oglesby 191 15 Questions and Discussion 194 & 200 16 Conclusion of Proceedings 203 17 Reporter's Certificate 204 18 19 20 21 22 23 24 25 4 1 EL MONTE, CALIFORNIA; THURSDAY, OCTOBER 24, 2002 2 9:35 A.M. 3 CHAIRMAN LLOYD: Good morning. The October 24 4 meeting of the Air Resources Board will now come to 5 order. Supervisor Patrick will please lead us in the 6 Pledge. 7 SUPERVISOR PATRICK: Please join us. 8 (The Pledge of Allegiance was 9 recited.) 10 CHAIRMAN LLOYD: Thank you. Will the Clerk of 11 the Board please call the roll. 12 CLERK-OF-THE-BOARD DORAIS: Dr. Burke? 13 (No audible response.) 14 CLERK-OF-THE-BOARD DORAIS: Mr. Calhoun? 15 MR. CALHOUN: Here. 16 CLERK-OF-THE-BOARD DORAIS: Ms. D'Adamo? 17 (No audible response.) 18 CLERK-OF-THE-BOARD DORAIS: Supervisor 19 DeSaulnier? 20 (No audible response.) 21 CLERK-OF-THE-BOARD DORAIS: Professor 22 Friedman? 23 PROFESSOR FRIEDMAN: Here. 24 CLERK-OF-THE-BOARD DORAIS: Dr. Friedman? 25 DR. FRIEDMAN: Here. 5 1 CLERK-OF-THE-BOARD DORAIS: Mr. McKinnon? 2 MR. McKINNON: Here. 3 CLERK-OF-THE-BOARD DORAIS: Supervisor 4 Patrick? 5 SUPERVISOR PATRICK: Here. 6 CLERK-OF-THE-BOARD DORAIS: Mrs. Riordan? 7 MRS. RIORDAN: Here. 8 CLERK-OF-THE-BOARD DORAIS: Supervisor 9 Roberts? 10 SUPERVISOR ROBERTS: Here. 11 CLERK-OF-THE-BOARD DORAIS: Chairman Lloyd? 12 CHAIRMAN LLOYD: Here. 13 Again, good morning. I'd like to 14 welcome everyone here and to remind you, for anyone 15 in the audience who wishes to testify on today's 16 agenda items, to please sign up with the Clerk of the 17 Board and, if you have written copies, provide 30 18 copies to the clerk. 19 I don't know whether my colleagues 20 have any comments at this stage, at the beginning or 21 not? Otherwise we'll go right into the first item, 22 which is 02-dash-8-dash-1, a status report to the 23 board on FACES, the Fresno Asthmatic Children's 24 Environmental Study -- Environment Study. 25 FACES is -- just a reminder here, the 6 1 FACES is the first study sponsored under the auspices 2 of ARB's Vulnerable Populations Research Program. 3 The overall goal of the FACES project is to determine 4 the effects of different components of particulate 5 matter in combination with other ambient and 6 environmental factors on asthma in young children. 7 The information gained from this study 8 will help the board understand the adverse effects of 9 air pollution on this potentially susceptible 10 subpopulation of asthmatic children and also help us 11 to define effective control strategies for the 12 offending pollutants. 13 At this point I would like to turn it 14 over and ask Mr. Kenny to begin -- introduce the item 15 and begin staff presentation. 16 MR. KENNY: Thank you, Dr. Lloyd and members 17 of the board. 18 As you stated, the FACES project 19 provides an opportunity to investigate the 20 relationship between particulate and other air 21 pollutants and environmental factors on the natural 22 history of asthma in a cohort of young children 23 residing in the Fresno region of Central -- of the 24 Central California area. 25 FACES was approved by the board in two 7 1 phases, first of which is the subject of this 2 presentation. This progress report provides current 3 information on the status of the project and the 4 progress made during approximately the first half of 5 this study. 6 FACES is a collaboration of many 7 individuals from several institutions, led by 8 investigators from the University of California at 9 Berkeley School of Public Health. Dr. Ira Tager, 10 the principal investigator, will provide the 11 information on the status of the project to date. 12 Dr. Tager. 13 DR. TAGER: Thank you. And thank you for the 14 opportunity to give you an update. Three of my 15 colleagues are in the audience -- Fred Lurmann from 16 Sonoma Technology, Kathleen Mortimer and Kathy 17 Hammond from U.C. Berkeley. 18 I've listed the other individuals who 19 are -- make up the senior investigator team. So 20 who's controlling -- do I have -- okay. Can I go to 21 the next one? Thank you. 22 So you heard the -- the name of the 23 project is FACES. The official title is listed 24 below. It's less easily said, which is why we came 25 up with an acronym. And it really defines what we're 8 1 interested in doing, which is looking at responses to 2 the short-term fluctuations in particle air pollution 3 in asthmatic children: implications for asthma 4 natural history. 5 That is, we're interested to identify 6 the characteristics of children who respond to 7 day-to-day increases in ambient air pollutants, 8 especially PM and its components. We want to find 9 out if these children, the children who respond, have 10 more severe asthma as they get older. This is a 11 question which really has not been investigated at 12 all. 13 And then we want to try to identify 14 the important components of PM, gaseous pollutants, 15 and bioaerosols in combination that are responsible 16 for any of the health effects that we observe as part 17 of the study. Next. 18 This is the -- as I said, this is the 19 only study that we're aware of that specifically 20 addresses the question of whether exposures to 21 short-term increases in ambient air pollution result 22 in long-term adverse outcomes in children's -- in 23 children with asthma. 24 And I guess there's another 25 Microsoft -- that was supposed to be an arrow. 9 1 Sometimes I've had talks where telephones come up. 2 And so this will be boxes, I guess, are arrows for 3 this talk. 4 Anyway, the key focus of our project 5 is we're interested in how acute effects feed into 6 long-term health effects. We focus on specific 7 components of PM, not just its -- the mass fractions. 8 We're interested in the effects of outdoor and indoor 9 exposures as they contribute to the overall health 10 burden that these children may be experiencing. 11 We pay particular attention to a 12 somewhat neglected area, which is that of the 13 bioaerosols and what their relationship is to health 14 effects that are potentially attributable to particle 15 air pollution. 16 And we try, as part of this study, to 17 learn something more about the mechanisms that might 18 be involved in the health effects related to air 19 pollution -- oxidative and immunologic mechanisms in 20 particular. Next. 21 So what have we accomplished so far? 22 We actually officially were funded in February of 23 0 -- of 2000. We established our field office, hired 24 and trained our field staff. We've recruited 210 of 25 the children so far, ages 6 to 11, with asthma. The 10 1 recruitment is still in progress and will end this 2 December. 3 We've carried out the follow-up -- the 4 enrollment and follow-up of these children exactly as 5 we specified in our protocol. We have developed and 6 implemented all of the field data collection and 7 data-management system that are required to obtain 8 the health data. 9 We're established all the 10 quality-assurance and quality-control procedures for 11 this. And we've actually had a visit from the 12 outside quality-assurance person, which was very 13 satisfactory. And we have kept the data that we're 14 collecting very up-to-date to minimize the lapse from 15 the time we collect the data to when we can begin to 16 analyze it. 17 And we've had three meetings, two 18 face-to-face and one by telecon- -- video conference, 19 with our advisory panel to keep them informed about 20 what it is that we're doing to get their feedback. 21 Next. 22 With regard to the extensive exposure 23 assessment and monitoring, we are getting data from 24 the central site -- First Street in Fresno, the EPA 25 supersite. We've added daily measurements to that of 11 1 metals and endotoxin and bioaerosols. We are well 2 into our home intensive sampling. We've implemented 3 the collection of detailed indoor and outdoor 4 air-quality data at a hundred -- we will have 5 completed a hundred homes during the health panels. 6 But we're well into that. 7 We're doing routine home samplings -- 8 NO2, ozone, environmental tobacco smoke, and house 9 dust -- in about 200 homes. And we have two 10 well-equipped mobile trailers that are collecting air 11 quality data at schools that were developed in 12 collaboration with the ARB staff. And those are 13 operating. Next. 14 We have developed some descriptive 15 summary reports of our cohort as they are now 16 available which have been contained in the interim 17 report that we submitted. We have developed, we 18 think, a useful severity classification for asthma. 19 This might be not seem like much of a 20 accomplishment. But it was actually a substantial 21 accomplishment since there's not a lot of agreement 22 amongst people doing research in this field on how we 23 should classify the severity of asthma. And we think 24 we've come up with a good way to do that. 25 We've submitted our first manuscript 12 1 on the lung-function protocol and equipment that 2 we're using. We have presented talks already at 3 national meetings that cover asthma severity, 4 moisture in homes, some of the statistical methods, 5 causal regression that we're using, exposure 6 assessment and a preliminary analysis that we did on 7 health effects related to distance from roadways. 8 We are spending a great deal of time 9 working on these statistical models that we're using 10 which are relatively new, innovative ways of trying 11 to untangle very complex exposure outcome 12 relationships such as the kinds that we're dealing 13 with. 14 We've carried out, as I've said, the 15 preliminary analysis of the relationship of proximity 16 to roadways and lung function in our children. And 17 we've obtained US-EPA funding for two substudies. 18 Next. 19 Other exposure -- we're collecting 20 ozone, SO2, nicotine that are known asthma triggers. 21 We're getting information about mobile source 22 indicators -- NO, NO2, carbon monoxide, elemental 23 organic carbons, PAHs. PM indicators are listed 24 there. I won't read them off. 25 And we're getting detailed information 13 1 on biologic agents -- pollen grains, fungal spores, 2 endotoxin, and dust allergens -- in people's homes. 3 Next. 4 We are also obtaining concurrent 5 measurements of all the key pollutants that are 6 likely to exacerbate asthma -- bioaerosols, as I 7 said, plus conventional air pollutants. We will be 8 characterizing neighborhood-scale pollutant 9 variability, spatial variability, roadway effects, 10 indoor-outdoor differences, and daily and seasonal 11 variability. 12 And we're also characterizing 13 home-scale pollutant variability, indoor-outdoor 14 concentrations, house dust, and environmental tobacco 15 smoke. 16 What are our plans? We obviously will 17 finish the recruitment of the study and continue the 18 follow-up with our exposure assessment and health 19 outcomes. We will finalize the overall 20 health-exposure database, which will actually take 21 place fairly soon. We're going to have a half-day 22 retreat to make sure that we put together an accurate 23 and user-friendly database. 24 We -- in the interim, we will be 25 carrying out interim analyses of health outcomes in 14 1 relation to the exposure, as the data permit us to do 2 so. There we'll be continuously working on the 3 exposure modeling that's required to do the study. 4 And obviously, as we move towards the 5 end of our data collection, we'll begin carrying out 6 the definitive analyses with the eye to submitting 7 papers to peer-review journals and then the 8 submission of our final report to ARB. 9 That's all I wanted to say for this. 10 And I guess we'll entertain questions or comments. 11 Is that the procedure? 12 CHAIRMAN LLOYD: Yes. 13 Dr. Friedman. 14 Thank you, Dr. Tager. 15 DR. FRIEDMAN: Dr. Tager, I've been a major 16 proponent of this study from the time of, you know, 17 its being put forward. But I have to tell you that I 18 have some concerns. I understand, as you do, you 19 know, what you've been coping with, with respect to 20 enrollment and the unforeseen, you know, difficulties 21 that came up and what you're trying to do to fix 22 that. 23 But there is an enrollment problem, 24 and there is a numbers problem. I'm not worried 25 about the numbers problem with respect to the number 15 1 of participants with respect to looking at the 2 short-term effects. But I am with respect to the 3 longitudinal long-term effects piece of this, which 4 is a crucial piece of this and was one of the major 5 reasons for being so enthusiastic about it in the 6 first place. 7 And let me be very candid about what 8 my concern is right now. I don't see that the kind 9 of approach by statisticians that's going to tell 10 us -- me -- about the power of the study with respect 11 to numbers in the longitudinal aspects of the study. 12 And I have a major concern. And I'm going to be very 13 blunt about this. 14 I need for your advisory panel to look 15 at this issue as a group, duke it out, flesh it out, 16 advise you and advise us about the prospects for 17 success with respect to the longitudinal aspects of 18 this because we are going to be asked soon to vote 19 the second round of funding for the study and I can't 20 do that in the absence of that kind of advice. 21 DR. TAGER: Okay. Let me respond to your 22 comment in several ways. First of all, the advisory 23 community has weighed in. As part of the evaluation, 24 the interim report, Lee Ann Shepherd, in fact, sent 25 me specifically an e-mail indicating that she was 16 1 quite satisfied with the material that we had 2 presented in the interim report about our prospects 3 for being able to assess the long-term outcomes, 4 which are of major interest to us as well as to the 5 board. 6 And my understanding, at least, that 7 she probably -- and that -- and also that Dr. Mark 8 Siegel, another biostatistician, also didn't have 9 problems with it, both of whom are very 10 sophisticated, very well versed in issues of 11 longitudinal analysis. 12 Now, I want to answer your question in 13 another way because I also have reservations about 14 issues of statistical power -- the way we do them and 15 statistically. They have uncertainties and problems. 16 And so I would only tell you that I 17 can cite for you studies. If you go to the 18 literature on environmental tobacco smoke in 19 children, which is in some respects analogous to what 20 we're dealing with here, there are studies, with 21 fewer than 200 children followed for shorter periods 22 of time than we're talking about, that have been able 23 to see -- one of which I did, which involved 150 24 children followed for 18 months, in which we could 25 see substantial effects over that period of growth, 17 1 making three measurements over an 18-month period of 2 time. 3 We're talking -- when we did the power 4 calculations for the longitudinal study, we assumed 5 that we would be seeing an effect on lung growth that 6 was not likely to be much bigger than environmental 7 tobacco smoke, which is pretty small. It's about 3 8 percent. 9 Now, if the effect is larger than 10 that, then the power calculations that we gave you 11 are rather conservative. We actually put a high bar 12 for ourselves by using environmental tobacco smoke, 13 which has a very small effect. 14 To give you an idea of what 3 percent 15 is, it's actually smaller than the measuring error of 16 the tests that were used to carry out these studies. 17 So we set a pretty high bar. 18 Now, can I guarantee you that we will, 19 in the end, be able to give you precise estimates of 20 the difference if there's one there? No. That would 21 be dishonest. But I don't think any study can 22 actually do that, given the technology of power 23 calculations. 24 I think -- but I feel very confident 25 that we, with the numbers recruited, will get there. 18 1 And then the last way I want to answer 2 your question is the numbers probably -- problem is 3 partly an artifact, which is not to deny that we've 4 had recruitment problems. So I don't want the 5 comment I'm about to make to be seen as rebutting the 6 fact that there have been recruitment problems 7 because you're absolutely correct. There have been. 8 But the part of the problem is, when 9 we set up how many subjects we thought we needed, we 10 based it on a study that Kathleen Mortimer, who's the 11 project director, was involved in, which had a level 12 of follow-up in it with well below what we're now 13 seeing in our study and a loss of data that appears 14 to be much more substantial than we expected. 15 And so we said we would try to recruit 16 450 people, in the hopes that we'd have approximately 17 300 that would give us data, under the assumptions of 18 data loss that we saw, based on the study that I 19 mentioned to you, which was the -- which was a large 20 study in several cities. 21 We're not seeing those kinds of data 22 loss. And so the -- in fact, the working numbers 23 that we will have -- they are going to be smaller 24 than what we had hoped, but they're not going to be 25 as small, relative to what we need, as it might 19 1 appear from just reading the report as it stands 2 right now. 3 I don't know if anyone else wants 4 to -- 5 DR. FRIEDMAN: Well, let me -- let me 6 continue. But though you may indeed have one or two 7 people from your advisory board who have indicated to 8 you that they think the powers is adequate, there are 9 also individuals who don't, on your advisory board. 10 And your advisory board has not met, 11 as a group, or discussed, as a group, the issue. And 12 I personally -- and that is part of an appropriate 13 process to advise both you and us about this issue. 14 You -- I -- I -- I pray that everything will indeed 15 in the end be judged as appropriate and the numbers 16 powerful enough and so forth and so on. 17 But it has not occurred yet to my 18 satisfaction. I plan to urge my colleagues, before 19 they vote the next round of funding, to get a 20 response from the group. And that group is part and 21 parcel of the process that was set up in the original 22 funding to help us all understand progress and 23 problems. And it hasn't been done yet. And it needs 24 to be done. 25 DR. TAGER: Well, I'm not sure I understand. 20 1 The advisory board was -- only one person that I know 2 of has not weighed in. But the advisory board was 3 sent the proposal. A request was made. 4 We've met three times with the 5 advisory board as a group. So we have had meetings 6 with the group. And we have discussed these issues. 7 We've also, as you well know, sent out 8 an interim letter detailing the issue, approximately 9 a year or so ago, which was circulated to the 10 advisory board. And as far as I'm aware -- there's 11 only one person who hasn't weighed in -- that issue 12 was dealt with, to the satisfaction of the board. 13 Now, the board was sent the 14 proposal -- the panel -- with a request to send to 15 the chair any concerns or issues that they had. And 16 so I'm not sure on what basis you say that they 17 haven't weighed in. 18 They certainly -- if they haven't 19 weighed in, it's not because we didn't ask them or 20 give them an opportunity to. They simply haven't 21 weighed in then. And I'm aware of only one of the 22 statisticians who hasn't weighed in. 23 DR. BODE: Dr. Friedman, could I make kind of 24 a suggestion here or solution, maybe, to this -- that 25 staff does have contact with the advisory panel. And 21 1 my suggestion would be that staff -- maybe this 2 afternoon, in fact -- make contact with Dr. Speizer, 3 raise your concerns, and see if we can get that group 4 to get together either through videoconference or 5 conference call but get them as a group to understand 6 the board's concerns and your concerns and address 7 those so we know that they do have the full advisory 8 panel's reflections on that. 9 DR. FRIEDMAN: That's all I'm really asking 10 for. But I would not be prepared, in the absence of 11 that, to go forward to the next step. I mean there's 12 a difference between individual solicitations of 13 members of a board and opinions and a board meeting 14 and actually discussing, as a board, the pros and 15 cons of certain specifics. 16 And as I said to Dr. Tager, I mean I 17 believe -- I'm hoping that 300, thereabouts, is going 18 to be an appropriate, adequate number for a power 19 analysis to be valid for the long -- the longer term. 20 But I am reminded that, when we funded the child 21 health study, we wound up paying -- what? -- about 22 four or five times more for that study. 23 And this is a research protocol that 24 you're proposing. This is not a growth industry. 25 And we have a responsibility to see to it that 22 1 process is followed correctly and we're advised 2 correctly and we act appropriately. 3 And until I get a better sense that 4 the entire group, as a group, are going to assure us 5 that this is the right way to go and that indeed this 6 longitudinal aspect looks good and promising and so 7 forth, we should defer until that information is 8 available. 9 And I think we should do that. So if 10 you can facilitate that, between now and that time, 11 that would be terrific. 12 DR. BODE: We will do that. 13 DR. FRIEDMAN: But that should happen before 14 we take the next step. 15 DR. BODE: Staff will do that. In fact, as 16 soon as we get done with this item, we'll try making 17 contact with the chairman to get his committee 18 members together. We'll work with Dr. Tager and his 19 colleagues and put the forth the concerns so that the 20 advisory panel does issue a report as a full panel. 21 CHAIRMAN LLOYD: And I certainly bow to the 22 expertise of Dr. Friedman and completely agree with 23 him on that. And obviously my concern was also that, 24 since we are now going to be voting on nearly $3 25 million at the next board, I want to make sure what 23 1 we are promised and what we've got are consistent and 2 we can still reach the goals of the study. 3 And I think that's what Dr. Friedman 4 is asking for -- not only that we can demonstrate 5 that but in a public process we do it. And, again, I 6 would agree also we're all hopeful that you can do it 7 with limited financing, although I guess the cost has 8 not reduced although the number of people may be 9 reduced. 10 But if we can get that to 11 satisfaction, I fully support that. But I strongly 12 agree with Dr. Friedman. 13 Mr. McKinnon? 14 MR. McKINNON: Yeah. I -- in my briefing, I 15 became aware that there may be some difficulty with 16 some of the medical institutions -- HMOs -- in the 17 recruitment. And I -- I'll make an offer. And that 18 is that I think there are large numbers of 19 institutionalized or unionized -- unionized -- rate 20 payers that pay premiums into those entities that are 21 not being cooperative and working with you. 22 And it seems to me that the people 23 that are paying the premiums would be very, very 24 interested in this study and probably are not aware 25 of it and probably would want their HMO to be working 24 1 with you. And I certainly would volunteer to spend a 2 few hours in Fresno, gathering the appropriate people 3 to have that conversation, if that's helpful. 4 CHAIRMAN LLOYD: Thank you, Mr. McKinnon. 5 Any other comments from the board? 6 Any others from staff or Dr. Tager? 7 Maybe the co-investigators could rise. 8 I recognize them. But maybe, from the colleagues of 9 the board, we could thank you for -- thank you for 10 coming. We appreciate it. 11 DR. TAGER: I guess I would like to make one 12 last comment because I guess, to be equally blunt, 13 I'm a little bit disturbed because -- to find out at 14 this late date that this process still has lingering 15 doubts because we have had innumerable 16 conversations -- I mean we're obviously aware that 17 this was an issue. And we've taken -- we've gone to 18 tremendous pains to address the issue head-on and 19 talk to people. 20 And I guess I'm a little bit concerned 21 at this late hour because the reality is there may be 22 a de facto ending of this study since, if we don't -- 23 if the funding for this study ends in February, 24 there's a large infrastructure in place that, you 25 know, can't -- if a decision is made in March that 25 1 this study should go forward because, in fact, what I 2 have told you here is, in fact, the case, it will be 3 a moot decision because we will not be able to keep 4 the infrastructure. 5 Now, I'm not raising this as some sort 6 of a, you know, a hostage or ransom. It's just that 7 I had understood -- and I'm actually quite taken 8 aback -- that this issue had been dealt with 9 explicitly. And I, in particular, had provided 10 innumerable opportunities directly to ask our 11 statistical colleagues to come forward if they had 12 reservations. 13 And the -- and people who came forward 14 to me did not express reservations. Now, I haven't 15 heard from one person. 16 And if that one person had 17 reservations, then I should have been informed about 18 them prior to this time so that, at this very last 19 minute, we would not be in the position of trying to 20 hastily get together -- I mean I know, for example, 21 Dr. Speizer will soon leave to go to England on 22 sabbatical. And it may not be that simple to get him 23 together. 24 So I'm a little distressed about the 25 process because I thought we had been very responsive 26 1 to the process and had opened up all the avenues of 2 communication and tried to fully address, as honestly 3 as we could, any of the concerns that the 4 statistician -- our statistical advisors had. 5 And I'm kind of surprised to find out 6 at this point that there are still lingering concerns 7 because this is, quite frankly, the first I've heard 8 of it. 9 CHAIRMAN LLOYD: In response to Dr. Tager, it 10 is not the last minute because what we're doing -- 11 your request for additional funding doesn't come up 12 for another month and what we're saying -- you're 13 hearing from the board is that "We still have 14 concerns. And we're giving you active warning." 15 If we were voting on that today, we 16 would have said that we would not be prepared to go 17 ahead. 18 We're giving you the opportunity here, 19 which -- not "the opportunity" -- we are requesting 20 you to present us with that information. And if 21 we're satisfied, then we'll move ahead. 22 You're assuming on the negative side. 23 So let -- what -- I think we're making a simple 24 request. If it cannot be done in one month, well, 25 then, we'll have to take extra time. But this is 27 1 what we're faced with. And with today's budget 2 constraints, we cannot just sign off on nearly $3 3 million without that support. So that's all we're 4 asking for. 5 DR. TAGER: I have no problem with the 6 request. I think it's a perfectly reasonable one. 7 And as I said, we've tried to be responsive to it. 8 We understand it was a problem and people were 9 concerned about it. 10 I don't just want to be -- feel in a 11 situation where we're really pressed for time and we 12 may not, through factors over which we have no 13 control, get the kind of meeting that you're 14 requesting done in the timely way in which you need 15 to have it done. 16 DR. BODE: Perhaps if I can allay some of 17 Dr. Tager's concerns, we're aware of the deadlines; 18 that, you know, staff actually has been working to 19 make sure that basically the paperwork is drawn up 20 so, as soon as the board has a conclusion they can 21 reach, that we can move that along as fast as we can. 22 And so we'll make all the, you know -- 23 work as fast we can and we will make those deadlines 24 so that there is no interruption in the study and 25 that we get the advisory panel together and we get 28 1 comments back so the board has confidence in the 2 decision. 3 CHAIRMAN LLOYD: Appreciate it very much. 4 Thank you. 5 Any other questions from the board? 6 With that, no witnesses signed up on 7 this item. 8 Mr. Kenny, any further comments? 9 MR. KENNY: Nothing further. 10 CHAIRMAN LLOYD: Okay. And since this is not 11 a regulatory item, it's not necessary to close the 12 record. So we'll move on to the next agenda item, 13 giving some time for staff to change over there. 14 The next item on the agenda today is 15 02-dash-8-dash-2 -- Proposed Modifications to the 16 Public Transit Fleet Rule and Interim Certification 17 Procedures for Hybrid Electric Buses. 18 Last March, staff updated the board on 19 implementation of this rule. At that time we heard 20 about transit agencies' progress in complying with 21 the NOx fleet average requirement and status of the 22 alternative NOx strategy exemption applications. 23 Staff also discussed the status of 24 retrofit technology to reduce particulate matter, or 25 PM. As you will recall, the transit rule requires 29 1 that most pre-1994 transit buses be retrofitted by 2 January, 2003, using traps that reduce PM by 85 3 percent or more. 4 However, due to the lack of available 5 traps for pre-1994 engines, this part of the rule was 6 not likely to be met. So we directed staff to adjust 7 the rule and bring it back. The board also asked 8 staff to develop certification test procedures for 9 heavy-duty hybrid buses. The technology that emerged 10 more fully after the initial transit rule was adopted 11 and one which we were particularly interested to see 12 advanced. 13 Finally the board asked staff to 14 report back in six months on the issues I've 15 described. The staff is here today to propose 16 regulatory changes concerning the PM-emissions- 17 reduction program and the interim certification test 18 procedures for heavy-duty hybrid buses. 19 At this point I'd like to turn it over 20 to Mr. Kenny to introduce the item and begin staff 21 presentation. 22 MR. KENNY: Thank you, Dr. Lloyd and members 23 of the board. Today, staff will be presenting 24 proposed amendments to the public transit bus fleet 25 rule. The amendments are designed to achieve 30 1 reductions in PM that are close to those promised in 2 the original rule and to encourage hybrid bus 3 technology for testing and interim certification 4 procedures. 5 As Dr. Lloyd said in his opening 6 statement, staff was asked to return to the board 7 proposed regulatory changes on two main issues. The 8 first was the modification of PM retrofit schedules 9 to better reflect PM technology availability and to 10 achieve similar PM reduction as in the original 11 regulation to the extent possible. 12 Second is the approval of interim 13 certification test procedures for heavy-duty hybrid 14 buses. Staff has also responded to the request to 15 look at allowing transit agencies to switch from the 16 diesel path to the alternative fuel path. 17 Since the March meeting, staff has 18 considered several options to the original PM 19 retrofit requirement. Staff has worked with transit 20 agencies and other stakeholders in an effort to 21 identify the most appropriate rule modifications. 22 Through public workshops, 23 teleconferencing, internet communications, and many 24 phone calls, staff has produced a proposal we believe 25 is responsive to transit agency comments and to the 31 1 board's directives to achieve similar PM emission 2 reductions as those achieved by the original fleet 3 rule. 4 Staff will also present additional 5 transit bus fleet rule changes as well as several 6 definitional changes. A one-time diesel-to- 7 alternative-fuel path change will be proposed that 8 affects only transit agencies within the South Coast. 9 Transit agencies in the South Coast 10 have been required to purchase alternative-fuel buses 11 since 2000 or 2001, depending on their size, and thus 12 allowing this change should not affect any expected 13 emission benefits from the rule. 14 Staff is also proposing to allow 15 fleets with fewer than 20 buses to apply for an 16 implementation delay if they can provide evidence of 17 considerable economic hardship. Also a few 18 definitional changes, along with proposed changes to 19 the annual reporting requirements, will be presented 20 for your consideration. 21 The proposed interim heavy-duty hybrid 22 bus certification procedures proposed today would 23 allow promising hybrid technology to undergo 24 certification testing that will reflect actual in-use 25 emissions performance. Using those more 32 1 representative interim test procedures will 2 demonstrate hybrid bus-emission benefits and should 3 help accelerate hybrid bus commercialization. 4 With hybrid certification in place, 5 manufacturers of hybrid bus technology would be 6 encouraged to further improve bus emissions and more 7 readily introduce greater numbers of these buses into 8 California. The proposed interim procedures would be 9 utilized through 2006. During this time, staff will 10 evaluate many hybrid buses and work closely with the 11 hybrid bus manufacturers to determine if any changes 12 are needed to the procedures before finalizing formal 13 hybrid bus certification procedures in 2007. 14 And with that, I'd like to turn it 15 over to Ms. Lucina Negrete, who will make the staff 16 presentation. 17 MS. NEGRETE: Thank you, Mr. Kenny and 18 Chairman Lloyd and members of the board. 19 It is my pleasure to present the staff 20 proposals for modifications to the urban transit bus 21 fleet rule and interim certification procedures for 22 heavy-duty hybrid electric vehicles. 23 Today's presentation will include a 24 brief background on the transit bus rule, a 25 description of the proposed modifications to the 33 1 transit bus fleet rule and impacts of the proposed 2 amendments, the proposed interim certification 3 procedure for hybrid electric vehicles in the urban 4 bus and heavy-duty vehicle classes, and staff's 5 conclusions and recommendations. 6 In February, 2000, this board adopted 7 the public transit bus fleet rule and emission 8 standards for new urban buses which endorsed our 9 efforts in working toward attaining California's 10 clean-air goals. The goal of the regulation is to 11 reduce NOx and PM emissions through setting both new 12 standards and a progressive fleet rule designed to 13 get advanced technology into urban buses quickly. 14 Over the years, the focus has been on 15 setting technology-forcing standards for engine 16 manufacturers. The February, 2000, urban transit bus 17 rules have done just that by setting lower standards 18 for 2002 and progressively much lower standards in 19 2004 and 2007. 20 The goal is for urban buses, like 21 other vehicle categories, to move toward achieving 22 near-zero to zero emissions in the future. 23 The public transit fleet rule contains 24 several requirements based on the fuel-path 25 selection. The first -- to select a fuel path -- has 34 1 been completed by all transit agencies. 2 The second -- to implement the use of 3 ultralow sulfur diesel by July 1, 2002 -- has been 4 met by the transit agencies, with the exception of 5 four small transit agencies facing financial hardship 6 in attaining ultralow sulfur diesel. 7 The third -- achieving a 4.8 8 gram-per-brake-horsepower-hour NOx fleet average as 9 of October 1, 2002 -- has been met by all but one 10 transit agency. Staff will be pursuing Notice of 11 Violations for that one. The alternative NOx 12 strategy demonstration is on schedule. 13 The next requirement to be met was to 14 retrofit diesel buses to reduce PM by 85 percent with 15 the first stage completed by January 1, 2003, and 16 continuing through 2009. We informed this board in 17 March that, technically, this requirement would be 18 difficult to accomplish. 19 No devices are currently verified for 20 engines older than 1994 and, due to the engine 21 temperature requirements, not all 1994 and newer 22 model year engines. The model-year engines that do 23 not have verified retrofit devices available include 24 the first group of buses that require PM retrofits by 25 January 1, 2003. 35 1 This board directed staff to consider 2 another approach for achieving as close to the same 3 PM-emission reductions as anticipated from the 4 current rulemaking. In addition, transit agencies 5 would be begin demonstrating zero-emission buses 6 beginning in July, 2004, and begin purchasing 7 zero-emission buses in 2008. 8 Let me now review the original PM 9 retrofit schedule. This table illustrates a transit 10 agency's obligation for retrofitting their engines to 11 reduce PM emissions by 85 percent or more. For 12 transit agencies on the diesel path, the retrofit 13 requirements are shown in red. On both fuel paths, 14 transit agencies must retrofit all pre-1991 diesel 15 engines as of January 1, 2003. 16 By 2007, transit agencies on the 17 diesel path must retrofit all 2002-and-earlier 18 model-year diesel engines. Transit agencies on the 19 alternate-fuel path, however, have the incentive of 20 retrofitting all 2002-and-earlier-model-year diesel 21 engines by 2009 -- two years later than the diesel 22 path. 23 The next portion of this presentation 24 focusses on the proposed amendments to the fleet 25 rule. 36 1 This slide lists a number of 2 modifications being proposed to the fleet portion of 3 the rule. I'll present a brief description of each 4 of these modifications. The most significant of 5 those modifications is a diesel-PM-emission-reduction 6 proposal. 7 As requested by the board, staff is 8 proposing modifications to achieve diesel-PM 9 reductions as envisioned in the original rule. The 10 applicable compliance stated in the new approach are 11 modelled on the already adopted rule, based on the 12 fuel path a transit agency selected and only for 13 diesel engines in the entire fleet. 14 The proposal requires transit agencies 15 to calculate their total diesel-PM fleet emissions as 16 of January 1, 2002, and reduce those emissions from 17 its diesel fleet by fixed percentages. Looking at 18 the diesel path, by January 1, 2004, a transit agency 19 is required to reduce PM emissions from its diesel-PM 20 emission baseline by 40 percent and 60 percent as of 21 January 1, 2005. 22 As of January 1, 2007, total diesel-PM 23 emissions must be reduced by 85 percent from the 24 diesel-PM baseline. 25 For transit agencies on the alternate- 37 1 fuel path, as with the engine-retrofit proposal, 2 PM-emission reductions are also required. However, 3 the percent reduction is lower, with the full 85 4 percent required in 2009, two years later than the 5 diesel path. 6 As of January 1, 2009, total diesel PM 7 emissions must be reduced by 85 percent from the 8 diesel-PM baseline. 9 The black line represents the baseline 10 scenario, which includes only anticipated diesel-PM 11 emissions considering the impact of new urban bus 12 engine-emission standards. The pink line represents 13 emissions taking into consideration PM-retrofit 14 requirements as adopted in 2000 and assuming retrofit 15 devices were available for all urban bus engines with 16 consideration of exemption and delays. 17 The blue line represents emissions 18 based on our proposed amendments to the PM-retrofit 19 requirements. Staff estimates that the proposed 20 amendments would reduce diesel-PM emissions by about 21 180 pounds per day in 2010. Emissions benefits would 22 be close to what was anticipated for diesel-PM from 23 the original rule. 24 Due to the time delay in implementing 25 the new approach and the lack of available technology 38 1 for pre-1994 engines, staff anticipates that PM 2 emissions would be slightly higher than the current 3 rule in 2004, which was pushed up to the 2005 time 4 frame. 5 If approved, the proposed amendments 6 will cost an average of about $25 per pound of diesel 7 PM reduced with a range of $11 to $45 per pound. In 8 the original rulemaking of 2000, that estimate was 9 $18 per pound. The cost effectiveness of the 10 proposal is well within the range of the cost 11 effectiveness estimated for the original rule. 12 The new approach provides more 13 flexibility to transit agencies than the current 14 rule; and it ensures that every diesel fleet will 15 reduce total diesel-PM emissions by 2007 and 2009, 16 consistent with the February, 2000, rulemaking. 17 The proposal allows the transit 18 agencies to choose the method of control to achieve 19 the required diesel-PM-emission reduction rather than 20 requiring a percent based on model year to be 21 retrofitted by a certain time frame. 22 The control options selected by a 23 transit agency must be certified or verified by ARB 24 for sale in California. 25 Options available to transit agencies 39 1 include replacing with newer model year buses, 2 repowering with cleaner engines, retiring older 3 buses, or retrofitting at any level of verification. 4 This board directed staff to evaluate 5 the impacts of allowing transit agencies to change 6 from the diesel path to the alternate-fuel path. 7 Since the alternative-fuel path achieves equivalent 8 NOx reductions and more PM reductions than that of 9 the diesel path, transit agencies selecting this path 10 were provided incentives to choose the 11 alternative-fuel path. 12 Transit agencies on the 13 alternative-fuel path have later compliance dates for 14 the PM-retrofit requirements, do not have to 15 demonstrate zero-emission buses, and may purchase 16 zero-emission buses beginning two years later than 17 transit agencies on the diesel path. 18 One reason for not allowing transit 19 agencies to change from the diesel path to the 20 alternate-fuel path, therefore, now that we are 21 nearly three years into the program, is that this 22 change impacts the overall emission reductions 23 achieved and the zero-emission bus program. 24 Staff determined that allowing all 25 transit agencies statewide to change from the diesel 40 1 to the alternate-fuel path is not necessary. Staff 2 solicited all transit agencies in California that 3 have declared the diesel path for interest in 4 switching to the alternative-fuel path. 5 Staff received responses from only 6 transit agencies located in the South Coast. And 7 only one transit agency responded with definite 8 interest in changing fuel paths. 9 Based on staff's evaluation of transit 10 programs in California, then, there would be very 11 little impact to the anticipated benefits if only a 12 switch of paths is allowed in the South Coast Air 13 Quality Management District because Rule 1192 in the 14 South Coast Air Quality Management District requires 15 all agencies with 15 or more urban buses to purchase 16 alternative-fuel buses as of July 1, 2001. 17 In the South Coast, only seven transit 18 agencies selected the diesel-fuel path. Under South 19 Coast Rule 1192, all but one agency would be required 20 to purchase alternative-fuel buses because they have 21 more than 15 buses. None of the transit agencies on 22 the diesel path in the South Coast are mandated to 23 participate in the zero-emission bus demonstration 24 since it is only required of agencies with more than 25 200 buses. 41 1 Because on -- based on our analysis, 2 therefore, staff proposes a one-time allowance for 3 transit agencies in the South Coast Air Quality 4 Management District to switch from the diesel path to 5 the alternative-fuel path. It would only be allowed 6 for those that declare the diesel path. A transit 7 agency must make this new declaration by January 31, 8 2004. 9 This state was selected to follow the 10 current schedule of reporting the -- reporting that 11 requires transit agencies to report to ARB on the 12 status of implementation annually by January 31 of 13 each year. While transit agencies are scheduled to 14 report again on January 31, 2003, final adoption of 15 this rulemaking will not have taken place by that 16 time. 17 When they declare the intent to make a 18 fuel-path change, in its letter to ARB, the transit 19 agency must also certify compliance with all 20 provisions of the fleet rule. 21 Currently, provisions require that 22 transit agencies on the diesel path wishing to 23 purchase 2004-through-2006 model year diesel, 24 bifueled, dual-fueled, or alternative-fueled engines 25 may only purchase those certified to a 42 1 0.5-gram-per-brake-horsepower-hour NOx-emission 2 standard. 3 As you recall, transit agencies that 4 were approved for the alternative NOx exemption may 5 purchase engines certified to a higher NOx standard. 6 Only seven transit agencies have received this 7 exemption. 8 But staff is concerned that no 9 alternative-fuel engine would be available that meets 10 the half-gram NOx standard in 2004. Staff proposes 11 to allow transit agencies on the diesel path to 12 purchase alternative-fuel engines certified at the 13 2.5-gram-per-brake-horsepower-hour NOx-plus-NMHC 14 standard. 15 This modification would encourage 16 transit agencies on the diesel path to purchase 17 alternative-fuel engines and maintain compliance with 18 the fleet rule requirements in 2004 through 2006. 19 On several occasions, staff has 20 received requests from small transit agencies to 21 delay compliance based on financial hardship. But 22 the current regulation does not have a provision that 23 allows for transit agencies to request an exemption 24 for any reason. 25 Staff is proposing that a new section 43 1 be added to provide the executive officer with the 2 authority to consider a transit agency's request for 3 delay based on financial hardship. 4 The transit agency is required to 5 submit documentation that includes an analysis of the 6 cost compliance, the sources of available funds, and 7 the shortfall between funds available and the cost of 8 the compliance. The transit agency must also specify 9 the date and means by which compliance will be 10 achieved. 11 This provision would apply to transit 12 agencies with fewer than 20 buses in their active 13 fleets. The request for delay would only be granted 14 for financial hardship. And applications must be 15 made to ARB's executive officer at least 30 days 16 prior to the required implementation date. 17 The executive officer has 90 days from 18 that date -- excuse me -- 90 days from the date the 19 application is received to render a decision. During 20 the waiting period, the applicant is responsible for 21 compliance until the application is approved or 22 denied. 23 Staff is preparing to make a change to 24 the alternative-fuel-definition language originally 25 proposed in the staff report. The 15-day-change 44 1 proposal repeals the alternative-fuel-definition 2 modification and retains the current alternative-fuel 3 definition approved in the February, 2000, 4 rulemaking. 5 Staff is proposing to allow transit 6 agencies to purchase heavy-duty pilot ignition 7 engines. This new technology uses natural gas as the 8 primary fuel and a very small quantity of diesel for 9 pilot ignition only. 10 Natural gas must be the primary fuel 11 used in the engine. Diesel use must be less than 10 12 percent of total fuel on an energy-equivalent basis 13 and only be used to initiate combustion. The engine 14 would never be able to operate solely on diesel fuel. 15 Under this new provision, heavy-duty 16 pilot ignition engines must be certified at the same 17 optional standards as alternative-fuel engines. 18 The Cummins-Westport ISX heavy-duty 19 pilot-ignition engine is an example of this new 20 technology, where a natural gas compression-ignition 21 engine utilizes a very small amount of diesel for 22 pilot ignition only. 23 This graph is a comparison of the 24 emissions from the Cummins ISX diesel engine and the 25 Cummins-Westport ISX heavy-duty pilot-ignition 45 1 engine, which shows a reduction in NOx and PM. 2 Cummins-Westport is currently developing a transit 3 bus version of this engine. 4 Staff is also proposing to modify the 5 proposed -- the provision that requires urban transit 6 buses to use ultralow sulfur fuel as of July 1 of 7 this year. 8 The proposed new provision has been 9 designed to continue the requirement of using 10 ultralow sulfur fuel but also -- but allows fuel, 11 such as diesel-water emulsions that are verified by 12 the executive officer as a diesel-emission-control 13 strategy to be used in urban transit buses. 14 This fuel would be verified to reduce 15 diesel PM and thus may show a net benefit for 16 emission reduction. In addition, staff proposes to 17 update current certification procedures for retrofits 18 with the new procedures adopted by this board in May, 19 2002. 20 To provide clarification to transit 21 agencies with the current regulation, staff is also 22 proposing to modify the definition of "active fleet" 23 and to add definitions for "emergency, contingency, 24 and spare bus." These changes provide definitions 25 more closely in agreement to the Federal Transit 46 1 Administration definitions. 2 Finally, staff is proposing modified 3 reporting requirements to reflect proposed 4 modifications to the fleet rule. Staff is also 5 proposing new interim certification procedures for 6 hybrid electric vehicles used in the urban bus and 7 heavy-duty vehicle classes. 8 Hybrid technology is a new, very 9 promising technology. This technology has the 10 potential for providing substantial emission 11 reductions in heavy-duty vehicles that operate in 12 stop-and-go fashion such as an urban transit bus. 13 A typical driving pattern of an urban 14 bus consists of frequent stops and accelerations. 15 These driving patterns are high polluting and 16 high-fuel consuming. Use of the hybrid-electric 17 technology in stop-and-go applications can shake off 18 the high-polluting episodes. 19 A hybrid-electric bus, as in these two 20 pictures, looks like and operates similar to an urban 21 transit bus. However, it is different from a typical 22 urban bus platform because it is not completely 23 powered by a heavy-duty engine. 24 Instead, its propulsion system is a 25 combination of two motive power sources -- a 47 1 renewable energy-storage system such as battery pack 2 or ultracapacitor with an electric motor that powers 3 the wheels and captures the energy through 4 regenerative braking and an auxiliary power unit, or 5 APU, that is typically an internal combustion engine 6 but could be a microturbine or fuel cell. 7 The use of the two power sources does 8 not allow the system to be tested or certified like 9 other heavy-duty engines. The two buses pictured 10 here are BAE Systems' and Allison Electric Drive's 11 diesel-hybrid-electric buses. 12 Including the two diesel-hybrid- 13 electric urban transit buses pictured on the previous 14 slides, there are many other types of hybrid-electric 15 buses in demonstration. On this slide, we show 16 Trans-Tech's CNG hybrid-electric urban transit bus, 17 ISE Research's fuel-cell hybrid-electric, ABS's 18 turbine-hybrid-electric bus and the -- and ISE 19 Research's gasoline-hybrid-electric. 20 When compared to other heavy-duty 21 vehicle classes, the hybrid-electric technology is 22 currently dominant in the urban bus and smaller bus 23 classes. In the future, staff anticipates that the 24 hybrid-electric technology will also be largely 25 demonstrated in other heavy-duty vehicle classes such 48 1 as delivery trucks. 2 In developing the proposed interim 3 certification procedures, staff worked closely with 4 United States Environmental Protection Agency as well 5 as stakeholders in order to develop an appropriate 6 test procedure that prudently quantifies emissions 7 from hybrid-electric vehicles. 8 This procedure, known as SAE J2711, 9 was approved by the Society of Automotive Engineers 10 in April, 2002, and is considered a recommended 11 practice for testing emissions from heavy-duty hybrid 12 vehicles. 13 Staff tested several hybrid-electric 14 urban transit buses following SAE J2711 in order to 15 establish the appropriateness of the approved 16 recommended practice for the urban bus vehicle class 17 in California. 18 This graph illustrates a comparison of 19 NOx emissions from a typical 1999 diesel and CNG 20 urban transit bus with those of some of the hybrid- 21 electric bus platforms currently available. 22 NOx emissions from the diesel and the 23 CNG buses are represented by the red and yellow bars, 24 respectively. Emissions from the hybrid-electric 25 buses are represented by the blue bars. The figure 49 1 illustrates that hybrid-electric bus technology has a 2 potential of reducing NOx emissions by about 3 50 percent or more. 4 The first four blue bars represent 5 emissions from the diesel hybrid electric buses. The 6 lowest emitting hybrid buses at the far right are 7 nondiesel-hybrid-electric buses -- a liquid propane 8 gas turbine and a gasoline-hybrid. 9 The GM-Allison diesel-hybrid and ISE 10 Research gasoline-hybrid bus are on display in the 11 front parking lot for you to review. 12 These are the results for PM 13 emissions. Similar to the previous slide, depending 14 on the platform and configuration of the hybrid- 15 electric system, PM emissions can also be reduced 16 dramatically while testing results indicate a 17 potential for significant emission reductions from 18 hybrid-electric technology used in urban transit 19 buses. 20 Tests conducted by staff following the 21 recommended procedure have been few and limited to 22 urban transit buses. Hence staff is recommending an 23 interim certification procedure. 24 The proposed interim certification 25 procedure is quantifiable and repeatable. It 50 1 incorporates a chassis test procedure -- SAE J2711 -- 2 that staff has modified for clarity. Chassis test 3 results would be correlated with the certification 4 value of the auxiliary power unit using emission- 5 factor ratio to express certification of the hybrid- 6 electric system in grams per brake horsepower hour. 7 The proposed certification procedures 8 are enforceable. It is necessary that the hybrid- 9 electric vehicles meet the heavy-duty vehicle 10 standards required by the respective heavy-duty 11 vehicle or urban classes. 12 This is why staff is proposing that 13 the auxiliary power unit and the hybrid-electric 14 system must be certified and labelled to meet 15 California standards for heavy-duty vehicles for the 16 selected vehicle class. 17 Currently all heavy-duty engines 18 certified for sale in California must meet 19 requirements for useful life, durability in emission 20 testing, warranty, record-keeping, and information. 21 The hybrid-electric vehicle's emission-related 22 components, which include the auxiliary power unit 23 and the hybrid-electric components, must meet these 24 requirements. 25 However, staff is proposing 51 1 significant flexibility during an interim period. 2 Considering that the hybrid-electric technology is 3 new to the heavy-duty vehicle sector, staff designed 4 a certification procedure that is flexible. If 5 approved, manufacturers would have several options 6 for certification. 7 Manufacturers may certify to 8 California's already adopted standards, following 9 engine-certification procedures already conducted for 10 heavy-duty vehicles. Manufacturers may claim a 25 11 percent emission reduction from the certification 12 standard for the auxiliary power unit in lieu of 13 testing. 14 Emerging technologies, such as 15 delivery truck and fuel-cell hybrids, may be 16 certified on a case-by-case basis. And for the first 17 three years, responsibility for certification may be 18 split between two parties. Staff anticipates that 19 certification would typically be the responsibility 20 of the engine manufacturer, the hybrid system 21 manufacturer, or both. 22 The issue of responsibility of the 23 hybrid bus for such things as the emissions and the 24 warranty have been a challenge to resolve during this 25 process. Manufacturers have stated that sales of 52 1 hybrid buses at this time are too low for either the 2 manufacturer of the engine, bus, or hybrid system to 3 take full responsibility. 4 To resolve this, staff is proposing 5 the opportunity for split responsibility during the 6 interim period. In addition, hybrids use smaller 7 engines than are typically used in an urban bus. 8 These smaller engines do not use PM aftertreatment 9 and have reduced useful-life requirements. 10 Staff does not believe it is 11 appropriate to allow higher PM emissions, but we have 12 proposed less rigorous useful life and durability 13 requirements. 14 Finally, staff is proposing to 15 maintain the single-party responsibility, if one 16 entity wishes to do so. Even more flexibility would 17 be provided in this case. 18 Finally, our conclusions and 19 recommendations: The amendments presented today 20 would provide transit agencies with flexibility and 21 an approach for achieving the much-needed PM-emission 22 reductions as originally anticipated in the 2000 23 rulemaking. 24 It is very important that California 25 continues to reduce PM emissions from urban transit 53 1 buses. The interim certification procedure for 2 hybrid-electric vehicles and urban bus and heavy-duty 3 vehicle classes is also necessary. This is a new, 4 promising technology that merits sale in California. 5 These procedures would enable 6 increased production and refinements for future 7 hybrid electric bus technology to possibly achieve 8 even larger emission reductions from urban transit 9 buses. Staff recommends the board approve the 10 proposed amendments to the current rule, respect a 11 15-day regulatory language change and the new interim 12 certification procedures as presented today. This 13 concludes my presentation. Thank you. 14 CHAIRMAN LLOYD: Madam Ombudsman, would you 15 please describe the public participation in the 16 process as this modification is brought before the 17 board and address any comments you wish to make. 18 MS. TSCHOGL: Thank you, Chairman Lloyd and 19 members of the board. The proposed amendments were 20 developed through interactions of ARB staff with 21 representatives of public transit agencies; 22 environmental organizations; and manufacturers of 23 emission-control devices, transit bus engines, and 24 electric drives. 25 In addition, staff worked with 54 1 representatives from academia, US-EPA, local air 2 districts, and other government agencies. Staff 3 provided the board with status reports on 4 implementation of the transit bus fleet rule on 5 September 20, 2001, and March 21, 2002. 6 Since the March meeting, staff has 7 continued to work with various stakeholders to 8 develop the amendments presented today. Staff held 9 three public workshops -- May 3 in Sacramento and 10 May 9 and June 25 in El Monte. 11 Additional stakeholder meetings 12 include hybrid-electric-drive stakeholder meetings 13 April 2 in Memphis, Tennessee and June 6 in El Monte; 14 a conference call regarding the definition of 15 "alternative fuel" on August 22; and an alternative- 16 fuel stakeholder meeting on September 17 with the 17 California Natural Gas Vehicle Partnership in Diamond 18 Bar. 19 Along with the workshops and 20 stakeholder meetings, staff participated in the 21 Northeast Advanced Vehicle Consortium's heavy-duty 22 hybrid certification workgroup -- got that? -- and 23 worked with the Society of Automotive Engineers to 24 develop a heavy-duty, hybrid-electric, chassis- 25 testing protocol. 55 1 Finally, staff gave a presentation on 2 the proposed amendments at the Electric Bus Workshop 3 in Santa Barbara on September 5. Draft versions of 4 the amendment were posted on ARB's website June 14 5 and July 3, along with solicitations for comment. 6 In addition, staff sent targeted 7 e-mails to public transit agencies and also worked 8 with the California Transit Association to send 9 notices to their members regarding the availability 10 of drafts for comments. The notice for today's 11 public meeting and the staff report were mailed and 12 posted on ARB's website on September 6, 2002. 13 In summary, staff has worked with 14 stakeholders through workshops, conference calls, 15 focus meetings, and one-on-one communications to 16 develop these amendments. Thank you. 17 CHAIRMAN LLOYD: Thank you very much. I just 18 had just one question. 19 When you talk about modifications 20 to -- on the ultralow sulfur requirement to allow 21 basically different fuels there, when they're tested, 22 I presume they'll go through a full suite of 23 pollutants there? The onus is on the proposer to 24 undertake that analysis? And they'll be -- include 25 all the particulates and all the organics, et cetera? 56 1 MS. STEELE: Yes. They have to go through our 2 verification process -- 3 CHAIRMAN LLOYD: Okay. Thank you. 4 MS. STEELE: -- just like any other, you know, 5 hardware device. It's a different technique than 6 you do with fuel. It's a full verification process. 7 CHAIRMAN LLOYD: Yeah. The way it looks 8 there, obviously "any fuel." That's a pretty broad 9 spectrum. So but they have to go through a pretty 10 tough -- 11 MS. STEELE: Right. 12 CHAIRMAN LLOYD: -- thing? Okay. 13 Questions? I'm going to turn it over 14 to my colleagues. 15 Mr. Calhoun. 16 MR. CALHOUN: During your presentation, you 17 mentioned the fact that 85 percent or more of 18 particulate matter comes from ninety -- from 1993- 19 and-older model-year engines. 20 CHAIRMAN LLOYD: Joe, can you speak into the 21 mike, please. 22 MR. CALHOUN: Okay. I'll be very blunt about 23 my question. What percentage of the fleet is '93- 24 and-older engines? Do we know? 25 MS. STEELE: We'll have to look it up. 57 1 MR. KITOWSKI: Were you specifically referring 2 to the percent of the fleet or percent of PM 3 emissions from the fleet which would -- 4 MR. CALHOUN: I'm talking about the percentage 5 of the fleet, just -- just a rough guess 'cause I'm 6 going somewhere else in just a minute. 7 MR. KITOWSKI: Oh, probably a little less then 8 a quarter. 9 DR. BODE: We have the numbers so -- 10 MR. CALHOUN: Okay. Okay. Well, fine -- 11 MS. STEELE: This is Nancy Steele. 12 Essentially 23 percent of the buses were '90 and 13 older -- model-year '90 and older and 25 percent were 14 model-year '91 to '95. 15 MR. CALHOUN: Okay. 16 MS. STEELE: So close to 50 percent are '95 17 and older. 18 MR. CALHOUN: Okay. So for those engines that 19 technology's available, what's the status of the 20 retrofit program? 21 MS. HEBERT: We currently still only have '94 22 and newer verifications for non-EGR engines. So only 23 '94-'95s have non-EGR engines have verified 24 particulate traps for them right now -- I'm sorry -- 25 '94 and newer -- 58 1 DR. BURKE: Yeah. But that wasn't the 2 question. 3 MS. HEBERT: -- later. Yeah. 4 MRS. RIORDAN: How many of those now are -- 5 have traps? 6 MS. STEELE: Have traps? Very small. The 7 number that have been actually retrofitted -- is that 8 your question? 9 MR. CALHOUN: Yes. 10 MS. STEELE: It's very small. When we came to 11 you back in March, the number was, I think, around 25 12 or so -- 25 or 50. 13 And certain of the transit agencies 14 were going to be doing much more retrofitting this 15 year. And they've had some problems, such as 16 Long Beach Transit was moving ahead. They've had 17 some problems, but they are still moving forward on 18 that. 19 San Francisco Muni only just got 20 funding to do their trap retrofits. So they're 21 moving forward. But during 2002, not that many 22 actually were retrofitted. 23 DR. FRIEDMAN: The 25 and 50 is an absolute 24 number, not a percentage? 25 DR. BODE: Yes. 59 1 CHAIRMAN LLOYD: Yes. I think so. 2 Yes. 3 MR. KITOWSKI: And just to be clear, though -- 4 MR. CALHOUN: No. No. No. My next question 5 is -- is the reason why they're not moving ahead the 6 lack of funding? Or is it because they're afraid of 7 the thought, the very thought of retrofitting one of 8 these engines with some technologies to control 9 particulate? 10 MS. STEELE: Based on my conversations with 11 them, it is really more lack of funding and some -- 12 not so much technological issues as just the issues 13 with the manufacturers being able to get them the 14 traps, being able to get them installed. So just 15 sort of sluggish because of interactions with the 16 market. 17 MR. CALHOUN: Well, why would that be a 18 problem if they've certified the technology? Why 19 would it be a problem for the technology to be made 20 available to the -- to the transit companies? 21 MR. KENNY: Actually, if I can interrupt for 22 just a moment, Mr. Calhoun, I was just speaking to 23 one of the MECA representatives. And they are also 24 scheduled to testify. 25 And MECA's comment on your question 60 1 was that they thought 300 buses had actually been 2 retrofitted with traps in the State of California 3 right now. And so it might be worthwhile to also 4 reraise the question again when the MECA 5 representative is up and we can kind of go into it in 6 some depth. 7 Part of what's happening, though, 8 right now is that we did recognize if, in fact, 9 the -- if the pre-'94 buses were essentially 10 unavailable for retrofitting because of the lack of 11 technology and so the focus that we had taken 12 originally when we came to the board was premised on 13 the fact that we thought we could actually go to the 14 pre-94's first because that's where the greatest bang 15 for the buck was going to be. That's where all the 16 emissions were. 17 When the technologies didn't evolve 18 for those pre-94's as we had originally anticipated, 19 we were really forced to be -- we were forced into a 20 position in which we needed to go back, look at how 21 we could achieve the emission reductions on PM in a 22 different fashion. 23 And so that's why we've come back to 24 you today with the idea being that, you know, we need 25 to look at how to get the PM reductions. We're 61 1 recognizing that our primary approach for pre-94 2 engines being retrofitted is unavailable to us. 3 DR. BURKE: Maybe, Mr. Kenny, I missed the 4 meeting. But I don't remember the board being 5 informed of the lack of progress on the pre-94 6 technology. 7 MR. KENNY: Yes. Dr. Burke, we actually did 8 have a meeting to that effect. And I can't recall 9 whether you were present or not. 10 DR. BURKE: Yeah. I was probably not here. 11 MR. KENNY: But we did inform the board of 12 that. And that was why we're coming back to you 13 today. 14 DR. BURKE: Can you refresh or inform me, 15 since I wasn't there, what happened to the pre-94 16 technology? 17 MR. KENNY: Well, what happens is we were 18 working with the different trap and filter 19 developers. The real difficulty became one of kind 20 of "duty cycle" for the engine. It was originally 21 anticipated that, in fact, we could develop kind of 22 almost a -- almost a one-size-fits-all technology for 23 trapping or filtering PM emissions. 24 And, in fact, as we've got further and 25 further into it, we recognize that the duty cycles 62 1 were extraordinarily important and those older 2 engines didn't really have the temperatures that were 3 necessary to have those technologies work effectively 4 in a passive fashion. 5 Now, there are always active 6 technologies. But the difficulty there was that you 7 then had to add additional hardware to the engines at 8 greater cost and you were adding, you know, 9 additional hardware at greater cost to older engines 10 with less value and their, you know, their remaining 11 life cycle was shorter. 12 DR. BURKE: Okay. 13 MR. KENNY: So that's why we got into this 14 position in which what we were left was really kind 15 of a regulation which had a problem. And we needed 16 to essentially go back, revamp it, and look at a way 17 to achieve those emission reductions. 18 CHAIRMAN LLOYD: Supervisor Roberts? 19 SUPERVISOR ROBERTS: Thank you, Mr. Chairman. 20 About a month ago, I attended a 21 National Public Transit Conference. And it was truly 22 amazing the number of different things that are out 23 there now. But one of the things that was attracting 24 a lot of attention, especially for some of the 25 California transit agencies, was a, I guess, what is 63 1 being called a "flex trolley," which is really a -- 2 it's an articulated bus and specifically is a bus 3 called a "Civvus." 4 And it's being, at least, talked about 5 by -- I know for a fact -- by a number of agencies. 6 It's a diesel-powered -- maybe clean diesel, but 7 diesel nonetheless. And I'm wondering -- it operates 8 more like a trolley. It's got wide doors so you can 9 have multiple loadings and unloadings, things of that 10 sort. 11 And the thought is that it will be 12 used in some type of exclusive guideway and, for that 13 reason, operate at lower cost. And I'm not asking 14 this because I'm necessarily an advocate of this 15 approach; but I can see that, at least in my own 16 area, becoming a -- very much a hot item in terms of 17 discussion. 18 And I'm wondering, for a transit 19 agency that has made the selection to go to 20 alternative fuels and now sees something for which 21 there may be a solution for transit issues but 22 doesn't fit within that category, what do they do in 23 that instance? 24 Is there is a procedure for 25 application to be able to utilize something like 64 1 that? What happens? 2 MR. CACKETTE: Well, right now, they can buy 3 15 percent of their buses as diesel powered. So if, 4 assuming they weren't going to buy more than 15 5 percent -- 6 SUPERVISOR ROBERTS: How long is "right now"? 7 MR. CACKETTE: Well, "right now" -- that 8 caveat has to do with whether or not -- which 9 emission standard it meets. "Right now," there would 10 be -- that engine would qualify, if certified, 11 through the end of '03. But at the end of '03 -- 12 that's when the emission standard for diesel buses 13 drops from 2.5 to .5. 14 And there's a question, you know, 15 beyond -- throughout the issue here, on the hybrid 16 discussion too, there's a question about whether or 17 not any of these engines will be certified to use 18 diesel beyond the January 1, '04, date. So that's 19 really kind of a caveat there. 20 MR. KITOWSKI: I'd also to like to point out, 21 Supervisor, that there is a company called "Trans- 22 Tech" that makes a hybrid, a hybrid bus, as well as a 23 CNG -- an alternative-fuel version of something which 24 sounds very similar to what you were talking about. 25 I'm not familiar specifically with 65 1 yours. But "Trans-Tech" makes something very similar 2 to that with a -- it's extended. It's got the wide 3 doors. And it's designed to go on its own dedicated 4 path. So there may be "alt"-fuel versions of that 5 already in use, especially in Denver, I think, is 6 where they've got a very large program. 7 SUPERVISOR ROBERTS: What's the name of that? 8 MR. KITOWSKI: "Trans-Tech." 9 SUPERVISOR ROBERTS: "Trans-Tech"? Okay. 10 And, Mr. Cackette, go over the 11 scheduling again. You said those new rules would 12 come into effect in January, 2004? 13 MR. CACKETTE: With the -- yes. With the 2004 14 model year. The way the rule was originally set up 15 is the -- for those that choose the diesel path, that 16 buses purchased with diesel engines would have to 17 meet a half-gram NOx standard as well as a stringent 18 particulate standard starting with the '04 model 19 unless they qualified or applied for and were 20 approved to have the alternative NOx -- 21 SUPERVISOR ROBERTS: I'm talking about the 22 other side -- those who have opted for the 23 alternative fuels. 24 MR. CACKETTE: Well, on the "alt"-fuel side, 25 until then, they can buy up to 15 percent of their 66 1 buses as diesels but after that -- 2 SUPERVISOR ROBERTS: Until January of 2004? 3 MR. CACKETTE: Right. But after that, those 4 engines have to meet the '05 standards as well. 5 SUPERVISOR ROBERTS: So any order that's 6 placed after January, 2004, would have to meet the 7 standards? 8 MR. CACKETTE: It's actually vehicles built, 9 isn't it? 10 SUPERVISOR ROBERTS: Are you talking about the 11 delivery? 12 MR. CACKETTE: Or is it -- 13 SUPERVISOR ROBERTS: Yeah. That's what I'm -- 14 MS. STEELE: The 2004 model year. 15 MR. CACKETTE: It's the model year. So it's 16 when the engine was built that goes into the bus if 17 it -- unless it's, I guess, the whole system is 18 certified. So it's roughly -- it's got to do with 19 production of the engine more than it does the 20 purchase date. 21 SUPERVISOR ROBERTS: Okay. I won't belabor 22 it. I'll get the details later. But I'll be 23 interested in that. 24 CHAIRMAN LLOYD: Thank you. 25 Professor Friedman? 67 1 PROFESSOR FRIEDMAN: Just a couple of quick 2 questions. How many small transit agencies, as 3 defined, are there? 20 or fewer-than-20 buses? 4 DR. BODE: We're doing an individual count. 5 PROFESSOR FRIEDMAN: I mean I don't need an 6 actual count. But is there -- are there quite a few? 7 Or is it just -- just a handful? 8 MS. STEELE: Sorry. I don't retain numbers 9 well in my mind. There's about between 20 and 25 10 that have fewer than 20 buses in their active fleet. 11 PROFESSOR FRIEDMAN: So they could apply for 12 an extension of compliance? 13 MS. STEELE: That's what we're proposing. 14 Yes. 15 PROFESSOR FRIEDMAN: Now, I want to understand 16 this rule, the proposed rule. As I understand it, 17 they're supposed to apply, at least 30 days before 18 the effective date that they would need to comply, to 19 extend that date and provide specified documentation 20 for support. 21 And then the executive officer has 90 22 days to make a decision. But, meanwhile, they're 23 responsible for complying. So isn't there a 60-day 24 period in there where they've got to comply even 25 though they've asked for an extension in which to 68 1 comply? Or am I -- 2 MR. KENNY: Yeah. You're correct. Actually, 3 Dr. Friedman, you're correct. Essentially, what we 4 were trying to look at was an incentive for them to 5 comply as early as possible before the deadline. But 6 they -- 7 PROFESSOR FRIEDMAN: They need to apply -- so 8 they really should be applying at least 90 days 9 before? 10 MR. KENNY: Well, they should. And what 11 happens is that they would have the option available 12 to them if they chose to wait until 30 days until 13 before the deadline. But obviously, then, they're in 14 a compliance situation for -- 15 PROFESSOR FRIEDMAN: They would be in default 16 for 60 -- up to 60 days while -- 17 MR. KENNY: They could be. 18 PROFESSOR FRIEDMAN: -- while the executive 19 officer -- 20 MR. KENNY: So I think, for them, what they 21 would probably do is look at that and recognize it's 22 to their advantage to actually apply, you know, at 23 least 90 days in advance. 24 PROFESSOR FRIEDMAN: Isn't that kind of a trap 25 for them? I mean why -- 69 1 MR. KENNY: Well -- 2 MRS. RIORDAN: Why would you do that? 3 PROFESSOR FRIEDMAN: Why not just say, "Apply 4 at least 90 days" -- 5 MRS. RIORDAN: -- 90 days -- 6 MR. KENNY: We can say that. But one of the 7 difficulties that we run into sometimes is that the 8 transit agencies do make requests up to the last 9 moment. And so we were trying to at least provide as 10 much flexibility as possible. 11 DR. FRIEDMAN: Well, Mike, can I ask you just 12 a follow-up? I think there's a letter in here 13 from -- I guess it's from Santa Barbara -- which is 14 the 20 -- they fit because they're talking about 20 15 buses, asking, I guess, for an extension because it 16 looks like it's somewhat less than a year they think 17 they can be in compliance. 18 So are you prepared to respond now -- 19 MR. KENNY: Well -- 20 DR. FRIEDMAN: -- to what they're asking us 21 about? 22 MR. KENNY: I think, Dr. Friedman, that's a 23 completely -- there's a little bit of a different 24 issue there. What we were talking about on the -- 25 kind of the extension issue was kind of a generic 70 1 thing where there are deadlines coming up. 2 The issue in the Santa Barbara case is 3 actually really probably more of a hybrid issue and 4 whether or not a transit agency which is on a 5 particular path will have the ability to buy hybrid 6 electrics. 7 And the difficulty, for everyone at 8 this particular point in time, is the way that the 9 rule is structured is that transit agencies really 10 had to make an election between the alt-fuel path and 11 the diesel path. 12 If a transit agency chose the diesel 13 path, they are unable to purchase diesel engines 14 between '04 and '06 unless they made an election also 15 to provide an alternative NOx-reduction strategy. 16 There are a number of transit agencies 17 that are on the diesel path which did not make that 18 election. And so they're now in a situation in which 19 they would like to buy hybrid electrics in that 20 period of time and they are unable to do so because 21 they chose not to make the election. 22 And so that's really what the 23 Santa Barbara issue is probably more about than this 24 issue of kind of extensions in specific 25 circumstances. 71 1 The other thing Mr. Cackette added was 2 essentially Santa Barbara isn't under 20 buses. 3 UNIDENTIFIED MALE VOICE: It's not? 4 MR. KENNY: They're not under 20 buses. 5 DR. FRIEDMAN: I thought they mentioned 20 6 buses. 7 MR. KENNY: No. See. They are basically sort 8 of the bigger issue, which is something that I think 9 you'll probably hear from some of the witnesses. And 10 it's something that, you know, we, as a staff, are 11 going to have to try to address in some fashion. 12 But we don't have a proposal or a 13 solution for you on that one today. 14 CHAIRMAN LLOYD: Okay. Questions from 15 colleagues? 16 MR. CALHOUN: Yes. I have one more. 17 CHAIRMAN LLOYD: Mr. Calhoun. 18 MR. CALHOUN: I've mentioned this to the staff 19 before. Suppose a transit agency does purchase a 20 hybrid-electric bus, and suddenly a problem 21 develops. I'm going to the two-party responsibility. 22 Where does he take it to get it fixed? 23 MR. KITOWSKI: Well -- 24 MR. CALHOUN: I just purchased -- okay. I 25 head this transit agency. And I bought this bus. 72 1 And it's hybrid, and it has something wrong. So now 2 do I come back to you because you're the guy I bought 3 it from? 4 MR. KITOWSKI: Yeah. There's two issues. You 5 would go back -- at this point, you'd go back to the 6 person or the dealership you bought it from. A 7 broader issue than that would be what would happen if 8 there is an emissions-related problem, if we 9 discovered an emissions-related problem? That's the 10 area that actually gives us the bigger concern. 11 We think the warranty coverage and 12 trying to appease the consumers of a new 13 technology -- we think the industry will be 14 responsive to the extent they can. They have been so 15 far. 16 But if there's an emissions-related 17 problem, we recognize that we are in a position, 18 during the interim period, for us to have to 19 determine whether it's the hybrid that's the issue or 20 whether it's the engine that's the issue and to take 21 appropriate action against the one that's 22 responsible. That could get tricky. 23 And we're willing to do that, I think, 24 for the interim period because this is such a 25 promising technology. We don't do that lightly. But 73 1 we do it because the technology is there to improve 2 emissions as opposed to just meet emissions. 3 MR. CALHOUN: But I'm the purchaser, and this 4 is my vehicle I use to acquire revenue. So now I'm 5 out of service. 6 MR. KITOWSKI: Right. 7 MR. CALHOUN: And let me be very blunt with 8 you. Is this the showstopper? You've got to have 9 both these people in order to make this work? 10 MR. KITOWSKI: I think it's the appropriate 11 action at this point. The volumes are very low. And 12 there is not -- from an emissions standpoint, there's 13 not the ability -- you've got three entities. 14 You've got the bus manufacturer; 15 you've got the engine manufacturer; and you've got 16 the hybrid manufacturer -- the three main entities 17 involved. And none of them are really in a position 18 at this point to take total responsibility for the 19 entire package. 20 MR. CALHOUN: Why is that? 21 MR. KITOWSKI: The engine manufacturer 22 traditionally does that. That's what they have done 23 for years. And I think they would be the logical 24 entity to do that long-term. However, the sales are 25 so low, it's not even registering as a blip on their 74 1 radar screen. 2 They're talking 1, 2, 20 , 40 -- you 3 know, volumes like that -- where doing something 4 significantly above and beyond what they ordinarily 5 do is just not a very sound business practice for 6 them. They would encourage -- they are encouraging 7 the technology. They're working with the hybrid 8 manufacturers. 9 But to extend their business case and 10 cover liability, even under a contractual agreement, 11 with -- for the hybrid system is a stretch for them. 12 Bus manufacturers have traditionally not, I think, 13 universally accepted that. 14 They're just not the entity that would 15 be involved there. They traditionally do have 16 difficulty packaging all the pieces together and are 17 not in any financial position do to. 18 And then the hybrid manufacturers are 19 the ones trying to develop the business case. And I 20 think they have their hands full simply developing 21 the business case for the responsibility that they 22 have. 23 I think, given time, you can come up 24 with contractual agreements between the suppliers, 25 between the hybrid manufacturers and the engine 75 1 manufacturers that they can work these issues out. 2 But until -- we thought it appropriate 3 to give them additional time to work that out in the 4 same way that, when a motor vehicle, a passenger car 5 is certified, there's contractual agreements that, if 6 the catalyst is faulty, it's not GM who is liable. 7 It's the catalyst supplier who is liable. 8 I think eventually those arrangements 9 can get worked out. And we're willing to take a 10 little bit of a risk, with these low sales volumes in 11 the early years, to help the industry develop. 12 MR. CALHOUN: Well, I'm going to mention 13 something about the catalyst supplier since you 14 brought it up. 15 MR. KITOWSKI: Okay. 16 MR. CALHOUN: If you go back -- you don't know 17 who the catalyst supplier is. You go back to the 18 dealer, if there's a problem, with this problem. And 19 the manufacturer has contractual arrangements with 20 the supplier of these different parts so they can 21 handle that. 22 And I would think that that would 23 be -- that that's where you are ultimately headed 24 with this. I think you recognize it as being a 25 problem and are proposing to allow three years in 76 1 order to sort of work this -- work it out. 2 And I don't think it's unreasonable. 3 But I would -- as the purchaser of the bus, I 4 would -- I wouldn't be want to be caught having to 5 confront a problem of that type. 6 MR. KITOWSKI: And there are several transit 7 agencies that are testifying. And it would be 8 interesting to put the question to them whether they 9 have, you know, concerns about investing in the 10 technology with a split certification. 11 I think they are okay. Generally they 12 would go back to Orion, who may have manufactured the 13 bus, or they would go back to "Milva" or whoever the 14 bus manufacturer was. But certainly it does 15 complicate issues. 16 CHAIRMAN LLOYD: Thank you very much. Seeing 17 no more questions, I think we'll take a five-minute 18 break for the court reporter before we begin the 19 general testimony. And the first witness will be 20 Henry Hogo, South Coast AQMD. So let's take a 21 five-minute -- well, make it 10 after 11:00 when we 22 get back on that clock over there. 23 (Break: 11:04 to 11:16 A.M.) 24 CHAIRMAN LLOYD: Yeah. And I'd like to start 25 the presentations from the witnesses today. As I 77 1 mentioned before the break, the first is Henry Hogo, 2 South Coast, and then Joshua Shaw and Arthur 3 Douwes -- those three there. 4 MR. HOGO: Good morning. Good morning, 5 Chairman Lloyd and members of the board. 6 CHAIRMAN LLOYD: Good morning. 7 MR. HOGO: For the record, my name is Henry 8 Hogo. I'm the Assistant Deputy Executive Officer at 9 the South Coast Air Quality Management District. And 10 I have submitted written comments. I'm not going to 11 read the written comments to you. But I just want to 12 summarize our comments this morning. 13 And my comments focus on the 14 definition of "alternative fuels" that staff had 15 originally proposed. We had serious concerns of the 16 changes that were originally proposed and the 17 widespread implications it has on advancing the 18 cleanest technologies possible. 19 But over the last several days, we've 20 been working very closely with your staff. And we 21 are pleased this morning to see the staff proposal to 22 retain the original or the current alternative-fuel 23 definition and propose a separate category for the 24 diesel pilot direct-injection natural gas engine 25 technologies. 78 1 And for your information, in the 2 industry, they call this the "DING technology" -- 3 D-I-N-G. So we have been very strong supporters of 4 the cleanest vehicle technologies possible, engine 5 technologies that can meet emission standards and 6 future emission standards. We believe that this 7 direct-injection technology will be important -- 8 plays an important role in meeting our clean-air 9 goals. 10 We do want to ask the staff if or urge 11 the staff, actually, to provide the specific language 12 on the proposal as early as possible because the 13 orders for buses can take up to two years for 14 delivery. So we do want to see that language 15 developed as early as possible. 16 With that, I did want to conclude that 17 we do support all the proposed amendments to the 18 transit bus rule. And we look forward to working 19 closely with your staff in crafting the language for 20 the DING technologies, if I can put that way. Thank 21 you. 22 CHAIRMAN LLOYD: Thanks very much, Henry. 23 Again, thanks for your continued working with the 24 staff and continuing pushing on the technology, 25 particularly with the CNG, to provide this 79 1 competition. 2 You mentioned that staff hadn't come 3 up with a date. Do you have a date that we should 4 set for the staff? 5 MR. HOGO: Well, I think that would be a 6 question to your staff. But we would urge them -- 7 your staff -- to work closely with us and perhaps 8 have a language as early as possible. 9 CHAIRMAN LLOYD: Do we have a feeling there, 10 Tom, or -- within, you know, is it within 30 days? 60 11 days? six months? 12 MS. STEELE: Six -- 13 MR. KENNY: Dr. Lloyd, actually I spoke with 14 Mr. Hogo about this ahead of time. And our thought 15 was is that we could try to get this done in probably 16 no more than six months but we would shoot for 17 basically a four-month time frame and try to get it 18 done, absolutely as he requested, as soon as we 19 possibly can. 20 CHAIRMAN LLOYD: That's acceptable? 21 MR. HOGO: Great. Thank you. 22 CHAIRMAN LLOYD: Dr. Burke. 23 DR. BURKE: I'd like to also thank Mr. Kenny 24 and the rest of the staff on their cooperative and 25 energetic efforts on behalf of resolving this matter. 80 1 I came prepared for wars this morning; and here it is 2 a love fest, you know. 3 CHAIRMAN LLOYD: It's still early. 4 DR. BURKE: I put my stuff away; so we got to 5 do it. 6 MR. McKINNON: Yeah. The basketball season 7 just started so -- 8 DR. BURKE: That's my guy there. That's my 9 guy. 10 CHAIRMAN LLOYD: Thank you very much. 11 Next, Joshua Shaw, then Arthur Douwes, 12 and Gene Walker. 13 MR. SHAW: Good morning. Thank you, Mr. 14 Chairman. Joshua Shaw, Executive Director of the 15 California Transit Association. 16 It's our public transit operators who 17 are out there on the road, doing their best to work 18 with you and the engine manufacturers and the 19 aftertreatment manufacturers to implement your 20 regulations that you adopted back in February of 21 2000. 22 And I'm happy to continue the love 23 fest. In fact, I'll just to try to add to it by 24 complimenting the Board Chair on his striking 25 likeness on the first page of the "Wall Street 81 1 Journal" this morning and let you know that we're 2 happy to work with you, even though we are the guinea 3 pigs, in demonstrating some of that technology the 4 "Wall Street Journal" is talking about that you and 5 the board is pursuing with regard to cleaning up the 6 rest of the fleet, other industry segments and 7 vehicle types. 8 We're happy to do that. And we hope 9 you'll agree with us that the data that your staff 10 shared with you this morning shows that we have made 11 great strides in implementing the original rules. We 12 have converted to ultralow sulfur fuel. Our NOx 13 fleet averages are in compliance. We are purchasing 14 newer, cleaner buses. 15 We are demonstrating the advanced 16 NOx-reduction program that was such a central 17 component of your original rule. And the next 18 speaker will tell you the details on that. And the 19 ZEB program is advancing. 20 In some instances, we actually think 21 we're going beyond the rules and requirements in 22 trying to clean up the air even more than the levels 23 you had set by funding extensive engine-repower 24 programs, lowering the NOx and PM fleet averages 25 below the required levels. 82 1 We're looking at some technology that 2 would provide 30 to 40 percent improvements in NOx 3 under the retrofit program, 85 percent in the PM 4 emissions. And some of our agencies are looking at 5 early application of the PM-soot filters where that 6 technology works. 7 Having said all that, a couple of the 8 requirements have led to some bumps in the road. We 9 don't take exception with the proposed amendments 10 today. We just wanted to bring to your attention, 11 for instance, in the ZEB program which is underway -- 12 and there are agencies committing funds to that 13 program -- some of the costs are coming in a lot 14 higher than we thought and the technology's a little 15 bit slower than we thought. 16 For instance, the San Mateo County 17 Transit District and the Santa Clara Valley Transit 18 Authority are seeing costs of $18 million for three 19 buses in the ZEB demonstration program. That's all 20 the -- not just per bus, but all the background 21 infrastructure costs behind that. 22 So there are some bumps in the road. 23 But we want to keep working with you to make sure 24 that we can implement that technology as best as 25 possible. 83 1 Two specific comments on the proposed 2 rules today -- well, one. The overview comment: We 3 support all the proposed amendments today. We're 4 happy to do that. 5 And two places we'd ask you to 6 consider going a little bit beyond the rules -- 7 Number 1: The alternative-fuel bus-purchase 8 provision for diesel-path transit agencies. 9 Your staff has indicated that the 10 technology might not be there for the '04-'06 time 11 frame and you've allowed some agencies to purchase 12 alternative-fuel engines that are less than the 13 standards you originally proposed back in February of 14 2000. 15 We would suggest you also allow them 16 to do the same for diesel-fuel engines if those 17 engines are capable of meeting the standards you're 18 setting for the alternative fuel. 19 For instance, a diesel engine might 20 actually have less PM levels. I think the 21 alternative-fuel engines you're allowing to be 22 purchased there are .03. The diesels, in that time 23 frame, would meet the .01. So that's actually lower. 24 And we might have good experience there. 25 But some additional flexibility in 84 1 that application of the proposed amendment would be 2 appreciated. 3 Secondly, the hybrid-electric bus: 4 You've already had a discussion with Mike Kenny and 5 the staff this morning about how critical those 6 technologies, whatever they may be, are going to be 7 in terms of meeting all of the requirements that 8 you've set in place, including those you're amending 9 today. 10 And while we very much appreciate the 11 new procedures you put in place -- and that does come 12 from our request to help us accelerate the 13 introduction of those technologies -- you heard one 14 example -- I was going to bring it up; you already 15 talked about it -- where some of our agencies want to 16 do a little bit more. 17 We don't have the solution today. But 18 we want to sort of bookmark this issue for you and 19 commit to try to continue working with your staff to 20 find out how we can bring the cleanest technologies 21 to all of the agencies, no matter what path they have 22 chosen if, in fact, those in-use test results show 23 they can meet or even exceed, as the one graph showed 24 you, your PM and NOx levels for either the natural 25 gas engine or the pure-diesel engine and the 85 1 selection of the paths in the original choice and 2 whether they did or didn't commit to the NOx- 3 reduction program, we think, shouldn't necessarily 4 prohibit them from introducing hybrid technologies 5 that can exceed those standards. 6 So we want to work with you to maybe 7 come back at a future board meeting and see if we can 8 go beyond even what's proposed today. 9 I'll conclude by, again, supporting 10 the amendments and be happy to answer any questions. 11 There are a number of speakers behind me who are 12 actually the men and women who literally get under 13 the engines, get under the hoods, and get into these 14 buses. And if you have real technical questions, I 15 would ask you to leave those to my members behind me. 16 Thank you. 17 CHAIRMAN LLOYD: Thanks, Josh. And, again, 18 I'd like to extend my thanks for your leadership of 19 the association and working closely with us and the 20 staff. I think, as you say, we haven't solved all 21 the issues; but I appreciate the spirit with which 22 you and the members have worked with us. So 23 appreciate that very much. 24 MR. SHAW: We would thank you and Mike and Tom 25 and Nancy and Jack and Ed and all the others. 86 1 They've always been available when we've had 2 concerns, and they're always ready to sit down and 3 talk with us. We appreciate that spirit of 4 cooperation. 5 CHAIRMAN LLOYD: Questions from -- 6 Professor Friedman. Your question? 7 PROFESSOR FRIEDMAN: Mr. Kenny, would you 8 comment on the -- 9 MR. KENNY: Sure. 10 PROFESSOR FRIEDMAN: -- statement that there 11 is a sort of a discrimination against or preference 12 for and a discrimination against -- on the 13 alternative-fuel bus -- 14 MR. KENNY: Sure. 15 PROFESSOR FRIEDMAN: -- provisions? 16 MR. KENNY: When the board originally adopted 17 the alternative -- when the board originally adopted 18 the dual-path approach, one of the things that we had 19 looked at, at that time, was that, if you're on the 20 diesel path, your obligation was to purchase buses 21 that would have met a .5-gram standard in the 22 '04-to-'06 time frame. 23 At about that same time, we also did 24 hear from the engine manufacturers that they were not 25 planning to produce such a bus. And so one of the 87 1 alternatives that was placed into the regulation at 2 that point in time was that a manufacturer who -- or 3 excuse me -- the transit agency who wished to be on 4 the diesel path had the option of essentially not 5 purchasing .5-gram buses but could then go to the 6 alternative NOx strategy approach. 7 We did provide, in the regulation, the 8 opportunity for transit agencies to elect to go down 9 the alternative NOx strategy. And if so, they had to 10 essentially inform us, put together an alternative 11 NOx-strategy-compliance plan, submit that to us. 12 And then it would be presumably 13 approved. And then they would have the ability to 14 buy buses above the .5-gram standard in the 15 '04-to-'06 time frame. 16 Seven transit agencies chose to do 17 that. A number of other transit agencies on the 18 diesel path chose not to do that. And so they're now 19 in a situation in which they do have not the ability 20 to buy the diesel buses because they made the 21 election to not go down that path in the past. 22 What we thought we could do, to try to 23 at least provide them with options, was to say to 24 them that they could now buy natural gas buses or 25 alternative-fuel buses during the '04-to-'06 time 88 1 frame. And so that's where we are at this point in 2 time. 3 With regard to the second question or 4 the second issue that Josh raised, I mean we do -- 5 PROFESSOR FRIEDMAN: Even though that would 6 mean the higher emissions? 7 MR. KENNY: Yes. And part of it was 8 essentially is to try to maintain the parity between 9 the two sides, which were somewhat polarized at the 10 board's previous meetings. 11 Other questions on that? Or should I 12 move on to the second issue? 13 PROFESSOR FRIEDMAN: That explains it. 14 MR. KENNY: With regard to the second issue, 15 we do actually think very highly of the hybrid 16 versions of the buses. And so we do want to look for 17 ways to try to get hybrid buses into the California 18 fleets as readily and as soon as we possibly can. 19 And what we're going to be doing is 20 working with the transit agencies to try to figure 21 out what the mechanisms are to get those buses out 22 there and to have them utilized by the transit 23 agencies. 24 And then, I guess, the last thing I 25 would want to add is just simply to echo the 89 1 chairman's comments. I mean I really do appreciate 2 kinda Josh's efforts and CTA's efforts and the 3 transit agency efforts because it really has been a 4 very collaborative approach over the last year as 5 we've tried to work these issues through. And it's 6 greatly appreciated. 7 MR. SHAW: Thank you. 8 CHAIRMAN LLOYD: And I think I'd like to also 9 address the issue of the zero-emission-bus 10 requirement. Clearly, it's been a big disappointment 11 to me to see the cost of these buses the way they 12 come in. 13 And so, as a result, staff is going to 14 come back to the board to address that issue next 15 year because we cannot sustain the expenditure of 16 public dollars in the way we originally looked at 17 that. So but staff will come back with a full 18 accounting of that issue. 19 Thanks. 20 MR. SHAW: Thank you. 21 CHAIRMAN LLOYD: Next, we have Arthur Douwes 22 and Gene Walker, then Edward Bass. 23 MR. DOUWES: Good morning, Chairperson Lloyd 24 and members of the board. My name is Art Douwes. 25 I'm with the Valley Transportation Authority. And 90 1 I'm here to present a couple things. 2 Number 1 is, in accordance with the 3 regulations for those properties that have submitted 4 an exemption to the 2004-2006 purchasing of .5 diesel 5 engines -- buses with diesel engines, we have a NOx 6 demonstration program for advanced NOx 7 aftertreatment. 8 I provided the board with a copy of 9 that, which looks like this here, as to the status 10 report. As you can see from this report, we have 11 gone out for an RFB and had -- two proposals were 12 received. Since that time, we have an agreement 13 established with Extengine Corporation for the 14 demonstration program. 15 The system proposed by Extengine has 16 been reviewed by ARB staff and has been approved by 17 ARB staff for this program. 18 In addition, tomorrow we'll have some 19 final discussions with Extengine for the 20 installation. And next week, a bus is going to be at 21 the CAVTC testing facility in Richmond for the 22 baseline testing. 23 Additionally, I've also provided a 24 secondary report, which has a nice picture of one of 25 our buses on that. And essentially that report is to 91 1 indicate that VTA, as well as other agencies, has 2 gone beyond the requirements of the regulations. VTA 3 has retrofitted a bus with alternative NOx-reduction 4 technology -- STT, a Swedish technology company. 5 And just recently the bus has been 6 here in Los Angeles at the ARB facility for testing. 7 The test results are included in there. In 8 comparison, essentially the test results indicate a 9 50 percent reduction in NOx, with this technology. 10 And in comparison with some recent 11 buses tested at ARB lab for CNG with oxidation 12 catalyst, they were -- appeared to be less than those 13 buses in NOx as well. 14 I would also like to mention that 15 hybrid technology is going forth in many areas. As 16 you all know, there are cars that are available in 17 hybrid vehicles. And we believe that that is a 18 promising technology and would like to consider that 19 for future technology. 20 I would also like to mention that we 21 appreciate all the cooperation and working 22 relationship with staff from the ARB who have helped 23 us through some of these efforts here in attaining 24 these results to date and specifically Dr. Nancy 25 Steele, who's been a great help on that. Thank you. 92 1 Any questions? 2 CHAIRMAN LLOYD: Thank you very much. 3 Questions? When will your tests 4 conclude -- the ones you show on here -- the -- 5 MR. DOUWES: On the -- 6 CHAIRMAN LLOYD: Some of the durability -- 7 MR. DOUWES: On the durability? We'll -- at 8 the present time, the waiver for -- or the waiver for 9 the testing is a one-year. So that is ending on 10 March of 2003. We will be requesting extension for 11 that -- for an indefinite time period to see how long 12 it actually will last. 13 But we will continue to keep the 14 ARB -- the board -- posted as to the results. 15 CHAIRMAN LLOYD: Thank you. 16 Gene Walker. Edward Bass. Tom Balon. 17 MR. WALKER: Good morning, Mr. Chair, board 18 members, and staff. I'm Gene Walker. I'm the 19 maintenance manager for Golden Gate Transit. I'm 20 also the CTA chairperson for the Northern California 21 Maintenance Committee. 22 I would like to take an opportunity to 23 thank the ARB staff for their efforts working with 24 transit agencies in developing the proposed 25 amendments to the bus transit fleet rule. 93 1 On October 7, a presentation was given 2 at a meeting with Dr. Lloyd, the executive officer 3 Mr. Kenny -- Kenny -- pardon me -- deputy executive 4 officer Mr. Cackette, and many of the ARB staff. 5 I would -- I had hoped that a copy of 6 that would have been here today. Unfortunately Mr. 7 Chuck Harvey, from "SAM Trans," was unable to make 8 it. So possibly we can get a copy of that in later 9 to you folks. 10 At this presentation, we communicated 11 with transit agencies who not only comply with the 12 current regulations but what we're doing is over and 13 above what is required. This includes testing of 14 various types of NOx and PM devices and fuel. We 15 reported on the advanced NOx demonstration project 16 and the ZEB-project progress and its high costs. 17 And maybe an explanation: Earlier 18 were some questions from the board of "What is 19 happening with 1994-and-earlier coaches?" 20 As we've reported earlier, bus transit 21 agencies are on a schedule from FTA on replacement of 22 coaches. The 1993 coach with a 12-year life span 23 would be set to be replaced in 2004. Figuring 24 contract time, manufacturing time, that bus probably 25 is going to be in service 14, 15 years. 94 1 So we would be in that 2004-2006 time 2 frame with an engine that is still running around 3 with maybe two-cycle technology. What we've done 4 proactively is, rather than rebuild the engines in 5 those coaches, most transit agencies have repowered 6 them with the latest four-cycle technology. 7 At Golden Gate Transit, we have 63 8 coaches, which we have delayed till the October, 9 2002, engine from Detroit Diesel was available -- 10 which I have the paperwork today was given me with 11 verification. So we are getting rid of the old 12 two-cycle engine; putting in a four-cycle with 2.5 13 NOx, .05 PM, which is a great reduction -- a huge 14 reduction. 15 This engine will also sustain future 16 aftertreatment to the exhaust because of its exhaust 17 temperature. We were not allowed that flexibility 18 with the old two-cycle technology. "SAM Trans," I 19 know, is actively repowering with four-cycle 20 technology. AC Transit. 21 But I'm not going to sit here and try 22 to throw their numbers out 'cause I really don't know 23 their numbers. I know for that, for a fact, that 24 "SAM Trans" is well over a hundred right now that 25 they have repowered. 95 1 Mr. Art Douwes spoke today about 2 working jointly with the ARB staff in the development 3 process of the RFB for the advanced NOx demonstration 4 project, which shows some great promise in reducing 5 NOx. 6 Our comments and concerns were 7 provided to the ARB staff, relate to the proposed 8 amendments including the hybrid bus and the 9 flexibility of purchases of engines in the year 2004- 10 2006. 11 Hybrid technology is in its infancy. 12 And transit wishes to test the technology as part of 13 our joint efforts to reduce emissions. To do so, we 14 have asked for flexibility in emission standards that 15 are proposed to allow for hybrid OEMs in California 16 market. We wish those manufacturers to be able to 17 come into California market on more than an 18 experimental basis with a yearly waiver. 19 There was reference of "What are we 20 going to do for warranties on hybrid coaches?" 21 Typically, when a transit agency puts a bid out for 22 coaches, we have an warranty time that's clearly 23 stipulated within the contract. We can hold 24 everyone's feet to the fire on that to make sure, if 25 we spend public money and are able to support that 96 1 vehicle for its life span. 2 It's kind of tough, if you have a 3 one-year waiver for a technology, such as a hybrid 4 bus, if it's expected to last during that time, to go 5 back to the agency who built it and their OEM, 6 whoever that might be, and say, "I have a one-year 7 waiver. Again, will you still uphold my warranty?" 8 So those are some important factors we 9 need to look at during this amendment process. 10 NOx and PM devices should soon be 11 verified that will allow for current engines meeting 12 the 10-2002 standards to further reduce air 13 emissions. Flexibility for transit agencies to 14 purchase 10-2002-standard engines and retrofit them 15 with advanced NOx and PM devices will aid in dirtier 16 engines and coaches being replaced in the year 2004 17 through 2006. 18 But as you're aware, of all I've 19 spoken about today, all this technology comes with a 20 hefty cost in an era of dwindling budgets and funds. 21 Our comments and concerns were presented to the ARB 22 staff to allow for continuous flexibility -- cautious 23 flexibility to the proposed amendments. 24 Transit agents will continue our 25 support of our common goal of reduced emissions. As 97 1 in the past, our efforts will trickle down to other 2 vehicles to reduce emissions on a much greater scale 3 and support the advancement of new clean-air 4 technology. Thank you. 5 CHAIRMAN LLOYD: Thank you very much. 6 Questions? Comments from the board? 7 Thank you very much. 8 We have Edward Bass, Tom Balon, Joshua 9 Goldman. 10 MR. BASS: Good morning. My name is Edward 11 Bass. And by way of introduction, I've spent many, 12 many years in emissions research, alternative fuels. 13 And I came to work for Allison Transmission after 14 testing their hybrid-electric bus many, many years 15 ago. 16 And so, you see, I've understood the 17 technology we're considering here both on diesel path 18 and the alternative-fuel path. 19 You've seen a bus out front that 20 illustrates the product that we would like to offer 21 in coordination with our partners, the OEMs and the 22 engine manufacturers as well. 23 Unfortunately, for the reasons I will 24 discuss, we don't see a path to commercialize that 25 technology in California. Yet we are proceeding in 98 1 other parts of the country unimpeded. 2 First of all, as you can see, from the 3 handout that I've given and the written comments too, 4 our system includes batteries or energy storage, 5 power electronics, drive units, and controls. 6 We do not supply an engine. And we do 7 not supply an aftertreatment device, although we work 8 very much hand-in-hand and walk in step with those 9 components. And we take that completely into the 10 design of our parts. 11 We like what has happened with 12 Appendix B of the transit bus rule in that staff, in 13 working with industry to come up with procedures that 14 can quantify hybrid benefits. But in the process, we 15 have gone astray in a couple of ways. 16 And so I've identified opportunities 17 for improving that appendix. And what I'm going to 18 suggest to you today is that it's not ready for 19 approval. First of all, we need to define the hybrid 20 system properly. By saying, "APU," we are including 21 an engine. And that is not part of the hybrid system 22 that the hybrid manufacturers supply. 23 We also need to allow the supplier of 24 hybrid systems to certify or verify an emissions 25 factor and not an emissions standard. There are 99 1 many, many reasons for that, not the least of which 2 is that we want to exactly determine the percent 3 improvement of the hybrid system and not move it to 4 some arbitrary category of emissions. 5 And another important factor is that 6 we, as a systems supplier, do not produce emissions. 7 We improve them. So we are not asking for an 8 emissions certification. We're asking for a 9 percent-improvement determination. 10 I think we've heard a lot about the 11 warranty issue. And I won't go into too much detail 12 there. But Mr. Walker was exactly on the right -- 13 the right point. We are already supplying a warranty 14 for the product. And it would be confusing to 15 everyone to have a different warranty for the 16 emissions system at this early stage in the product 17 when we are trying to define the service intervals 18 for the product. 19 Finally, on the opportunities for 20 Appendix B, we believe that, as many have said 21 already, the issue with the '04 engine requirement on 22 the diesel path -- and we are fuel neutral; but our 23 biggest opportunity is with diesels -- there needs to 24 be a new opportunity for those who did not realize 25 hybrid technology when they were considering their 100 1 choices in the past. 2 Now, with that option, the staff could 3 extend the exempt alternative path for NOx strategy 4 to those who want to implement hybrid technology and 5 still have the net environmental benefit by the year 6 2015, as stated. 7 Why are we so concerned about buses 8 when it's such a small business? And I'll tell you. 9 We know that, if we can make it in buses, we can make 10 it all types of heavy-duty vehicles. And as I've 11 shown on this page, we are looking at all the other 12 heavy-duty vehicle applications, not just commercial, 13 but military. 14 And this product has to prove itself 15 both from a compliance perspective and performance 16 and durability in the bus market to make it into 17 these other applications as well. 18 I mentioned that we were deploying 19 this technology all across the country. And I want 20 to go ahead and just list a few of our deployments as 21 we move into the production phase of our program. 22 We're working with Philadelphia, Hartford, 23 New Jersey, Saint Paul, Saint -- Salt Lake, Austin, 24 Houston, Orange County, Portland, and Seattle. 25 These cities know that this is a good 101 1 way to meet their implementation plans and be very 2 efficient with their resources, both financial and 3 and emissions and air quality. 4 I don't need to belabor the point that 5 the hybrids have already demonstrated the ability to 6 meet equivalent parity with CNG. That's in a staff 7 report, a previous test report. So I must point out 8 the obvious. "Why should we put all our eggs in one 9 basket when we have multiple ways to clean the air?" 10 And I know everybody wants hybrids. 11 Everybody here wants to see hybrids. But we do need 12 to look at the practical impediments. And we see a 13 roadblock. And here's why. 14 We can't -- we can't have an engine in 15 our hybrid unless there's something done about the 16 '04 standard. And we can't certify to the full 17 benefit of the hybrid without some changes to that 18 procedure. 19 So in conclusion, I'm suggesting that 20 we resolve these unintended blocks to hybrid 21 technology by granting the medium-duty-engine 22 allowance for this application in transit buses by 23 allowing DPF as verified technology in order to meet 24 the .01 particulate standard and extending the 25 deadlines for those transits who want to consider 102 1 hybrids for their alternative NOx strategy and, 2 finally, ensuring that the procedure we adopt for 3 quantifying benefits is for an emissions factor or 4 percent reduction and not an engine-emission 5 standard. 6 I want to, in summary, also thank the 7 staff for their tirelessness and high availability to 8 us whenever we want to discuss the issues. We know 9 that they are trying to make this work in a new 10 paradigm. Hybrids do represent a completely new 11 paradigm for heavy-duty industry. 12 And I hope that we will have the 13 opportunity, perhaps by way of a two-month extension, 14 to work with the staff on this Appendix B before it 15 is passed. Thank you very much. 16 CHAIRMAN LLOYD: Thank you. I'd like to ask 17 staff to comment on the points raised. 18 MR. KENNY: I think I'll address the first 19 one. And then I'll probably turn it over to Tom. 20 With regard to the point about extending the 21 deadline -- I mean, again, we don't think it's 22 appropriate to extend the deadline. 23 What we tried to do was craft kind of 24 a dual-path approach that really was fair to all the 25 parties. We did try to provide, again, you know, 103 1 multiple options for people to comply. 2 In this particular situation, those 3 options either were or were not taken advantage of, 4 at this particular point in time. And so it would 5 almost be as if we were changing the rules kind of in 6 midstream. 7 The one other thing I would point out 8 is that hybrid technologies are available, even under 9 the current dual-path approach. It's just the place 10 where they have difficulties is diesel-hybrid 11 technologies under the diesel path for an agency that 12 chose not to engage in an alternative-NOx-compliance 13 plan. Anything else beyond that basically is 14 available to the transit agencies. 15 And then I think the last thing I want 16 to say is, again, we actually think that the hybrid 17 technologies in all their forms -- whether they're 18 diesel, alternative fuels, or whatever -- are 19 something that actually are very enticing and very 20 encouraging. 21 And so we do want to work with 22 Mr. Bass and with others in the transit agencies to 23 try to figure out ways to get these into the 24 marketplace. But I think the request to just simply 25 kind of turn the rules aside in midstream is probably 104 1 an inappropriate request. 2 CHAIRMAN LLOYD: And the buses operating in 3 Orange County -- what are -- yeah. What are they? 4 What are the ones operating in Orange County? Are 5 they diesel-hybrids? 6 MR. BASS: Well, yes, sir. 7 DR. BURKE: How long have they been operating? 8 MR. BASS: They've been operating almost two 9 years, I believe. 10 DR. BURKE: I think I was at the ceremony that 11 inaugurated them. 12 CHAIRMAN LLOYD: I think -- I know that staff 13 is going to answer. And I know that Professor 14 Friedman had a question here. But was staff going to 15 answer the rest of the -- yeah. 16 MR. KITOWSKI: Well, I'll go through a little 17 methodical on each of the points that -- the first -- 18 the first two are actually related to finding hybrid 19 systems by the parts supplied and allowing suppliers 20 to certify an emission factor. 21 I think Allison-GM as simply the 22 manufacturer of the hybrid system -- that is, the 23 electric motor; the batteries; and the components, 24 related components -- certainly does, I believe, view 25 themselves as kind of a supplier in the same way that 105 1 a catalyst manufacturer might -- catalytic-converter 2 manufacturer might view themselves as a supplier. 3 But to us, the emissions of -- or the 4 operation of that hybrid system can't be segregated 5 very easily from the emissions of that particular 6 vehicle. 7 How they design that system is 8 integrally involved -- it interacts with the 9 engine -- and it isn't something that we feel is a 10 component. We feel it is a power source to the 11 engine and really does needs to be integrated and 12 certified separately as a component. 13 Now we are allowing them to certify 14 separately, kind of like a component, for that 15 interim period. But, you know, long-term, we do 16 believe we need to move toward the one-party 17 certification and view it as a complete system. 18 The hybrid itself, I believe, is going 19 to -- the emissions that come from that engine are 20 going to be dependent on how they design that hybrid 21 and what engine it's applying to and the particular 22 vehicle it's on. All three interact. 23 And, therefore, to us, it's important 24 that that hybrid system actually have the emissions 25 value associated with it. If you have an engine at 106 1 2-and-a-half grams of NOx and a hybrid system which 2 gets a 50 percent reduction on a particular engine 3 with a particular bus, then it meets 1.25 grams. 4 But if that hybrid system gets 40 5 percent reduction on a different bus or with a 6 different engine, then it needs a different emission 7 value. We think it's important that an emission 8 value get associated with a particular system. 9 In terms of warranty flexibility, I 10 think we have given as much flexibility as we 11 probably feel comfortable with. We've relaxed the 12 requirements for hybrids. We've relaxed the 13 durability requirements in the interim period. And 14 we've relaxed the warranty requirements. 15 At some point, you really do have to 16 draw a line and say, "Okay. We do need sort of 17 minimum requirements to be met." And we feel we are 18 at that point. 19 The biggest issue, I think, is the -- 20 which Mr. Kenny already touched on -- was extending 21 the deadline for the NOx provision. That is the 22 alternative-NOx strategy. And we do recognize that 23 there would be additional business opportunities for 24 GM-Allison on their diesel-hybrids if we did open up 25 the alternative-NOx strategy again. 107 1 But what Mr. Kenny is saying -- we do 2 need to balance that with those transit agencies and 3 those companies who have met our time lines 4 previously that we have laid down and not be 5 undercutting those who have already met our rules 6 that we've had in place for 2-and-a-half years now. 7 CHAIRMAN LLOYD: And the last point about 8 using emission factors or percentages rather than 9 gram per brake horsepower per hour? 10 MR. KITOWSKI: Yeah. I think that that 11 relates allowing -- I'm sorry -- using emission 12 factors rather than percent -- that relates to the 13 first point I think I was discussing that we would 14 much rather have a transit bus labelled as meeting 15 1.2 grams of NOx rather than a hybrid system labelled 16 as, you know, 42 percent reduction or a hybrid system 17 that -- I think what GM-Allison proposing is a ratio 18 where the hybrid system is meeting a certain ratio of 19 that -- meeting a certain ratio that really wouldn't 20 make sense to anybody in use; whereas an emission 21 standard is something readily recognizable that 22 people could utilize. 23 DR. BURKE: Mr. Chairman. 24 CHAIRMAN LLOYD: Yes, Dr. Burke. 25 DR. BURKE: Yeah. I just wanted to make 108 1 sure -- that's why I left the podium for a moment -- 2 that I was there on the day that this demonstration 3 project was inaugurated in Orange County. 4 And we made it, as an agency, very 5 clear that, you know, that it was a demonstration 6 project and they would have to meet the advancing 7 technology requirements that are out there for, not 8 only diesel, but natural gas engines. 9 And I think that extending the 10 deadline would -- just wouldn't be appropriate. 11 CHAIRMAN LLOYD: Okay. Thank you for that 12 insight. That's helpful. Well, Mr. McKinnon, 13 Professor Friedman. 14 MR. McKINNON: Just -- just so that I'm clear 15 on this to staff: Is there anybody that has asked 16 for us to extend the deadline? Is that a real issue 17 or -- 18 MR. KENNY: There has been -- there's been no 19 formal application. But we have had requests from at 20 least one transit agency, and potentially two transit 21 agencies, that we would essentially reopen the NOx- 22 application approach -- the alternative-NOx 23 application approach. 24 And we've told them essentially that 25 we didn't think that was the right way to go. 109 1 MR. McKINNON: Thanks. 2 CHAIRMAN LLOYD: Professor Friedman. 3 PROFESSOR FRIEDMAN: Yeah. I just wanted to 4 follow that. In your next-to-last comment about how 5 that would undercut those who had chosen perhaps more 6 wisely or had chosen, I want to be clear in my own 7 mind. Who would be hurt? And how would they be hurt 8 if we did open up the choice -- 9 MR. KENNY: Well, where we are right now -- 10 PROFESSOR FRIEDMAN: -- if we reopened it? 11 MR. KENNY: -- is essentially you have transit 12 agencies which have had to make the election about 13 choosing a diesel or an alternative-fuel path. And 14 those have been done. 15 And then we had the second choice for 16 the diesel-path transit agencies in which they had to 17 make a determination as to whether or not to elect to 18 go down the alternative-NOx-compliance strategy or to 19 not go down that path. 20 And this was the issue that was really 21 pretty extensively debated, I think, probably close 22 to a year ago, in which there were a number of 23 transit agencies that made a determination that, in 24 fact, they would not go down the alternative-NOx- 25 compliance strategy. 110 1 And we were concerned about it at the 2 time because we were concerned the transit agencies 3 might come back to you and essentially say to you 4 that "We are not going to be able to provide buses 5 between '04 and '06 because of the fact that we don't 6 have the ability to if we don't elect this 7 alternative-NOx-compliance strategy." 8 And so we did make a very, very strong 9 outreach effort to all the transit agencies in the 10 State to make sure that they understood what the 11 rules were and that, in fact, if they went down an 12 alternative-NOx-compliance strategy and they showed 13 those NOx reductions, then, they would have the 14 ability to buy higher than .5-gram-NOx buses. 15 Very few transit agencies on the 16 diesel path chose that course. And so we are 17 actually confronting today the thing that we were 18 worried about roughly over a year ago, which is that 19 they would come back and say, "We can't buy buses 20 because we didn't choose the alternative-NOx- 21 compliance strategy." 22 If we reopen it up, there is an issue 23 of essentially the credibility of the regulation, the 24 credibility of the board and then there's the 25 consequence from an emissions standpoint in terms of 111 1 the lost emissions that would have been associated 2 with the original time line as opposed to a delayed 3 time line. 4 CHAIRMAN LLOYD: Thank you. Thank you very 5 much. 6 We've got Tom Balon, Joshua Goldman, 7 and Dr. "Kush" -- Kubsh. 8 MR. BALON: Good morning, for about another 9 five minutes. My name is Tom Balon. I work for 10 Michael Bradley in Concord, Massachusetts. And I'm 11 here today on behalf of BAE Systems to talk about 12 their hybrid bus. I'm just going read, kind of 13 paraphrase, my written comments, which you should 14 have in front of you. 15 BAE Systems -- well, I did file a 16 purple card. And I agree with Ed, to some extent, 17 that the rule, as currently written, needs some 18 additional modifications before it can be approved. 19 I think our stance could be described as neutral. 20 But I'm going to walk through a time 21 line here that describes kind of BAE's position and 22 where the -- and kind of the limitations we see in 23 the rule that have put us where we are today. 24 I'm just to going read from this for a 25 little bit, and then I'll jump off. 112 1 The proposed rule does recognize the 2 unique benefits of hybrid-electric technology and has 3 created a procedure to quantify those benefits. 4 It incorporates the newly developed 5 SAE J2711 procedure for chassis testing and includes 6 a methodology that was pioneered by Ed Bass to apply 7 an emissions factor derived from chassis testing to 8 proportionately reduce the effective emission level, 9 ending with an equivalent emission level, which is 10 what Jack was referring to, be that 1.8, 1.5, or 11 1.2. 12 It also contains, in the short term, 13 flexibility, which is crucial to helping the 14 technology and market developed in California. And 15 I'll come back to that flexibility because, in BAE's 16 estimation, in the entire Appendix B certification, 17 there's a single paragraph. And that's the paragraph 18 that grants the 25 percent verified, not certified, 19 benefit without the need to go through the 20 certification procedure. 21 And it's that flexibility that BAE is 22 keyed in on that would allow them to sell their 23 current products here in California. 24 BAE has currently approximately twenty 25 demonstration vehicles with the hybrid-drive 113 1 technology. Seven of those vehicles are in 2 California -- six hybrid buses and one fuel-cell bus. 3 Altogether, between those seven and another seventeen 4 vehicles on the East Coast, this twenty-vehicle fleet 5 has accumulated more than half-a-million miles of 6 in-revenue-service testing. 7 And I told some of the operators I 8 wouldn't say this in front of everybody, but I'm 9 going to say it again. And I'll say it out for 10 everybody as well. I'd like to thank a lot of the 11 transit operators for their help during these 12 demonstration projects because there have certainly 13 been problems. 14 And, in a lot of ways, transit 15 agencies are the best R and D lab out there. They've 16 got the ability where, if a vehicle does break down, 17 they maintain a "spare ratio." And they can work 18 with us. And we've made incredible progress in the 19 last year that probably only could have been made 20 with transit operators. You wouldn't have made that 21 much progress with trucks. 22 So I would like to thank everybody for 23 that. BAE Systems currently has 325 hybrids, which 24 is on order with New York City Transit. In addition 25 to the 10 original pilot vehicles that New York has, 114 1 they have one of the preproduction commercial pilots 2 that's been in service now for approximately 90 days. 3 During those 90 days, there have been 4 door problems, but the hybrid system has been 5 operating flawlessly. That particular bus, as Ed and 6 a couple of people have mentioned, is equipped with 7 an "ISB" medium-duty -- medium heavy-duty engine. 8 That engine has been certified by Cummins to meet the 9 49-state EPA urban bus standard -- 2.5 for NOx and 05 10 for PM. 11 When installed in the hybrid-systems 12 bus with Orion, that engine's been retrofitted with a 13 verified diesel particulate filter to meet the .01 PM 14 standard. 15 Between testing on both "Environment 16 Canada" and in CARB's own labs -- and you saw that 17 illustrated in the slides -- the hybrid systems 18 typically demonstrate on the "dyno" approximately a 19 50 percent benefit for NOx. 20 They also represent about an 85 21 percent benefit for PM. However, I would say most of 22 that PM benefit is associated with the diesel 23 particulate filter. So we're kind of concentrating 24 specifically on NOx. 25 I'm going to go through the immediate 115 1 time line in the rule and kind of point out a couple 2 of things that kind of put us in a predicament. And 3 the first one's immediate. 4 In October of this year, the CARB 5 rules require that a diesel bus sold in the State of 6 California must be equipped with a first-fit 7 certified diesel-particulate filter. BAE Systems 8 has a problem in that the ISB engine, which is medium 9 duty and is typically installed in, like, Dodge 10 full-size pickup trucks, does not come certified with 11 a diesel particulate filter. 12 We have to use a verified retrofit 13 filter. And we've talked to Cummins, and the 14 near-term market opportunities in California -- 15 Cummins basically rejected any plans to certify that 16 engine first fit with a diesel-particulate filter. 17 I would state that the vehicle, as 18 sold currently in New York and as we'd like to sell 19 it to California, meets 2.5 and meets the .01 with a 20 verified diesel particulate filter. But without some 21 accommodation, that vehicle cannot be sold in 22 California. 23 In 2004, the diesel-NOx standard falls 24 to .5, which, again, the engine manufacturers have 25 said, "We will not supply engines meeting the .5 116 1 standard." As far as Cummins and Detroit Diesel are 2 concerned, that's close enough to the .2 that they're 3 going to put their eggs in their one basket and move 4 forward, hoping to get something on the market by 5 2007. 6 What that means for the transit 7 agencies in California is that there are only seven 8 agencies that have been granted alternative 9 exemptions that can buy diesel buses. The remainder 10 of the agencies will either have to keep their 11 vehicles -- not buy buses, keep their existing 12 vehicles running, or they'll have to retrofit. 13 I think that's unfortunate because it 14 kind of accomplishes -- it's contrary to what you 15 wanted to accomplish. And that is you're going to 16 keep the old diesel buses on the road longer. 17 The issue for BAE systems with the .5 18 standard is the hybrid system cannot, unfortunately, 19 take a 2.5-gram engine down to .5. So there's no -- 20 I think originally, a year ago, we may have thought 21 that was possible. But that's certainly not going to 22 happen. 23 The issue we're left with now is that 24 you've got a very limited market. You've got seven 25 diesel agencies that can only buy a limited number of 117 1 buses in a three-year period, and only some portion 2 of those buses are going to be hybrid-electric. And 3 the costs associated with the certification are too 4 onerous, given that limited market, and cannot 5 possibly be offset. 6 Now, that's one direction where the 7 market's been narrowed down in the short term. I 8 want to jump to 2007 for a second. In 2007, the NOx 9 standard drops to .2 gram per brake horsepower hour. 10 And in 2007, a 50 percent hybrid benefit will get you 11 from .2 down to .1. 12 The issue there is the benefit is so 13 small that, again, the risk and expense of 14 certification are so great that there's a ton of 15 costs and no benefit. And that, for BAE Systems, is 16 unacceptable. 17 For about a year during the 18 meetings -- and Ed Bass was in on this as well -- we 19 had asked for verification. 20 And we had asked specifically for 21 interim verification because we knew, in 2007, that 22 the primary benefits for hybrid-electric drive would 23 be fuel economy and the NOx and PM. Those benefits 24 would be met in the engine standards. 25 We'd also like to point out that, in 118 1 2007, the .2 engine standard's not going to go away. 2 We, for 49 state buses and certainly for California, 3 will still be required to purchase an engine with .2 4 standards and to impose both the engine certification 5 and the chassis certification on only hybrid and not 6 diesel and alternative-fuel buses. It seems a little 7 unfair to us at this time. 8 I think Ed's asked the question -- we 9 were going to ask the question as well. One of the 10 ways to increase that market, at least in the short 11 term -- for 2004, '05, and '06 -- is to open up the 12 alternative exemption. And I do see CARB's point in 13 not wanting to open that up. 14 However, having made that point, I 15 will tell you that BAE's only option is not to 16 certify and to instead take the 25 percent, which I 17 know, for transit agencies, only gets them from 2.5 18 to 1.8. But it certainly will reduce the fleet 19 average. 20 And I think the buses, in testing, 21 have consistently shown 50 percent. And the risk of 22 taking 25 percent, you know -- it's a hands-down win 23 for us with very little risk. 24 I would like to end on a kind of a 25 positive note. There's a lot of good stuff written 119 1 in the CARB rule as it's currently written. The "SA" 2 procedure's good. 3 The outlines for warranty and 4 everything else -- I think, if you look at a lot of 5 the flexibility staff wrote into the report, you'll 6 find that the stuff written -- that all the 7 flexibility, as far as warranty and everything else, 8 resembles the verification procedure quite a bit: 9 five-year, 150,000 miles, and dual-source 10 flexibility, which looks a lot like a certified 11 engine and a verified diesel particulate filter. 12 And I think a lot of this language is 13 just in the wrong place and needs to be taken out of 14 the certification rule and moved into the 15 verification procedure. Thank you very much. 16 CHAIRMAN LLOYD: Thank you. 17 Mr. McKinnon. 18 MR. McKINNON: Yeah. I recognize that the 19 staff has had a tough job to continue kind of a 20 balance here. But you've suggested that the opening 21 up of the market, based upon our opening up the rule 22 on the alternative path, would help with your 23 economies of scale. 24 And that really pushes the question. 25 Do you have back orders of 300 buses for New York 120 1 City? 2 MR. BALON: 325 -- 3 MR. McKINNON: 325. How many buses do you 4 make a year, say? 5 MR. BALON: The first 100, I believe, are 6 scheduled for delivery starting early next year and 7 serial production will continue through about August 8 or September. The first order of 100 has been 9 delayed such that the remaining 200 will continue 10 from that point right on. And we deliver through 11 2004. 12 MR. McKINNON: So your back orders of buses is 13 what duration? I lost that. 2 years? 3 years? 14 MR. BALON: It's typically about 18 months 15 between an RFB and getting a bus actually delivered. 16 I would note that the 325 are Orion buses and that 17 there are seven or eight different transit bus 18 manufacturers so -- 19 MR. McKINNON: Okay. Thanks. 20 CHAIRMAN LLOYD: Any other questions? 21 Thank you very much. 22 Joshua Goldman, Dr. Kubsh, and Bonnie 23 Holmes-Gen. 24 MR. GOLDMAN: Hello, staff, members of the 25 board. My name is Joshua Goldman. I work for ISE 121 1 Research down in San Diego, California. We are a 2 small OEM for hybrid-electric-drive systems. And we 3 have currently worked with six different OEMs in 4 installing our systems, as well as other systems, 5 into buses with many of them in revenue service as we 6 speak. 7 One of the buses that we have 8 developed is a gasoline-hybrid-electric bus that is 9 in service at the "Alma" Trans facility and is also 10 available outside for viewing. 11 First, I want to state that -- I want 12 to thank the staff for their hard work in this effort 13 to bring this proposal and this recommendation to the 14 table here. They've done an excellent job. They're 15 also worked with us on a one-to-one basis as well as 16 across the group to get these hybrid buses into 17 market as best they see fit. 18 We've also worked with them at their 19 CARB-MTA facility in verification of the hybrid bus, 20 as they've shown in the graph here in their 21 proceedings. 22 ISE research is not in the business to 23 supply buses. We're in the business to supply drive 24 systems, much like other hybrid OEMs. We see 25 ourselves working with the OEMs to make cleaner buses 122 1 for California as well as the rest of the country. 2 Our buses are able to meet 2002, 3 2004, and 2007 standards with certain drive systems. 4 That drive system can be particular for the agency. 5 And we allow them to select which drive system and 6 which power unit to use in order to meet the 7 certification levels. 8 For instance, with the gasoline-hybrid 9 bus, we have been able to meet 2007 standards. And 10 we will continue to develop this technology as well 11 as others to be the forefront in California for clean 12 buses. 13 Other vehicles that we produce are 14 turbine buses, using the "Castro" microturbine, 15 another certified hybrid-electric-drive system, as 16 well as fuel-cell buses, which is what everyone sees 17 as the future for this technology. 18 We hope that the board will accept 19 this procedure and that they will use this as kind of 20 a stepping stone for us to get hybrids to the market 21 with clean engines. 22 We want to say one comment -- that 23 we'd like to add gasoline as an alternative fuel and 24 to be stated as an alternative fuel. This is a fuel 25 that has proven itself in a clean vehicle. And we 123 1 would also like for you to add hydrogen as an 2 alternative fuel. That is another fuel that has been 3 proven in a vehicle to be a clean bus. 4 In terms of warranty, I want to talk a 5 bit as a smaller entity in this game. We aren't like 6 Allison or BAE Systems. We don't have the ability to 7 warrant our drive system separate from or inclusive 8 with the engine. 9 But we do like CARB's interim 10 procedure for allowing for the 25 percent reduction. 11 We think that will allow us to cost effectively get 12 our drive systems to the market and to the agencies. 13 We ask that these buses be made available for testing 14 at reduced costs similar to what they've done before 15 for particular instances as ordered by the executive 16 officer. 17 One comment I want to make to 18 Supervisors Roberts, since he was talking a bit about 19 the "Civvus" trolley bus. There are many 20 technologies out there, whether you call them 21 hybrids, diesel electrics. There are lots of 22 vehicles that have proven themselves to make the air 23 cleaner. 24 Our point here is that you need to 25 look at what the "heat" engine itself is. If you 124 1 still have an electric bus but it's powered with 2 diesel, you still have a diesel bus. If you have 3 gasoline-powered buses, that's an alternative fuel. 4 If you have a hydrogen-fuel-cell engine, that's also 5 an alternative fuel. 6 So we ask you to look at what we're 7 using to power these buses when we go to market in 8 California. For instance, there are versions of that 9 trolley bus available or to be available, hopefully, 10 with CNG engines. Same idea of a bus, different 11 power unit. 12 That's all my comments for now. If 13 you have any questions, I'll be available outside or 14 here. 15 CHAIRMAN LLOYD: Thank you. I guess -- remind 16 my colleagues is I guess ISE was one -- won one of 17 the "ICAT" grants several years ago and -- 18 MR. GOLDMAN: Yes, sir. 19 CHAIRMAN LLOYD: -- it's interesting. I'm 20 pleased to see the progress that you're making there. 21 And, of course, with Supervisor Roberts's territory 22 down in San Diego. 23 You didn't mention -- you didn't 24 mention the batteries -- well, two comments. It was 25 very interesting to hear gasoline as an alternate 125 1 fuel. I mean different background in that, I guess. 2 But also on the batteries -- you 3 mentioned adding some of those. 4 Does staff have any comments on that? 5 Any problems with including these batteries? I don't 6 remember the contention of that. 7 DR. BODE: No. I think they're fine. They're 8 fine. 9 CHAIRMAN LLOYD: Mr. McKinnon. 10 MR. McKINNON: Yes. 11 MR. GOLDMAN: Oh, I had one more -- one more 12 comment also to add in. We'd also like you to add 13 the battery technologies and -- that we have in the 14 comments section. 15 CHAIRMAN LLOYD: That's what I was asking 16 about. 17 MR. GOLDMAN: Oh, okay. Sorry. Thank you. 18 MR. McKINNON: I have a question for 19 Mr. Goldman and one for staff. 20 Where do you do the manufacturing? 21 Where does your company do the manufacturing? In San 22 Diego? 23 MR. GOLDMAN: Yes. 24 MR. McKINNON: That's good stuff. 25 California -- California needs manufacturing jobs. 126 1 We need to take a serious look at this. 2 The question for staff -- he asked for 3 the inclusion of gasoline and hydrogen. And actually 4 I guess the question for Mr. Goldman -- hydrogen is 5 included as fuel cells. Are you talking about 6 burning hydrogen as a fuel? 7 MR. GOLDMAN: In the internal combustion 8 engine. Yes. 9 MR. McKINNON: Got it. Okay. 10 So re-up the question on gasoline with 11 staff. What's your preference on burning of 12 hydrogen? 13 UNIDENTIFIED MALE VOICE: The way -- we think 14 that the way it's written, both hydrogen and gasoline 15 in the applications that he's talking about -- i.e., 16 hybrid engines or hybrid power trains in buses -- are 17 covered by our definition of "alternate fuel." 18 But I think we could take either -- by 19 placing on the record that it's the board's intent to 20 accept these in these applications -- probably do it. 21 Or else we can change the reg if it's the pleasure of 22 the board. 23 Technically, I think it's fine. Both 24 fuels are extremely clean in the applications that 25 we're talking about. 127 1 MR. McKINNON: Thank you. 2 MR. GOLDMAN: Okay. 3 CHAIRMAN LLOYD: Supervisor Roberts. 4 SUPERVISOR ROBERTS: Well, that was going to 5 be my question, too. And I think, if we can clarify 6 that with some additional language, I think it would 7 be -- it would be -- I'd like to see that. Okay. 8 CHAIRMAN LLOYD: Thank you. 9 MR. GOLDMAN: Thank you very much. 10 CHAIRMAN LLOYD: Then Joseph Kubsh, Bonnie 11 Holmes-Gen, and Richard McPherson. 12 DR. KUBSH: Thank you to Chairman Lloyd. Good 13 afternoon, members of the board and staff. My name 14 is Dr. Joseph Kubsh. I recently joined the 15 Manufacturers Emission Control Association as their 16 technical director, and I'd like to provide some 17 comments based on our written comments that were 18 submitted for this -- proposed revisions of the urban 19 bus rule. 20 The Manufacturers Emission Control 21 Association is pleased to provide comments and 22 support of the proposed revisions to the Air 23 Resources Board's program to reduce emissions from 24 urban buses. 25 As stated on previous occasions, we 128 1 believe the urban bus fleet rule is a balanced, fair, 2 and flexible approach to achieve significant emission 3 reductions in a cost-effective manner. The proposed 4 revisions, designed to give transit operators even 5 greater flexibility in their strategies to reduce 6 PM-emission levels of existing buses, is consistent 7 with the spirit of and enhances the overall 8 effectiveness of this program. 9 The adoption of this program in early 10 2000 has helped to encourage considerable investment 11 in efforts in developing technologies to meet the 12 requirements of not only the urban bus program but 13 emission-control strategies for other diesel-powered 14 vehicles and equipment as well. 15 The retrofit portion of the urban bus 16 program provides important immediate emission- 17 reduction benefits and offers an opportunity to 18 demonstrate the effectiveness of a retrofit strategy. 19 Also the urban bus retrofit program 20 can serve as a model for possible other future 21 initiatives to reduce PM emissions from other 22 categories of existing diesel-powered vehicles and 23 equipment that are found in urban areas. 24 As was indicated earlier today, 25 several of our members have already verified diesel- 129 1 particulate filters that can be utilized on urban 2 buses as well other heavy-duty vehicles. And other 3 companies are in the process of trying -- of 4 verifying retrofit technologies for urban buses in 5 other applications. 6 Several of our members are also 7 developing and applying retrofit NOx-control 8 strategies such as selective catalytic reduction and 9 exhaust gas for circulation. We strongly support the 10 staff's recommendations to revise the current 11 regulations to give transit authorities the 12 flexibility to develop strategies to reduce PM 13 emissions from existing buses. 14 We believe one significant benefit of 15 this added flexibility is that transit agencies will 16 be able to retrofit the newer 1994-and-later model- 17 year bus engines earlier than was provided in the 18 provisions of the program previously. 19 To date, almost 2,000 diesel- 20 particulate filters have been installed and are 21 performing effectively on 1994-and-newer model-year 22 bus engines throughout the United States. And as Mr. 23 Kenny indicated earlier, approximately 300 of those 24 buses are operating here in California. 25 Filters equipped on these model-year 130 1 engines and operated on ultralow sulfur fuel have 2 repeatedly demonstrated the ability to achieve very 3 large reductions -- greater than 90 percent of 4 particulate matter as well as the elimination of 5 diesel smoke and odor and greater than 90 percent 6 reduction in toxic hydrocarbons species associated 7 with particulate matter. 8 Regarding older, pre-1994 model-year 9 engines, our organization agrees with staff's 10 conclusions here that these older engines do provide 11 technologically more challenging applications for 12 passive-type particulate filter systems. 13 And certainly by allowing transit 14 authorities to pursue strategies that will include 15 retrofitting the newer, 1994-and-later model-year 16 buses first, will provide our industry more time to 17 develop technologies aimed at these older buses. 18 Just to close, I'd like to certainly 19 commend the board for its continuing efforts to 20 provide the people of California with healthy air 21 quality and for demonstrating true leadership in this 22 innovative regulatory program. 23 We'd also like to thank staff for its 24 willingness to work closely with all interested 25 parties and for its tireless efforts to develop 131 1 effective implementation strategies. 2 Our industry pledges its continued 3 support to ensure that this important regulatory 4 initiative is a success and the desired emission 5 reductions are effectively achieved. Thank you. 6 CHAIRMAN LLOYD: Thank you very much. Again, 7 I'd like to re -- again, compliment also MECA on its 8 work in pushing this area. I'd also to like to 9 reiterate, I guess, you know, formally what's 10 obvious. 11 I think we're interested in both, you 12 know, NOx and PM reductions in the retrofit sense as 13 well. But, again, for your members, I think it's 14 important -- wherever you can capture both of those 15 to the maximum extent possible, I think that's very, 16 very important for us. 17 DR. KUBSH: Well, we're also very excited 18 about the NOx-retrofit activity that was described 19 previously and hope to see more of those here in 20 California. 21 CHAIRMAN LLOYD: Yes. And throughout the 22 state, we need that for attainment. So that's very 23 important. 24 Comments from my colleagues? Any 25 questions? No? 132 1 Thank you very much. Thanks for 2 coming out. 3 Bonnie Holmes-Gen and Richard 4 McPherson. 5 MS. HOLMES-GEN: Good afternoon, Chairman and 6 board members. I'm Bonnie Holmes-Gen. I'm with the 7 American Lung Association of California, but I'm also 8 here on behalf of my colleagues from the Natural 9 Resources Defense Council, the Planning and 10 Conservation League, and the Coalition for Clean Air. 11 We have been following the evolution 12 of the transit bus rule very, very closely from its 13 beginning. It's a very important measure for us, 14 both for reducing smog precursors and toxic emissions 15 from diesel exhaust. 16 And we appreciate very much the 17 challenges that have been before the board in trying 18 to deal with the changes in technologies, retrofit 19 technologies, available and trying to make up this 20 shortfall and devise a practical strategy for 21 achieving emission -- equivalent emission reductions. 22 So I, you know, appreciate the 23 challenges before you and, you know, in general, you 24 know, are coming here to support modifications 25 because we absolutely need to do something to capture 133 1 those emissions reductions from older buses. 2 At the same time, I want to raise the 3 concern before you that we are losing a couple of 4 years here of progress between 2003 and 2005. There 5 is a shortfall in the particulate emissions in that 6 time period. And you know I realize that, by the 7 charts, that that shortfall is made up in some of the 8 later years. 9 But I don't want to lose sight of the 10 fact that there is a shortfall. When the original 11 transit bus rule was originally discussed, as you 12 know, that was very controversial. And one of the 13 things that the environmental community was very 14 concerned about was the early reduction of 15 particulate-matter emissions. 16 And we actually tightened up -- we 17 appreciate with your help -- the retrofit schedule in 18 the final version of the rule to make -- to get some 19 earlier reductions on the diesel path. 20 So I want to raise this issue to, 21 Number 1, to flag it as an issue; and, Number 2, to 22 look at it in the context of what we're doing on 23 diesel-pollution reduction. As you're very aware, in 24 June, you just adopted stricter air-quality standards 25 for particulate matter. 134 1 And diesel's, of course, a very 2 significant source of particulate matter, including 3 PM 2.5. So you know we are looking at everything the 4 board does around diesel very closely and believe 5 that the board needs to do everything possible to 6 move further faster -- as fast as possible -- to 7 reduce health risks of diesel exhaust. 8 And you're hearing health updates at 9 your board meetings. And so you know the mounting 10 health evidence. 11 The Children's Health Study is now 12 pointing to diesel as a -- as one of the reasons for 13 the lag that's been noticed in the lung-function 14 growth in children -- this 10 percent-per-year lag 15 that's very troubling that we're seeing -- and, of 16 course, all the evidence that came together that 17 supported the tightening of the PM standards. 18 So what I'm suggesting is that the 19 board should direct the staff to take a look at what 20 could be done to make up that lag in emission 21 reductions, take a look at the -- 22 CHAIRMAN LLOYD: Wasn't that 1 percent rather 23 than 10 percent? 24 MS. HOLMES-GEN: No. It actually is 25 10 percent. I'm pretty -- 135 1 CHAIRMAN LLOYD: 10 percent? 10 percent per 2 year? 3 MS. HOLMES-GEN: Yeah. It's 10 percent per 4 year. That's my recollection of the material. I've 5 seen a couple presentations in the growth rate of the 6 lung. Yeah. Lung-function growth rate. 7 Anyway, my suggestion -- take a look 8 at the package of toxic-control measures, both those 9 that have been adopted, those that are in line to be 10 adopted and take a look and see if there's something 11 that could be done to make up some of these emission 12 reductions or, you know, look at some additional 13 incentives that could be offered to transit agencies 14 to go further in the early years. 15 But I wanted to put that before you. 16 Second of all, I wanted to note that 17 the actual emissions -- the effectiveness of the rule 18 with this strategy that we're going with clearly 19 depends on the baseline number we start with because 20 the emissions reductions are calculated as percentage 21 reductions from the baseline number. 22 So, you know, we do have a certain 23 concern that, given that we don't know exactly what 24 the emission baseline is for each transit agency, we 25 know that there's some stringent criteria that are 136 1 included in the staff recommendation and the draft 2 revisions for the rule. 3 I appreciate these stringent criteria, 4 but we don't know what the calculation is going to 5 be. And so we do think that you should ask the staff 6 to report back when we have those actual numbers and 7 we know what emissions reductions are going to be 8 required of each transit agency and we can get a 9 better picture of "Are those as close to equivalency 10 as we think? Or are we getting more lags in 11 compliance, more lags in emission performance here?" 12 Third, I wanted to mention, on behalf 13 of Lung Association and all the colleagues, the 14 concern about continuing to support and promote 15 hydrogen-fuel-cell technology. And one way to do 16 that would be to require that all future fueling 17 stations that handle gaseous fuels are built to 18 handle hydrogen specifically. 19 We've raised that issue in comments. 20 And I wanted to raise that issue before you today as 21 one thing that you -- one concrete thing you could do 22 to promote hydrogen-fuel-cell technology. 23 I feel I need to just make a quick 24 comment on all the discussion about the alternative- 25 NOx pathway. It should be reopened. You know it 137 1 seems like it's a very difficult issue. It's not one 2 that we have really discussed among all the 3 colleagues. 4 But I would, at this point, caution 5 the board to take a close examination of the 6 emissions cost and benefits. And have a concern 7 about the board going with that approach because it 8 basically means the board has allowed the 9 manufacturers, in a sense, to come in and set the 10 pace. 11 The manufacturers dug their heels in, 12 said they can't meet these NOx-emission limitations. 13 And then the board would be responding to that. And 14 that is of great concern to us. 15 So those are our comments. And, 16 again, appreciate the difficulty that the staff is 17 facing here. And the bottom line is that we need to 18 make sure that we are doing everything possible to 19 get emissions reductions in these buses that are, you 20 know, so predominant in the urban core and are really 21 important to the health of residents living in the 22 urban core and those that are commuting and spend a 23 lot of time in these highly polluted areas. 24 CHAIRMAN LLOYD: Thanks very much. And I 25 think you know the board is committed to same 138 1 objectives as you are there, Bonnie. 2 I don't know whether staff wanted to 3 respond to any of the comments made. 4 The only one I would say -- on the 5 latter part of the refueling, clearly we're aware 6 that, on the zero-emission bus, which is -- we're 7 aware this would come in with hydrogen, would come 8 back to the board. 9 But I would also like to say, as part 10 of the -- both the California fuel-cell partnership 11 but also with the efforts throughout the State to do 12 technology forcing, I think the leadership of the 13 South Coast AQMD, in putting in natural gas and 14 hydrogen stations -- I think they're a great example 15 of minding -- being mindful of the linkage between 16 the two there. 17 MR. KENNY: The only comment I would have is, 18 with regard to Ms. Holme-Gen's comment about the PM 19 reductions and for the need to report back to the 20 board -- I mean we're happy to at least provide the 21 board with information on kind of an ongoing basis 22 with regard to what we're doing here. 23 I mean we share Ms. Holmes-Gen's 24 concern about, you know, PM health effects. I mean 25 they're obviously very, very serious. And we'd like 139 1 to do everything we can to reduce PM as rapidly as we 2 can. 3 MS. HOLMES-GEN: Thank you. 4 CHAIRMAN LLOYD: Mr. McKinnon? 5 MR. McKINNON: Yeah. I just -- I have to sort 6 of respond to one piece of it. And that is that PM 7 is the problem, not diesel versus CNG. They both 8 produce PM. And what we're -- what we're facing is 9 dealing with emerging technology that's going to 10 affect a lot more than just buses. 11 So while I agree with lots of what you 12 said about not rolling back, I mean one of the 13 difficult questions that has to be faced here, when 14 organizing solely against diesel, is that, if you 15 start talking about some heavy trucking applications 16 and hills and a number of variables, CNG may not work 17 very well. 18 But if what we've all done together, 19 including the Lung Association by pushing this 20 agenda -- if what we've all done together is moved 21 the hybrid technology to the -- or moved technology 22 or helped push technology -- the manufacturers have 23 done the moving -- but we've pushed the technology so 24 that we can move into some of the other applications 25 that are really huge, huge problems, if we start 140 1 dealing with, like, major trucking and figuring out 2 how to clean it up. 3 And it may be hybrid technology ends 4 up being a huge part of that solution. So it may be 5 more difficult to organize without villainizing one 6 fuel or another. But I think that the big solution 7 which you've fought for -- and you've pushed us as a 8 movement to do -- the big solution is going to 9 include all sorts of technologies and all sorts of 10 fuels. 11 And I'm happy that we're doing sort of 12 this balancing act of fuel neutrality and pushing -- 13 pushing -- but and I'm going to steal something 14 Dr. Friedman said to me earlier. 15 We were looking at some of the 16 numbers. And you know a lot of this wouldn't have 17 happened without the zero-emission requirement -- a 18 lot of this technology. And I know the American Lung 19 Association's fought hard and fast for that. So 20 anyway I said my piece. Thanks. 21 CHAIRMAN LLOYD: Thank you, Mr. McKinnon. 22 MS. HOLMES-GEN: Well, yeah. I just, you 23 know -- our intention is not to vilify -- I mean, you 24 know, vilify a technology either. And I think we all 25 share the same bottom line goals. And, you know, we 141 1 are, of course, always committed to emerging 2 technologies, especially that use, you know, battery 3 and, you know, have potential for moving to 4 zero-emission technology. 5 I'm just -- I'm just concerned that we 6 might need to examine this a little more closely 7 before you take action. 8 CHAIRMAN LLOYD: Thank you. 9 And last witness, Richard McPherson. 10 MR. McPHERSON: Chairman, commissioners, and 11 staff, my name is Richard McPherson with a small 12 company called Combustion Technologies out of Little 13 Rock, Arkansas; but we have operations in Australia, 14 other parts of Asia, and in Europe. So sometimes 15 we're not so small. 16 CHAIRMAN LLOYD: So why not California? 17 MR. McPHERSON: California -- we have, by 18 virtue of the fact that myself and one other person 19 live here -- we're trying to do what we can to help 20 California. In fact, we found a liquid catalyst a 21 number of years ago over in Europe, brought it to 22 North America in 1999, and sent some information to 23 the board -- since you brought it up -- in 1999 and 24 2000, of which we got no response from. 25 However, having said that, we just 142 1 recently ran what we refer to as an "average truck 2 test." We went and looked at the inventory of trucks 3 in the United States and what we will see in the next 4 few years. 5 We went out and brought a 1989 Ford 6 350 with a 16-foot van, put it on the road for 8,000 7 miles with this catalyst in the diesel fuel, and had 8 a California emissions testing lab do the test. Got 9 a 44 percent reduction in total hydrocarbons, a 20 10 percent reduction in NOx, and 25 percent reduction in 11 particulates. 12 And have sent that around. And we 13 first showed it first at our debut in the United 14 States at the Pacific Oil Conference in Reno about 15 three weeks ago. 16 I only offer this because I heard the 17 talk about the pre-1994 emissions and that there's a 18 lack of technology. I would offer to you that this 19 particular liquid fuel catalyst is very economical, 20 very easy to add to diesel fuel. 21 And it can be put in place in all of 22 California diesel in a fairly short period of time 23 and make a remarkable difference for the pre-1994 24 vehicles as well as many of the ones between 1994 and 25 today. Thank you very much. 143 1 CHAIRMAN LLOYD: Thank you very much. 2 I guess I was hoping you would give 3 the information to staff on -- what -- 4 MR. McPHERSON: I will -- I will. I didn't 5 realize I was going to give a talk, but I'll give you 6 some additional information. I left some up there 7 for you at the start of the meeting. 8 CHAIRMAN LLOYD: Okay. 9 MR. McPHERSON: Actually part of -- some of 10 your staff has found out about what we've done and 11 has asked me to come up to Sacramento on the 29th and 12 give them a two-hour presentation. And I'm going to 13 do that, and I'll bring a bunch of information then. 14 CHAIRMAN LLOYD: Oh, great. Great. 15 DR. FRIEDMAN: Could you just tell us? Is it 16 a synthesized or is it a natural product? 17 MR. McPHERSON: It's a hundred percent 18 hydrocarbon production. The inventor was -- during 19 the 1973 Arab oil embargo, he was a "boilers-fuels" 20 chemist. And his work was intended to reduce the 21 amount of imported oil into the country of Ireland. 22 He worked for 13 years to come up with a product. 23 It's a hundred percent hydrocarbon. It's very fuel 24 soluble from Number 1 to Number 6 to "Bunker C" to 25 even petrol or gasoline. 144 1 We don't talk much about gasoline. 2 We've got a cooperative agreement going with a major 3 engine manufacturer for gasoline. But it's a hundred 4 percent hydrocarbon. The EPA finally came out after 5 three years -- federal EPA came out and said, "This 6 is not a additive. It's" -- gave you a phone number 7 to call. "Have your customers call us. And we'll be 8 glad to talk to 'em about it." 9 CHAIRMAN LLOYD: Thank you. 10 Are there comments from staff? 11 MR. KENNY: No comments. Oh, there are, just 12 very quickly, Dr. Lloyd, there are letters. 13 UNIDENTIFIED MALE VOICE: The verification 14 process which you adopted in May is a means for him 15 to demonstrate emission reductions in his additive. 16 And we'll connect him with the right people. 17 CHAIRMAN LLOYD: Okay. Thank you. Thank you 18 very much. 19 MR. McPHERSON: Thank you. Thank you. 20 CHAIRMAN LLOYD: So any further comments? 21 You've got some letters? 22 MR. KENNY: We do have basically the letters, 23 if we could summarize. 24 Never mind. Excuse me. 25 CHAIRMAN LLOYD: I think they've been covered. 145 1 MR. KENNY: They have been. 2 MR. McKINNON: Mr. Chairman? 3 CHAIRMAN LLOYD: Yes. 4 MR. McKINNON: I have a question out of one of 5 the letters. And I can't remember which one. There 6 was a suggestion that we lower the gross weight of 7 the buses because of changing technology. Are we at 8 risk of buses getting so light that they fall out of 9 the rule? Is that a real problem? 10 MS. STEELE: The way that the reg -- the way 11 that the regulation defines the urban bus is that 12 heavy heavy-duty -- sorry -- heavy heavy-duty engine 13 or of a type that would normally be powered with a 14 heavy heavy-duty engine. 15 So after -- we sort of developed a 16 working definition that, if they're a 35-foot bus or 17 bigger, that's generally a type that would normally 18 be powered with a heavy heavy-duty engine. So we're 19 not really looking at gross vehicle weight anymore at 20 this point. 21 MR. McKINNON: Thanks. 22 CHAIRMAN LLOYD: I guess, since all the 23 testimony, written submissions, and staff comments 24 for this item have been entered into the record and 25 the board did not grant an extension of the comment 146 1 period, I'm officially closing the record on this 2 portion of the agenda, Item Number 02-dash-30. 3 Written or oral comments received 4 after the comment period has been closed will not be 5 accepted as part of the official record on this 6 agenda item. 7 I would like to ask my colleagues if 8 they've had any ex parte communication they'd like to 9 reveal at this time. 10 (No audible response.) 11 CHAIRMAN LLOYD: So I guess I'm the only one. 12 I have two. On October the 7th, I think, as Mr. 13 Shaw mentioned, I met at the Air Resources Board with 14 a representative of the California Transit 15 Association and EMA. 16 Those in attendance were Josh Shaw, 17 Gene Walker, Jed Mandel, "Duran Dural," Michael 18 "Mylenthopi," Art Douwes, Chuck Harvey, Scott 19 Mitchell, and Phil Murphy, together with staff. 20 And the intent was to discuss this 21 rule, areas where we are proposing some regulation, 22 and to bring us up to date on areas where they had 23 actually overcomplied and demonstration programs 24 already in place. Nothing covered there that wasn't 25 covered today. 147 1 Then, October 22, we met with in -- at 2 Air Resources Boards also, with staff and Mr. Kenny 3 as well, with San Francisco Muni railroads. The 4 attendees were Martin "Malera," Michael Burns, Jose 5 "Sineras," and Joe Speaks. 6 And that was the issue discussed 7 earlier where people are choosing -- elected to 8 choose a diesel path and didn't have an alternative 9 compliance for NOx. And so we discussed those 10 issues. And we concluded that we'd have further 11 discussions as time proceeded. 12 MS. WALSH: Dr. Lloyd, if I could -- 13 CHAIRMAN LLOYD: Yes. 14 MS. WALSH: Oh, I -- 15 CHAIRMAN LLOYD: Yes, please. 16 MS. WALSH: I just wanted to clarify one 17 thing. In terms of the closing the record today, 18 that is appropriate. But I did want to indicate that 19 the record would be opened again when we put out the 20 15-day notice. 21 CHAIRMAN LLOYD: Yes. That was -- I was going 22 to say that. That will be open. Thank you very 23 much. 24 I guess we have a resolution -- well, 25 we have a resolution before us. And I call it to 148 1 review. We also had -- at least I had one suggestion 2 raised by Professor Friedman where I think it's 3 important, would represent the sentiments here. 4 And I think, Mr. Kenny, you 5 volunteered earlier, given some of the evolving 6 technology here and the interest in some of the 7 technologies, we would certainly appreciate a 8 progress report or at least no later than one year. 9 If anything comes up before that time, 10 bring us up to speed. And I recognize probably, 11 before that time, as I'm thinking out loud, maybe, 12 when you bring the aspect on the zero-emission bus 13 back to us, maybe we could get an update at that 14 time. And that will be probably within the next nine 15 months, if I'm correct. 16 Mr. McKinnon. 17 MR. McKINNON: Mr. Chairman, I would like to 18 move Resolution 02-30. 19 DR. FRIEDMAN: Second. 20 CHAIRMAN LLOYD: All in favor, say "Aye." 21 ALL BOARD MEMBERS: Aye. 22 CHAIRMAN LLOYD: Sorry? 23 MR. KENNY: Before you go, there were two 24 quick questions I did want to ask. 25 CHAIRMAN LLOYD: Yeah. 149 1 MR. KENNY: Essentially there was a question 2 that Professor Friedman had raised with regards to 3 the 90-day versus the 30-day time frame and whether 4 the board sentiment was to essentially change it from 5 30 to 90. 6 And then, secondly, there was the 7 question that, I think, Mr. Roberts had raised with 8 regard to including hydrogen and gasoline as part of 9 the alt-fuel definition and whether that was also the 10 sentiment of the board. 11 CHAIRMAN LLOYD: I assumed that was included. 12 SUPERVISOR ROBERTS: Oh, I think we have -- 13 MR. KENNY: I want to make sure it's clear, 14 though. 15 SUPERVISOR ROBERTS: -- we have to ask for it 16 to be included, I think -- 17 MR. KENNY: Well, I wanted to make sure that, 18 in fact, that was the sentiment of the board -- that 19 it be included. And, you know, there is a question 20 as to whether or not it may already be included under 21 the definition, which is, I think, where the staff 22 was at. But I also wanted to clarify it so there 23 wasn't any question about it. 24 MR. McKINNON: Mr. Chairman, I would like to 25 move 02-30 with those two modifications included. 150 1 SUPERVISOR ROBERTS: That it explicitly be 2 included. 3 CHAIRMAN LLOYD: Yes. 4 MR. McKINNON: The fuel question -- hydrogen 5 and gasoline -- 6 CHAIRMAN LLOYD: Yeah. 7 MR. McKINNON: -- included in the 90-day 8 period. 9 MRS. RIORDAN: Mr. Chairman? 10 CHAIRMAN LLOYD: Mrs. Riordan. 11 MRS. RIORDAN: If that were to pass, my 12 suggestion would be for the staff to make very sure 13 that the transit agencies -- and I'm thinking of the 14 small ones -- are informed of that change. I think 15 that's very important that we underscore that because 16 many of those transit agencies my have -- and I'm 17 speaking of some very rural areas -- they may only 18 have one or two people in the office and not realize 19 that that has been changed. 20 And I would suggest that you notify 21 them if this is successful in passage. 22 MR. KENNY: What we would is actually put this 23 out for a 15-day modification and so there would be a 24 notice procedure and a comment procedure associated 25 with it. And we'll go out of our way to make sure 151 1 that the smaller agencies are get it. 2 MRS. RIORDAN: But you need to underscore that 3 change. 4 MR. KENNY: Got it. 5 MRS. RIORDAN: It's -- I mean I know that we 6 notice people. But I think you need to underscore 7 that this is a change. 8 MR. KENNY: All right. 9 MRS. RIORDAN: Okay. 10 MR. KENNY: We will. 11 MRS. RIORDAN: Thank you. 12 CHAIRMAN LLOYD: I'm just wondering if Mr. 13 Cackette is going to add something to the 14 deliberations. 15 MR. CACKETTE: All that led to is "No 16 comment." 17 CHAIRMAN LLOYD: Oh, okay. 18 Well, with those two changes -- and, 19 as I understand it, staff will make sure that the 20 gasoline and hydrogen, if it's not already in there 21 included, will be explicitly called out, per 22 Supervisor Roberts there. So -- 23 PROFESSOR FRIEDMAN: I have a question. 24 CHAIRMAN LLOYD: Professor? 25 Mr. Kenny. Professor Friedman. 152 1 PROFESSOR FRIEDMAN: Would you have the 2 discretion, for good cause, to not rigidly enforce a 3 90-day prior request for extension of compliance? I 4 mean if it came in within -- within -- 5 MR. KENNY: 89 days? 6 PROFESSOR FRIEDMAN: -- 89 days, does that 7 mean that it's too late and there's -- 8 MR. KENNY: Well -- 9 PROFESSOR FRIEDMAN: I understand. Once you 10 explained it to me, I understood what you were 11 driving at. And I wasn't as concerned. 12 MR. KENNY: The answer -- the answer to your 13 question is "Yes." If we put a 90-day time frame on, 14 then they're going have to submit those applications 15 for, you know, leniency essentially at the 90-day 16 mark. 17 And so, you know, what we were trying 18 to do is to simply give them the most possible -- the 19 greatest possible flexibility we could, recognizing 20 that, if they get closer and closer to the deadline, 21 what ends up happening is that they harm themselves 22 more than anybody else. So but, if they came in at 23 89 days or 88 days -- I'd have to -- 24 PROFESSOR FRIEDMAN: If -- let's just take one 25 more minute, if it's all right. If we left it the 153 1 way it is, assuming that Mr. McKinnon would agree, at 2 30 days, they have to request the extension to 3 comply. But assuming you don't act within 30 days, 4 you have another 60 days -- you have 90 days. 5 MR. KENNY: Right. 6 PROFESSOR FRIEDMAN: So they've got to somehow 7 comply. 8 MR. KENNY: Right. 9 PROFESSOR FRIEDMAN: But if they don't, if 10 they can't, you have the discretion -- 11 MR. KENNY: We always have the discretion to 12 essentially not enforce the regulation for a period 13 of time -- 14 PROFESSOR FRIEDMAN: -- to not enforce it and 15 not impose penalties. 16 MR. KENNY: That's correct. 17 PROFESSOR FRIEDMAN: So that's kind of where 18 I -- that satisfies me, when I raised the point -- 19 How strong do you feel? As your 20 secondary? 21 I just thought it might be a trap -- 22 30, 90, you know -- 23 MR. KENNY: Yeah. We weren't trying to 24 actually create a trap. 25 PROFESSOR FRIEDMAN: I know you weren't. 154 1 MR. KENNY: We were really trying to provide 2 the greatest -- 3 PROFESSOR FRIEDMAN: You were trying to give 4 flexibility -- 5 MR. KENNY: Right. 6 PROFESSOR FRIEDMAN: When you explained it, I 7 saw that. 8 CHAIRMAN LLOYD: Well, of course -- 9 Well, Mr. McKinnon. 10 MR. McKINNON: I'm much, much, much less 11 concerned about this time period than the inclusion 12 of gasoline and hydrogen. 13 CHAIRMAN LLOYD: Right. Yes. 14 MR. McKINNON: You know, frankly -- 15 MR. KENNY: Actually our suggestion -- 16 MR. McKINNON: The good doctor and the good 17 professor are really the debate here. So that the -- 18 DR. FRIEDMAN: Then it needs to be rational 19 and understandable. 20 PROFESSOR FRIEDMAN: Right. And I thought it 21 was. 22 MR. KENNY: What we could do is essentially, 23 if you chose, is we could actually -- since we're 24 going to do 15-day comments anyways, we could 25 actually just simply pose the question. And then, if 155 1 you were comfortable with it, I could make the 2 determination at the end of the 15-day comment period 3 whether it goes to, you know, 90 days or whether it 4 stays at 30 days. 5 UNIDENTIFIED MALE VOICE: Whichever they 6 prefer. 7 MR. KENNY: Whichever they prefer. 8 PROFESSOR FRIEDMAN: You also could act within 9 30 days -- 10 MR. KENNY: Could. 11 PROFESSOR FRIEDMAN: It's possible. 12 CHAIRMAN LLOYD: Precedent. 13 UNIDENTIFIED MALE VOICE: Let's leave it. 14 MR. McKINNON: I'm going to remake my motion 15 for the period of time here. Okay. I'm going to 16 move the Resolution 02-30, asking that it -- 17 understanding, with our understanding, that it's 18 going to be modified to explicitly include gasoline 19 and hydrogen as potential fuels that can be used. 20 So -- 21 DR. FRIEDMAN: Second. 22 CHAIRMAN LLOYD: And then staff will come 23 back? 24 MR. KENNY: Yes. 25 CHAIRMAN LLOYD: Okay. So we have a second -- 156 1 DR. BURKE: Can I take a step back? Can you 2 restate that? 3 MR. McKINNON: Sorry. No. No. No. 4 CHAIRMAN LLOYD: All in favor, say, "Aye." 5 ALL BOARD MEMBERS: Aye. 6 CHAIRMAN LLOYD: Any in opposition? 7 (No audible response.) 8 CHAIRMAN LLOYD: No. 9 Thank you. What we will do, we will 10 take a half-hour break. So we'll reassemble at 20 11 after 1:00 to cover the other two items. Thank you. 12 (The lunch recess was taken at 13 12:48 P.M.) 14 \\\ 15 \\\ 16 \\\ 17 \\\ 18 \\\ 19 \\\ 20 \\\ 21 \\\ 22 \\\ 23 \\\ 24 \\\ 25 \\\ 157 1 AFTERNOON SESSION 2 (1:29 P.M.) 3 4 CHAIRMAN LLOYD: The next item on the agenda 5 today is 02-dash-8-dash-3, a Status Report on the 6 Off-Road Emissions-Control Program for Spark- 7 Ignition and Compression-Ignition Engines. 8 We've been looking at off-road mobile 9 sources for some time. And I'm looking forward to 10 reviewing our progress in this area with a concern, 11 however, about how successful we will be in the next 12 round since it's not entirely up to us -- by which I 13 mean, obviously, the State of California, rather than 14 the EPA -- to decide how this category of emission 15 sources will ultimately be regulated. 16 We need a great deal of cooperation 17 and commitment at the national and international 18 level to get things done. Take a step back. Let me 19 remind my colleagues on the board that the 1988 20 California Clean Air Act directed the ARB to consider 21 emissions standards for off-road mobile sources. 22 During the public hearings for 23 off-road categories held in 1998, 2000, and 2001, 24 the board requested that staff prepare a review of 25 the impact of implementing of various off-road 158 1 emissions standards and to identify the 2 emission-control strategies that could be used on 3 off-road mobile sources in the future. 4 The presentation before the board 5 today has been developed in response to that request, 6 at which point I'll turn it over to Mr. Kenny to 7 begin the -- introduce the item, begin staff 8 presentation. 9 MR. KENNY: Thank you, Mr. Chairman and 10 members of the board. Beginning in 1990, when the 11 first small off-road engine regulations were approved 12 by this board, the ARB has undertaken the control of 13 virtually every source of off-road mobile emissions. 14 In 1998, 2000, and 2001, this board 15 adopted regulations for off-road spark-ignition and 16 compression-ignition engines. The implementation of 17 these new requirements has either already started or 18 will start within the next couple of years. 19 In the past, periodic reviews of 20 industry's progress, both in meeting current Air 21 Resources Board regulations and in striving to meet 22 requirements with future effective dates, have helped 23 the board determine whether it needs to reevaluate 24 regulatory requirements. 25 Recently, this board directed staff to 159 1 conduct a review of the effects of its off-road 2 regulations and of emission-control strategies that 3 could be applied to off-road mobile sources. Staff 4 held a two-day public workshop and conducted 5 individual meetings with industry representatives -- 6 including engine manufacturers, equipment 7 manufacturers, and industry associations -- to 8 fulfill the board's directive. 9 Many of the programs within the 10 off-road category are scheduled to have additional 11 requirements proposed for incorporation in the near 12 future. Staff presentation, today, however is 13 informational only. There will be no regulatory 14 changes proposed for your consideration. 15 And with that, I'd like to now turn 16 the presentation over to Mr. Dave Salardino of the 17 Mobile Source Control Division. Dave. 18 MR. SALARDINO: Thank you. 19 Good morning, Chairman, members of the 20 board, ladies and gentlemen. 21 CHAIRMAN LLOYD: It's afternoon up here. 22 It's afternoon up here. 23 MR. SALARDINO: Sorry. Good afternoon, 24 Chairman Lloyd, members of the board, ladies and 25 gentlemen. 160 1 In 1988, the California Clean Air Act 2 required that ARB consider regulations for off-road 3 engines. Since that time, the board has adopted 4 programs to reduce emissions from practically every 5 type of off-road engine. 6 In the course of proposing the various 7 off-road regulations, the board directed staff to 8 provide reviews of industry's compliance with 9 California's off-road regulations. Today's 10 presentation responds to this directive. 11 Today, staff would like to present a 12 review of four major California off-road 13 emission-reduction programs. I will start with some 14 background information explaining the emissions 15 impact of off-road engines with respect to all 16 mobile-source emissions in California. 17 I will then discuss each of the four 18 categories of off-road engines shown here. I will 19 discuss the regulatory events that have led up to 20 present day, current compliance with California's 21 regulations, and further steps to reduce -- to 22 further reduce emissions from those sources. 23 But to begin, before I describe each 24 of these categories in further detail, I would like 25 to first provide a brief overview of the emissions 161 1 impact of off-road mobile sources. 2 We have represented here the statewide 3 hydrocarbon mobile-source emissions inventory for the 4 year 2000 and projected to 2010 and 2020. This 5 compares on-road versus off-road engines, based on 6 the regulations currently in place and includes all 7 off-road sources, not just those that are being 8 discussed today. 9 We see that, although both the on-road 10 and off-road mobile-source hydrocarbon-emissions 11 inventories are decreasing overall as a result of the 12 board-adopted regulations, the off-road contribution 13 to the total is increasing. The proportional 14 increase is due to both the projected growth of 15 off-road engine usage and the more effective control 16 of on-road sources. 17 Here we have the current and projected 18 statewide NOx mobile-source emissions inventory. The 19 off-road emissions estimates are separated into two 20 pieces -- one representing locomotives, commercial 21 marine vessels and aircraft; and a second piece 22 representing land-based mobile off-road engines. 23 Once again, we see that both the 24 on-road and off-road mobile-source emissions 25 inventories are decreasing over time as a result of 162 1 the board-adopted regulations. In this case, 2 however, the off-road contribution, which starts out 3 at a combined 35 percent in 2000, actually surpasses 4 the on-road contribution by 2020. 5 Here we see the relationship between 6 off-road and on-road particulate emissions from 7 diesel mobile sources. Again, the off-road emissions 8 inventory are separated into two pieces, one 9 representing locomotives and commercial marine 10 vessels and a second piece representing land-based 11 mobile off-road engines. 12 For diesel-exhaust particulate matter, 13 it is clear that land-based off-road sources are the 14 dominant contributors, making up 47 to 58 percent of 15 the total inventory for the year's model. Also note 16 that land-based, off-road diesel engines emit more 17 than twice the PM as on-road diesel trucks. 18 The diesel portion of today's 19 presentation will focus primarily on land-based 20 diesel engines. 21 As you can see from the previous 22 slides, emissions from off-road sources were and will 23 continue to be a significant portion of the mobile- 24 source inventory. In the 1994 state implementation 25 plan for ozone, for the first time, the ARB calls for 163 1 substantial emission reductions from off-road 2 engines, ranging from forklifts to tractors to 3 recreational boats, to help meet the one-hour federal 4 ozone standard in six areas around California. 5 In fact, 8 of the 16 mobile-source- 6 control measures described in 1994 SIP were aimed at 7 off-road sources. Since then, the ARB has worked 8 closely with US-EPA to adopt and implement 9 regulations to fulfill those SIP commitments with 10 state and federal regulations. 11 The Federal Clean Air Act of 1990 12 preempts California from controlling emissions from 13 new farm and construction equipment under 175 14 horsepower. Therefore, ARB is relying upon US-EPA to 15 adopt stringent standards for preempt engines. 16 This is particularly important for the 17 land-based diesel category, in which over 70 percent 18 of the population is preempted from ARB's authority 19 to regulate. 20 In this graph, we see the statewide 21 hydrocarbon-emissions inventory for each of the 22 categories we discussed today: small off-road 23 engines, which we call "SORE"; large spark-ignition 24 off-road engines, labelled as "LSI engines"; 25 recreational marine engines; and diesel engines 164 1 typically used in construction and farm equipment. 2 We can see the hydrocarbon emissions 3 from each category are expected to decline during the 4 next 20 years. The improvement is due to the 5 regulations in place today. Hydrocarbon emissions 6 from each of the categories will decrease by roughly 7 50 percent or more between 2000 and 2020. 8 Here we have a similar slide showing 9 the statewide NOx inventory. It is very apparent 10 that, out of the four categories, the diesel engine 11 is the dominant source of NOx emissions. 12 We can also see that the regulations 13 currently in place will have a significant impact on 14 the NOx-emissions inventory with NOx emissions from 15 land-based diesel engines being reduced by over 55 16 percent during the 2000-to-2020 time period. 17 It is important to note, however, that 18 over 200 tons per day still remain, making off-road 19 diesels one of the largest sources of NOx emissions. 20 I would now like to review the first 21 category of engines, the small off-road engines, or 22 SORE, category which is equipment powered by gasoline 23 engines less than 25 horsepower. 24 The category primarily consists of 25 two- and four-stroke single-cylinder engines. 165 1 Typically these engines use a carburetor with no 2 fuel-injection system. These engines can generally 3 be divided into two application categories -- those 4 used in lawn and garden equipment, such as lawn 5 mowers -- excuse me -- those used in lawn and garden 6 and those used in general utility equipment. 7 Examples of lawn and garden equipment 8 include lawn mowers, both walk-behind and riding; 9 trimmers; blowers; and chain saws. General utility 10 equipment includes equipment such as generators, as 11 well as pumps and compressors. 12 Small off-road engines were first -- 13 were the first off-road category subject to emission- 14 control regulations. Adopted by the board in 1990, 15 the first tier was implemented with the 1995 models. 16 To comply with the 1995 Tier 1 standards, engines 17 were modified to run at a leaner air-fuel ratio. 18 Manufacturers also improved the 19 emissions performance of their engines by using 20 better materials and improved cooling strategies. 21 To meet the second tier of our 22 regulations for engines used in handheld equipment 23 which use engines less than 65 cc's, manufacturers 24 used a variety of strategies. Some further refined 25 their two-stoke designs. 166 1 Others introduced lightweight 2 four-stroke engines into the marketplace as a 3 substitute for the more polluting two-strokes. Other 4 manufacturers chose to outfit their two-stroke 5 engines with a catalyst. And it appears, for the 6 less-expensive equipment, more electric models are 7 available. 8 For the nonhandheld, which typically 9 uses engine over 65 cc's, the primary approach used 10 to meet the Tier 2 standards was to switch from 11 side-valve engine designs, which in the past have 12 been the typical design of lawn mower engines, to a 13 more complex, more fuel-efficient, and cleaner 14 overhead-valve configuration. Much cleaner 15 side-valve engines have also been introduced. 16 Here we can see the benefits we've 17 achieved on a per-engine basis for the handheld or 18 less than 65 cc engines. As you can see, the 19 standards result in engines that are, in some cases, 20 90 percent cleaner than uncontrolled engines. 21 The dramatic emissions improvement was 22 also achieved for the larger engines typically used 23 in lawn mowers, which are now over 80 percent cleaner 24 than typically uncontrolled engines. 25 This slide illustrates the adopted 167 1 emission standards -- excuse me. This slide 2 illustrates that the adopted emission standards for 3 small engines will continue to reduce emissions 4 throughout the decade. Note that the emissions in 5 2000 have already been reduced by the introduction of 6 cleaner engines beginning in 1995. 7 Between 2010 and 2020, the 8 contribution's expected to stay relatively stable as 9 the additional of cleaner engines is offset by 10 growth. I will address our efforts to further reduce 11 these emissions in an upcoming slide. 12 With the implementation of the more 13 stringent 2000-model-year standards, a full supply of 14 lawn mowers and other nonhandheld engines were 15 available. However, with regard to smaller handheld 16 engines, production dropped below previous years. 17 Staff conducted surveys in 2000, 18 2001, and 2002 of the available handheld equipment -- 19 of the available handheld equipment found in various 20 retailers throughout Northern and Southern 21 California. The surveys provided snapshot of model 22 availability. 23 Each bar shown here represents the 24 total number of equipment models that were available 25 on retailer shelves. Please note that the equipment 168 1 includes both gasoline and electric. Staff found 2 that retailers had available current as well as 3 previous years' equipment. For instance, the lawn 4 trimmers found on the shelves during the survey 5 completed in 2000 included 2000, 1999, 1998, and 6 even previous years' model equipment. 7 You will note that there was an 8 apparent drop in available models in 2001, which 9 probably reflects the lower production volumes in 10 2000. However, we can see that, by 2002, the number 11 of models available has surpassed the 2000 results. 12 This is consistent with production 13 information submitted to ARB by manufactures which 14 shows a strong rebound in production following the 15 2000 model year. 16 Staff is currently evaluating the 17 potential for cleaner smaller and small engines. 18 Recent testing has indicated that evaporative 19 emissions from small engines are a major contributor 20 of hydrocarbons. Staff is in the process of 21 developing evaporative-emission requirements for 22 small engines. 23 The proposal is expected to achieve a 24 50 percent reduction in hydrocarbon emissions in 25 2020 by reducing permeation of evaporative emissions 169 1 from fuel hoses and tanks. 2 In addition, staff is looking to 3 further reduce exhaust emissions. The key to this 4 effort is a test program at Southwest Research 5 Institute. Included in the test program are six new 6 nonhandheld engines which represent a cross-section 7 of the category. 8 We are equipping these engines with 9 catalysts for the purpose of demonstrating at least a 10 50 percent reduction in emissions. Staff is expected 11 to propose amendments to the small-engine regulations 12 in 2003 that will include reducing both evaporative 13 and exhaust emissions. 14 Next, I will discuss large spark- 15 ignition engine program. Large spark-ignition 16 engine -- large spark-ignition, or LSI, engines are 17 typically used in a variety of industrial 18 applications. 19 They are most commonly found in 20 forklifts but are also used extensively in equipment 21 such as portable generators, airport service 22 vehicles, specialty vehicles as well as large turf- 23 care equipment, irrigation pumps, and sweepers. 24 LSI engines are over 25 horsepower and 25 are typically defeatured versions of current or past 170 1 automotive -- automobile engines with less- 2 sophisticated fuel and emission-control systems. 3 In 1998, the board adopted a 4 two-phased emission-reduction approach for LSI 5 engines, based on the emission-reduction capability 6 of closed-loop, three-way catalyst technology. 7 The first phase of the standards 8 includes a 3-gram-per-brake-horsepower-hour 9 hydrocarbon-plus-NOx standard, which is phased in 10 over three years beginning with the 2001 model year. 11 The second phase standards are fully 12 implemented with the 2004 models. These include a 13 requirement to demonstrate durability to ensure that 14 the engines remain clean for the entire useful life. 15 Since implementation of this program 16 last year, there have been no reported problems or 17 issues concerning technical feasibility of the 18 emission standards or product availability. Engines 19 have been certified compliant for use in forklifts, 20 generator sets, pumps, and sweepers. 21 In most cases, manufacturers have been 22 able to certify and produce engines to levels well 23 below our standards. Typical hydrocarbon-plus-NOx 24 values for the certified engines range from 2.6 all 25 the way down to 0.2 grams per brake horsepower hour, 171 1 which is well below the 3-gram-per-brake-horsepower- 2 hour standard. 3 The 3-gram-per-brake-horsepower-hour 4 hydrocarbon-plus-NOx emission standards that the 5 board adopted represents more than a 75 percent 6 reduction in hydrocarbon-plus-NOx emissions compared 7 to an uncontrolled engine. 8 Here we see the statewide emissions 9 reductions for hydrocarbon plus NOx as a result of 10 the adopted regulations. The 2000 emissions 11 represent a population of unregulated engines. By 12 2010, the standards will result in a 39-ton-per-day 13 benefit, with that benefit improving to 49 tons per 14 day by 2020. 15 Since the 1998 regulatory action, 16 ARB, South Coast Air Quality Management District, and 17 US-EPA cosponsored a study by the Southwest Research 18 Institute to assess the durability of electronically 19 controlled closed-loop three-way catalyst-emission- 20 control systems that would be used on LSI engines. 21 The results of the test program showed 22 that emission-control systems were durable and the 23 emissions results were well below ARB's adopted 24 emissions standards. In addition, as part of that 25 test program, a transient test cycle was developed to 172 1 better represent real-life operation as compared to 2 the "steady-state" test cycles currently used to 3 demonstrate compliance for LSI engines. 4 Because of the Federal Clean Air Act 5 preemption, California must rely on the US-EPA to 6 regulate about 20 percent of the engines in this 7 category. The US-EPA recently finalized its own rule 8 for LSI engines. 9 The federal program aligns with ARB's, 10 beginning in 2004. However, based on the Southwest 11 Research Institute data, the US-EPA regulations 12 include more stringent standards than California's, 13 beginning in 2007. The US-EPA's 2007 standards also 14 incorporate the new transient test cycle. 15 Staff intends to propose aligning the 16 California standards with US-EPA's 2007 standards at 17 a subsequent board hearing. Incorporating the US-EPA 18 standards will allow us to enforce these standards in 19 California and will achieve an additional emissions 20 reduction of over 30 percent from large 21 spark-ignition engines. 22 The next category to be discussed is 23 recreational marine engines. ARB's control measures 24 in this category have been directed at reducing the 25 ozone-forming emissions from spark-ignition gasoline 173 1 engines that are used to propel various types of 2 recreational vessels. 3 The next four slides will identify the 4 types of recreational vessels covered by ARB's 5 regulations. Inboards are derived from automotive 6 engines and used in various recreational activities, 7 including open-water towing and waterskiing. 8 Like inboards, stern drives are used 9 in the same sorts of recreational activities. An 10 outboard is used similarly as other boats, but the 11 engine and drive unit is housed external to the whole 12 of the boat. 13 Personal water craft, or PWCs, are 14 primarily used for recreation but are also used in 15 emergency-response applications. In 1996, the US-EPA 16 promulgated the first set of emission requirements 17 for recreational marine engines. This rulemaking was 18 limited to engines used in outboards and PWCs. The 19 requirements are such that these engines will become 20 progressively cleaner through 2006. 21 Subsequent to EPA rulemaking, ARB 22 staff determined the outboards, and especially PWCs, 23 were a much larger source of emissions, especially on 24 summer weekend days, when we often experience high 25 smog levels. Based on this finding, the board 174 1 adopted more stringent exhaust-emission standards in 2 1998. 3 Implemented in 2001, California 4 standards immediately required emission levels equal 5 to US -- to EPA's most stringent standards. Still 6 more stringent standards are scheduled for 2004 and 7 2008. Manufacturers are meeting these standards by 8 switching their fuel systems from carburetors to 9 fuel-injection and replacing two strokes with four 10 strokes. 11 Inboard and stern drives were not part 12 of the initial -- these initial rulemakings. However 13 in 2001, ARB adopted regulations for inboards and 14 stern drives. New 2003 model vessels are capped at 15 current levels. And beginning in 2007, engines 16 meeting catalyst-based standards will be introduced. 17 By 2009, all engines using inboard and 18 stern drives will meet this standard. 19 The stars indicate the relative 20 emission levels of these engines. The more stars, 21 the cleaner the engine. California has a labelling 22 program that uses these symbols so that consumers can 23 make an informed purchase. 24 The majority of outboard and PWCs are 25 used on the weekends, particularly during the summer 175 1 months. Their emissions contribute greatly to the 2 formation of ozone. Uncontrolled, these engines 3 would be emitting well over 300 tons per day of 4 hydrocarbon plus NOx in 2010 statewide. But with the 5 emissions standards in place, these engine emissions 6 will be reduced by almost one third. 7 Although the fleet is anticipated to 8 grow, the emissions modelling shows that additional 9 reductions will be achieved in 2020. 10 Like outboards and PWCs, inboards and 11 stern drives are most often used on summer weekends, 12 and the fleet is anticipated to grow. With the 13 phase-in of the catalyst day standards over the 14 2007-to-2009 time frame, emissions benefits are 15 modest in 2010. 16 But by 2020, even with fleet growth, 17 emission standards will reduce emissions from these 18 engines by 28 tons per day statewide from the 2010 19 baseline or by 56 tons per day from the 2020 20 baseline. 21 The majority of 2002 model outboard 22 and PWC engines are already ahead of the curve, 23 meeting the 2004 two-star level. Moreover, almost 24 one third of the outboards are already meeting the 25 2008 three-star level. Inboard and stern-drive 176 1 engines are not required to certify until the 2003 2 model year. 3 However, one manufacturer has already 4 certified an engine to the three-star level. And 5 other manufacturers are in the process of certifying. 6 Staff anticipates there will be several certified 7 inboard and stern-drive engines by year's end. 8 The US-EPA has recently proposed a 9 control measure that would require all new 10 recreational spark-ignition marine engines or vessels 11 to reduce evaporative emissions by 80 percent in 12 2008. We will propose to harmonize with such a rule. 13 The first steps in an ARB in-water 14 catalyst demonstration project are underway. The 15 goal of the board-directed project is to demonstrate 16 the safeness and durability of catalysts in the 17 marine environment. Other involved parties include 18 US-EPA, US Coast Guard, members of the National 19 Marine Manufacturers Association, and members of the 20 Manufacturers of Emission Controls Association. 21 Staff is planning to return to the 22 board with the results of this project. The 23 projected completion date for the project is 2004. 24 The last category to be discussed are 25 diesel engines. The off-road diesel-engine 177 1 regulations cover a wide variety of engines typically 2 operating on diesel fuel although all "spent" fuels 3 may also be used. However, for simplification and 4 for the purposes of this presentation, we'll refer to 5 these collectively as "diesel engines." 6 The engines in this category are 7 typically used for power -- used to power 8 construction, agricultural, and industrial equipment. 9 As an example, these engines are used in equipment 10 such as generators, tractors, excavators, airport 11 tows, and transportation for refrigeration units. 12 Presented in this slide are the NOx 13 emissions from diesel engines for 2010. This points 14 out that combined off-road diesel engines contribute 15 as much NOx as do on-road diesel trucks. 16 One third of the off-road NOx 17 emissions is from trains and ships. The remaining 18 two thirds is from diesel engines typically used in 19 construction and farm equipment. 20 Here we have a similar chart for PM 21 emissions. For diesel-exhaust particulate matter, it 22 is clear that land-based, off-road sources are the 23 dominant contributors, making up 56 percent of the 24 total inventory in 2010. On-road diesel trucks 25 account for only one fourth of the emissions in 2010 178 1 due to the stringent PM standards that have been in 2 place in since the mid-1990's. 3 In 1992, the board adopted regulations 4 covering off-road diesel engines, 175 horsepower and 5 greater. In 1994, the board approved the State 6 implementation plan for ozone. 7 In particular, SIP Measures M9 and M10 8 called for ARB and US-EPA, respectively, to adopt 9 more stringent HC-plus-NOx- emission standards for 10 new off-road diesel engines beginning in 2005. 11 As a result, in 1996, a statement of 12 principles was approved and signed by the ARB, 13 US-EPA, and industry. The statement of principles 14 called for harmonization of ARB's and US-EPA's 15 regulations for off-road diesel engines. 16 Instead of implementing the SIP 17 standards in 2005, the statement of principles 18 incorporated a gradual multitiered, emission- 19 reduction scheme earlier than the 2000 -- than 2005, 20 that would achieve the air-quality benefits called 21 for in the SIP. 22 US-EPA and ARB in 1998 and 2000, 23 respectively, adopted a final rule incorporating the 24 agreements outlined in the statement of principles. 25 As mentioned earlier, the Federal 179 1 Clean Air Act prohibits California and other states 2 from regulating emissions from new engines used in 3 construction and farm equipment less than 175 4 horsepower. 5 These preempt-equipment types 6 represent about 70 percent of the off-road diesel 7 engines operating in California. Because of the 8 preemption, ARB works closely with the US-EPA and 9 relies heavily on federal action to regulate these 10 engines to obtain needed emission reductions. 11 As you can see, preempt engines make 12 up about two thirds of the diesel PM emissions shown 13 in the blue-shaded areas of the bars. Even though 14 the pie chart from the earlier slides shows that 15 off-road diesels are dominant contributors to the 16 PM-emissions inventory, this chart shows that PM 17 standards already adopted will significantly reduce 18 the diesel-PM contribution. 19 Similarly, the current regulations 20 provide significant hydrocarbon-plus-NOx benefits. 21 As you can see, preempt engines also make up about 22 two thirds of the diesel-hydrocarbon-plus-NOx 23 emissions as shown in the blue-shaded areas of the 24 bars. And the standards already adopted will 25 significantly reduce the diesel-hydrocarbon-plus-NOx 180 1 contribution. 2 Certification data, provided by 3 diesel-engine manufacturers since 1998, indicate that 4 projected sales estimates have largely been 5 unaffected by the introduction of diesel-emissions 6 standards. Diesel sales, in general, have increased 7 over this time period, with the notable exception 8 being agricultural equipment greater than 175 9 horsepower. 10 This trend, however, is likely due to 11 declining farmland activity in California rather than 12 an inability to comply with the regulations. The 13 Tier 1 requirements beginning in 1995 -- began in 14 1995 and were fully implemented in 2000. There have 15 been no known compliance issues with these standards. 16 Tier 2 standards are currently in 17 effect for the 300-to-600 and 600-to-750 horsepower 18 categories as of 2001 and 2002, respectively, with 19 full implementation scheduled to occur in the 2005 20 model year. 21 Few manufacturers have had to use 22 equipment flexibility provisions to meet the 23 standards. Similarly, no compliance issues have been 24 brought to staff's attention, nor are there any 25 anticipated in the future. Certification data also 181 1 revealed that many engines currently certified at the 2 Tier 1 standards are already capable of meeting the 3 Tier 2 requirements without modifications. 4 Approximately one third to one half of 5 all 50-to-300-horsepower engines fall into this 6 category. Even a small portion of greater-than-750- 7 horsepower engines currently meet Tier 2 standards. 8 This slide shows the history of 9 emission standards for both on-road and off-road 10 applications in the 275-horsepower range. It is 11 apparent, from the circled portion of the chart, that 12 the off-roads standards will significantly lag behind 13 the on-road standards in 2007, when the latest round 14 of on-road standards are implemented. 15 Similar to the previous slide, as 16 on-road diesel-engine NOx-emission standards have 17 steadily become more stringent, off-road standards 18 are lagging behind. 19 Looking to the future, ARB is working 20 with US-EPA to adopt nationwide standards for 21 off-road diesel engines that are similar to those 22 required for 2007 on-road engines. US-EPA's 23 assistance is needed to address emissions from 24 preempted engines and to facilitate harmonization in 25 the marketplace. 182 1 The standards under consideration 2 would reduce NOx and PM emissions by another 90 3 percent. Particulate filters and NOx-absorbers would 4 likely be used to meet these levels of control. To 5 enable the use of these technologies, 15-parts-per- 6 million sulfur-diesel fuel will have to be required 7 by US-EPA for off-road use. 8 US-EPA is also working with Europe 9 with the goal of harmonization -- or of harmonizing 10 new proposed standards. 11 In conclusion, emission standards have 12 successfully been implemented for -- on off-road 13 mobile sources. Manufacturers have been able to 14 design and produce engines that meet the standards 15 implemented, and an adequate supply of complying 16 engines are available in all categories. 17 As a result, we attained and will 18 continue to see a significant reduction in 19 smog-forming emissions. Hydrocarbon emissions from 20 these off-road, mobile-source categories will be 21 reduced by 64 percent, and NOx emissions will be 22 reduced by 54 percent over the 2000-to-2020 time 23 frame. 24 Additionally, as a result of these 25 off-road emission-reduction programs, we have seen 183 1 many advancements in emission-control technologies in 2 the off-road sector. Moreover, we expect these 3 advancements to continue. And thus staff will 4 continue to look for opportunities to further reduce 5 off-road emissions. 6 As an example, staff is scheduled to 7 return to the board in the summer of 2003 to propose 8 new evaporative standards and more stringent exhaust- 9 emission standards for small off-road engines. 10 As previously shown, land-based, 11 off-road sources are responsible for about one half 12 of the diesel-PM inventory and approximately one 13 third of the total NOx inventory from mobile sources 14 in California. This is by far the largest piece of 15 the pie and offers significant potential for future 16 reductions. 17 Given the many similarities between 18 on-road and off-road engines, it is both logical and 19 reasonable to expect aftertreatment technologies to 20 transfer, without much additional developmental work, 21 from on-road to off-road applications. 22 On-road aftertreatment requirements 23 are scheduled to begin in 2007 in California and 24 nationally. We have worked closely with the US-EPA 25 in establishing national standards sufficient to meet 184 1 stringent -- sufficiently stringent to meet 2 California's air-quality needs. We will continue to 3 work with the US-EPA to establish Tier 4 standards 4 for off-road diesel engines that meet the target of 5 reducing PM and NOx by another 90 percent. 6 We anticipate a successful outcome in 7 this endeavor. However, should efforts to align 8 standards and implementation schedules with US-EPA 9 fail to meet California's air-quality needs, staff is 10 prepared to develop separate State standards for 11 those engines that ARB has the authority to regulate. 12 And we will continue to look for 13 opportunities to reduce emissions from other off-road 14 categories as well. 15 This concludes the presentation. 16 Staff will be happy to address any questions and 17 comments you may have at this time. 18 CHAIRMAN LLOYD: Thank you very much. Very 19 comprehensive overview. Appreciate it. 20 Questions or comments from the board? 21 MRS. RIORDAN: Mr. Chairman, I would just ask 22 if all is going well with US-EPA, if -- if things 23 look good? 24 MR. CACKETTE: Yes. I think things do look 25 fairly good. The industry is -- 185 1 DR. BURKE: You're down two thirds. We got 2 two people shaking their heads, "No." 3 MR. CACKETTE: Well, I guess -- 4 DR. BURKE: If you guys can't agree -- 5 MR. CACKETTE: I guess it depends on what the 6 question is. But I think it was regarding the 7 off-road engines that you were interested in. 8 MRS. RIORDAN: Yes. Yes. 9 MR. CACKETTE: And I would say I think things 10 are going pretty good. EPA's in Europe now, trying 11 to negotiate a harmonization with the European- 12 proposed standards. And that seems to be a very 13 important thing to the industry because its 14 equipment's used everywhere around the world. 15 MRS. RIORDAN: Exactly. And if we all 16 harmonize, they are more readily -- 17 MR. CACKETTE: Yeah. 18 MRS. RIORDAN: -- going to cooperate and -- 19 MR. CACKETTE: And there is not any -- you 20 know, I think the industry wants to use these 21 technologies on their engines to the extent that they 22 believe it's feasible. 23 MRS. RIORDAN: Uh-huh. 24 MR. CACKETTE: There's not any foot-dragging 25 or any real resistance to having tighter standards 186 1 apply to off-road equipment. 2 MRS. RIORDAN: Okay. Thanks. 3 CHAIRMAN LLOYD: Is this harmonizing in a 4 direction we would approve? 5 MR. CACKETTE: Well, I think -- as we've 6 always said with harmonizing, "It's great as long as 7 it meets our needs." 8 CHAIRMAN LLOYD: Yeah. 9 MR. CACKETTE: So it's -- so far, I don't 10 think that there's any real compromise on -- that 11 would affect California in what I see kind of playing 12 out. But that'll depend on what the final situation, 13 I guess, leads to. 14 MR. KENNY: If I could just add a couple of 15 things. I mean one of the things you heard David 16 Salardino say at the very end of the presentation is 17 that California -- actually, ARB staff is prepared to 18 essentially go it alone and propose our own standards 19 to you if, in fact, that we don't see the kinds of 20 standards come forward from US-EPA. 21 And I think that's the one thing that 22 we are a little bit concerned about is that we do 23 want to make sure that, in fact, we do see kind of 24 standards come forward from the US-EPA that 25 essentially address the types of PM reductions that 187 1 we need in probably the shorter term. 2 And it would be a tough thing for us 3 to do to essentially propose that to you simply 4 because of the fact that the market in California 5 alone is not all that large. And so we don't have 6 sort of the driving capability -- 7 MRS. RIORDAN: Yeah. Right. 8 MR. KENNY: -- that we have, for example, on 9 light-duty vehicles. But at the same time, you know, 10 we are very concerned. And we do want to ensure 11 that, in fact, those PM reductions are achieved 12 simply because of the health implications of them. 13 And so, you know, what we have been 14 trying do is make it very clear to the engine 15 manufacturers that, in fact, those PM reductions are 16 extraordinarily important to us and that, as they 17 work with US-EPA, that they need to be very aware of 18 the fact that the opportunity for PM reductions in 19 California needs to be considered and, if it takes 20 maybe a little bit more time for the rest of the 21 country, that is fine. 22 But we want to make sure that we get 23 those reductions in California, maybe a little bit 24 sooner. 25 CHAIRMAN LLOYD: And how do we stand in terms 188 1 of preparing the way with low-sulfur diesel? 2 MR. KENNY: Well, we actually do prepare the 3 way much better than the rest of the country because, 4 you know, we are planning to propose to you, in the 5 near future, kind of a low-sulfur-diesel requirement 6 for California fuel. 7 And that same requirement probably 8 won't be in place in the rest of the country for 9 several years after it's in place in California. 10 CHAIRMAN LLOYD: Thank you. 11 Well, any other comments or questions? 12 Thank you, again. 13 Since this is not a regulatory item, 14 it is not necessary to officially close the record. 15 So with that, I'd like to thank staff. And we'll 16 move on to our final presentation. Thank you very 17 much. 18 Final item on the agenda is 02-dash-8- 19 dash-4, the review of air-quality legislation for 20 2002. As we know, the legislature just finished its 21 two-year session in August. And the governor has 22 taken action on all of the bills that reached his 23 desk. 24 Therefore, I've asked Rob Oglesby, our 25 legislative director, to give us an overview of the 189 1 past legislative year. And I'd also like to take 2 this time to compliment Rob and his staff for another 3 excellent year of service to the board, culminating 4 with Rob being asked to go over and work with the 5 governor's staff in reviewing the bills. 6 So we appreciate, Rob, all your hard 7 work and appreciate the report that you've giving us 8 today. 9 But before that, I'd like to turn it 10 over to Mr. Kenny to see if he has any comments at 11 this time. 12 MR. KENNY: The only comments I really have 13 are the ones you just stated, I mean. And I really 14 do want to echo that. I mean Rob is an 15 extraordinary -- extraordinarily good. He basically 16 is a wonderful asset for the Air Resources Board. 17 And, you know, I probably can't say enough exemplary 18 things about him. 19 He truly is someone that I think many, 20 many people look at and recognize the talent he has, 21 the dedication he provides. And probably more 22 importantly than anything, his understanding of the 23 legislature and his ability to sort of work inside 24 the legislature, I mean, is something that really is 25 unique and obviously to our great advantage. 190 1 CHAIRMAN LLOYD: I would second your 2 statements. You can't beat -- 3 DR. FRIEDMAN: Besides he got half of us 4 confirmed so -- 5 MR. OGLESBY: Well, thank you. Thank you for 6 those kinds words. 7 MRS. RIORDAN: Near and dear to your heart. 8 MR. OGLESBY: For the record, my name's Rob 9 Oglesby. And this is the home stretch. And -- oh, 10 you're ready. 11 Mr. Chairman, members of the board, 12 and Mr. Kenny, thank you. I always look forward to 13 this annual opportunity to appear before you to 14 provide a brief review of significant air-quality 15 legislation. 16 First, I'd like to acknowledge the 17 legislative office staff, who could not be here 18 today. Sheila Marsee; Chris Elms; Jon Costantino; 19 Lisa Smith; Joni Martin; and the keystone to our 20 office, Executive Assistant Ollie Awolowo. They are 21 dedicated, hard working, and serve you well. 22 I also would like to recognize the 23 support the legislative office receives from the 24 chairman's office, the executive office, and the 25 excellent program staff at the board. The 191 1 legislative office relies on ARB staff to come 2 through on short notice with the analyses, data, and 3 program history that are the tools of our trade. We 4 appreciate their consistent support and 5 professionalism. 6 Now, I'll begin with a brief overview 7 of this year's legislative session. 8 The final recess of the 2001-2002 9 legislative session was August 31. And the deadline 10 for the governor to sign or veto bills was midnight 11 on September 30. More than 3,700 bills remained 12 active at the beginning of the year. 13 The legislative office followed 102 14 air quality-measures. And of these, 29 bills became 15 law. Most of those new laws take effect January 1. 16 I'd like to highlight five issue areas. 17 And these are reducing greenhouse-gas 18 emissions from passenger vehicles, extending Smog 19 Check 2 to the San Francisco Bay Area, laying the 20 foundation to protect the public from pollution 21 indoors, maintaining progress in environmental 22 justice, and defending our critical programs in the 23 state-budget process. 24 The board has already received two 25 briefings on California's landmark greenhouse-gas 192 1 legislation -- Assembly Member Pavley's AB 1493. But 2 no legislative review would be complete without 3 noting this achievement. And for the benefit of 4 those attending this hearing or watching the web 5 broadcast, I'll just touch on this bill's major 6 provisions. 7 By January 1, 2005, ARB is required to 8 adopt regulations that achieve the maximum feasible 9 and cost-effective reduction of greenhouse-gas 10 pollution from new passenger vehicles beginning with 11 the 2009 model year. The regulations must be 12 transmitted to the legislature for review. 13 And I'd also like to mention that the 14 opponents to the bill launched an expensive 15 disinformation campaign. 16 So for the record, I will reiterate 17 that ARB is specifically prohibited from banning the 18 sale of any vehicle category in the state, including 19 SUVs and minivans or imposing additional fees and 20 taxes on any motor vehicle, fuel, or vehicle miles 21 travelled or reducing vehicle weight, mandating the 22 reduction of vehicle weight or placing limitations or 23 reductions on speed limits or limiting the amount of 24 vehicle miles that can be travelled. 25 Next, I'd like to turn to the 193 1 long-standing controversy between the Central Valley 2 and the San Francisco Bay Area relating to 3 transported pollution and enhanced Smog Check. After 4 years of impasse, legislation to expand Smog Check 2 5 to the Bay Area finally became law in Assembly Member 6 Cardoza's AB 2637. 7 AB 2637 requires the Bureau of 8 Automotive Repair to expand the enhanced Smog Check 9 program to the San Francisco Bay Area as soon as 10 possible but allows time for the Smog Check industry 11 to upgrade test equipment and establish sufficient 12 members of test-only shops. 13 The bill also made modifications to 14 the program statewide. Most significantly, beginning 15 January 1, 2000, up to two additional years may be 16 added to the time before a new car must undergo Smog 17 Check. Currently the first Smog Check is due after 18 a car is four years old. 19 If the ARB determines that no 20 significant adverse air-quality impacts would occur, 21 cars could be exempt from Smog Check for up to six 22 years. 23 CHAIRMAN LLOYD: Let me ask you, at that 24 point, before I forget, is that a staff decision or a 25 board decision? If it's a board decision, when will 194 1 it come before the board? 2 MR. OGLESBY: The legislation specifies the 3 board decision. 4 MR. CACKETTE: And we're getting ready to 5 start the technical evaluation right now. And I 6 think -- I don't think we've picked a month but, you 7 know, first quarter to second quarter of next year. 8 CHAIRMAN LLOYD: Okay. Thank you. 9 MR. OGLESBY: And staff is now analyzing the 10 impacts of extending the new-car exemption. 11 And now I'd like to talk about the 12 benefits of the bill. First, San Francisco Bay Area 13 will enjoy the combined benefits of cleaner air and 14 an improved relationship with their grateful downwind 15 neighbors. 16 Specifically, the improved program 17 will reduce smog-forming emissions by a total of 26 18 tons per day -- and that is 10 tons a day of ROG and 19 16 tons per day of NOx -- with the added benefit of 20 reductions of toxic air contaminants. The toxic 21 pollutant benzene, for example, will be reduced by 22 640 pounds per day. 23 The bill also resolves no less than 24 three lawsuits filed by Central Valley and mountain 25 air districts against the Air Resources Board and the 195 1 US-EPA. The lawsuits all sought the implementation 2 of Smog Check 2 in the Bay Area to mitigate downwind 3 impacts of transported pollution. 4 If approved by the board, the two-year 5 extension of the new-car exemption annually would 6 save about 1.4 million motorists the cost and 7 inconvenience of a smog check that may provide no 8 proportionate air-quality benefit. That could save 9 consumers about $64 million annually. 10 Next, I'd like to discuss the 11 legislation related to indoor air pollution. This 12 year the legislature gave us direction to focus more 13 attention to indoor health threats by approving 14 Assembly Member Keeley's AB 1173. Californians spend 15 approximately 87 percent of their time indoors, and 16 children and the elderly spend even more time exposed 17 to indoor air pollutants. 18 The health effects of indoor air 19 pollutants range from short-term eye and throat 20 irritation to long-term effects like respiratory 21 disease and cancer. 22 Initially introduced as a bold measure 23 to grant ARB broad authority to regulate sources of 24 indoor air pollution, in final form AB 1173 directs 25 ARB to produce a comprehensive report describing and 196 1 ranking the sources of indoor pollution and 2 suggesting possible mitigation. The report is due 3 January 1, 2004. 4 This endeavor is anticipated to be the 5 scientific foundation for future board actions to 6 reduce the public's health risk from indoor sources 7 of pollution. 8 Now let me move on to environmental 9 justice. Assembly Member Chu's AB 2312 demonstrates 10 the administration's continues commitment to 11 environmental justice at Cal-EPA. 12 This bill establishes an environmental 13 justice small-grant program administered by Cal-EPA 14 to provide grants of up to $20,000 to local community 15 nonprofit organizations for projects that raise 16 environmental justice concerns. Grants must be used 17 for resolving environmental problems and expanding 18 environmental understanding and involvement in an 19 affected community. 20 The bill prohibits the use of the 21 grant funds for lobbying, litigation, or to leverage 22 other state or federal matching funds. The governor 23 directed Cal-EPA to direct sufficient monies from 24 special funds to implement this program. 25 Now let me briefly mention a few other 197 1 air-quality bills of note. Assembly Member Keeley's 2 AB 2461 extends the January 1, 2003, sunset date for 3 the vehicle license fee exemption that applies to the 4 incremental cost of an alternatively fueled vehicle. 5 And it extends that until January 1, 2009. 6 Assembly Members Havice's AB 1314 7 allows local authorities to designate and enforce 8 special parking places for zero-emission vehicles. 9 Senator Machado's SB 433 repeals the January 1, 2003, 10 sunset on ARB's civil and administrative penalties 11 related to enforcing fuel regulations. 12 And, finally, Assembly Member 13 Lowenthal's AB 2650 should reduce diesel-truck 14 emissions at the state's major ports by reducing 15 truck-idling time at the gates. 16 Now I'd like to turn to the 2002-03 17 state budget. 18 After a record-setting, 62-day 19 stalemate, the legislature passed and the governor 20 approved a budget that preserves our valuable assets 21 and the ability to execute our core mission. 22 Helped by an infusion of a $25 million 23 in Carl Moyer funds from Proposition 40, ARB's 24 overall budget grew from 132 million, in 01-02, to 25 139 million. Proposition 40 will provide another 25 198 1 million for the next year's budget as well. 2 Budget-control language directs at 3 least 20 percent of these Proposition 40 funds to 4 acquire clean and safe school buses. Now, excluding 5 the infusion of Prop 40 money, ARB absorbed budget 6 reductions amounting to $18.6 million from the 7 132-million baseline budget from last year. 8 The legislative office also 9 participated in several special interim hearings. 10 This year the legislature held special fact-finding 11 hearings on diesel emissions at ports, California's 12 Title V exemption for agriculture, and children's 13 health. 14 And, finally, our annual report. This 15 document provided to you today tells the legislative 16 story for all the air-quality-related bills we 17 identified and tracked in 2002. 18 For the audience members, let me note 19 that several copies of the summary had been made 20 available at the sign-in table. I notice they were 21 gone early in the hearing. So I'd mention that, if 22 anyone watching this broadcast or attending this 23 hearing would like a copy of this report, they can 24 obtain it by contacting my office at 916-322-2896. 25 I appreciate the board's hearing and 199 1 the board's interest in the legislative program. If 2 you have any questions about my presentation, I'd be 3 happy to answer them. Also please do not hesitate to 4 contact me at any time with any legislative questions 5 or concerns you may have. Thank you. 6 CHAIRMAN LLOYD: Thank you very much indeed, 7 Rob. Did I pick up -- or maybe I misunderstood -- 8 when you were talking about Smog Check and the two- 9 year additional exemption, did you say there was no 10 need for staff to do that report because they had 11 concluded that there was going to be minimal negative 12 impact? Or was I wrong on that? 13 MR. OGLESBY: We're required to do a finding. 14 And staff is currently analyzing what the emission 15 consequences are of excluding those two additional 16 years. 17 In general, cars that are that new 18 tend to have lower failure rates. But staff still 19 has to complete its work and do its assessment. And 20 it's up to the board to ratify that decision. 21 CHAIRMAN LLOYD: Okay. Comments, questions 22 from the board? 23 PROFESSOR FRIEDMAN: If any of us has new cars 24 within four years, I guess we're conflicted, aren't 25 we? 200 1 MR. CALHOUN: What is it at now? Is it four 2 years now? 3 MR. OGLESBY: It's a four-year. 4 MR. CALHOUN: Four-year now. So it would be 5 potentially -- 6 MR. OGLESBY: It would be potentially two 7 additional years -- up to two additional years. 8 PROFESSOR FRIEDMAN: It starts at four to six; 9 correct? 10 MR. OGLESBY: Four to six. 11 MR. CACKETTE: Well, I think there's -- just 12 to add to that, there clearly is going to be an 13 emission impact, a loss of benefit from not 14 inspecting those cars. 15 The question is "How big is it? How 16 big will it be in the future as cars continue to get 17 cleaner?" and whether there's some argument that 18 maybe you have to keep the vehicles in now, but a few 19 years later you might be able to let them out. 20 And then sort of the overall argument 21 that the emission -- there is a lot of money that is 22 being spent on inspecting those vehicles. So is it 23 worth inspecting these vehicles or not? I think the 24 way it works is that it's -- actually the board has 25 to sort of disapprove the implementation of the 201 1 exemption. 2 If we find that there's too much lost 3 for our air-quality plan, then your action would say 4 that that extra two years of exemption does not go 5 into place. If you did nothing, I think it goes into 6 place automatically. 7 PROFESSOR FRIEDMAN: Is it a two-year block 8 that can't be broken? I mean -- 9 MR. CACKETTE: No. I think it could be 10 broken. 11 PROFESSOR FRIEDMAN: What if you found that, 12 in one more year, and then there was a dramatic 13 increase? 14 MR. OGLESBY: It's up to -- 15 MR. CACKETTE: That's possible. 16 CHAIRMAN LLOYD: It's up to -- 17 MR. OGLESBY: It's up to two years. 18 MR. CACKETTE: Yeah. 19 CHAIRMAN LLOYD: Well, thank you very much, 20 Rob. 21 MR. OGLESBY: It's a pleasure. 22 CHAIRMAN LLOYD: And I would also say, 23 concluding this item here, that I'd also like to 24 recognize the outstanding work done by Catherine 25 Witherspoon in the Chair's office. I know Catherine 202 1 has worked with Rob very closely, very well. And I 2 know she's spent many, many hours, particularly on 3 the greenhouse and other bills. And so I would like 4 to acknowledge Catherine's outstanding work in that 5 area. 6 So I don't know whether the board has 7 any -- this is not a regulatory item. It's not 8 necessary to close the record. I don't know whether 9 there are any other comments from the board. 10 Mr. McKinnon. 11 MR. McKINNON: Yeah. I just -- I want to 12 recognize, you know, Rob and Catherine and the staff 13 and frankly the legislature and the governor. What a 14 year. I mean greenhouse gas, indoor air quality, and 15 dealing with -- beginning to deal with the San 16 Joaquin Valley's problems. Big year. Big year. 17 Maybe -- maybe a long -- hard to repeat. Very, very 18 good job. 19 CHAIRMAN LLOYD: Excellent. Let me concur 20 with that. With that, I guess we'll officially 21 conclude the October 24, 2002, meeting of the Air 22 Resources Board. And we look forward to seeing you 23 all next month up in Sacramento, hopefully without 24 fog. Thank you. 25 (Proceedings concluded at 2:25 P.M.) --o0o-- 203 1 STATE OF CALIFORNIA ) ) ss. 2 COUNTY OF LOS ANGELES ) 3 4 I, NEALY KENDRICK, CSR No. 11265, do hereby 5 certify: 6 That the foregoing transcript of proceedings 7 was taken before me at the time and place therein set 8 forth and thereafter transcribed by computer under my 9 direction and supervision, and I hereby certify the 10 foregoing transcript of proceedings is a full, true, 11 and correct transcript of the proceedings. 12 I further certify that I am neither counsel 13 for nor related to any party to said action nor in 14 anywise interested in the outcome thereof. 15 IN WITNESS WHEREOF, I have hereunto subscribed 16 my name this 5th day of November, 2002. 17 18 _______________________________ NEALY KENDRICK, CSR NO. 11265 19 20 21 22 23 24 25 204